Item
1.01. Entry into a Material Definitive Agreement.
On January 5, 2022, Pluristem Therapeutics, Inc.,
or the Company, through its subsidiary Pluristem Ltd., or the Subsidiary, and Tnuva Food Industries – Agricultural Cooperative in
Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva, entered into certain
agreements relating to the establishment and operation of a joint venture company, Plurinuva Ltd. (which name may be changed from time
to time), an Israeli company, or NewCo, with the purpose of developing cultured meat products of all types and kinds. NewCo is intended
to be engaged in the development, manufacturing and commercialization of technology, know-how and products that will be based on licensed
products relating to the field, or the Field, of cultured meat, or the Licensed Products.
The consummation of the transactions contemplated
above is subject to the fulfillment of customary conditions precedent, including without limitation, the approval of the Israeli Innovation
Authority.
In furtherance of the joint venture, Tnuva entered
into a Share Purchase Agreement, or SPA, with NewCo and the Subsidiary, pursuant to which NewCo shall issue, on the closing date of the
SPA, or the Closing Date, 187,500 of its ordinary shares to Tnuva, constituting 15.79% of its share capital as of the Closing Date, as
well as a warrant, in consideration of an aggregate of $7,500,000 in cash. The warrant, or the First Warrant, to be issued to Tnuva, permits
Tnuva to purchase up to 125,000 ordinary shares of NewCo at an exercise price of $40.00 per share, and has a term commencing on the Closing
Date and ending at the earlier of (i) six (6) months from the Closing Date, (ii) immediately prior to and subject to the consummation
of an initial public offering or acquisition of NewCo or (iii) the consummation of a financing round with a non-affiliated investor. In
addition, on the six (6) months anniversary of the Closing Date, and provided that the First Warrant has not expired, NewCo shall issue
to Tnuva a second warrant, or the Second Warrant, which will permit Tnuva to purchase up to a number of ordinary shares, or the then most
senior securities issued by NewCo, of NewCo, in consideration for such amount equal to 200% of the remaining balance of the aggregate
purchase price of the First Warrant, or the Aggregate Exercise Price, provided that Tnuva exercises at least 62,500 ordinary shares at
a price per share of $40.00, or $2,500,000 in the aggregate, of the First Warrant. The Second Warrant’s exercise price per share
equals $76.00. The Second Warrant has a term commencing on the six (6) months anniversary of the Closing Date and ending at the earlier
of (i) six (6) months from its issuance, (ii) immediately prior to and subject to the consummation of an initial public offering or acquisition
of NewCo or (iii) the consummation of a financing round with a non-affiliated investor. In addition, pursuant to the SPA, in the event
the Company decides to use its technology for the development of cultured milk or fish products, Tnuva shall also have the right, for
a period of seven (7) years following the Closing Date, to participate in the formation of additional separate joint ventures for the
development of those products.
Prior to the Closing Date, the Subsidiary and
NewCo shall execute a Technology License Agreement, or the License Agreement, and at the Closing, the Subsidiary and NewCo shall execute
a Transitional Services Agreement, or the Services Agreement. Pursuant to the License Agreement, the Subsidiary shall grant NewCo an exclusive,
royalty bearing, perpetual and irrevocable, worldwide, non-transferable (except under specific circumstances specified thereunder), sublicensable
license to its technology for the use in the development of the Licensed Products. In addition, NewCo shall grant the Subsidiary, pursuant
to the License Agreement, an exclusive, perpetual and irrevocable, worldwide, sublicensable, royalty-free, license to use, make, exploit
and develop the improvements made by NewCo to the licensed technology outside of the Field. In consideration for the license, NewCo agreed
to grant the Subsidiary royalties in the mid-single digits. Pursuant to the terms of the Services Agreement, the Subsidiary shall provide
NewCo transitional services to support its commercial efforts on a cost basis, for an initial term of eighteen (18) months, subject to
mutual extension for an additional six (6) months.
Pursuant to the SPA, Tnuva and NewCo agreed to
enter into a Commercialization Agreement within twelve (12) months pursuant to which Tnuva shall be granted exclusive marketing, distribution
and sale rights of the Licensed Products in Israel. Tnuva’s exclusivity in the region will be subject to achieving and maintaining
specific milestones. NewCo shall retain exclusive worldwide marketing, distribution, and sale rights for the Licensed Products worldwide,
except in Israel.