| COMMITMENTS AND CONTINGENCIES |
NOTE 12: - COMMITMENTS AND CONTINGENCIES
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a. |
As of June 30, 2026, an amount
of $1,047 of
cash and deposits was pledged by Pluri Biotech to secure its credit line, lease agreement and bank guarantees and by Ever After Foods
to secure its lease agreement. |
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b. |
Under the Law for the Encouragement
of Industrial Research and Development, 1984, or the Research Law, research and development programs that meet specified criteria and
are approved by the Israel Innovation Authority, or IIA, are eligible for grants of up to 50%
of the project’s expenditures, as determined by the research committee, in exchange for the payment of royalties from the sale of
products developed under the program. Regulations under the Research Law generally provide for the payment of royalties to the IIA of
3%
on sales of products and services derived from a technology developed using these grants until 100%
of the U.S. dollar-linked grant is repaid. The Company’s obligation to pay these royalties is contingent on its actual sale of such
products and services. In the absence of such sales, no payment is required. The outstanding balance of the grants will be subject to
interest at a rate equal to the 12-month secured overnight financing rate, or SOFR, applicable to U.S. dollar deposits that is published
on the first business day of each calendar year. Following the full repayment of the grant, there is no further liability for royalties.
As of June 30, 2026, the Company’s contingent liability in respect to royalties to the IIA amounted to $28,021,
not including SOFR interest as described above. |
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c. |
In April 2017, the Company was
awarded a Smart Money grant of approximately $229
from Israel’s Ministry of Economy and Industry to facilitate certain marketing and business development activities with respect
to its advanced cell therapy products in the Chinese market, including Hong Kong. The Israeli government granted the Company budget resources
that are intended to be used to advance the Company’s product candidate towards marketing in the China-Hong Kong markets. The Company
will also receive support from Israel’s trade representatives stationed in China, including Hong Kong, along with experts appointed
by the Smart Money program. As part of the program, the Company will repay royalties of 5%
of the Company’s revenues in the region for a five-year period, beginning in the year in which the Company will not be entitled
to reimbursement of expenses under the program and will be spread for a period of up to 5
years or until the amount of the grant is fully paid. As of August 4, 2022, the grant from this Smart Money program received was approximately
$180
and the program has ended. To date, no royalties were paid or accrued. |
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d. |
In September 2017, the Company
signed an agreement with the Tel-Aviv Sourasky Medical Center, or Ichilov Hospital, to conduct a Phase I/II trial of PLX-PAD cell therapy
for the treatment of Steroid-Refractory Chronic Graft-Versus-Host-Disease, or GVHD. As part of the agreement with Ichilov Hospital, the
Company will pay royalties of 1%
from its net sales of the PLX-PAD product relating to GVHD, with a maximum aggregate royalty amount of approximately $500. |
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e. |
For information regarding royalties
to the EIB, see note 9. |
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