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 March 31, 2024

☐ 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 May 20, 2024, there were 34,430,280 shares of registrant’s common stock outstanding.

ORGENESIS INC.

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

TABLE OF CONTENTS

		Page

PART I - FINANCIAL INFORMATION

ITEM 1	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3

	Condensed Consolidated Statements of Loss and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023	5

	Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2024 and 2023	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	8

	Notes to Condensed Consolidated Financial Statements	9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	27

ITEM 4.	Controls and Procedures	27

PART II - OTHER INFORMATION		28

ITEM 1.	Legal Proceedings	28

ITEM 1A.	Risk Factors	28

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

ITEM 3.	Defaults Upon Senior Securities	31

ITEM 4.	Mine Safety Disclosures	31

ITEM 5.	Other Information	31

ITEM 6.	Exhibits	32

SIGNATURES		33

PART I –FINANCIAL INFORMATION

Item 1. Financial Statements

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)


	As of
	March 31, 2024		December 31, 2023
Assets

CURRENT ASSETS:
Cash and cash equivalents	$	80	$	837
Restricted cash		485		642
Accounts receivable, net of credit losses of $29,760 as of March 31, 2024 ($0 as of December 31, 2023)		245		88
Prepaid expenses and other receivables		1,112		2,017
Receivables from related parties		-		458
Inventory		34		34
TOTAL CURRENT ASSETS		1,956		4,076

NON-CURRENT ASSETS:
Deposits	$	255	$	38
Investments in associates		8		8
Property, plant and equipment, net		16,404		1,475
Intangible assets, net		8,950		7,375
Operating lease right-of-use assets		1,804		351
Goodwill		1,211		1,211
Other assets		332		18
TOTAL NON-CURRENT ASSETS		28,964		10,476
TOTAL ASSETS	$	30,920	$	14,552

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

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

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

(Unaudited)

	As of
	March 31, 2024			December 31, 2023
Liabilities net of (Capital Deficiency)

CURRENT LIABILITIES:
Accounts payable	$	13,707		$	6,451
Accounts payable related Parties		2,697			133
Accounts payable		2,697			133
Accrued expenses and other payables		4,106			2,218
Income tax payable		786			740
Employees and related payables		1,529			1,079
Other payable related parties		-			52
Advance payments on account of grant		2,695			2,180
Short-term loans		626			650
Current maturities of finance leases		65			18
Current maturities of operating leases		476			216
Short-term and current maturities of convertible loans		2,344			2,670
TOTAL CURRENT LIABILITIES		29,031			16,407

LONG-TERM LIABILITIES:
Non-current operating leases	$	1,274		$	96
Loans payable		2,696			-
Convertible loans		20,336			18,967
Retirement benefits obligation		98			-
Finance leases		14			4
Contingent liability (see note 4)		4,643			-
Other long-term liabilities		377			61
TOTAL LONG-TERM LIABILITIES		29,438			19,128
TOTAL LIABILITIES		58,469			35,535

CAPITAL DEFICIENCY:
Common stock of $0.0001 par value: Authorized at March 31, 2024 and December 31, 2023: 145,833,334 shares; Issued at March 31, 2024 and December 31, 2023: 34,625,349 and 32,163,630 shares, respectively; Outstanding at March 31, 2024 and December 31, 2023: 34,338,782 and 31,877,063 shares, respectively.		4			3
Additional paid-in capital		159,650			156,837
Receipts on account of shares to be allotted		155			-
Accumulated other comprehensive income		126			65
Treasury stock, 286,567 shares as of March 31, 2024 and December 31, 2023		(1,266	)		(1,266	)
Accumulated deficit		(186,386	)		(176,622	)
Equity attributable to Orgenesis Inc.		(27,717	)		(20,983	)
Non-controlling interest		168			-
TOTAL CAPITAL DEFICIENCY		(27,549	)		(20,983	)
TOTAL LIABILITIES AND CAPITAL DEFICIENCY	$	30,920		$	14,552

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)


	Three Months Ended
	March 31,			March 31,
	2024			2023

Revenue	$	141		$	142
Cost of revenues		492			2,722
Gross loss		(351	)		(2,580	)
Cost of development services and research and development expenses		2,370			3,281
Amortization of intangible assets		153			207
Selling, general and administrative expenses including credit losses, net of $3,225 and $9,489 for the three months ended March 31, 2024 and 2023 respectively		6,056			13,528
Operating loss		8,930			19,596
Loss from deconsolidation		66			-
Other income, net		-			(2	)
Loss from extinguishment in connection with convertible loan		141			283
Credit loss on convertible loan receivable		-			2,688
Financial expenses, net		852			681
Share in net loss of associated companies		-			2
Loss before income taxes		9,989			23,248
Tax expense		16			129
Net loss		10,005			23,377
Net income (loss) attributable to non-controlling interests (including redeemable)		(240	)		(3,907	)
Net loss attributable to Orgenesis Inc.		9,765			19,470
Loss per share:
Basic and diluted	$	0.29		$	0.87

Weighted average number of shares used in computation of Basic and Diluted loss per share:
Basic and diluted		33,176,657			26,477,113

Comprehensive loss:
Net loss	$	10,005		$	23,377
Other Comprehensive loss (income) – Translation adjustment		(61	)		41
Comprehensive loss		9,944			23,418
Comprehensive loss attributed to non-controlling interests		(240	)		(3,907	)
Comprehensive loss attributed to Orgenesis Inc.	$	9,704		$	19,511

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		Capital		Allotted		Income (Loss)		Shares			Deficit			Inc.			Interest			Total
	Common Stock			Additional Paid-in		Receipts on Account of Shares to be		Accumulated Other Comprehensive		Treasury			Accumulated			Equity Attributed to Orgenesis			Non- Controlling
	Number	Par Value		Capital		Allotted		Income (Loss)		Shares			Deficit			Inc.			Interest			Total
Balance at January 1, 2024	31,877,063	$	3	$	156,837	$	-	$	65	$	(1,266	)	$	(176,622	)		(20,983	)	$	-		$	(20,983	)
Changes during the three months ended March 31, 2024:
Stock-based compensation	-		-		86		-		-		-			-			86			-			86
Issuance of Shares and warrants to service providers	164,000		-*		226		-		-		-			-			226			-			226
Issuance of shares and receipts on account of shares and warrants to be allotted	2,272,719		-*		2,341		155		-		-			-			2,496			-			2,496
NCI arising from Octomera reconsolidation	-		-		-		-		-		-			-			-			408			408
Issuance of Shares due to exercise of warrants	25,000		-*		19		-		-		-			-			20			-			20
Extinguishment in connection with convertible loan restructuring	-		-		141		-		-		-			-			141			-			141
Comprehensive income (loss) for the period	-		-		-		-		61		-			(9,765	)		(9,704	)		(240	)		(9,944	)
Balance at March 31, 2024	34,338,782	$	4	$	159,650	$	155	$	126	$	(1,266	)	$	(186,386	)	$	(27,717	)	$	168		$	(27,549	)

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		Capital				(Loss)			Shares			Deficit			Inc.			Interest			Total
	Common Stock			Additional Paid-in				Accumulated Other Comprehensive Income			Treasury			Accumulated			Equity Attributed to Orgenesis			Non- Controlling
	Number	Par Value		Capital				(Loss)			Shares			Deficit			Inc.			Interest			Total
Balance at January 1, 2023	25,545,755	$	3	$	150,355		-	$	(270	)	$	(1,266	)	$	(121,261	)	$	27,561		$	1,510		$	29,071
Balance	25,545,755	$	3	$	150,355		-	$	(270	)	$	(1,266	)	$	(121,261	)	$	27,561		$	1,510		$	29,071
Changes during the three months ended March 31, 2023:
Stock-based compensation	-		-		159		-		-			-			-			159			-			159
Issuance of shares and warrants	1,947,368		-*		3,441		-		-			-			-			3,441			-			3,441
Issuance of Shares due to exercise of warrants	368,420		-*		-				-			-			-			-*			-			-*
Issuance of warrants with respect to convertible loans	-		-		449				-			-			-			449			-			449
Extinguishment in connection with convertible loan restructuring	-		-		287				-			-			-			287			-			287
Adjustment to redemption value of redeemable non-controlling interest	-		-		(3,671	)			-			-			-			(3,671	)		-			(3,671	)
Comprehensive loss for the period	-		-		-		-		(41	)		-			(19,470	)		(19,511	)		(236	)		(19,747	)
Balance at March 31, 2023	27,861,543	$	3	$	151,020		-	$	(311	)	$	(1,266	)	$	(140,731	)

SEC Form 10-Q filed by Orgenesis Inc.