10-Q: Pluri Inc. Reports Q2 2025 Financial Results, Revenue Increases Amid Cost Reduction Efforts

Pluri Inc. reports increased revenue for the six months ended December 31, 2024, driven by new business verticals, while continuing cost reduction and efficiency plans to manage operating losses.

Summary

• Pluri Inc. reported financial results for the quarter and six months ended December 31, 2024.
• Revenues increased to $511,000 for the six months and $185,000 for the three months ended December 31, 2024, compared to $159,000 and $105,000 for the same periods in 2023, driven by CDMO and agtech services.
• The company's net loss decreased to $9.146 million for the six months and $3.110 million for the three months ended December 31, 2024, compared to $10.092 million and $4.994 million for the same periods in 2023.
• The decrease in net loss is attributed to reduced general and administrative expenses and R&D expenses, as well as the launch of new business verticals.
• As of December 31, 2024, Pluri's cash balances totaled $22.374 million.
• The company is in discussions with the EIB regarding a potential restructuring of the terms of its loan.
• Pluri is pursuing various funding sources, including licensing agreements, joint ventures, partnerships, grants, and equity sales.
• The company expects to generate revenue from CDMO services, collaborations, and licenses.
• Pluri received a Nasdaq deficiency letter regarding the minimum stockholders' equity requirement and has submitted a compliance plan with an extension granted until May 24, 2025.
• Subsequent to the quarter, Pluri entered into securities purchase agreements for private placement offerings expected to generate gross proceeds of $10 million.
• Pluri also entered into a term sheet for the purchase of shares of Kokomodo Ltd., an agtech company, for $4.5 million in Pluri common shares, subject to shareholder approval.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While revenue increased and net loss decreased, the company still faces significant financial challenges, including an accumulated deficit and a Nasdaq deficiency notice. The potential capital raise and acquisition of Kokomodo are positive developments, but their success is not guaranteed.

Positives

• Revenue increased due to new business verticals in CDMO and agtech.
• Net loss decreased due to cost reduction efforts and new business initiatives.
• The company has a working capital surplus of $17.930 million as of December 31, 2024.
• Pluri is actively pursuing multiple funding sources, including non-dilutive grants and collaborations.
• The company is expanding its business through strategic acquisitions, such as the potential purchase of Kokomodo Ltd.
• PluriCDMO is generating revenues from signed agreements with clients.
• The company has a contract with NIAID for $4.2 million to develop PLX-R18 cell therapy.

Negatives

• The company has an accumulated deficit of $429.310 million.
• Pluri has a total shareholders' deficit of $8.028 million as of December 31, 2024.
• The company received a Nasdaq deficiency letter regarding the minimum stockholders' equity requirement.
• There is no guarantee that the Kokomodo Transaction will be completed.
• The company is currently in discussions with the EIB regarding a potential restructuring of the terms of its loan, however, there is no certainty that such restructuring will be achieved.

Risks

• Failure to meet Nasdaq's continued listing requirements could result in delisting and negatively impact the share price and ability to raise capital.
• Military conditions in Israel, where the company's facilities are located, may cause interruption or suspension of business operations.
• The company's reliance on grants from the IIA and other sources could be adversely affected if these grants are no longer available.
• The company may be required to obtain additional liquidity resources in order to support the commercialization of its products and technology and maintain its R&D activities.
• The potential acquisition of Kokomodo is subject to shareholder approval and may not be completed.

Future Outlook

Pluri expects to generate revenues from CDMO services, collaborations based on cell-based products, and licenses to use its technology and products, and believes it has sufficient cash to fund operations for at least the next twelve months.

Industry Context

Pluri is operating in the biotechnology industry, focusing on regenerative medicine, immunotherapy, food tech, and agtech. The company is leveraging its cell-based technology platform to develop products and services in these areas. The launch of PluriCDMO reflects a trend in the industry towards specialized manufacturing services for cell therapies. The company's collaborations and partnerships indicate a strategy to expand its reach and capabilities in various sectors.

Comparison to Industry Standards

• It is difficult to compare Pluri's results directly to industry standards without specific benchmarks for companies with similar business models and stages of development.
• However, the company's focus on cell-based technologies aligns with broader trends in the biotechnology industry, where companies like CRISPR Therapeutics and Editas Medicine are developing gene-editing therapies.
• Pluri's CDMO business competes with established players like Lonza and Catalent, which offer manufacturing services for a wide range of biopharmaceutical products.
• The company's agtech initiatives are part of a growing trend towards sustainable agriculture and alternative food sources, with companies like Beyond Meat and Impossible Foods leading the way in plant-based meat alternatives.
• Pluri's financial performance, including its revenue growth and net losses, should be evaluated in the context of its R&D investments and commercialization efforts, as well as the overall market conditions for biotechnology companies.

Stakeholder Impact

• Shareholders face the risk of delisting if the company fails to regain compliance with Nasdaq listing requirements.
• Employees may be affected by cost reduction efforts and potential restructuring of the company's operations.
• Customers of PluriCDMO can benefit from the company's manufacturing services for cell therapies.
• The potential acquisition of Kokomodo could impact the agtech industry and the availability of cultivated cacao products.
• The company's collaborations and partnerships could lead to new products and services in regenerative medicine, immunotherapy, food tech, and agtech.

Next Steps

• Regain compliance with Nasdaq listing requirements by May 24, 2025.
• Obtain shareholder approval for the Kokomodo Transaction.
• Close the private placement offerings and utilize the proceeds for working capital and general corporate purposes.
• Continue discussions with the EIB regarding a potential restructuring of the loan terms.
• Advance the development of PLX-R18 cell therapy under the contract with NIAID.
• Pursue collaborations and partnerships to expand the company's business in regenerative medicine, immunotherapy, food tech, and agtech.

Key Dates