ORGS Orgenesis Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the Quarterly Period Ended June 30, 2023

 

or

 

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

 

For the Transition Period from ___________ to ___________

 

Commission file number: 001-38416

 

ORGENESIS INC.

(Exact name of registrant as specified in its charter)

 

Nevada		98-0583166
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

20271 Goldenrod Lane

Germantown, MD 20876

(Address of principal executive offices) (Zip Code)

 

(480) 659-6404

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

Yes ☒ No ☐

 

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

Yes ☒ No ☐

 

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

  

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

 

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

 

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

 

As of August 10, 2023, there were 28,466,807 shares of registrant’s common stock outstanding.

 

 

 

ORGENESIS INC.

FORM 10-Q

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

 

TABLE OF CONTENTS

 

		Page
PART I - FINANCIAL INFORMATION		3
ITEM 1	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Loss and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022	5
	Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	10
	Notes to Condensed Consolidated Financial Statements	11
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	35
ITEM 4.	Controls and Procedures	35
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	36
ITEM 1A.	Risk Factors	36
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
ITEM 3.	Defaults Upon Senior Securities	36
ITEM 4.	Mine Safety Disclosures	36
ITEM 5.	Other Information	36
ITEM 6.	Exhibits	37
SIGNATURES		38

 

 

PART I –FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

(Unaudited)

 

		June 30, 2023				December 31, 2022
		As of
		June 30, 2023				December 31, 2022
Assets
CURRENT ASSETS:
Cash and cash equivalents		$	180			$	5,311
Restricted cash			1,047				1,058
Accounts receivable, net			6				36,183
Prepaid expenses and other receivables			4,300				958
Receivables from related parties			966				-
Convertible loan to related party			2,762				2,688
Inventory			34				120
Total current assets			9,295				46,318
NON-CURRENT ASSETS:
Deposits		$	47			$	331
Equity investees			31,484				39
Loans to associates			97				96
Property, plant and equipment, net			1,249				22,834
Intangible assets, net			7,681				9,694
Operating lease right-of-use assets			494				2,304
Goodwill			3,703				8,187
Deferred tax			-				103
Other assets			717				1,022
Total non-current assets			45,472				44,610
TOTAL ASSETS		$	54,767			$	90,928

 

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

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Cont’d)

(U.S. Dollars in thousands)

(Unaudited)

 

		As of
		June 30, 2023				December 31, 2022
Liabilities and Equity
CURRENT LIABILITIES:
Accounts payable		$	3,826			$	4,429
Accounts payable related parties			133				-
Accrued expenses and other payables			2,235				2,578
Income tax payable			520				289
Employees and related payables			901				1,860
Other payables related parties			999				-
Advance payments on account of grant			1,481				1,578
Contract liabilities			-				70
Current maturities of finance leases			18				60
Current maturities of operating leases			254				542
Short-term and current maturities of convertible loans			2,344				4,504
Total current liabilities			12,711				15,910
LONG-TERM LIABILITIES:
Non-current operating leases		$	184			$	1,728
Convertible loans			17,834				13,343
Retirement benefits obligation			-				163
Long-term debt and finance leases			13				95
Advance payments on account of grant			-				144
Other long-term liabilities			60				271
Total long-term liabilities			18,091				15,744
TOTAL LIABILITIES			30,802				31,654
REDEEMABLE NON-CONTROLLING INTEREST		$	-			$	30,203
EQUITY:
Common stock of $0.0001 par value: Authorized at June 30, 2023 and December 31, 2022: 145,833,334 shares; Issued at June 30, 2023 and December 31, 2022: 28,753,374 and 25,832,322 shares, respectively; Outstanding at June 30, 2023 and December 31, 2022: 28,466,807 and 25,545,755 shares, respectively			3				3
Additional paid-in capital			154,743				150,355
Accumulated other comprehensive (income) loss			62				(270	)
Treasury stock 286,567 shares as of June 30, 2023 and December 31, 2022			(1,266	)			(1,266	)
Accumulated deficit			(129,577	)			(121,261	)
Equity attributable to Orgenesis Inc.			23,965				27,561
Non-controlling interest			-				1,510
Total equity			23,965				29,071
TOTAL LIABILITIES REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY		$	54,767			$	90,928

 

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

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

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

(Unaudited)

 

		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Three Months Ended								Six Months Ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
Revenues		$	6,975			$	6,699			$	14,019			$	13,276
Revenues from related party			-				502				-				1,137
Total revenues			6,975				7,201				14,019				14,413
Cost of revenues			3,232				1,063				5,954				1,777
Gross profit			3,743				6,138				8,065				12,636
Cost of development services and research and development expenses			3,527				7,838				6,808				14,489
Amortization of intangible assets			208				229				415				461
Selling, general and administrative expenses			3,337				2,803				7,376				5,654
Operating loss			3,329				4,732				6,534				7,968
Other income, net			-				(8	)			(2	)			(8	)
Loss from extinguishment in connection with convertible loan			-				-				283				-
Financial expenses, net			655				389				1,299				602
Profit from deconsolidation of Octomera (see note 3)			(411	)			-				(411	)			-
Share in net loss (profit) of associated companies			(3	)			368				(1	)			915
Loss before income taxes			3,570				5,481				7,702				9,477
Tax expenses			91				11				220				12
Net loss			3,661				5,492				7,922				9,489
Net income (loss) attributable to non-controlling interests (including redeemable)			466				(65	)			394				(53	)
Net loss attributable to Orgenesis Inc.		$	4,127			$	5,427			$	8,316			$	9,436
Loss per share:
Basic and diluted		$	0.15			$	0.22			$	0.30			$	0.38
Basic		$	0.15			$	0.22			$	0.30			$	0.38
Weighted average number of shares used in computation of Basic and Diluted loss per share:
Basic and diluted			28,357,779				24,820,756				27,308,183				24,711,462
Basic			28,357,779				24,820,756				27,308,183				24,711,462
Comprehensive loss:
Net loss		$	3,661			$	5,492			$	7,922			$	9,489
Other comprehensive loss - translation adjustments			11				326				52				477
Release of translation adjustment due to deconsolidation of Octomera			(384	)			-				(384	)			-
Comprehensive loss			3,288				5,818				7,590				9,966
Comprehensive income (loss) attributed to non-controlling interests			466				(65	)			394				(53	)
Comprehensive loss attributed to Orgenesis Inc.		$	3,754			$	5,753			$	7,984			$	9,913

 

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

 

 

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				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			25,545,755			$	3			$	150,355		-	$	(270	)		$	(1,266	)		$	(121,261	)		$	27,561			$	1,510			$	29,071
Changes during the six months ended June 30, 2023:
Stock-based compensation to employees and directors			-				-				279				-				-				-				279				-				279
Stock-based compensation to service providers			-				-				32				-				-				-				32				-				32
Issuance of shares and warrants net of issuance costs			1,947,368				- *				3,341				-				-				-				3,341								3,341
Issuance of Shares due to exercise of warrants			973,684				- *				-		-		-				-				-				-				-				-
Issuance of warrants with respect to convertible loans			-				-				449				-				-				-				449				-				449
Extinguishment in connection with convertible loan restructuring			-				-				287				-				-				-				287				-				287
Deconsolidation of Non-controlling Interests			-				-				-				-				-				-				-				(1,421	)			(1,421	)
Comprehensive income (loss) for the period			-				-				-		-		332				-				(8,316	)			(7,984	)			(89	)			(8,073	)
Balance at June 30, 2023			28,466,807				3				154,743		-		62				(1,266	)			(129,577	)			23,965				-				23,965

 

*

Represents an amount lower than $1 thousand.

 

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

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

(Unaudited)

 

		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
		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 January 1, 2022			24,280,799			$	3			$	145,916			$	-			$	207			$	(1,266	)		$	(106,372	)		$	38,488			$	143			$	38,631
Changes during the six months ended June 30, 2022:
Stock-based compensation to employees and directors			-				-				463				-				-				-				-				463				-				463
Stock-based compensation to service providers			-				-				37				-				-				-				-				37				-				37
Exercise of options			510,017				-*				6				-				-				-				-				6				-				6
Issuance of warrants with respect to convertible loans			-				-				397				-				-				-				-				397				-				397
Receipts on account of shares and warrants to be allotted			-				-				-				2,175				-				-				-				2,175				-				2,175
Issuance of shares related to acquisition of Mida			29,940				-*				100				-				-				-				-				100				-				100
Comprehensive loss for the period			-				-				-				-				(477	)			-				(9,436	)			(9,913	)			(53	)			(9,966	)
Balance at June 30, 2022			24,820,756			$	3			$	146,919			$	2,175			$	(270	)		$	(1,266	)		$	(115,808	)		$	31,753			$	90			$	31,843

 

*

Represents an amount lower than $1 thousand.

 

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

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

(Unaudited)

 

		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
		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			27,861,543			$	3			$	154,691		-	$	(311	)		$	(1,266	)		$	(125,450	)		$	27,667			$	1,336			$	29,003
Changes during the three months ended June 30, 2023:
Stock-based compensation to employees and directors			-				-				136				-				-				-				136				-				136
Stock-based compensation to service providers			-				-				16				-				-				-				16				-				16
Issuance of shares and warrants net of issuance costs			-				-				(100	)	-		-				-				-				(100	)			-				(100	)
Issuance of Shares due to exercise of warrants			605,264				- *				-				-				-				-				-				-				-
Deconsolidation of Non-controlling Interests			-				-				-				-				-				-				-				(1,421	)			(1,421	)
Comprehensive income for the period			-				-				-	-			373				-				(4,127	)			(3,754	)			85				(3,669	)
Balance at June 30, 2023			28,466,807			$	3			$	154,743		-	$	62			$	(1,266	)		$	(129,577	)		$	23,965			$	-			$	23,965

 

*

Represents an amount lower than $1 thousand.

 

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

 

 

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			24,820,756			$	3			$	146,290			$	-			$	56			$	(1,266	)		$	(110,381	)		$	34,702			$	155			$	34,857
Changes during the three months ended June 30, 2022:
Stock-based compensation to employees and directors			-				-				220				-				-				-				-				220				-				220
Stock-based compensation to service providers			-				-				12				-				-				-				-				12				-				12
Issuance of warrants with respect to convertible loans			-				-				397				-				-				-				-				397				-				397
Receipts on account of shares and warrants to be allotted			-				-				-				2,175				-				-				-				2,175				-				2,175
Comprehensive loss for the period			-				-				-				-				(326	)			-				(5,427	)			(5,753	)			(65	)			(5,818	)
Balance at June 30, 2022			24,820,756			$	3			$	146,919			$	2,175			$	(270	)		$	(1,266	)		$	(115,808	)		$	31,753			$	90			$	31,843

 

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

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars in thousands)

(Unaudited)

 

		June 30, 2023				June 30, 2022
		Six Months Ended
		June 30, 2023				June 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(7,922	)		$	(9,489	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation			311				500
Capital gain, net			-				(5	)
Profit from deconsolidation of Octomera			(411	)			-
Share in losses (income) of associated companies, net			(1	)			915
Depreciation and amortization expenses			1,175				975
Effect of exchange differences on inter-company balances			237				142
Net changes in operating leases			(67	)			(33	)
Interest expenses accrued on loans and convertible loans			226				495
Loss from extinguishment in connection with convertible loan restructuring			283				-
Changes in operating assets and liabilities:
Increase in accounts receivable			(8,011	)			(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

 

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

 

 

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 75% of Octomera LLC.

 

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

 

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed and traded on the Nasdaq Capital Market under the symbol “ORGS.”

 

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 $130 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.

 

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.

 

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 our 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, we evaluate our estimates, judgments, and methodologies. We base our estimates on historical experience and on various other assumptions that we believe 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 and the determination of the fair value of the retained interest of equity investment. 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 $5,000,000 in cash in exchange for 500,000 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 100,000 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 profit of $411 thousand, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:

 

 SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS

		(in thousands)
Fair value of the retained interest in Octomera		$	31,442
Net assets deconsolidated			32,551
Other related items deconsolidated, net			(1,520	)
Net profit		$	411

 

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 $31.4 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.

 

13

 

 

The preliminary allocation of the purchase price (“PPA”) to net assets acquired and liability assumed resulted in the recognition of intangible asset of $6.2 million and other net assets of $25.2 million. The value assigned to intangible assets is amortized over a period of 10 years and the related amortization will be included under share in net losses (profits) from associated companies. The estimated fair value is preliminary and based on the information that was available as of June 30, 2023. Thus, the measurement of fair value reflected is subject to change and such change could be significant.

 

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:

 SCHEDULE OF NET ASSETS DECONSOLIDATED

ASSETS:
Cash and cash equivalents			973
Other current assets			47,217
Non-current assets			29,443
TOTAL ASSETS			77,633
LIABILITIES:
Current liabilities			6,566
Long-term liabilities			2,313
TOTAL LIABILITIES			8,879
REDEEMABLE NON-CONTROLLING INTEREST			36,203
NET ASSETS DECONSOLIDATED			32,551

 

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 is as follows:

 

 SCHEDULE OF SEGMENT REPORTING

		Octomera				Therapies				Eliminations				Consolidated
		(in thousands)
Revenues		$	13,779				240			$	-			$	14,019
Revenues from related party			-				-				-				-
Total revenues															14019
Cost of revenues*			(5,084	)			(398	)			-				(5,482	)
Gross profit			8,695				(158	)			-				8,537
Cost of development services and research and development expenses*			(4,501	)			(2,051	)			-				(6,552	)
Operating expenses*			(3,623	)			(3,721	)			-				(7,344	)
Other income, net			2				-				-				2
Depreciation and amortization			(779	)			(396	)			-				(1,175	)
Loss from extinguishment in connection with convertible loan			-				(283	)			-				(283	)
Financial Expenses, net			(494	)			(806	)			1				(1,299	)
Profit from deconsolidation of Octomera			-				-				411				411
Share in net income of associated companies			-				1				-				1
Income (loss) before income taxes		$	(700	)			(7,414	)		$	412			$	(7,702	)

 

*

Excluding Depreciation, amortization expenses

 

Segment data for the six months ended June 30, 2022 is as follows:

 

		Octomera				Therapies				Eliminations				Consolidated
		(in thousands)
Revenues		$	12,949				3,862			$	(3,535	)		$	13,276
Revenues from related party			1,137				-				-				1,137
Total revenues			14,086				3,862				(3,535	)			14,413
Cost of revenues*			(1,324	)			(640	)			356				(1,608	)
Gross profit			12,762				3,222				(3,179	)			12,805
Cost of development services and research and development expenses*			(6,772	)			(10,028	)			2,635				(14,165	)
Operating expenses*			(1,437	)			(4,740	)			544				(5,633	)
Other income, net			3				5				-				8
Depreciation and amortization			(397	)			(578	)			-				(975	)
Financial Expenses, net			(1,251	)			649				-				(602	)
Share in net income of associated companies			-				(915	)			-				(915	)
Income (loss) before income taxes		$	2,908			$	(12,385	)		$	-			$	(9,477	)

 

*

Excluding Depreciation, amortization expenses

 

Segment data for the three months ended June 30, 2023 is as follows:

 

		Octomera				Therapies				Eliminations				Consolidated
		(in thousands)
Revenues		$	6,865				110			$	-			$	6,975
Revenues from related party			-				-				-				-
Total revenues															6,975
Cost of revenues*			(2,776	)			(220	)			-				(2,996	)
Gross profit			4,089				(110	)			-				3,979
Cost of development services and research and development expenses*			(2,420	)			(975	)			-				(3,395	)
Operating expenses*			(1,909	)			(1,407	)			-				(3,316	)
Depreciation and amortization			(394	)			(203	)			-				(597	)
Financial Expenses, net			(228	)			(428	)			1				(655	)
Profit from deconsolidation of Octomera			-				-				411				411
Share in net income of associated companies			-				3				-				3
Income (loss) before income taxes		$	(862	)			(3,120	)		$	412			$	(3,570	)

 

*

Excluding Depreciation, amortization expenses

 

15

 

 

Segment data for the three months ended June 30, 2022 is as follows:

 

		Octomera				Therapies				Eliminations				Consolidated
		(in thousands)
Revenues		$	6,606				1,920			$	(1,827	)		$	6,699
Revenues from related party			502				-				-				502
Total revenues			7,108				1,920				(1,827	)			7,201
Cost of revenues*			(974	)			(351	)			356				(969	)
Gross profit			6,134				1,569				(1,471	)			6,232
Cost of development services and research and development expenses*			(3,296	)			(5,583	)			1,207				(7,672	)
Operating expenses*			(728	)			(2,327	)			264				(2,791	)
Other income, net			3				5				-				8
Depreciation and amortization			(207	)			(294	)			-				(501	)
Financial Expenses, net			(700	)			311				-				(389	)
Share in net income of associated companies			(1	)			(367	)			-				(368	)
Income (loss) before income taxes		$	1,205			$	(6,686	)		$	-			$	(5,481	)

 

*

Excluding Depreciation, amortization expenses

 

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 1,947,368 shares (the “Shares”) of common stock, par value $0.0001 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.

 

16

 

 

NOTE 6 – CONVERTIBLE LOANS

 

Convertible loans outstanding as of June 30, 2023 and December 31, 2022 are as follows:

 

 SCHEDULE OF LONG TERM CONVERTIBLE NOTES

Principal Amount				Issuance Date				Current Interest Rate				Current Maturity				Current Exercise Price
(in thousands)				(Year)				%				(Year)				$
Convertible Loans Outstanding as of June 30, 2023
$	750				2018				10	%			2026				2.50
	1,500				2019				10	%			2026				7.00
	100				2019				8	%			2023				2.50
	5,000				2019				10	%			2026				2.50
	100				2020				8	%			2023				7.00
	5,000				2022				10	%			2026				2.50
	1,150				2022				6	%			2023				4.50
	5,000				2023				8	%			2026				2.46
	485				2023				8	%			2024				-*
$	19,085

 

*

See Koligo convertible loan agreement below.

 

Convertible Loans Outstanding as of December 31, 2022
$	750				2018				2	%			2023				7.00
	1,600				2019				8	%			2024				7.00
	5,000				2019				6	%			2023				7.00
	100				2020				8	%			2023				7.00
	8,000				2022				10	%			2024				2.5
	1,150				2022				6	%			2023				4.5
$	16,600

 

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 $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.

 

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”).

 

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 $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.

 

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 $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.

 

NOTE 7 – STOCK-BASED COMPENSATION

 

a.

Options Granted to Employees

 

The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2023 to June 30, 2023:

 

 SCHEDULE OF STOCK OPTIONS GRANTED 

No. of Options Granted

Exercise Price

Vesting Period

Fair Value at Grant (in thousands)

Expiration Period

Employees

53,500

$

1.36

Quarterly over a period of two years

$

46

10 years

 

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

 

 SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS

		During the Period from January 1, 2023 to June 30, 2023
Value of one common share		$	1.36
Dividend yield			0	%
Expected stock price volatility			70	%
Risk free interest rate			3.91	%
Expected term (years)			5.56

 

19

 

 

b.

Options Granted to Non-Employees

 

The table below summarizes all the options for the purchase of shares in the Company granted to consultants and service providers during the period from January 1, 2023 to June 30, 2023:

 

 SCHEDULE OF STOCK OPTIONS GRANTED

No. of Options Granted

Exercise Price

Vesting Period

Fair Value at Grant (in thousands)

Expiration Period

Non-employees

8,335

$

1.36

Annually over a period of five years

$

9

10 years

 

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

 

 SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS

		During the Period from January 1, 2023 to June 30, 2023
Value of one common share		$	1.36
Dividend yield			0	%
Expected stock price volatility			80	%
Risk free interest rate			4.07	%
Expected term (years)			10

 

NOTE 8 – LOSS PER SHARE

 

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

 

 SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE

		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		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.		$	4,127			$	5,427			$	8,316			$	9,436
Weighted average number of common shares outstanding			28,357,779				24,820,756				27,308,183				24,711,462
Net loss per share		$	0.15			$	0.22			$	0.30			$	0.38

 

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 7,911,844 shares underlying outstanding options and warrants and 7,101,236 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 7,916,597 shares underlying outstanding options and warrants and 5,184,127 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 6,205,193 shares underlying outstanding options and warrants and 2,152,298 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 6,327,171 shares underlying outstanding options and warrants and 2,668,011 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:

 

 SCHEDULE OF DISAGGREGATION OF REVENUE

		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Three Months Ended								Six Months Ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		(in thousands)
Revenue stream:
POC development services		$	-			$	6,274			$	-			$	12,598
Cell process development services and hospital services			6,180				511				8,488				1,399
POC cell processing			795				416				5,531				416
Total		$	6,975			$	7,201			$	14,019			$	14,413

 

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

 

 SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER

		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Three Months Ended								Six Months Ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		(in thousands)
Revenue earned:
Customer A (United States)		$	-			$	2,502			$	3,605			$	3,729
Customer B (United States)		$	3,415			$	-			$	3,415			$	-
Customer C (United States)		$	2,572			$	-			$	2,572			$	-
Customer D (Greece)		$	-			$	1,996			$	2,022			$	2,656
Customer E (Korea)		$	-			$	742			$	-			$	3,425
Customer F (United Arab Emirates)		$	-			$	1,187			$	-			$	2,254
Revenue earned		$	-			$	1,187			$	-			$	2,254

 

Contract Assets and Liabilities

 

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

 

The activity for trade receivables is comprised of:

 

 SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES

		June 30, 2023				June 30, 2022
		Six Months Ended
		June 30, 2023				June 30, 2022
		(in thousands)
Balance as of beginning of period		$	36,183			$	15,245
Elimination of acquisition receivables			-				(1,337	)
Additions			14,057				13,953
Collections			(6,045	)			(8,892	)
Exchange rate differences			(73	)			(183	)
Deconsolidation of Octomera			(44,116	)			-
Balance as of end of period		$	6			$	18,786

 

* The activity of the related party included in the trade receivables activity above is comprised of:

 

21

 

 

		June 30, 2023				June 30, 2022
		Six Months Ended
		June 30, 2023				June 30, 2022
		(in thousands)
Balance as of beginning of period		$	-			$	1,972
Additions			-				1,137
Collections			-				(1,070	)
Balance as of end of period		$	-			$	2,039

 

The activity for contract liabilities is comprised of:

 

 SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES

		June 30, 2023				June 30, 2022
		Six Months Ended
		June 30, 2023				June 30, 2022
		(in thousands)
Balance as of beginning of period		$	70			$	59
Additions			36				11
Deconsolidation of Octomera			(106	)			-
Balance as of end of period		$	-			$	70

 

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”). 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.

 

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 $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:

 

	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 $8 million unless agreed otherwise by the parties to the option.

 

 

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 on Form 10-Q, 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 on Form 10-Q. 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”).

 

 

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.

 

 

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.

 

 

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”).

 

 

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.

 

 

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				June 30, 2022
		(in thousands)
Revenues		$	6,975			$	6,699
Revenues from related party			-				502
Total revenues			6,975				7,201
Cost of revenues			3,232				1,603
Gross profit			3,743				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			3,337				2,803
Operating loss			3,329				4,732
Other income, net			-				(8	)
Financial expenses, net			655				389
Profit from deconsolidation of Octomera			(411	)			-
Share in net loss (profit) of associated company			(3	)			368
Loss before income taxes			3,570				5,481
Tax expense			91				11
Net loss		$	3,661			$	5,492

 

Revenues

 

During the three months ended June 30, 2023, we recognized revenue in the amount of $6,975 thousand, as compared to $7,201 during the three months ended June 30, 2022, representing a decrease of 3%. This was mainly attributable to:

 

	●	An increase in POC cell processing revenue in the amount of $379 thousand as a result of new signed cell processing contracts in the Octomera segment; and
	●	An increase in cell process development and hospital services revenue in the amount of $5,669 thousand, offset by a decline in POC development services of $6,274 thousand, mainly in the Octomera segment. This is a result of progression in our revenue model, where, following the completion of POCare development services performance obligations, we entered into cell processing agreements with certain customers. The third-party customers now retain the ownership of any intellectual property created. We have completed the performance obligations under all of the POCare development services contracts concluded in prior years.

 

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

 

 

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
		(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			639				346
Total		$	3,337			$	2,803

 

 

Selling, general and administrative expenses for the three months ended June 30, 2023 were $3,337 thousand, as compared to $2,803 thousand for the three months ended June 30, 2022, representing an increase of 19%. 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, professional fees, and other general and administrative expenses in the Octomera segment due to the ramp up of activity, 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		$	559			$	239
Foreign exchange loss, net			94				149
Other expenses			2				1
Total		$	655			$	389

 

Financial expenses, net for the three months ended June 30, 2023 were $655 thousand, as compared to $389 thousand for the three months ended June 30, 2022, representing an increase of 68%. 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				June 30, 2022
		(in thousands)
Revenues		$	14,019			$	13,276
Revenues from related party			-				1,137
Total revenue			14,019				14,413
Cost of revenues			5,954				1,777
Gross profit			8,065				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			7,376				5,654
Operating loss			6,534				7,968
Other income, net			(2	)			(8	)
Loss from extinguishment in connection with convertible loan			283				-
Financial expenses, net			1,299				602
Profit from deconsolidation of Octomera			(411	)			-
Share in net loss (profit) of associated company			(1	)			915
Loss before income taxes			7,702				9,477
Tax expense			220				12
Net loss		$	7,922			$	9,489

 

 

Revenues

 

Our revenues for the six months ended June 30, 2023 were $14,019 thousand, as compared to $14,413 thousand for the six months ended June 30, 2022, representing a decrease of 3%. There was an increase in POC cell processing in the amount of $5,115 thousand and cell process development services in the amount of $7,089 thousand which was offset by a decline in POC development services of $12,598 . The decrease in POC development services was as a result of our having completed the majority of performance obligations under the POC development services contracts.

 

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

 

 

● 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				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			1,234				849
Total		$	7,376			$	5,654

 

Selling, general and administrative expenses for the six months ended June 30, 2023 were $7,376 thousand, as compared to $5,654 thousand for the six months ended June 30, 2022, representing an increase of 30%. The increase was mainly as a result of increases in salaries and related expenses, professional fees, and other general and administrative expenses as a result of ramped up activities in the Octomera segment and accounting and legal fees incurred as a result of investment activities.

 

Financial Expenses, net

 

		Six Months Ended
		June 30, 2023				June 30, 2022
		(in thousands)
Interest expense on convertible loans and loans		$	1,054			$	364
Foreign exchange loss, net			242				231
Other expenses (income)			3				7
Total		$	1,299			$	602

 

Financial expenses, net for the six months ended June 30, 2023 were $1,299 thousand, as compared to $602 thousand for the six months ended June 30, 2022, representing an increase of 116%. The increase was mainly as a result of increased interest expenses on convertible loans.

 

Working Capital

 

		As of
		June 30, 2023				December 31, 2022
		(in thousands)
Current assets		$	9,295			$	46,318
Current liabilities			12,711				15,910
Working capital		$	(3,416	)		$	30,408

 

 

Current assets decreased by $37,023 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
		(in thousands)
Net loss		$	(7,922	)		$	(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 increased revenues in the Octomera segment which have not yet been collected.

 

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.

 

 

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 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 report, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

 

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.

 

  

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.

 

 

Item 6. Exhibits

 

Exhibits required by Item 601 of Regulation S-K

 

No.		Description
(10)		Material Contracts
10.1		Amendment No. 1 to Unit Purchase Agreement dated as of May 5, 2023 by and among Orgenesis Inc., Morgenesis LLC and MM OS Holdings, L.P. (incorporated by reference to an exhibit to our current report on Form 8-K, filed on May 10, 2023).
10.2		Amendment No. 2 to Unit Purchase Agreement dated as of June 30, 2023 by and among Orgenesis Inc., Morgenesis LLC and MM OS Holdings, L.P, (incorporated by reference to an exhibit to our current report on Form 8-K, filed on July 7, 2023).
10.3		Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of Morgenesis LLC, (incorporated by reference to an exhibit to our current report on Form 8-K, filed on July 7, 2023).
(31)		Rule 13a-14(a)/15d-14(a) Certification
31.1*		Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2*		Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
(32)		Section 1350 Certification
32.1*		Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2*		Certification Statement of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
(101)*		Interactive Data Files
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

 

 

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:	August 10, 2023
	/s/ Neil Reithinger
	Neil Reithinger
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)
Date:	August 10, 2023

 

 

 

Exhibit 31.1

 

ORGENESIS INC.

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

 

I, Vered Caplan, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended 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:	August 10, 2023

 

 

 

Exhibit 31.2

 

ORGENESIS INC.

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

 

I, Neil Reithinger, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q 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/ Neil Reithinger
	Neil Reithinger
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)
Date:	August 10, 2023

 

 

 

Exhibit 32.1

 

ORGENESIS INC.

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

 

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

 

(a)	The Quarterly Report on Form 10-Q of Orgenesis Inc. for the quarter ended 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 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:	August 10, 2023

 

 

 

Exhibit 32.2

 

ORGENESIS INC.

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

 

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

 

(a)	The Quarterly Report on Form 10-Q of Orgenesis Inc. for the quarter ended 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 fairly presents, in all material respects, the financial condition and results of operations of Orgenesis Inc.

 

By:	/s/ Neil Reithinger
	Neil Reithinger
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)
Date:	August 10, 2023

 

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-38416
Entity Registrant Name	ORGENESIS INC.
Entity Central Index Key	0001460602
Entity Tax Identification Number	98-0583166
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	20271 Goldenrod Lane
Entity Address, City or Town	Germantown
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20876
City Area Code	(480)
Local Phone Number	659-6404
Title of 12(b) Security	Common Stock
Trading Symbol	ORGS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,466,807

v3.23.2

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 180	$ 5,311
Restricted cash	1,047	1,058
Accounts receivable, net	6	36,183
Prepaid expenses and other receivables	4,300	958
Convertible loan to related party	2,762	2,688
Inventory	34	120
Total current assets	9,295	46,318
NON-CURRENT ASSETS:
Deposits	47	331
Equity investees	31,484	39
Loans to associates	97	96
Property, plant and equipment, net	1,249	22,834
Intangible assets, net	7,681	9,694
Operating lease right-of-use assets	494	2,304
Goodwill	3,703	8,187
Deferred tax		103
Other assets	717	1,022
Total non-current assets	45,472	44,610
TOTAL ASSETS	54,767	90,928
CURRENT LIABILITIES:
Accrued expenses and other payables	2,235	2,578
Income tax payable	520	289
Employees and related payables	901	1,860
Advance payments on account of grant	1,481	1,578
Contract liabilities		70
Current maturities of finance leases	18	60
Current maturities of operating leases	254	542
Short-term and current maturities of convertible loans	2,344	4,504
Total current liabilities	12,711	15,910
LONG-TERM LIABILITIES:
Non-current operating leases	184	1,728
Convertible loans	17,834	13,343
Retirement benefits obligation		163
Long-term debt and finance leases	13	95
Advance payments on account of grant		144
Other long-term liabilities	60	271
Total long-term liabilities	18,091	15,744
TOTAL LIABILITIES	30,802	31,654
REDEEMABLE NON-CONTROLLING INTEREST		30,203
EQUITY:
Common stock of $0.0001 par value: Authorized at June 30, 2023 and December 31, 2022: 145,833,334 shares; Issued at June 30, 2023 and December 31, 2022: 28,753,374 and 25,832,322 shares, respectively; Outstanding at June 30, 2023 and December 31, 2022: 28,466,807 and 25,545,755 shares, respectively	3	3
Additional paid-in capital	154,743	150,355
Accumulated other comprehensive (income) loss	62	(270)
Treasury stock 286,567 shares as of June 30, 2023 and December 31, 2022	(1,266)	(1,266)
Accumulated deficit	(129,577)	(121,261)
Equity attributable to Orgenesis Inc.	23,965	27,561
Non-controlling interest		1,510
Total equity	23,965	29,071
TOTAL LIABILITIES REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY	54,767	90,928
Related Party [Member]
CURRENT ASSETS:
Accounts receivable, net
Receivables from related parties	966
CURRENT LIABILITIES:
Accounts payable related parties	133
Other payables related parties	999
Nonrelated Party [Member]
CURRENT LIABILITIES:
Accounts payable related parties	$ 3,826	$ 4,429

v3.23.2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
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

v3.23.2

Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Revenues	$ 6,975	$ 6,699	$ 14,019	$ 13,276
Total revenues	6,975	7,201	14,019	14,413
Cost of revenues	3,232	1,063	5,954	1,777
Gross profit	3,743	6,138	8,065	12,636
Cost of development services and research and development expenses	3,527	7,838	6,808	14,489
Amortization of intangible assets	208	229	415	461
Selling, general and administrative expenses	3,337	2,803	7,376	5,654
Operating loss	3,329	4,732	6,534	7,968
Other income, net		(8)	(2)	(8)
Loss from extinguishment in connection with convertible loan			283
Financial expenses, net	655	389	1,299	602
Profit from deconsolidation of Octomera (see note 3)	(411)		(411)
Share in net loss (profit) of associated companies	(3)	368	(1)	915
Loss before income taxes	3,570	5,481	7,702	9,477
Tax expenses	91	11	220	12
Net loss	3,661	5,492	7,922	9,489
Net income (loss) attributable to non-controlling interests (including redeemable)	466	(65)	394	(53)
Net loss attributable to Orgenesis Inc.	$ 4,127	$ 5,427	$ 8,316	$ 9,436
Loss per share:
Basic	$ 0.15	$ 0.22	$ 0.30	$ 0.38
Diluted	$ 0.15	$ 0.22	$ 0.30	$ 0.38
Weighted average number of shares used in computation of Basic and Diluted loss per share:
Basic	28,357,779	24,820,756	27,308,183	24,711,462
Diluted	28,357,779	24,820,756	27,308,183	24,711,462
Comprehensive loss:
Other comprehensive loss - translation adjustments	$ 11	$ 326	$ 52	$ 477
Release of translation adjustment due to deconsolidation of Octomera	(384)		(384)
Comprehensive loss	3,288	5,818	7,590	9,966
Comprehensive income (loss) attributed to non-controlling interests	466	(65)	394	(53)
Comprehensive loss attributed to Orgenesis Inc.	3,754	5,753	7,984	9,913
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Total revenues		$ 502		$ 1,137

v3.23.2

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]		Common Stock Including Additional Paid in Capital [Member]	Receipts on Account of Shares to be Allotted [Member]	AOCI Attributable to Parent [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 3		$ 145,916		$ 207	$ (1,266)	$ (106,372)	$ 38,488	$ 143	$ 38,631
Beginning balance, shares at Dec. 31, 2021	24,280,799
Stock-based compensation to employees and directors			463					463		463
Stock-based compensation to service providers			37					37		37
Issuance of warrants with respect to convertible loans			397					397		397
Comprehensive loss for the period					(477)		(9,436)	(9,913)	(53)	(9,966)
Exercise of options		[1]	6					6		6
Exercise of options, shares	510,017
Receipts on account of shares and warrants to be allotted				2,175				2,175		2,175
Issuance of shares related to acquisition of Mida		[1]	100					100		100
Issuance of shares related to acquisition of Mida, shares	29,940
Ending balance, value at Jun. 30, 2022	$ 3		146,919	2,175	(270)	(1,266)	(115,808)	31,753	90	31,843
Ending balance, shares at Jun. 30, 2022	24,820,756
Beginning balance, value at Mar. 31, 2022	$ 3		146,290		56	(1,266)	(110,381)	34,702	155	34,857
Beginning balance, shares at Mar. 31, 2022	24,820,756
Stock-based compensation to employees and directors			220					220		220
Stock-based compensation to service providers			12					12		12
Issuance of warrants with respect to convertible loans			397					397		397
Comprehensive loss for the period					(326)		(5,427)	(5,753)	(65)	(5,818)
Receipts on account of shares and warrants to be allotted				2,175				2,175		2,175
Ending balance, value at Jun. 30, 2022	$ 3		146,919	2,175	(270)	(1,266)	(115,808)	31,753	90	31,843
Ending balance, shares at Jun. 30, 2022	24,820,756
Beginning balance, value at Dec. 31, 2022	$ 3		150,355		(270)	(1,266)	(121,261)	27,561	1,510	29,071
Beginning balance, shares at Dec. 31, 2022	25,545,755
Stock-based compensation to employees and directors			279					279		279
Stock-based compensation to service providers			32					32		32
Issuance of shares and warrants net of issuance costs		[2]	3,341					3,341		3,341
Issuance of shares and warrants, shares	1,947,368
Issuance of Shares due to exercise of warrants		[2]
Issuance of Shares due to exercise of warrants, shares	973,684
Issuance of warrants with respect to convertible loans			449					449		449
Extinguishment in connection with convertible loan restructuring			287					287		287
Deconsolidation of Non-controlling Interests									(1,421)	(1,421)
Comprehensive loss for the period					332		(8,316)	(7,984)	(89)	(8,073)
Ending balance, value at Jun. 30, 2023	$ 3		154,743		62	(1,266)	(129,577)	23,965		23,965
Ending balance, shares at Jun. 30, 2023	28,466,807
Beginning balance, value at Mar. 31, 2023	$ 3		154,691		(311)	(1,266)	(125,450)	27,667	1,336	29,003
Beginning balance, shares at Mar. 31, 2023	27,861,543
Stock-based compensation to employees and directors			136					136		136
Stock-based compensation to service providers			16					16		16
Issuance of shares and warrants net of issuance costs			(100)					(100)		(100)
Issuance of Shares due to exercise of warrants		[3]
Issuance of Shares due to exercise of warrants, shares	605,264
Deconsolidation of Non-controlling Interests									(1,421)	(1,421)
Comprehensive loss for the period					373		(4,127)	(3,754)	85	(3,669)
Ending balance, value at Jun. 30, 2023	$ 3		$ 154,743		$ 62	$ (1,266)	$ (129,577)	$ 23,965		$ 23,965
Ending balance, shares at Jun. 30, 2023	28,466,807
[1] Represents an amount lower than $1 thousand. [2] Represents an amount lower than $1 thousand. [3] Represents an amount lower than $1 thousand.

v3.23.2

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	$ (7,922)	$ (9,489)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation	311	500
Capital gain, net		(5)
Profit from deconsolidation of Octomera	(411)
Share in losses (income) of associated companies, net	(1)	915
Depreciation and amortization expenses	1,175	975
Effect of exchange differences on inter-company balances	237	142
Net changes in operating leases	(67)	(33)
Interest expenses accrued on loans and convertible loans	226	495
Loss from extinguishment in connection with convertible loan restructuring	283
Changes in operating assets and liabilities:
Increase in accounts receivable	(8,011)	(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

v3.23.2

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 $0.0001 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 $130 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.

v3.23.2

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2023
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.   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 our 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, we evaluate our estimates, judgments, and methodologies. We base our estimates on historical experience and on various other assumptions that we believe 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 and the determination of the fair value of the retained interest of equity investment. 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.

v3.23.2

REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION	6 Months Ended
	Jun. 30, 2023
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 500,000 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 100,000 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 profit of $411 thousand, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:    SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS     (in thousands)           Fair value of the retained interest in Octomera   $ 31,442   Net assets deconsolidated     32,551   Other related items deconsolidated, net     (1,520 ) Net profit   $ 411     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 $31.4 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.     The preliminary allocation of the purchase price (“PPA”) to net assets acquired and liability assumed resulted in the recognition of intangible asset of $6.2 million and other net assets of $25.2 million. The value assigned to intangible assets is amortized over a period of 10 years and the related amortization will be included under share in net losses (profits) from associated companies. The estimated fair value is preliminary and based on the information that was available as of June 30, 2023. Thus, the measurement of fair value reflected is subject to change and such change could be significant.   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:  SCHEDULE OF NET ASSETS DECONSOLIDATED           ASSETS:         Cash and cash equivalents     973   Other current assets     47,217   Non-current assets     29,443   TOTAL ASSETS     77,633             LIABILITIES:         Current liabilities     6,566   Long-term liabilities     2,313   TOTAL LIABILITIES     8,879             REDEEMABLE NON-CONTROLLING INTEREST     36,203             NET ASSETS DECONSOLIDATED     32,551

v3.23.2

SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2023
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 is as follows:    SCHEDULE OF SEGMENT REPORTING     Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 13,779       240     $ -     $ 14,019   Revenues from related party     -       -       -       -   Total revenues                             14019    Cost of revenues*     (5,084 )     (398 )     -       (5,482 ) Gross profit     8,695       (158 )               -       8,537   Cost of development services and research and development expenses*     (4,501 )     (2,051 )     -       (6,552 ) Operating expenses*     (3,623 )     (3,721 )     -       (7,344 ) Other income, net     2       -       -       2   Depreciation and amortization     (779 )     (396 )     -       (1,175 ) Loss from extinguishment in connection with convertible loan     -       (283 )     -       (283 ) Financial Expenses, net     (494 )     (806 )     1       (1,299 ) Profit from deconsolidation of Octomera     -       -       411       411   Share in net income of associated companies     -       1       -       1   Income (loss) before income taxes   $ (700 )     (7,414 )   $ 412     $ (7,702 )   * Excluding Depreciation, amortization expenses   Segment data for the six months ended June 30, 2022 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 12,949       3,862     $ (3,535 )   $ 13,276   Revenues from related party     1,137       -       -       1,137   Total revenues     14,086       3,862       (3,535 )     14,413   Cost of revenues*     (1,324 )     (640 )     356       (1,608 ) Gross profit     12,762       3,222       (3,179 )     12,805   Cost of development services and research and development expenses*     (6,772 )     (10,028 )     2,635       (14,165 ) Operating expenses*     (1,437 )     (4,740 )     544       (5,633 ) Other income, net     3       5       -       8   Depreciation and amortization     (397 )     (578 )     -       (975 ) Financial Expenses, net     (1,251 )     649       -       (602 ) Share in net income of associated companies     -       (915 )     -       (915 ) Income (loss) before income taxes   $ 2,908     $ (12,385 )   $ -     $ (9,477 )   * Excluding Depreciation, amortization expenses   Segment data for the three months ended June 30, 2023 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 6,865       110     $           -     $ 6,975   Revenues from related party     -       -       -       -   Total revenues                             6,975    Cost of revenues*     (2,776 )     (220 )     -       (2,996 ) Gross profit     4,089       (110 )     -       3,979   Cost of development services and research and development expenses*     (2,420 )     (975 )     -       (3,395 ) Operating expenses*     (1,909 )     (1,407 )     -       (3,316 ) Depreciation and amortization     (394 )     (203 )     -       (597 ) Financial Expenses, net     (228 )     (428 )     1       (655 ) Profit from deconsolidation of Octomera     -       -       411       411   Share in net income of associated companies     -       3       -       3   Income (loss) before income taxes   $ (862 )     (3,120 )   $ 412     $ (3,570 )   * Excluding Depreciation, amortization expenses     Segment data for the three months ended June 30, 2022 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 6,606       1,920     $ (1,827 )   $ 6,699   Revenues from related party     502       -       -       502   Total revenues     7,108       1,920       (1,827 )     7,201   Cost of revenues*     (974 )     (351 )     356       (969 ) Gross profit     6,134       1,569       (1,471 )     6,232   Cost of development services and research and development expenses*     (3,296 )     (5,583 )     1,207       (7,672 ) Operating expenses*     (728 )     (2,327 )     264       (2,791 ) Other income, net     3       5       -       8   Depreciation and amortization     (207 )     (294 )     -       (501 ) Financial Expenses, net     (700 )     311       -       (389 ) Share in net income of associated companies     (1 )     (367 )     -       (368 ) Income (loss) before income taxes   $ 1,205     $ (6,686 )   $ -     $ (5,481 )   * Excluding Depreciation, amortization expenses

v3.23.2

EQUITY	6 Months Ended
	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 1,947,368 shares (the “Shares”) of common stock, par value $0.0001 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.

v3.23.2

CONVERTIBLE LOANS	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
CONVERTIBLE LOANS	NOTE 6 – CONVERTIBLE LOANS   Convertible loans outstanding as of June 30, 2023 and December 31, 2022 are as follows:    SCHEDULE OF LONG TERM CONVERTIBLE NOTES Principal Amount     Issuance Date     Current Interest Rate     Current Maturity     Current Exercise Price   (in thousands)     (Year)     %     (Year)     $   Convertible Loans Outstanding as of June 30, 2023   $ 750       2018       10 %     2026       2.50     1,500       2019       10 %     2026       7.00     100       2019       8 %     2023       2.50     5,000       2019       10 %     2026       2.50     100       2020       8 %     2023       7.00     5,000       2022       10 %     2026       2.50     1,150       2022       6 %     2023       4.50     5,000       2023       8 %     2026       2.46     485       2023       8 %     2024       -*   $ 19,085                                       * See Koligo convertible loan agreement below.   Convertible Loans Outstanding as of December 31, 2022   $ 750       2018       2 %     2023       7.00     1,600       2019       8 %     2024       7.00     5,000       2019       6 %     2023       7.00     100       2020       8 %     2023       7.00     8,000       2022       10 %     2024       2.5     1,150       2022       6 %     2023       4.5   $ 16,600                                     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 $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.   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.

v3.23.2

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	NOTE 7 – STOCK-BASED COMPENSATION   a. Options Granted to Employees   The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2023 to June 30, 2023:    SCHEDULE OF STOCK OPTIONS GRANTED        No. of Options Granted     Exercise Price     Vesting Period   Fair Value at Grant (in thousands)     Expiration Period   Employees     53,500     $ 1.36     Quarterly over a period of two years   $ 46       10 years     The fair valuation of these option grants is based on the following assumptions:    SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS     During the Period from January 1, 2023 to June 30, 2023   Value of one common share   $ 1.36   Dividend yield     0 % Expected stock price volatility     70 % Risk free interest rate     3.91 % Expected term (years)     5.56       b. Options Granted to Non-Employees   The table below summarizes all the options for the purchase of shares in the Company granted to consultants and service providers during the period from January 1, 2023 to June 30, 2023:    SCHEDULE OF STOCK OPTIONS GRANTED     No. of Options Granted     Exercise Price     Vesting Period   Fair Value at Grant (in thousands)     Expiration Period   Non-employees     8,335     $ 1.36     Annually over a period of five years   $ 9       10 years     The fair valuation of these option grants is based on the following assumptions:    SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS     During the Period from January 1, 2023 to June 30, 2023   Value of one common share   $ 1.36   Dividend yield     0 % Expected stock price volatility     80 % Risk free interest rate     4.07 % Expected term (years)     10

v3.23.2

LOSS PER SHARE	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
LOSS PER SHARE	NOTE 8 – LOSS PER SHARE   The following table sets forth the calculation of basic and diluted loss per share for the period indicated:    SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       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.   $ 4,127     $ 5,427     $ 8,316     $ 9,436   Weighted average number of common shares outstanding     28,357,779       24,820,756       27,308,183       24,711,462   Net loss per share   $ 0.15     $ 0.22     $ 0.30     $ 0.38     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 7,911,844 shares underlying outstanding options and warrants and 7,101,236 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 7,916,597 shares underlying outstanding options and warrants and 5,184,127 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 6,205,193 shares underlying outstanding options and warrants and 2,152,298 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 6,327,171 shares underlying outstanding options and warrants and 2,668,011 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.

v3.23.2

REVENUES	6 Months Ended
	Jun. 30, 2023
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:    SCHEDULE OF DISAGGREGATION OF REVENUE     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       Three Months Ended     Six Months Ended       June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       (in thousands)   Revenue stream:                                                                   POC development services   $ -     $ 6,274     $ -     $ 12,598   Cell process development services and hospital services     6,180       511       8,488       1,399   POC cell processing     795       416       5,531       416   Total   $ 6,975     $ 7,201     $ 14,019     $ 14,413     A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:    SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       Three Months Ended     Six Months Ended       June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       (in thousands)   Revenue earned:                                                                   Customer A (United States)   $ -     $ 2,502     $ 3,605     $ 3,729   Customer B (United States)   $ 3,415     $ -     $ 3,415     $ -   Customer C (United States)   $ 2,572     $ -     $ 2,572     $ -   Customer D (Greece)   $ -     $ 1,996     $ 2,022     $ 2,656   Customer E (Korea)   $ -     $ 742     $ -     $ 3,425   Customer F (United Arab Emirates)   $ -     $ 1,187     $ -     $ 2,254   Revenue earned   $ -     $ 1,187     $ -     $ 2,254     Contract Assets and Liabilities   Contract assets are mainly comprised of trade receivables net of allowance for doubtful debts, which includes amounts billed and currently due from customers.   The activity for trade receivables is comprised of:    SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES     June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   Balance as of beginning of period   $ 36,183     $ 15,245   Elimination of acquisition receivables     -       (1,337 ) Additions     14,057       13,953   Collections     (6,045 )     (8,892 ) Exchange rate differences     (73 )     (183 ) Deconsolidation of Octomera     (44,116 )     -   Balance as of end of period   $ 6     $ 18,786     * The activity of the related party included in the trade receivables activity above is comprised of:         June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   Balance as of beginning of period   $ -     $ 1,972   Additions     -       1,137   Collections     -       (1,070 ) Balance as of end of period   $ -     $ 2,039     The activity for contract liabilities is comprised of:    SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES     June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   Balance as of beginning of period   $ 70     $ 59   Additions     36       11   Deconsolidation of Octomera     (106 )     -   Balance as of end of period   $ -     $ 70

v3.23.2

OTHER SIGNIFICANT TRANSACTIONS DURING THE SIX MONTHS ENDED JUNE 30, 2023	6 Months Ended
	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.

v3.23.2

LEGAL PROCEEDINGS	6 Months Ended
	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.

v3.23.2

SUBSEQUENT EVENTS	6 Months Ended
	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:     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 $8 million unless agreed otherwise by the parties to the option.

v3.23.2

BASIS OF PRESENTATION (Policies)	6 Months Ended
	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.
Significant Accounting Policies	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	Use of Estimates in the Preparation of Financial Statements   The preparation of our 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, we evaluate our estimates, judgments, and methodologies. We base our estimates on historical experience and on various other assumptions that we believe 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 and the determination of the fair value of the retained interest of equity investment. Actual results could differ from those estimates.
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.
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.

v3.23.2

REDEEMABLE NON-CONTROLLING INTEREST AND DECONSOLIDATION (Tables)	6 Months Ended
	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 profit of $411 thousand, representing the difference between the fair value of the retained interest in Octomera and the net assets deconsolidated in the transaction as follows:    SCHEDULE OF FAIR VALUE OF RETAINED EARNINGS     (in thousands)           Fair value of the retained interest in Octomera   $ 31,442   Net assets deconsolidated     32,551   Other related items deconsolidated, net     (1,520 ) Net profit   $ 411
SCHEDULE OF NET ASSETS DECONSOLIDATED	The following table represents the deconsolidated amounts from the Company’s Balance Sheet:  SCHEDULE OF NET ASSETS DECONSOLIDATED           ASSETS:         Cash and cash equivalents     973   Other current assets     47,217   Non-current assets     29,443   TOTAL ASSETS     77,633             LIABILITIES:         Current liabilities     6,566   Long-term liabilities     2,313   TOTAL LIABILITIES     8,879             REDEEMABLE NON-CONTROLLING INTEREST     36,203             NET ASSETS DECONSOLIDATED     32,551

v3.23.2

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2023
Segment Reporting [Abstract]
SCHEDULE OF SEGMENT REPORTING	Segment data for the six months ended June 30, 2023 is as follows:    SCHEDULE OF SEGMENT REPORTING     Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 13,779       240     $ -     $ 14,019   Revenues from related party     -       -       -       -   Total revenues                             14019    Cost of revenues*     (5,084 )     (398 )     -       (5,482 ) Gross profit     8,695       (158 )               -       8,537   Cost of development services and research and development expenses*     (4,501 )     (2,051 )     -       (6,552 ) Operating expenses*     (3,623 )     (3,721 )     -       (7,344 ) Other income, net     2       -       -       2   Depreciation and amortization     (779 )     (396 )     -       (1,175 ) Loss from extinguishment in connection with convertible loan     -       (283 )     -       (283 ) Financial Expenses, net     (494 )     (806 )     1       (1,299 ) Profit from deconsolidation of Octomera     -       -       411       411   Share in net income of associated companies     -       1       -       1   Income (loss) before income taxes   $ (700 )     (7,414 )   $ 412     $ (7,702 )   * Excluding Depreciation, amortization expenses   Segment data for the six months ended June 30, 2022 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 12,949       3,862     $ (3,535 )   $ 13,276   Revenues from related party     1,137       -       -       1,137   Total revenues     14,086       3,862       (3,535 )     14,413   Cost of revenues*     (1,324 )     (640 )     356       (1,608 ) Gross profit     12,762       3,222       (3,179 )     12,805   Cost of development services and research and development expenses*     (6,772 )     (10,028 )     2,635       (14,165 ) Operating expenses*     (1,437 )     (4,740 )     544       (5,633 ) Other income, net     3       5       -       8   Depreciation and amortization     (397 )     (578 )     -       (975 ) Financial Expenses, net     (1,251 )     649       -       (602 ) Share in net income of associated companies     -       (915 )     -       (915 ) Income (loss) before income taxes   $ 2,908     $ (12,385 )   $ -     $ (9,477 )   * Excluding Depreciation, amortization expenses   Segment data for the three months ended June 30, 2023 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 6,865       110     $           -     $ 6,975   Revenues from related party     -       -       -       -   Total revenues                             6,975    Cost of revenues*     (2,776 )     (220 )     -       (2,996 ) Gross profit     4,089       (110 )     -       3,979   Cost of development services and research and development expenses*     (2,420 )     (975 )     -       (3,395 ) Operating expenses*     (1,909 )     (1,407 )     -       (3,316 ) Depreciation and amortization     (394 )     (203 )     -       (597 ) Financial Expenses, net     (228 )     (428 )     1       (655 ) Profit from deconsolidation of Octomera     -       -       411       411   Share in net income of associated companies     -       3       -       3   Income (loss) before income taxes   $ (862 )     (3,120 )   $ 412     $ (3,570 )   * Excluding Depreciation, amortization expenses     Segment data for the three months ended June 30, 2022 is as follows:       Octomera     Therapies     Eliminations     Consolidated       (in thousands)   Revenues   $ 6,606       1,920     $ (1,827 )   $ 6,699   Revenues from related party     502       -       -       502   Total revenues     7,108       1,920       (1,827 )     7,201   Cost of revenues*     (974 )     (351 )     356       (969 ) Gross profit     6,134       1,569       (1,471 )     6,232   Cost of development services and research and development expenses*     (3,296 )     (5,583 )     1,207       (7,672 ) Operating expenses*     (728 )     (2,327 )     264       (2,791 ) Other income, net     3       5       -       8   Depreciation and amortization     (207 )     (294 )     -       (501 ) Financial Expenses, net     (700 )     311       -       (389 ) Share in net income of associated companies     (1 )     (367 )     -       (368 ) Income (loss) before income taxes   $ 1,205     $ (6,686 )   $ -     $ (5,481 )   * Excluding Depreciation, amortization expenses

v3.23.2

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:    SCHEDULE OF LONG TERM CONVERTIBLE NOTES Principal Amount     Issuance Date     Current Interest Rate     Current Maturity     Current Exercise Price   (in thousands)     (Year)     %     (Year)     $   Convertible Loans Outstanding as of June 30, 2023   $ 750       2018       10 %     2026       2.50     1,500       2019       10 %     2026       7.00     100       2019       8 %     2023       2.50     5,000       2019       10 %     2026       2.50     100       2020       8 %     2023       7.00     5,000       2022       10 %     2026       2.50     1,150       2022       6 %     2023       4.50     5,000       2023       8 %     2026       2.46     485       2023       8 %     2024       -*   $ 19,085                                       * See Koligo convertible loan agreement below.   Convertible Loans Outstanding as of December 31, 2022   $ 750       2018       2 %     2023       7.00     1,600       2019       8 %     2024       7.00     5,000       2019       6 %     2023       7.00     100       2020       8 %     2023       7.00     8,000       2022       10 %     2024       2.5     1,150       2022       6 %     2023       4.5   $ 16,600

v3.23.2

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	The table below summarizes the terms of options for the purchase of shares in the Company granted to employees during the period from January 1, 2023 to June 30, 2023:    SCHEDULE OF STOCK OPTIONS GRANTED        No. of Options Granted     Exercise Price     Vesting Period   Fair Value at Grant (in thousands)     Expiration Period   Employees     53,500     $ 1.36     Quarterly over a period of two years   $ 46       10 years
SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS	The fair valuation of these option grants is based on the following assumptions:    SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS     During the Period from January 1, 2023 to June 30, 2023   Value of one common share   $ 1.36   Dividend yield     0 % Expected stock price volatility     70 % Risk free interest rate     3.91 % Expected term (years)     5.56
Non-Employees [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
SCHEDULE OF STOCK OPTIONS GRANTED	The table below summarizes all the options for the purchase of shares in the Company granted to consultants and service providers during the period from January 1, 2023 to June 30, 2023:    SCHEDULE OF STOCK OPTIONS GRANTED     No. of Options Granted     Exercise Price     Vesting Period   Fair Value at Grant (in thousands)     Expiration Period   Non-employees     8,335     $ 1.36     Annually over a period of five years   $ 9       10 years
SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS	The fair valuation of these option grants is based on the following assumptions:    SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS     During the Period from January 1, 2023 to June 30, 2023   Value of one common share   $ 1.36   Dividend yield     0 % Expected stock price volatility     80 % Risk free interest rate     4.07 % Expected term (years)     10

v3.23.2

LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE	The following table sets forth the calculation of basic and diluted loss per share for the period indicated:    SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       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.   $ 4,127     $ 5,427     $ 8,316     $ 9,436   Weighted average number of common shares outstanding     28,357,779       24,820,756       27,308,183       24,711,462   Net loss per share   $ 0.15     $ 0.22     $ 0.30     $ 0.38

v3.23.2

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:    SCHEDULE OF DISAGGREGATION OF REVENUE     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       Three Months Ended     Six Months Ended       June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       (in thousands)   Revenue stream:                                                                   POC development services   $ -     $ 6,274     $ -     $ 12,598   Cell process development services and hospital services     6,180       511       8,488       1,399   POC cell processing     795       416       5,531       416   Total   $ 6,975     $ 7,201     $ 14,019     $ 14,413
SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER	A breakdown of the revenues per customer constituted at least 10% of revenues is as follows:    SCHEDULE OF BREAKDOWN OF REVENUES PER CUSTOMER     June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       Three Months Ended     Six Months Ended       June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022       (in thousands)   Revenue earned:                                                                   Customer A (United States)   $ -     $ 2,502     $ 3,605     $ 3,729   Customer B (United States)   $ 3,415     $ -     $ 3,415     $ -   Customer C (United States)   $ 2,572     $ -     $ 2,572     $ -   Customer D (Greece)   $ -     $ 1,996     $ 2,022     $ 2,656   Customer E (Korea)   $ -     $ 742     $ -     $ 3,425   Customer F (United Arab Emirates)   $ -     $ 1,187     $ -     $ 2,254   Revenue earned   $ -     $ 1,187     $ -     $ 2,254
SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES	The activity for trade receivables is comprised of:    SCHEDULE OF ACTIVITY FOR TRADE RECEIVABLES     June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   Balance as of beginning of period   $ 36,183     $ 15,245   Elimination of acquisition receivables     -       (1,337 ) Additions     14,057       13,953   Collections     (6,045 )     (8,892 ) Exchange rate differences     (73 )     (183 ) Deconsolidation of Octomera     (44,116 )     -   Balance as of end of period   $ 6     $ 18,786     * The activity of the related party included in the trade receivables activity above is comprised of:         June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   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	The activity for contract liabilities is comprised of:    SCHEDULE OF ACTIVITY FOR CONTRACT LIABILITIES     June 30, 2023     June 30, 2022       Six Months Ended       June 30, 2023     June 30, 2022       (in thousands)   Balance as of beginning of period   $ 70     $ 59   Additions     36       11   Deconsolidation of Octomera     (106 )     -   Balance as of end of period   $ -     $ 70

v3.23.2

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	$ 129,577		$ 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

v3.23.2

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	$ (3,661)	$ (5,492)	$ (7,922)	$ (9,489)
Net assets deconsolidated	32,551		32,551
Octomera [Member]
Noncontrolling Interest [Line Items]
Net profit			411
Fair value of the retained interest in Octomera	31,442		31,442
Net assets deconsolidated	32,551		32,551
Other related items deconsolidated, net	$ (1,520)		$ (1,520)

v3.23.2

SCHEDULE OF NET ASSETS DECONSOLIDATED (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Noncontrolling Interest [Abstract]
Cash and cash equivalents	$ 973
Other current assets	47,217
Non-current assets	29,443
TOTAL ASSETS	77,633
Current liabilities	6,566
Long-term liabilities	2,313
TOTAL LIABILITIES	8,879
REDEEMABLE NON-CONTROLLING INTEREST	36,203
NET ASSETS DECONSOLIDATED	$ 32,551

v3.23.2

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		$ 31,400,000
Recognition of intangible assets		6,200,000
Assets		$ 25,200,000
Amortization of intangible assets		10 years
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

v3.23.2

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	$ 6,975		$ 6,699		$ 14,019		$ 13,276
Total revenues	6,975		7,201		14,019		14,413
Cost of revenues	(2,996)	[1]	(969)	[2]	(5,482)	[3]	(1,608)	[4]
Gross profit	3,979		6,232		8,537		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	(3,316)	[1]	(2,791)	[2]	(7,344)	[3]	(5,633)	[4]
Other income, net			8		2		8
Depreciation and amortization	(597)		(501)		(1,175)		(975)
Loss from extinguishment in connection with convertible loan					(283)
Financial Expenses, net	(655)		(389)		(1,299)		(602)
Profit from deconsolidation of Octomera	411				411
Share in net income of associated companies	3		(368)		1		(915)
Income (loss) before income taxes	(3,570)		(5,481)		(7,702)		(9,477)
Related Party [Member]
Segment Reporting Information [Line Items]
Total revenues			502				1,137
Octomera [Member]
Segment Reporting Information [Line Items]
Revenues	6,865		6,606		13,779		12,949
Total revenues			7,108				14,086
Cost of revenues	(2,776)	[1]	(974)	[2]	(5,084)	[3]	(1,324)	[4]
Gross profit	4,089		6,134		8,695		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	(1,909)	[1]	(728)	[2]	(3,623)	[3]	(1,437)	[4]
Other income, net			3		2		3
Depreciation and amortization	(394)		(207)		(779)		(397)
Loss from extinguishment in connection with convertible loan
Financial Expenses, net	(228)		(700)		(494)		(1,251)
Profit from deconsolidation of Octomera
Share in net income of associated companies			(1)
Income (loss) before income taxes	(862)		1,205		(700)		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	(1,407)	[1]	(2,327)	[2]	(3,721)	[3]	(4,740)	[4]
Other income, net			5				5
Depreciation and amortization	(203)		(294)		(396)		(578)
Loss from extinguishment in connection with convertible loan					(283)
Financial Expenses, net	(428)		311		(806)		649
Profit from deconsolidation of Octomera
Share in net income of associated companies	3		(367)		1		(915)
Income (loss) before income taxes	(3,120)		(6,686)		(7,414)		(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]
Other income, net
Depreciation and amortization
Loss from extinguishment in connection with convertible loan
Financial Expenses, net	1				1
Profit from deconsolidation of Octomera	411				411
Share in net income of associated companies
Income (loss) before income taxes	412				412
Eliminations [Member] | Related Party [Member]
Segment Reporting Information [Line Items]
Total revenues
[1] Excluding Depreciation, amortization expenses [2] Excluding Depreciation, amortization expenses [3] Excluding Depreciation, amortization expenses [4] Excluding Depreciation, amortization expenses

v3.23.2

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

v3.23.2

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
[1] See Koligo convertible loan agreement below.

v3.23.2

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%

v3.23.2

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

v3.23.2

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

v3.23.2

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.	$ 4,127	$ 5,427	$ 8,316	$ 9,436
Weighted average number of common shares outstanding basic	28,357,779	24,820,756	27,308,183	24,711,462
Weighted average number of common shares outstanding diluted	28,357,779	24,820,756	27,308,183	24,711,462
Net loss per share basic	$ 0.15	$ 0.22	$ 0.30	$ 0.38
Net loss per share diluted	$ 0.15	$ 0.22	$ 0.30	$ 0.38

v3.23.2

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	7,911,844	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

v3.23.2

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	$ 6,975	$ 7,201	$ 14,019	$ 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	6,180	511	8,488	1,399
POC Cell Processing [Member]
Disaggregation of Revenue [Line Items]
Total	$ 795	$ 416	$ 5,531	$ 416

v3.23.2

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	$ 6,975	$ 6,699	$ 14,019	$ 13,276
Customer A [Member] | UNITED STATES
Disaggregation of Revenue [Line Items]
Revenue earned		2,502	3,605	3,729
Customer B [Member] | UNITED STATES
Disaggregation of Revenue [Line Items]
Revenue earned	3,415		3,415
Customer C [Member] | UNITED STATES
Disaggregation of Revenue [Line Items]
Revenue earned	2,572		2,572
Customer D [Member] | GREECE
Disaggregation of Revenue [Line Items]
Revenue earned		1,996	2,022	2,656
Customer E [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

v3.23.2

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	14,057	13,953
Collections	(6,045)	(8,892)
Exchange rate differences	(73)	(183)
Deconsolidation of Octomera	(44,116)
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

v3.23.2

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

v3.23.2

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

v3.23.2

SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ in Thousands	Jul. 25, 2023	Jun. 30, 2023
Subsequent Event [Line Items]
Equity interest valuation		$ 31,400
Subsequent Event [Member] | SubLicense Agreements [Member]
Subsequent Event [Line Items]
Equity interest valuation	$ 8,000
Subsequent Event [Member] | Mircod LLC [Member]
Subsequent Event [Line Items]
Payments for termination of joint venture	1,000
Subsequent Event [Member] | Israeli Subisidiary [Member]
Subsequent Event [Line Items]
Loan amount	$ 175
Interest rate	8.00%
Repayment date	Jan. 01, 2024

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