NOTE 1 – DESCRIPTION OF BUSINESS

Orgenesis Inc. (the “Company”) is a global biotech company working to unlock the promise of cell and gene therapies (“CGTs”) in an affordable and accessible offering. CGTs can use the patient’s own cells (autologous), or use donor cells (allogenic), and for regulatory purposes, are classified as Advanced Therapy Medicinal Products (“ATMPs”). We are primarily focused on pioneering a paradigm-shifting decentralized approach to CGT therapies utilizing an automated and/or closed approach validated for compliant production at or near the patient care site (“Decentralized Cell Processing or DCP Platform”). This approach has the potential to overcome the limitations of traditional centralized processing methods due to their complex logistics and inefficient unscalable processing methods leading to cost prohibitive products that currently limit the number of patients that can have access to these therapies.

To overcome the challenges posed by traditional centralized processing methods, the Company has designed and implemented its DCP Platform - a scalable hub and spoke infrastructure of analytical centers overseeing standardized production platforms, technology and services governed by a central quality system, focusing on replicability and standardization of infrastructure and equipment with centralized monitoring and data management.

Features of the DCP Platform include a locally implemented quality system, Standard Operating Procedures (SOPs), Good Manufacturing Practices (“GMP”), training procedures, quality-control testing and hub oversight of the actual production. The Company is leveraging its unique approach to therapy production using its DCP Platform and various manufacturing platforms to address some of the quality, supply chain, scale-up and production challenges, adapting these therapies to validated manufacturing platforms that are adapted to standardized production units that can be placed quickly and a low cost throughout its DCP network.

To achieve these goals, the Company is developing a pipeline of POCare advanced therapies that can be processed and produced under such closed and automated processes and systems (“POCare Therapies”) as well as developing a collaborative worldwide network of academia, hospitals, and industry partners (POCare Network”) who are collaborating with the Company to build its DCP Platform.

On January 29, 2024 (“date of reconsolidation”), the Company and an affiliate of Metalmark Capital Partners (“Metalmark” or “MM”) entered into a Unit Purchase Agreement (the “UPA”), pursuant to which the Company acquired all of the preferred units of Octomera owned by MM (the “Acquisition”). Accordingly, the Company currently owns 100% of the equity interests of Octomera. The Company had previously deconsolidated Octomera from its consolidated financial statements (See note 3).

These consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries. During 2024, the Company acquired Octomera (see note 3) and deconsolidated its OBI, Korea and Belgium subsidiaries (see note 20).

On September 20, 2024, the Company implemented a 1-for-10 reverse stock split (the “Reverse Split”) of its authorized and outstanding shares of Common Stock. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. Following the Reverse Split, the number of authorized shares of common stock that the Company is authorized to issue from time to time is 14,583,333 shares.

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is traded on the OTCQX under the symbol “ORGS.” On September 27, 2023, the Company received a notice from the Listing Qualifications Staff (“Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the bid price of the Common Stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2) (the “Bid Price Rule”). On April 17, 2024, the Company received a notice (the “Notice”) from the Staff in which it determined that in accordance with Listing Rule 5810(c)(2)(A), the Staff stated that it could not accept a plan to regain compliance and the Staff stated that the Company’s securities would be delisted from The Nasdaq Capital Market unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”) to address the deficiencies and present a plan to regain compliance. As permitted by the Notice, the Company timely requested a hearing before the Panel, which request stayed any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel. On June 6, 2024, the Company met with the Panel regarding the Company’s potential delisting from The Nasdaq Stock Market as a result of its violation of the Bid Price Rule and non-compliance with the equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”) or any of the alternative requirements in Listing Rule 5550(b). On June 8, 2024, the Company received the Panel’s decision which granted the Company until October 14, 2024 to regain compliance with the Bid Price and Equity Rules. On October 17, 2024, Nasdaq notified the Company that the Panel had determined to delist the Company’s Common Stock and that trading of the Company’s Common Stock will be suspended at the open of trading on October 21, 2024. In connection with the Nasdaq delisting notice, Nasdaq will complete the delisting by filing a Form 25 Notification of Delisting with the U.S. Securities and Exchange Commission (the “SEC”) after applicable appeal periods have lapsed. The Company’s Common Stock began trading under “ORGS” on the OTCQX with the open of the markets on October 21, 2024.

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.

Through December 31, 2024, the Company had an accumulated deficit of $224,787. For the year ended December 31, 2024, the Company incurred negative cash flows from operating activities of $17,076. The Company’s activities have been funded primarily by offerings of its equity securities, loans, and convertible loans. There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its business operations.

Further reductions in revenues or increases in operating costs, including cost to invest in and expand facilities, research and development, and commercial and clinical activities would require the Company to take mitigating actions such as seeking additional financing and/or postponing expenditures that are not based on firm commitments. In addition, to fund the Company’s operations until it can generate sustainable positive cash flows, the Company will need to raise additional funds.

During the year ended December 31, 2024, management identified impairment indicators and performed an impairment assessment for the Therapies reporting unit. Based on the quantitative analysis, management concluded that the reporting unit’s fair value was below its carrying amount and therefore recorded a full impairment of goodwill of $1,211, property, plant and equipment of $8,752, and intangible assets of $8,375 (total impairment of approximately $18,338 million). This impairment conclusion was based on our potential delay of payments to suppliers because of lack of funds, the dissolution of our subsidiaries in Belgium and Israel, our lack of revenue and the low market value of our common stock. In addition, as part of the Company’s annual assessment of its lease agreements, the Company recognized total lease charges of $1,541 that were recorded in rent expense.

The Company expects its current and projected cash resources and commitments will not be sufficient to meet the Company’s obligations for the next 12 months from the issuance of these financial statements,, raising a substantial doubt about the Company’s ability to continue as a going concern. 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. The Company’s ability to fund the completion of its ongoing and planned activities may be substantially dependent upon whether the Company can obtain sufficient funding at acceptable terms. If the Company is unable to raise sufficient additional capital or meet revenue targets, it may have to reduce or eliminate certain activities and reduce its headcount.