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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended March 31, 2024

 

or

 

☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from ___________ to ___________

 

Commission file number: 001-38416

 

 

ORGENESIS INC.

(Exact name of registrant as specified in its charter)

 

Nevada   98-0583166

(State or other jurisdiction

of incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

20271 Goldenrod Lane

Germantown, MD 20876

(Address of principal executive offices) (Zip Code)

 

(480) 659-6404

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbols(s)   Name of each exchange on which registered
Common Stock   ORGS   The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
  Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of May 20, 2024, there were 34,430,280 shares of registrant’s common stock outstanding.

 

 

 

 
 

 

ORGENESIS INC.

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

 

TABLE OF CONTENTS

 

  Page
   
PART I - FINANCIAL INFORMATION  
     
ITEM 1 Financial Statements (unaudited) 3
     
  Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 3
     
  Condensed Consolidated Statements of Loss and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023 5
     
  Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2024 and 2023 6
     
  Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 8
     
  Notes to Condensed Consolidated Financial Statements 9
     
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
     
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 27
     
ITEM 4. Controls and Procedures 27
     
PART II - OTHER INFORMATION 28
     
ITEM 1. Legal Proceedings 28
     
ITEM 1A. Risk Factors 28
     
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 31
     
ITEM 3. Defaults Upon Senior Securities 31
     
ITEM 4. Mine Safety Disclosures 31
     
ITEM 5. Other Information 31
     
ITEM 6. Exhibits 32
     
SIGNATURES 33

 

2
 

 

PART I –FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars, in thousands, except share and per share amounts)

(Unaudited)

 

         
   As of 
   March 31,
2024		   December 31,
2023		 
Assets        
         
CURRENT ASSETS:          
Cash and cash equivalents  $80   $837 
Restricted cash   485    642 
Accounts receivable, net of credit losses of $29,760 as of March 31, 2024 ($0 as of December 31, 2023)   245    88 
Prepaid expenses and other receivables   1,112    2,017 
Receivables from related parties   -    458 
Inventory   34    34 
TOTAL CURRENT ASSETS   1,956    4,076 
           
NON-CURRENT ASSETS:          
Deposits  $255   $38 
Investments in associates   8    8 
Property, plant and equipment, net   16,404    1,475 
Intangible assets, net   8,950    7,375 
Operating lease right-of-use assets   1,804    351 
Goodwill   1,211    1,211 
Other assets   332    18 
TOTAL NON-CURRENT ASSETS   28,964    10,476 
TOTAL ASSETS  $30,920   $14,552 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3
 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(U.S. Dollars, in thousands, except share and per share amounts)

(Unaudited)

 

   As of 
   March 31,
2024		   December 31,
2023		 
Liabilities net of (Capital Deficiency)          
           
CURRENT LIABILITIES:          
Accounts payable  $13,707   $6,451 
Accounts payable related Parties   2,697    133 
Accrued expenses and other payables   4,106    2,218 
Income tax payable   786    740 
Employees and related payables   1,529    1,079 
Other payable related parties   -    52 
Advance payments on account of grant   2,695    2,180 
Short-term loans   626    650 
Current maturities of finance leases   65    18 
Current maturities of operating leases   476    216 
Short-term and current maturities of convertible loans   2,344    2,670 
TOTAL CURRENT LIABILITIES   29,031    16,407 
           
LONG-TERM LIABILITIES:          
Non-current operating leases  $1,274   $96 
Loans payable   2,696    - 
Convertible loans   20,336    18,967 
Retirement benefits obligation   98    - 
Finance leases   14    4 
Contingent liability (see note 4)   4,643    - 
Other long-term liabilities   377    61 
TOTAL LONG-TERM LIABILITIES   29,438    19,128 
TOTAL LIABILITIES   58,469    35,535 
           
CAPITAL DEFICIENCY:          
Common stock of $0.0001 par value: Authorized at March 31, 2024 and December 31, 2023: 145,833,334 shares; Issued at March 31, 2024 and December 31, 2023: 34,625,349 and 32,163,630 shares, respectively; Outstanding at March 31, 2024 and December 31, 2023: 34,338,782 and 31,877,063 shares, respectively.   4    3 
Additional paid-in capital   159,650    156,837 
Receipts on account of shares to be allotted   155    - 
Accumulated other comprehensive income   126    65 
Treasury stock, 286,567 shares as of March 31, 2024 and December 31, 2023   (1,266)   (1,266)
Accumulated deficit   (186,386)   (176,622)
Equity attributable to Orgenesis Inc.   (27,717)   (20,983)
Non-controlling interest   168    - 
TOTAL CAPITAL DEFICIENCY   (27,549)   (20,983)
TOTAL LIABILITIES AND CAPITAL DEFICIENCY  $30,920   $14,552 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4
 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(U.S. Dollars in Thousands, Except Share and Loss Per Share Amounts)

(Unaudited)

 

         
  Three Months Ended 
   March 31,   March 31, 
  2024    2023 
         
Revenue  $141   $142 
Cost of revenues   492    2,722 
Gross loss   (351)   (2,580)
Cost of development services and research and development expenses   2,370    3,281 
Amortization of intangible assets   153    207 
Selling, general and administrative expenses including credit losses, net of $3,225 and $9,489 for the three months ended March 31, 2024 and 2023 respectively   6,056    13,528 
Operating loss   8,930    19,596 
Loss from deconsolidation   

66

    

-

 
Other income, net   -    (2)
Loss from extinguishment in connection with convertible loan   141    283 
Credit loss on convertible loan receivable   -    2,688 
Financial expenses, net   852    681 
Share in net loss of associated companies   -    2 
Loss before income taxes   9,989    23,248 
Tax expense   16    129 
Net loss   10,005    23,377 
Net income (loss) attributable to non-controlling interests (including redeemable)   (240)   (3,907)
Net loss attributable to Orgenesis Inc.   9,765    19,470 
Loss per share:          

Basic and diluted

  $0.29   $0.87 
           
Weighted average number of shares used in computation of Basic and Diluted loss per share:          
Basic and diluted   33,176,657    26,477,113 
           
Comprehensive loss:          
Net loss  $10,005   $23,377 
Other Comprehensive loss (income) – Translation adjustment   (61)   41 
Comprehensive loss   9,944    23,418 
Comprehensive loss attributed to non-controlling interests   (240)   (3,907)
Comprehensive loss attributed to Orgenesis Inc.  $9,704   $19,511 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5
 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(U.S. Dollars in thousands, except share amounts)

(Unaudited)

 

    Number   Par Value   Capital   Allotted   Income (Loss)   Shares   Deficit   Inc.   Interest   Total 
    Common Stock   Additional
Paid-in		   Receipts on
Account of
Shares to
be		   Accumulated
Other
Comprehensive		   Treasury   Accumulated   Equity
Attributed to
Orgenesis		   Non-
Controlling		     
    Number   Par Value   Capital   Allotted   Income (Loss)   Shares   Deficit   Inc.   Interest   Total 
Balance at January 1, 2024   31,877,063   $              3   $156,837   $-   $65   $(1,266)  $(176,622)   (20,983)  $-   $(20,983)
Changes during the three months ended March 31, 2024:                                                  
Stock-based compensation   -    -    86    -    -    -    -    86    -    86 
Issuance of Shares and warrants to service providers   164,000    -*    226    -    -    -    -    226    -    226 
Issuance of shares and receipts on account of shares and warrants to be allotted   2,272,719    -*    2,341    155    -    -    -    2,496    -    2,496 
NCI arising from Octomera reconsolidation   -    -    -    -    -    -    -    -    408    408 
Issuance of Shares due to exercise of warrants   25,000    -*    19    -    -    -    -    20    -    20 
Extinguishment in connection with convertible loan restructuring   -    -    141    -    -    -    -    141    -    141 
Comprehensive income (loss) for the period   -    -    -    -    61    -    (9,765)   (9,704)   (240)   (9,944)
Balance at March 31, 2024   34,338,782   $4   $159,650   $155   $126   $(1,266)  $(186,386)  $(27,717)  $168   $(27,549)

 

*Represents an amount lower than $1 thousand

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6
 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(U.S. Dollars in thousands, except share amounts)

(Unaudited)

 

    Number  

Par Value

  

Capital

  

(Loss)

   Shares  

Deficit

  

Inc.

  

Interest

   Total 
    Common Stock   Additional
Paid-in		  

Accumulated

Other

Comprehensive

Income

   Treasury  

Accumulated

  

Equity

Attributed

to

Orgenesis

  

Non-

Controlling

     
    Number  

Par Value

  

Capital

  

(Loss)

   Shares  

Deficit

  

Inc.

  

Interest

   Total 
Balance at January 1, 2023   25,545,755   $               3   $150,355  - $(270)  $(1,266)  $(121,261)  $27,561   $1,510   $29,071 
Changes during the three months ended March 31, 2023:                                             
Stock-based compensation   -    -    159  -  -    -    -    159    -    159 
Issuance of shares and warrants   1,947,368    -*    3,441  -  -    -    -    3,441    -    3,441 
Issuance of Shares due to exercise of warrants   368,420    -*    -    -    -    -    

 -*

    -    -* 
Issuance of warrants with respect to convertible loans   -    -    449    -    -    -    449    -    449 
Extinguishment in connection with convertible loan restructuring   -    -    287    -    -    -    287    -    287 
Adjustment to redemption value of redeemable non-controlling interest   -    -    (3,671)   -    -    -    (3,671)   -    (3,671)
Comprehensive loss for the period   -    -    -  -  (41)   -    (19,470)   (19,511)   (236)   (19,747)
Balance at March 31, 2023   27,861,543   $3   $151,020  - $(311)  $(1,266)  $(140,731)  $8,715   $1,274   $9,989 

 

*Represents an amount lower than $1 thousand

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

7
 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars in thousands)

(Unaudited)

 

   2024   2023 
   Three Months Ended 
   March 31,   March 31, 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(10,005)  $(23,377)
Adjustments required to reconcile net loss to net cash used in operating activities:          
Stock-based compensation   312    159 
Loss from deconsolidation of OBI   66    - 
Share in loss of associated entities, net   -    2 
Depreciation and amortization expenses   381    578 
Credit loss on Convertible Loan receivable   -    2,688 
Credit loss related to OBI   2,049    - 
Effect of exchange differences on inter-company balances   (200)   179 
Net changes in operating leases   (8)   (47)
Change in interest expenses accrued on loans and convertible loans   637    (274)
Loss from extinguishment in connection with convertible loan restructuring   141    283 
Changes in operating assets and liabilities:          
Accounts receivable   (74)   14,790 
Prepaid expenses and other accounts receivable   1,438    (2,183)
Inventory   -   (10)
Other assets   (1)   2 
Accounts payable   502    (59)
Accrued expenses and other payables   442    24 
Employee and related payables   (119)   2 
Deferred taxes, net   (2)   3 
           
Net cash used in operating activities  $(4,441)  $(7,240)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (204)   (1,285)
Cash acquired from acquisition of Octomera   139    - 
Impact to cash resulting from deconsolidation of OBI   

(5

)   

-

Investment in long-term deposits   2    (22)
Net cash used in investing activities  $(68)  $(1,307)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from issuance of shares and warrants net of transaction costs   2,360    3,441 
Proceeds from issuance of convertible loans   75    5,485 
Proceeds from receipts on account of shares to be allotted   155    - 
Repayment of convertible loans and convertible bonds   -    (3,000)
Repayment of short and long-term debt   (33)   (16)
Proceeds from issuance of loans payable   307    - 
Receipt from Germfree (see note 1 a)   750    - 
Net cash provided by financing activities  $3,614   $5,910 
           
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH  $(895)  $(2,637)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (19)   (1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD   1,479    6,369 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $565   $3,731 
           
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES          
Right-of-use assets obtained in exchange for new operation lease liabilities  $-   $753 
Increase (decrease) in accounts payable related to purchase of property, plant and equipment  $-   $14 
Extinguishment in connection with convertible loan restructuring  $

141

   $287 
           
CASH PAID DURING THE YEAR FOR:          
Interest  $-   $785 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

8
 

 

ORGENESIS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2024 and 2023

(Unaudited)

(U.S. Dollars in thousands, except share amounts)

 

NOTE 1 – DESCRIPTION OF BUSINESS

 

a.General

 

Orgenesis Inc. (the “Company”) is a global biotech company working to unlock the potential of Cell and Gene Therapies (“CGTs”) in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products (“ATMPs”). The Company is mostly focused on the development of autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care (“POCare”).

 

As of the date of this report, the Company operates two segments:

 

  ● The “Octomera” segment which includes the Company’s POCare Services that are performed in decentralized hubs which provide harmonized and standardized services to customers (“POCare Centers”). The Company’s subsidiary, Octomera LLC, holds all of the Octomera segment activities.
  ● The “Therapies” segment which includes therapies related activities.

 

On January 29, 2024, the Company and Metalmark Capital Partners (“Metalmark” or “MM”) entered into a Unit Purchase Agreement (the “MM UPA”), pursuant to which the Company acquired all of the preferred units of Octomera LLC (“Octomera”) previously owned by MM (the “MM Acquisition”), and effective that date, reconsolidated Octomera into its accounts. The Company currently owns 100% of the equity interests of Octomera. The Company had previously, from June 30, 2023 (“date of deconsolidation”), deconsolidated Octomera from its consolidated financial statements and had recorded its equity interest in Octomera as an equity method investment.

 

These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries.

 

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed and traded on the Nasdaq Capital Market under the symbol “ORGS.” The Company must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days. Because the Company’s Common Stock has traded for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq sent a deficiency notice to the Company. On April 17, 2024, the Company received a notice (the “Notice”) from Nasdaq stating that the Company’s securities would be delisted from The Nasdaq Capital Market unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”) to address the deficiencies and present a plan to regain compliance. As permitted by the Notice, the Company has requested a hearing before the Panel, which request will stay any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel. The Company’s common stock has remained listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process.

 

As used in this report and unless otherwise indicated, the term “Company” refers to Orgenesis Inc. and its Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars.

 

b.Liquidity

 

Through March 31, 2024, the Company had an accumulated deficit of $186,386 and for the three months ended March 31, 2024 incurred negative operating cashflows of $4,441. The Company’s activities have been funded by generating revenue, through offerings of its securities, and through proceeds from loans. There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its activities.

 

9
 

 

The Company will need to use mitigating actions such as to seek additional financing, refinance or amend the terms of existing loans or postpone expenses that are not based on firm commitments. In order to fund its operations, until such time that we can generate sustainable positive cash flows, the Company will need to raise additional funds. For the three months ended March 31, 2024 and as of the date of this report, the Company assessed its financial condition and concluded that based on current and projected cash resources and commitments, as well as other factors mentioned above, there is a substantial doubt about its ability to continue as a going concern. The Company is planning to raise additional capital to continue its operations and to repay its outstanding loans when they become due, as well as to explore additional avenues to increase revenues and reduce or delay expenditures. The Company may also exchange some of its outstanding loans and accounts payable for securities of the Company. There can be no assurance that the Company will be able to raise additional capital on acceptable terms, or at all, or be able to exchange its outstanding loans and accounts payable for securities of the Company.

 

The Company’s common stock is listed for trading on the Nasdaq Capital Market. As mentioned above, the Company must satisfy Nasdaq’s continued listing requirements. Failure to meet continuing listing requirements risk delisting, which may make it more difficult to raise additional capital.

 

On April 5, 2024, the Company entered into an Asset Purchase and Strategic Collaboration Agreement (the “Purchase Agreement”) with Griffin Fund 3 BIDCO, Inc., (“Germfree”), for the sale by the Company of five Orgenesis Mobile Processing Units and Labs (“OMPULs”) to Germfree, which will be incorporated into Germfree’s lease fleet and leased back to the Company or third-party lessees designated by the Company. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework (“OQMSF”) and related intellectual property rights, Germfree will pay an aggregate purchase price of $8,340 subject to any final adjustment through the verification mechanism as set forth in the Purchase Agreement. Pursuant to the Agreement, Germfree paid the Company $750 (for an exclusive manufacturing supply agreement) on February 27, 2024 and $5,538 during April 2024.

 

On May 10, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 150,000 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”). The Company received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

The estimation and execution uncertainty regarding the Company’s future cash flows and management’s judgments and assumptions in estimating these cash flows is a significant estimate. Those assumptions include reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash.

 

NOTE 2 – BASIS OF PRESENTATION

 

a. Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all normal and recurring adjustments necessary to fairly state the financial position and results of operations of the Company. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on April 15, 2024. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2023, but not all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) are included in this Quarterly Report on Form 10-Q.

 

10
 

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, the amount of revenues and expenses, determination of loss on deconsolidation, valuation of investments, purchase price allocations, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.

 

NOTE 3 – SEGMENT INFORMATION

 

Segment data for the three months ended March 31, 2024 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $29   $135   $(23)  $141 
Cost of revenues*   (937)   (150)   710    (377)
Gross profit   (908)   (15)   687    (236)
Cost of development services and research and development expenses*   (1,785)   (1,179)   697    (2,267)
Operating expenses*   (63)   (5,519)   (464)   (6,046)
Loss from deconsolidation   -    -    (66)   (66)
Depreciation and amortization   (430)   (194)   243    (381)
Loss from extinguishment in connection with convertible loan   -    (141)   -    (141)
Financial income (expenses), net   (290)   (686)   124    (852)
Income (loss) before income taxes  $(3,476)  $(7,734)  $1,221   $(9,989)

 

*Excluding Depreciation, amortization expenses

 

Segment data for the three months ended March 31, 2023 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $12   $130   $-   $142 
Cost of revenues*   (2,308)   (178)   -    (2,486)
Gross profit   (2,296)   (48)   -    (2,344)
Cost of development services and research and development expenses*   (2,081)   (1,076)   -    (3,157)
Operating expenses*   (11,203)   (2,314)   -    (13,517)
Other income, net   2    -    -    2 
Depreciation and amortization   (385)   (193)   -    (578)
Credit loss on convertible loan receivable   -    (2,688)   -    (2,688)
Loss from extinguishment in connection with convertible loan   -    (283)   -    (283)
Financial Expenses, net   (266)   (415)   -    (681)
Share in net income of associated companies   -    (2)   -    (2)
Income (loss) before income taxes  $(16,229)  $(7,019)  $-   $(23,248)

 

*Excluding Depreciation, amortization expenses

 

The Company does not review assets by segment. Therefore, the measure of assets has not been disclosed for each segment.

 

11
 

 

NOTE 4 – RECONSOLIDATION OF OCTOMERA LLC

 

Pursuant to the MM UPA signed on January 29, 2024, the Company and MM agreed to the following:

 

1.Consideration:

 

  ● Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three year period 2025-2027, then the Company will pay 5% of Net Revenues to MM pursuant to the MM UPA.
     
  ● Milestone Payments: If the Company sells Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, the Company shall pay Seller 5% of the net proceeds.

 

2.MM’s designated members of the Board of Managers of Octomera resigned and the Company amended the Second Amended and Restated Limited Liability Company Agreement of Octomera (the “Octomera LLC Agreement”) to be a single member agreement reflecting the transactions consummated under the UPA, such that MM no longer (i) is member of Octomera or a party to the Octomera LLC Agreement, or (ii) has a right to appoint members of the board of managers of Octomera.

 

3.The outstanding indebtedness payable from Orgenesis Maryland LLC to MM pursuant to an aggregate of 10 secured promissory notes (the “Notes”) with a collective original principal amount of $2,600, were amended to, among other things, extend the maturity thereof to January 29, 2034 and to terminate the security interest granted by Orgenesis Maryland in favor of MM that secured the obligations under the Notes.

 

Fair Value of Consideration Transferred

 

Accounting guidance provides that the allocation of the purchase price may be adjusted for up to one year from the date of the acquisition to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of the purchase price allocation that is not yet finalized is related to intangible assets, property, plant and equipment, and certain other assets and tax matters and the related impact on goodwill.

 

In evaluating the fair value of the Octomera Equity Investment under the income approach, the Company used a discounted cash flow model of the business, adjusted to the Company’s share in the investment. Key assumptions used to determine the estimated fair value included: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-term future growth determined based on the growth prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of capital adjusted for the relevant risk associated with the Company’s reporting unit operations and the uncertainty inherent in the Company’s internally developed forecasts. The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of other intangible assets, net, which comprised of technology. The useful life of the technology for amortization purposes was determined by considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible assets, adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic, or other factors that may limit the useful life of intangible assets.

 

The following table summarizes the allocation of purchase price  to the fair values of the assets acquired and liabilities assumed as of the Transaction date:

  

   (in thousands) 
Total contingent liability to MM for royalty and milestone payments  $4,643 
      
Total assets acquired:     
Cash and cash equivalents  $139 
Property, plants and equipment, net   17,852 
Other Assets   3,478 
Total assets  $21,469 
      
Total liabilities assumed:     
Total current liabilities  $(12,518)
Total long-term liabilities   (5,628)
Total liabilities  $(18,146)
      
Know how Technology   1,728 
      
Total Net Assets  $5,051 
Fair-Value of Non-controlling interests   (408)
Total liability to MM  $4,643 

 

12
 

 

The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of an intangible asset know-how of $1,728 and a liability to MM in the amount of $4,643. The know-how has a useful life of 10 years. The useful life of the intangible asset for amortization purposes was determined considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible asset adjusted as appropriate for the entity-specific factors, including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets.

 

Key inputs for the fair values valuation are summarized below.

SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION

 

      
Key Valuation Inputs  Jan 31st, 2024 
Discount rate   40%
Risk-free interest rate   4.4%
Average 5 years revenue growth   50%

 

The Company incurred transaction costs of approximately $50 during the three months ended March 31, 2024, which were included in general and administrative expenses in the condensed consolidated statements of operations.

 

The revenues and net loss of Octomera from January 1, 2024 until the reconsolidation date were $23 and $1,244 respectively.

 

Fair Value Assumptions Used in Accounting for Derivative Liabilities

 

ASC 815 requires assessing the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.

 

In January 29, 2024, in connection with the PPA study Octomera LLC the Company has recognize a liability to pay MM two components:

 

1. Royalties (based on revenues in years 2, 4 and 4 as of Closing and;

2. Earnout amount, which is dependent of a future trigger event- in case of an IPO or exit.

 

The Company classified these derivative liabilities as a Level 3 fair value measurement and used the Monte Carlo pricing model to calculate the fair value as of January 29, 2024 and March 31, 2024 $5,112.

 

Key inputs for the simulation are summarized below.

 

Key Valuation Inputs 

Jan 31st, 2024 and

March 31 2024

 
Standard Deviation   13.5%
Risk-free interest rate   4.4%
Possible trigger event examination   Year 10 
Average 5 years revenue growth   50%
Trigger events   30%
Revenues multiple   10 

 

* Based on a Monte Carlo simulation analysis of 30,000 iterations

 

Deconsolidation of Orgenesis Biotech Israel Limited (“OBI”)

 

On February 14, 2024, following a claim for payment of past salaries due by employees of OBI, a fully owned subsidiary of Octomera, the district court in Haifa, Israel, appointed a trustee to run the affairs of OBI with the intention of rehabilitating OBI to be able to operate and pay OBI’s creditors under an arrangement with them. As a result of this appointment, effective February 14, 2024, the Company no longer controls OBI and ceased to consolidate the results of OBI into its consolidated results. The Company recognized a loss as a result of the deconsolidation of $66 . The Company does not currently believe that rehabilitation is possible and has submitted a proposal to the trustee to purchase certain of OBI’s equipment, which has not yet been approved by the court.

 

The Company recorded $2,697 being what it owed to OBI on February 14, 2024 under Accounts payable related Parties on the balance sheet of March 31, 2024.

 

The following table summarizes the deconsolidate assets and liabilities as of February 14, 2024:

 

      
Total assets acquired:     
Cash and cash equivalents  $4 
Property, plants and equipment, net   2,884 
Other Assets   1,422 
Total assets  $4,310 
      
Total liabilities assumed:  $4,244 
Total Net Assets deconsolidated  $66 
Loss from deconsolidation of OBI  $66 

 

NOTE 5 – EQUITY

 

Private Placement Offering

 

On March 3, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 2,272,719 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”), all such Warrants exercisable immediately and expiring five years from their date of issuance. The Company received gross proceeds of approximately $2.3 million before deducting related offering expenses. The Offering closed on March 5, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

Shares and warrants issued to advisors

 

On January 25, 2024, the Company issued, pursuant to the MM acquisition, 164,000 shares of the Company’s common stock, par value $0.0001 per share, in full consideration for a debt owed by Octomera to said advisor.

 

On March 7, 2024 (the “Effective Date”), the Company entered into a strategic advisor agreement with an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months, subject to earlier termination or extension for an additional 12 months at the request of the advisor. In consideration for such services, the Company agreed to (i) pay such individual $75 per quarter, (ii) issue 500,000 shares to such individual on the 90th day after the Effective Date if such individual is providing services to the Company at such time and (iii) issue to such individual warrants to purchase up to 500,000 shares of Common Stock at an exercise price of $1.03, which vests one third on the Effective Date, one third on the 90th day after the Effective Date and one third on the 180th day after the Effective Date.

 

13
 

 

NOTE 6 – CONVERTIBLE LOANS

 

The tables below summarize the Company’s outstanding convertible loans as of March 31, 2024 and December 31, 2023 respectively:

 

Principal Amount   Issuance
Date		   Current
Interest
   Current
Maturity		   Current
Conversion
Price of
loan into		    
at Issuance   (Year)   Rate %   (Year)   equity $   Note 
Convertible Loans Outstanding as of March 31, 2024 
$750    2018    10%   2026    2.50      
 1,500    2019    10%   2026    2.50      
 100    2019    8%   *2024   2.50      
 5,000    2019    10%   2026    2.50      
 100    2020    8%   *2024   7.00      
 5,000    2022    10%   2026    2.50      
 1,150    2022    6%   *2023   4.50      
 5,000    2023    8%   2026    2.46      
 735    2023    8%   2026    0.85    6a
 325    2024    8%   2024    0.85    6b
 75    2024    10%   2024    1.03      
$19,735                          

 

*Was not repaid by March 31, 2024.

 

Principal     Issuance
Date		     Current
Interest
     Current
Maturity		     Current
Conversion
Price of
loan into 		     
Amount     (Year)     Rate %     (Year)     equity $     Note  
Convertible Loans Outstanding as of December 31, 2023  
$ 750       2018       10 %     2026       2.50          
  1,500       2019       10 %     2026       2.50          
  100       2019       8 %     2024       2.50          
  5,000       2019       10 %     2026       2.50          
  100       2020       8 %     2024       7.00          
  5,000       2022       10 %     2026       2.50          
  1,150       2022       6 %     **2023     4.50          
  5,000       2023       8 %     2026       2.46          
  735       2023       8 %     2024               6a
$ 19,335                                          

 

**Was not yet paid by December 31, 2023.

 

14
 

 

Additional notes related to changes in convertible loans terms that occurred in 2024

 

6a. In January 2024, the Company and Lender agreed to extend the maturity date of the loan amount to December 31, 2026. The Company awarded warrants to purchase 840,000 of the Company’s Common Stock at a price of $0.85 per share. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as an extinguishment.

 

6b. In January 2024, the Company and Lender agreed to extend the maturity date of a previously non-convertible loan amount to December 31, 2024. The Company awarded warrants to purchase 360,000 of the Company’s Common Stock at a price of $0.85 per share and granted Lender the right to convert any part of the Outstanding amount into Common Stock of the Company at the conversion rate of $0.85 per share. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as a modification.

 

Koligo convertible loan

 

On September 29, 2023, Koligo entered into a convertible loan agreement with Sai Traders (the “Lender”), pursuant to which the Lender agreed to loan the Borrower up to $25,000 (the “Sai Convertible Loan”). As of the date of this quarterly report on Form 10-Q, none of the Sai Convertible Loan was received by the Company .

 

NOTE 7 – STOCK-BASED COMPENSATION

 

a.Options Granted to Employees

 

The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2024 to March 31, 2024:

  

    No. of
Options
Granted		   Exercise
Price		   Vesting Period  Fair Value at
Grant
(in thousands)		   Expiration
Period		 
Employees    200,000   $0.5   Quarterly over a period of two years  $67    10 years 

 

The fair valuation of these option grants is based on the following assumptions:

 

   During the Period from
January 1, 2024 to
March 31, 2024		 
Value of one common share  $0.49 
Dividend yield   0%
Expected stock price volatility   79%
Risk free interest rate   3.86%
Expected term (years)   5.56 

 

NOTE 8 –LOANS

 

The table below summarizes the Company’s outstanding Long-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Principal
Amount		  Interest
Rate		   Year of
Maturity		   March 31,
2024		   December 31,
2023		 
(in thousands)  %       (in thousands) 
$ 2,600   10    2034   $2,696   $- 

 

15
 

 

See note 4.

 

The table below summarizes the Company’s outstanding short-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Currency   Interest
Rate		   March 31,
2024		   December 31,
2023		 
    %   (in thousands) 
USD    8   $263   $258 
USD    10    42    41 
USD    10    250    - 
USD    10    57    - 
USD    (*)8   (**)    331 
USD    10    -    20 
Euro    8    14    - 
         $626   $650 

 

(*)Weighted average interest.
(**)The terms of the loan were amended on January 1, 2024. Under the new terms the loan is convertible into Common shares. See note 6.

 

NOTE 9 – LOSS PER SHARE

 

The following table sets forth the calculation of basic and diluted loss per share for the period indicated:

 

  March 31,
2024		   March 31,
2023		 
 Three Months Ended 
  March 31,
2024		   March 31,
2023		 
   (in thousands, except per share data) 
Basic and diluted:           
Net loss attributable to Orgenesis Inc.   $9,765   $19,470 
Adjustment of redeemable non-controlling interest to redemption amount    -    3,671 
Net loss attributable to Orgenesis Inc. for loss per share   $9,765   $23,141 
Weighted average number of common shares outstanding    33,176,657    26,477,113 
Net loss per share   $0.29   $0.87 

 

For the three months ended March 31, 2024 and March 31, 2023, all outstanding convertible notes, options and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. Diluted loss per share does not include 11,513,836 shares underlying outstanding options and warrants and 8,270,398 shares upon conversion of convertible loans for the three months ended March 31, 2024, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include 8,620,224 shares underlying outstanding options and warrants and 6,987,879 shares upon conversion of convertible loans for the three months ended March 31, 2023, because the effect of their inclusion in the computation would be antidilutive.

 

16
 

 

NOTE 10 – REVENUES

 

Disaggregation of Revenue

 

The following table disaggregates the Company’s revenues by major revenue streams.

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue stream:          
Cell process development services and hospital services  $141   $142 
           
Total  $141   $142 

 

A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue earned:          
Customer A (United States)  $75   $65 
Customer B (United States)  $60   $65 

 

Contract Assets and Liabilities

 

Contract assets are mainly comprised of trade receivables net of allowance for credit losses, which includes amounts billed and currently due from customers.

 

The activity for trade receivables is comprised of:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $88   $36,183 
Reconsolidation of Octomera   82    - 
Additions   150    155 
Collections   (75)   (5,454)
Allowances for credit losses   -    (9,514)
Exchange rate differences   -    (22)
Balance as of end of period  $245   $21,348 

 

The activity for contract liabilities is comprised of:

SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES 

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $200   $70 
Reconsolidation of Octomera   110    - 
Deconsolidation of OBI   (60)   - 
Additions   10      
Realizations   (4)   36 
Balance as of end of period  $256   $106 

 

17
 

 

NOTE 11 – LEGAL PROCEEDINGS

 

On January 18, 2022, a complaint (the “Complaint”) was filed in the Tel Aviv District Court (the “Court”) against the Company, Orgenesis LTD (“the Israeli Subsidiary”), Prof. Sarah Ferber, Vered Caplan and Dr. Efrat Asa Kunik (collectively, the “defendants”) by plaintiffs the State of Israel, as the owner of Chaim Sheba Medical Center at Tel Hashomer (“Sheba”), and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (collectively, the “plaintiffs”). In the Complaint, the plaintiffs are seeking that the Court issue a declaratory remedy whereby the defendants are required to pay royalties to the plaintiffs at the rate of 7% of the sales and 24% of any and all revenues in consideration for sublicenses related to any product, service or process that contain know-how and technology of Sheba and any and all know-how and technology either developed or supervised by Prof. Ferber in the field of cell therapy, including in the category of the point-of-care platform and any and all services and products in relation to the defendants’ CDMO activity. In addition, the plaintiffs seek that the defendants provide financial statements and pay NIS 10,000 to the plaintiffs due to the royalty provisions of the license agreement, dated February 2, 2012, between the Israeli subsidiary and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (the “License Agreement”). The Complaint alleges that the Company and the Israeli subsidiary used know-how and technology of Sheba and know-how and technology either developed or supervised by Prof. Ferber while employed by Sheba in the field of cell therapy, including in the category of the point-of-care platform and the services and products in relation to the defendants’ CDMO activity and are entitled to the payment of certain royalties pursuant to the terms of the License Agreement. The defendants have filed their statements of defense responding to this Complaint, the Plaintiffs filed their response and the parties are now conducting disclosure proceedings in accordance with Israel’s civil regulations. In accordance with Israel’s civil regulations, the parties considered alternative means to resolve at least some of the disputes and have consented to engage the services of a mutually agreeable mediator. The mediation is currently taking place. According to management’s estimation, since a loss is not considered probable, no provision was made in the financial statements.

 

On September 6, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, Octomera LLC, Orgenesis Biotech Israel LTD, Theracell Laboratories Private Company and Vered Caplan (collectively, the “defendants”) by Ehud Almon (Plaintiff) for certain finders’ fees and / or royalties related to sales made by an Octomera subsidiary to a Greek entity in the amount of $896K and also for other means of compensation. The Israeli Subsidiary and Vered Caplan filed their statement of defense on January 28, 2024 claiming, inter alia, that the Plaintiff did not serve as a broker, but rather served as the Greek entity’s representative and as such he is not entitled to compensation of any kind from the defendants. It was also clarified that the defendants did not enter into a finder’s agreement with the Plaintiff. Additionally, The Israeli subsidiary and Vered Caplan claimed that the Plaintiff concealed material information from the court, including the signed partnership agreement between the Greek entity’s owner and the Plaintiff, as well as certain criminal charges brought against him in Greece. On February 22, 2024, the Plaintiff filed a request for service of process to deliver the Claim to the Company and the other defendants incorporated outside of Israel. This request was denied on the same day. An appeal filed by the Plaintiff on the aforementioned decision was denied. As such, the Claim has yet to be legally delivered to the defendants incorporated outside of Israel (including the Company). According to management’s estimation, since the likelihood of the Plaintiff winning the case is less than fifty percent, no provision was made in the financial statements.

 

On October 26, 2023, a complaint was filed in the Supreme Court of the State of New York by plaintiffs Southern Israel Bridging Fund Two LP and Mr. Amir Hasidim, against the Company, seeking the payment of $1,150 together with interest in the amount of 6%. In the Complaint plaintiff’s alleged the amount provided to the Company was based on a Convertible Loan Agreement dated May 17, 2022, which provided for a loan amount of $5,000. Notwithstanding the Convertible Loan Agreement, on August 21, 2023, Company sent the plaintiffs an offset notice in light of the plaintiffs’ breach of obligations under the Convertible Loan Agreement and the damages caused to the Company as a result of said breach. The Company counter sued as well, seeking damages for Plaintiff’s breach of contract, fraud and harassment. Accordingly, the Company disputes whether it owes plaintiffs the amount sought in the Complaint.

 

On November 1, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, and Vered Caplan (collectively, the “Defendants”) by Fidelity Venture Capital Ltd. and Dror Atzmon (together – the “Plaintiffs”). The claim is based on two agreements the Company entered into with the Plaintiffs on November 2, 2016: (a) an unsecured convertible note agreements for an aggregate amount of NIS 1 million ($280 thousand). The loan bears a monthly interest rate of 2% and will mature on May 1, 2017, unless converted earlier and (b) a consultation agreement which awarded the Plaintiffs 800 thousand warrants. The exercise price of the warrants and conversion price were fixed at $0.52 per share (pre-reverse stock split implemented by the Company in November 2017). On April 27, 2017, and November 2, 2017, the Company entered into extension agreements through November 2, 2017 and May 2, 2018, respectively, in connection with the convertible note agreements. In March 2018, the Plaintiffs submitted a notice of their intention to convert into shares the Company’s common stock, the principal amount of the loan, and accrued interest of approximately $383 thousand outstanding. In addition, the Plaintiffs exercised all the warrants awarded in the consultation agreement. In light of the reverse stock split which took place in November 2017, the Company disagreed with the plaintiffs’ calculations regarding the number of issuable shares of Common Stock. The Company responded to the notice and rejected these contentions in their entirety. In April 2018, the Company terminated the agreements based on several claims, including mistake, intentional misrepresentation and bad faith. Therefore, the Company deposited the shares in total amount of 107,985 issued under those agreements and the principal amount and accrued interest of the loan in an escrow account. The deposit of the principal amount and accrued interest presented as restricted cash in the balance sheet as of December 31, 2023. Based on the calculation difference, in their Claim, the Plaintiffs request damages in the amount of NIS 40.14M, and the issuance of 11,869,600 shares of the Company. The Defendants filed their statement of defense on April 15, 2024, in which they raised, among others, the aforementioned claims and additional procedural and substantial claims, including laches. The Claim is scheduled for pretrial which will take place on October 31, 2024. According to management’s estimation, since the likelihood of the Plaintiffs winning the case is less than fifty percent, no provision was made in the financial statements.

 

Except as described above, the Company is not involved in any pending material legal proceedings.

 

18
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly Report, as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024. Certain statements made in this discussion are “forward-looking statements” within the meaning of 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Other factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

 

Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company,” “our Company” or “Orgenesis” refer to Orgenesis Inc., a Nevada corporation, and our majority or wholly-owned subsidiaries, Orgenesis Korea Co. Ltd. (the “Korean Subsidiary”); Orgenesis Belgium SRL, a Belgian-based entity (the “Belgian Subsidiary”); Orgenesis Services SRL, a Belgian-based entity (“Orgenesis Services SRL”); Orgenesis Ltd., an Israeli corporation (the “Israeli Subsidiary”); Orgenesis Maryland LLC, a Maryland limited liability company (the “Maryland Subsidiary”); Orgenesis Switzerland Sarl, (the “Swiss Subsidiary”); Orgenesis Biotech Israel Ltd. (“OBI”); Koligo Therapeutics Inc., a Kentucky corporation (“Koligo”); Tissue Genesis International LLC (“Tissue Genesis”) a Texas limited liability company; Orgenesis Germany GmbH (the “German Subsidiary”); Orgenesis CA, Inc. (the “California Subsidiary”); Mida Biotech BV (the “Dutch Subsidiary”); Orgenesis Australia PTY LTD (the “Australian Subsidiary”); Orgenesis Italy SRL (the “Italian Subsidiary”), Theracell Laboratories Private Company (“Theracell Laboratories”), a Greek company, Orgenesis Austria GmbH, an Austrian company; ORGS POC CA Inc, a Delaware company; and Octomera LLC, a Delaware limited liability company.

 

19
 

 

Business Overview

 

We are a global biotech company working to unlock the potential of CGTs in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products, or ATMPs. We are mostly focused on autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care, or POCare. This approach has the potential to overcome the limitations of traditional commercial manufacturing methods that do not translate well to commercial production of advanced therapies due to their cost prohibitive nature and complex logistics to deliver such treatments to patients (ultimately limiting the number of patients that can have access to, or can afford, these therapies).

 

To achieve these goals, we have developed a collaborative worldwide network of research institutes and hospitals who are engaged in the POCare model, or our POCare Network, and a pipeline of licensed POCare advanced therapies that can be processed and produced under such closed and automated processes and systems, or POCare Therapies. We are developing our pipeline of advanced therapies and with the goal of entering into out-licensing agreements for these therapies.

 

We have two operating segments – our POCare Services and our therapeutic development operations. We conduct our core POCare operations through our wholly-owned subsidiary Octomera which was a consolidated subsidiary of ours until June 30, 2023 and which became a consolidated subsidiary again effective January 29, 2024 when we entered into a unit purchase agreement pursuant to which we acquired all of the equity interests of Octomera LLC.

 

Octomera segment (mainly POCare Services)

 

The POCare Services that we and our affiliated entities perform include:

 

● Process development of therapies, process adaptation, and optimization inside the OMPULs, or “OMPULization”;
● Adaptation of automation and closed systems to serviced therapies;
● Incorporation of the serviced therapies compliant with GMP in the OMPULs that we designed and built;
● Tech transfers and training of local teams for the serviced therapies at the POCare Centers;
● Processing and supply of the therapies and required supplies under GMP conditions within our POCare Network, including required quality control testing;

 

The POCare Services are performed in decentralized hubs that provide harmonized and standardized services to customers, or POCare Centers. We are working to expand the number and scope of our POCare Centers. We believe that this provides an efficient and scalable pathway for CGT therapies to reach patients rapidly at lowered costs. Our POCare Services are designed to allow rapid capacity expansion while integrating new technologies to bring together patients, doctors and industry partners with a goal of achieving standardized, regulated clinical development and production of therapies.

 

Therapies segment (POCare Therapies)

 

While the biotech industry struggles to determine the best way to lower cost of goods and enable CGTs to scale, the scientific community continues to advance and push the development of such therapies to new heights. Clinicians and researchers are excited by all the new tools (new generations of industrial viruses, big data analysis for genetic and molecular data) and technologies (CRISPR, mRNA, etc.) available (often at a low cost) to perform advanced research in small labs. Most new therapies arise from academic institutes or small spinouts from such institutes. Though such research efforts may manage to progress into a clinical stage, utilizing lab based or hospital-based production solutions they lack the resources to continue the development of such drugs to market approval.

 

Historically, drug/therapeutic development has required investments of hundreds of millions of dollars to be successful. One significant cause for the high cost is that each therapy often requires unique production facilities and technologies that must be subcontracted or built. Further the cost of production during the clinical stage is extremely expensive, and the cost of the clinical trial itself is very high. Given these financial restraints, researchers and institutes hope to out- license their therapeutic products to large biotech companies or spin-out new companies and raise large fundraising rounds. However, in many cases they lack the resources and the capability to de-risk their therapeutic candidates enough to be attractive for such fundings or partnership.

 

20
 

 

Our POCare Network is an alternative to the traditional pathway of drug development. Orgenesis works closely with many such institutes and is in close contact with researchers in the field. The partnerships with leading hospitals and research institutes gives us a deep insight as to the developments in the field, as well as the market potential, the regulatory landscape and optimal clinical pathway to get these products to market.

 

The ability to produce these products at low cost, allows for an expedited development process and the partnership with hospitals around the globe enables joint grants and lower cost of clinical development. The POCare Therapies division reviews many therapies available for out licensing and select the ones which they believe have the highest market potential, can benefit the most from a point of care approach and have the highest chance of clinical success. It assesses such issues by utilizing its global POCare Network and its internal knowhow accumulated over a decade of involvement in the field.

 

The goal of this in-licensing is to quickly adapt such therapies to a point-of- care approach through regional partnerships, and to out-license the products for market approval in non-core geographical regions. This approach lowers overall development cost, through minimizing pre-clinical development costs incurred by us, and through receiving of the additional funding from grants and/or payments by regional partners.

  

Significant developments during the quarter ended March 31, 2024

 

On January 29, 2024 (“Closing” or “Transaction date” or “Reconsolidation date”), we and Metalmark Capital Partners (“MM”) entered into a Unit Purchase Agreement (“MM UPA”), pursuant to which we acquired all of the preferred units of Octomera previously owned by MM and effective that date, reconsolidated Octomera into our accounts (“MM acquisition”). As consideration for the MM Acquisition, we and MM agreed to the following consideration:

 

  ● Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three-year period 2025-2027, then we will pay 5% of Net Revenues to MM pursuant to the MM UPA.
     
  ● Milestone Payments: If we sell Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, the Company shall pay Seller 5% of the net proceeds.

 

Pursuant to the acquisition, MM’s designated members of the Board of Managers of Octomera resigned and the we amended the Second Amended and Restated Limited Liability Company Agreement of Octomera to be a single member agreement to reflect the transactions contemplated by the UPA so that MM shall no longer (i) be a party to such agreement, (ii) have a right to appoint members of the board of managers of Octomera or (iii) be a member of Octomera.

 

In addition, the outstanding indebtedness payable from us to MM pursuant to an aggregate of 10 secured promissory notes (the “Notes”) with a collective original principal amount of $2,600, were amended to, among other things, extend the maturity thereof to January 29, 2034 and to terminate the security interest granted by us in favor of MM that secured the obligations under the Notes.

 

On February 14, 2024, following a claim for payment of past salaries due, by employees of OBI, the district court in Haifa, Israel, appointed a trustee to run the affairs of OBI with the intention of rehabilitating OBI to be able to operate and pay OBI’s creditors under an arrangement with them. As a result of this appointment, effective February 14, 2024, we no longer control OBI and ceased to consolidate the results of OBI into our consolidated results. We recognized a loss as a result of the deconsolidation of $285. We do not currently believe that rehabilitation is possible and have submitted a proposal to the trustee to purchase certain of OBI’s equipment, which has not yet been approved by the court.

 

On March 3, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 2,272,719 shares of our common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”). We received gross proceeds of approximately $2.3 million before deducting related offering expenses. The Offering closed on March 5, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

21
 

 

Results of Operations

 

Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

 

The following table presents our results of operations for the three months ended March 31, 2024 and 2023:

 

    Three Months Ended  
    March 31,
2024		     March 31,
2023 ()		  
    (in thousands)  
Revenues   $ 141     $ 142  
Cost of revenues     492       2,722  
Gross profit     (351 )     (2,580 )
Cost of development services and research and development expenses     2,370       3,281  
Amortization of intangible assets     153       207  
Selling, general and administrative expenses included credit losses of $3,225 for the three months ended March 31, 2024 ($9,489 for the three months ended March 31, 2023)     6,056       13,528  
Operating loss     8,930       19,596  
Other income, net     -       (2 )
Loss from extinguishment in connection with convertible loan     141       283  
Credit loss on Convertible loan receivable     -       2,688  
Financial expenses, net     852       681  
Share in net loss of associated entities     -       2  
Loss from deconsolidation     66       -  
Loss before income taxes     9,989       23,248  
Tax expense     16       129  
Net loss   $ 10,005     $ 23,377  

 

Revenues

 

Our revenues for the three months ended March 31, 2024 were $141, as compared to $142 for the three months ended March 31, 2023, representing a decrease of 1%. The revenues were from hospital services provided by Kologo.

 

Expenses

 

Cost of revenues

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Salaries and related expenses  $252   $1,113 
Stock-based compensation   1    2 
Professional fees and consulting services   19    807 
Raw materials   13    228 
Depreciation expenses, net   115    236 
Other expenses   92    336 
Total  $492   $2,722 

 

22
 

 

Cost of revenues for the three months ended March 31, 2024 were $492, as compared to $2,722 for the three months ended March 31, 2023, representing a decrease of 82%. The decrease was mainly attributable to reduced Octomera segment cost of revenues, as well as our accounting for Octomera segment cost of revenues from the Reconsolidation date compared to accounting for the full three months of cost of revenues in the three months ended March 31, 2023, where Octomera was a consolidated subsidiary. In addition, there was a decline in salaries and related expenses and professional fees and consulting services in the Octomera segment as a result of reduced activities in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 as a result of reduced activities especially at OBI.

 

Cost of development services and research and development expenses

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Salaries and related expenses  $1,365   $1,628 
Stock-based compensation   36    84 
Professional fees and consulting services   467    796 
Lab expenses   67    176 
Depreciation expenses, net   103    124 
Other research and development expenses   405    554 
Less – grant   (73)   (81)
Total  $2,370   $3,281 

 

Cost of development services and research and development for the three months ended March 31, 2024 were $2,370, as compared to $3,281 for the three months ended March 31, 2023, representing a decrease of 28%.

 

The decrease is mainly attributable to our accounting for Octomera segment cost of development services and research and development expenses from the Reconsolidation date compared to accounting for the full three months in the three months ended March 31, 2023, where Octomera was a consolidated subsidiary. In addition, salaries and related expenses, professional fees and lab expenses in the Octomera segment in the three months ended March 31, 2024 declined as compared to the three months ended March 31, 2023 as a result of reduced activities especially at OBI. Other research and development expenses in the Therapies segment declined in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, as a result of reduced activities.

 

Selling, General and Administrative Expenses

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Salaries and related expenses  $706   $1,173 
Stock-based compensation   49    73 
Accounting and legal fees   865    1,550 
Professional fees   523    361 
Rent and related expenses   56    66 
Business development   164    210 
Depreciation expenses, net   10    11 
Other general and administrative expenses including credit losses of $3,225 as of March 31, 2024 ($9,489 as of March 31, 2023)   3,683    10,084 
Total  $6,056   $13,528 

 

23
 

 

Selling, general and administrative expenses for the three months ended March 31, 2024 were $6,056, as compared to $13,528 for the three months ended March 31, 2023, representing a decrease of 55%. The decrease was mainly attributable to 1) accounting for Octomera segment selling, general and administrative expenses from the Reconsolidation date compared to accounting for the full three months in the three months ended March 31, 2023, where Octomera was a consolidated subsidiary; 2) reduced salaries and related expenses in the Octomera segment as a result of reduced activities; 3) a decline in accounting and legal fees in the three months ended March 31, 2024 as compared to in the three months ended March 31, 2023 where we undertook certain financing transactions; 4) credit losses reported in the three months ended March 31, 2024 of $3,225 compared to credit losses of $9,489 in the three months ended March 31, 2023.

 

Credit Loss on Convertible loan receivable.

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Credit loss on convertible loan receivable  $-   $2,688 

 

The credit loss for the three months ended March 31, 2024 was $0 compared to $2,688 for the three months ended March 31, 2023. This was attributable to a provision created for a credit loss on a loan in the three months ended March 31, 2023.

 

Financial Expenses, net

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Interest expense on convertible loans and loans  $802   $532 
Foreign exchange loss, net   49    148 
Other expense   1    1 
Total  $852   $681 

 

Financial expenses, net for the three months ended March 31, 2024 were $852, as compared to $681 for the three months ended March 31, 2023, representing an increase of 25%. The increase was mainly attributable to increased interest rates incurred on convertible loans, and more convertible loan financing raised.

 

24
 

 

Working Capital

 

   As of 
   March 31,
2024		   December 31,
2023		 
   (in thousands) 
Current assets  $1,956   $4,076 
Current liabilities   29,031    16,407 
Working capital  $(27,075)  $(12,331)

 

Current assets decreased by $2,120 between December 31, 2023 and March 31, 2024. The decrease was mainly attributable to a decline in cash and cash equivalents of and prepaid expenses and other receivables.

 

Current liabilities increased by $12,624 between December 31, 2023 and March 31, 2024 The increase was mainly attributable to the reconsolidation of Octomera which included an increase in accounts payable, accrued expenses and other payables, employees and related payables, and advance payments on account of grants, as well as an increase in a loan to a related party.

 

Liquidity and Financial Condition

 

   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Net loss  $(10,005)  $(23,377)
           
Net cash used in operating activities   (4,441)   (7,240)
Net cash used in investing activities   (68)   (1,307)
Net cash provided by financing activities   3,614    5,910 
           
Decrease in cash and cash equivalents  $(895)  $(2,637)

 

During the quarter ended March 31, 2024, we funded our operations from operations as well as from proceeds raised from equity and debt offerings.

 

Net cash used in operating activities for the three months ended March 31, 2024 was approximately $4,441, as compared to net cash used in operating activities of approximately $7,240 for the three months ended March 31, 2023. The decline was mainly as a result of:

 

● a net loss of $10,005 for the three months ended March 31, 2024 compared to a net loss of $23,377 for the three months ended March 31, 2023;
● non cash items incurred in the three months ended March 31, 2023 that were not incurred in the three months ended March 31, 2024

 

Net cash used in investing activities for the three months ended March 31, 2024 was approximately $68, as compared to net cash used in investing activities of approximately $1,307 for the three months ended March 31, 2023. The change was mainly as a result of a decline in purchases of property and equipment.

 

Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $3,614, as compared to net cash provided by financing activities of approximately $5,910 for the three months ended March 31, 2023. The decrease was mainly attributable to proceeds raised from equity investments in the amount of $2,360 in the three months ended March 31, 2024 as compared to $3,441 in the three months ended March 31, 2023. In addition, in the three months ended March 31, 2024, we raised convertible loans in the amount of $75 compared to $5,485 in the three months ended March 31, 2023. These decreases were offset by issuance of loans of $307 and a receipt of $750 from Germfree received in the three months ended March 31, 2024 ($0 received in the three months ended March 31, 2023).

 

25
 

 

Liquidity & Capital Resources Outlook

 

Through March 2024, we had an accumulated deficit of $186,386 and for the three months ended March 31, 2024 incurred negative operating cashflows of $4,441. Our activities have been funded by generating revenue, proceeds from convertible loan agreements, and through offerings of our securities. There is no assurance that our business will generate sustainable positive cash flows to fund our operations.

 

Our common stock is listed for trading on the Nasdaq Capital Market. On September 27, 2023, we received a notice from the Listing Qualifications Staff (“Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the bid price of our common stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with Listing Rule 5810(c)(3)(A), we were provided 180 calendar days, or until March 25, 2024, to regain compliance with the Bid Price Rule. On March 26, 2024, the Staff determined that we qualified for a second 180-day compliance period. On April 17, 2024, we received a notice (the “Notice”) from the Staff in which it determined that we are no longer eligible for the second 180-day compliance period. In accordance with Listing Rule 5810(c)(2)(A), the Staff stated that it cannot accept a plan to regain compliance and that as such, this matter is an additional and separate basis for delisting our securities from The Nasdaq Stock Market. The Staff stated that our securities would be delisted from The Nasdaq Capital Market unless we timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”) to address the deficiencies and present a plan to regain compliance. As permitted by the Notice, we timely requested a hearing before the Panel, which request stayed any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel. Our common stock will remain listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process. Failure to meet such Nasdaq continuing listing requirements and remain listed on Nasdaq will make it more difficult to raise additional capital.

 

On April 5, 2024, we entered into an Asset Purchase and Strategic Collaboration Agreement (the “Purchase Agreement”) with Griffin Fund 3 BIDCO, Inc., (“Germfree”), for the sale by us of five OMPULs to Germfree, which will be incorporated into Germfree’s lease fleet and leased back to us or third-party lessees designated by the us. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework (“OQMSF”) and related intellectual property rights, Germfree will pay an aggregate purchase price of $8,340 subject to any final adjustment through the verification mechanism as set forth in the Purchase Agreement. Pursuant to the Agreement, Germfree paid us $750 on February 27, 2024 and $5,538 during April 2024.

 

On May 10, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement, 150,000 shares of the our common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”). We received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

26
 

 

The estimation and execution uncertainty regarding our future cash flows and management’s judgments and assumptions in estimating these cash flows is a significant estimate. Those assumptions include reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash.

 

Due to our financial position, we will need to seek additional financing, refinance or amend the terms of existing convertible loans or postpone expenses that are not based on firm commitments In order to fund our operations until such time that we can generate sustainable positive cash flows, we will need to raise additional funds. As of the date of this report, we assessed our financial condition and concluded that based on our current and projected cash resources and commitments, as well as other factors mentioned above, there is a substantial doubt about our ability to continue as a going concern. We are planning to raise additional capital to continue our operations and to repay our outstanding loans when they become due, as well as to explore additional avenues to increase revenues and reduce or delay expenditures. There can be no assurance that we will be able to raise additional capital on acceptable terms, or at all.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

 

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, the design and operation of our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting.

 

Management determined that we have the following material weakness in our internal control over financial reporting as of December 31, 2023:

 

We did not perform appropriate analyses related to our internal control over financial reporting in the accounting for whether it is probable we will collect substantially all the consideration to which we are entitled for revenue services provided, as well as our estimated credit losses. As of March 31, 2024, such material weakness has not been remediated.

 

27
 

 

Remediation Activities

 

Management’s remediation activities, which have already commenced and will continue during 2024, include the design of enhanced controls that include a thorough credit assessment of all new customers, analysis of payment history for existing customers and its impact related to the accounting for revenues, as well as an additional control designed to calculate the expected credit loss on the balances when there is an indication that a customer may not be pay the full receivable amount. These controls are already designed, however, management will need a number of periods in order to ensure effectiveness of such control.

 

Changes in Internal Control Over Financial Reporting

 

Except as set forth above, there have been no changes in our internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Information regarding legal proceedings is available in Note 11 to the condensed consolidated financial statements in this Report.

 

Except as described above, we are not involved in any pending material legal proceedings.

 

ITEM 1A. RISK FACTORS

 

An investment in the Company’s Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 15, 2024, in addition to other information contained in our reports and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. Except as set forth below, there have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2023. The Company’s business, operating results and financial condition could be adversely affected due to any of those risks.

 

28
 

 

We may be unsuccessful in raising the capital necessary to address our going concern issues and to comply with the Nasdaq stockholders’ equity requirements, or if we are successful, it may be on terms that are highly dilutive to existing stockholders.

 

Historically, we funded our operations by raising capital from external sources, including through the sale of common stock and convertible loans. We are currently facing significant challenges to our ability to raise significant amounts of capital through the sale of common stock, including the following factors:

 

● in general, it is difficult for development stage companies to raise capital under current market conditions, especially those with early stage programs like ours;
● the perception that we may be unable to continue as a going concern may impede our ability to attract further equity investment;
● our common stock has been trading below $1.00 per share since August 2023 and we may not regain compliance with the bid price and stockholders’ equity requirements for the Nasdaq Capital Market and could be delisted by the Staff following our Hearing. The potential delisting of our common stock from Nasdaq could adversely affect our ability to raise additional capital through the public or private sale of equity securities; and
● we are currently subject to the “baby shelf” limitations on our potential use of our shelf registration statement, which limits such use to an offering size of no more than one third of our public float.

 

Given these factors, there can be no assurances we will be successful at raising sufficient capital to address our going concern issues or the Nasdaq stockholders’ equity requirements. However, if we are successful, it may be on terms that are very dilutive to existing stockholders.

 

A delisting of our common stock from Nasdaq could adversely affect our ability to raise additional capital through the public or private sale of equity securities and for investors to dispose of, or obtain accurate quotations as to the market value of, our common stock.

 

If our common stock is ultimately delisted by Nasdaq, our common stock may be eligible to trade on the OTC Pink Market or another over-the-counter market. Any such alternative would likely result in it being more difficult for us to raise additional capital through the public or private sale of equity securities and for investors to dispose of, or obtain accurate quotations as to the market value of, our common stock. In addition, there can be no assurance that our common stock would be eligible for trading on any such alternative exchange or markets.

 

Unless our common stock is listed on a national securities exchange, such as the Nasdaq Capital Market, our common stock may also be subject to the regulations regarding trading in “penny stocks,” which are those securities trading for less than $5.00 per share, and that are not otherwise exempted from the definition of a penny stock under other exemptions provided for in the applicable regulations. The following is a list of the general restrictions on the sale of penny stocks:

 

● Before the sale of penny stock by a broker-dealer to a new purchaser, the broker-dealer must determine whether the purchaser is suitable to invest in penny stocks. To make that determination, a broker-dealer must obtain, from a prospective investor, information regarding the purchaser’s financial condition, investment experience, and objectives. Subsequently, the broker-dealer must deliver to the purchaser a written statement setting forth the basis of the suitability finding and obtain the purchaser’s signature on such statement.
● A broker-dealer must obtain from the purchaser an agreement to purchase the securities. This agreement must be obtained for every purchase until the purchaser becomes an “established customer.”

 

29
 

 

● The Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires that before effecting any transaction in any penny stock, a broker-dealer must provide the purchaser with a “risk disclosure document” that contains, among other things, a description of the penny stock market and how it functions, and the risks associated with such investment. These disclosure rules are applicable to both purchases and sales by investors.
● A dealer that sells penny stock must send to the purchaser, within 10 days after the end of each calendar month, a written account statement including prescribed information relating to the security.

 

These requirements can severely limit the liquidity of securities in the secondary market because fewer brokers or dealers are likely to be willing to undertake these compliance activities. If our common stock is not listed on a national securities exchange, the rules and restrictions regarding penny stock transactions may limit an investor’s ability to sell to a third party and our trading activity in the secondary market may be reduced.

 

We will likely seek to effect a reverse stock split in order to address the $1.00 minimum bid price requirement under Nasdaq rules. In the event a reverse stock split is implemented, we cannot predict the effect that such reverse stock split would have on the market price for shares of our common stock, and the history of similar reverse stock splits for companies in like circumstances has varied. Some investors may have a negative view of a reverse stock split. Even if such reverse stock split were to have a positive effect on the market price for shares of our common stock, performance of our business and financial results, general economic conditions and the market perception of our business, and other adverse factors which may not be in our control could lead to a decrease in the price of our common stock following such reverse stock split.

 

We conduct certain of our operations in Israel. Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may affect certain of our operations.

 

Because we conduct certain operations in the State of Israel, some of our business and operations may be affected by economic, political, geopolitical and military conditions in Israel. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Moreover, the clash between Israel and Hezbollah in Lebanon, may escalate in the future into a greater regional conflict. The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s economic implications on the Company’s business and operations and on Israel’s economy in general.

 

Any hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and its trading partners could adversely affect certain of our operations and results of operations and could make it more difficult for us to raise capital. The conflict in Israel could also result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. There have been travel advisories imposed relating to travel to Israel, and restriction on travel, or delays and disruptions as related to imports and exports may be imposed in the future. Additionally, certain members of our management and employees are located and reside in Israel. Shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict may temporarily disrupt our management and employees’ ability to effectively perform their daily tasks.

 

The Israel Defense Forces (the “IDF”), the national military of Israel, is a conscripted military service, subject to certain exceptions. Certain of our R&D and finance personnel live in Israel. Certain of our employees are subject to military service in the IDF and have been called to serve, and additional employees may be called to serve in the future. It is possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, for example, may have unintended negative effects and adversely impact our results of operations, liquidity or cash flows. Additionally, the absence of employees of our Israeli suppliers and service providers due to their military service in the current or future wars or other armed conflicts may disrupt their operations, which in turn may adversely affect our ability to deliver or provide products and services to customers.

 

30
 

 

The hostilities with Hamas, Hezbollah and other organizations and countries have included and may include terror, missile and drone attacks. In the event that any of our facilities, including back-up information technology systems located in Israel, are damaged as a result of hostile actions, or hostilities otherwise disrupt our ongoing operations, our ability to deliver or provide products and services in a timely manner to meet our contractual obligations towards customers and vendors could be adversely affected. Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

 

As of the date of this Quarterly Report, our operations have not been directly negatively affected by the ongoing hostilities in the region. As a result, as of the date of this Quarterly Report, our ability to deliver or provide products and services to our customers has not been materially affected. We cannot currently assess how the ongoing hostilities will affect our business conditions and harm our results of operations in the future, due to the factors and risks discussed above.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On January 25, 2024, the Company issued to an advisor in connection with the MM acquisition 164,000 shares of the Company’s common stock in full consideration for a debt owed by Octomera to such advisor. These shares of common stock were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended.

 

On March 7, 2024 (the “Effective Date”), the Company entered into a strategic advisor agreement with an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months, subject to earlier termination or extension for an additional 12 months at the request of the advisor. In partial consideration for such services, the Company agreed to issue 500,000 shares to such individual on the 90th day after the Effective Date if such individual is providing services to the Company at such time and issue to such individual warrants to purchase up to 500,000 shares of Common Stock at an exercise price of $1.03, which vests one third on the Effective Date, one third on the 90th day after the Effective Date and one third on the 180th day after the Effective Date. These warrants and the shares of common stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended.

 

On March 26, 2024, in connection with the Company’s loan from an existing investor in the amount of $250, the Company issued warrants to purchase 242,719 shares of Common Stock at an exercise price of $1.03, which expire on March 25, 2029. These warrants and the shares of common stock underlying such warrants were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) promulgated under the Securities Act of 1933, as amended.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

31
 

 

Item 6. Exhibits

 

Exhibits required by Item 601 of Regulation S-K:

 

No.   Description
4.1   Form of Nir Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 5, 2024)
4.2   Form of Lukach Warrant (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 5, 2024)
4.3   Form of March 2024 Warrant with $1.50 exercise price (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 7, 2024)
4.4   Form of March 2024 Warrant with $2.00 exercise price (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 7, 2024)
10.1   Loan Extension Agreement, dated as of January 1, 2024, by and between the Company and Yehuda Nir (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 5, 2024)
10.2   Loan Extension Agreement, dated as of January 1, 2024, by and between the Company and Aharon Lukach (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 5, 2024)
10.3   Amendment Agreement, dated as of January 16, 2024, to Securities Purchase Agreement, dated November 8, 2023, by and among the Company and the November 2023 Investor (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 22, 2024)
10.4   Term Sheet, dated as of January 18, 2024, between the Company and MM OS Holdings L.P. (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 24, 2024)
10.5   Unit Purchase Agreement, dated as of January 29, 2024, between the Company and MM OS Holdings L.P. (incorporated by reference to an exhibit to our current report on Form 8-K, filed on January 31, 2024)
10.6   Binding Term Sheet, dated as of February 26, 2024, between Orgenesis Maryland LLC and Germfree Laboratories LLC (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 1, 2024)
10.7   Securities Purchase Agreement, dated March 3, 2024, by and among the Company and the Investors (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 7, 2024)
(31)   Rule 13a-14(a)/15d-14(a) Certification
31.1*   Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2*   Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
(32)   Section 1350 Certification
32.1*   Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2*   Certification Statement of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
(101)*   Interactive Data Files
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
     

*

  

Filed herewith.

 

32
 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

ORGENESIS INC.  
   
By:  
   
/s/ Vered Caplan  
Vered Caplan  
President & Chief Executive Officer  
(Principal Executive Officer)  
Date: May 20, 2024  
   
/s/ Victor Miller  
Victor Miller  
Chief Financial Officer, Treasurer and Secretary  
(Principal Financial Officer and Principal Accounting Officer)  
Date: May 20, 2024  

 

33

 

 

Exhibit 31.1

 

ORGENESIS INC.

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Vered Caplan, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Orgenesis Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
   
  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
   
  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

By:  
   
/s/ Vered Caplan  
Vered Caplan  
President & Chief Executive Officer  
(Principal Executive Officer)  
Date: May 20, 2024  

 

 

 

 

Exhibit 31.2

 

ORGENESIS INC.

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Victor Miller, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Orgenesis Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
   
  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
   
  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

By:  
   
/s/ Victor Miller  
Victor Miller  
Chief Financial Officer, Treasurer and Secretary  
(Principal Financial Officer and Principal Accounting Officer)  
Date: May 20, 2024  

 

 

 

 

Exhibit 32.1

 

ORGENESIS INC.

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, Vered Caplan, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(a)The Quarterly Report on Form 10-Q of Orgenesis Inc. for the quarter ended March 31, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(b)Information contained in the Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Orgenesis Inc.

 

By:  
   
/s/ Vered Caplan  
Vered Caplan  
President & Chief Executive Officer  
(Principal Executive Officer)  
Date: May 20, 2024  

 

 

 

 

 

Exhibit 32.2

 

ORGENESIS INC.

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, Victor Miller, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(a)The Quarterly Report on Form 10-Q of Orgenesis Inc. for the quarter ended March 31, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(b)Information contained in the Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Orgenesis Inc.

 

By:  
   
/s/ Victor Miller  
Victor Miller  
Chief Financial Officer, Treasurer and Secretary  
(Principal Financial Officer and Principal Accounting Officer)  
Date: May 20, 2024  

 

 

 

 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 20, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-38416  
Entity Registrant Name ORGENESIS INC.  
Entity Central Index Key 0001460602  
Entity Tax Identification Number 98-0583166  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 20271 Goldenrod Lane  
Entity Address, City or Town Germantown  
Entity Address, State or Province MD  
Entity Address, Postal Zip Code 20876  
City Area Code (480)  
Local Phone Number 659-6404  
Title of 12(b) Security Common Stock  
Trading Symbol ORGS  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   34,430,280
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
CURRENT ASSETS:    
Cash and cash equivalents $ 80 $ 837
Restricted cash 485 642
Accounts receivable, net of credit losses of $29,760 as of March 31, 2024 ($0 as of December 31, 2023) 245 88
Prepaid expenses and other receivables 1,112 2,017
Inventory 34 34
TOTAL CURRENT ASSETS 1,956 4,076
NON-CURRENT ASSETS:    
Deposits 255 38
Investments in associates 8 8
Property, plant and equipment, net 16,404 1,475
Intangible assets, net 8,950 7,375
Operating lease right-of-use assets 1,804 351
Goodwill 1,211 1,211
Other assets 332 18
TOTAL NON-CURRENT ASSETS 28,964 10,476
TOTAL ASSETS 30,920 14,552
CURRENT LIABILITIES:    
Accrued expenses and other payables 4,106 2,218
Income tax payable 786 740
Employees and related payables 1,529 1,079
Advance payments on account of grant 2,695 2,180
Short-term loans 626 650
Current maturities of finance leases 65 18
Current maturities of operating leases 476 216
Short-term and current maturities of convertible loans 2,344 2,670
TOTAL CURRENT LIABILITIES 29,031 16,407
LONG-TERM LIABILITIES:    
Non-current operating leases 1,274 96
Loans payable 2,696
Convertible loans 20,336 18,967
Retirement benefits obligation 98
Finance leases 14 4
Contingent liability (see note 4) 4,643
Other long-term liabilities 377 61
TOTAL LONG-TERM LIABILITIES 29,438 19,128
TOTAL LIABILITIES 58,469 35,535
CAPITAL DEFICIENCY:    
Common stock of $0.0001 par value: Authorized at March 31, 2024 and December 31, 2023: 145,833,334 shares; Issued at March 31, 2024 and December 31, 2023: 34,625,349 and 32,163,630 shares, respectively; Outstanding at March 31, 2024 and December 31, 2023: 34,338,782 and 31,877,063 shares, respectively. 4 3
Additional paid-in capital 159,650 156,837
Receipts on account of shares to be allotted 155
Accumulated other comprehensive income 126 65
Treasury stock, 286,567 shares as of March 31, 2024 and December 31, 2023 (1,266) (1,266)
Accumulated deficit (186,386) (176,622)
Equity attributable to Orgenesis Inc. (27,717) (20,983)
Non-controlling interest 168
TOTAL CAPITAL DEFICIENCY (27,549) (20,983)
TOTAL LIABILITIES AND CAPITAL DEFICIENCY 30,920 14,552
Related Party [Member]    
CURRENT ASSETS:    
Receivables from related parties 458
CURRENT LIABILITIES:    
Accounts payable 2,697 133
Other payable related parties 52
Nonrelated Party [Member]    
CURRENT LIABILITIES:    
Accounts payable $ 13,707 $ 6,451
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Allowance for credit losses $ 29,760 $ 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 145,833,334 145,833,334
Common stock, shares issued 34,625,349 32,163,630
Common stock, shares outstanding 34,338,782 31,877,063
Treasury stock, shares 286,567 286,567
v3.24.1.1.u2
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Revenue $ 141 $ 142
Cost of revenues 492 2,722
Gross loss (351) (2,580)
Cost of development services and research and development expenses 2,370 3,281
Amortization of intangible assets 153 207
Selling, general and administrative expenses including credit losses, net of $3,225 and $9,489 for the three months ended March 31, 2024 and 2023 respectively 6,056 13,528
Operating loss 8,930 19,596
Loss from deconsolidation 66
Other income, net (2)
Loss from extinguishment in connection with convertible loan 141 283
Credit loss on convertible loan receivable 2,688
Financial expenses, net 852 681
Share in net loss of associated companies 2
Loss before income taxes 9,989 23,248
Tax expense 16 129
Net loss 10,005 23,377
Net income (loss) attributable to non-controlling interests (including redeemable) (240) (3,907)
Net loss attributable to Orgenesis Inc. $ 9,765 $ 19,470
Basic $ 0.29 $ 0.87
Diluted $ 0.29 $ 0.87
Weighted average number of shares used in computation of Basic and Diluted loss per share:    
Basic 33,176,657 26,477,113
Diluted 33,176,657 26,477,113
Comprehensive loss:    
Net loss $ 10,005 $ 23,377
Other Comprehensive loss (income) – Translation adjustment (61) 41
Comprehensive loss 9,944 23,418
Comprehensive loss attributed to non-controlling interests (240) (3,907)
Comprehensive loss attributed to Orgenesis Inc. $ 9,704 $ 19,511
v3.24.1.1.u2
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Credit losses expenses $ 3,225 $ 9,489
v3.24.1.1.u2
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Receipts On Account Of Shares To Be Alloted [Member]
AOCI Attributable to Parent [Member]
Treasury Stock, Common [Member]
Retained Earnings [Member]
Parent [Member]
Noncontrolling Interest [Member]
Total
Balance at Dec. 31, 2022 $ 3 $ 150,355 $ (270) $ (1,266) $ (121,261) $ 27,561 $ 1,510 $ 29,071
Balance, shares at Dec. 31, 2022 25,545,755                
Stock-based compensation 159 159 159
Issuance of Shares due to exercise of warrants [1]   [1] [1]
Issuance of Shares due to exercise of warrants, shares 368,420                
Extinguishment in connection with convertible loan restructuring 287   287 287
Comprehensive loss for the period (41) (19,470) (19,511) (236) (19,747)
Issuance of shares and warrants [1] 3,441 3,441 3,441
Issuance of shares and warrants, shares 1,947,368                
Issuance of warrants with respect to convertible loans 449   449 449
Adjustment to redemption value of redeemable non-controlling interest (3,671)   (3,671) (3,671)
Balance at Mar. 31, 2023 $ 3 151,020 (311) (1,266) (140,731) 8,715 1,274 9,989
Balance, shares at Mar. 31, 2023 27,861,543                
Balance at Dec. 31, 2023 $ 3 156,837 65 (1,266) (176,622) (20,983) (20,983)
Balance, shares at Dec. 31, 2023 31,877,063                
Stock-based compensation 86 86 86
Issuance of Shares and warrants to service providers [2] 226 226 226
Issuance of Shares and warrants to service providers, shares 164,000                
Issuance of shares and receipts on account of shares and warrants to be allotted [2] 2,341 155 2,496 2,496
Issuance of shares and receipts on account of shares and warrants to be allotted, shares 2,272,719                
NCI arising from Octomera reconsolidation 408 408
Issuance of Shares due to exercise of warrants [2] 19 20 20
Issuance of Shares due to exercise of warrants, shares 25,000                
Extinguishment in connection with convertible loan restructuring 141 141 141
Comprehensive loss for the period 61 (9,765) (9,704) (240) (9,944)
Balance at Mar. 31, 2024 $ 4 $ 159,650 $ 155 $ 126 $ (1,266) $ (186,386) $ (27,717) $ 168 $ (27,549)
Balance, shares at Mar. 31, 2024 34,338,782                
[1] Represents an amount lower than $1 thousand
[2] Represents an amount lower than $1 thousand
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (10,005) $ (23,377)
Adjustments required to reconcile net loss to net cash used in operating activities:    
Stock-based compensation 312 159
Loss from deconsolidation of OBI 66
Share in loss of associated entities, net 2
Depreciation and amortization expenses 381 578
Credit loss on Convertible Loan receivable 2,688
Credit loss related to OBI 2,049
Effect of exchange differences on inter-company balances (200) 179
Net changes in operating leases (8) (47)
Change in interest expenses accrued on loans and convertible loans 637 (274)
Loss from extinguishment in connection with convertible loan restructuring 141 283
Changes in operating assets and liabilities:    
Accounts receivable (74) 14,790
Prepaid expenses and other accounts receivable 1,438 (2,183)
Inventory (10)
Other assets (1) 2
Accounts payable 502 (59)
Accrued expenses and other payables 442 24
Employee and related payables (119) 2
Deferred taxes, net (2) 3
Net cash used in operating activities (4,441) (7,240)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (204) (1,285)
Cash acquired from acquisition of Octomera 139
Impact to cash resulting from deconsolidation of OBI (5)
Investment in long-term deposits 2 (22)
Net cash used in investing activities (68) (1,307)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of shares and warrants net of transaction costs 2,360 3,441
Proceeds from issuance of convertible loans 75 5,485
Proceeds from receipts on account of shares to be allotted 155
Repayment of convertible loans and convertible bonds (3,000)
Repayment of short and long-term debt (33) (16)
Proceeds from issuance of loans payable 307
Receipt from Germfree (see note 1 a) 750
Net cash provided by financing activities 3,614 5,910
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (895) (2,637)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (19) (1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 1,479 6,369
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD 565 3,731
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES    
Right-of-use assets obtained in exchange for new operation lease liabilities 753
Increase (decrease) in accounts payable related to purchase of property, plant and equipment 14
Extinguishment in connection with convertible loan restructuring 141 287
CASH PAID DURING THE YEAR FOR:    
Interest $ 785
v3.24.1.1.u2
DESCRIPTION OF BUSINESS
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
DESCRIPTION OF BUSINESS

NOTE 1 – DESCRIPTION OF BUSINESS

 

a.General

 

Orgenesis Inc. (the “Company”) is a global biotech company working to unlock the potential of Cell and Gene Therapies (“CGTs”) in an affordable and accessible format. CGTs can be centered on autologous (using the patient’s own cells) or allogenic (using master banked donor cells) and are part of a class of medicines referred to as advanced therapy medicinal products (“ATMPs”). The Company is mostly focused on the development of autologous therapies that can be manufactured under processes and systems that are developed for each therapy using a closed and automated approach that is validated for compliant production near the patient for treatment of the patient at the point of care (“POCare”).

 

As of the date of this report, the Company operates two segments:

 

  ● The “Octomera” segment which includes the Company’s POCare Services that are performed in decentralized hubs which provide harmonized and standardized services to customers (“POCare Centers”). The Company’s subsidiary, Octomera LLC, holds all of the Octomera segment activities.
  ● The “Therapies” segment which includes therapies related activities.

 

On January 29, 2024, the Company and Metalmark Capital Partners (“Metalmark” or “MM”) entered into a Unit Purchase Agreement (the “MM UPA”), pursuant to which the Company acquired all of the preferred units of Octomera LLC (“Octomera”) previously owned by MM (the “MM Acquisition”), and effective that date, reconsolidated Octomera into its accounts. The Company currently owns 100% of the equity interests of Octomera. The Company had previously, from June 30, 2023 (“date of deconsolidation”), deconsolidated Octomera from its consolidated financial statements and had recorded its equity interest in Octomera as an equity method investment.

 

These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries.

 

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed and traded on the Nasdaq Capital Market under the symbol “ORGS.” The Company must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days. Because the Company’s Common Stock has traded for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq sent a deficiency notice to the Company. On April 17, 2024, the Company received a notice (the “Notice”) from Nasdaq stating that the Company’s securities would be delisted from The Nasdaq Capital Market unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”) to address the deficiencies and present a plan to regain compliance. As permitted by the Notice, the Company has requested a hearing before the Panel, which request will stay any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel. The Company’s common stock has remained listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process.

 

As used in this report and unless otherwise indicated, the term “Company” refers to Orgenesis Inc. and its Subsidiaries. Unless otherwise specified, all amounts are expressed in United States Dollars.

 

b.Liquidity

 

Through March 31, 2024, the Company had an accumulated deficit of $186,386 and for the three months ended March 31, 2024 incurred negative operating cashflows of $4,441. The Company’s activities have been funded by generating revenue, through offerings of its securities, and through proceeds from loans. There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its activities.

 

 

The Company will need to use mitigating actions such as to seek additional financing, refinance or amend the terms of existing loans or postpone expenses that are not based on firm commitments. In order to fund its operations, until such time that we can generate sustainable positive cash flows, the Company will need to raise additional funds. For the three months ended March 31, 2024 and as of the date of this report, the Company assessed its financial condition and concluded that based on current and projected cash resources and commitments, as well as other factors mentioned above, there is a substantial doubt about its ability to continue as a going concern. The Company is planning to raise additional capital to continue its operations and to repay its outstanding loans when they become due, as well as to explore additional avenues to increase revenues and reduce or delay expenditures. The Company may also exchange some of its outstanding loans and accounts payable for securities of the Company. There can be no assurance that the Company will be able to raise additional capital on acceptable terms, or at all, or be able to exchange its outstanding loans and accounts payable for securities of the Company.

 

The Company’s common stock is listed for trading on the Nasdaq Capital Market. As mentioned above, the Company must satisfy Nasdaq’s continued listing requirements. Failure to meet continuing listing requirements risk delisting, which may make it more difficult to raise additional capital.

 

On April 5, 2024, the Company entered into an Asset Purchase and Strategic Collaboration Agreement (the “Purchase Agreement”) with Griffin Fund 3 BIDCO, Inc., (“Germfree”), for the sale by the Company of five Orgenesis Mobile Processing Units and Labs (“OMPULs”) to Germfree, which will be incorporated into Germfree’s lease fleet and leased back to the Company or third-party lessees designated by the Company. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions set forth therein, in consideration for the purchase of the OMPULs, the Orgenesis Quality Management Systems Framework (“OQMSF”) and related intellectual property rights, Germfree will pay an aggregate purchase price of $8,340 subject to any final adjustment through the verification mechanism as set forth in the Purchase Agreement. Pursuant to the Agreement, Germfree paid the Company $750 (for an exclusive manufacturing supply agreement) on February 27, 2024 and $5,538 during April 2024.

 

On May 10, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 150,000 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”). The Company received gross proceeds of approximately $154 before deducting related offering expenses. The Offering closed on May 10, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

The estimation and execution uncertainty regarding the Company’s future cash flows and management’s judgments and assumptions in estimating these cash flows is a significant estimate. Those assumptions include reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash.

 
v3.24.1.1.u2
BASIS OF PRESENTATION
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
BASIS OF PRESENTATION

NOTE 2 – BASIS OF PRESENTATION

 

a. Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all normal and recurring adjustments necessary to fairly state the financial position and results of operations of the Company. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on April 15, 2024. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2023, but not all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) are included in this Quarterly Report on Form 10-Q.

 

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, the amount of revenues and expenses, determination of loss on deconsolidation, valuation of investments, purchase price allocations, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.

 
v3.24.1.1.u2
SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION

NOTE 3 – SEGMENT INFORMATION

 

Segment data for the three months ended March 31, 2024 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $29   $135   $(23)  $141 
Cost of revenues*   (937)   (150)   710    (377)
Gross profit   (908)   (15)   687    (236)
Cost of development services and research and development expenses*   (1,785)   (1,179)   697    (2,267)
Operating expenses*   (63)   (5,519)   (464)   (6,046)
Loss from deconsolidation   -    -    (66)   (66)
Depreciation and amortization   (430)   (194)   243    (381)
Loss from extinguishment in connection with convertible loan   -    (141)   -    (141)
Financial income (expenses), net   (290)   (686)   124    (852)
Income (loss) before income taxes  $(3,476)  $(7,734)  $1,221   $(9,989)

 

*Excluding Depreciation, amortization expenses

 

Segment data for the three months ended March 31, 2023 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $12   $130   $-   $142 
Cost of revenues*   (2,308)   (178)   -    (2,486)
Gross profit   (2,296)   (48)   -    (2,344)
Cost of development services and research and development expenses*   (2,081)   (1,076)   -    (3,157)
Operating expenses*   (11,203)   (2,314)   -    (13,517)
Other income, net   2    -    -    2 
Depreciation and amortization   (385)   (193)   -    (578)
Credit loss on convertible loan receivable   -    (2,688)   -    (2,688)
Loss from extinguishment in connection with convertible loan   -    (283)   -    (283)
Financial Expenses, net   (266)   (415)   -    (681)
Share in net income of associated companies   -    (2)   -    (2)
Income (loss) before income taxes  $(16,229)  $(7,019)  $-   $(23,248)

 

*Excluding Depreciation, amortization expenses

 

The Company does not review assets by segment. Therefore, the measure of assets has not been disclosed for each segment.

 

 
v3.24.1.1.u2
RECONSOLIDATION OF OCTOMERA LLC
 3 Months Ended
Mar. 31, 2024
Reconsolidation Of Octomera Llc  
RECONSOLIDATION OF OCTOMERA LLC

NOTE 4 – RECONSOLIDATION OF OCTOMERA LLC

 

Pursuant to the MM UPA signed on January 29, 2024, the Company and MM agreed to the following:

 

1.Consideration:

 

  ● Royalty Payments: If Octomera and its subsidiaries generate Net Revenue during the three year period 2025-2027, then the Company will pay 5% of Net Revenues to MM pursuant to the MM UPA.
     
  ● Milestone Payments: If the Company sells Octomera within ten years from the date of the Closing at a price that is more than $40 million excluding consideration for certain Excluded Assets as per the UPA, the Company shall pay Seller 5% of the net proceeds.

 

2.MM’s designated members of the Board of Managers of Octomera resigned and the Company amended the Second Amended and Restated Limited Liability Company Agreement of Octomera (the “Octomera LLC Agreement”) to be a single member agreement reflecting the transactions consummated under the UPA, such that MM no longer (i) is member of Octomera or a party to the Octomera LLC Agreement, or (ii) has a right to appoint members of the board of managers of Octomera.

 

3.The outstanding indebtedness payable from Orgenesis Maryland LLC to MM pursuant to an aggregate of 10 secured promissory notes (the “Notes”) with a collective original principal amount of $2,600, were amended to, among other things, extend the maturity thereof to January 29, 2034 and to terminate the security interest granted by Orgenesis Maryland in favor of MM that secured the obligations under the Notes.

 

Fair Value of Consideration Transferred

 

Accounting guidance provides that the allocation of the purchase price may be adjusted for up to one year from the date of the acquisition to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of the purchase price allocation that is not yet finalized is related to intangible assets, property, plant and equipment, and certain other assets and tax matters and the related impact on goodwill.

 

In evaluating the fair value of the Octomera Equity Investment under the income approach, the Company used a discounted cash flow model of the business, adjusted to the Company’s share in the investment. Key assumptions used to determine the estimated fair value included: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-term future growth determined based on the growth prospects of the reporting units; and (c) a discount rate which reflects the weighted average cost of capital adjusted for the relevant risk associated with the Company’s reporting unit operations and the uncertainty inherent in the Company’s internally developed forecasts. The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of other intangible assets, net, which comprised of technology. The useful life of the technology for amortization purposes was determined by considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible assets, adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic, or other factors that may limit the useful life of intangible assets.

 

The following table summarizes the allocation of purchase price  to the fair values of the assets acquired and liabilities assumed as of the Transaction date:

  

   (in thousands) 
Total contingent liability to MM for royalty and milestone payments  $4,643 
      
Total assets acquired:     
Cash and cash equivalents  $139 
Property, plants and equipment, net   17,852 
Other Assets   3,478 
Total assets  $21,469 
      
Total liabilities assumed:     
Total current liabilities  $(12,518)
Total long-term liabilities   (5,628)
Total liabilities  $(18,146)
      
Know how Technology   1,728 
      
Total Net Assets  $5,051 
Fair-Value of Non-controlling interests   (408)
Total liability to MM  $4,643 

 

 

The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of an intangible asset know-how of $1,728 and a liability to MM in the amount of $4,643. The know-how has a useful life of 10 years. The useful life of the intangible asset for amortization purposes was determined considering the period of expected cash flows generated by the assets used to measure the fair value of the intangible asset adjusted as appropriate for the entity-specific factors, including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets.

 

Key inputs for the fair values valuation are summarized below.

SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION

 

      
Key Valuation Inputs  Jan 31st, 2024 
Discount rate   40%
Risk-free interest rate   4.4%
Average 5 years revenue growth   50%

 

The Company incurred transaction costs of approximately $50 during the three months ended March 31, 2024, which were included in general and administrative expenses in the condensed consolidated statements of operations.

 

The revenues and net loss of Octomera from January 1, 2024 until the reconsolidation date were $23 and $1,244 respectively.

 

Fair Value Assumptions Used in Accounting for Derivative Liabilities

 

ASC 815 requires assessing the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.

 

In January 29, 2024, in connection with the PPA study Octomera LLC the Company has recognize a liability to pay MM two components:

 

1. Royalties (based on revenues in years 2, 4 and 4 as of Closing and;

2. Earnout amount, which is dependent of a future trigger event- in case of an IPO or exit.

 

The Company classified these derivative liabilities as a Level 3 fair value measurement and used the Monte Carlo pricing model to calculate the fair value as of January 29, 2024 and March 31, 2024 $5,112.

 

Key inputs for the simulation are summarized below.

 

Key Valuation Inputs 

Jan 31st, 2024 and

March 31 2024

 
Standard Deviation   13.5%
Risk-free interest rate   4.4%
Possible trigger event examination   Year 10 
Average 5 years revenue growth   50%
Trigger events   30%
Revenues multiple   10 

 

* Based on a Monte Carlo simulation analysis of 30,000 iterations

 

Deconsolidation of Orgenesis Biotech Israel Limited (“OBI”)

 

On February 14, 2024, following a claim for payment of past salaries due by employees of OBI, a fully owned subsidiary of Octomera, the district court in Haifa, Israel, appointed a trustee to run the affairs of OBI with the intention of rehabilitating OBI to be able to operate and pay OBI’s creditors under an arrangement with them. As a result of this appointment, effective February 14, 2024, the Company no longer controls OBI and ceased to consolidate the results of OBI into its consolidated results. The Company recognized a loss as a result of the deconsolidation of $66 . The Company does not currently believe that rehabilitation is possible and has submitted a proposal to the trustee to purchase certain of OBI’s equipment, which has not yet been approved by the court.

 

The Company recorded $2,697 being what it owed to OBI on February 14, 2024 under Accounts payable related Parties on the balance sheet of March 31, 2024.

 

The following table summarizes the deconsolidate assets and liabilities as of February 14, 2024:

 

      
Total assets acquired:     
Cash and cash equivalents  $4 
Property, plants and equipment, net   2,884 
Other Assets   1,422 
Total assets  $4,310 
      
Total liabilities assumed:  $4,244 
Total Net Assets deconsolidated  $66 
Loss from deconsolidation of OBI  $66 

 
v3.24.1.1.u2
EQUITY
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
EQUITY

NOTE 5 – EQUITY

 

Private Placement Offering

 

On March 3, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement, 2,272,719 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $1.03 per share, and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $1.50 per share and warrants to purchase up to 2,272,719 shares of Common Stock at an exercise price of $2.00 per share (collectively, the “Warrants”), all such Warrants exercisable immediately and expiring five years from their date of issuance. The Company received gross proceeds of approximately $2.3 million before deducting related offering expenses. The Offering closed on March 5, 2024. The Warrants are exercisable immediately and expire five years from the date of issuance.

 

Shares and warrants issued to advisors

 

On January 25, 2024, the Company issued, pursuant to the MM acquisition, 164,000 shares of the Company’s common stock, par value $0.0001 per share, in full consideration for a debt owed by Octomera to said advisor.

 

On March 7, 2024 (the “Effective Date”), the Company entered into a strategic advisor agreement with an individual relating to the provision of strategic advice and assistance to the Company for a term of 12 months, subject to earlier termination or extension for an additional 12 months at the request of the advisor. In consideration for such services, the Company agreed to (i) pay such individual $75 per quarter, (ii) issue 500,000 shares to such individual on the 90th day after the Effective Date if such individual is providing services to the Company at such time and (iii) issue to such individual warrants to purchase up to 500,000 shares of Common Stock at an exercise price of $1.03, which vests one third on the Effective Date, one third on the 90th day after the Effective Date and one third on the 180th day after the Effective Date.

 

 
v3.24.1.1.u2
CONVERTIBLE LOANS
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE LOANS

NOTE 6 – CONVERTIBLE LOANS

 

The tables below summarize the Company’s outstanding convertible loans as of March 31, 2024 and December 31, 2023 respectively:

 

Principal Amount   Issuance
Date		   Current
Interest
   Current
Maturity		   Current
Conversion
Price of
loan into		    
at Issuance   (Year)   Rate %   (Year)   equity $   Note 
Convertible Loans Outstanding as of March 31, 2024 
$750    2018    10%   2026    2.50      
 1,500    2019    10%   2026    2.50      
 100    2019    8%   *2024   2.50      
 5,000    2019    10%   2026    2.50      
 100    2020    8%   *2024   7.00      
 5,000    2022    10%   2026    2.50      
 1,150    2022    6%   *2023   4.50      
 5,000    2023    8%   2026    2.46      
 735    2023    8%   2026    0.85    6a
 325    2024    8%   2024    0.85    6b
 75    2024    10%   2024    1.03      
$19,735                          

 

*Was not repaid by March 31, 2024.

 

Principal     Issuance
Date		     Current
Interest
     Current
Maturity		     Current
Conversion
Price of
loan into 		     
Amount     (Year)     Rate %     (Year)     equity $     Note  
Convertible Loans Outstanding as of December 31, 2023  
$ 750       2018       10 %     2026       2.50          
  1,500       2019       10 %     2026       2.50          
  100       2019       8 %     2024       2.50          
  5,000       2019       10 %     2026       2.50          
  100       2020       8 %     2024       7.00          
  5,000       2022       10 %     2026       2.50          
  1,150       2022       6 %     **2023     4.50          
  5,000       2023       8 %     2026       2.46          
  735       2023       8 %     2024               6a
$ 19,335                                          

 

**Was not yet paid by December 31, 2023.

 

 

Additional notes related to changes in convertible loans terms that occurred in 2024

 

6a. In January 2024, the Company and Lender agreed to extend the maturity date of the loan amount to December 31, 2026. The Company awarded warrants to purchase 840,000 of the Company’s Common Stock at a price of $0.85 per share. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as an extinguishment.

 

6b. In January 2024, the Company and Lender agreed to extend the maturity date of a previously non-convertible loan amount to December 31, 2024. The Company awarded warrants to purchase 360,000 of the Company’s Common Stock at a price of $0.85 per share and granted Lender the right to convert any part of the Outstanding amount into Common Stock of the Company at the conversion rate of $0.85 per share. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as a modification.

 

Koligo convertible loan

 

On September 29, 2023, Koligo entered into a convertible loan agreement with Sai Traders (the “Lender”), pursuant to which the Lender agreed to loan the Borrower up to $25,000 (the “Sai Convertible Loan”). As of the date of this quarterly report on Form 10-Q, none of the Sai Convertible Loan was received by the Company .

 
v3.24.1.1.u2
STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 7 – STOCK-BASED COMPENSATION

 

a.Options Granted to Employees

 

The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2024 to March 31, 2024:

  

    No. of
Options
Granted		   Exercise
Price		   Vesting Period  Fair Value at
Grant
(in thousands)		   Expiration
Period		 
Employees    200,000   $0.5   Quarterly over a period of two years  $67    10 years 

 

The fair valuation of these option grants is based on the following assumptions:

 

   During the Period from
January 1, 2024 to
March 31, 2024		 
Value of one common share  $0.49 
Dividend yield   0%
Expected stock price volatility   79%
Risk free interest rate   3.86%
Expected term (years)   5.56 

 
v3.24.1.1.u2
LOANS
 3 Months Ended
Mar. 31, 2024
Loans  
LOANS

NOTE 8 –LOANS

 

The table below summarizes the Company’s outstanding Long-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Principal
Amount		  Interest
Rate		   Year of
Maturity		   March 31,
2024		   December 31,
2023		 
(in thousands)  %       (in thousands) 
$ 2,600   10    2034   $2,696   $- 

 

 

See note 4.

 

The table below summarizes the Company’s outstanding short-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Currency   Interest
Rate		   March 31,
2024		   December 31,
2023		 
    %   (in thousands) 
USD    8   $263   $258 
USD    10    42    41 
USD    10    250    - 
USD    10    57    - 
USD    (*)8   (**)    331 
USD    10    -    20 
Euro    8    14    - 
         $626   $650 

 

(*)Weighted average interest.
(**)The terms of the loan were amended on January 1, 2024. Under the new terms the loan is convertible into Common shares. See note 6.

 
v3.24.1.1.u2
LOSS PER SHARE
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
LOSS PER SHARE

NOTE 9 – LOSS PER SHARE

 

The following table sets forth the calculation of basic and diluted loss per share for the period indicated:

 

  March 31,
2024		   March 31,
2023		 
 Three Months Ended 
  March 31,
2024		   March 31,
2023		 
   (in thousands, except per share data) 
Basic and diluted:           
Net loss attributable to Orgenesis Inc.   $9,765   $19,470 
Adjustment of redeemable non-controlling interest to redemption amount    -    3,671 
Net loss attributable to Orgenesis Inc. for loss per share   $9,765   $23,141 
Weighted average number of common shares outstanding    33,176,657    26,477,113 
Net loss per share   $0.29   $0.87 

 

For the three months ended March 31, 2024 and March 31, 2023, all outstanding convertible notes, options and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. Diluted loss per share does not include 11,513,836 shares underlying outstanding options and warrants and 8,270,398 shares upon conversion of convertible loans for the three months ended March 31, 2024, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include 8,620,224 shares underlying outstanding options and warrants and 6,987,879 shares upon conversion of convertible loans for the three months ended March 31, 2023, because the effect of their inclusion in the computation would be antidilutive.

 

 
v3.24.1.1.u2
REVENUES
 3 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
REVENUES

NOTE 10 – REVENUES

 

Disaggregation of Revenue

 

The following table disaggregates the Company’s revenues by major revenue streams.

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue stream:          
Cell process development services and hospital services  $141   $142 
           
Total  $141   $142 

 

A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue earned:          
Customer A (United States)  $75   $65 
Customer B (United States)  $60   $65 

 

Contract Assets and Liabilities

 

Contract assets are mainly comprised of trade receivables net of allowance for credit losses, which includes amounts billed and currently due from customers.

 

The activity for trade receivables is comprised of:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $88   $36,183 
Reconsolidation of Octomera   82    - 
Additions   150    155 
Collections   (75)   (5,454)
Allowances for credit losses   -    (9,514)
Exchange rate differences   -    (22)
Balance as of end of period  $245   $21,348 

 

The activity for contract liabilities is comprised of:

SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES 

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $200   $70 
Reconsolidation of Octomera   110    - 
Deconsolidation of OBI   (60)   - 
Additions   10      
Realizations   (4)   36 
Balance as of end of period  $256   $106 

 

 
v3.24.1.1.u2
LEGAL PROCEEDINGS
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
LEGAL PROCEEDINGS

NOTE 11 – LEGAL PROCEEDINGS

 

On January 18, 2022, a complaint (the “Complaint”) was filed in the Tel Aviv District Court (the “Court”) against the Company, Orgenesis LTD (“the Israeli Subsidiary”), Prof. Sarah Ferber, Vered Caplan and Dr. Efrat Asa Kunik (collectively, the “defendants”) by plaintiffs the State of Israel, as the owner of Chaim Sheba Medical Center at Tel Hashomer (“Sheba”), and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (collectively, the “plaintiffs”). In the Complaint, the plaintiffs are seeking that the Court issue a declaratory remedy whereby the defendants are required to pay royalties to the plaintiffs at the rate of 7% of the sales and 24% of any and all revenues in consideration for sublicenses related to any product, service or process that contain know-how and technology of Sheba and any and all know-how and technology either developed or supervised by Prof. Ferber in the field of cell therapy, including in the category of the point-of-care platform and any and all services and products in relation to the defendants’ CDMO activity. In addition, the plaintiffs seek that the defendants provide financial statements and pay NIS 10,000 to the plaintiffs due to the royalty provisions of the license agreement, dated February 2, 2012, between the Israeli subsidiary and Tel Hashomer Medical Research, Infrastructure and Services Ltd. (the “License Agreement”). The Complaint alleges that the Company and the Israeli subsidiary used know-how and technology of Sheba and know-how and technology either developed or supervised by Prof. Ferber while employed by Sheba in the field of cell therapy, including in the category of the point-of-care platform and the services and products in relation to the defendants’ CDMO activity and are entitled to the payment of certain royalties pursuant to the terms of the License Agreement. The defendants have filed their statements of defense responding to this Complaint, the Plaintiffs filed their response and the parties are now conducting disclosure proceedings in accordance with Israel’s civil regulations. In accordance with Israel’s civil regulations, the parties considered alternative means to resolve at least some of the disputes and have consented to engage the services of a mutually agreeable mediator. The mediation is currently taking place. According to management’s estimation, since a loss is not considered probable, no provision was made in the financial statements.

 

On September 6, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, Octomera LLC, Orgenesis Biotech Israel LTD, Theracell Laboratories Private Company and Vered Caplan (collectively, the “defendants”) by Ehud Almon (Plaintiff) for certain finders’ fees and / or royalties related to sales made by an Octomera subsidiary to a Greek entity in the amount of $896K and also for other means of compensation. The Israeli Subsidiary and Vered Caplan filed their statement of defense on January 28, 2024 claiming, inter alia, that the Plaintiff did not serve as a broker, but rather served as the Greek entity’s representative and as such he is not entitled to compensation of any kind from the defendants. It was also clarified that the defendants did not enter into a finder’s agreement with the Plaintiff. Additionally, The Israeli subsidiary and Vered Caplan claimed that the Plaintiff concealed material information from the court, including the signed partnership agreement between the Greek entity’s owner and the Plaintiff, as well as certain criminal charges brought against him in Greece. On February 22, 2024, the Plaintiff filed a request for service of process to deliver the Claim to the Company and the other defendants incorporated outside of Israel. This request was denied on the same day. An appeal filed by the Plaintiff on the aforementioned decision was denied. As such, the Claim has yet to be legally delivered to the defendants incorporated outside of Israel (including the Company). According to management’s estimation, since the likelihood of the Plaintiff winning the case is less than fifty percent, no provision was made in the financial statements.

 

On October 26, 2023, a complaint was filed in the Supreme Court of the State of New York by plaintiffs Southern Israel Bridging Fund Two LP and Mr. Amir Hasidim, against the Company, seeking the payment of $1,150 together with interest in the amount of 6%. In the Complaint plaintiff’s alleged the amount provided to the Company was based on a Convertible Loan Agreement dated May 17, 2022, which provided for a loan amount of $5,000. Notwithstanding the Convertible Loan Agreement, on August 21, 2023, Company sent the plaintiffs an offset notice in light of the plaintiffs’ breach of obligations under the Convertible Loan Agreement and the damages caused to the Company as a result of said breach. The Company counter sued as well, seeking damages for Plaintiff’s breach of contract, fraud and harassment. Accordingly, the Company disputes whether it owes plaintiffs the amount sought in the Complaint.

 

On November 1, 2023, a claim (the “Claim”) was filed in the Tel Aviv District Court (the “Court”) against the Company, the Israeli Subsidiary, and Vered Caplan (collectively, the “Defendants”) by Fidelity Venture Capital Ltd. and Dror Atzmon (together – the “Plaintiffs”). The claim is based on two agreements the Company entered into with the Plaintiffs on November 2, 2016: (a) an unsecured convertible note agreements for an aggregate amount of NIS 1 million ($280 thousand). The loan bears a monthly interest rate of 2% and will mature on May 1, 2017, unless converted earlier and (b) a consultation agreement which awarded the Plaintiffs 800 thousand warrants. The exercise price of the warrants and conversion price were fixed at $0.52 per share (pre-reverse stock split implemented by the Company in November 2017). On April 27, 2017, and November 2, 2017, the Company entered into extension agreements through November 2, 2017 and May 2, 2018, respectively, in connection with the convertible note agreements. In March 2018, the Plaintiffs submitted a notice of their intention to convert into shares the Company’s common stock, the principal amount of the loan, and accrued interest of approximately $383 thousand outstanding. In addition, the Plaintiffs exercised all the warrants awarded in the consultation agreement. In light of the reverse stock split which took place in November 2017, the Company disagreed with the plaintiffs’ calculations regarding the number of issuable shares of Common Stock. The Company responded to the notice and rejected these contentions in their entirety. In April 2018, the Company terminated the agreements based on several claims, including mistake, intentional misrepresentation and bad faith. Therefore, the Company deposited the shares in total amount of 107,985 issued under those agreements and the principal amount and accrued interest of the loan in an escrow account. The deposit of the principal amount and accrued interest presented as restricted cash in the balance sheet as of December 31, 2023. Based on the calculation difference, in their Claim, the Plaintiffs request damages in the amount of NIS 40.14M, and the issuance of 11,869,600 shares of the Company. The Defendants filed their statement of defense on April 15, 2024, in which they raised, among others, the aforementioned claims and additional procedural and substantial claims, including laches. The Claim is scheduled for pretrial which will take place on October 31, 2024. According to management’s estimation, since the likelihood of the Plaintiffs winning the case is less than fifty percent, no provision was made in the financial statements.

 

Except as described above, the Company is not involved in any pending material legal proceedings.
v3.24.1.1.u2
BASIS OF PRESENTATION (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of presentation

a. Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all normal and recurring adjustments necessary to fairly state the financial position and results of operations of the Company. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on April 15, 2024. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2023, but not all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) are included in this Quarterly Report on Form 10-Q.

 

 
Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, the amount of revenues and expenses, determination of loss on deconsolidation, valuation of investments, purchase price allocations, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.
v3.24.1.1.u2
SEGMENT INFORMATION (Tables)
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
SCHEDULE OF SEGMENT REPORTING

Segment data for the three months ended March 31, 2024 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $29   $135   $(23)  $141 
Cost of revenues*   (937)   (150)   710    (377)
Gross profit   (908)   (15)   687    (236)
Cost of development services and research and development expenses*   (1,785)   (1,179)   697    (2,267)
Operating expenses*   (63)   (5,519)   (464)   (6,046)
Loss from deconsolidation   -    -    (66)   (66)
Depreciation and amortization   (430)   (194)   243    (381)
Loss from extinguishment in connection with convertible loan   -    (141)   -    (141)
Financial income (expenses), net   (290)   (686)   124    (852)
Income (loss) before income taxes  $(3,476)  $(7,734)  $1,221   $(9,989)

 

*Excluding Depreciation, amortization expenses

 

Segment data for the three months ended March 31, 2023 is as follows:

 

   Octomera   Therapies   Eliminations   Consolidated 
   (in thousands) 
Revenues  $12   $130   $-   $142 
Cost of revenues*   (2,308)   (178)   -    (2,486)
Gross profit   (2,296)   (48)   -    (2,344)
Cost of development services and research and development expenses*   (2,081)   (1,076)   -    (3,157)
Operating expenses*   (11,203)   (2,314)   -    (13,517)
Other income, net   2    -    -    2 
Depreciation and amortization   (385)   (193)   -    (578)
Credit loss on convertible loan receivable   -    (2,688)   -    (2,688)
Loss from extinguishment in connection with convertible loan   -    (283)   -    (283)
Financial Expenses, net   (266)   (415)   -    (681)
Share in net income of associated companies   -    (2)   -    (2)
Income (loss) before income taxes  $(16,229)  $(7,019)  $-   $(23,248)

 

*Excluding Depreciation, amortization expenses
v3.24.1.1.u2
RECONSOLIDATION OF OCTOMERA LLC (Tables)
 3 Months Ended
Mar. 31, 2024
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF DECONSOLIDATE ASSETS AND LIABILITIES

The following table summarizes the allocation of purchase price  to the fair values of the assets acquired and liabilities assumed as of the Transaction date:

  

   (in thousands) 
Total contingent liability to MM for royalty and milestone payments  $4,643 
      
Total assets acquired:     
Cash and cash equivalents  $139 
Property, plants and equipment, net   17,852 
Other Assets   3,478 
Total assets  $21,469 
      
Total liabilities assumed:     
Total current liabilities  $(12,518)
Total long-term liabilities   (5,628)
Total liabilities  $(18,146)
      
Know how Technology   1,728 
      
Total Net Assets  $5,051 
Fair-Value of Non-controlling interests   (408)
Total liability to MM  $4,643 
SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION

Key inputs for the fair values valuation are summarized below.

SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION

 

      
Key Valuation Inputs  Jan 31st, 2024 
Discount rate   40%
Risk-free interest rate   4.4%
Average 5 years revenue growth   50%
SCHEDULE OF KEY INPUTS

Key inputs for the simulation are summarized below.

 

Key Valuation Inputs 

Jan 31st, 2024 and

March 31 2024

 
Standard Deviation   13.5%
Risk-free interest rate   4.4%
Possible trigger event examination   Year 10 
Average 5 years revenue growth   50%
Trigger events   30%
Revenues multiple   10 

 

* Based on a Monte Carlo simulation analysis of 30,000 iterations
Orgenesis Biotech Israel Limited [Member]  
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF DECONSOLIDATE ASSETS AND LIABILITIES

The following table summarizes the deconsolidate assets and liabilities as of February 14, 2024:

 

      
Total assets acquired:     
Cash and cash equivalents  $4 
Property, plants and equipment, net   2,884 
Other Assets   1,422 
Total assets  $4,310 
      
Total liabilities assumed:  $4,244 
Total Net Assets deconsolidated  $66 
Loss from deconsolidation of OBI  $66 
v3.24.1.1.u2
CONVERTIBLE LOANS (Tables)
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
SCHEDULE OF LONG TERM CONVERTIBLE NOTES

The tables below summarize the Company’s outstanding convertible loans as of March 31, 2024 and December 31, 2023 respectively:

 

Principal Amount   Issuance
Date		   Current
Interest
   Current
Maturity		   Current
Conversion
Price of
loan into		    
at Issuance   (Year)   Rate %   (Year)   equity $   Note 
Convertible Loans Outstanding as of March 31, 2024 
$750    2018    10%   2026    2.50      
 1,500    2019    10%   2026    2.50      
 100    2019    8%   *2024   2.50      
 5,000    2019    10%   2026    2.50      
 100    2020    8%   *2024   7.00      
 5,000    2022    10%   2026    2.50      
 1,150    2022    6%   *2023   4.50      
 5,000    2023    8%   2026    2.46      
 735    2023    8%   2026    0.85    6a
 325    2024    8%   2024    0.85    6b
 75    2024    10%   2024    1.03      
$19,735                          

 

*Was not repaid by March 31, 2024.

 

Principal     Issuance
Date		     Current
Interest
     Current
Maturity		     Current
Conversion
Price of
loan into 		     
Amount     (Year)     Rate %     (Year)     equity $     Note  
Convertible Loans Outstanding as of December 31, 2023  
$ 750       2018       10 %     2026       2.50          
  1,500       2019       10 %     2026       2.50          
  100       2019       8 %     2024       2.50          
  5,000       2019       10 %     2026       2.50          
  100       2020       8 %     2024       7.00          
  5,000       2022       10 %     2026       2.50          
  1,150       2022       6 %     **2023     4.50          
  5,000       2023       8 %     2026       2.46          
  735       2023       8 %     2024               6a
$ 19,335                                          

 

**Was not yet paid by December 31, 2023.
v3.24.1.1.u2
STOCK-BASED COMPENSATION (Tables) - Options Granted To Employees [Member]
 3 Months Ended
Mar. 31, 2024
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]  
SCHEDULE OF EMPLOYEE STOCK OWNERSHIP PLAN DISCLOSURES

The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2024 to March 31, 2024:

  

    No. of
Options
Granted		   Exercise
Price		   Vesting Period  Fair Value at
Grant
(in thousands)		   Expiration
Period		 
Employees    200,000   $0.5   Quarterly over a period of two years  $67    10 years 
SCHEDULE OF STOCK OPTIONS ACTIVITY

The fair valuation of these option grants is based on the following assumptions:

 

   During the Period from
January 1, 2024 to
March 31, 2024		 
Value of one common share  $0.49 
Dividend yield   0%
Expected stock price volatility   79%
Risk free interest rate   3.86%
Expected term (years)   5.56 
v3.24.1.1.u2
LOANS (Tables)
 3 Months Ended
Mar. 31, 2024
Loans  
SCHEDULE OF LONG TERM LOANS

The table below summarizes the Company’s outstanding Long-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Principal
Amount		  Interest
Rate		   Year of
Maturity		   March 31,
2024		   December 31,
2023		 
(in thousands)  %       (in thousands) 
$ 2,600   10    2034   $2,696   $- 
SCHEDULE OF SHORT TERM LOANS

The table below summarizes the Company’s outstanding short-term loans as of March 31, 2024 and December 31, 2023, respectively:

 

Currency   Interest
Rate		   March 31,
2024		   December 31,
2023		 
    %   (in thousands) 
USD    8   $263   $258 
USD    10    42    41 
USD    10    250    - 
USD    10    57    - 
USD    (*)8   (**)    331 
USD    10    -    20 
Euro    8    14    - 
         $626   $650 

 

(*)Weighted average interest.
(**)The terms of the loan were amended on January 1, 2024. Under the new terms the loan is convertible into Common shares. See note 6.
v3.24.1.1.u2
LOSS PER SHARE (Tables)
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE

The following table sets forth the calculation of basic and diluted loss per share for the period indicated:

 

  March 31,
2024		   March 31,
2023		 
 Three Months Ended 
  March 31,
2024		   March 31,
2023		 
   (in thousands, except per share data) 
Basic and diluted:           
Net loss attributable to Orgenesis Inc.   $9,765   $19,470 
Adjustment of redeemable non-controlling interest to redemption amount    -    3,671 
Net loss attributable to Orgenesis Inc. for loss per share   $9,765   $23,141 
Weighted average number of common shares outstanding    33,176,657    26,477,113 
Net loss per share   $0.29   $0.87 
v3.24.1.1.u2
REVENUES (Tables)
 3 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
SCHEDULE OF DISAGGREGATION OF REVENUE

The following table disaggregates the Company’s revenues by major revenue streams.

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue stream:          
Cell process development services and hospital services  $141   $142 
           
Total  $141   $142 
SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER

A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Revenue earned:          
Customer A (United States)  $75   $65 
Customer B (United States)  $60   $65 
SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES

The activity for trade receivables is comprised of:

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $88   $36,183 
Reconsolidation of Octomera   82    - 
Additions   150    155 
Collections   (75)   (5,454)
Allowances for credit losses   -    (9,514)
Exchange rate differences   -    (22)
Balance as of end of period  $245   $21,348 
SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES

The activity for contract liabilities is comprised of:

SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES 

 

   March 31,
2024		   March 31,
2023		 
   Three Months Ended 
   March 31,
2024		   March 31,
2023		 
   (in thousands) 
Balance as of beginning of period  $200   $70 
Reconsolidation of Octomera   110    - 
Deconsolidation of OBI   (60)   - 
Additions   10      
Realizations   (4)   36 
Balance as of end of period  $256   $106 
v3.24.1.1.u2
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended
May 10, 2024
Apr. 05, 2024
Mar. 03, 2024
Feb. 27, 2024
Apr. 16, 2024
Mar. 31, 2024
Mar. 31, 2023
Jan. 29, 2024
Jan. 25, 2024
Dec. 31, 2023
Common stock, par value           $ 0.0001     $ 0.0001 $ 0.0001
Accumulated deficit           $ 186,386       $ 176,622
Negative operating cashflows           4,441 $ 7,240      
Gross proceeds from offering           $ 2,360 $ 3,441      
Asset Purchase Agreement [Member]                    
Proceeds from acquire productive assets       $ 750            
Asset Purchase Agreement [Member] | Subsequent Event [Member]                    
Aggregate purchase price   $ 8,340                
Proceeds from acquire productive assets         $ 5,538          
Securities Purchase Agreement [Member] | Private Placement [Member]                    
Common stock, par value     $ 0.0001              
Common stock shares issued and sell     2,272,719              
Sale of stock, price per share     $ 1.03              
Gross proceeds from offering     $ 2,300              
Securities Purchase Agreement [Member] | Private Placement [Member] | Warrant [Member]                    
Purchase of warrants     2,272,719              
Exercise price of warrants     $ 1.50              
Securities Purchase Agreement [Member] | Private Placement [Member] | Warrant One [Member]                    
Purchase of warrants     2,272,719              
Exercise price of warrants     $ 2.00              
Securities Purchase Agreement [Member] | Subsequent Event [Member]                    
Gross proceeds from offering $ 154                  
Securities Purchase Agreement [Member] | Subsequent Event [Member] | Warrant [Member]                    
Purchase of warrants 150,000                  
Exercise price of warrants $ 1.50                  
Warrants expire year 5 years                  
Securities Purchase Agreement [Member] | Subsequent Event [Member] | Warrant One [Member]                    
Purchase of warrants 150,000                  
Exercise price of warrants $ 2.00                  
Securities Purchase Agreement [Member] | Subsequent Event [Member] | Private Placement [Member]                    
Common stock, par value $ 0.0001                  
Common stock shares issued and sell 150,000                  
Sale of stock, price per share $ 1.03                  
Octomera LLC [Member]                    
Equity method investment, ownership percentage               100.00%    
ORGS [Member]                    
Common stock, par value           $ 0.0001        
Minimum closing bid price           $ 1.00        
v3.24.1.1.u2
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Segment Reporting Information [Line Items]    
Revenues $ 141 $ 142
Cost of revenues (377) [1] (2,486) [2]
Gross profit (236) (2,344)
Cost of development services and research and development expenses (2,267) [1] (3,157) [2]
Operating expenses (6,046) [1] (13,517) [2]
Loss from deconsolidation (66)
Depreciation and amortization (381) (578)
Loss from extinguishment in connection with convertible loan (141) (283)
Financial income (expenses), net (852) (681)
Income (loss) before income taxes (9,989) (23,248)
Other income, net 2
Credit loss on convertible loan receivable (2,688)
Share in net income of associated companies (2)
Octomera [Member]    
Segment Reporting Information [Line Items]    
Revenues 29 12
Cost of revenues (937) [1] (2,308) [2]
Gross profit (908) (2,296)
Cost of development services and research and development expenses (1,785) [1] (2,081) [2]
Operating expenses (63) [1] (11,203) [2]
Loss from deconsolidation  
Depreciation and amortization (430) (385)
Loss from extinguishment in connection with convertible loan
Financial income (expenses), net (290) (266)
Income (loss) before income taxes (3,476) (16,229)
Other income, net   2
Credit loss on convertible loan receivable  
Share in net income of associated companies  
Therapies [Member]    
Segment Reporting Information [Line Items]    
Revenues 135 130
Cost of revenues (150) [1] (178) [2]
Gross profit (15) (48)
Cost of development services and research and development expenses (1,179) [1] (1,076) [2]
Operating expenses (5,519) [1] (2,314) [2]
Loss from deconsolidation  
Depreciation and amortization (194) (193)
Loss from extinguishment in connection with convertible loan (141) (283)
Financial income (expenses), net (686) (415)
Income (loss) before income taxes (7,734) (7,019)
Other income, net  
Credit loss on convertible loan receivable   (2,688)
Share in net income of associated companies   (2)
Eliminations [Member]    
Segment Reporting Information [Line Items]    
Revenues (23)
Cost of revenues 710 [1] [2]
Gross profit 687
Cost of development services and research and development expenses 697 [1] [2]
Operating expenses (464) [1] [2]
Loss from deconsolidation (66)  
Depreciation and amortization 243
Loss from extinguishment in connection with convertible loan
Financial income (expenses), net 124
Income (loss) before income taxes $ 1,221
Other income, net  
Credit loss on convertible loan receivable  
Share in net income of associated companies  
[1] Excluding Depreciation, amortization expenses
[2] Excluding Depreciation, amortization expenses
v3.24.1.1.u2
SCHEDULE OF PURCHASE PRICE TO THE FAIR VALUES OF THE ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - Octomera [Member]
$ in Thousands
Mar. 31, 2024
USD ($)
Restructuring Cost and Reserve [Line Items]  
Total contingent liability to MM for royalty and milestone payments $ 4,643
Total assets acquired:  
Cash and cash equivalents 139
Property, plants and equipment, net 17,852
Other Assets 3,478
Total assets 21,469
Total liabilities assumed:  
Total current liabilities (12,518)
Total long-term liabilities (5,628)
Total liabilities (18,146)
Know how Technology 1,728
Total Net Assets 5,051
Fair-Value of Non-controlling interests (408)
Total liability to MM $ 4,643
v3.24.1.1.u2
SCHEDULE OF KEY INPUTS FOR THE FAIR VALUES VALUATION (Details) - Octomera [Member]
Jan. 31, 2024
Measurement Input, Discount Rate [Member]  
Restructuring Cost and Reserve [Line Items]  
Average 5 years revenue growth 40
Measurement Input, Risk Free Interest Rate [Member]  
Restructuring Cost and Reserve [Line Items]  
Average 5 years revenue growth 4.4
Measurement Input, Long-Term Revenue Growth Rate [Member]  
Restructuring Cost and Reserve [Line Items]  
Average 5 years revenue growth 50
v3.24.1.1.u2
SCHEDULE OF KEY INPUTS (Details) - Fair Value, Inputs, Level 3 [Member]
 3 Months Ended
Mar. 31, 2024
Measurement Input Standard Deviation [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Risk free interest rate 13.5
Measurement Input, Risk Free Interest Rate [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Risk free interest rate 4.4
Measurement Input Trigger Event [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Possible trigger event examination 10 years
Measurement Input, Long-Term Revenue Growth Rate [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Risk free interest rate 50
Measurement Input Trigger Events [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Risk free interest rate 30
Measurement Input, Revenue Multiple [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Risk free interest rate 10
v3.24.1.1.u2
SCHEDULE OF DECONSOLIDATE ASSETS AND LIABILITIES (Details) - Orgenesis Biotech Israel Limited [Member]
$ in Thousands
Feb. 14, 2024
USD ($)
Restructuring Cost and Reserve [Line Items]  
Cash and cash equivalents $ 4
Property, plants and equipment, net 2,884
Other Assets 1,422
Total assets 4,310
Total liabilities assumed: 4,244
Total Net Assets 66
Loss from deconsolidation of OBI $ 66
v3.24.1.1.u2
RECONSOLIDATION OF OCTOMERA LLC (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]      
Net Income (Loss) Attributable to Parent $ (9,765) $ (19,470)  
Recognized loss on deconsolidation 66    
Fair Value, Inputs, Level 3 [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of derivative liabilities 5,112    
Octomera [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Recognition of intangible asset 1,728    
Liability to MM 4,643    
Transaction cost 50    
Revenues 23    
Net Income (Loss) Attributable to Parent 1,244    
10 Secured Promissory Notes [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Original principal amount 2,600    
Unit Purchase Agreement [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Milestone payments $ 40,000    
Milestone sales percentage 5.00%    
Metalmark [Member] | Unit Purchase Agreement [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Royalty percentage to be received 5.00%    
Related Party [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Accounts payable related parties $ 2,697   $ 133
v3.24.1.1.u2
EQUITY (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 07, 2024
Mar. 03, 2024
Jan. 25, 2024
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Subsidiary, Sale of Stock [Line Items]            
Common stock, par value     $ 0.0001 $ 0.0001   $ 0.0001
Gross proceeds from offering       $ 2,360 $ 3,441  
Number of shares issued     164,000      
Common Stock [Member]            
Subsidiary, Sale of Stock [Line Items]            
Number of shares issued for service       164,000    
Securities Purchase Agreement [Member] | Private Placement [Member]            
Subsidiary, Sale of Stock [Line Items]            
Common stock shares issued and sell   2,272,719        
Common stock, par value   $ 0.0001        
Sale of stock, price per share   $ 1.03        
Warrants expire term   5 years        
Gross proceeds from offering   $ 2,300        
Securities Purchase Agreement [Member] | Private Placement [Member] | Warrant [Member]            
Subsidiary, Sale of Stock [Line Items]            
Purchase of warrants   2,272,719        
Exercise price of warrants   $ 1.50        
Securities Purchase Agreement [Member] | Private Placement [Member] | Warrant One [Member]            
Subsidiary, Sale of Stock [Line Items]            
Purchase of warrants   2,272,719        
Exercise price of warrants   $ 2.00        
Strategic Advisor Agreement [Member]            
Subsidiary, Sale of Stock [Line Items]            
Professional fees $ 75          
Number of shares issued for service 500,000          
Strategic Advisor Agreement [Member] | Common Stock [Member]            
Subsidiary, Sale of Stock [Line Items]            
Purchase of warrants 500,000          
Exercise price of warrants $ 1.03          
v3.24.1.1.u2
SCHEDULE OF LONG TERM CONVERTIBLE NOTES (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Convertible Loans One [Member]    
Debt Instrument [Line Items]    
Principal amount $ 750 $ 750
Debt instrument issuance year 2018 2018
Interest rate 10.00% 10.00%
Maturity period 2026 2026
Current conversion price $ 2.50 $ 2.50
Convertible Loans Two [Member]    
Debt Instrument [Line Items]    
Principal amount $ 1,500 $ 1,500
Debt instrument issuance year 2019 2019
Interest rate 10.00% 10.00%
Maturity period 2026 2026
Current conversion price $ 2.50 $ 2.50
Convertible Loans Three [Member]    
Debt Instrument [Line Items]    
Principal amount $ 100 $ 100
Debt instrument issuance year 2019 2019
Interest rate 8.00% 8.00%
Maturity period 2024 [1] 2024
Current conversion price $ 2.50 $ 2.50
Convertible Loans Four [Member]    
Debt Instrument [Line Items]    
Principal amount $ 5,000 $ 5,000
Debt instrument issuance year 2019 2019
Interest rate 10.00% 10.00%
Maturity period 2026 2026
Current conversion price $ 2.50 $ 2.50
Convertible Loans Five [Member]    
Debt Instrument [Line Items]    
Principal amount $ 100 $ 100
Debt instrument issuance year 2020 2020
Interest rate 8.00% 8.00%
Maturity period 2024 [1] 2024
Current conversion price $ 7.00 $ 7.00
Convertible Loans Six [Member]    
Debt Instrument [Line Items]    
Principal amount $ 5,000 $ 5,000
Debt instrument issuance year 2022 2022
Interest rate 10.00% 10.00%
Maturity period 2026 2026
Current conversion price $ 2.50 $ 2.50
Convertible Loans Seven [Member]    
Debt Instrument [Line Items]    
Principal amount $ 1,150 $ 1,150
Debt instrument issuance year 2022 2022
Interest rate 6.00% 6.00%
Maturity period 2023 [1] 2023 [2]
Current conversion price $ 4.50 $ 4.50
Convertible Loans Eight [Member]    
Debt Instrument [Line Items]    
Principal amount $ 5,000 $ 5,000
Debt instrument issuance year 2023 2023
Interest rate 8.00% 8.00%
Maturity period 2026 2026
Current conversion price $ 2.46 $ 2.46
Convertible Loans Nine [Member]    
Debt Instrument [Line Items]    
Principal amount $ 735 $ 735
Debt instrument issuance year 2023 2023
Interest rate 8.00% 8.00%
Maturity period 2026 2024
Current conversion price $ 0.85  
Convertible Loans Ten [Member]    
Debt Instrument [Line Items]    
Principal amount $ 325  
Debt instrument issuance year 2024  
Interest rate 8.00%  
Maturity period 2024  
Current conversion price $ 0.85  
Convertible Loans Eleven [Member]    
Debt Instrument [Line Items]    
Principal amount $ 75  
Debt instrument issuance year 2024  
Interest rate 10.00%  
Maturity period 2024  
Current conversion price $ 1.03  
Convertible Loans [Member]    
Debt Instrument [Line Items]    
Principal amount $ 19,735 $ 19,335
[1] Was not repaid by March 31, 2024.
[2] Was not yet paid by December 31, 2023.
v3.24.1.1.u2
CONVERTIBLE LOANS (Details Narrative) - USD ($)
 1 Months Ended
Jan. 25, 2024
Jan. 31, 2024
Sep. 29, 2023
Debt Instrument [Line Items]      
Warrants to purchse 164,000    
Sai Convertible Loan Agreement [Member] | Lender [Member]      
Debt Instrument [Line Items]      
Principal loan amount     $ 25,000
Non Convertible Loans [Member]      
Debt Instrument [Line Items]      
Warrants to purchse   360,000  
Share price   $ 0.85  
Conversion price per share   $ 0.85  
Offshore Investor [Member]      
Debt Instrument [Line Items]      
Warrants to purchse   840,000  
Share price   $ 0.85  
v3.24.1.1.u2
SCHEDULE OF EMPLOYEE STOCK OWNERSHIP PLAN DISCLOSURES (Details) - Employees [Member]
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2024
USD ($)
$ / shares
shares
No of options granted | shares 200,000
Exercise price | $ / shares $ 0.5
Stock options vesting period description Quarterly over a period of two years
Fair value at grant | $ $ 67
Expiration period 10 years
v3.24.1.1.u2
SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) - Employees [Member]
 3 Months Ended
Mar. 31, 2024
$ / shares
Value of one common share $ 0.49
Dividend yield 0.00%
Expected stock price volatility 79.00%
Risk free interest rate 3.86%
Expected term (years) 5 years 6 months 21 days
v3.24.1.1.u2
SCHEDULE OF LONG TERM LOANS (Details) - Long-Term Debt [Member] - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]    
Principal amount $ 2,600  
Interest rate 10.00%  
Year of maturity 2034  
Long term debt $ 2,696
v3.24.1.1.u2
SCHEDULE OF SHORT TERM LOANS (Details)
€ in Thousands, $ in Thousands
Mar. 31, 2024
USD ($)
Mar. 31, 2024
EUR (€)
Dec. 31, 2023
USD ($)
Dec. 31, 2023
EUR (€)
Short-Term Debt [Line Items]        
Short term debt $ 626   $ 650  
Short-Term Debt [Member]        
Short-Term Debt [Line Items]        
Interest rate 8.00% 8.00%    
Short term debt $ 263   258  
Short Term Debt One [Member]        
Short-Term Debt [Line Items]        
Interest rate 10.00% 10.00%    
Short term debt $ 42   41  
Short Term Debt Two [Member]        
Short-Term Debt [Line Items]        
Interest rate 10.00% 10.00%    
Short term debt $ 250    
Short Term Debt Three [Member]        
Short-Term Debt [Line Items]        
Interest rate 10.00% 10.00%    
Short term debt $ 57    
Short Term Debt Four [Member]        
Short-Term Debt [Line Items]        
Interest rate [1] 8.00% 8.00%    
Short term debt [2]   331  
Short Term Debt Five [Member]        
Short-Term Debt [Line Items]        
Interest rate 10.00% 10.00%    
Short term debt   $ 20  
Short Term Debt Six [Member]        
Short-Term Debt [Line Items]        
Interest rate 8.00% 8.00%    
Short term debt | €   € 14  
[1] Weighted average interest.
[2] The terms of the loan were amended on January 1, 2024. Under the new terms the loan is convertible into Common shares. See note 6.
v3.24.1.1.u2
SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Earnings Per Share [Abstract]    
Net loss attributable to Orgenesis Inc. $ 9,765 $ 19,470
Adjustment of redeemable non-controlling interest to redemption amount 3,671
Net loss attributable to Orgenesis Inc. for loss per share $ 9,765 $ 23,141
Weighted average number of common shares outstanding - basic 33,176,657 26,477,113
Weighted average number of common shares outstanding - diluted 33,176,657 26,477,113
Net loss per share - basic $ 0.29 $ 0.87
Net loss per share - diluted $ 0.29 $ 0.87
v3.24.1.1.u2
LOSS PER SHARE (Details Narrative) - shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Options and Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities excluded from computation of earnings per share amount 11,513,836 8,620,224
Shares upon Conversion of Convertible Loans [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities excluded from computation of earnings per share amount 8,270,398 6,987,879
v3.24.1.1.u2
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Disaggregation of Revenue [Line Items]    
Total $ 141 $ 142
Cell Process Development Services And Hospital Services [Member]    
Disaggregation of Revenue [Line Items]    
Total $ 141 $ 142
v3.24.1.1.u2
SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Disaggregation of Revenue [Line Items]    
Revenue $ 141 $ 142
Customer A [Member] | UNITED STATES    
Disaggregation of Revenue [Line Items]    
Revenue 75 65
Customer B [Member] | UNITED STATES    
Disaggregation of Revenue [Line Items]    
Revenue $ 60 $ 65
v3.24.1.1.u2
SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]    
Balance as of beginning of period $ 88 $ 36,183
Reconsolidation of Octomera 82
Additions 150 155
Collections (75) (5,454)
Allowances for credit losses (9,514)
Exchange rate differences (22)
Balance as of end of period $ 245 $ 21,348
v3.24.1.1.u2
SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]    
Balance as of beginning of period $ 200 $ 70
Reconsolidation of Octomera 110
Deconsolidation of OBI (60)
Additions 10  
Realizations (4) 36
Balance as of end of period $ 256 $ 106
v3.24.1.1.u2
LEGAL PROCEEDINGS (Details Narrative)
$ / shares in Units, ₪ in Thousands
 3 Months Ended
Nov. 01, 2023
ILS (₪)
Oct. 26, 2023
USD ($)
Jan. 18, 2022
ILS (₪)
Mar. 31, 2018
USD ($)
Mar. 31, 2024
Nov. 01, 2023
USD ($)
$ / shares
shares
Nov. 01, 2023
ILS (₪)
shares
Sep. 06, 2023
USD ($)
Apr. 30, 2018
shares
Prceedings actions taken by plaintiff description         In the Complaint, the plaintiffs are seeking that the Court issue a declaratory remedy whereby the defendants are required to pay royalties to the plaintiffs at the rate of 7% of the sales and 24% of any and all revenues in consideration for sublicenses related to any product, service or process that contain know-how and technology of Sheba and any and all know-how and technology either developed or supervised by Prof. Ferber in the field of cell therapy, including in the category of the point-of-care platform and any and all services and products in relation to the defendants’ CDMO activity.        
Loss contingency, damages paid, value | ₪     ₪ 10,000            
Royalty guarantee commitments amount               $ 896,000  
Plaintiffs request damages amount | ₪ ₪ 40,140                
Issuance of shares | shares           11,869,600 11,869,600    
Common Stock [Member]                  
Principal amount of the loan and accrued interest       $ 383,000          
Issuance of shares | shares                 107,985
Unsecured Convertible Note Agreements [Member]                  
Unsecured convertible debt           $ 280,000 ₪ 1,000    
Monthly interest rate           2.00% 2.00%    
Consultation Agreement [Member]                  
Warrants awarded | shares           800,000 800,000    
Warrants exercise price | $ / shares           $ 0.52      
Mr Amir Hasidim [Member]                  
Unsecured convertible debt   $ 5,000              
Southern Israel Bridging Fund Two LP [Member] | Mr Amir Hasidim [Member]                  
Plaintiffs request damages amount   $ 1,150              
Litigation settlement interest percentage   6.00%              
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