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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, 2021

 

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 May 6, 2021, there were 24,479,751 shares of registrant’s common stock outstanding

 

 

 

 

 

 

ORGENESIS INC.

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

 

TABLE OF CONTENTS

 

    Page
     
PART I - FINANCIAL INFORMATION 3
     
ITEM 1 Financial Statements (unaudited) 3
     
  Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 3
     
  Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020 5
     
  Condensed Consolidated Statements of Changes in Equity as of March 31, 2021 and December 31, 2020 6
     
  Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 8
     
  Notes to Condensed Consolidated Financial Statements 9
     
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
     
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 21
     
ITEM 4. Controls and Procedures 21
     
PART II - OTHER INFORMATION 21
     
ITEM 1. Legal Proceedings 21
     
ITEM 1A. Risk Factors 22
     
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
     
ITEM 3. Defaults Upon Senior Securities 22
     
ITEM 4. Mine Safety Disclosures 22
     
ITEM 5. Other Information 22
     
ITEM 6. Exhibits 23
     
SIGNATURES 24

 

2

 

 

PART I –FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in Thousands)

(Unaudited)

 

  

March 31,

2021

  

December 31,

2020

 
   As of 
  

March 31,

2021

  

December 31,

2020

 
Assets          
           
CURRENT ASSETS:          
Cash and cash equivalents  $41,841   $44,923 
Restricted cash   471    645 
Accounts receivable, net   11,354    3,085 
Prepaid expenses and other receivables   679    1,070 
Grants receivable   168    169 
Inventory   200    185 
Total current assets   54,713    50,077 
           
NON-CURRENT ASSETS:          
Deposits  $348   $296 
Investments in associates, net   160    175 
Property, plant and equipment, net   3,469    3,073 
Intangible assets, net   12,675    13,023 
Operating lease right-of-use assets   1,341    1,474 
Goodwill   8,602    8,745 
Other assets   802    821 
Total non-current assets   27,397    27,607 
TOTAL ASSETS  $82,110   $77,684 

 

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

 

3

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Cont’d)

(U.S. Dollars in Thousands)

(Unaudited)

 

  

March 31,

2021

  

December 31,

2020

 
   As of 
  

March 31,

2021

  

December 31,

2020

 
Liabilities and Equity          
           
CURRENT LIABILITIES:          
Accounts payable  $10,294   $8,649 
Accrued expenses and other payables   987    792 
Income tax payable   7    7 
Employees and related payables   1,638    1,463 
Advance payments on account of grant   1,126    692 
Short-term loans and current maturities of long- term loans   -    145 
Contract liabilities, mainly related party   59    59 
Current maturities of finance leases   18    19 
Current maturities of operating leases   474    485 
Current maturities of convertible loans   4,327    3,974 
Total current liabilities   18,930    16,285 
           
LONG-TERM LIABILITIES:          
Non-current operating leases  $895   $1,020 
Convertible loans   7,082    7,200 
Retirement benefits obligation   91    74 
Non-current finance leases   57    64 
Other long-term liabilities   303    313 
Total long-term liabilities   8,428    8,671 
TOTAL LIABILITIES   27,358    24,956 
           
EQUITY:          
Common stock of $0.0001 par value, 145,833,334 shares authorized, 24,469,406 and 24,223,093 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   3    3 
Additional paid-in capital   142,449    140,397 
Receipts on account of shares to be allotted   424    - 
Accumulated other comprehensive income   471    748 
Treasury stock, 57,615 and 55,309 shares as of March 31, 2021 and December 31, 2020, respectively   (260)   (250)
Accumulated deficit   (88,538)   (88,319)
Equity attributable to Orgenesis Inc.   54,549    52,579 
Non-controlling interest   203    149 
Total equity   54,752    52,728 
TOTAL LIABILITIES AND EQUITY  $82,110   $77,684 

 

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

 

4

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (INCOME)

(U.S. Dollars in Thousands, Except Share and Loss Per Share Amounts)

(Unaudited)

 

   March 31,
2021
   March 31,
2020
 
   Three Months Ended 
   March 31,
2021
   March 31,
2020
 
Revenues  $8,232   $1,385 
Revenues from related party   1,157    493 
Total revenues   9,389    1,878 
Cost of services and other research and development expenses   6,127    4,873 
Amortization of intangible assets   238    223 
Selling, general and administrative expenses   2,968    3,518 
Other income, net   (25)   (3)
Operating loss (income)   (81)   6,733 
Financial expenses, net   233    329 
Share in net loss of associated companies   15    - 
Loss from continuing operation before income taxes   167    7,062 
Tax income   (2)   (47)
Net loss from continuing operation   165    7,015 
Net income from discontinued operations, net of tax   -    (76,465)
Net loss (income)   165    (69,450)
Net loss (income) attributable to non-controlling interests from continuing operation   54    (39)
Net loss attributable to non-controlling interests from discontinued operations   -    (492)
Net loss (income) attributable to Orgenesis Inc.   219    (69,981)
           
Loss (Earning) per share:          
Basic and diluted from continuing operations  $0.01   $0.39
Basic and diluted from discontinued operations  $-   $(4.62)
Basic and diluted  $0.01   $(4.23)
           
Weighted average number of shares used in computation of Basic and Diluted loss per share:          
Basic and diluted   24,192,951    17,780,830 
           
Comprehensive loss (income):          
           
Net loss from Continuing Operation  $165   $7,015 
Net income from Discontinued Operations, Net of Tax   -    (76,465)
Other Comprehensive loss – Translation adjustment   277    644 
Release of translation adjustment due to sale of subsidiary   -    (194)
Comprehensive loss (income)   442    (69,000)
Comprehensive loss (income) attributed to non-controlling interests from continuing operation   54    (39)
Comprehensive income attributed to non-controlling interests from discontinued operation   -    (492)
Comprehensive loss (income) attributed to Orgenesis Inc.  $496   $(69,531)

 

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

 

5

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

(Unaudited)

 

   1   2   3   4   5   6   7   8   9   10 
   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-

Controlling

Interest

   Total 
Balance at January 1, 2021   24,167,784   $3   $140,397   $-   $748   $(250)  $(88,319)  $52,579   $149   $52,728 
Changes during the three months ended March 31, 2021:                                                  
Stock-based compensation to employees and directors   -    -    320    -    -    -    -    320    -    320 
Stock-based compensation to service providers   -    *    244    -    -    -    -    244    -    244 
Exercise of options   8,750     *    50    -    -    -    -    50    -    50 
Issuance of Shares due to exercise of warrants   237,563     *    1,438    424    -    -    -    1,862    -    1,862 
Repurchase of treasury stock   (2,306)   -    -    -    -    (10)   -    (10)   -    (10)
Comprehensive income (loss) for the period   -    -    -    -    (277)   -    (219)   (496)   54    (442)
Balance at March 31, 2021   24,411,791   $3   $142,449   $424   $471   $(260)  $(88,538)  $54,549   $203   $54,752 

 

 

* Represents an amount lower than $ 1 thousand

 

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

 

6

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

(Unaudited)

 

   1   2

   3

   4

   5

   6

   7

   8 
   Common Stock                     
   Number  

Par

Value

  

Addi-

tional

Paid-in

Capital

  

Accumulated

Other

Comprehensive

Income (Loss)

  

Accumulated

Deficit

  

Equity

Attributed

to

Orgenesis

Inc.

  

Non-

Controlling

Interest

   Total 
Balance at January 1, 2020   16,140,962   $2   $94,691   $213   $(89,429)  $5,477   $601   $6,078 
Changes during the three months ended March 31, 2020:                                        
Stock-based compensation to employees and directors   -    -    626    -    -    626    -    626 
Stock-based compensation to service providers   20,088    *    240    -    -    240    -    240 
Beneficial conversion feature of convertible loans   -    -    42    -    -    42    -    42 
Issuance of shares and warrants   2,200,000    *    8,438    -    -    8,438    -    8,438 
Sale of subsidiaries   

-

    

-

    

-

    

-

    

-

    

-

    

(413

)   

(413

)
Adjustment to redemption value of redeemable non-controlling interest   -    -    5,160    -    -    5,160    -    5,160 
Comprehensive income (loss) for the period   -    -    -    (450)   69,981    69,531    (39)   69,492 
Balance at March 31, 2020   18,361,050   $2   $109,197   $(237)  $(19,448)  $89,514   $149   $89,663 

 

* Represents an amount lower than $1 thousand

 

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

 

7

 

 

ORGENESIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (*)

(U.S. Dollars in thousands)

(Unaudited)

 

   March 31,   March 31, 
   Three Months Ended 
   March 31,   March 31, 
   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES:          
           
Net income (loss)  $(165)  $69,450 
Adjustments required to reconcile net loss to net cash used in operating activities:          
Stock-based compensation   564    866 
Capital loss, net   19    11 
Gain on disposal of subsidiaries   -    (97,049)
Share in loss of associated companies, net   15    - 
Depreciation and amortization expenses   453    494 
Effect of exchange differences on inter-company balances   45    138 
Net changes in operating leases   (3)   8 
Interest expenses accrued on loans and convertible loans (including amortization of beneficial conversion feature)   234    257 
Changes in operating assets and liabilities:          
Increase in accounts receivable   (8,275)   (1,370)
Increase in inventory   (20)   (76)
Increase in other assets   (5)   (20)
Decrease (Increase) in prepaid expenses and other accounts receivable   351    (697)
Increase (decrease) in accounts payable   1,510    (5,206)
Increase in accrued expenses and other payables   202    19,595 
Increase (decrease) in employee and related payables   201    (113)
Increase in contract liabilities   -    170 
Increase (decrease) in advance payments and receivables on account of grant, net   327    (104)
Decrease in deferred taxes   -    (47)
           
Net cash used in operating activities  $(4,547)  $(13,693)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Increase in loan to JV with a related party   -    (500)
Purchase of property and equipment   (530)   (699)
Proceed from sale of subsidiaries   -    104,222 
Investment in long-term deposits   (9)   - 
Repayment of long-term deposits   -    22 
           
Net cash provided by (used in) investing activities  $(539)  $103,045 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
           
Repurchase of treasury stock   (10)   - 
Proceeds from issuance of shares and warrants (net of transaction costs)   1,488    8,438 
Proceeds from issuance of convertible loans (net of transaction costs)   -    250 
Proceeds from receipts on account of shares to be allotted   424    - 
Repayment of convertible loans and convertible bonds   -    (1,900)
Repayment of short and long-term debt   (4)   (431)
Net cash provided by financing activities  $1,898   $6,357 
           
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH  $(3,188)  $95,709 
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (68)   (84)
           
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD   45,568    12,041 
           
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $42,312   $107,666 
           
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES          
           
Finance Leases of property, plant and equipment  $-   $363 
Right-of-use assets obtained in exchange for new operation lease liabilities, net  $-   $231 
Purchase of property, plant and equipment included in accounts payable  $155   $756 

 

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

 

(*) See Note 3 for information regarding the discontinued operation

 

8

 

 

ORGENESIS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2021 and 2020

(Unaudited)

 

NOTE 1 – DESCRIPTION OF BUSINESS

 

a. General

 

Orgenesis Inc., a Nevada corporation, 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 (“ATMP”). The Company mostly focusses on autologous therapies, with processes and systems that are developed for each therapy using a closed and automated processing system approach that is validated for compliant production near the patient at their point of care for treatment of the patient. 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 the treatments to patients (ultimately limiting the number of patients that can have access to, or can afford, these therapies).

 

To achieve these goals, the Company has developed a Point of Care Platform comprised of three enabling components: a pipeline of licensed POCare Therapies that are designed to be processed and produced in closed, automated POCare Technology systems and a collaborative POCare Network. Via a combination of science, technology, engineering, and networking, the Company is working to provide a more efficient and scalable pathway for advanced therapies to reach patients more rapidly at lowered costs. The Company also draws on extensive medical expertise to identify promising new autologous therapies to leverage within the POCare Platform either via ownership or licensing.

 

The POCare Network brings together patients, doctors, industry partners, research institutes and hospitals worldwide with a goal of achieving harmonized, regulated clinical development and production of the therapies.

 

Over time, the Company has worked to develop and validate POCare Technologies that can be combined within mobile production units for advanced therapies. The Company has made significant investments in the development of several types of Orgenesis Mobile Processing Units and Labs (“OMPULs”) with the expectation of use and/or distribution through our POCare Network of partners, collaborators, and joint ventures. As of the date of this report, the OMPULs are still in the development stage.

 

OMPULs are designed for the purpose of validation, development, performance of clinical trials, manufacturing and/or processing of potential or approved cell and gene therapy products in a safe, reliable, and cost-effective manner at the point of care, as well as the manufacturing of such CGTs in a consistent and standardized manner in all locations. The design delivers a potential industrial solution for the Company to deliver CGTs to practically any clinical institution at the point of care.

 

Until December 31, 2019, the Company operated the POCare Platform as one of two business separate business segments.

 

Historically, the second separate business segment was operated as a Contract Development and Manufacturing Organization (“CDMO”) platform, providing contract manufacturing and development services for biopharmaceutical companies (the “CDMO Business”). The CDMO platform was historically operated mainly through majority-owned Masthercell Global (which consisted of the following two subsidiaries: MaSTherCell S.A. in Belgium (“MaSTherCell”), and Masthercell U.S., LLC in the United States (“Masthercell U.S.”) (collectively, the “Masthercell Global Subsidiaries”)).

 

9

 

 

In February 2020, the Company sold its entire equity interests in Masthercell Global Inc. (the “Masthercell Business”), which comprised the majority of the Company’s Contract Development and Manufacturing Organization (“CDMO”) business, to Catalent Pharma Solutions, Inc. (the “Masthercell Sale”). The Company determined that the Masthercell Business (“Discontinued Operation”) met the criteria to be classified as a discontinued operation as of the first quarter of 2020. The Discontinued Operation includes the vast majority of the previous CDMO Business, including majority-owned Masthercell, including MaSTherCell, Masthercell U.S. and all of the Masthercell Global Subsidiaries (See Note 3).

 

The Company has continued to grow its infrastructure and expand its processing sites into new markets and jurisdictions. In addition, the Company has been investing manpower and financial resources to focus on developing, manufacturing and rolling out several types of OMPULs to be used and/or distributed through our POCare Network of partners, collaborators, and joint ventures.

 

The Chief Executive Officer (“CEO”) is the Company’s chief operating decision-maker who reviews financial information prepared on a consolidated basis. Effective from the first quarter of 2020, all of the Company’s continuing operations are in one segment, being the point-of-care business via our POCare Platform. Therefore, no segment report has been presented.

 

The Company currently conducts its core CGT business operations through itself and its subsidiaries which are all wholly-owned except as otherwise stated (collectively, the “Subsidiaries”). The Subsidiaries are as follows:

 

United States: Orgenesis Maryland Inc. (the “U.S. Subsidiary”) is the center of activity in North America currently focused on setting up of the POCare Network.
   
Koligo Therapeutics Inc. (“Koligo”) is a Kentucky corporation that was acquired in 2020 and is currently focused on developing the POCare network and therapies.
   
European Union: Orgenesis Belgium SRL (the “Belgian Subsidiary”) is the center of activity in Europe currently focused on process development and preparation of European clinical trials.
   
Orgenesis Switzerland Sarl (the “Swiss subsidiary) incorporated in October 2020 is currently focused on providing management services to the Company.
   
Israel: Orgenesis Ltd. (the “Israeli Subsidiary”) is a provider of regulatory, clinical and pre-clinical services, and Orgenesis Biotech Israel Ltd. (“OBI”) is a provider of cell-processing services in Israel.
   
Korea: Orgenesis Korea Co. Ltd. (the “Korean Subsidiary”), is a provider of processing and pre-clinical services in Korea. The Company owns 94.12% of the Korean Subsidiary.

 

These condensed consolidated financial statements include the accounts of Orgenesis Inc. and its subsidiaries (2020 including the Discontinued Operation).

 

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

 

As of March 31, 2021, the Company has accumulated losses of approximately $89 Million.

 

Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and expected level of expenditures for at least 12 months from the date of the issuance of these financial statements. 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 may decide to seek additional financing.

 

10

 

 

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, 2020, as filed with the Securities and Exchange Commission (“SEC”). The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2020, but not all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) are included.

 

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 determining whether an acquisition is a business combination or a purchase of asset. Actual results could differ from those estimates.

 

The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We examined the impact of COVID-19 on our financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.

 

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.

 

Revision of Previously Reported Consolidated Financial Statements

 

In connection with the preparation of the company’s consolidated financial statements for the fiscal year ended December 31, 2020, the Company identified an immaterial error originating in the first quarter of 2020 related to the gain calculation on the sale of MastherCell, which was consummated in February 2020. The Company did not adjust the gain calculation for the reversal of previously-recorded accretion adjustments to the carrying amount of the Redeemable Non-Controlling Interest (NCI) in the amount of $5,574. The Company has revised its financial statements presented herein for the three months ended March 31, 2020 to correct the error. The revision resulted in an increase to additional paid-in capital and a decrease in net income from discontinued operations, net of tax. There is no impact on net loss from continuing operations or earning per share. In addition, there is no impact on the Company’s balance sheet or statement of cash flows.

 

The following table summarizes the impact of the revision on additional paid-in capital and net income from discontinued operations, net of tax for the three months ended March 31, 2020:

 

   As reported   Adjustment   As revised 
   (in thousands) 
             
Net income from discontinued operations, net of tax  $82,039   $(5,574)  $76,465 
Additional paid-in capital   103,623    5,574    109,197 

 

NOTE 3 – DISCONTINUED OPERATIONS

 

On February 2, 2020, the Company completed the Masthercell sale and determined that the Masthercell Business met the criteria to be classified as a discontinued operation.

 

11

 

 

The financial results of the Masthercell Business are presented as income from discontinued operations, net of tax on the Company’s condensed Consolidated Statement of Comprehensive Loss (Income). The following table presents the financial results associated with the Masthercell Business operation as reflected in the Company’s condensed Consolidated Comprehensive loss (Income) (in thousands):

 

   The period from January 1, 2020 until the disposal date 
OPERATIONS    
Revenues  $2,556 
Cost of revenues   1,480 
Cost of research and development and research and development services, net   7 
Selling, general and administrative expenses   1,896 
Other expenses, net   305 
Operating loss   1,132 
Financial income, net   (29)
Loss before income taxes   1,103 
Tax expenses   - 
Net loss from discontinuing operation, net of tax  $1,103 
      
DISPOSAL     
Gain on disposal before income taxes  $97,049 
Provision for income taxes   (19,481)
Gain on disposal  $77,568 
      
Net profit from discontinuing operation, net of tax  $76,465 

 

The following table represents the components of the cash flows from discontinued operations (in thousands):

 

   The period from January 1, 2020 until the disposal date 
     
Net cash flows used in operating activities  $(2,409)
Net cash flows used in investing activities  $(579)
Net cash flows used in financing activities  $(51)

 

Disaggregation of Revenue

 

The following table disaggregates the Company’s revenues by major revenue streams related to discontinued operations (in thousands):

 

    The period from January 1, 2020 until the disposal date 
Revenue stream:     
      
Cell process development services  $2,556 
Total  $2,556 

 

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NOTE 4 – EQUITY

 

During the three months ended March 31, 2021, the Company received approximately $1.9 million from the exercise of warrants for the purchase of the Company’s Common Stock at a price of $6.24. A total of 237,563 shares were issued during the quarter ended March 31, 2021 (and a further 67,960 shares were issued during the second quarter).

 

During the three months ended March 31, 2021, the Company received $50 thousand from the exercise of options for the purchase of 8,750 shares of the Company’s Common Stock at a weighted average price of $5.56.

 

NOTE 5 – LOSS (EARNINGS) 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

   March 31, 2021   March 31, 2020 
   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands, except per share data) 
Basic and diluted:          
Net loss from continuing operations attributable to Orgenesis Inc.  $219   $6,976 
           
Net income from discontinued operations attributable to Orgenesis Inc. for earning per share   -    (76,957)
Adjustment of redeemable non-controlling interest to redemption amount   -    (5,160)
Basic: Net income (loss) available to common stockholders   -    (82,117)
           
Net (income) loss attributable to Orgenesis Inc. for loss (earning) per share   219    (75,141)
           
Weighted average number of common shares outstanding   24,192,951    17,780,830 
Loss per common share from continuing operations  $0.01   $0.39 
Earnings per common share from discontinued operations  $-   $(4.62)
Net loss (earnings) per share  $0.01   $(4.23)

 

NOTE 6 – REVENUES

 

Disaggregation of Revenue

 

The following table disaggregates the Company’s revenues by major revenue streams.

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Revenue stream:          
           
POC and hospital services  $9,254   $1,851 
Cell process development services   135    27 
Total  $9,389   $1,878 

 

13

 

 

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

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Revenue earned:          
Customer A  $2,391   $- 
Customer B   1,646    - 
Customer C   1,157    487 
Customer D – related party   1,157    493 
Customer E   956    374 
Customer F   -    496 

 

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:

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Balance as of beginning of period  $3,085   $1,831 
Additions   9,478    1,378 
Collections   (1,204)   (344)
Exchange rate differences   (5)   - 
Balance as of end of period  $11,354   $2,865 

 

The activity for contract liabilities is comprised of:

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Balance as of beginning of period  $59   $325 
Additions   -    567 
Realizations   -    (496)
Balance as of end of period  $59   $396 

 

 

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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, 2020 as filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2021. 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 and the effects that the COVID-19 outbreak, or similar pandemics, could have on our business and CGT Biotech Platform. 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.

 

The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.

 

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, Orgenesis Korea Co. Ltd. (the “Korean Subsidiary”); Orgenesis Belgium SRL, a Belgian-based entity (the “Belgian Subsidiary”); Orgenesis Ltd., an Israeli corporation (the “Israeli Subsidiary”); Orgenesis Maryland Inc., a Maryland corporation (the “U.S. Subsidiary”); Orgenesis Switzerland Sarl, which was incorporated in October 2020 (the “Swiss Subsidiary”); Orgenesis Biotech Israel Ltd. (“OBI”); Koligo Therapeutics Inc., a Kentucky corporation, purchased in 2020 (“Koligo”); Masthercell Global Inc. (“Masthercell”) and its wholly owned subsidiaries Cell Therapy Holdings S.A., MaSTherCell, S.A. (“MaSTherCell”), a Belgian-based subsidiary and a Contract Development and Manufacturing Organization (“CDMO”) specialized in cell therapy development and manufacturing for advanced medicinal products, and Masthercell U.S., LLC (“Masthercell U.S.”), a U.S.-based CDMO (collectively, “Masthercell”). The Company sold all of its equity interests in Masthercell and its subsidiaries in February 2020.

 

15

 

 

Corporate Overview

 

Orgenesis Inc., a Nevada corporation, 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 (ATMPs). We mostly focus on autologous therapies, with processes and systems that are developed for each therapy using a closed and automated processing system approach that is validated for compliant production near the patient at their point of care for the treatment of patients. 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 the 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 Point of Care Platform comprised of three enabling components: a pipeline of licensed POCare Therapies that are designed to be processed and produced in closed, automated POCare Technology systems and a collaborative POCare Network. Via a combination of science, technology, engineering, and networking, we are working to provide a more efficient and scalable pathway for advanced therapies to reach patients more rapidly at lowered costs. We also draw on extensive medical expertise to identify promising new autologous therapies to leverage within the POCare Platform either via ownership or licensing.

 

The POCare Network brings together patients, doctors, industry partners, research institutes and hospitals worldwide with a goal of achieving harmonized, regulated clinical development and production of the therapies.

 

POCare Platform Operations via Subsidiaries

 

We currently conduct our core business operations ourselves and through our subsidiaries, which are all wholly-owned except as otherwise stated below (collectively, the “Subsidiaries”). The Subsidiaries are as follows:

 

United States

 

Orgenesis Maryland Inc. (the “U.S. Subsidiary”) is the center of activity in North America and is currently focused on setting up the POCare Network.
   
Koligo Therapeutics Inc. (“Koligo”) is a Kentucky corporation that we acquired in 2020 and is currently focused on developing the POCare network and therapies.

 

Europe

 

Orgenesis Belgium SRL (the “Belgian Subsidiary”) is the center of activity in Europe and is currently focused on process development and the preparation of European clinical trials.
   
Orgenesis Switzerland Sarl (the “Swiss Subsidiary”), was incorporated in October 2020, and is currently focused on providing management services to us.

 

Asia

 

Orgenesis Ltd. in Israel (the “Israeli Subsidiary”) is a provider of regulatory, clinical and pre-clinical services.
   
Orgenesis Biotech Israel Ltd. (“OBI”), is a provider of cell-processing services in Israel.
   
Orgenesis Korea Co. Ltd. (the “Korean Subsidiary”), is a provider of processing and pre-clinical services in Korea. We own 94.12% of the Korean Subsidiary.

 

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Business Strategy

 

Our aim is to provide a pathway to bring Advanced Therapy Medicinal Products (“ATMPs”) in the cell and gene therapy industry from research to patients worldwide through our POCare Platform. We define point of care as a process of collecting, processing, and administering cells within the patient care environment, namely through academic partnerships in a hospital setting. We believe that this approach is an attractive proposition for personalized medicine because of our strategic partnerships with suppliers that help us to customize closed systems into effective mobile clean room facilities. This will potentially help to minimize or eliminate the need for cell transportation, which is a high-risk and costly aspect of the supply chain.

 

We aim to build value in various aspects of our company ranging from supply related processes including development and distribution systems, clinical and regulatory services, engineering and devices such as OMPULs discussed below, delivery systems, therapies including immuno-oncology, anti-aging, anti-viral, metabolic, nephrology, dermatology, orthopedic, as well as regenerative technologies.

 

Over time, we have worked to develop and validate POCare Technologies that can be combined within mobile production units for advanced therapies. We made significant investments in the development of several types of Orgenesis Mobile Processing Units and Labs (“OMPULs”) with the expectation of use and/or distribution through our POCare Network of partners, collaborators, and joint ventures. We anticipate distributing and using the OMPULS through our POCare Network of partners, collaborators, and joint ventures.

 

OMPULs are designed for the purpose of validation, development, performance of clinical trials, manufacturing and/or processing of potential or approved cell and gene therapy products in a safe, reliable, and cost-effective manner at the point of care, as well as the manufacturing of such CGTs in a consistent and standardized manner in all locations. The design delivers a potential industrial solution for us to deliver CGTs to most clinical institutions at the point of care.

 

Revenue Model and Business Development

 

Our Point of Care (“POCare”) Platform is comprised of three enabling components: a multitude of licensed cell based POCare Therapeutics that are produced in closed, automated POCare Technology systems and a collaborative POCare Network. Our therapies include, but are not limited to, autologous, cell-based immunotherapies, therapeutics for metabolic diseases, anti-viral diseases, and tissue regeneration. We are establishing and positioning the business to bring point-of-care therapies to patients in a scalable way working directly with hospitals and through regional joint venture partners (“JVs”) and JVs active in autologous cell therapy product development, including facilities in various countries in North America, Europe, Latin America, Asia, the Middle East, and Australia. The POCare Platform’s goal is to enable a rapid, globally harmonized pathway for these therapies to reach large numbers of patients at lowered costs through efficient and decentralized production. The POCare Network brings together industry partners, research institutes and hospitals worldwide to achieve harmonized, regulated clinical development and production of the therapies.

 

We are focused on technology in-licensing and therapeutic collaborations, and we out-license therapies marketing rights and manufacturing rights to partners and / or to the JVs. In many cases, the JVs are responsible for the preparation of clinical trials, local regulatory approvals and regional marketing activities. Such licensing includes exclusive or nonexclusive, sublicensable, royalty bearing rights and license to the Orgenesis Background IP as required solely to manufacture, distribute and market and sell Orgenesis Products within the relevant territories. In consideration of the rights and the licenses so granted, we receive a royalty in the range of ten percent of the net sales generated by the JVs and/or its sublicensees (as applicable) with respect to the Orgenesis Products.

 

In addition, in many cases, once the JVs become profitable, we are entitled (in addition to any of its rights as holder of the JVs and prior to any other distributions of dividends by the JVs to shareholders of the JVs) to certain royalties pursuant to an Orgenesis License Agreement, to receive from the JVs royalties at a range of 10 to 15 percent of the JV’s audited U.S. GAAP profit, after tax.

 

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We currently generate revenues from POCare services and sales which is comprised of:

 

R&D services provided to out licensing partners

 

The Company has signed POCare Master Services Agreements (“MSAs”) with our JV partners. In terms of the MSAs, we provide certain broadly defined development services that relate to our licensed therapies designed to develop or enhance the therapy with the objective of preparing it for clinical use. Such services, per therapy, include regulatory services, pre-clinical studies, intellectual property services, development services, and GMP process translation.

 

Hospital supply

 

Hospital services includes the sale or lease of products and the performance of processing services to our POCare hospitals or other medical providers. We either work directly with hospitals or receive payments through our regional JV partnerships.

 

Results of Operations

 

Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020.

 

The following table presents our results of operations for the three months ended March 31, 2021 and 2020:

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Revenues  $8,232   $1,385 
Revenues to Related Party   1,157    493 
Cost of services and other research and development expenses   6,127    4,873 
Amortization of intangible assets   238    223 
Selling, general and administrative expenses   2,968    3,518 
Share in net loss of associated companies   15    - 
Financial expenses, net   233    329 
Other income, net   (25)   (3)
Loss before income taxes  $167   $7,062 

 

During the three months ended March 31, 2021, we recognized point-of-care development service revenue in the amount of $9,254 thousand, as compared to $1,851 during the three months ended March 31, 2020, representing an increase of 400%, due to increased activity under MSAs with our existing and new joint venture partners.

 

Expenses

 

Cost of services and other research and development expenses

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Salaries and related expenses  $2,236   $916 
Stock-based compensation   158    86 
Professional fees and consulting services   2,125    401 
Lab expenses   627    619 
Depreciation expenses, net   163    132 
Other research and development expenses   818    2,804 
Less – grant   -    (85)
Total  $6,127   $4,873 

 

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Research and development expenses for the three months ended March 31, 2021 were $6,127 thousand, as compared to $4,873 thousand for the three months ended March 31, 2020, representing an increase of 26%.

 

The increase is mainly attributable to the continued expansion of our pipeline of licensed CGTs with a harmonized pathway for regulatory approval, the expansion of our POC capacity globally, further investments in automated processing units and processes, further development of owned and licensed advanced therapies to enable commercial production, and additional work with partners to enable efficient closed processing system technologies addressing POCare needs.

 

Furthermore, additional employees were hired as we expanded our research and development to the evaluation and development of new cell therapies and related technologies.

 

We also continued investing in the development of several types of OMPULs with the expectation of use and/or distribution through our POCare Network of partners, collaborators, and joint ventures.

 

Selling, General and Administrative Expenses

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Salaries and related expenses  $679   $502 
Stock-based compensation   407    331 
Accounting and legal fees   872    1,624 
Professional fees   412    437 
Rent and related expenses   30    61 
Business development   148    250 
Depreciation expenses, net   52    25 
Other general and administrative expenses   368    288 
Total  $2,968   $3,518 

 

Selling, general and administrative expenses for the three months ended March 31, 2021 were $2,968 thousand, as compared to $3,518 thousand for the three months ended March 31, 2020, representing a decrease of 16%. The decrease in selling, general and administrative expenses in the three months ended in March 31, 2021 compared to the three months ended March 31, 2020 is primarily attributable to a decrease in accounting and legal fees of $752 thousand, as a result of decreased corporate investment activities in 2021 compared to 2020.

 

Financial Expenses, net

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
Interest expense on convertible loans and loans  $253   $422 
Foreign exchange loss, net   56    57 
Other income   (76)   (150)
Total  $233   $329 

 

Financial expenses, net for the three months ended March 31, 2021 were $233 thousand, as compared to $329 thousand for the three months ended March 31, 2020, representing a decrease of 29%. The decrease was mainly a result of repayments in relation to the convertible loans during 2020.

 

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Working Capital

 

   As of 
  

March 31, 2021

  

December 31, 2020

 
   (in thousands) 
Current assets  $54,713   $50,077 
Current liabilities   18,930    16,285 
Working capital gain  $35,783   $33,792 

 

Current assets increased, primarily due to increased accounts receivable as a result of the increased revenues. The increase in current liabilities was mainly attributable to an increase in accounts payable caused by the expansion of business operations.

 

Liquidity and Financial Condition

 

   Three Months Ended 
   March 31, 2021   March 31, 2020 
   (in thousands) 
         
Net income (loss)  $(165)  $69,450 
           
Net cash used in operating activities   (4,547)   (13,693)
Net cash provided by (used in) investing activities   (539)   103,045 
Net cash provided by financing activities   1,898    6,357 
           
Increase (decrease) in cash and cash equivalents  $(3,188)  $95,709 

 

During the quarter ended March 31, 2021, we funded our operations from existing funds.

 

Net cash used in operating activities for the three months ended March 31, 2021 was approximately $5 million, as compared to net cash used in operating activities of approximately $14 million for the three months ended March 31, 2020.

 

Net cash used in investing activities for the three months ended March 31, 2021 was approximately $1 million, as compared to net cash provided by investing activities of approximately $103 million for the three months ended March 31, 2020. The change was mainly due to the proceeds from Masthercell in the first quarter of 2020. Net cash used in investing activities was primarily for related activates under our CGT Biotech Platform.

 

Liquidity & Capital Resources Outlook

 

We believe that our current cash balance as well as revenues from our current operations results will provide sufficient liquidity to fund our operating needs for at least the next 12 months. However, there are factors that can impact our ability to continue to fund our operating needs, including:

 

restrictions on our ability to expand sales volume from our CGT Biotech Platform; and
the need for us to continue to invest in operating activities to remain competitive or acquire other businesses and technologies and to complement our products, expand the breadth of our business, enhance our technical capabilities or otherwise offer growth opportunities.

 

If there are further increases in operating costs in general and administrative expenses for facilities expansion, funding for some of our collaborations and joint ventures, research and development, commercial and clinical activity or decreases in revenues from customers, we may decide to seek additional financing.

 

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Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s 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 March 31, 2021 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

 

We know of no material pending legal proceedings to which the Company or its subsidiaries are a party or of which any of its properties, or the properties of its subsidiaries, are the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

 

We know of no material proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to the Company or its Subsidiaries or has a material interest adverse to the Company or its subsidiaries.

 

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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, 2020, as filed with the SEC on March 9, 2021, 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, 2020. 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

 

Sales of Unregistered Equity Securities

 

There were no sales of unregistered equity securities during the three-month period ended March 31, 2021.

 

Issuer Purchases of Equity Securities

 

On May 14, 2020, our Board of Directors approved the stock repurchase plan (the “Stock Repurchase Plan”) pursuant to which we may, from time to time, purchase up to $10 million of our outstanding shares of common stock. The shares may be repurchased from time to time in privately negotiated transactions or the open market, including pursuant to Rule 10b5-1 trading plans, and in accordance with applicable regulations of the SEC. The timing and exact amount of any repurchases will depend on various factors including, general and business market conditions, corporate and regulatory requirements, share price, alternative investment opportunities and other factors. The Repurchase Plan commenced on May 29, 2020 and does not obligate us to acquire any specific number of shares in any period, and may be expanded, extended, modified, suspended or discontinued by the Board of Directors at any time.

 

The following table summarizes the share repurchase activity pursuant to the Stock Repurchase Plan during the quarter ended March 31, 2021.

 

   Total Number of Shares Purchased   Average Price Paid per Share   Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs  

Maximum Value that May Yet Be Purchased Under the Plans or Programs

 
                 (in thousands) 
January 2021   

2,306

   $

4.45

    

2,306

   $9,740 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

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Item 6. Exhibits

 

Exhibits required by Item 601 of Regulation S-K

 

No.   Description
(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

 

*

 

 

Filed herewith.

 

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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: May 6, 2021  
   
/s/ Neil Reithinger  
Neil Reithinger  
Chief Financial Officer, Treasurer and Secretary  
(Principal Financial Officer and Principal Accounting Officer)  
Date: May 6, 2021  

 

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