UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the Quarterly Period Ended
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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(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 | ||
| The
|
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.
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).
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 | ☐ |
| ☒ | 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 ☐
As of August 10, 2023, there were shares of registrant’s common stock outstanding.
EXPLANATORY NOTE
As previously reported in the Company’s Current Report on Form 8-K filed on April 15, 2024, in connection with its completion of its year-end reporting processes for its 2023 fiscal year, the Company identified errors in accounting for (i) revenues, equity investees, goodwill, share on loss of associated companies, and selling, general and administration expenses (ii) convertible loan receivable and credit losses related to such convertible loan.
On April 10, 2024, the Audit Committee of the Board of Directors of the Company, in consultation with management of the Company and the Company’s independent registered public accounting firm, Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, concluded that certain items of the Company’s previously issued unaudited condensed consolidated interim financial statements as of and for the fiscal periods ended March 31, 2023, June 30, 2023 and September 30, 2023 included in the Company’s Quarterly Reports on Form 10-Q for such periods should no longer be relied upon and that the Company needed to restate those previously issued financial statements.
See Note 2, under the caption “Restatement of Previously Issued Financial Statements”, to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q/A for additional information and a reconciliation of the previously reported amounts to the restated amounts.
Contemporaneously with the filing of this Form 10-Q/A, the Company is filing an amendment to its Quarterly Reports on Form 10-Q as of and for each of the periods ended March 31, 2023 and September 30, 2023.
Internal Control Considerations
In connection with the restatement, the Company’s management reassessed the effectiveness of its disclosure controls and procedures and internal control over financial reporting as of June 30, 2023. As a result of that reassessment, the Company’s management determined that its disclosure controls and procedures and internal control over financial reporting as of June 30, 2023 were not effective as a result of the inappropriate measurement of expected credit losses and revenues. For additional information about the nature of the Company’s material weaknesses which contributed to the financial statement restatement described herein, see Part I, Item 4 “Controls and Procedures”, in this Form 10-Q/A.
Items Amended in this Filing
This Form 10-Q/A sets forth the Original Filing, as amended, in its entirety; however, this Form 10-Q/A amends and restates the following Items of the Original Filing to the extent necessary to reflect the adjustments set forth in Note 1, under the caption “Restatement of Previously Issued Financial Statements” and to make corresponding revisions to the Company’s financial data cited elsewhere in this Form 10-Q/A.
● Part I, Item 1 - Financial Statements
● Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
● Part I, Item 4 - Controls and Procedures
In addition, Part II, Item 6 “Exhibits” of this Form 10-Q/A is amended, as the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing (Exhibits 31.1, 31.2, 32.1 and 32.2), and the Company has provided its restated condensed consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.
Except as described above, no other changes have been made to the Original Filing. This Form 10-Q/A speaks as of the date of the Original Filing and does not reflect events that may have occurred after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. Among other things, forward-looking statements made in the Original Filing have not been revised to reflect events, results or developments that occurred or facts that became known to the Company after the date of the Original Filing, and such forward-looking statements should be read in conjunction with the Company’s filings with the SEC, including those subsequent to the filing of the Original Filing.
ORGENESIS INC.
FORM 10-Q/A
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
TABLE OF CONTENTS
| 2 |
PART I –FINANCIAL INFORMATION
Item 1. Financial Statements
ORGENESIS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
(Unaudited)
| As of | ||||||||
| June 30, 2023 | December 31, 2022 | |||||||
| (As
Restated see note 2) | ||||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net of credit losses of | ||||||||
| Prepaid expenses and other receivables | ||||||||
| Receivables from related parties | ||||||||
| Convertible loan receivable | ||||||||
| Inventory | ||||||||
| Total current assets |
| |||||||
| NON-CURRENT ASSETS: | ||||||||
| Deposits | $ | $ | ||||||
| Equity investees |
| |||||||
| loans to associates | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Goodwill |
| |||||||
| Deferred tax | ||||||||
| Other assets | ||||||||
| Total non-current assets |
| |||||||
| TOTAL ASSETS | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
ORGENESIS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Cont’d)
(U.S. Dollars in thousands)
(Unaudited)
| As of | ||||||||
| June 30, 2023 | December 31, 2022 | |||||||
| (As Restated) | ||||||||
| Liabilities and Equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable related parties | ||||||||
| Accrued expenses and other payables | ||||||||
| Income tax payable | ||||||||
| Employees and related payables | ||||||||
| Other payables related parties | ||||||||
| Advance payments on account of grant | ||||||||
| Contract liabilities | ||||||||
| Current maturities of finance leases | ||||||||
| Current maturities of operating leases | ||||||||
| Short-term and current maturities of convertible loans | ||||||||
| Total current liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Non-current operating leases | $ | $ | ||||||
| Convertible loans | ||||||||
| Retirement benefits obligation | ||||||||
| Long-term debt and finance leases | ||||||||
| Advance payments on account of grant | ||||||||
| Other long-term liabilities | ||||||||
| Total long-term liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| REDEEMABLE NON-CONTROLLING INTEREST | $ | $ | ||||||
| EQUITY: | ||||||||
| Common stock of $ par value: Authorized at June 30, 2023 and December 31, 2022: shares; Issued at June 30, 2023 and December 31, 2022: and shares, respectively; Outstanding at June 30, 2023 and December 31, 2022: and shares, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive (income) loss | ( | ) | ||||||
| Treasury stock shares as of June 30, 2023 and December 31, 2022 | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Equity attributable to Orgenesis Inc. | ( | ) | ||||||
| Non-controlling interest | ||||||||
| Total equity | ( | ) | ||||||
| TOTAL LIABILITIES REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY | $ | $ | ||||||
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 | Six Months Ended | |||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
| (As Restated) | (As Restated) | |||||||||||||||
| Revenues | $ |
| $ | $ |
| $ | ||||||||||
| Revenues from related party | ||||||||||||||||
| Total revenues |
|
| ||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ( | ) | ( | ) | ||||||||||||
| Cost of development services and research and development expenses | ||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||
| Selling, general and
administrative expenses including credit losses of $ |
| |||||||||||||||
Operating loss |
| |||||||||||||||
| Loss from deconsolidation of Octomera (see note 3) | ||||||||||||||||
| Other income, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Credit loss on convertible loan receivable | ||||||||||||||||
| Loss from extinguishment in connection with convertible loan | ||||||||||||||||
| Financial expenses, net |
| |||||||||||||||
| Share in net loss (profit) of associated companies | ( | ) | ( | ) | ||||||||||||
| Loss before income taxes |
| |||||||||||||||
| Tax expenses | ||||||||||||||||
| Net loss | ||||||||||||||||
| Net income (loss) attributable to non-controlling interests (including redeemable) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Orgenesis Inc. | $ |
| $ | $ |
| $ | ||||||||||
| Loss per share: | ||||||||||||||||
| Basic and diluted | $ | $ | $ | $ | ||||||||||||
| Weighted average number of shares used in computation of Basic and Diluted loss per share: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ |
| $ | $ | $ | |||||||||||
| Other comprehensive loss - translation adjustments | ||||||||||||||||
| Release of translation adjustment due to deconsolidation of Octomera | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | ||||||||||||||||
| Comprehensive income (loss) attributed to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributed to Orgenesis Inc. | $ | $ | $ | $ | ||||||||||||
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)
(As Restated)
| Common Stock | ||||||||||||||||||||||||||||||||||||
| Number | Par Value | Addi-tional Paid-in Capital | Accumu-lated Other Compre-hensive Income (Loss) | Treasury Shares | Accumu-lated Deficit | Equity Attributed to Orgenesis Inc. | Non- Contro- lling Interest | Total | ||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||
| Changes during the six months ended June 30, 2023: | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation to employees and directors | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation to service providers | - | |||||||||||||||||||||||||||||||||||
| Issuance of shares and warrants net of issuance costs | * | |||||||||||||||||||||||||||||||||||
| Issuance of Shares due to exercise of warrants | * | |||||||||||||||||||||||||||||||||||
| Issuance of warrants with respect to convertible loans | - | |||||||||||||||||||||||||||||||||||
| Extinguishment in connection with convertible loan restructuring | - | |||||||||||||||||||||||||||||||||||
| Deconsolidation of Octomera | - | ( | ) | |||||||||||||||||||||||||||||||||
| Adjustment to redemption value of redeemable non-controlling interest | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Comprehensive income (loss) for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at June 30, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| * |
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)
| Common Stock | ||||||||||||||||||||||||||||||||||||||||
| Number | Par Value | Addi- Paid-in Capital | Receipts on Account of Shares to be Allotted | Accumulated Other Compre- Income | Treasury Shares | Accumu- Deficit | Equity Attri- to Orgenesis Inc. | Non- Contro- Interest | Total | |||||||||||||||||||||||||||||||
| Balance at January 1, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Changes during the six months ended June 30, 2022: | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to employees and directors | - | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to service providers | - | |||||||||||||||||||||||||||||||||||||||
| Exercise of options | * | |||||||||||||||||||||||||||||||||||||||
| Issuance of warrants with respect to convertible loans | - | |||||||||||||||||||||||||||||||||||||||
| Receipts on account of shares and warrants to be allotted | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of shares related to acquisition of Mida | * | |||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
ORGENESIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(U.S. Dollars in thousands, except share amounts)
(Unaudited)
(As Restated)
| Common Stock | ||||||||||||||||||||||||||||||||||||
| Number | Par Value | Addi-tional Paid-in Capital | Accumu-lated Other Compre-hensive Income (Loss) | Treasury Shares | Accumu-lated Deficit | Equity Attri-buted to Orgenesis Inc. | Non- Contro-lling Interest | Total | ||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||
| Changes during the three months ended June 30, 2023: | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation to employees and directors | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation to service providers | - | |||||||||||||||||||||||||||||||||||
| Issuance of shares and warrants net of issuance costs | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Issuance of Shares due to exercise of warrants | * | |||||||||||||||||||||||||||||||||||
| Deconsolidation of Octomera | - | ( | ) | |||||||||||||||||||||||||||||||||
| Adjustment to redemption value of redeemable non-controlling interest | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Comprehensive income for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
ORGENESIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(U.S. Dollars in thousands, except share amounts)
(Unaudited)
| Common Stock | ||||||||||||||||||||||||||||||||||||||||
| Number | Par Value | Addi-tional Paid-in Capital | Receipts on Account of Shares to be Allotted | Accumulated Other Compre-hensive Income (loss) | Treasury Shares | Accumu-lated Deficit | Equity Attri-buted to Orgenesis Inc. | Non- Contro-lling Interest | Total | |||||||||||||||||||||||||||||||
| Balance at April 1, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Changes during the three months ended June 30, 2022: | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to employees and directors | - | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to service providers | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of warrants with respect to convertible loans | - | |||||||||||||||||||||||||||||||||||||||
| Receipts on account of shares and warrants to be allotted | - | |||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 9 |
ORGENESIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. Dollars in thousands)
(Unaudited)
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (As Restated) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Capital gain, net | ( | ) | ||||||
| Loss from deconsolidation of Octomera | ||||||||
| Share in losses (income) of associated companies, net | ( | ) | ||||||
| Depreciation and amortization expenses | ||||||||
| Credit loss on convertible loan receivable | ||||||||
| Effect of exchange differences on inter-company balances | ||||||||
| Net changes in operating leases | ( | ) | ( | ) | ||||
| Interest expenses accrued on loans and convertible loans | ||||||||
| Loss from extinguishment in connection with convertible loan restructuring | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (increase) in accounts receivable | ( | ) | ||||||
| Decrease (increase) in inventory | ( | ) | ||||||
| Decrease in other assets | ||||||||
| Decrease (increase) in prepaid expenses and other accounts receivable | ( | ) | ||||||
| Increase (decrease) in accounts payable | ( | ) | ||||||
| Increase in accrued expenses and other payables | ||||||||
| Increase in employee and related payables | ||||||||
| Increase in contract liabilities | ||||||||
| Change in advance payments and receivables on account of grant, net | ( | ) | ||||||
| Change in deferred taxes, net | ||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Repayment of convertible loan to related party partners | ||||||||
| Increase in loan to associates entities | ( | ) | ||||||
| Repayment of loan granted | ||||||||
| Sale of property and equipment | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Cash acquired from acquisition of Mida | ||||||||
| Impact to cash resulting from deconsolidation (see note 3) | ( | ) | ||||||
| Investment in long-term deposits | ( | ) | ( | ) | ||||
| Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of shares and warrants (in 2022 due to exercise of options) net of transaction costs | ||||||||
| Proceeds from issuance of convertible loans | ||||||||
| Proceeds from transaction with redeemable non-controlling interest that do not acquire control of a subsidiary, see note 3 | ||||||||
| Proceeds from receipts on account of shares and warrants to be allotted | ||||||||
| Repayment of convertible loans and convertible bonds | ( | ) | ( | ) | ||||
| Repayment of short and long-term debt | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | $ | $ | ||||||
| NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $ | ( | ) | $ | ( | ) | ||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ) | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES | ||||||||
| Right-of-use assets obtained in exchange for new operation lease liabilities | $ | $ | ||||||
| Increase (decrease) in accounts payable related to purchase of property, plant and equipment | $ | $ | ( | ) | ||||
| Issuance of common stocks for the acquisition of Mida | $ | $ | ||||||
| Extinguishment in connection with convertible loan restructuring | $ | $ | ||||||
| CASH PAID DURING THE YEAR FOR: | ||||||||
| Interest | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 10 |
ORGENESIS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2023 and 2022
(Unaudited)
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, or 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, or POCare.
In connection with the investment by an affiliate of Metalmark Capital Partners (“Metalmark” or “MM) in the Company’s subsidiary Morgenesis LLC (“Morgenesis”) in November 2022 (“the Metalmark Investment”), the Company separated its operations into two operating segments: the operations of Morgenesis LLC (the “Morgenesis” or “Octomera” segment) and therapies related activities (the “Therapies” segment).
On June 30, 2023, in connection with an additional $1 million investment in Morgenesis, the Company and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement Amendment”) to change the name of Morgenesis to “Octomera LLC” and to amend Morgenesis’ board composition. Pursuant to the LLC Agreement Amendment, the board of managers of Octomera (the “Octomera Board”) will be comprised of five managers, two of which will be appointed by the Company, one of which will be an industry expert appointed by MM, and two of which will be appointed by MM. The change was effective immediately. However, as a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, the Company deconsolidated Octomera from its consolidated financial statements as of June 30, 2023 (“effective date of deconsolidation”) and recorded its equity interest in Octomera as an equity method investment, see note 3
The
Company currently owns approximately
These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries.
The Company’s common stock, par value $ per share (the “Common Stock”), is listed and traded on the Nasdaq Capital Market under the symbol “ORGS.”
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
June 30, 2023, the Company had an accumulated deficit of $
If there are further increases in operating costs for facilities expansion, research and development, commercial and clinical activity or decreases in revenues from customers, the Company will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. In addition, in order to fund the Company’s operations until such time that the Company can generate sustainable positive cash flows, the Company may need to raise additional funds.
| 11 |
Current and projected cash resources and commitments, as well as the other factors mentioned above, raise a substantial doubt about the Company’s ability to continue as a going concern to meet the Company’s current operations for the next 12 months. Management plans include raising additional capital to fund the Company’s operations and to repay the Company’s outstanding loans when they become due, as well as exploring additional avenues to increase revenue and reduce capital expenditures. If the Company is unable to raise sufficient additional capital or meet revenue targets, it may have to curtail certain activities.
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, 2022, as filed with the Securities and Exchange Commission (“SEC”) on March 22, 2023. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2022, 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.
Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the condensed consolidated financial statements as of and for the quarter ended June 30, 2023 included in the Form 10-Q originally filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2023 (the “Original Filing”), the Company identified a correction required to be made in its historical condensed consolidated financial statements and related disclosures as of and for the three and six months ended June 30, 2023. The correction relates to the accounting treatment of i) revenues, equity investees, goodwill, share on loss of associated companies, and selling, general and administration expenses (ii) convertible loan receivable and credit losses related to such convertible loan recorded during the three and six months ended June 30, 2023. In the Company’s Original Filing, the Company overstated revenues, as a result of inappropriate accounting for revenue recognition where, due to insufficient evidence of the collectability, it was not probable that the Company will collect substantially all of the consideration to which it is entitled in exchange for the services that it transferred to the customer. Account receivable and convertible loan were also restated due to inappropriate accounting for estimated credit losses.
The tables below set forth the condensed consolidated financial statements, including as reported, the impacts resulting from the restatement and the as restated amounts for the quarterly period ended June 30, 2023 (in thousands, except per share amounts):
| June 30, 2023 | ||||||||||||
| As Originally Reported | Adjustments | As Restated | ||||||||||
| (In thousands) | ||||||||||||
| Convertible loan receivable | $ | $ | ( | ) | $ | |||||||
| Total Current Assets | ( | ) | ||||||||||
| Equity investees | ( | ) | ||||||||||
| Goodwill | ( | ) | ||||||||||
| Total non-current assets | ( | ) | ||||||||||
| Total Assets | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Equity attributable to Orgenesis Inc. | ( | ) | ( | ) | ||||||||
| Total Equity | ( | ) | ( | ) | ||||||||
| Total Liabilities, redeemable Non-Controlling Interest and Equity | ( | ) | ||||||||||
| Six months ended June 30, 2023 | ||||||||||||
| As Originally Reported | Adjustments | As Restated | ||||||||||
| (In thousands) | ||||||||||||
| Revenue | $ | $ | ( | ) | $ | |||||||
| Total revenues | ( | ) | ||||||||||
| Gross (loss) profit | ( | ) | ( | ) | ||||||||
| Selling, general and administrative expenses | ||||||||||||
| Operating loss | ||||||||||||
| Loss (profit) from deconsolidation of Octomera | ( | ) | ||||||||||
| Credit losses on convertible loan receivable | ||||||||||||
| Financial expenses, net | ||||||||||||
| Loss before income taxes | ||||||||||||
| Net loss | ||||||||||||
| Net income (loss) attributable to non-controlling interests (including redeemable) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Orgenesis Inc. | ||||||||||||
| Loss per share: | ||||||||||||
| Basic and diluted | ||||||||||||
| Comprehensive loss: | ||||||||||||
| Net loss | ||||||||||||
| Comprehensive loss | ||||||||||||
| Comprehensive income (loss) attributed to non-controlling interests | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributed to Orgenesis Inc. | ||||||||||||
| Six months ended June 30, 2023 | ||||||||||||
| As Originally Reported | Adjustments | As Restated | ||||||||||
| (In thousands) | ||||||||||||
| Cash Flow from Operating Activities: | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Loss (profit) from deconsolidation of Octomera | ( | ) | ||||||||||
| Credit losses on convertible loan receivable | ||||||||||||
| Effect of exchange differences on inter-company balances | ( | ) | ||||||||||
| Interest expenses accrued on loans and convertible loans | ||||||||||||
| Decrease (increase) in accounts receivable | ( | ) | ||||||||||
b. Significant Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except as described below:
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, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for Smaller Reporting Companies (SRCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08 “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance results in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance is to be applied prospectively to acquisitions that occur on or after the effective date. The guidance is currently effective for fiscal years that began after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
| 12 |
Reclassifications
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. These reclassifications had no net effect on previously reported results of operations.
NOTE 3 – REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION
Metalmark Investment in Octomera LLC
On
May 5, 2023, the Company and MM entered into Amendment No. 1 to the Unit Purchase Agreement dated November 4, 2022 (the “UPA”).
Pursuant to Amendment No 1, MM agreed to pay $
On
June 30, 2023, the Company and MM entered into Amendment No. 2 (the “Amendment”) to the UPA (“Amendment No. 2”).
Pursuant to Amendment No. 2, MM agreed to pay $
As
a result of the deconsolidation (see note 1a), the Company recorded a net loss of $
| (in thousands) | ||||
| (As Restated) | ||||
| Fair value of the retained interest in Octomera | $ | |||
| Net assets deconsolidated | ||||
| Release of translation adjustment | ||||
| Net loss | $ | |||
The change in board composition does not constitute a strategic shift from the Company’s perspective and therefore the Company did not treat the deconsolidation as a discontinued operation.
Following
the Amendment No. 2, the Company accounts for its investment in Octomera according to the equity method in accordance with ASC Topic
323, as it has retained the ability to exercise significant influence but does not control the entity. The Company thus recognized an
equity method investment in a total amount of $
| 13 |
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 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 represents the deconsolidated amounts from the Company’s Balance Sheet (As Restated):
| ASSETS: | ||||
| Cash and cash equivalents | ||||
| Other current assets | ||||
| Non-current assets | ||||
| TOTAL ASSETS | ||||
| LIABILITIES: | ||||
| Current liabilities | ||||
| Long-term liabilities | ||||
| TOTAL LIABILITIES | ||||
| REDEEMABLE NON-CONTROLLING INTEREST | ||||
| NON-CONTROLLING INTEREST | ||||
| NET ASSETS DECONSOLIDATED | ( | ) |
NOTE 4 – SEGMENT INFORMATION
The Morgenesis operations segment, which has been renamed to the Octomera segment following the change of name of Morgenesis LLC to Octomera LLC includes mainly POCare Services, while the therapies related segment includes the Company’s therapeutic development operations. The segment information includes all the results of the Octomera segment up to the effective date of deconsolidation.
Because the Company conducted all its operations as one segment prior to the Metalmark Investment, the above changes were reflected through retroactive revision of prior period segment information based on the subsidiaries that were transferred to Octomera. Certain activities of these subsidiaries have changed after they were transferred to Octomera operations segment.
The Company’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the two identified reportable segments to make decisions about resources to be allocated to the segments and assess their performance.
The Company does not review assets by segment. Therefore, the measure of assets has not been disclosed for each segment.
| 14 |
Segment data for the six months ended June 30, 2023 (As Restated) is as follows:
| Octomera | Therapies | Eliminations | Consolidated | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues* | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ( | ) | ( | ) | ( | ) | ||||||||||
| Cost of development services and research and development expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
Loss from deconsolidation of Octomera | ( | ) | ( | ) | ||||||||||||
| Other income, net | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from extinguishment in connection with convertible loan | ( | ) | ( | ) | ||||||||||||
| Credit losses on convertible loan receivable | ( | ) | ( | ) | ||||||||||||
| Financial Expenses, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Share in net income of associated companies | ||||||||||||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
Segment data for the six months ended June 30, 2022 is as follows:
| Octomera | Therapies | Eliminations | Consolidated | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | $ | ( | ) | $ | |||||||||||
| Revenues from related party | ||||||||||||||||
| Total revenues | ( | ) | ||||||||||||||
| Cost of revenues* | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Cost of development services and research and development expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income, net | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||
| Financial income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Share in net loss of associated companies | ( | ) | ( | ) | ||||||||||||
| Income (loss) before income taxes | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| * |
Segment data for the three months ended June 30, 2023 (As Restated) is as follows:
| Octomera | Therapies | Eliminations | Consolidated | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues* | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ( | ) | ( | ) | ( | ) | ||||||||||
| Cost of development services and research and development expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
Loss from deconsolidation of Octomera | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||
| Financial expenses, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Share in net income of associated companies | ||||||||||||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
| 15 |
Segment data for the three months ended June 30, 2022 is as follows:
| Octomera | Therapies | Eliminations | Consolidated | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | $ | ( | ) | $ | |||||||||||
| Revenues from related party | ||||||||||||||||
| Total revenues | ( | ) | ||||||||||||||
| Cost of revenues* | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Cost of development services and research and development expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses* | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income, net | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||
| Financial Expenses, net | ( | ) | ( | ) | ||||||||||||
| Share in net loss of associated companies | ( | ) | ( | ) | ( | ) | ||||||||||
| Income (loss) before income taxes | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| * |
NOTE 5 – EQUITY
On
February 23, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional
and accredited investors (the “Purchaser”) relating to the issuance and sale of shares (the “Shares”)
of common stock, par value $ per share (the “Common Stock”), and warrants to purchase up to
As of June 30, 2023, all of the warrants were exercised using the alternate cashless exercise option described above.
| 16 |
NOTE 6 – CONVERTIBLE LOANS
Convertible loans outstanding as of June 30, 2023 and December 31, 2022 are as follows:
| Principal Amount | Issuance Date | Current Interest Rate | Current Maturity | Current Exercise Price | ||||||||||||||
| (in thousands) | (Year) | % | (Year) | $ | ||||||||||||||
| Convertible Loans Outstanding as of June 30, 2023 | ||||||||||||||||||
| $ | % | |||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | * | |||||||||||||||||
| $ | ||||||||||||||||||
| * |
| Convertible Loans Outstanding as of December 31, 2022 | ||||||||||||||||||
| $ | % | |||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| % | ||||||||||||||||||
| $ | ||||||||||||||||||
Convertible Loans Entered into in 2023
On
January 10, 2023 (the “Effective Date”), the Company entered into the following agreements: (i) a convertible loan agreement
(the “NewTech Convertible Loan Agreement”) with NewTech Investment Holdings, LLC (the “NewTech Lender”), pursuant
to which the NewTech Lender loaned the Company $
The
terms of the NewTech Convertible Loan Agreement and the Malik Loan Agreement are identical. Interest is calculated at
At
any time prior to or on the Maturity Date, any Lender may provide the Company with written notice to convert all or part of the Outstanding
Amount into shares of our Common Stock equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) a price equal to
$
| 17 |
The Convertible Loan Agreements contain customary affirmative and negative covenants, including a minimum share reserve, transactions with affiliates, and restrictions on the incurrence of additional debt. Each Lender’s obligation to fund its respective Loan Amount is subject to customary closing conditions and deliverables.
Under
the terms of the Convertible Loan Agreements, the Company will use the proceeds from the Loan Amount to (i) redeem the loan amount from
the previously disclosed Convertible Loan Agreement, dated as of May 19, 2022 between Orgenesis and Ricky Steven Neumann, as amended
by the previously disclosed certain Convertible Loan Extension Agreement, dated as of October 23, 2022, by and between Orgenesis and
Ricky Steven Neumann, and (ii) for general corporate purposes. Pursuant to the terms, the Company repaid said loan upon receipt of the
Loan Amount. The use of proceeds from any Additional Loan Amount (as defined in the Convertible Loan Agreements) will be to redeem existing
indebtedness; provided, that $
In
connection with such loan, the Company agreed to issue the NewTech Lender warrants representing the right to purchase
Koligo Convertible Loan
On
March 27, 2023, the Company’s subsidiary Koligo Therapeutics Inc. (“Borrower”), entered into a convertible loan agreement
(the “Convertible Loan Agreement”) with Yehuda Nir (the “Lender,” and together with the Borrower, the “Parties”),
pursuant to which the Lender agreed to loan the Borrower up to $
The
Parties agreed that the Lender shall have the option to assign $
Under
the terms of the Koligo Convertible Loan Agreement, the Borrower agreed to use the Loan Amount to fund working capital and ongoing operations
and for no other purposes unless the Lender agrees in writing. As of June 30, 2023, Koligo received $
| 18 |
Extension of Existing Loan Agreements
On
January 12, 2023, the Company entered into (i) a Convertible Credit Line and Unsecured Convertible Note Extension #2 Agreement with Yosef
Dotan (the “Dotan Extension Agreement”), (ii) a Convertible Credit Line Extension Agreement with Aharon Lukach (the “Lukach
Extension Agreement”) and (iii) a Convertible Loans and Unsecured Convertible Notes Extension #2 Agreement with Yehuda Nir (the
“Nir Extension Agreement”), each which extended the maturity date of the convertible loans under their respective loan agreements
(as described below) to January 31, 2026. The aggregate principal amount of loans extended was $
The
Dotan Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $
The
Lukach Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $
The
Nir Extension Agreement related to
| a. | Options Granted to Employees |
No. of Options Granted | Exercise Price | Vesting Period | Fair Value at Grant (in thousands) | Expiration Period | ||||||||||||||
| Employees | $ | $ | years | |||||||||||||||
| During the Period from January 1, 2023 to June 30, 2023 | ||||
| Value of one common share | $ | |||
| Dividend yield | % | |||
| Expected stock price volatility | % | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| 19 |
| b. | Options Granted to Non-Employees |
No. of Options Granted | Exercise Price | Vesting Period | Fair Value at Grant (in thousands) | Expiration Period | ||||||||||||||
| Non-employees | $ | $ | years | |||||||||||||||
| During the Period from January 1, 2023 to June 30, 2023 | ||||
| Value of one common share | $ | |||
| Dividend yield | % | |||
| Expected stock price volatility | % | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2023 | June
30, 2022 | June 30, 2023 | June
30, 2022 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Basic and diluted: | ||||||||||||||||
| Net loss attributable to Orgenesis Inc. | $ | $ | $ | $ | ||||||||||||
| Adjustment of redeemable non-controlling interest to redemption amount | ( | ) | ||||||||||||||
| Net loss attributable to Orgenesis Inc. for loss per share | $ | $ | $ | $ | ||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Net loss per share | $ | $ | $ | $ | ||||||||||||
For the six months ended June 30, 2023 and June 30, 2022, 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 shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the six months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the three months ended June 30, 2023, because the effect of their inclusion in the computation would be antidilutive.
Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the six months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the three months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive.
| 20 |
NOTE 9 – REVENUES
Disaggregation of Revenue
The following table disaggregates the Company’s revenues by major revenue streams:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
| (As Restated) | (As Restated) | |||||||||||||||
| (in thousands) | ||||||||||||||||
| Revenue stream: | ||||||||||||||||
| POC development services | $ | $ | $ | $ | ||||||||||||
| Cell process development services and hospital services |
|
| ||||||||||||||
| POC cell processing | ||||||||||||||||
| Total | $ |
| $ | $ | $ | |||||||||||
A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
| (As Restated) | (As Restated) | |||||||||||||||
| (in thousands) | ||||||||||||||||
| Revenue earned: | ||||||||||||||||
| Customer A (United States) | $ | $ | $ | $ | ||||||||||||
| Customer B (United States) | $ | $ | $ | $ | ||||||||||||
| Customer C (United States) | $ | $ | $ | $ | ||||||||||||
| Customer D (United States) | $ | $ | $ | $ | ||||||||||||
| Customer E (Greece) | $ | $ | $ | $ | ||||||||||||
| Customer F (Korea) | $ | $ | $ | $ | ||||||||||||
| Customer G (United Arab Emirates) | $ | $ | $ | $ | ||||||||||||
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:
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (As Restated) | ||||||||
| (in thousands) | ||||||||
| Balance as of beginning of period | $ | $ | ||||||
| Elimination of acquisition receivables | ( | ) | ||||||
| Additions |
| |||||||
| Collections | ( | ) | ( | ) | ||||
| Allowances for credit losses | ( | ) | ||||||
| Exchange rate differences | ( | ) | ( | ) | ||||
| Deconsolidation of Octomera | ( | ) | ||||||
| Balance as of end of period | $ | $ | ||||||
* The activity of the related party included in the trade receivables activity above is comprised of:
| 21 |
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Balance as of beginning of period | $ | $ | ||||||
| Additions | ||||||||
| Collections | ( | ) | ||||||
| Balance as of end of period | $ | $ | ||||||
The activity for contract liabilities is comprised of:
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Balance as of beginning of period | $ | $ | ||||||
| Additions | ||||||||
| Deconsolidation of Octomera | ( | ) | ||||||
| Balance as of end of period | $ | $ | ||||||
NOTE 10 – OTHER SIGNIFICANT TRANSACTIONS DURING THE SIX MONTHS ENDED JUNE 30, 2023
In January 2023, the Company entered into updated joint venture (JV) agreements (JVAs) with Theracell Advanced Biotechnology SA, Broaden Bioscience and Technology Corp, Image Securities FZC, Cure Therapeutics, and Med Centre for Gene and Cell Therapy FZ-LLC and assigned certain rights and obligations under its JVAs to Texas Advanced Therapies LLC, a Delaware Limited Liability company (“Texas AT”) not related to the Company. Texas AT will receive the Company’s option to require the incorporation of the JV Entity, Company’s share in the JV Entity if and when the latter are incorporated, an option to invest additional funding in the JV Entity, and board and veto rights on certain critical decisions in the JV Entity. The Company has retained the call option to acquire the JV partner’s share in the JVE, to receive a royalty and a right to conclude the Manufacturing and Service Agreement with the JV entity. Pursuant to the JVAs, the Company will no longer be entitled to the additional share of fifteen percent of the JVE’s GAAP profit after tax granted as per the previous version of the JVAs. The Company also has no further obligation to provide any additional funding to the JV entities. As of June 30, 2023, no JV entities were incorporated pursuant to the JVAs.
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 and Orgenesis Limited, the Company’s Israeli subsidiary (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”).
| 22 |
NOTE 12 – SUBSEQUENT EVENTS
On July 6, 2023, Neil Reithinger informed the Company of his decision to resign as Chief Financial Officer, Treasurer and Secretary of the Company to pursue other opportunities. Mr. Reithinger will remain with the Company until he completes his transition of duties through September 1, 2023.
On July 6, 2023, the Company appointed Elliot Maltz as its Chief Financial Officer, effective September 1, 2023.
On July 11, 2023, Efrat Assa Kunik informed the Company of her decision to resign as Chief Development Officer of the Company to pursue other opportunities.
On
July 25, 2023, the Israeli Subsidiary received a loan from an offshore investor in the amount of $
On
July 25, 2023, the Company and Mircod LLC (“Mircod”) entered into a settlement and release agreement pursuant to which they
agreed to terminate the joint venture and loan agreement between themselves. Mircod agreed to deliver all the related deliverables to
the Company, and the Company agreed to pay Mircod consideration in the amount of $
On July 25, 2023, the Company, a Sub-licensee, and the equity interest owner of that Sub-licensee (“Sub-licensee Owner”), entered into agreements whereby:
| 1) | the Company sub-licensed certain of its therapies to Sublicensee in return for royalties on future sales and payments upon the successful completion of certain milestones; | |
| 2) | subject to the fulfilment certain conditions and milestones, the Sub-licensee Owner granted the Company a call option to purchase his interests in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $8 million unless agreed otherwise by the parties to the option; and | |
| 3) |
subject
to the fulfilment of certain conditions and milestones, the Sub-licensee Owner was granted a put option to cause the Company to purchase
his equity interest in Sub-licensee at a valuation to be determined by a third-party valuation firm of not less than $ |
| 23 |
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, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2023. 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 or subsidiaries of Octomera LLC (whose name was changed on June 30, 2023 from Morgenesis LLC), 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 (formerly Orgenesis Maryland Inc.), a Maryland limited liability company (the “U.S. 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”) which was purchased in 2022; 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 incorporated in 2023; and Octomera LLC, a Delaware limited liability company (“Morgenesis” or “Octomera”).
| 24 |
This Item has been revised for the effects of the restatement, as discussed in Note 2, Basis of Presentation, of the financial statements included elsewhere in this Quarterly Report on Form 10-Q/A.
Corporate 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 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, 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. Our cellular therapies, though defined as drug products, conceptually differ from other drug modalities in that they are based on reprogramming of cells sourced from the patient or from a donor. In most cases, they are individually produced per patient in a highly sterile and controlled environment, and their efficacy is optimized when administered a short time following production as fresh product.
To advance the execution of our goal of bringing such therapies to market, we have designed and built our POCare Platform - a scalable infrastructure of technology and services that ensures a central quality system, replicability and standardization of infrastructure and equipment, and centralized monitoring and data management. The platform is constructed on POCare Centers that serve as hubs that locally implement our quality system, Good Manufacturing Practices, training procedures, quality control testing, incoming supply of materials and oversee the actual production in the Orgenesis Mobile Processing Units & Labs, or OMPULs.
In connection with the investment by an affiliate of Metalmark Capital Partners (“Metalmark” or “MM”) in November 2022, we separated our operations into two operating segments: the operations of Morgenesis LLC (the “Morgenesis” segment which we have renamed to the “Octomera” segment following the change of name of Morgenesis LLC to Octomera LLC) and therapies related activities (the “Therapies” segment). Prior to that, we conducted all our operations as one single segment. The Octomera segment includes mainly POCare Services and include the results of the subsidiaries transferred to Octomera and all of the operations of Octomera LLC. The Therapies segment includes our therapeutic development operations. The segment information presented in note 3 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q reflects the results of the subsidiaries that were transferred to Octomera.
On June 30, 2023, in connection with an additional $1 million investment in Octomera, we and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement Amendment”) to change the name of Morgenesis to “Octomera LLC” and to amend Octomera’s board composition. Pursuant to the LLC Agreement Amendment, the board of managers of Octomera (the “Octomera Board”) will be comprised of five managers, two of which will be appointed by us, one of which will be an industry expert appointed by MM, and two of which will be appointed by MM. However, as a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, we deconsolidated Octomera from our consolidated financial statements as of June 30, 2023 (the “effective date of deconsolidation”) and recorded our equity interest in Octomera as an equity method investment.
We currently own approximately 75% of Octomera LLC.
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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.
Our POCare Network is an alternative to the traditional pathway of drug development. We collaborate with academic institutions and entities that have been spun out from such institutions. We are in close contact with researchers who are experts in the field of the drug and also partners with leading hospitals and research institutes. Based on such collaborations, we enter into in-licensing agreements with relevant institutions for promising therapies with the aim of adapting them to a point-of-care setting through regional or strategic biological partnerships. Based on the results of the collaboration, we are then able to out-license our own therapeutic developments, as well as those therapies developed from in-licensing agreements to out-licensing partners at preferred geographical regions.
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 preferred 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.
Our therapies development subsidiaries are:
| ● | Koligo Therapeutics, Inc., a Kentucky corporation, which is a regenerative medicine company, specializing in developing personalized cell therapies. It is currently focused on commercializing its metabolic pipeline via the POCare Network throughout the United States and in international markets. |
| ● | Orgenesis CA, Inc. a Delaware corporation, which is currently focused on development of technologies and therapies in California. |
| ● | Orgenesis Belgium SRL which is currently focused on product development. Since its incorporation, the subsidiary been awarded grants in excess of 18 million Euro from the Walloon region for several projects (DGO6 grants). |
| ● | Orgenesis Switzerland Sarl, which is currently focused on providing group management services. |
| ● | MIDA Biotech BV, which is currently focused on research and development activities, was granted a 4 million Euro grant under the European Innovation Council Pathfinder Challenge Program which supports cutting-edge science and technology. The grant is for technologies enabling the production of autologous induced pluripotent stem cells (iPSCs) using microfluidic technologies and artificial intelligence (AI). |
| Orgenesis Italy SRL which is currently focused on R&D activities. | |
| ● | Orgenesis Ltd., an Israeli subsidiary which is focused on R&D and a provider of R&D management services for out licenced products. Israel as a hub for biotech research and pioneers in this field. |
| ● | Orgenesis Austria GmbH, an Austrian subsidiary, which is focused on R&D activities. |
| 26 |
Octomera segment (mainly POCare Services)
Octomera LLC (“Octomera” or “Morgenesis”) is responsible for most of our POCare services platform. The POCare Services platform is utilized by parties such as biotech companies and hospitals for the supply of their products. Octomera’s services include adapting the process to the platform and supplying the products, or POCare Services. These are services for third party companies and for CGTs that are not necessarily based on our POCare Therapies. 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 design 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; and |
| ● | Contract Research Organization services for clinical trials. |
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 with the intention of providing 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.
POCare Services Operations Subsidiaries
We conduct our core POCare operations through Octomera (of which we currently own approximately 75%) and which was a consolidated subsidiary of the Company until June 30, 2023. The Octomera subsidiaries which are all wholly owned except as otherwise stated below (collectively, the “Subsidiaries”) include:
| ● | Orgenesis Maryland LLC, which is the center of POCare Services activity in North America and is currently focused on setting up and providing POCare Services and cell-processing services to the POCare Network. |
| ● | Tissue Genesis International LLC, a Texas limited liability company currently focused on development of our technologies and therapies. |
| ● | Orgenesis Services SRL, which is currently focused on expanding our POCare Network in Belgium. |
| ● | Orgenesis Germany GmbH, which is currently focused on providing CRO services to the POCare Network. |
| ● | Orgenesis Korea Co. Ltd., which is a provider of cell-processing and pre-clinical services in Korea. Octomera owns 94.12% of the Korean Subsidiary. |
| ● | Orgenesis Biotech Israel Ltd., which is a provider of process development and cell-processing services in Israel. |
| ● | Orgenesis Australia PTY LTD, which was transferred to Octomera in January 2023 and is currently focused on the development of our POC Network in Australia. |
| ● | Theracell Laboratories private company, a Greek company currently focused on expanding our POCare Network. |
| ● | ORGS POC CA Inc, incorporated in 2023, which is currently focussed on expanding our POCare Network in California. |
Developments During the Six Months Ended June 30, 2023
On January 10, 2023 (“Effective date”), we entered into convertible loan agreements (the “CLAs”) with lenders pursuant to which we received convertible loans totaling $5 million. Interest on the CLAs is calculated at 8% per annum (based on a 365-day year); provided, that if an Event of Default (as defined in the Convertible Loan Agreements) has occurred and is continuing, the Outstanding Amount (as defined herein) will be calculated at 15.0% per annum. The Loan Amount and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”) shall either (i) be repaid in cash or (ii) convert to shares of our common stock, par value $0.0001 per share (“Common Stock”), on the third anniversary of the Effective Date (the “Maturity Date”). At any time prior to or on the Maturity Date, Lender may provide us with written notice to convert all or part of the Outstanding Amount into shares of our Common Stock equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) a price equal to $2.464 per share (subject to adjustment for certain capital events, such as stock splits) (the “Conversion Price”).
| 27 |
Under the terms of the CLAs, we may use the proceeds from the Loan Amount to (i) redeem the loan amount from the previously disclosed Convertible Loan Agreement, dated as of May 19, 2022 between Orgenesis and Ricky Steven Neumann, as amended by the previously disclosed certain Convertible Loan Extension Agreement, dated as of October 23, 2022, by and between Orgenesis and Ricky Steven Neumann, and (ii) for general corporate purposes. Pursuant to the terms, we repaid said loan upon receipt of the Loan Amount. In connection with the CLAs, we agreed to issue Lender warrants representing the right to purchase 507,305 shares of our Common Stock, at an exercise price of $2.50 per share.
On February 23, 2023, we entered into a securities purchase agreement with certain institutional and accredited investors relating to the issuance and sale of 1,947,368 shares of common stock, par value $0.0001 per share and warrants to purchase up to 973,684 shares of Common Stock at a purchase price of $1.90 per share of Common Stock and accompanying Warrants in a registered direct offering. The offering closed on February 27, 2023 and the Company received approximately $3.7 million, before deducting the placement agent’s cash fee equal to 7% of the proceeds. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes, including the Company’s therapy related activities. The offering was made pursuant to an effective registration statement on Form S-3 (Registration Statement No. 333-254806), as previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) on April 7, 2021, a base prospectus included as part of the registration statement, and a final prospectus supplement filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended.
On March 27, 2023, our subsidiary Koligo Therapeutics Inc. (“Borrower”), entered into a convertible loan agreement (the “Convertible Loan Agreement”) with Yehuda Nir (the “Lender,”), pursuant to which the Lender agreed to loan the Borrower up to $5,000,000 (the “Loan Amount”). Interest is calculated at 8% per annum (based on a 365-day year) and is payable, along with the principal, on or before January 1, 2024.
If prior to December 31, 2023, the Borrower issues equity securities (“Equity Securities”) in a transaction or series of related transactions resulting in aggregate gross proceeds to the Borrower of at least $5,000,000 (excluding conversion of the Loan Amount) (a “Qualified Financing”), then the outstanding principal amount of the Loan Amount, and any and all accrued but unpaid interest thereon, will automatically convert into such Equity Securities issued pursuant to the Qualified Financing at a price per share equal to fifty percent (50%) of the price per share paid for each share of the Equity Securities purchased for cash by the investors in the Qualified Financing.
As of June 30, 2023, we borrowed $485 thousand pursuant to the Convertible Loan Agreement, and borrowed an additional $175 thousand in July 2023.
In January 2023, we entered into updated joint venture (JV) agreements (the “JVAs”) with Theracell Advanced Biotechnology SA, Broaden Bioscience and Technology Corp, Image Securities FZC, Cure Therapeutics, and Med Centre for Gene and Cell Therapy FZ-LLC and assigned certain rights and obligations under its JVAs to Texas Advanced Therapies LLC, a Delaware Limited Liability company (“Texas AT”) not related to us. Texas AT will receive our option to require the incorporation of the JV Entity, our share in the JV Entity if and when the latter are incorporated, an option to invest additional funding in the JV Entity, and board and veto rights on certain critical decisions in the JV Entity. We have retained the call option to acquire the JV partner’s share in the JVE, to receive a royalty and a right to conclude the Manufacturing and Service Agreement with the JV entity. We have no further obligation to provide any additional funding to the JV entities. As of June 30, 2023, no JV entities were incorporated as per the JVAs.
Results of Operations
The results of our operations include all of the results of Octomera LLC and its subsidiaries (the Octomera segment) up to the effective date of deconsolidation.
| 28 |
Comparison of the Three Months Ended June 30, 2023 to the Three Months Ended June 30, 2022.
The following table presents our results of operations for the three months ended June 30, 2023 and 2022:
| Three-Months Ended | ||||||||
June 30, 2023 (As Restated) | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Revenues | $ | 113 | $ | 6,699 | ||||
| Revenues from related party | - | 502 | ||||||
| Total revenues | 113 | 7,201 | ||||||
| Cost of revenues | 3,232 | 1,063 | ||||||
| Gross profit | (3,119 | ) | 6,138 | |||||
| Cost of development services and research and development expenses | 3,527 | 7,838 | ||||||
| Amortization of intangible assets | 208 | 229 | ||||||
| Selling, general and administrative expenses included credit losses $14,878 for the three months ended June 30, 2023 | 18,216 | 2,803 | ||||||
| Operating loss | 25,070 | 4,732 | ||||||
| Loss from deconsolidation of Octomera | 5,343 | - | ||||||
| Other income, net | - | (8 | ) | |||||
| Financial expenses, net | 692 | 389 | ||||||
| Share in net loss of associated company | (3 | ) | 368 | |||||
| Loss before income taxes | 31,102 | 5,481 | ||||||
| Tax expense | 91 | 11 | ||||||
| Net loss | $ | 31,193 | $ | 5,492 | ||||
Revenues
During the three months ended June 30, 2023, we recognized revenue in the amount of $113 thousand, as compared to $7,201 during the three months ended June 30, 2022, representing a decrease of 98%.
During the 3 months ended June 30, 2023 we entered into new agreements with certain customers. We completed certain performance obligations under the agreements but did not recognize any revenue because revenue recognition conditions under ASC606 were not all met.
Expenses
Cost of Revenues
| Three-Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 1,091 | $ | 486 | ||||
| Stock-based compensation | 1 | 13 | ||||||
| Professional fees and consulting services | 1,071 | 21 | ||||||
| Raw materials | 482 | 71 | ||||||
| Depreciation expenses, net | 236 | 94 | ||||||
| Other expenses | 351 | 378 | ||||||
| Total | $ | 3,232 | $ | 1,063 | ||||
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Cost of revenues for the three months ended June 30, 2023 were $3,232 thousand, as compared to $1,063 thousand for the three months ended June 30, 2022, representing an increase of 204%. The increase was due to increased costs in the Octomera segment, including additional salaries, professional fees, raw materials and depreciation expenses incurred mainly related to higher costs of revenues of process development and POC cell processing, the revenues of which increased.
Cost of Development Services and Research and Development Expenses
| Three-Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 1,856 | $ | 2,576 | ||||
| Stock-based compensation | 79 | 138 | ||||||
| Subcontracting, professional and consulting services | 805 | 1,657 | ||||||
| Lab expenses | 128 | 636 | ||||||
| Depreciation expenses, net | 132 | 166 | ||||||
| Other research and development expenses | 587 | 2,665 | ||||||
| Less – grant | (60 | ) | - | |||||
| Total | $ | 3,527 | $ | 7,838 | ||||
Cost of development services and research and development for the three months ended June 30, 2023 were $3,527 thousand, as compared to $7,838 thousand for the three months ended June 30, 2022, representing a decrease of 55%. The changes contributing to the decrease during the quarter were attributable to:
● a decrease of $720 thousand in salaries and related expenses mainly in the Octomera segment where costs that were related to POC development services were no longer required due to the conclusion of the POC development revenue contracts;
● a decrease of $852 thousand in subcontracting, professional and consulting service fees, resulting from our heavily investing in subcontracting, professional and consulting service fees in previous years and the reduction of such expenditures this year; and
● a decrease of $2,078 thousand on other research and development expenses mainly as a result of our decision to reduce other research and development expenses.
Selling, General and Administrative Expenses
| Three-Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (As Restated) | ||||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 1,088 | $ | 925 | ||||
| Stock-based compensation | 71 | 81 | ||||||
| Accounting and legal fees | 794 | 1,009 | ||||||
| Professional fees | 525 | 244 | ||||||
| Rent and related expenses | 48 | 56 | ||||||
| Business development | 151 | 130 | ||||||
| Depreciation expenses, net | 21 | 12 | ||||||
| Other general and administrative expenses | 15,518 | 346 | ||||||
| Total | $ | 18,216 | $ | 2,803 | ||||
| 30 |
Selling, general and administrative expenses for the three months ended June 30, 2023 were $18,216 thousand, as compared to $2,803 thousand for the three months ended June 30, 2022, representing an increase of 550%. The increase in selling, general and administrative expenses in the three months ended June 30, 2022 compared to the three months ended June 30, 2021 is primarily attributable to an increase in salaries and related expenses and , professional fees in the Octomera segment due to the ramp up of activity, an increase in other general and administrative expenses due to an increased provision for credit losses in the Octomera segment, offset by a decline in accounting and legal fees.
Financial Expenses, net
| Three-Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Interest expense on convertible loans and loans | $ | 597 | $ | 239 | ||||
| Foreign exchange loss, net | 94 | 149 | ||||||
| Other expenses | 2 | 1 | ||||||
| Total | $ | 693 | $ | 389 | ||||
Financial expenses, net for the three months ended June 30, 2023 were $693 thousand, as compared to $389 thousand for the three months ended June 30, 2022, representing an increase of 78%. The increase was mainly due to interest expenses on convertible loans.
Comparison of the Six Months Ended June 30, 2023 to the Six Months Ended June 30, 2022.
The following table presents our results of operations for the six months ended June 30, 2023 and 2022:
| Six Months Ended | ||||||||
June 30, 2023 (As Restated) | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Revenues | $ | 255 | $ | 13,276 | ||||
| Revenues from related party | - | 1,137 | ||||||
| Total revenue | 255 | 14,413 | ||||||
| Cost of revenues | 5,954 | 1,777 | ||||||
| Gross profit | (5,699 | ) | 12,636 | |||||
| Cost of development services and research and development expenses | 6,808 | 14,489 | ||||||
| Amortization of intangible assets | 415 | 461 | ||||||
| Selling, general and administrative expenses included credit losses of $24,367 for the six months ended June 30, 2023 | 31,744 | 5,654 | ||||||
| Operating loss | 44,666 | 7,968 | ||||||
| Other income, net | (2 | ) | (8 | ) | ||||
| Loss from deconsolidation of Octomera | 5,343 | - | ||||||
| Credit loss on convertible loan receivable | 2,688 | |||||||
| Loss from extinguishment in connection with convertible loan | 283 | - | ||||||
| Financial expenses, net | 1,373 | 602 | ||||||
| Share in net loss (profit) of associated company | (1 | ) | 915 | |||||
| Loss before income taxes | 54,350 | 9,477 | ||||||
| Tax expense | 220 | 12 | ||||||
| Net loss | $ | 54,570 | $ | 9,489 | ||||
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Revenues
Our revenues for the six months ended June 30, 2023 were $255 thousand, as compared to $14,413 thousand for the six months ended June 30, 2022, representing a decrease of 98%.
During the 6 months ended June 30, 2023 we entered into new agreements with certain customers. We completed certain performance obligations under the agreements but did not recognize any revenue because revenue recognition conditions under ASC606 were not all met.
Expenses
Cost of Revenues
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 2,204 | $ | 815 | ||||
| Stock-based compensation | 3 | 26 | ||||||
| Professional fees and consulting services | 1,878 | 43 | ||||||
| Raw materials | 710 | 101 | ||||||
| Depreciation expenses, net | 472 | 169 | ||||||
| Other expenses | 687 | 623 | ||||||
| Total | $ | 5,954 | $ | 1,777 | ||||
Cost of revenues for the six months ended June 30, 2023 were $5,954 thousand, as compared to $1,777 thousand for the six months ended June 30, 2022, representing an increase of 235%. The increase was due to increased costs including additional salaries, professional fees, raw materials and depreciation expenses incurred as a result of increased process development and cell processing revenues mainly in the Octomera segment.
Cost of Development Services and Research and Development Expenses
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 3,484 | $ | 5,425 | ||||
| Stock-based compensation | 163 | 297 | ||||||
| Subcontracting, professional and consulting services | 1,601 | 3,383 | ||||||
| Lab expenses | 304 | 1,218 | ||||||
| Depreciation expenses, net | 256 | 324 | ||||||
| Other research and development expenses | 1,141 | 3,842 | ||||||
| Less – grant | (141 | ) | - | |||||
| Total | $ | 6,808 | $ | 14,489 | ||||
Cost of development services and research and development for the six months ended June 30, 2023 were $6,808 thousand, as compared to $14,489 thousand for the six months ended June 30, 2022, representing a decrease of 53%. The increase was mainly attributable to:
● a decrease of $1,941 thousand in salaries and related expenses mainly in the Octomera segment where costs that were related to POC development services were no longer required due to the conclusion of the POC development revenue contracts; and
| 32 |
● a decrease of $5,397 thousand in subcontracting, professional and consulting service fees, lab expenses, and other research and development expenses, resulting from our heavily investing in subcontracting, professional and consulting service fees in previous years and the reduction of such expenditures this year.
Selling, General and Administrative Expenses
| Six Months Ended | ||||||||
| June 30, 2023 (As Restated) | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Salaries and related expenses | $ | 2,261 | $ | 1,825 | ||||
| Stock-based compensation | 144 | 175 | ||||||
| Accounting and legal fees | 2,344 | 1,919 | ||||||
| Professional fees | 886 | 504 | ||||||
| Rent and related expenses | 114 | 110 | ||||||
| Business development | 361 | 251 | ||||||
| Depreciation expenses, net | 32 | 21 | ||||||
| Other general and administrative expenses | 25,602 | 849 | ||||||
| Total | $ | 31,744 | $ | 5,654 | ||||
Selling, general and administrative expenses for the six months ended June 30, 2023 were $31,744 thousand, as compared to $5,654 thousand for the six months ended June 30, 2022, representing an increase of 461%. The increase was mainly as a result of increases in salaries and related expenses and professional fees as a result of ramped up activities in the Octomera segment, other general and administrative expenses as a result an increased provision for credit losses in the Octomera segment, and accounting and legal fees incurred as a result of investment activities.
Credit Loss
| Six Months Ended | ||||||||
| June 30, 2023 (As Restated) | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Credit loss on convertible loans | $ | 2,688 | $ | - | ||||
Credit losses for the six months ended June 30, 2023 were $2,688 compared to $0 for the three months ended June 30, 2022. This was attributable to a provision created for a possible credit loss on a loan.
Financial Expenses, net
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (in thousands) | ||||||||
| Interest expense on convertible loans and loans | $ | 1,129 | $ | 364 | ||||
| Foreign exchange loss, net | 242 | 231 | ||||||
| Other expenses (income) | 3 | 7 | ||||||
| Total | $ | 1,374 | $ | 602 | ||||
Financial expenses, net for the six months ended June 30, 2023 were $1,374 thousand, as compared to $602 thousand for the six months ended June 30, 2022, representing an increase of 128%. The increase was mainly as a result of increased interest expenses on convertible loans.
Working Capital
| As of | ||||||||
| June 30, 2023 | December 31, 2022 | |||||||
| (As Restated) | ||||||||
| (in thousands) | ||||||||
| Current assets | $ | 6,533 | $ | 46,318 | ||||
| Current liabilities | 12,711 | 15,910 | ||||||
| Working capital | $ | (6,178 | ) | $ | 30,408 | |||
| 33 |
Current assets decreased by $39,785 thousand between December 31, 2022 and June 30, 2023 due mainly to the deconsolidation of the Octomera subsidiary.
Current liabilities decreased by $3,199 thousand between December 31, 2022 and June 30, 2023 primarily as a result of the deconsolidation of the Octomera subsidiary.
Liquidity and Financial Condition
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| (As Restated) | ||||||||
| (in thousands) | ||||||||
| Net loss | $ | (54,570 | ) | $ | (9,489 | ) | ||
| Net cash used in operating activities | (13,154 | ) | (9,206 | ) | ||||
| Net cash used in investing activities | (2,802 | ) | (4,863 | ) | ||||
| Net cash provided by financing activities | 10,796 | 10,906 | ||||||
| Decrease in cash and cash equivalents | $ | (5,160 | ) | $ | (3,163 | ) | ||
During the six months ended June 30, 2023, we funded our operations from existing funds, and equity and loan financings.
Net cash used in operating activities for the six months ended June 30, 2023 was approximately $13.2 million, as compared to net cash used in operating activities of approximately $9.2 million for the six months ended June 30, 2022. This is mainly attributable to the increased net loss for the period.
Net cash used in investing activities for the six months ended June 30, 2023 was approximately $2.8 million, as compared to net cash used in investing activities of approximately $4.9 million for the six months ended June 30, 2022. The decrease was mainly due to loans granted to associated entities last year and reduced investments in OMPULs.
Net cash provided by financing activities for the six months ended June 30, 2022 was approximately $10.8 million, as compared to net cash provided by financing activities of approximately $10.9 million for the six months ended June 30, 2022. During the six months ended June 30, 2023 we raised equity investments in the net amount of $3.3 million (see Note 4), raised proceeds from loans in the amount of $5.5 million (see Note 5), raised proceeds from MM in the amount of $5 million see note 3 and repaid convertible loans in the amount of $3 million (see Note 5).
Liquidity & Capital Resources Outlook
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.
If there are further increases in operating costs for facilities expansion, research and development, commercial and clinical activity or decreases in revenues from customers, we will need to use mitigating actions such as to seek additional financing, refinance or amend the terms of existing convertible loans or postpone expenses that are not based on firm commitments. In addition, in order to fund our operations until such time that we can generate sustainable positive cash flows, we will need to raise additional funds.
Our current and projected cash resources and commitments, as well as other factors mentioned above, raise a substantial doubt about our ability to continue as a going concern. We are planning to raise additional capital to continue our operations and repay our outstanding loans when they become due, as well as to explore additional avenues to increase revenues and reduce expenditures. There can be no assurance that we will be able to raise additional capital on acceptable terms, or at all.
| 34 |
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 to accomplish their objectives at the reasonable assurance level due to the material weakness in our internal control over financial reporting described below. Such material weakness contributed to the restatement of our financial statements as described in this Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the three and six months ended June 30, 2023, Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the three months ended March 31, 2023 and in Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the three and nine months ended September 30, 2023. As restated, our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q/A were prepared in accordance with U.S. GAAP, and our management has concluded that such restated consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.
Management has determined that the Company had the following material weakness in its internal control over financial reporting:
We did not perform appropriate credit loss analyses related to our internal control over financial reporting in the accounting for whether we will collect substantially all the consideration as it relates to revenues as well as our estimated credit losses in the three and six months ended June 30, 2023. As a result, we identified a deficiency in the operating effectiveness of our internal control over financial reporting related to our accounting for revenues and credit losses in the three and six months ended June 30, 2023, which resulted in the restatement of the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2023 which was effected through the Company’s filing of this Amendment.
This material weakness contributed to material misstatements in our consolidated financial statements for the period presented, which have been corrected and restated herein. Accordingly, management has concluded that this control deficiency constitutes a material weakness.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
| 35 |
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, 2022, as filed with the SEC on March 22, 2023, 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. 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, 2022. The Company’s business, operating results and financial condition could be adversely affected due to any of those risks.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
Item 5. Other Information
None.
| 36 |
Item 6. Exhibits
Exhibits required by Item 601 of Regulation S-K
* Filed herewith.
| 37 |
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: | April 15, 2024 | |
| /s/ Victor Miller | ||
|
Victor Miller |
||
| Chief Financial Officer, Treasurer and Secretary | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
| Date: | April 15, 2024 | |
| 38 |
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/A for the quarter ended June 30, 2023 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 operations 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: | April 15, 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/A for the quarter ended June 30, 2023 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 operations 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: | April 15, 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/A of Orgenesis Inc. for the quarter ended June 30, 2023 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/A 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: | April 15, 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/A of Orgenesis Inc. for the quarter ended June 30, 2023 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/A 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: | April 15, 2024 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Accounts receivable net of credit losses | $ 0 | $ 0 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 145,833,334 | 145,833,334 |
| Common stock, shares issued | 28,753,374 | 25,832,322 |
| Common stock, shares outstanding | 28,466,807 | 25,545,755 |
| Treasury stock, shares | 286,567 | 286,567 |
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Credit Loss [Abstract] | ||
| Selling, general and administrative expense credit loss | $ 24,367 | $ 14,878 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss | $ (54,570) | $ (9,489) |
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||
| Stock-based compensation | 311 | 500 |
| Capital gain, net | (5) | |
| Loss from deconsolidation of Octomera | 5,343 | |
| Share in losses (income) of associated companies, net | (1) | 915 |
| Depreciation and amortization expenses | 1,175 | 975 |
| Credit loss on convertible loan receivable | 2,688 | |
| Effect of exchange differences on inter-company balances | 214 | 142 |
| Net changes in operating leases | (67) | (33) |
| Interest expenses accrued on loans and convertible loans | 300 | 495 |
| Loss from extinguishment in connection with convertible loan restructuring | 283 | |
| Changes in operating assets and liabilities: | ||
| Decrease (increase) in accounts receivable | 30,144 | (3,724) |
| Decrease (increase) in inventory | (389) | 4 |
| Decrease in other assets | 4 | 17 |
| Decrease (increase) in prepaid expenses and other accounts receivable | (1,857) | 435 |
| Increase (decrease) in accounts payable | 2,891 | (923) |
| Increase in accrued expenses and other payables | 245 | 1,171 |
| Increase in employee and related payables | 227 | 135 |
| Increase in contract liabilities | 36 | 10 |
| Change in advance payments and receivables on account of grant, net | (140) | 169 |
| Change in deferred taxes, net | 9 | |
| Net cash used in operating activities | (13,154) | (9,206) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Repayment of convertible loan to related party partners | 138 | |
| Increase in loan to associates entities | (2,197) | |
| Repayment of loan granted | 782 | |
| Sale of property and equipment | 68 | |
| Purchase of property, plant and equipment | (1,796) | (4,352) |
| Cash acquired from acquisition of Mida | 702 | |
| Impact to cash resulting from deconsolidation (see note 3) | (973) | |
| Investment in long-term deposits | (33) | (4) |
| Net cash used in investing activities | (2,802) | (4,863) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from issuance of shares and warrants (in 2022 due to exercise of options) net of transaction costs | 3,341 | 6 |
| Proceeds from issuance of convertible loans | 5,485 | 9,150 |
| Proceeds from transaction with redeemable non-controlling interest that do not acquire control of a subsidiary, see note 3 | 5,000 | |
| Proceeds from receipts on account of shares and warrants to be allotted | 2,175 | |
| Repayment of convertible loans and convertible bonds | (3,000) | (416) |
| Repayment of short and long-term debt | (30) | (9) |
| Net cash provided by financing activities | 10,796 | 10,906 |
| NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (5,160) | (3,163) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 18 | (51) |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 6,369 | 5,974 |
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 1,227 | 2,760 |
| 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 | (354) |
| Issuance of common stocks for the acquisition of Mida | 100 | |
| Extinguishment in connection with convertible loan restructuring | 287 | |
| CASH PAID DURING THE YEAR FOR: | ||
| Interest | $ 785 | $ 67 |
DESCRIPTION OF BUSINESS |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| 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, or 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, or POCare.
In connection with the investment by an affiliate of Metalmark Capital Partners (“Metalmark” or “MM) in the Company’s subsidiary Morgenesis LLC (“Morgenesis”) in November 2022 (“the Metalmark Investment”), the Company separated its operations into two operating segments: the operations of Morgenesis LLC (the “Morgenesis” or “Octomera” segment) and therapies related activities (the “Therapies” segment).
On June 30, 2023, in connection with an additional $1 million investment in Morgenesis, the Company and MM entered into Amendment No. 1 to the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement Amendment”) to change the name of Morgenesis to “Octomera LLC” and to amend Morgenesis’ board composition. Pursuant to the LLC Agreement Amendment, the board of managers of Octomera (the “Octomera Board”) will be comprised of five managers, two of which will be appointed by the Company, one of which will be an industry expert appointed by MM, and two of which will be appointed by MM. The change was effective immediately. However, as a result of the amendment to the composition of the Octomera Board pursuant to the LLC Agreement Amendment described above, the Company deconsolidated Octomera from its consolidated financial statements as of June 30, 2023 (“effective date of deconsolidation”) and recorded its equity interest in Octomera as an equity method investment, see note 3
The Company currently owns approximately 75% of Octomera LLC.
These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries.
The Company’s common stock, par value $ per share (the “Common Stock”), is listed and traded on the Nasdaq Capital Market under the symbol “ORGS.”
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 June 30, 2023, the Company had an accumulated deficit of $166 million. For the six months ended June 30, 2023 the Company incurred negative cash flows from operating activities of $13.2 million. The Company’s activities have been funded primarily by generating revenue, offerings of the Company’s securities and convertible loans. There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its business operations.
If there are further increases in operating costs for facilities expansion, research and development, commercial and clinical activity or decreases in revenues from customers, the Company will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. In addition, in order to fund the Company’s operations until such time that the Company can generate sustainable positive cash flows, the Company may need to raise additional funds.
Current and projected cash resources and commitments, as well as the other factors mentioned above, raise a substantial doubt about the Company’s ability to continue as a going concern to meet the Company’s current operations for the next 12 months. Management plans include raising additional capital to fund the Company’s operations and to repay the Company’s outstanding loans when they become due, as well as exploring additional avenues to increase revenue and reduce capital expenditures. If the Company is unable to raise sufficient additional capital or meet revenue targets, it may have to curtail certain activities.
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.
|
BASIS OF PRESENTATION |
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| 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, 2022, as filed with the Securities and Exchange Commission (“SEC”) on March 22, 2023. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2022, 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.
Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the condensed consolidated financial statements as of and for the quarter ended June 30, 2023 included in the Form 10-Q originally filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2023 (the “Original Filing”), the Company identified a correction required to be made in its historical condensed consolidated financial statements and related disclosures as of and for the three and six months ended June 30, 2023. The correction relates to the accounting treatment of i) revenues, equity investees, goodwill, share on loss of associated companies, and selling, general and administration expenses (ii) convertible loan receivable and credit losses related to such convertible loan recorded during the three and six months ended June 30, 2023. In the Company’s Original Filing, the Company overstated revenues, as a result of inappropriate accounting for revenue recognition where, due to insufficient evidence of the collectability, it was not probable that the Company will collect substantially all of the consideration to which it is entitled in exchange for the services that it transferred to the customer. Account receivable and convertible loan were also restated due to inappropriate accounting for estimated credit losses.
The tables below set forth the condensed consolidated financial statements, including as reported, the impacts resulting from the restatement and the as restated amounts for the quarterly period ended June 30, 2023 (in thousands, except per share amounts):
b. Significant Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except as described below:
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, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for Smaller Reporting Companies (SRCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08 “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance results in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance is to be applied prospectively to acquisitions that occur on or after the effective date. The guidance is currently effective for fiscal years that began after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
Reclassifications
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. These reclassifications had no net effect on previously reported results of operations.
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REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION |
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| Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION | NOTE 3 – REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION
Metalmark Investment in Octomera LLC
On May 5, 2023, the Company and MM entered into Amendment No. 1 to the Unit Purchase Agreement dated November 4, 2022 (the “UPA”). Pursuant to Amendment No 1, MM agreed to pay $5,000,000 in cash in exchange for Class A Preferred Units of Morgenesis to support the continued expansion of Orgenesis’ POCare Services (the “Subsequent Investment”). The investment amount of the First Future Investment (as defined in the UPA) was reduced by the amount of the Subsequent Investment.
On
June 30, 2023, the Company and MM entered into Amendment No. 2 (the “Amendment”) to the UPA (“Amendment No. 2”).
Pursuant to Amendment No. 2, MM agreed to pay $1,000,000
in cash in exchange for Class A Preferred Units of Octomera to support
the continued expansion of Orgenesis’ POCare Services. The investment amount of the First Future Investment (as defined in the
UPA) was further reduced by the amount of this additional investment. As a result of the deconsolidation (see note 1a), the Company recorded a net loss of $5,343 thousand, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:
The change in board composition does not constitute a strategic shift from the Company’s perspective and therefore the Company did not treat the deconsolidation as a discontinued operation.
Following the Amendment No. 2, the Company accounts for its investment in Octomera according to the equity method in accordance with ASC Topic 323, as it has retained the ability to exercise significant influence but does not control the entity. The Company thus recognized an equity method investment in a total amount of $0 million comprised of the assumed fair value of the Octomera shares held by the Company. Following the deconsolidation the Company recognized related parties balances that are disclosed on the face of the Company’s balance sheet.
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 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 represents the deconsolidated amounts from the Company’s Balance Sheet (As Restated):
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SEGMENT INFORMATION |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT INFORMATION | NOTE 4 – SEGMENT INFORMATION
The Morgenesis operations segment, which has been renamed to the Octomera segment following the change of name of Morgenesis LLC to Octomera LLC includes mainly POCare Services, while the therapies related segment includes the Company’s therapeutic development operations. The segment information includes all the results of the Octomera segment up to the effective date of deconsolidation.
Because the Company conducted all its operations as one segment prior to the Metalmark Investment, the above changes were reflected through retroactive revision of prior period segment information based on the subsidiaries that were transferred to Octomera. Certain activities of these subsidiaries have changed after they were transferred to Octomera operations segment.
The Company’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the two identified reportable segments to make decisions about resources to be allocated to the segments and assess their performance.
The Company does not review assets by segment. Therefore, the measure of assets has not been disclosed for each segment.
Segment data for the six months ended June 30, 2023 (As Restated) is as follows:
Segment data for the six months ended June 30, 2022 is as follows:
Segment data for the three months ended June 30, 2023 (As Restated) is as follows:
Segment data for the three months ended June 30, 2022 is as follows:
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EQUITY |
6 Months Ended |
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Jun. 30, 2023 | |
| Equity [Abstract] | |
| EQUITY | NOTE 5 – EQUITY
On February 23, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (the “Purchaser”) relating to the issuance and sale of shares (the “Shares”) of common stock, par value $ per share (the “Common Stock”), and warrants to purchase up to 973,684 shares of Common Stock (the “Warrants”) at a purchase price of $1.90 per share of Common Stock and accompanying Warrants in a registered direct offering (the “Offering”). The Offering closed on February 27, 2023 (the “Closing Date”).
The Warrants have an exercise price of $1.90 per share, are exercisable immediately and will expire five years following the date of issuance. The Warrants have an alternate cashless exercise option (beginning on or after the earlier of (a) the thirty-day anniversary of the date of the Purchase Agreement and (b) the date on which the aggregate composite trading volume of Common Stock following the public announcement of the pricing terms exceeds 13,600,000 shares), to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise and (y) 1.0. The aggregate gross proceeds to the Company from the Offering was $3.7 million, before deducting placement agent cash fees equal to 7.0% of the gross proceeds received and other expenses from the Offering payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes, including the Company’s therapy related activities.
As of June 30, 2023, all of the warrants were exercised using the alternate cashless exercise option described above.
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CONVERTIBLE LOANS |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE LOANS | NOTE 6 – CONVERTIBLE LOANS
Convertible loans outstanding as of June 30, 2023 and December 31, 2022 are as follows:
Convertible Loans Entered into in 2023
On January 10, 2023 (the “Effective Date”), the Company entered into the following agreements: (i) a convertible loan agreement (the “NewTech Convertible Loan Agreement”) with NewTech Investment Holdings, LLC (the “NewTech Lender”), pursuant to which the NewTech Lender loaned the Company $4,000,000 (the “NewTech Loan Amount”), and (ii) a convertible loan agreement (the “Malik Convertible Loan Agreement”, together with the NewTech Convertible Loan Agreement, the “Convertible Loan Agreements”) with Ariel Malik (the “Malik Lender”, together with the NewTech Lender, the “Lenders”), pursuant to which the Malik Lender loaned the Company $1,000,000 (the “Malik Loan Amount”, together with the NewTech Loan Amount, the “Loan Amount”).
The terms of the NewTech Convertible Loan Agreement and the Malik Loan Agreement are identical. Interest is calculated at 8% per annum (based on a 365-day year); provided, that if an Event of Default (as defined in the Convertible Loan Agreements) has occurred and is continuing, the Outstanding Amount (as defined herein) will be calculated at 15.0% per annum. The Loan Amount and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”) shall either (i) be repaid in cash or (ii) convert to shares of common stock, par value $ per share (“Common Stock”), of the Company on the third anniversary of the Effective Date (the “Maturity Date”). The Maturity Date may be extended by the Lender upon the written consent of the Lender. The Outstanding Amount may be prepaid by the Company in whole or in part at any time with the prior approval of the Lender.
At any time prior to or on the Maturity Date, any Lender may provide the Company with written notice to convert all or part of the Outstanding Amount into shares of our Common Stock equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) a price equal to $2.464 per share (subject to adjustment for certain capital events, such as stock splits) (the “Conversion Price”).
The Convertible Loan Agreements contain customary affirmative and negative covenants, including a minimum share reserve, transactions with affiliates, and restrictions on the incurrence of additional debt. Each Lender’s obligation to fund its respective Loan Amount is subject to customary closing conditions and deliverables.
Under the terms of the Convertible Loan Agreements, the Company will use the proceeds from the Loan Amount to (i) redeem the loan amount from the previously disclosed Convertible Loan Agreement, dated as of May 19, 2022 between Orgenesis and Ricky Steven Neumann, as amended by the previously disclosed certain Convertible Loan Extension Agreement, dated as of October 23, 2022, by and between Orgenesis and Ricky Steven Neumann, and (ii) for general corporate purposes. Pursuant to the terms, the Company repaid said loan upon receipt of the Loan Amount. The use of proceeds from any Additional Loan Amount (as defined in the Convertible Loan Agreements) will be to redeem existing indebtedness; provided, that $3,000,000 of the Additional Loan Amount may be used for general corporate purposes.
In connection with such loan, the Company agreed to issue the NewTech Lender warrants representing the right to purchase 405,844 shares of Common Stock, at an exercise price of $2.50 per share and the Malik Lender warrants representing the right to purchase 101,461 shares of Common Stock, at an exercise price of $2.50 per share. Such Warrants will be exercisable at any time beginning six months and one day after closing and ending 36 months after the closing date.
Koligo Convertible Loan
On March 27, 2023, the Company’s subsidiary Koligo Therapeutics Inc. (“Borrower”), entered into a convertible loan agreement (the “Convertible Loan Agreement”) with Yehuda Nir (the “Lender,” and together with the Borrower, the “Parties”), pursuant to which the Lender agreed to loan the Borrower up to $5,000,000 (the “Loan Amount”). Interest is calculated at 8% per annum (based on a 365-day year) and is payable, along with the principal, on or before January 1, 2024 (the “Maturity Date”). The Maturity Date may be extended by the Lender in the Lender’s sole and absolute discretion and any such extension(s) shall be in writing signed by the Parties. The Loan Amount may be prepaid by the Borrower in whole or in part at any time with the prior written approval of the Lender.
If prior to December 31, 2023, the Borrower issues equity securities (“Equity Securities”) in a transaction or series of related transactions resulting in aggregate gross proceeds to the Borrower of at least $5,000,000 (excluding conversion of the Loan Amount) (a “Qualified Financing”), then the outstanding principal amount of the Loan Amount, and any and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”), will automatically convert into such Equity Securities issued pursuant to the Qualified Financing at a price per share equal to fifty percent (50%) of the price per share paid for each share of the Equity Securities purchased for cash by the investors in the Qualified Financing (the “Mandatory Conversion”). The per share price for the Mandatory Conversion shall be calculated on a fully diluted basis (including equity underlying all outstanding options, warrants, and other convertible securities, but excluding the Equity Securities issuable upon the Mandatory Conversion).
The Parties agreed that the Lender shall have the option to assign $1,500,000 of the Loan Amount due to the Lender under that certain convertible loan agreement between the Lender and the Company dated April 21, 2022, as amended, (collectively the “Original Loan”), to the Borrower (the “Loan Assignment”). The terms of the Loan Assignment will be the same as under the Original Loan, including a maturity date of January 31, 2026 and an annual interest rate of 10%. The Loan Assignment will be subject to the Mandatory Conversion as described above. As of the date of the issue of these financial statements, said assignment did not occur.
Under the terms of the Koligo Convertible Loan Agreement, the Borrower agreed to use the Loan Amount to fund working capital and ongoing operations and for no other purposes unless the Lender agrees in writing. As of June 30, 2023, Koligo received $485 thousand under the Koligo Convertible Loan Agreement, and in July 2023 received an additional $175 thousand.
Extension of Existing Loan Agreements
On January 12, 2023, the Company entered into (i) a Convertible Credit Line and Unsecured Convertible Note Extension #2 Agreement with Yosef Dotan (the “Dotan Extension Agreement”), (ii) a Convertible Credit Line Extension Agreement with Aharon Lukach (the “Lukach Extension Agreement”) and (iii) a Convertible Loans and Unsecured Convertible Notes Extension #2 Agreement with Yehuda Nir (the “Nir Extension Agreement”), each which extended the maturity date of the convertible loans under their respective loan agreements (as described below) to January 31, 2026. The aggregate principal amount of loans extended was $12 million and the interest rate on the extended loans varied between 2% and 10%. In consideration for the extensions, (i) the interest rate on such principal amount of such loans was increased to 10% per annum commencing on February 1, 2023 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a 10% per annum interest rate), (ii) the conversion price of the loans was reduced from $7.00 to $2.50 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a $2.50 conversion price), (iii) the exercise price of the warrants issuable upon conversion of the 2% Notes and the Nir Convertible Loan Agreement dated as of May 17, 2019 was reduced to $2.50 per share and the term of such warrants was extended to January 31, 2026.
The Dotan Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $750,000 principal amount plus interest is outstanding, and 2% Notes purchased from the Company on November 3, 2018, of which $250,000 principal amount plus interest is outstanding. Based on its analysis, the Company concluded that the change in terms referred to Convertible Credit Line Agreement and the 2% Notes should be accounted for as a modification and an extinguishment respectively.
The Lukach Extension Agreement related to a Convertible Credit Line Agreement dated as of October 3, 2019, as amended, of which $750,000 principal amount plus interest is outstanding. Based on its analysis, the Company concluded that the change in terms referred to above should be accounted for as a modification.
The Nir Extension Agreement related to 2% Notes purchased from the Company on November 3, 2018, as amended, of which $500,000 principal amount plus interest is outstanding, a Convertible Loan Agreement dated as of May 17, 2019, of which $5,000,000 principal amount plus interest is outstanding, and a Convertible Loan Agreement dated as of April 12, 2022, as amended, of which $5,000,000 principal amount plus interest is outstanding. Based on its analysis, the Company concluded that the change in terms referred to the 2% Notes and Convertible Loan Agreement should be accounted for as an extinguishment and a modification respectively.
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STOCK-BASED COMPENSATION |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION |
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LOSS PER SHARE |
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LOSS PER SHARE |
For the six months ended June 30, 2023 and June 30, 2022, 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 shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the six months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the three months ended June 30, 2023, because the effect of their inclusion in the computation would be antidilutive.
Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the six months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive. Diluted loss per share does not include shares underlying outstanding options and warrants and shares upon conversion of convertible loans for the three months ended June 30, 2022, because the effect of their inclusion in the computation would be antidilutive.
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REVENUES |
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| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUES | NOTE 9 – REVENUES
Disaggregation of Revenue
The following table disaggregates the Company’s revenues by major revenue streams:
A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:
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:
* The activity of the related party included in the trade receivables activity above is comprised of:
The activity for contract liabilities is comprised of:
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OTHER SIGNIFICANT TRANSACTIONS DURING THE SIX MONTHS ENDED JUNE 30, 2023 |
6 Months Ended |
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Jun. 30, 2023 | |
| Other Significant Transactions During Six Months Ended June 30 2023 | |
| OTHER SIGNIFICANT TRANSACTIONS DURING THE SIX MONTHS ENDED JUNE 30, 2023 | NOTE 10 – OTHER SIGNIFICANT TRANSACTIONS DURING THE SIX MONTHS ENDED JUNE 30, 2023
In January 2023, the Company entered into updated joint venture (JV) agreements (JVAs) with Theracell Advanced Biotechnology SA, Broaden Bioscience and Technology Corp, Image Securities FZC, Cure Therapeutics, and Med Centre for Gene and Cell Therapy FZ-LLC and assigned certain rights and obligations under its JVAs to Texas Advanced Therapies LLC, a Delaware Limited Liability company (“Texas AT”) not related to the Company. Texas AT will receive the Company’s option to require the incorporation of the JV Entity, Company’s share in the JV Entity if and when the latter are incorporated, an option to invest additional funding in the JV Entity, and board and veto rights on certain critical decisions in the JV Entity. The Company has retained the call option to acquire the JV partner’s share in the JVE, to receive a royalty and a right to conclude the Manufacturing and Service Agreement with the JV entity. Pursuant to the JVAs, the Company will no longer be entitled to the additional share of fifteen percent of the JVE’s GAAP profit after tax granted as per the previous version of the JVAs. The Company also has no further obligation to provide any additional funding to the JV entities. As of June 30, 2023, no JV entities were incorporated pursuant to the JVAs.
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LEGAL PROCEEDINGS |
6 Months Ended |
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Jun. 30, 2023 | |
| 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 and Orgenesis Limited, the Company’s Israeli subsidiary (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 million 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. Since a material loss is not considered probable, no provision was made in the financial statements.
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SUBSEQUENT EVENTS |
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Jun. 30, 2023 | ||||||||||
| Subsequent Events [Abstract] | ||||||||||
| SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS
On July 6, 2023, Neil Reithinger informed the Company of his decision to resign as Chief Financial Officer, Treasurer and Secretary of the Company to pursue other opportunities. Mr. Reithinger will remain with the Company until he completes his transition of duties through September 1, 2023.
On July 6, 2023, the Company appointed Elliot Maltz as its Chief Financial Officer, effective September 1, 2023.
On July 11, 2023, Efrat Assa Kunik informed the Company of her decision to resign as Chief Development Officer of the Company to pursue other opportunities.
On July 25, 2023, the Israeli Subsidiary received a loan from an offshore investor in the amount of $175 thousand. The loan bears 8% annual interest and is repayable on January 1, 2024.
On July 25, 2023, the Company and Mircod LLC (“Mircod”) entered into a settlement and release agreement pursuant to which they agreed to terminate the joint venture and loan agreement between themselves. Mircod agreed to deliver all the related deliverables to the Company, and the Company agreed to pay Mircod consideration in the amount of $1 million, of which half will be paid in cash, and one half in Orgenesis shares, upon receipt of the deliverables.
On July 25, 2023, the Company, a Sub-licensee, and the equity interest owner of that Sub-licensee (“Sub-licensee Owner”), entered into agreements whereby:
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BASIS OF PRESENTATION (Policies) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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, 2022, as filed with the Securities and Exchange Commission (“SEC”) on March 22, 2023. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2022, 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.
Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the condensed consolidated financial statements as of and for the quarter ended June 30, 2023 included in the Form 10-Q originally filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2023 (the “Original Filing”), the Company identified a correction required to be made in its historical condensed consolidated financial statements and related disclosures as of and for the three and six months ended June 30, 2023. The correction relates to the accounting treatment of i) revenues, equity investees, goodwill, share on loss of associated companies, and selling, general and administration expenses (ii) convertible loan receivable and credit losses related to such convertible loan recorded during the three and six months ended June 30, 2023. In the Company’s Original Filing, the Company overstated revenues, as a result of inappropriate accounting for revenue recognition where, due to insufficient evidence of the collectability, it was not probable that the Company will collect substantially all of the consideration to which it is entitled in exchange for the services that it transferred to the customer. Account receivable and convertible loan were also restated due to inappropriate accounting for estimated credit losses.
The tables below set forth the condensed consolidated financial statements, including as reported, the impacts resulting from the restatement and the as restated amounts for the quarterly period ended June 30, 2023 (in thousands, except per share amounts):
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| Significant Accounting Policies | b. Significant Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except as described below:
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| 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, goodwill impairment, and assessment of credit losses. Actual results could differ from those estimates.
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| Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for Smaller Reporting Companies (SRCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08 “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. The guidance results in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance is to be applied prospectively to acquisitions that occur on or after the effective date. The guidance is currently effective for fiscal years that began after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
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| Reclassifications | Reclassifications
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. These reclassifications had no net effect on previously reported results of operations. |
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BASIS OF PRESENTATION (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Restatement Items to Prior Period Financial Statements | The tables below set forth the condensed consolidated financial statements, including as reported, the impacts resulting from the restatement and the as restated amounts for the quarterly period ended June 30, 2023 (in thousands, except per share amounts):
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REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS | As a result of the deconsolidation (see note 1a), the Company recorded a net loss of $5,343 thousand, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:
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| SCHEDULE OF NET ASSETS DECONSOLIDATED | The following table represents the deconsolidated amounts from the Company’s Balance Sheet (As Restated):
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SEGMENT INFORMATION (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF SEGMENT REPORTING | Segment data for the six months ended June 30, 2023 (As Restated) is as follows:
Segment data for the six months ended June 30, 2022 is as follows:
Segment data for the three months ended June 30, 2023 (As Restated) is as follows:
Segment data for the three months ended June 30, 2022 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE LOANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF LONG TERM CONVERTIBLE NOTES | Convertible loans outstanding as of June 30, 2023 and December 31, 2022 are as follows:
|
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STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||
| Employees [Member] | |||||||||||||||||||||||||||||||||||||||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF STOCK OPTIONS GRANTED |
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| SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS |
|
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| Non-Employees [Member] | |||||||||||||||||||||||||||||||||||||||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF STOCK OPTIONS GRANTED |
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| SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS |
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LOSS PER SHARE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE |
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REVENUES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DISAGGREGATION OF REVENUE | The following table disaggregates the Company’s revenues by major revenue streams:
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| SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER | A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:
|
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| SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES | The activity for trade receivables is comprised of:
* The activity of the related party included in the trade receivables activity above is comprised of:
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| SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES | The activity for contract liabilities is comprised of:
|
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Schedule of Restatement Items to Prior Period Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Convertible loan receivable | ||||||||
| Total current assets | 6,533 | 6,533 | $ 46,318 | |||||
| Equity investees | 41 | 41 | 39 | |||||
| Goodwill | 1,211 | 1,211 | 8,187 | |||||
| Total non-current assets | 11,537 | 11,537 | 44,610 | |||||
| Total Assets | 18,070 | 18,070 | 90,928 | |||||
| Accumulated deficit | (166,274) | (166,274) | (121,261) | |||||
| Equity attributable to Orgenesis Inc. | (12,732) | (12,732) | 27,561 | |||||
| Total Equity | (12,732) | $ 31,843 | (12,732) | $ 31,843 | $ 9,989 | 29,071 | $ 34,857 | $ 38,631 |
| Total Liabilities, redeemable Non-Controlling Interest and Equity | 18,070 | 18,070 | $ 90,928 | |||||
| Total revenues | 113 | 6,699 | 255 | 13,276 | ||||
| Gross (loss) profit | (3,119) | 6,138 | (5,699) | 12,636 | ||||
| Selling, general and administrative expenses | 31,744 | |||||||
| Operating loss | 25,070 | 4,732 | 44,666 | 7,968 | ||||
| Loss from deconsolidation of Octomera | 5,343 | 5,343 | ||||||
| Credit losses on convertible loan receivable | 2,688 | |||||||
| Financial expenses, net | 692 | 389 | 1,373 | 602 | ||||
| Loss before income taxes | 31,102 | 5,481 | 54,350 | 9,477 | ||||
| Net loss | 31,193 | 5,492 | 54,570 | 9,489 | ||||
| Net income (loss) attributable to non-controlling interests (including redeemable) | (5,650) | (65) | (9,557) | (53) | ||||
| Net loss attributable to Orgenesis Inc. | $ 25,543 | $ 5,427 | $ 45,013 | $ 9,436 | ||||
| Loss per share: | ||||||||
| Net income per common share - basic | $ 0.76 | $ 0.22 | $ 1.63 | $ 0.38 | ||||
| Net income per common share - diluted | $ 0.76 | $ 0.22 | $ 1.63 | $ 0.38 | ||||
| Comprehensive loss: | ||||||||
| Comprehensive loss | $ 30,820 | $ 5,818 | $ 54,238 | $ 9,966 | ||||
| Comprehensive income (loss) attributed to non-controlling interests | (5,650) | (65) | (9,557) | (53) | ||||
| Comprehensive loss attributed to Orgenesis Inc. | 25,170 | 5,753 | 44,681 | 9,913 | ||||
| Cash Flow from Operating Activities: | ||||||||
| Net loss | (31,193) | $ (5,492) | (54,570) | (9,489) | ||||
| Effect of exchange differences on inter-company balances | 214 | 142 | ||||||
| Interest expenses accrued on loans and convertible loans | 300 | 495 | ||||||
| Decrease (increase) in accounts receivable | 30,144 | $ (3,724) | ||||||
| Previously Reported [Member] | ||||||||
| Convertible loan receivable | 2,762 | 2,762 | ||||||
| Total current assets | 9,295 | 9,295 | ||||||
| Equity investees | 31,484 | 31,484 | ||||||
| Goodwill | 3,703 | 3,703 | ||||||
| Total non-current assets | 45,472 | 45,472 | ||||||
| Total Assets | 54,767 | 54,767 | ||||||
| Accumulated deficit | (129,577) | (129,577) | ||||||
| Equity attributable to Orgenesis Inc. | 23,965 | 23,965 | ||||||
| Total Equity | 23,965 | 23,965 | ||||||
| Total Liabilities, redeemable Non-Controlling Interest and Equity | 54,767 | 54,767 | ||||||
| Total revenues | 14,019 | |||||||
| Gross (loss) profit | 8,065 | |||||||
| Selling, general and administrative expenses | 7,376 | |||||||
| Operating loss | 6,534 | |||||||
| Loss from deconsolidation of Octomera | (411) | |||||||
| Credit losses on convertible loan receivable | ||||||||
| Financial expenses, net | 1,299 | |||||||
| Loss before income taxes | 7,702 | |||||||
| Net loss | 7,922 | |||||||
| Net income (loss) attributable to non-controlling interests (including redeemable) | 394 | |||||||
| Net loss attributable to Orgenesis Inc. | $ 7,984 | |||||||
| Loss per share: | ||||||||
| Net income per common share - basic | $ 0.30 | |||||||
| Net income per common share - diluted | $ 0.30 | |||||||
| Comprehensive loss: | ||||||||
| Comprehensive loss | $ 7,590 | |||||||
| Comprehensive income (loss) attributed to non-controlling interests | 394 | |||||||
| Comprehensive loss attributed to Orgenesis Inc. | 7,984 | |||||||
| Cash Flow from Operating Activities: | ||||||||
| Net loss | (7,922) | |||||||
| Effect of exchange differences on inter-company balances | 237 | |||||||
| Interest expenses accrued on loans and convertible loans | 226 | |||||||
| Decrease (increase) in accounts receivable | (8,011) | |||||||
| Revision of Prior Period, Reclassification, Adjustment [Member] | ||||||||
| Convertible loan receivable | (2,762) | (2,762) | ||||||
| Total current assets | (2,762) | (2,762) | ||||||
| Equity investees | (31,443) | (31,443) | ||||||
| Goodwill | (2,492) | (2,492) | ||||||
| Total non-current assets | (33,935) | (33,935) | ||||||
| Total Assets | (36,697) | (36,697) | ||||||
| Accumulated deficit | (36,697) | (36,697) | ||||||
| Equity attributable to Orgenesis Inc. | (36,697) | (36,697) | ||||||
| Total Equity | (36,697) | (36,697) | ||||||
| Total Liabilities, redeemable Non-Controlling Interest and Equity | $ (36,697) | (36,697) | ||||||
| Total revenues | (13,764) | |||||||
| Gross (loss) profit | (13,764) | |||||||
| Selling, general and administrative expenses | 24,368 | |||||||
| Operating loss | 38,132 | |||||||
| Loss from deconsolidation of Octomera | 5,754 | |||||||
| Credit losses on convertible loan receivable | 2,688 | |||||||
| Financial expenses, net | 74 | |||||||
| Loss before income taxes | 46,648 | |||||||
| Net loss | 46,648 | |||||||
| Net income (loss) attributable to non-controlling interests (including redeemable) | (9,951) | |||||||
| Net loss attributable to Orgenesis Inc. | $ 36,697 | |||||||
| Loss per share: | ||||||||
| Net income per common share - basic | $ 1.33 | |||||||
| Net income per common share - diluted | $ 1.33 | |||||||
| Comprehensive loss: | ||||||||
| Comprehensive loss | $ 46,648 | |||||||
| Comprehensive income (loss) attributed to non-controlling interests | (9,951) | |||||||
| Comprehensive loss attributed to Orgenesis Inc. | 36,697 | |||||||
| Cash Flow from Operating Activities: | ||||||||
| Net loss | (46,648) | |||||||
| Effect of exchange differences on inter-company balances | (23) | |||||||
| Interest expenses accrued on loans and convertible loans | 74 | |||||||
| Decrease (increase) in accounts receivable | $ 38,155 | |||||||
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
| Commons stock, par value | $ 0.0001 | $ 0.0001 | |
| Accumulated deficit | $ 166,274 | $ 121,261 | |
| Net cash used in operating activities | $ 13,154 | $ 9,206 | |
| Octomera LLC [Member] | |||
| Equity method investment, ownership percentage | 75.00% | ||
| ORGS [Member] | |||
| Commons stock, par value | $ 0.000001 | ||
SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Noncontrolling Interest [Line Items] | ||||
| Net profit | $ (5,343) | $ (5,343) | ||
| Net assets deconsolidated | (4,959) | (4,959) | ||
| Octomera [Member] | ||||
| Noncontrolling Interest [Line Items] | ||||
| Net profit | 5,343 | |||
| Fair value of the retained interest in Octomera | ||||
| Net assets deconsolidated | 4,959 | 4,959 | ||
| Release of translation adjustment | $ 384 | $ 384 | ||
SCHEDULE OF NET ASSETS DECONSOLIDATED (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
|---|---|
| Noncontrolling Interest [Abstract] | |
| Cash and cash equivalents | $ 973 |
| Other current assets | 9,087 |
| Non-current assets | 31,935 |
| TOTAL ASSETS | 41,995 |
| Current liabilities | 6,566 |
| Long-term liabilities | 2,313 |
| TOTAL LIABILITIES | 8,879 |
| REDEEMABLE NON-CONTROLLING INTEREST | 26,797 |
| NON-CONTROLLING INTEREST | 1,360 |
| NET ASSETS DECONSOLIDATED | $ (4,959) |
REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION (Details Narrative) - USD ($) |
6 Months Ended | |
|---|---|---|
May 05, 2023 |
Jun. 30, 2023 |
|
| Noncontrolling Interest [Line Items] | ||
| Equity Method Investment, Aggregate Cost | $ 0 | |
| Morgenesis and MM OS Holdings, L.P. [Member] | Unit Purchase Agreement [Member] | Class A Preferred Units [Member] | ||
| Noncontrolling Interest [Line Items] | ||
| Purchase of shares, value | $ 5,000,000 | |
| Purchase of shares | 500,000 | |
| Octomera And MOS Holdings LP [Member] | Unit Purchase Agreement [Member] | Class A Preferred Units [Member] | ||
| Noncontrolling Interest [Line Items] | ||
| Purchase of shares, value | $ 1,000,000 | |
| Purchase of shares | 100,000 |
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Revenues | $ 113 | $ 6,699 | $ 255 | $ 13,276 | ||||||||||||
| Total revenues | 113 | 7,201 | 255 | 14,413 | ||||||||||||
| Cost of revenues | (2,996) | [1] | (969) | [2] | (5,482) | [3] | (1,608) | [4] | ||||||||
| Gross profit | (2,883) | 6,232 | (5,227) | 12,805 | ||||||||||||
| Cost of development services and research and development expenses | (3,395) | [1] | (7,672) | [2] | (6,552) | [3] | (14,165) | [4] | ||||||||
| Operating expenses | (18,195) | [1] | (2,791) | [2] | (31,712) | [3] | (5,633) | [4] | ||||||||
| Loss from deconsolidation of Octomera | (5,343) | (5,343) | ||||||||||||||
| Other income, net | 8 | 2 | 8 | |||||||||||||
| Depreciation and amortization | (597) | (501) | (1,175) | (975) | ||||||||||||
| Loss from extinguishment in connection with convertible loan | (283) | |||||||||||||||
| Credit losses on convertible loan receivable | (2,688) | |||||||||||||||
| Financial Expenses, net | (692) | (389) | (1,373) | (602) | ||||||||||||
| Share in net loss of associated companies | 3 | (368) | 1 | (915) | ||||||||||||
| Income (loss) before income taxes | (31,102) | (5,481) | (54,350) | (9,477) | ||||||||||||
| Related Party [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Total revenues | 502 | 1,137 | ||||||||||||||
| Octomera [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Revenues | 3 | 6,606 | 15 | 12,949 | ||||||||||||
| Total revenues | 7,108 | 14,086 | ||||||||||||||
| Cost of revenues | (2,776) | [1] | (974) | [2] | (5,084) | [3] | (1,324) | [4] | ||||||||
| Gross profit | (2,773) | 6,134 | (5,069) | 12,762 | ||||||||||||
| Cost of development services and research and development expenses | (2,420) | [1] | (3,296) | [2] | (4,501) | [3] | (6,772) | [4] | ||||||||
| Operating expenses | (16,787) | [1] | (728) | [2] | (27,990) | [3] | (1,437) | [4] | ||||||||
| Loss from deconsolidation of Octomera | ||||||||||||||||
| Other income, net | 3 | 2 | 3 | |||||||||||||
| Depreciation and amortization | (394) | (207) | (779) | (397) | ||||||||||||
| Loss from extinguishment in connection with convertible loan | ||||||||||||||||
| Credit losses on convertible loan receivable | ||||||||||||||||
| Financial Expenses, net | (229) | (700) | (495) | (1,251) | ||||||||||||
| Share in net loss of associated companies | (1) | |||||||||||||||
| Income (loss) before income taxes | (22,603) | 1,205 | (38,832) | 2,908 | ||||||||||||
| Octomera [Member] | Related Party [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Total revenues | 502 | 1,137 | ||||||||||||||
| Therapies [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Revenues | 110 | 1,920 | 240 | 3,862 | ||||||||||||
| Total revenues | 1,920 | 3,862 | ||||||||||||||
| Cost of revenues | (220) | [1] | (351) | [2] | (398) | [3] | (640) | [4] | ||||||||
| Gross profit | (110) | 1,569 | (158) | 3,222 | ||||||||||||
| Cost of development services and research and development expenses | (975) | [1] | (5,583) | [2] | (2,051) | [3] | (10,028) | [4] | ||||||||
| Operating expenses | (1,408) | [1] | (2,327) | [2] | (3,722) | [3] | (4,740) | [4] | ||||||||
| Loss from deconsolidation of Octomera | ||||||||||||||||
| Other income, net | 5 | 5 | ||||||||||||||
| Depreciation and amortization | (203) | (294) | (396) | (578) | ||||||||||||
| Loss from extinguishment in connection with convertible loan | (283) | |||||||||||||||
| Credit losses on convertible loan receivable | (2,688) | |||||||||||||||
| Financial Expenses, net | (464) | 311 | (879) | 649 | ||||||||||||
| Share in net loss of associated companies | 3 | (367) | 1 | (915) | ||||||||||||
| Income (loss) before income taxes | (3,157) | (6,686) | (10,176) | (12,385) | ||||||||||||
| Therapies [Member] | Related Party [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Eliminations [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Revenues | (1,827) | (3,535) | ||||||||||||||
| Total revenues | (1,827) | (3,535) | ||||||||||||||
| Cost of revenues | [1] | 356 | [2] | [3] | 356 | [4] | ||||||||||
| Gross profit | (1,471) | (3,179) | ||||||||||||||
| Cost of development services and research and development expenses | [1] | 1,207 | [2] | [3] | 2,635 | [4] | ||||||||||
| Operating expenses | [1] | 264 | [2] | [3] | 544 | [4] | ||||||||||
| Loss from deconsolidation of Octomera | (5,343) | (5,343) | ||||||||||||||
| Other income, net | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Loss from extinguishment in connection with convertible loan | ||||||||||||||||
| Credit losses on convertible loan receivable | ||||||||||||||||
| Financial Expenses, net | 1 | 1 | ||||||||||||||
| Share in net loss of associated companies | ||||||||||||||||
| Income (loss) before income taxes | (5,342) | (5,342) | ||||||||||||||
| Eliminations [Member] | Related Party [Member] | ||||||||||||||||
| Segment Reporting Information [Line Items] | ||||||||||||||||
| Total revenues | ||||||||||||||||
| ||||||||||||||||
EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions |
Feb. 23, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|---|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
| Common stock, par value | $ 0.0001 | $ 0.0001 | |
| Securities Purchase Agreement [Member] | |||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
| Sale of stock, shares | 1,947,368 | ||
| Common stock, par value | $ 0.0001 | ||
| Purchase of warrants | 973,684 | ||
| Exercise price of warrants | $ 1.90 | ||
| Warrant exercisable description | The Warrants have an exercise price of $1.90 per share, are exercisable immediately and will expire five years following the date of issuance | ||
| Warrants term | 5 years | ||
| Warrant alternated cashless exercise description | The Warrants have an alternate cashless exercise option (beginning on or after the earlier of (a) the thirty-day anniversary of the date of the Purchase Agreement and (b) the date on which the aggregate composite trading volume of Common Stock following the public announcement of the pricing terms exceeds 13,600,000 shares), to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise and (y) 1.0. The aggregate gross proceeds to the Company from the Offering was $3.7 million, before deducting placement agent cash fees equal to 7.0% of the gross proceeds received and other expenses from the Offering payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes, including the Company’s therapy related activities | ||
| Proceeds from private placemenrt | $ 3.7 |
SCHEDULE OF LONG TERM CONVERTIBLE NOTES (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|||
| Convertible Loans One [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 750 | $ 750 | ||
| Issuance Date (Year) | 2018 | 2018 | ||
| Current Interest Rate | 10.00% | 2.00% | ||
| Current Maturity (Year) | 2026 | 2023 | ||
| Current Exercise Price | $ 2.50 | $ 7.00 | ||
| Convertible Loans Two [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 1,500 | $ 1,600 | ||
| Issuance Date (Year) | 2019 | 2019 | ||
| Current Interest Rate | 10.00% | 8.00% | ||
| Current Maturity (Year) | 2026 | 2024 | ||
| Current Exercise Price | $ 7.00 | $ 7.00 | ||
| Convertible Loans Three [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 100 | $ 5,000 | ||
| Issuance Date (Year) | 2019 | 2019 | ||
| Current Interest Rate | 8.00% | 6.00% | ||
| Current Maturity (Year) | 2023 | 2023 | ||
| Current Exercise Price | $ 2.50 | $ 7.00 | ||
| Convertible Loans Four [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 5,000 | $ 100 | ||
| Issuance Date (Year) | 2019 | 2020 | ||
| Current Interest Rate | 10.00% | 8.00% | ||
| Current Maturity (Year) | 2026 | 2023 | ||
| Current Exercise Price | $ 2.50 | $ 7.00 | ||
| Convertible Loans Five [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 100 | $ 8,000 | ||
| Issuance Date (Year) | 2020 | 2022 | ||
| Current Interest Rate | 8.00% | 10.00% | ||
| Current Maturity (Year) | 2023 | 2024 | ||
| Current Exercise Price | $ 7.00 | $ 2.5 | ||
| Convertible Loans Six [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 5,000 | $ 1,150 | ||
| Issuance Date (Year) | 2022 | 2022 | ||
| Current Interest Rate | 10.00% | 6.00% | ||
| Current Maturity (Year) | 2026 | 2023 | ||
| Current Exercise Price | $ 2.50 | $ 4.5 | ||
| Convertible Loans Seven [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 1,150 | |||
| Issuance Date (Year) | 2022 | |||
| Current Interest Rate | 6.00% | |||
| Current Maturity (Year) | 2023 | |||
| Current Exercise Price | $ 4.50 | |||
| Convertible Loans Eight [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 5,000 | |||
| Issuance Date (Year) | 2023 | |||
| Current Interest Rate | 8.00% | |||
| Current Maturity (Year) | 2026 | |||
| Current Exercise Price | $ 2.46 | |||
| Convertible Loans Nine [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 485 | |||
| Issuance Date (Year) | 2023 | |||
| Current Interest Rate | 8.00% | |||
| Current Maturity (Year) | 2024 | |||
| Current Exercise Price | [1] | |||
| Convertible Loans [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Principal Amount | $ 19,085 | $ 16,600 | ||
| ||||
CONVERTIBLE LOANS (Details Narrative) - USD ($) |
Mar. 27, 2023 |
Jan. 12, 2023 |
Jan. 10, 2023 |
Jul. 31, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Apr. 12, 2022 |
Oct. 03, 2019 |
May 17, 2019 |
Nov. 03, 2018 |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt Instrument [Line Items] | ||||||||||
| Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
| Lender [Member] | Koligo Therapeutics Inc [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 5,000,000 | |||||||||
| Interest rate | 8.00% | |||||||||
| Debt instrument maturity date | Jan. 01, 2024 | |||||||||
| Borrower [Member] | Koligo Therapeutics Inc [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Debt instrument conversion | If prior to December 31, 2023, the Borrower issues equity securities (“Equity Securities”) in a transaction or series of related transactions resulting in aggregate gross proceeds to the Borrower of at least $5,000,000 (excluding conversion of the Loan Amount) (a “Qualified Financing”), then the outstanding principal amount of the Loan Amount, and any and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”), will automatically convert into such Equity Securities issued pursuant to the Qualified Financing at a price per share equal to fifty percent (50%) of the price per share paid for each share of the Equity Securities purchased for cash by the investors in the Qualified Financing (the “Mandatory Conversion”). The per share price for the Mandatory Conversion shall be calculated on a fully diluted basis (including equity underlying all outstanding options, warrants, and other convertible securities, but excluding the Equity Securities issuable upon the Mandatory Conversion) | |||||||||
| NewTech Convertible Loan Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 4,000,000 | |||||||||
| Malik Loan Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 1,000,000 | |||||||||
| NewTech Convertible Loan Agreement and Malik Loan Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Interest rate | 8.00% | |||||||||
| Debt description | the Outstanding Amount (as defined herein) will be calculated at 15.0% per annum. The Loan Amount and all accrued but unpaid interest thereon (collectively, the “Outstanding Amount”) shall either (i) be repaid in cash or (ii) convert to shares of common stock, par value $0.0001 per share (“Common Stock”), of the Company on the third anniversary of the Effective Date (the “Maturity Date”). The Maturity Date may be extended by the Lender upon the written consent of the Lender. The Outstanding Amount may be prepaid by the Company in whole or in part at any time with the prior approval of the Lender. | |||||||||
| Conversion price | $ 2.464 | |||||||||
| NewTech Convertible Loan Agreement and Malik Loan Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Common stock, par value | $ 0.0001 | |||||||||
| Convertible Loan Agreements [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 3,000,000 | |||||||||
| Convertible subordinated debt | $ 485,000 | |||||||||
| Convertible Loan Agreements [Member] | Subsequent Event [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Convertible subordinated debt | $ 175,000 | |||||||||
| Convertible Loan Agreements [Member] | NewTech Lender [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Warrants to purchase common stock | 405,844 | |||||||||
| Warrant excercise price | $ 2.50 | |||||||||
| Convertible Loan Agreements [Member] | Malik Lender [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Warrants to purchase common stock | 101,461 | |||||||||
| Warrant excercise price | $ 2.50 | |||||||||
| Convertible Loan Agreements [Member] | Lender [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 1,500,000 | |||||||||
| Interest rate | 10.00% | |||||||||
| Debt instrument maturity date | Jan. 31, 2026 | |||||||||
| Extension of Existing Loan Agreements [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 12,000,000 | |||||||||
| Debt instrument conversion | (i) the interest rate on such principal amount of such loans was increased to 10% per annum commencing on February 1, 2023 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a 10% per annum interest rate), (ii) the conversion price of the loans was reduced from $7.00 to $2.50 (except for the Nir Convertible Loan Agreement dated as of April 12, 2022, which already had a $2.50 conversion price), (iii) the exercise price of the warrants issuable upon conversion of the 2% Notes and the Nir Convertible Loan Agreement dated as of May 17, 2019 was reduced to $2.50 per share and the term of such warrants was extended to January 31, 2026. | |||||||||
| Extension of Existing Loan Agreements [Member] | Minimum [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Interest rate | 2.00% | |||||||||
| Extension of Existing Loan Agreements [Member] | Maximum [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Interest rate | 10.00% | |||||||||
| Dotan Extension Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 750,000 | $ 250,000 | ||||||||
| Interest rate | 2.00% | 2.00% | ||||||||
| Lukach Extension Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 750,000 | |||||||||
| Nir Extension Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Principal amount extended | $ 5,000,000 | $ 5,000,000 | $ 500,000 | |||||||
| Interest rate | 2.00% | |||||||||
| Convertible Loan Agreement [Member] | ||||||||||
| Debt Instrument [Line Items] | ||||||||||
| Interest rate | 2.00% |
SCHEDULE OF STOCK OPTIONS GRANTED (Details) $ / shares in Units, $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2023
USD ($)
$ / shares
shares
| |
| Employees [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Number of options granted | shares | 53,500 |
| Exercise price | $ / shares | $ 1.36 |
| Vesting peirod description | Quarterly over a period of two years |
| Fair value at grant | $ | $ 46 |
| Expiration period | 10 years |
| Non-Employees [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Number of options granted | shares | 8,335 |
| Exercise price | $ / shares | $ 1.36 |
| Vesting peirod description | Annually over a period of five years |
| Fair value at grant | $ | $ 9 |
| Expiration period | 10 years |
SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS (Details) |
6 Months Ended |
|---|---|
|
Jun. 30, 2023
$ / shares
| |
| Employees [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Value of one common share | $ 1.36 |
| Dividend yield | 0.00% |
| Expected stock price volatility | 70.00% |
| Risk free interest rate | 3.91% |
| Expected term (years) | 5 years 6 months 21 days |
| Non-Employees [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Value of one common share | $ 1.36 |
| Dividend yield | 0.00% |
| Expected stock price volatility | 80.00% |
| Risk free interest rate | 4.07% |
| Expected term (years) | 10 years |
SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Earnings Per Share [Abstract] | ||||
| Net loss attributable to Orgenesis Inc. | $ 25,543 | $ 5,427 | $ 45,013 | $ 9,436 |
| Adjustment of redeemable non-controlling interest to redemption amount | (3,671) | |||
| Net loss attributable to Orgenesis Inc. for loss per share | $ 21,872 | $ 5,427 | $ 45,013 | $ 9,436 |
| Weighted average number of common shares outstanding basic | 28,603,597 | 24,820,756 | 27,546,229 | 24,711,462 |
| Weighted average number of common shares outstanding diluted | 28,603,597 | 24,820,756 | 27,546,229 | 24,711,462 |
| Net loss per share basic | $ 0.76 | $ 0.22 | $ 1.63 | $ 0.38 |
| Net loss per share diluted | $ 0.76 | $ 0.22 | $ 1.63 | $ 0.38 |
LOSS PER SHARE (Details Narrative) - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| 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 | 7,916,597 | 6,327,171 | 7,673,798 | 6,205,193 |
| 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 | 5,184,127 | 2,668,011 | 7,101,236 | 2,152,298 |
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Total | $ 113 | $ 7,201 | $ 255 | $ 14,413 |
| POC Development Services [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total | 6,274 | 12,598 | ||
| Cell Process Development Services and Hospital Services [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total | 113 | 511 | 255 | 1,399 |
| POC Cell Processing [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total | $ 416 | $ 416 | ||
SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | $ 113 | $ 6,699 | $ 255 | $ 13,276 |
| Customer A [Member] | UNITED STATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 65 | 130 | ||
| Customer B [Member] | UNITED STATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 45 | 45 | ||
| Customer C [Member] | UNITED STATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 65 | |||
| Customer D [Member] | UNITED STATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 2,502 | 3,729 | ||
| Customer E [Member] | GREECE | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 1,996 | 2,656 | ||
| Customer F [Member] | KOREA, REPUBLIC OF | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 742 | 3,425 | ||
| Customer F [Member] | UNITED ARAB EMIRATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | 1,187 | 2,254 | ||
| Customer G [Member] | UNITED ARAB EMIRATES | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue earned | $ 1,187 | $ 2,254 | ||
SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Balance as of beginning of period | $ 36,183 | $ 15,245 |
| Elimination of acquisition receivables | (1,337) | |
| Additions | 293 | 13,953 |
| Collections | (6,045) | (8,892) |
| Allowances for credit losses | (24,388) | |
| Exchange rate differences | (52) | (183) |
| Deconsolidation of Octomera | (5,985) | |
| Balance as of end of period | 6 | 18,786 |
| Related Party [Member] | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Balance as of beginning of period | 1,972 | |
| Additions | 1,137 | |
| Collections | (1,070) | |
| Balance as of end of period | $ 2,039 | |
SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Revenue from Contract with Customer [Abstract] | ||
| Balance as of beginning of period | $ 70 | $ 59 |
| Additions | 36 | 11 |
| Deconsolidation of Octomera | (106) | |
| Balance as of end of period | $ 70 | |
LEGAL PROCEEDINGS (Details Narrative) - ILS (₪) ₪ in Millions |
6 Months Ended | |
|---|---|---|
Jan. 18, 2022 |
Jun. 30, 2023 |
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| 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 |
SUBSEQUENT EVENTS (Details Narrative) - USD ($) |
Jul. 25, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Subsequent Event [Line Items] | ||
| Equity interest valuation | $ 0 | |
| Subsequent Event [Member] | SubLicense Agreements [Member] | ||
| Subsequent Event [Line Items] | ||
| Equity interest valuation | $ 8,000,000 | |
| Subsequent Event [Member] | Mircod LLC [Member] | ||
| Subsequent Event [Line Items] | ||
| Payments for termination of joint venture | 1,000,000 | |
| Subsequent Event [Member] | Israeli Subisidiary [Member] | ||
| Subsequent Event [Line Items] | ||
| Loan amount | $ 175,000 | |
| Interest rate | 8.00% | |
| Repayment date | Jan. 01, 2024 |
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