Exhibit 99.2

Kadimastem Ltd.

Financial Statements as of December 31, 2024

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Kadimastem Ltd.

Opinion on the Financial Statements

We have audited the accompanying statements of financial position of Kadimastem Ltd. (the “Company”) as of December 31, 2024 and 2023, the related statements of profit or loss and other comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.

The Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1B to the financial statements, the Company has suffered recurring losses and negative cash flows from operations and has a deficiency in equity, an accumulated deficit and a working capital deficiency, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Kost Forer Gabbay & Kasierer

A member of Ernst & Young Global

We have served as the Company’s auditor since 2008.
Tel-Aviv, Israel

June 5, 2025

Kadimastem Ltd.
STATEMENTS OF FINANCIAL POSITION

The accompanying Notes are an integral part of the financial statements.

KADIMASTEM LTD.
Statements of Profit or Loss and Other Comprehensive Loss

The attached Notes constitute an integral part of the financial statements.

KADIMASTEM LTD.
STATEMENTS OF CHANGES IN EQUITY

KADIMASTEM LTD.
STATEMENTS OF CHANGES IN EQUITY — (Continued)

The attached Notes constitute an integral part of the financial statements.

KADIMASTEM LTD.
STATEMENTS OF CASH FLOWS

The attached Notes constitute an integral part of the financial statements.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 1: — General

Kadimastem Ltd. (hereinafter, the “Company”) was incorporated in Israel on October 6, 2008, and began its business activities on August 27, 2009. On June 6, 2013, the Company completed a public offering of its shares on the Tel Aviv Stock Exchange (“TASE”). The Company’s offices are located in Ness Ziona, Israel. The Company is engaged in the development of drugs for the treatment of terminal muscular dystrophy (also known as ALS) and diabetes in the field of regenerative medicine.

The Company’s ability to continue its operations depends on raising resources to finance its operations. The Company is involved in raising funds by arranging private placements to investors in Israel and abroad, raising funds on the TASE, and issuing rights to its current shareholders. At present, there is no certainty as to the Company’s ability to generate income or raise additional capital in the future, if at all.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements do not include any adjustments regarding the carrying amounts of the assets and liabilities and their classification should the Company not continue to operate as a going concern. Such adjustment could be material.

The “Swords of Iron” War (hereinafter, the “War”) broke out in the State of Israel in October 2023. The continued War has led to a slowdown in business activity in the Israeli economy due to, among other things, factories in the south and north of the country being closed, infrastructure damage, the recruitment of reserve personnel for an unknown period of time, and the disruption of economic activity in Israel. The War’s continuation may have far-reaching consequences for many industries and different geographical areas of the country.

The potential fluctuations in commodity prices, foreign exchange rates, availability of materials, availability of manpower, local services, and access to local resources may affect entities that mostly operate with or in Israel.

Since this event is characterized by high uncertainty, and as of the date hereof, the duration and intensity of its impact on the economy in the medium and long term is unascertainable, the Company does not have the ability to assess the full impact of the above on the scope of its business and its operating results.

NOTE 2: — ACCOUNTING POLICIES

The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated.

The financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards, as issued by the International Accounting Standards Board (“IASB”).

The functional currency of the Company is the New Israel Shekel (“NIS”), which represents the primary economic environment in which the Company operates. The presentation currency of the financial statements is USD.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 2: — ACCOUNTING POLICIES (cont.)

The financial statements are presented in USD since the Company believes that financial statements in USD provide more relevant information to the investors and users of the financial statements, who are located primarily in the US.

Assets and liabilities are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss). Capital transactions in shareholders’ equity are translated using historical rates of exchange.

Government grants are recognized when there is a reasonable assurance that the grants would be received and that the Company would meet all the conditions for receiving the grant.

Government grants from the Israel Innovation Authority (“IIA”) are recognized as a liability at the time of their receipt if there is a reasonable assurance that the research activity would result in sales that would entitle the State to royalties.

The Company does not anticipate revenues in the foreseeable future, and therefore, it does not recognize a liability component, and the grant is recorded under profit and loss as an offset from the Company’s research and development expenses.

For each reporting date, the Company makes an assessment of the expected grant to be received in the subsequent period, for the reporting period, and accordingly, records a provision in the books for income receivable.

Current or deferred taxes are recognized in profit or loss, except if they refer to items that are recognized in other comprehensive income or in equity.

Deferred taxes

Deferred taxes are calculated with respect to the temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes.

Deferred taxes are calculated according to the tax rate that is expected to apply when the asset is realized or the liability is settled, based on the tax laws that have been enacted or substantively enacted by the reporting date.

The Company recognizes deferred tax assets up to the amount of the liability for deferred taxes due to the uncertainty as to utilization of losses in the foreseeable future.

The Company treats a contract as a lease when, in accordance with the terms of the contract, the right to control an identified asset is transferred for a period of time in exchange for a consideration.

For leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases with a term up to 12 months and leases for which the underlying asset has a lesser value. For these excluded leases, the Company has elected to recognize these lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in IFRS 16 and does not separate the lease components from the non-lease components, such as management and maintenance services, included in a single contract.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 2: — ACCOUNTING POLICIES (cont.)

At the commencement date, a lease liability includes all lease payments (these payments do not include variable lease payments) that have not yet been paid, discounted at the interest rate implicit in the lease when it can be determined readily or according to the Company’s incremental borrowing rate. After the commencement date, the Company measures the lease liability using the effective interest method.

The right-of-use asset at the commencement date is recognized in the amount equal to the lease liability, plus lease payments paid on or before the commencement date and any transaction costs incurred. The right-of-use asset is measured through applying the cost model and depreciated over its useful life or the term of the lease, whichever is shorter.

Below are data regarding the number of years of depreciation of the relevant right-of-use assets by class of underlying asset:

Where there are indications of impairment, the Company assesses the impairment of the right-of-use asset in accordance with the provisions of IAS 36.

At the commencement date of the lease, the Company uses the applicable index rate on the commencement date for the purpose of calculating future lease payments.

In transactions in which the Company is a lessee, changes in the total future lease payments as a result of a change in the index are discounted (with no change in the discount rate applicable to the lease liability) and recorded as an adjustment of the lease liability and the right-of-use asset only when there is a change in the cash flows that results from a change in the index (that is, at the time in which the adjustment to the lease payments comes into effect).

A non-cancellable lease term includes both the periods that are covered by an option to extend the lease, when it is reasonably certain that the option will be exercised, and the periods that are covered by an option to terminate the lease, when it is reasonably certain that the termination option will not be exercised.

In the event that there is a change in the likelihood of exercising an extension option or the expected non-exercise of the lease termination option, the Company remeasures the outstanding lease liability in accordance with the updated lease period, according to the updated discount rate on the day of the change in the likelihood, and the total change is credited to the balance of the right-of-use asset until it is zeroed and then, to profit or loss.

In each reporting period, the Company’s management examines the likelihood of exercising an extension option and updates the aforementioned leases’ amortization schedules accordingly.

According to the Company’s assessment, no extension option will be exercised.

In transactions where the Company leases an underlying asset (the “primary lease”) and subsequently subleases such underlying asset to a third party (the “sublease”), the Company assesses whether all the risks and rewards associated with ownership of the right-of-use asset have been transferred. This assessment includes, inter alia, an evaluation of the sublease term relative to the useful life of the right-of-use asset arising from the primary lease.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 2: — ACCOUNTING POLICIES (cont.)

If all the risks and rewards of ownership of the right-of-use asset have been substantially transferred, the sublease is classified as a finance lease, otherwise it is classified as an operating lease.

In the sublease entered into during the year, the risks and rewards were not transferred to the third party, therefore the accounting treatment was a reduction of lease expenses rather than classification as a financing lease.

Property and equipment are presented at cost, including direct purchase costs, and less accumulated depreciation and accumulated impairment losses, and do not include current maintenance expenses.

Depreciation is calculated at equal annual rates based on the straight-line method throughout the asset’s useful life, as follows:

Leasehold improvements are depreciated using the straight-line method over the lease period, or according to the estimated life of the improvement, whichever is shorter.

The useful life, the depreciation method, and the residual value of each asset are examined, at a minimum, per year end, and any changes are treated as a change in accounting estimate prospectively. The depreciation of assets ceases on the date on which the asset is classified as an asset held for sale or the date on which the asset is derecognized, whichever is earlier.

The Company depreciates the fixed assets according to its economic life.

In an issuance of a unit of securities, the proceeds received (before the issuance expenses) are allocated to the securities issued in the unit in accordance with this order of allocation: financial derivatives and other financial instruments that are presented at fair value in each period. The fair value is then determined for financial liabilities that are measured at amortized cost, and the consideration allocated for equity instruments is determined as the residual value. The issuance costs are allocated to each component on a pro rata basis, according to the amounts determined for each component of the unit.

In January 2020, the IASB published an amendment to International Accounting Standards (“IAS”) 1, Presentation of Financial Statements (“IAS 1”), regarding the requirements for classifying liabilities as current or non-current (hereinafter, the “Original Amendment”). In October 2022, the IASB published a subsequent amendment to amend the Original Amendment (hereinafter, the “Subsequent Amendment”).

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 2: — ACCOUNTING POLICIES (cont.)

The Subsequent Amendment stated that:

The Original Amendment stated that the right to convert a liability would affect the entire liability’s classification as a current or a non-current liability, except if the conversion component is equity-based.

The Original Amendment and the Subsequent Amendment were applied retroactively as of the annual periods commencing January 1, 2024.

The Company has a loan (see Note 15) that is immediately convertible into ordinary shares of the Company, with the conversion component classified in the financial statements as a financial liability. As a result of the aforementioned amendments, the liability related to the convertible loan and the liability related to the conversion component and options, amounting to USD $230 thousand and USD $1,002 thousand, respectively, as of December 31, 2023, were reclassified from non-current liabilities to current liabilities.

IFRS 18 — Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements (the “New Standard”), which replaces IAS 1, Presentation of Financial Statements (hereinafter: IAS 1).

The objective of the New Standard is to enhance comparability and transparency in financial statements.

The New Standard incorporates existing requirements from IAS 1 and introduces new requirements for the presentation in the statement of profit or loss. These include the presentation of totals and subtotals according to the new standard, disclosures of management-defined performance measures, and new requirements for the aggregation and disaggregation of financial information.

The New Standard does not change the recognition or measurement of items in the financial statements. However, as items in the statement of profit or loss will be required to be classified into one of five categories (operating, investing, financing, income taxes, and discontinued operations), it may impact the entity’s reported operating profit. Moreover, the issuance of the New Standard led to limited-scope amendments to other standards, including IAS 7, Statement of Cash Flows and IAS 34, Interim Financial Reporting.

The New Standard is to be applied retrospectively for annual periods beginning on or after January 1, 2027. Early adoption is permitted in accordance with the decision of the Israeli Securities Authority, subject to disclosure for annual periods commencing on or after January 1, 2025.

The Company is evaluating the impact on the financial statements of the New Standard, including the impact of the amendments to other accounting standards resulting from the New Standard.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 3: — SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS USED IN PREPARING THE FINANCIAL STATEMENTS

In the process of implementing the accounting policies in the financial statements, the Company has made the following judgments, which have a material impact on the amounts recognized in the financial statements:

Discount rate for lease liability

The Company cannot readily determine the interest rate implicit in the lease, and therefore, for the purpose of calculating the lease liability, it uses the Company’s incremental borrowing rate. The Company conducted an assessment to determine the suitable nominal interest rate for the discounting of the lease contracts, in accordance with the Company’s financial risk, the lease contract term, and other economic variables.

The weighted average incremental interest rate used to discount the future lease payments when calculating the outstanding lease liability at the time of the standard’s first-time implementation is 20%.

Calculation of the value of the conversion component and options of the convertible loan

The Company has received a convertible loan from several shareholders, and the loan agreement includes warrants that would be granted to the lenders under certain conditions. Due to the complexity of the terms of the loan agreement, which includes an embedded conversion component and a right to receive warrants upon certain conditions, the attribution of the consideration received between the components of the agreement upon initial recognition requires judgement and the use of various option pricing models. (See Note 15).

Shareholder transactions

The Company received a short-term loan from one of its shareholders at non-market terms. The Company accounts for these transactions as transactions that include a contribution to equity, while recognizing them according to fair value in accordance with IFRS 9. The contribution amount, which reflects the difference between the aforementioned fair value and the terms of the transaction, is credited to equity, net of the tax effect. In order to determine the contribution to equity, the Company must assess the market terms as of the day of the transaction, including the price of the guarantee under market terms, as if it had been provided by an unrelated third party.

Determining the fair value of share-based payment transactions

The fair value of share-based payment transactions is determined upon initial recognition, using an acceptable option pricing model. The model is based on data as to the share price and the exercise price, in addition to assumptions regarding the expected volatility, expected life expected dividend, and the risk-free interest rate.

When preparing the financial statements, the management must use estimates and assumptions that affect the implementation of the accounting policy and the reported total assets, liabilities, revenues, and expenses. In formulating the accounting estimates, management relies on past experience, various facts, external factors, and reasonable assumptions, depending on the circumstances. Changes in accounting estimates are recognized in the period in which the estimate is changed.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 3: — SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS USED IN PREPARING THE FINANCIAL STATEMENTS (cont.)

Below are the primary assumptions made in the financial statements in connection with uncertainties as of the reporting date and critical estimates calculated by the Company, for which a substantial change in the estimates and assumptions may change the value of assets and liabilities in the financial statements in the following year:

Grants from the Israel Innovation Authority

Government grants from the IIA at the Ministry of Industry, Trade and Labor are recognized as a liability if economic benefits that would generate sales, such that the State would be entitled to royalties, are expected as a result of the research and development activities. There is uncertainty regarding the estimated future cash flows that were used to determine the total liability.

Determining the Fair Value of a Non-Marketable Financial Instrument — Convertible Loan

The fair value of a non-marketable financial instrument classified within Level 3 of the fair value hierarchy is determined based on valuation techniques. Fair value is generally estimated based on the assessment of future cash flows discounted at current discount rates for items with similar terms and risk characteristics.

Changes in the estimates of future cash flows and discount rates, taking into account risk assessments such as liquidity risk, credit risk, and volatility, which constitute unobservable data, may affect the fair value of the financial instrument.

NOTE 4: — CASH AND CASH EQUIVALENTS

Note 5: — Accounts receivable

Note 6: — Leases

The Company has lease agreements that include leases on buildings, equipment, and vehicles that are used for the Company’s current operations. The lease agreements for the building, equipment, and vehicles have expired, and as of December 31, 2024, there is no asset or liability balance in respect thereof.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 6: — Leases (cont.)

In 2024, a new lease agreement was signed for a building for one year only, and the Company’s management estimates that it will not exercise the extension option, and accordingly the asset and the liability in respect thereof has not been recognized.

2024

2023

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 6: — Leases (cont.)

Analysis of the lease liabilities’ repayment dates — see Note 13B.

Note 7: — Property and equipment

2024

2023

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 7: — Property and equipment (cont.)

Note 8: — Fair value measurement

The balances of cash and cash equivalents, accounts receivables, restricted cash, short-term bank credit, trade payables, accounts payable, and interested-party loans in the financial statements are equal to or approximately their fair value.

The tables below present the fair value measurement hierarchy for the Company’s liabilities and others as of December 31, 2024 and December 31, 2023.

As of December 31, 2024:

As of December 31, 2023:

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 9: — LIABILITIES AND LOANS FROM INTERESTED PARTIES AND OTHERS

When the Bank Loan was first recognized, the Company measured the fair value of the benefit it had received from Prof. Revel in his capacity as an interested party in the Company and credited it to the interested party transaction capital reserve, less the tax effect. The discount rate was determined according to the CAPM (capital asset pricing model) and the WACC (weighted average cost of capital) as of the reporting date, and was determined by the Company at a rate of approximately 21%, based on the following assumptions:

Since December 31, 2020, the loan has been renewed annually for an additional year, such that as of December 31, 2024, the repayment date is December 31, 2025.

As of December 31, 2024, due to the change in interest rates in the economy, the interest rate on the Bank Loan is 7.75%.

The Bank Loan is presented at fair value as of December 31, 2024, in the amount of USD $293 thousand.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 9: — LIABILITIES AND LOANS FROM INTERESTED PARTIES AND OTHERS (cont.)

Due to updates to the aforementioned loan terms, in 2024, 2023, and 2022, the Company credited a benefit to the interested party transactions capital reserve, totaling USD $28, $53, and47$ thousand net, respectively.

Loan terms

NOTE 10: — TRADE PAYABLES

Note 11: — Accounts payable

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 12: — CONTINGENT liabilities to the Innovation Authority in respect of royalties

As of the date of the financial statements, the Company received USD $1,030 thousands from this amount.

The total grants received from the National Authority for Technological Innovation by December 31, 2024, for which the Company is contingently liable to pay future royalties, was USD $14,209 thousand.

As of the date of the financial statements, the Company does not recognize a liability to the IIA, as it does not anticipate having revenues in the foreseeable future.

Note 13: — Financial Instruments

Below is a classification of the financial assets and financial liabilities in the financial statements for the financial instrument categories in accordance with IFRS 9:

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 13: — Financial Instruments (cont.)

Liabilities for a transaction with an interested party is measured according to fair value at the time of the transaction. Since it is a transaction in the capacity of a shareholder, the Company credits the difference between the fair value and the proceeds from the transaction after deducting the tax to equity in the interested party capital reserve item. The Company assessed the market conditions on the day of the transaction for each transaction and in different periods at a rate of about 21 percent.

In each reporting period, the Company recognizes financing expenses due to the revaluation of the loan as of the reporting date.

As of the date of the report, the Company recognized financing expenses due to the revaluation of loans from an interested party and a loan from a banking corporation amounting to approximately USD $5,044 thousand in 2024 and approximately USD $153 thousand in 2023.

The Company’s main financial liabilities consist of loans. These financial liabilities are mainly intended to finance the Company’s operations and provide guarantees that support its operations. The Company’s main assets are comprised of receivables and cash derives directly from its operations.

The Company is exposed to market risk, interest rate risk, foreign currency risk, and liquidity risk. The Company’s senior management oversees the management of these risks.

Market risk is the risk that the fair value or future cash flows from a financial instrument will change because of changes in market prices. Market risks include three types of risk: interest rate risk, currency risk, and other price risks, such as stock price risk and commodity price risk. Financial instruments that are affected by the market risk include, among others, loans and borrowings and deposits.

The interest risk is the risk that future fair value or cash flows from a financial instrument will change because of changes in the market interest rate.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 13: — Financial Instruments (cont.)

The Company is exposed to an exchange rate risk arising from exposure to various currencies, mainly the US dollar and the euro. The exchange rate risk arises from recognized liabilities that are denominated in a foreign currency that is not the functional currency.

The table below demonstrates the sensitivity test to a reasonably possible change in dollar exchange rates, while all other variables remain unchanged. The impact on the Company’s pre-tax loss is due to the changes in the fair value of assets and liabilities.

The Company monitors the risk to a shortage of funds using a liquidity planning tool. The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments (including interest payments):

December 31, 2024

December 31, 2023

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 13: — Financial Instruments (cont.)

The Company’s goals in managing its equity are to preserve the Company’s ability to ensure business continuity, and thus generate a return for the shareholders, investors, and other interested parties.

The Group pledged a portion of its short-term deposits. As of December 31, 2023, the fair value of the pledged deposits amounted to USD $170 thousand. In October 2024, the deposit was released, and as of December 31, 2024, its balance is zero.

Note 14: — EMPLOYEE BENEFIT ASSETS AND LIABILITIES

Employee benefits include short-term benefits, post-employment benefits, other long-term benefits, and termination benefits.

Post-employment benefits

The applicable labor laws and the Severance Pay Law in Israel require the Company to pay severance to employees upon their dismissal or retirement, or to make regular contributions into defined contribution plans according to Section 14 of the Severance Pay Law, as described below. The Company’s liability accounted for is a post-employment benefit.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 14: — EMPLOYEE BENEFIT ASSETS AND LIABILITIES (cont.)

The calculation of the Company’s liability with respect to employee benefits is determined according to the effective employment agreement and the employee’s salary and employment terms, which establish the right to receive compensation.

The post-employment employee benefits are generally funded by contributions that are classified as a defined benefit plan or a defined contribution plan, as detailed below.

Section 14 of the Severance Pay Law (1963) applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Company into pension funds or policies of insurance companies release the Company from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.

The Company accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as above, as a defined benefit plan for which an employee benefit liability is recognized and for which the Company deposits amounts in central severance pay funds and in qualifying insurance policies.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

Note 14: — EMPLOYEE BENEFIT ASSETS AND LIABILITIES (cont.)

Below are the reasonably possible changes as of the end of the reporting period, for each actuarial assumption, assuming that the other actuarial assumptions are constant:

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 15: — CONVERTIBLE LOAN AND CONVERSION COMPONENT OF CONVERTIBLE LOAN AND WARRANTS

Below are the terms of the loan:

The loan principal will bear interest at an annual rate of 10% (non-linked) (hereinafter, the “Interest” and with the loan principal, the “Loan”). The Loan repayment date will be after 15 months from the First Completion Date, and despite the above, the Company may extend the Loan repayment date by an additional period of 6 months (hereinafter, the “Extension Period” and the “Repayment Date,” respectively). The Company will not be allowed to pay off the Loan before the Repayment Date. As of the reporting date, the Loan has not yet been converted, as it is subject to the merger transaction with NLS.

On the due date, the investors will be entitled, at their sole discretion, to repayment of the Loan in one of the following two methods: (a) paying off the Loan in cash, or (b) paying off the Loan by way of conversion into ordinary shares of the Company, (hereinafter, “Shares”); in the event that on the due date, the Company will not have the means to repay the Loan, the investors may, at their sole discretion, convert the Loan, as described above, or remain indebted until a later date when the Company can repay the Loan. It is clarified that the investors have the right to convert the Loan into Shares at any time starting from the date of deposit of the Initial Loan Amount, at their sole discretion.

KADIMASTEM LTD.
NOTES TO FINANCIAL STATEMENTS

NOTE 15: — CONVERTIBLE LOAN AND CONVERSION COMPONENT OF CONVERTIBLE LOAN AND WARRANTS (cont.)