Orgenesis(US:ORGS)2023-11-13 21:15Company Structure and Operations - The company has separated its operations into two segments: Octomera LLC (formerly Morgenesis) and Therapies, with the Octomera segment focusing on POCare Services[128]. - As of June 30, 2023, the company owns approximately 75% of Octomera LLC, which was deconsolidated from the company's financial statements[130][129]. - The company invested $836 thousand and $6.5 million into Octomera during 2023 in exchange for preferred shares[140]. - The company has developed a POCare Platform to ensure quality, replicability, and standardization in the production of advanced therapies[127]. - The POCare Therapies division is focused on adapting therapies for point-of-care settings and aims to out-license products for market approval in preferred regions[136]. - The company collaborates with academic institutions and hospitals to develop therapies, aiming to lower overall development costs through partnerships[134][135]. - The company has subsidiaries focused on expanding the POCare Network in various regions, including Belgium, Korea, and California[143]. Financial Performance - Total revenues for the three months ended September 30, 2023, were $110, a decrease of 99% compared to $7,988 for the same period in 2022, primarily due to the deconsolidation of Octomera[157][158]. - Cost of revenues for the three months ended September 30, 2023, were $139, down 86% from $983 in the same period in 2022, also attributed to the deconsolidation of Octomera[160]. - Operating loss for the three months ended September 30, 2023, was $11,753, compared to an operating loss of $281 for the same period in 2022[157]. - Net loss for the three months ended September 30, 2023, was $12,653, compared to a net loss of $1,408 for the same period in 2022[157]. - Cost of development services and research and development expenses for the three months ended September 30, 2023, were $808, a decrease of 78% from $3,683 in the same period in 2022[162]. - The Octomera segment recognized revenue of $2,704 for the three months ended September 30, 2023, down 66% from $7,903 in the same period in 2022, due to incomplete performance obligations[159]. - Total revenue for the nine months ended September 30, 2023 was $14,129, a decrease of 37% from $22,401 in the same period in 2022, mainly due to the deconsolidation of Octomera[169]. - Cost of revenues for the nine months ended September 30, 2023 was $6,093, an increase of 121% from $2,760 in the same period in 2022, driven by increased salaries, professional fees, and raw materials[171]. - Cost of development services and research and development expenses for the nine months ended September 30, 2023 was $7,616, a decrease of 58% from $18,172 in the same period in 2022, primarily due to the deconsolidation of Octomera[172]. - Net loss for the nine months ended September 30, 2023 was $20,575, compared to a net loss of $10,897 in the same period in 2022[180]. Financing and Liquidity - As of September 30, 2023, the company borrowed $660 thousand under a convertible loan agreement, with additional loans of $175 thousand and $250 thousand received in July and August 2023, respectively[149][151]. - On September 29, 2023, the company entered into a convertible loan agreement for up to $25 million, with an initial installment of $1.5 million[153]. - The company intends to use proceeds from a securities purchase agreement, which raised approximately $3.7 million, for working capital and general corporate purposes[146]. - Net cash provided by financing activities for the nine months ended September 30, 2023 was approximately $12,393, a decrease from $20,095 in the same period in 2022[182]. - Liquidity outlook indicates that the company has been primarily funded by equity securities and loans, with no assurance of generating sustainable positive cash flows[183]. - The company anticipates that current and projected cash resources will be insufficient to meet obligations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[185]. - Management plans include raising additional capital to fund operations and repay outstanding loans, as well as exploring avenues to increase revenue and reduce capital expenditures[185]. - The company may need to seek additional financing or postpone non-essential expenses if revenues decline or operating costs increase[184]. - The ability to fund ongoing and planned activities is substantially dependent on obtaining sufficient funding at acceptable terms[185]. - If the company cannot raise sufficient capital or meet revenue targets, it may have to reduce or eliminate certain activities and decrease headcount[185]. Expenses and Losses - Selling, general and administrative expenses for the three months ended September 30, 2023 were $1,245, a decrease of 60% compared to $3,104 for the same period in 2022, primarily due to the deconsolidation of Octomera[163]. - Share in net loss of associated company for the three months ended September 30, 2023 was $9,518, representing an increase of 3,374% from $274 in the same period in 2022, mainly due to credit losses related to overdue customers in Octomera[165]. - Financial expenses, net for the three months ended September 30, 2023 were $508, a decrease of 54% from $1,100 in the same period in 2022, attributed to foreign exchange losses incurred in the previous year[167]. - Current assets decreased by $37,542 from $46,318 on December 31, 2022 to $8,776 on September 30, 2023, mainly due to the deconsolidation of Octomera[178]. - There are no off-balance sheet arrangements that materially affect the company's financial condition or results of operations[186].