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Brainstorm Cell Therapeutics

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FY2020 Annual Report · Brainstorm Cell Therapeutics
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

⌧   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020

☐    TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER 001-36641

BRAINSTORM CELL THERAPEUTICS INC.
(Exact Name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

1325 Avenue of Americas, 28th Floor
New York, NY
(Address of principal executive offices)

20-7273918
(I.R.S. Employer
Identification No.)

10019
(Zip Code)

Registrant’s telephone number, including area code: (201) 488-0460

Securities registered under Section 12(b) of the Act:

Title of each class
Common Stock, $0.00005 par value

     Trading Symbol(s)

BCLI

Name of each exchange on which registered
The Nasdaq Stock Market LLC
(Nasdaq Capital Market)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐   No  ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ☐   No  ⌧

Securities registered under Section 12(g) of the Act: None

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 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.
(Check one):

Large accelerated filer ☐

Non-accelerated filer ⌧

Emerging growth company ☐

Accelerated filer ☐

Smaller reporting 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 any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate  by  check  mark  whether  the  registrant  has  filed  a  report  on  and  attestation  to  its  management’s  assessment  of  the  effectiveness  of  its  internal  control  over  financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report,. Yes ☒   No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐   No ⌧

The  approximate  aggregate  market  value  of  the  voting  and  non-voting  common  equity  held  by  non-affiliates  of  the  issuer  as  of  June  30,  2020  (the  last  business  day  of  the
registrant’s most recently completed second fiscal quarter), was $278,374,634.

As of February 4, 2021, the number of shares outstanding of the registrant's Common Stock, $0.00005 par value per share, was 35,721,429.

 
    
 
 
 
 
 
 
Table of Contents

BRAINSTORM CELL THERAPEUTICS INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 2020
TABLE OF CONTENTS

ITEM

1.
1A.
1B.
2.
3.
4.

5.
6.
7.
7A.
8.
9.
9A.
9B.

10.
11.
12.
13.
14.

15.
16.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

PART I

PART II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information

PART III

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Exhibits, Financial Statement Schedules
Form 10-K Summary

PART IV

2

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3
33
54
54
54
54

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Table of Contents

PART I
SPECIAL NOTE

Unless otherwise specified in this Annual Report on Form 10-K, all references to currency, monetary values and dollars set forth herein
shall mean United States (U.S.) dollars.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains numerous statements, descriptions, forecasts and projections, regarding BrainStorm Cell Therapeutics Inc.
(together  with  its  consolidated  subsidiaries,  the  “Company,”  “BrainStorm,”  “we,”  “us”  or  “our”)  and  its  potential  future  business
operations  and  performance,  including  financial  results  for  the  most  recent  fiscal  year,  statements  regarding  the  market  potential  for
treatment of neurodegenerative disorders such as ALS, the sufficiency of our existing capital resources for continuing operations in 2021
and beyond, the safety and clinical effectiveness of our NurOwn® technology, our clinical trials of NurOwn® and its related clinical
development, and our ability to develop collaborations and partnerships to support our business plan. In some cases you can identify
such  “forward-looking  statements”  by  the  use  of  words  like  “may,”  “will,”  “should,”  “could,”  “expects,”  “hopes,”  “anticipates,”
“believes,”  “intends,”  “plans,”  “projects,”  “targets,”  “goals,”  “estimates,”  “predicts,”  “likely,”  “potential,”  or  “continue”  or  the
negative of any of these terms or similar words. These statements, descriptions, forecasts and projections constitute “forward-looking
statements,” and as such involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of
activity,  performance  and  achievements  to  be  materially  different  from  any  results,  levels  of  activity,  performance  and  achievements
expressed or implied by any such “forward-looking statements.” These risks and uncertainties include, but are not limited to our need to
raise  additional  capital,  our  ability  to  continue  as  a  going  concern,  regulatory  approval  of  our  NurOwn®  treatment  candidate,  the
success of our product development programs and research, regulatory and personnel issues, development of a global market for our
services, the ability to secure and maintain research institutions to conduct our clinical trials, the ability to generate significant revenue,
the  ability  of  our  NurOwn®  treatment  candidate  to  achieve  broad  acceptance  as  a  treatment  option  for  ALS,  PMS,  AD  or  other
neurodegenerative  diseases,  our  ability  to  manufacture  and  commercialize  our  NurOwn®  treatment  candidate,  obtaining  patents  that
provide meaningful protection, competition and market developments, our ability to protect our intellectual property from infringement
by third parties, heath reform legislation, demand for our services, currency exchange rates and product liability claims and litigation,
disruptions  in  our  business  due  to  the  COVID  19  outbreak,  including  our  clinical  development  activities,  and  other  factors  described
under  “Risk  Factors”  in  this  annual  report  on  Form  10-K  for  the  fiscal  year  ended  December  31,  2020.  These  “forward-looking
statements” are based on certain assumptions that we have made as of the date hereof. To the extent these assumptions are not valid, the
associated “forward-looking statements” and projections will not be correct. Although we believe that the expectations reflected in these
“forward-looking statements” are reasonable, we cannot guarantee any future results, levels of activity, performance, or achievements. It
is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it
should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end
of each quarter or the year. Although these expectations may change, we may not inform you if they do and we undertake no obligation
to  do  so,  except  as  required  by  applicable  securities  laws  and  regulations.  We  caution  investors  that  our  business  and  financial
performance  are  subject  to  substantial  risks  and  uncertainties.  In  evaluating  our  business,  prospective  investors  should  carefully
consider  the  information  set  forth  under  the  caption  “Risk  Factors”  in  this  annual  report  on  Form  10-K  for  the  fiscal  year  ended
December 31, 2020, in addition to the other information set forth herein and elsewhere in our other public filings with the Securities and
Exchange Commission (“SEC”).

Item 1.        BUSINESS.

Company Overview

BrainStorm Cell Therapeutics Inc. is a leading biotechnology company committed to the development and commercialization of best-in-
class  autologous  cellular  therapies  for  the  treatment  of  neurodegenerative  diseases  including:  Amyotrophic  Lateral  Sclerosis  (“ALS”,
also known as Lou Gehrig’s disease); Progressive Multiple Sclerosis (“PMS”); Alzheimer's disease (AD); and other neurodegenerative
diseases. NurOwn®, our proprietary platform, leverages cell culture methods to induce autologous bone marrow-derived mesenchymal
stem  cells  (MSCs)  to  secrete  high  levels  of  neurotrophic  factors  (NTFs),  modulate  neuroinflammatory  and  neurodegenerative  disease
processes, promote neuronal survival and improve neurological function.

NurOwn® has been evaluated in a Phase 3 ALS trial, is currently being evaluated in a Phase 2 PMS clinical trials, and is planned to be
evaluated in a Phase 2 AD clinical trial. We announced top-line data from our Phase 3 ALS trial on November 17, 2020. The U.S. Phase

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2 PMS trial faced slight delays in enrollment due to the COVID- 19 pandemic, but as of June 2020, all the trial sites were back on track
to continue with the trial. On December 18, 2020, we announced the completion of all dosing in the study participants in the trial and
expect  topline  clinical  trial  results  by  the  end  of  the  first  quarter  of  2021.  On  June  24,  2020,  we  announced  a  new  clinical  program
focused on the development of NurOwn® as a treatment for AD. As part of the newly announced program, we are planning a multi-
national Phase 2 clinical trial in Europe to evaluate the safety and preliminary efficacy of NurOwn® treatment in patients with prodromal
to mild AD.

Our wholly-owned Israeli subsidiary, BrainStorm Cell Therapeutics Ltd. (“Israeli Subsidiary”), holds exclusive rights to commercialize
NurOwn® technology through a licensing agreement with Ramot (“Ramot”), the technology transfer company of Tel Aviv University,
Israel. Our Israeli Subsidiary was granted approval by the Israeli Ministry of Health (“MoH”) to treat ALS patients with NurOwn® under
the Hospital Exemption Pathway (“HE”).

NurOwn® has a strong and comprehensive intellectual property portfolio and was granted Fast Track designation by the U.S. Food and
Drug  Administration  (FDA)  and  Orphan  Drug  status  by  the  FDA  and  the  European  Medicines  Agency  (EMA)  for  ALS.  For  more
information, visit BrainStorm’s website at www.brainstorm-cell.com.

We currently employ 40 employees in the United States and in Israel. Most of the senior management team is based in the United States,
and all of our ongoing clinical trial sites for ALS and PMS are in the United States. The clinical trial sites for our planned AD trial will
be in Europe. Our R&D center is located in Petach Tikva, Israel. In addition, we currently lease a GMP certified manufacturing facility in
Jerusalem, Israel, and have recently leased a new cleanroom facility, which includes three state-of-the-art cleanrooms, at the Tel Aviv
Sourasky Medical Center to manufacture NurOwn® mainly for expanding our production capacity into The European Union (EU) and
the local Israeli market.

The pandemic caused by the novel strain of coronavirus, SARS-CoV 2 (COVID-19) disease has currently impacted and may continue to
adversely  impact  our  business,  including  our  preclinical  studies  and  clinical  trials.  In  December  2019,  a  novel  strain  of  coronavirus,
surfaced in Wuhan, China. Since then, COVID- 19 has spread worldwide, significantly impacting the United States, Europe and Israel,
where the Company conducts its operations, as well as its clinical trials for NurOwn®. In response to the spread of COVID-19 and to
ensure safety of employees and continuity of business operations, we closed our offices, with our administrative employees continuing
their work remotely and limited the number of staff in any given research and development laboratory. Our research and development
laboratory in Israel and manufacturing sites in U.S. and in Israel remain open. The full extent to which the COVID-19 pandemic will
directly  or  indirectly  impact  our  business,  results  of  operations  and  financial  condition  will  depend  on  future  developments  that  are
highly uncertain and cannot be accurately predicted at this time, including new information that may emerge concerning COVID-19, the
actions  taken  to  contain  it  or  treat  its  impact  and  the  economic  impact  on  local,  regional,  national  and  international  markets.  Our
management team is actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers,
industry,  and  workforce.  For  additional  information  on  risks  posed  by  the  COVID-19  pandemic,  please  see  Part  II,  Item  1A  –  Risk
Factors – Risks Related to the COVID-19 Pandemic.

2020 and Recent Highlights

* We completed dosing of all participants in our Phase 3 ALS trial in July 2020, and announced top-line data from this trial on
November  17,  2020.  Results  from  the  trial  showed  that  NurOwn®  was  generally  well  tolerated  in  the  population  of  rapidly
progressing  ALS  patients.  While  showing  a  numerical  improvement  in  the  treated  group  compared  to  placebo  across  the
primary  and  key  secondary  efficacy  endpoints,  the  trial  did  not  reach  statistically  significant  results.  In  an  important,  pre-
specified  subgroup  with  early  disease  based  on  ALS  Functional  Rating  Score  (“ALSFRS-R”)  baseline  score  35,  NurOwn®
demonstrated  a  clinically  meaningful  treatment  response  across  the  primary  and  key  secondary  endpoints  and  remained
consistent  with  our  pre-trial,  data-derived  assumption.  In  this  subgroup,  there  were  34.6%  responders  who  met  the  primary
endpoint  definition  on  NurOwn  and  15.6%  on  Placebo  (p=0.288),  and  the  average  change  from  baseline  to  week  28  in
ALSFRS-R  total  score  was  -1.77  on  NurOwn  and  -3.78  on  Placebo  (p=0.198),  an  improvement  of  2.01  ALSFRS-R  points
favoring NurOwn®. When following the SAP to implement sensitivity to the primary endpoint, there is a slight change in the
percentage  of  responders  but  no  P  value  change.  No  new  safety  concerns  were  identified.  Following  the  completion  of  our
phase  3  ALS  trial,  we  are  diligently  pursuing  next  steps,  including  active  discussions  with  the  FDA  to  identify  regulatory
pathways  that  may  support  NurOwn®’s  approval  in  ALS.  We  are  also  in  active  dialog  with  the  FDA  around  our  Chemistry,
Manufacturing and Controls (CMC) plans for registration, and completed a successful meeting in December 2020.

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* Our Phase 2 trial of NurOwn® in Progressive Multiple Sclerosis (PMS), entitled ‘A Phase 2, open-label, multicenter study to
evaluate  the  safety  and  efficacy  of  repeated  administration  of  NurOwn®  (Autologous  Mesenchymal  Stem  Cells  Secreting
Neurotrophic Factors; MSC-NTF cells) in participants with Progressive Multiple Sclerosis (PMS),’ is ongoing at 5 leading U.S.
Multiple Sclerosis centers. The Phase 2 PMS trial faced slight delays in enrollment due to the COVID-19 pandemic. Scheduled
March and April 2020 new patient enrollments were deferred to May 2020 due to site closures related to COVID-19. As of June
2020, all the trial sites were back on track to continue with the trial. On December 18, 2020, we announced the completion of
all dosing in the study participants in the trial and expect topline clinical trial results by the end of the first quarter of 2021.

* On March 6, 2020, we entered into a distribution agreement with Raymond James & Associates, Inc. (the “Agent”), pursuant to
which we were able to sell from time to time, through the Agent, shares of Common Stock, having an aggregate offering price
of up to $50,000,000 (the “March 6, 2020 ATM”). Sales under the March 6, 2020 ATM were made by any method permitted by
law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including,
without  limitation,  sales  made  directly  on  the  Nasdaq  Capital  Market,  on  any  other  existing  trading  market  for  the  Shares,
through a market maker or as otherwise agreed by the Company and the Agent. We sold an aggregate of 2,446,64 shares of
Common  Stock  pursuant  to  the  March  6,  2020  ATM  at  an  average  price  of  $9.45  per  share,  raising  gross  proceeds  of
approximately $23.11 million. The March 6, 2020 ATM Distribution Agreement was amended and restated in its entirety on
September 25, 2020 (the “September 25, 2020 ATM”) (please see details below).

* On  March  7,  2019,  the  Israeli  MoH  approved  our  treatment  of  up  to  13  ALS  patients  with  NurOwn®  under  the  Israeli  HE
regulatory  pathway.  This  approval  expired  on  March  7,  2020.  Ichilov  Hospital  and  the  Company  have  since  then  received
approval from the MoH for the extension of the program. Based on the approval, the Company has enrolled 12 out of the first
13 patients under the HE regulatory pathway as of December 31, 2020 and intends to enroll the maximum number of patients
that have been approved. The Company is currently collecting clinical data for patients who have already received treatment at
the Ichilov Hospital. Thus far, the Company has received $3.4 million in gross proceeds in connection with the treatment of the
aforementioned patients.

* On  April  3,  2020,  we  announced  that  our  Israeli  Subsidiary  has  been  awarded  a  non-dilutive  grant  of  approximately  $1.5
million by the Israel Innovation Authority (IIA). The grant enables the Company to continue development of advanced cellular
manufacturing  capabilities,  furthers  the  development  of  MSC-derived  exosomes  as  a  novel  therapeutic  platform,  and  will
ultimately enable BrainStorm to expand its therapeutic pipeline in neurodegenerative disorders. As of December 31, 2020, the
Israeli Subsidiary has received $940,000 out of the $1.5 million awarded.

* On  May  7,  2020,  we  announced  that  we  will  be  leasing  a  new  cleanroom  facility,  which  includes  three  state-of-the-art
cleanrooms, at the Tel Aviv Sourasky Medical Center to manufacture NurOwn® for the European Union (EU). The new facility
will  significantly  increase  our  capacity  to  manufacture  and  ship  its  product  into  the  EU  and  the  local  Israeli  market.  The
cleanroom facility is part of Sourasky’s Institute for Advanced Cellular Therapies.

* On June 9, 2020, we announced that The ALS Association and I AM ALS have awarded us a combined grant of $500,000 to

support an ALS biomarker research study.

* On June 15, 2020, we announced that we have been granted Small and Medium-Sized Enterprise (SME) status by the European

Medicines Agency’s (EMA) Micro, Small and Medium-Sized Enterprise (SME) office.

* On June 24, 2020, we announced a new clinical program focused on the development of NurOwn® as a treatment for AD. As
part of the newly announced program, we are planning a multi-national Phase 2 clinical trial in Europe to evaluate the safety
and preliminary efficacy of NurOwn® treatment in patients with prodromal to mild AD. The 52-week, open-label, proof-of-
concept clinical trial in Europe is designed to evaluate NurOwn® in 40 participants with prodromal to mild AD. It is currently
expected  to  be  conducted  at  the  VU  University  Medical  Center  (Amsterdam),  Pitié-Salpêtrière  Hospital  (Paris),  and  other
clinical trial sites in the Netherlands and France.

* On June 29, 2020, our Company’s shares joined the Russell 2000® Index and the broad-market Russell 3000® Index.

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* On  July  23,  2020,  we  announced  a  groundbreaking  pre-clinical  study  of  NurOwn®  derived  Exosome-based  treatment  for
COVID-19  acute  respiratory  distress  syndrome  (“ARDS”).  Intratracheal  administration  of  exosomes  extracted  from  MSC’s
using  NurOwn®  technology  resulted  in  statistically  significant  improvement  in  multiple  lung  parameters  in  a  mouse  model.
With  this  study,  the  Company  has  successfully  completed  its  first  milestone  in  developing  an  innovative  exosome-based
platform-technology for the treatment of severe COVID-19 infection.

* On  August  19,  2020,  we  announced  the  publication  of  a  Letter  to  the  Editor  titled,  "Effects  of  MSC-NTF  cells  on  T  and  B

regulatory cell function in ALS" in the journal Amyotrophic Lateral Sclerosis and Frontotemporal Degeneration.

* On  August  25,  2020,  we  announced  the  acceptance  of  a  clinical  abstract  documenting  an  association  between  magnetic
resonance  imaging  (MRI)  measures  and  functional  improvement  in  a  prospective  natural  history  cohort  of  patients  with
progressive multiple sclerosis (PMS) matched to the NurOwn® Phase 2 inclusion criteria. The data was presented as a poster
on  September  11-13  at  the  eighth  joint  virtual  meeting  of  the  Americas  Committee  for  Treatment  and  Research  in  Multiple
Sclerosis (ACTRIMS) and the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) and will be
important in the analysis of our Phase 2 outcomes.

* On  September  16,  2020,  we  announced  that  the  Japanese  Patent  Office  (JPO)  has  granted  Brainstorm's  Japanese  Patent,

number: 6,753,887, titled: “Methods of Generating Mesenchymal Stem Cells Which Secrete Neurotrophic Factors”.

* On  September  25,  2020,  we  entered  into  an  Amended  and  Restated  Distribution  Agreement  (the  “Distribution  Agreement”)
with SVB Leerink LLC (“Leerink”) and Raymond James & Associates, Inc. (“Raymond James” and, together with Leerink, the
“Agents”) pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock, having an
aggregate offering price of up to $45,000,000, which aggregate amount includes any amount unsold pursuant to the March 6,
2020 ATM (the “September 25, 2020 ATM”). Sales under the September 25, 2020 ATM are made by any method permitted by
law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including,
without  limitation,  sales  made  directly  on  the  Nasdaq  Capital  Market,  on  any  other  existing  trading  market  for  the  Shares,
through  a  market  maker  or  as  otherwise  agreed  by  the  Company  and  the  Agents.  The  Distribution  Agreement  amends  and
restates in its entirety the Company’s prior agreement in connection with the March 6, 2020 ATM. During the quarter ended
December 31, 2020, we sold an aggregate of 3,564,385 shares of Common Stock pursuant to the September 25, 2020 ATM at
an average price of $6.10 per share, raising gross proceeds of approximately $21.8 million.

* On October 22, 2020, we announced a partnership with Catalent, the leading global provider of advanced delivery technologies,
for the manufacture of our Mesenchymal Stem Cell Platform Therapy NurOwn®, which is being currently investigated for the
treatment of ALS.

* On October 26, 2020, we announced the selection of Rapid Reshore & Development (RR&D) as our partner to expedite site
selection and design services for a state-of-the-art manufacturing facility for NurOwn® (autologous MSC-NTF) in the U.S.

* On November 17, 2020 we announced topline results from our NurOwn® Phase 3 ALS Study.

* On  December  14,  2020,  we  announced  the  NurOwn®  Expanded  Access  Program  through  which  NurOwn®  will  be  made

available for ALS patients who completed all Phase 3 clinical trial assessments and meet specific eligibility criteria.

* On December 18, 2020, we announced that all dosing has been completed in the ongoing Phase 2 trial evaluating NurOwn®

(MSC-NTF cells) as a treatment for PMS and expect top-line clinical trial results by the end of the first quarter of 2021.

* On January 20, 2021 we announced the peer-reviewed publication of a preclinical study in the journal Stem Cell and Research
Therapy. The study, entitled "MSC-NTF (NurOwn®) exosomes: a novel therapeutic modality in the mouse LPS-induced ARDS
model,"  evaluated  the  use  of  NurOwn®  (MSC-NTF  cell)  derived  exosomes  in  a  mouse  model  of  acute  respiratory  distress
syndrome (ARDS).

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NurOwn® Proprietary Technology

NurOwn®  technology  is  based  on  an  innovative  manufacturing  protocol,  which  induces  the  differentiation  of  purified  and  expanded
bone marrow-derived mesenchymal stem cells (“MSC”) and consistently generates cells that release high levels of multiple neurotrophic
factors  (“MSC-NTF”  cells)  to  modulate  neuroinflammatory  and  neurodegenerative  disease  processes,  promote  neuronal  survival  and
improve neurological function. These factors are known to be critical for the growth, survival and differentiation of neurons, including:
glial-derived neurotrophic factor (“GDNF”); brain-derived neurotrophic factor (“BDNF”); vascular endothelial growth factor (“VEGF”);
and hepatocyte growth factor (“HGF”), among others. GDNF is one of the most potent survival factors for peripheral motor neurons and
have  demonstrated  important  neuroprotective  effects  in  ALS,  PMS,  AD  and  other  neurodegenerative  diseases  as  well  as  modulating
neuroinflammation, a prominent, consistent and early feature of these diseases.

NurOwn® manufacturing involves a multi-step process that includes the following: harvesting and isolating undifferentiated stem cells
from  the  patient's  own  bone  marrow;  processing  of  cells  at  the  manufacturing  site;  cryopreservation  of  MSC  to  enable  multiple
treatments  from  a  single  bone  marrow  sample;  and  intrathecal  (“IT”)  injection  of  MSC-NTF  cells  into  the  same  patient  by  standard
lumbar  puncture.  This  administration  procedure  does  not  require  hospitalization  and  has  been  shown  to  be  generally  well  tolerated  in
multiple CNS clinical trials to date. The completed NurOwn® U.S. Phase 3 ALS study, the ongoing NurOwn® U.S. Phase 2 PMS study
and the planned EU Phase 2 clinical trial in prodromal to mild AD, all evaluated or are evaluating the therapeutic potential of repeated
intrathecal MSC-NTF cell administration (three doses at bi-monthly intervals).

The  proprietary  technology  and  manufacturing  processing  of  NurOwn®  (MSC-NTF  cells)  for  clinical  use  is  conducted  in  full
compliance with current Good Manufacturing Practice (“cGMP”). The NurOwn® proprietary technology is fully owned to or developed
by  our  Israeli  Subsidiary.  All  granted  patents  related  to  NurOwn®  (MSC-NTF  cells)  manufacturing  process  are  fully  assigned  to  or
owned by our Israeli Subsidiary (please see Intellectual Property section for details).  

The NurOwn® Transplantation Process

● Bone marrow aspiration from the patient;
● MSC Isolation and propagation;
● MSC Cryopreservation;
● MSC thawing and differentiation into neurotrophic-factor secreting (MSC-NTF; NurOwn®) cells; and
● Autologous transplantation into the patient’s cerebrospinal fluid by IT injection (standard lumbar puncture).

Differentiation before Transplantation

We  believe  that  the  ability  to  induce  autologous  adult  mesenchymal  stem  cells  into  differentiated  MSC-NTF  cells  makes  NurOwn®
uniquely suited for the treatment of neurodegenerative diseases.

The specialized MSC-NTF cells secrete multiple neurotrophic factors and immunomodulatory cytokines that may result in:

Protection of existing neurons;
Promotion of neuronal repair;

*
*
* Neuronal functional improvement; and
*

Immunomodulation and reduced neuroinflammation.

Autologous (Self-transplantation)

The NurOwn® technology platform is autologous, using the patient’s own bone-marrow derived stem cells for “self-transplantation.” In
autologous transplantation, there is no introduction of unrelated donor antigens that may lead to alloimmunity, no risk of rejection and no
need for treatment with immunosuppressive agents, which can cause severe and/or long-term side effects. In addition, the use of adult
stem cells is free of several ethical concerns associated with the use of embryonic-derived stem cells in some countries.

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NurOwn® ALS Clinical Program

We  announced  top-line  data  from  the  Phase  3  clinical  trial  of  NurOwn®  in  ALS  on  November  17,  2020.  We  have  been  granted  Fast
Track designation by the U.S. Food and Drug Administration (“FDA”) for this indication, and been granted Orphan Drug Status, in the
U.S. and Europe, which provides us the potential for an extended period of exclusivity.

Phase 1/2 ALS Open Label Trials

We have completed two early stage Phase 1/2 and 2 open-label clinical trials of NurOwn® in patients with ALS at the Hadassah Medical
Center  (“Hadassah”)  in  Jerusalem,  Israel,  as  well  as  a  Phase  2  double-blind,  placebo-controlled,  multicenter  clinical  trial  at  three
prestigious  U.S.  Medical  centers  -  the  Massachusetts  General  Hospital  (MGH)  in  Boston,  Massachusetts  Memorial  Hospital  in
Worcester, Massachusetts, and the Mayo Clinic in Rochester, Minnesota - all highly experienced in the management and investigation of
ALS.

The  first  two  open-label  trials  were  approved  by  the  Israeli  MoH.  The  first-in-human  trial,  a  Phase  1  safety  and  efficacy  trial  of
NurOwn®  administered  either  intramuscularly  or  intrathecally  in  12  ALS  patients,  was  initiated  in  June  2011.  In  the  Phase  2  dose-
escalating  study,  14  ALS  patients  were  administered  NurOwn®  by  a  combined  route  of  intramuscular  and  intrathecal  administration.
These studies demonstrated the safety of NurOwn® by both routes of administration and showed preliminary signs of efficacy.

In January 2016, the results of the two completed Phase 1/2 study and Phase 2 open label trials were published in JAMA Neurology. This
demonstrated  a  slower  rate  of  disease  progression  following  MSC-NTF  cell  transplantation  as  measured  by  the  ALSFRS-R,  the  gold
standard for the evaluation of ALS functional status, and Forced Vital Capacity (“FVC”), a measure of pulmonary function, as well as
positive trends in the rate of decline of muscle volume and the compound motor axon potential (“CMAPs”). This was the first published
clinical data using autologous mesenchymal stem cells, induced under culture conditions to produce NTFs, with the potential to deliver a
combined neuroprotective and immunomodulatory therapeutic effect in ALS and potentially modify the course of this disease.

Phase 2 ALS Randomized Trial

The Phase 2 U.S. study was conducted under an FDA Investigational New Drug (“IND”) application. This randomized, double-blind,
placebo-controlled multi-center U.S. Phase 2 clinical trial evaluating NurOwn® in ALS patients was conducted at three clinical sites: (i)
the Massachusetts General Hospital (MGH) in Boston, (ii) Massachusetts Memorial Hospital in Worcester, Massachusetts, and (iii) the
Mayo Clinic in Rochester, Minnesota. For this trial, NurOwn® was manufactured at the Connell and O’Reilly Cell Manipulation Core
Facility  at  the  Dana  Farber  Cancer  Institute  in  Boston  and  at  the  Human  Cellular  Therapy  Lab  at  the  Mayo  Clinic.  In  this  study,  48
patients were randomized 3:1 to receive NurOwn® or placebo.

Results  of  this  Phase  2  Study  were  published  in  the  peer  reviewed  Journal  ‘Neurology’.  The  publication  entitled  NurOwn,  Phase  2,
Randomized, Clinical Trial in Patients with ALS: Safety, Clinical, and Biomarker Results was published in December 2019.

Key findings from the trial were as follows:

*

The study achieved its primary objective, demonstrating that NurOwn® transplantation was safe and well-tolerated. There were
no discontinuations from the trial due to AEs and there were no deaths in the study. The most common adverse events (of mild
or moderate severity), were transient procedure-related AEs such as headache, back pain, pyrexia arthralgia and injection-site
discomfort, which were more commonly seen in the NurOwn®-treated participants compared to placebo.

* NurOwn®  achieved  multiple  secondary  efficacy  endpoints,  showing  evidence  of  a  clinically  meaningful  benefit.  Notably,
response  rates  in  the  ALS  functional  rating  scale  (48-point  ALSFRS-R  outcome  measure)  were  higher  in  NurOwn®-treated
participants, compared to placebo, at all study timepoints over 24 weeks.

* A pre-specified responder analysis examined percentage improvements in the post treatment ALSFRS-R slope (change/month)
compared to pre-treatment slope and demonstrated that a higher proportion of NurOwn® treated participants achieved a 100%
improvement in the post-treatment vs. pre-treatment slope, compared to the placebo group. This analysis also demonstrated

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that  a  higher  proportion  of  the  NurOwn®  treated  participants  achieved  a  1.5  point  per  month  or  greater  improvement  in  the
post-treatment vs. pre-treatment ALSFRS-R slope, compared to the placebo group.

*

The beneficial treatment effects were greater in the rapid progressor subgroup (in which pretreatment ALSFRS-R declined by 2
or more points in the three months pre-treatment).

* As an important confirmation of NurOwn®’s mechanism of action, levels of neurotrophic factors and inflammatory markers
were measured in the cerebrospinal fluid (“CSF”) samples collected from participants pre and two weeks post treatment. In the
samples of those participants treated with NurOwn®, statistically significant increases in levels of neurotrophic factors VEGF,
HGF and LIF and a statistically significant reduction in inflammatory markers MCP-1, SDF-1 and CHIT-1 were observed post-
transplantation. Furthermore, the observed reduction in inflammatory markers correlated with ALS functional improvements.
  These  clinical-biomarker  correlations  were  not  seen  in  placebo-treated  participants,  consistent  with  the  proposed  combined
neuroprotective and immunomodulatory mechanism of action of NurOwn® in ALS.

*

In  summary,  a  higher  proportion  of  NurOwn®  treated  participants,  particularly  those  with  more  rapid  disease  progression,
experienced  stabilization  or  improvement  in  ALS  function,  as  measured  by  the  post-treatment  vs.  pre-treatment  ALSFRS-R
slope change. These meaningful ALS clinical observations were evaluated in our Phase 3 study using repeat dosing in ALS
rapid progressors.

Phase 3 ALS Clinical Trial

Following  successful  completion  of  the  Phase  2  study,  we  conducted  a  Phase  3  trial  (a  multi-dose  double-blind,  placebo-controlled,
multicenter trial protocol) that was designed to generate data to potentially support a Biologic License Application (“BLA”) submission
in the U.S. for NurOwn® in ALS. The clinical trial completed enrollment in October 2019 of an enriched patient population of rapid
progressors (~50% of ALS patients) based on superior outcomes observed in the Phase-2 pre-specified sub-group. The study is registered
at www.clinicaltrials.gov (ClinicalTrials.gov Identifier: NCT03280056).

We  announced  top-line  data  from  our  Phase  3  ALS  trial  on  November  17,  2020.  Results  from  the  trial  showed  that  NurOwn®  was
generally well tolerated in the population of rapidly progressing ALS patients. However, the trial did not reach statistically significant
results.  No  new  safety  concerns  were  identified.  Following  the  completion  of  our  phase  3  ALS  trial,  we  are  diligently  pursuing  next
steps, including active discussions with the FDA to identify regulatory pathways that may support NurOwn®’s approval in ALS. We are
also in active dialog with the FDA around our Chemistry, Manufacturing and Controls (CMC) plans for registration, and completed a
successful meeting in December 2020.

Key findings from the trial were as follows:

* NurOwn® was generally well tolerated in this population of rapidly progressing ALS patients.

* While  showing  a  numerical  improvement  in  the  treated  group  compared  to  placebo  across  the  primary  and  key  secondary

efficacy endpoints, the trial did not reach statistically significant results.

*

The primary efficacy endpoint, a responder analysis evaluating the proportion of participants who experienced a 1.25 points per
month improvement in the post-treatment Revised Amyotrophic Lateral Sclerosis Functional Rating Scale (ALSFRS-R) slope
compared to pre-treatment, was powered on assumed treatment response rates of 35% on NurOwn® versus 15% on Placebo.
These estimates were based on available historical clinical trial data and the NurOwn® Phase 2 data. The primary endpoint was
achieved in 34.7% of NurOwn® participants versus 27.7% for Placebo (p=0.453). Therefore, the trial met the expected 35%
NurOwn® treatment group efficacy response assumption, however the high placebo response exceeded the placebo response
expected based on contemporary ALS trials. When following the SAP to implement sensitivity to the primary endpoint, there is
a slight change in the percentage of responders but no P value change.

*

The secondary efficacy endpoint measuring average change in ALSFRS-R total score from baseline to Week 28, was -5.52 with
NurOwn® versus -5.88 on Placebo, a difference of 0.36 (p= 0.693).

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*

In  an  important,  pre-specified  subgroup  early  in  the  disease  course  based  on  ALSFRS-R  baseline  score  greater  than  35,
NurOwn®  demonstrated  a  clinically  meaningful  treatment  response  across  the  primary  and  key  secondary  endpoints  and
remained consistent with our pre-trial, data-derived assumptions.  In this subgroup, there were 34.6% responders who met the
primary endpoint definition on NurOwn® and 15.6% on Placebo (p=0.288), and the average change from baseline to week 28
in ALSFRS-R total score was -1.77 on NurOwn® and -3.78 on Placebo (p=0.198), an improvement of 2.01 ALSFRS-R points
favoring NurOwn®.

* Cerebrospinal  fluid  (CSF)  biomarker  analyses  confirmed  that  treatment  with  NurOwn®  resulted  in  a  statistically  significant
increase of neurotrophic factors and reduction in neurodegenerative and neuroinflammatory biomarkers that was not observed
in the placebo treatment group.

*

Pre-specified  statistical  modeling  designed  to  predict  clinical  response  with  high  sensitivity  and  specificity  based  on  ALS
biomarkers and ALS Function confirmed that NurOwn® treatment outcomes could be predicted by baseline ALS function as
well as key CSF neurodegenerative and neuroinflammatory biomarkers.

We have developed a validated cryopreservation process for the long-term storage of MSC, that allows multiple doses of NurOwn® to be
created  from  a  single  bone  marrow  harvest  procedure  in  the  multi-dose  clinical  trial  and  to  avoid  the  need  for  patients  to  undergo
repeated  bone  marrow  aspiration.  A  validation  study  was  conducted  in  2017  comparing  NurOwn®  derived  from  fresh  MSC  to  those
derived  from  cryopreserved  MSC.  Company  scientists  were  successful  in  showing  that  the  MSC  can  be  stored  in  the  vapor  phase  of
liquid nitrogen for prolonged periods of time, while maintaining their characteristics. Cryopreserved MSC are capable of differentiating
into NurOwn®, similar to the NurOwn® derived from fresh MSC from the same patient/donor, prior to cryopreservation and maintain
their key functional properties including immunomodulation and neurotrophic factor secretion.

We contracted with City of Hope's Center for Biomedicine and Genetics to manufacture clinical supplies of NurOwn® adult stem cells
for our Phase 3 clinical study. City of Hope supported the manufacturing of NurOwn® and placebo for the participants treated in the
Phase 3 study. The Connell and O’Reilly Cell Manipulation Core Facility at the Dana Farber Cancer Institute (DFCI) in Boston was also
contracted to manufacture NurOwn® and placebo for Phase 3 ALS clinical study participants and commenced manufacturing in October
2018. DFCI core manufacturing facility has also been supplying NurOwn® for our Phase 2 PMS study.

On  October  22,  2020,  we  announced  a  partnership  with  Catalent,  the  leading  global  provider  of  advanced  delivery  technologies,  to
manufacture  NurOwn®,  which  is  being  currently  evaluated  for  the  treatment  of  ALS.  If  approved,  Catalent  will  be  our  partner  for
manufacturing commercial quantities of NurOwn® to treat patients with ALS. Our tech transfer to Catalent has already been initiated
and  will  allow  for  continuous  supply  of  NurOwn®  for  future  clinical  trials  and  initial  commercialization.  On  October  26,  2020,  we
announced  the  selection  of  RR&D  as  our  partner  to  expedite  site  selection  and  design  services  for  a  state-of-the-art  manufacturing
facility  for  NurOwn®  (autologous  MSC-NTF)  in  the  U.S.  Our  partnership  with  RR&D  to  help  us  establish  in-house  manufacturing
capabilities  will  accelerate  once  a  regulatory  pathway  is  clear.  These  partnerships  will  ensure  an  ongoing  cGMP  clinical  supply  of
NurOwn® and enable us to provide rapid treatment access to patients if we obtain regulatory approval.

Meeting with FDA senior management

In July 2019, the BrainStorm management team was invited to participate in a special in-person, high-level meeting with the senior
management of the FDA Drug and Biologics Centers and, ‘I AM ALS’, a grassroots ALS advocacy group advocating for an ALS cure.

FDA’s Dr. Peter Marks, Director of the Center for Biologics Evaluation and Research (CBER) and Dr. Janet Woodcock Director of the
Center for Drug Evaluation and Research (CDER) were in attendance with senior FDA staff. BrainStorm’s Phase 3 ALS principal
Investigators Dr. Robert Brown (Massachusetts Memorial Hospital, Worcester, Massachusetts) and Dr. Merit Cudkowicz (Massachusetts
General Hospital, Boston) joined by teleconference.

The meeting’s purpose was to discuss BrainStorm’s ongoing Phase 3 ALS clinical trial as well as efforts to speed treatment access to the
ALS patient community. The meeting enabled an open and effective dialogue between the FDA and BrainStorm, setting the stage for
future meetings to explore practical options to quickly bring our investigational treatment to those living with ALS.

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On February 11, 2020, the Company announced that it held a high-level meeting with the FDA to discuss potential NurOwn® regulatory
pathways for approval in ALS. In the planned meeting with senior CBER leadership and several leading U.S. ALS experts, the FDA
confirmed that the Phase 3 ALS trial is collecting relevant data critical to the assessment of NurOwn® efficacy. The FDA indicated that
they would look at the "totality of the evidence" in the expected Phase 3 clinical trial data. Furthermore, based on their detailed data
assessment, they are committed to working collaboratively with BrainStorm to identify a regulatory pathway forward, including
opportunities to expedite statistical review of data from the Phase 3 trial.

Following the completion of our phase 3 ALS trial, we are diligently pursuing next steps, including active discussions with the FDA to
identify regulatory pathways that may support NurOwn®’s approval in ALS. We are also in active dialog with the FDA around our
Chemistry, Manufacturing and Controls (CMC) plans for registration, and completed a successful meeting in December 2020.

ALS Expanded Access Program

On December 14, 2020, we announced the NurOwn® Expanded Access Program (EAP) through which NurOwn® will be made
available for ALS patients who completed all Phase 3 scheduled treatments and follow-up assessments and meet specific eligibility
criteria.

The protocol for the EAP was developed in partnership with the FDA to provide access to NurOwn® for Phase 3 clinical trial
participants who meet specific eligibility criteria. Initially, patients less severely affected by ALS, as measured by ALSFRS-R, will be
the first to receive treatment. This approach is informed by recently announced topline data from the Company's Phase 3 clinical trial.
According to the FDA, EAPs, alternatively known as "compassionate use" programs, provide a pathway for patients to receive an
investigational medicine for a serious disease or condition outside of a clinical trial.

Through the EAP, the six clinical centers participating in the Phase 3 NurOwn® trial will each have the opportunity to treat ALS patients
who completed the trial. These six centers are: University of California, Irvine; Cedars-Sinai Medical Center; California Pacific Medical
Center; Massachusetts General Hospital; University of Massachusetts Medical School; and Mayo Clinic. EAP treatment of ALS patients
who have completed the Phase 3 clinical trial will not interfere with data or regulatory timelines. The Dana Farber Cancer Institute will
initially manufacture the investigational therapy, assisted by on-site BrainStorm personnel.

Patient Access Programs (ALS)

The Company, working collaboratively with the Tel Aviv Sourasky Medical Center (Ichilov Hospital), was approved on March 7, 2019
to treat up to 13 ALS patients with NurOwn®, under the Israel Hospital Exemption regulatory pathway for Advanced Therapy Medicinal
Products  (ATMP),  which  was  adopted  by  the  Israeli  MoH  from  the  EMA  regulation.  This  pathway  enables  the  Company  to  make
NurOwn® accessible to ALS patients in Israel, for a fee. This approval expired on March 7, 2020. Ichilov Hospital and the Company has
since then received approval from the MoH for the extension of the program. Based on the approval, the Company has enrolled 12 out of
the first 13 patients under the HE regulatory pathway as of December 31, 2020 and intends to enroll the maximum number of patients
that  have  been  approved.  The  Company  is  currently  collecting  clinical  data  for  patients  who  have  already  received  treatment  at  the
Ichilov  Hospital.  Thus  far,  the  Company  has  received  $3.4  million  in  gross  proceeds  in  connection  with  the  treatment  of  the
aforementioned patients.

NurOwn®  in Progressive Multiple Sclerosis

On  December  15,  2018,  the  FDA  approved  the  Company's  IND  to  conduct  a  Phase  2  open  label  trial  of  repeated  intrathecal
administration  of  NurOwn®  in  PMS  (www.clinicaltrials.gov  Identifier  NCT03799718).  The  study  entitled  ‘A  Phase  2,  open-label,
multicenter  study  to  evaluate  the  safety  and  efficacy  of  repeated  administration  of  NurOwn®  (Autologous  Mesenchymal  Stem  Cells
Secreting Neurotrophic Factors; MSC-NTF cells) in participants with Progressive Multiple Sclerosis (MS)’ will recruit 20 PMS patients
at 5 leading US PMS centers.

On December 18, 2019 the clinical trial independent Data Safety Monitoring Board (DSMB) for the PMS study completed the first, pre-
specified interim analysis, of safety outcomes for the first 9 participants enrolled in the study. After careful review of all available clinical
trial data, the DSMB unanimously concluded “the study should continue as planned without any protocol modification”.

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The U.S. Phase 2 PMS trial faced slight delays in enrollment due to the COVID 19 pandemic, but as of June 2020, all the trial sites were
back on track to continue with the trial. On December 18, 2020, we announced the completion of dosing of all study participants and
expect topline clinical trial results by the end of the first quarter of 2021.

On November 14, 2019, we received a $495,330 grant from the National Multiple Sclerosis Society, through its Fast Forward program,
to advance BrainStorm’s Phase 2 open-label, multicenter clinical trial of repeated intrathecal administration of NurOwn® in participants
with progressive Multiple Sclerosis. As of December 31, 2020, we  received $321,965 on account of the grant from which $74,300 was
received during the year.

NurOwn® in Alzheimer’s Disease

We are designing a multi-national Phase 2 clinical trial to evaluate the safety, preliminary efficacy and pharmacodynamics of NurOwn®
treatment in patients with prodromal to mild AD. The 52-week study is expected to enroll 40 participants with prodromal to mild AD that
will  receive  three  intrathecal  NurOwn®  doses  8  weeks  apart.  Inclusion  criteria  include  well-defined  clinical  criteria  for  prodromal  to
mild AD as well as CSF biomarker defined criteria for AD.

The  Phase  2  clinical  trial  will  evaluate  safety,  preliminary  efficacy  and  pharmacodynamics  of  NurOwn®,  including  effects  on
inflammatory, Alzheimer’s-specific, neurodegenerative, and synaptic biomarkers, as well as a range of key clinical measures of cognition
and  function.  It  is  currently  expected  to  be  conducted  at  the  VU  University  Medical  Center  (Amsterdam),  Pitié-Salpêtrière  Hospital
(Paris), and other clinical trial sites in the Netherlands and France.

The lead investigators for the trial are two world renowned clinical experts in AD: Prof. Philip Scheltens, M.D., Ph.D., and Prof. Bruno
Dubois, M.D., Ph.D. Prof. Scheltens, the principal investigator (PI) of the study, is Professor of Cognitive Neurology and Director of the
Alzheimer  Centre  at  Amsterdam  University  Medical  Center.  He  has  extensive  experience  as  a  principal  investigator  in  many
international  clinical  trials  in  this  field.  Prof.  Dubois,  the  French  national  coordinator  of  the  study,  is  Professor  of  Neurology  at  the
Neurological Institute of the Salpétrière University Hospital. He is the past President of the Scientific Committee of France-Alzheimer,
President  of  IFRAD  (International  Fund  Raising  for  Alzheimer's  Disease)  as  well  as  a  member  of  the  European  Alzheimer  Disease
Consortium (EADC).

While  many  Alzheimer's  therapies  have  focused  on  a  single  target  such  as  tau  or  beta-amyloid,  NurOwn®  has  the  capability  to
simultaneously  target  multiple  relevant  biological  pathways  and  bring  a  comprehensive  approach  to  this  multifactorial  disease.
Importantly,  NurOwn®’s  mechanism  of  action  may  allow  the  therapy  to  enable  synergistic  combinations  with  anti-tau  or  anti-beta-
amyloid  treatments,  further  underscoring  its  potential  to  address  critical  unmet  needs  in  AD.  In  such  a  complex  disease,  addressing
inflammation and neuroprotection is an innovative approach and a first in the world for this technology.

On July 8, 2020, the Company hosted a KOL webinar to discuss its NurOwn® Phase 2 AD Program. The webinar featured presentations
from Prof. Scheltens and Prof. Dubois, the lead investigators in the trial. For more information on the KOL webinar and presentation,
visit BrainStorm's website at www.brainstorm-cell.com.

Non-Dilutive Funding

In July 2017, we were awarded a grant in the amount of $15,912,390 from the California Institute for Regenerative Medicine (CIRM) to
aid in funding the Company’s pivotal Phase 3 study of NurOwn®, for the treatment of ALS. We received $12,550,000 of the CIRM grant
from  2017  2019:  $9,050,000  from  2017  through  2018,  and  an  additional  $3,500,000  in  2019.  On  March  16,  2020,  we  received
$2,200,000  from  CIRM  for  achieving  our  pre-determined  milestones.  In  July  2020,  we  received  an  additional  $700,000  for  making
further progress in our Phase 3 study. On December 1, 2020, we received our final payment of $462,390 for achieving our last milestone.
We have now received in full the total amount of the $15,912,390 grant funding awarded by CIRM. The grant does not bear a royalty
payment commitment nor is the grant otherwise refundable.

On  November  14,  2019,  we  were  awarded  a  $495,330  grant  from  the  National  Multiple  Sclerosis  Society  (NMSS),  through  its  Fast
Forward  program,  for  serum  and  CSF  biomarkers  analysis  in  BrainStorm’s  Phase  2  open-label,  multicenter  clinical  trial  of  repeated
intrathecal  administration  of  NurOwn®  in  participants  with  PMS.  As  of  December  31,  2020,  we  have  received  $321,965  out  of  the
$495,330 awarded.

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On April 3, 2020, we announced that our wholly owned subsidiary, BrainStorm Cell Therapeutics Ltd., has been awarded a new non-
dilutive  grant  of  approximately  $1.5  million  by  the  Israel  Innovation  Authority  (“IIA”).  The  grant  enables  the  Company  to  continue
development  of  advanced  cellular  manufacturing  capabilities,  furthers  development  of  MSC-derived  exosomes  as  a  novel  therapeutic
platform, and will ultimately enable BrainStorm to expand the therapeutic pipeline in neurodegenerative disorders. As of December 31,
2020, we have received $940,000 out of the $1.5 million awarded.

On June 9, 2020, we announced that The ALS Association and I AM ALS have awarded us a combined grant of $500,000 to support an
ALS  biomarker  research  study.  The  grant  will  be  used  to  draw  insights  from  data  and  samples  collected  from  patients  enrolled  in
BrainStorm's ongoing Phase 3 clinical trial of its NurOwn® treatment, and to further the understanding of critical biomarkers associated
with treatment response for people with ALS. As of December 31, 2020, we have received $200,000 out of $500,000 awarded.

Intellectual Property Updates in 2020

A  key  element  of  our  overall  strategy  is  to  establish  a  broad  portfolio  of  patents  and  other  methods  described  below  to  protect  its
proprietary technologies and products. BrainStorm is the sole licensee or assignee of 23 granted patents 2 allowed patents and 22 patent
applications in the United States, Canada, Europe, and Israel, as well as in additional countries worldwide, including countries in the Far
East  and  South  America  (in  calculating  the  number  of  granted  patents,  each  European  patent  validated  in  multiple  jurisdictions  was
counted as a single patent).

On  January  27,  2020,  the  Israeli  patent  Office  allowed  application  number  246943  titled  ‘Method  of  Qualifying  Cells’.  The  allowed
claims cover a method of qualifying whether a cell population is a suitable therapeutic for treating Amyotrophic Lateral Sclerosis (ALS)
and an isolated population of cells that secrete neurotrophic factors which are qualified useful as a therapeutic for treating ALS.

On  January  29,  2020,  the  European  Patent  Office  (EPO)  communicated  its  intention  to  grant  a  European  patent  titled  ‘Methods  of
Generating  Mesenchymal  Stem  Cells  which  secrete  Neurotrophic  Factors’.  The  allowed  claims  cover  the  method  for  manufacturing
MSC-NTF cells (NurOwn®).

On  February  18,  2020,  the  US  Patent  and  Trademark  Office  (USPTO)  issued  US  Patent  No.  10,564,149  titled  ‘Populations  of
Mesenchymal Stem Cells That Secrete Neurotrophic Factors’. The allowed claims cover a pharmaceutical composition for MSC-NTF
cells  secreting  neurotrophic  factors  (NurOwn®)  comprising  a  culture  medium  as  a  carrier  and  an  isolated  population  of  differentiated
bone marrow-derived MSCs that secrete neurotrophic factors.

On September 1, 2020, the Israeli Patent Office issued Israeli Patent No. 246943 titled ‘Method of Qualifying Cells’. The granted claims
include a cell population that secretes neurotrophic factors which is qualified useful as a therapeutic for treating ALS, and a method for
qualifying said population.

On  September  16,  2020,  the  Company  announced  that  the  Japanese  Patent  Office  (JPO)  has  granted  Brainstorm's  Japanese  Patent,
number: 6,753,887, titled: "Methods of Generating Mesenchymal Stem Cells Which Secrete Neurotrophic Factors". The allowed claims
cover  a  method  of  generating  cells  which  secrete  neurotrophic  factors  from  human  undifferentiated  mesenchymal  stem  cells  (MSCs)
derived from the bone marrow of a single donor. The said neurotrophic factors includes: brain derived neurotrophic factor (BDNF); glial
derived neurotrophic factor (GDNF); hepatocyte growth factor (HGF); and vascular endothelial growth factor (VEGF).

On  December  15,  2020,  the  Canadian  Patent  office  sealed  Patent  no.  2,937,305  titled  ‘Pharmaceutical  composition  comprising  bone-
marrow  derived  mesenchymal  stem  cells’.  The  granted  claims  include  a  pharmaceutical  composition  for  NurOwn®  (MSC-NTF  cells,
Mesenchymal  Stem  Cells  secreting  Neurotrophic  Factors),  comprising  a  culture  medium  as  a  carrier  and  an  isolated  population  of
differentiated bone marrow-derived MSCs that secrete neurotrophic factors

Patents protecting NurOwn® have been issued in the United States, Canada, Japan, Europe, Hong Kong, and Israel.

For a complete list of our patent portfolio, please refer to “Intellectual Property” section below.

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Scientific presentations in 2020

On January 12, 2020, Mr. Chaim Lebovits presented at the 3rd Annual Neuroscience Innovation Forum at the Marines’ Memorial Club
in San Francisco, California.

On  January  12,  2020,  Dr.  Ralph  Kern  MD,  MHSc  participated  on  a  Rare  &  Orphan  Diseases  Panel  at  the  3rd  Annual  Neuroscience
Innovation Forum at the Marines’ Memorial Club in San Francisco, California.

On January 24, 2020, Dr. Ralph Kern MD, MHSc delivered a podium presentation entitled “CIRM funded Stem Cell Clinical Trials in
California  –  Updates”  at  the  10th  Annual  California  ALS  Research  Summit  hosted  at  the  Cedars-Sinai  Medical  Center,  Los  Angeles,
California.

On February 11, 2020, Mr. Chaim Lebovits presented at the BIO CEO and Investor Conference at the Marriott Marquis in New York
City, New York.

On February 17, 2020, Dr. Ralph Kern MD, MHSc presented at the Noble Capital Markets’ Sixteenth Annual Investor Conference at the
Hard Rock Hotel and Casino, Hollywood, Florida.

On June 8, 2020, Dr. Ralph Kern MD, MHSc provided a corporate overview at the BIO Digital 2020 Virtual Conference.

On June 18, 2020, Dr. Ralph Kern MD, MHSc presented a corporate overview at the Raymond James Virtual Human Health Innovations
Conference.

On  August  13,  2020,  Dr.  Ralph  Kern  MD,  MHSc  presented  a  corporate  overview  at  the  40th  Annual  Canaccord  Genuity  Growth
Conference.

On September 9, 2020, Dr. Ralph Kern MD, MHSc made a presentation on "Stem Cells for neurological applications, clinical and stem
cells-based product development" at the Advanced Therapies & Expo 2020 Virtual Conference.

On  September  11,  the  Company  presented  a  poster  at  the  eighth  joint  virtual  meeting  of  the  Americas  Committee  for  Treatment  and
Research in Multiple Sclerosis (ACTRIMS) and the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS).

On September 14, 2020, Dr. Ralph Kern MD, MHSc participated in a panel discussion on neurodegenerative diseases at the 2020 CIRM
Grantee Virtual Conference.

On September 24, 2020, Dr. Ralph Kern MD, MHSc presented at the "WuXi Apptec - Collaborations That Transform Meeting (Multiple
Sclerosis)" Virtual Conference.

On  September  30,  2020,  Dr.  Stacy  Lindborg,  PhD  presented  a  poster  titled,  "Advancing  NurOwn®  for  ALS:  Phase  3  Clinical  Trial
Design" at the Annual Northeast ALS (NEALS) Virtual Meeting.

Between  October  12-16,  2020,  Dr.  Stacy  Lindborg,  Ph.D.,  delivered  an  on-demand  webinar  at  the  2020  Cell  &  Gene  Meeting  on  the
Mesa, held virtually.

On October 20, 2020, the Company presented a poster titled, "MSC-NTF (NurOwn®) Exosomes: A Novel Therapeutic Modality in the
Mouse LPS-induced ARDS model Analysis" at the NYSCF Conference Meeting, being held virtually.

On November 9, 2020, the Company presented results from the Company's placebo controlled, randomized, double-blind Phase 3 trial
evaluating NurOwn® (MSC-NTF cells) as a treatment for ALS at the 31st International Symposium on ALS/MND virtual symposium.

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Research and Development

We  are  actively  engaged  in  research  and  development  to  evaluate  the  potential  for  clinical  development  of  NurOwn®  in
neurodegenerative  disorders,  neurodegenerative  eye  disease  and  acute  respiratory  distress  syndrome  (ARDS).  Research  is  currently
ongoing  to  develop  additional  specialized  derivative  cell  products  such  as  MSC-NTF  derived  Exosomes.  Exosomes  are  extracellular
nano-vesicles (secreted by the cells) that carry various molecular components of their cell of origin, including nucleic acids, proteins and
lipids. Exosomes can transfer molecules from one cell to another, thereby mediating cell-to-cell communication, ultimately regulating
many  cell  processes,  which  are  suitable  for  clinical  applications  in  multiple  neurodegenerative  diseases.  NurOwn®  derived  exosomes
may possess unique features for the enhanced delivery of therapeutics to the brain, due to their ability to cross the blood brain barrier and
to penetrate the brain and spinal cord.

In addition, NurOwn® derived exosomes have the potential to treat acute respiratory distress syndrome (ARDS) due to their ability to
penetrate  deep  tissues  and  decrease  the  inflammatory  response.  ARDS  is  a  type  of  respiratory  failure  associated  with  widespread
inflammation and lung damage mediated by dysregulated cytokine production and is one of the severe features of COVID-19.

MSC  exosomes  may  be  delivered  intravenously  or  directly  into  the  lungs  via  intratracheal  administration  have  several  practical
advantages over cellular therapy including ease of storage, stability, formulation and low immunogenicity.

The exosomes research efforts are primarily focused on:

1. Manufacturing of MSC-NTF exosomes from bone marrow derived MSC and umbilical cord derived MSC:

a. Developing and optimizing large scale cell culture processes using bioreactors, to generate exosomes.

b. Developing advanced scalable purification GMP methods that can be applied to commercial use.

2. Quantification, characterization of phenotype and exosome cargo.

3. Assessment of MSC-NTF exosomes potency and stability.

4. Establishment of a method for exosomes modification.

5. Preclinical experiments in neurodegenerative models.

In a pre-clinical study, we evaluated MSCs and NurOwn® derived exosomes in an LPS ARDS-mouse model, relevant to severe acute
lung injury. The results from the study showed that intratracheal administration of NurOwn® derived exosomes resulted in a statistically
significant improvement in multiple lung parameters. These included the clinically relevant factors: functional lung recovery, reduction
in pro-inflammatory cytokines and most importantly, attenuation of lung damage. Moreover, MSC-NTF cell derived exosomes exhibited
a superior effect when compared to treatment with exosomes derived from naïve MSCs from the same donor. On January 20, 2021 we
announced  the  peer-reviewed  publication  of  this  preclinical  study  in  the  journal  Stem  Cell  and  Research  Therapy.  The  study,  entitled
"MSC-NTF  (NurOwn®)  exosomes:  a  novel  therapeutic  modality  in  the  mouse  LPS-induced  ARDS  model,"  evaluated  the  use  of
NurOwn® (MSC-NTF cell) derived exosomes in a mouse model of acute respiratory distress syndrome (ARDS).

For  the  completed  and  ongoing  multidose  clinical  studies  in  ALS  and  PMS,  the  Company  has  improved  the  efficiency  of  NurOwn®
production and improved its stability, allowing manufacturing to take place at centralized clean room facilities from which NurOwn® is
distributed to the clinical trial sites, where the cells are then administered to patients. The Company is also engaged in several research
initiatives to further improve and scale-up manufacturing capacity and extend the shelf life of NurOwn®.

Corporate Information

We are incorporated under the laws of the State of Delaware. Our principal executive offices are located at 1325 Avenue of Americas,
28th Floor, New York, NY 10019, and our telephone number is (201) 488-0460. We also maintain an office in Petach Tikva, Israel. We
maintain a website at http://www.brainstorm-cell.com. The information on our website is not incorporated into this Annual Report on
Form 10-K.

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History

In 2004, the Company entered into a research and license agreement with Ramot to acquire certain stem cell technology, commenced
development of novel cell therapies for neurodegenerative diseases, and discontinued its previous business selling digital data recorders.
The  Company  was  reincorporated  in  the  State  of  Delaware  on  November  15,  2006,  and  previously  was  incorporated  in  the  State  of
Washington.  In  October  2004,  the  Company  formed  the  Israeli  Subsidiary.  The  Israeli  Subsidiary  formed  wholly  owned  subsidiaries
Brainstorm Cell Therapeutics UK Ltd., in the United Kingdom on February 19, 2013 (currently inactive), Advanced Cell Therapies Ltd.
in  Israel  on  June  21,  2018  and  Brainstorm  Cell  Therapeutics  Limited  in  Ireland  on  October  1,  2019.  A  reverse  stock  split  of  the
Company’s shares of Common Stock by a ratio of 1-for-15 was effected after market close on September 15, 2014, in connection with
the September 30, 2014 listing of the Company’s Shares of Common Stock on the Nasdaq Capital Market. Unless otherwise indicated,
all share numbers and exercise prices in this Annual Report on Form 10-K are split-adjusted.

The Company’s Common Stock trades on the Nasdaq Capital Market under the ticker symbol “BCLI.”

Company Business Strategy

Our business strategy is to develop and commercialize NurOwn® for the treatment of neurodegenerative diseases. Our highest priority is
to obtain regulatory approval of NurOwn® for ALS and the rapid execution of our U.S. open-label, multicenter Phase 2 clinical trial in
PMS and planned multi-national Phase 2 clinical trial in Europe for AD. We expect topline clinical trial results from our Phase 2 PMS
trial by the end of the first quarter of 2021.

We  are  leveraging  our  strong  existing  pre-clinical  data  to  advance  innovative  IND-enabling  pre-clinical  programs  in  several
neurodegenerative disease with high unmet medical need. We have developed NurOwn® exosome-based platform-technology to expand
our  technology  platform  and  pipeline.  The  most  advanced  preclinical  data  using  this  platform  technology  for  ARDS,  one  of  the  most
severe complications of COVID-19 pandemic, has recently been accepted for publication by Stem Cell Research & Therapy. The data
showed  that  intratracheal  administration  of  exosomes  extracted  from  MSC’s  using  NurOwn®  (MSC-NTF)  resulted  in  statistically
significant improvement in multiple lung parameters in a mouse model. MSC-NTF exosomes were superior to control in reducing ARDS
markers,  including  physiological  damage  as  well  as  increasing  oxygenation  levels.  With  this  study,  the  Company  has    successfully
completed  its  first  milestone  in  developing  an  innovative  exosome-based  platform-technology  for  the  treatment  of  severe  ARDS.  On
January 20, 2021 we announced the peer-reviewed publication of this preclinical study in the journal Stem Cell and Research Therapy.
The study, entitled "MSC-NTF (NurOwn®) exosomes: a novel therapeutic modality in the mouse LPS-induced ARDS model," evaluated
the use of NurOwn® (MSC-NTF cell) derived exosomes in a mouse model of acute respiratory distress syndrome (ARDS).

We are also engaged in strategic partnerships to expand our cGMP capabilities. Our tech transfer to Catalent has already been initiated
and will allow for continuous supply of NurOwn® for future clinical trials and initial commercialization, if approved. Our partnership
with  RR&D,  to  help  us  establish  in-house  manufacturing  capabilities,  will  accelerate  once  a  regulatory  pathway  is  clear.  These
partnerships will ensure an ongoing cGMP clinical supply of NurOwn® and enable us to provide rapid treatment access to patients if we
obtain regulatory approval.

We may also choose to seek a strategic partnership with a pharmaceutical or biotechnology company for the global commercialization of
NurOwn® for ALS, if approved, or to support the execution of additional BLA-enabling clinical programs in other neurodegenerative
diseases.

NurOwn® in CNS Disease

Our highest priority is to obtain regulatory approval of NurOwn® for ALS. We also strategically focused on fully executing the clinical
development of NurOwn® in PMS, AD as well as continuing our pre-clinical evaluation of the NurOwn® technology platform in other
CNS disorders based on our broad preclinical experience in ALS, PMS, AD, Huntington’s Disease and Autism.

Amyotrophic Lateral Sclerosis (ALS)

ALS, often referred to as “Lou Gehrig's disease,” is a progressive neurodegenerative disease that primarily affects motor nerve cells in
the brain and the spinal cord. Motor neurons reach from the brain to the spinal cord and from the spinal cord to the muscles throughout
the body. The progressive degeneration of the motor neurons in ALS patients lead to progressive weakness, respiratory failure and

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eventually, death. The median survival for ALS patients is between 2 and 5 years from the onset of symptoms. Across the world, the
prevalence of ALS is approximately 4-7 per 100,000. It is estimated that as many as 30,000 Americans have the disease at any given
time, with about 51,000 individuals affected in the territory of the European Single Market. Estimated annual treatment and health care
costs  for  advanced  stage  patients  can  be  as  high  as  $100,000-$200,000  per  annum.  Worldwide  it  is  estimated  that  there  are  450,000
patients with ALS.  

Treatment  decisions  are  typically  determined  by  the  patient's  symptoms,  preferences  and  the  stage  of  the  disease.  Approved  disease
modifying medications include:

* Riluzole –approved by the FDA to treat ALS. Riluzole extends the time to death or ventilation by several months; however, it

has not been shown to improve the daily functioning of ALS patients.

* Radicava (Edaravone) – a free radical scavenger- approved by FDA (May 2017) based on a single Phase 3 study carried out in

Japan.

Progressive Multiple Sclerosis (PMS)

Progressive Multiple Sclerosis (PMS) is characterized by the relentless accumulation of central nervous system injury due to peripheral
and compartmentalized inflammation, demyelination, axonal damage, and neuronal degeneration and results in increasing motor, visual,
and cognitive impairment and significant disability that impacts daily living, employment, and socioeconomic status. There is currently
no effective regenerative therapy for this disabling disease that affects approximately one million individuals in the US.

There are currently over 1.25 million people with PMS worldwide, with roughly 0.5 million of these patients located in the U.S. Over
10,000 new cases are diagnosed annually in the U.S., mostly affecting women between the ages of 20 and 50. Annual drug treatment
costs for PMS can be as much as $80,000 a year per patient.

The  lack  of  safe  and  effective  therapies  in  PMS,  the  intrinsic  immunomodulatory  properties  of  MSC-NTF  cells  and  the  potential  of
MSC-NTF secreted neurotrophic factors to promote neuronal repair and remyelination makes NurOwn® an attractive treatment option to
evaluate in PMS.

Alzheimer’s Disease (AD)

Alzheimer’s  Disease  (AD)  is  the  most  common  form  of  dementia,  a  progressive  brain  disease  that  slowly  destroys  memories  and
thinking  skills.  The  Alzheimer’s  pathology  starts  15-20  years  before  symptoms  appear.  Symptoms  usually  start  with  difficulty  storing
and retrieving new information. In advanced stages, symptoms include confusion, as well as mood and behavior changes, and inability to
perform basic life tasks. Throughout the disease process there is a steady, unstoppable death of brain cells.  This is a fatal disease with an
average time of 8 years from diagnosis to death.  No cure exists, but medications and management strategies may temporarily improve
symptoms, in a modest fashion.

Over 5 million people in the U.S. currently have AD. The number of Americans with AD is projected to triple to 16 million by 2050. In
the EU, it is estimated that greater than 7.5 million people who currently have AD and is projected to reach over 13 million by 2050.
Worldwide  about  50  million  people  have  some  form  of  dementia,  and  someone  in  the  world  develops  dementia  every  three  seconds.
Every 65 seconds someone in U.S. develops AD. By 2050 this is projected to be every 33 seconds. In the age group above 55, AD is the
most feared disease of all diseases including cancer. It is estimated that the potential healthcare cost savings from early diagnosis of AD
to be approximately $7.9 trillion.

Intellectual Property

We are committed to the protection of our technology and intellectual property with patents and other methods described below.

We  are  the  sole  licensee  or  assignee  of  23  granted  patents  2  allowed  patents  and  22  patent  applications  in  the  United  States,  Canada,
Europe, and Israel, as well as in additional countries worldwide, including countries in the Far East and South America (in calculating
the number of granted patents, each European patent validated in multiple jurisdictions was counted as a single patent).

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On  June  18,  2006,  an  International  Patent  Application  (Publication  No.  WO  2006/134602)  was  filed  entitled  "Isolated  Cells  and
Populations  Comprising  Same  for  the  Treatment  of  CNS  Diseases."  National  phase  applications  were  filed  in  many  jurisdictions
including US and Europe.

On February 11, 2014, the U.S. Patent and Trademark Office (“USPTO”) granted US patent, 8,647,874 which claims priority from this
PCT application. This patent relates to the production method of the Company's proprietary stem cells induced to secrete large quantities
of neurotrophic factors.  

On  September  3,  2014,  a  European  patent  was  granted  by  the  European  Patent  Office  (“EPO”)  which  claims  priority  from  WO
2006/134602. This patent (No. 1893747) has been validated in the following European countries: CH, CZ, DE, DK, ES, FR, GB, IE, IT
and NL. The granted claims relate to the method of generating the cells.

On January 30, 2018, the U.S. Patent and Trademark Office (“USPTO”) granted US patent, No. 9,879,225 which claims priority from
this same PCT application This patent relates to methods of treating amyotrophic lateral sclerosis (ALS) and Parkinson's disease using
mesenchymal stem cells that secrete neurotrophic factors, specifically glial derived neurotrophic factor (GDNF).

On May 26, 2009, an International Patent Application (Publication No. WO 2009/144718) was filed entitled "Mesenchymal stem cells
for the treatment of CNS diseases". National phase applications were filed in US, Europe and Israel.

On  March  4,  2014,  we  were  granted  U.S.  Patent  (No.  8,663,987)  which  claims  priority  from  WO  2009/144718.  The  claims  of  this
granted patent relate to the composition of cells.

On August 6, 2013, an International Patent Application (Publication No. WO 2014/024183) was filed entitled "Methods of generating
Mesenchymal  stem  cells  which  secrete  neurotrophic  factors".  National  phase  applications  were  filed  in  the  US,  Europe,  Hong  Kong,
Canada, Brazil, Japan and Israel.

A  divisional  patent  application  therefrom  was  granted  as  US  Patent  No.  8,900,574  on  December  2,  2014.  The  claims  of  this  granted
patent relate to a method of treating neurodegenerative disorders by administering MSC-derived cells which secrete BDNF and do not
secrete  bNGF.  The  neurodegenerative  diseases  include  Parkinson’s  disease,  amyotrophic  lateral  sclerosis  (ALS)  and  Huntingdon’s
disease.

A  subsequent  divisional  patent  application  therefrom  was  granted  on  October  25,  2016  as  United  States  Patent  No.  9,474,787  titled
"Mesenchymal Stem Cells for the Treatment of CNS Diseases. The granted claims cover mesenchymal stem derived-cells that secrete
neurotrophic  factors,  including  brain-derived  neurotrophic  factor  (BDNF)  and  glial  derived  neurotrophic  factor  (GDNF),  as  well  as
pharmaceutical compositions comprising these factors.  

In September 2015, we were granted patent No. 209604 by Israel’s Patent Office for our application titled “Mesenchymal stem cells for
the treatment of CNS diseases " which claims priority from WO 2009/144718. The claims cover the cell composition itself, the method
of generating and the use of the cells for treating any CNS disease or disorder.

In July 2018, the European Patent Office ("EPO") granted a Europe-wide patent for Patent No 2285951, which claims priority from WO
2009/144718.  The  allowed  claims  cover  methods  of  treating  ALS  using  mesenchymal  stem  cells  that  secrete  neurotrophic  factors,
including  brain  derived  neurotrophic  factor  (BDNF).  This  patent  will  provide  protection  for  MSC-NTF  cells  (NurOwn®)  in  the  EU
validated states until 2029.

In  August  2018,  the  USPTO  granted  US  Patent  No  10,052,363  which  relates  to  methods  of  treating  ALS,  Parkinson's  disease  and
Huntington Disease with NurOwn®. This patent will provide protection for MSC-NTF cells (NurOwn®) in the US until 2029.

On  July  6,  2018,  the  Japanese  Patent  Office  ("JPO")  granted  Japanese  patent  No.  6,362,596,  entitled:  'Methods  of  Generating
Mesenchymal Stem Cells Which Secrete Neurotrophic Factors” which claims priority from WO 2014/024183. This patent will provide
protection for MSC-NTF cells (NurOwn®) in Japan until 2033. The allowed claims cover a method of generating cells which secrete
brain  derived  neurotrophic  factor  (BDNF),  glial  derived  neurotrophic  factor  (GDNF),  hepatocyte  growth  factor  (HGF)  and  vascular
endothelial growth factor (VEGF).

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On August 24, 2018, the U.S. Patent and Trademark Office (“USPTO”) granted US Patent No. 10,046,010 titled 'Methods of Generating
Mesenchymal  Stem  Cells  Which  Secrete  Neurotrophic  Factors'.  Allowed  claims  cover  the  method  for  generating  MSC-NTF  cells
(NurOwn®) in industrial amounts for clinical practice. This patent will provide protection for MSC-NTF cells (NurOwn®) in the US
until 2033.

On October 10, 2018, the European Patent Office allowed the European Patent Application No. 13164650.7 titled “Mesenchymal stem
cells for the treatment of CNS diseases" which claims priority from WO 2009/144718. The allowed claims cover the isolated cells as
well  as  their  use  in  the  manufacture  of  a  medicament  for  treating  a  CNS  disease  or  disorder  (selected  from  the  group  consisting  of
Parkinson's,  multiple  sclerosis,  epilepsy,  amyotrophic  lateral  sclerosis,  stroke,  autoimmune  encephalomyelitis,  diabetic  neuropathy,
glaucomatous neuropathy, Alzheimer's disease and Huntingdon's disease)

On  December  21,  2018,  the  Israel  Patent  Office  granted  patent  No.  237124  titled  'Methods  of  Generating  Mesenchymal  Stem  Cells
Which Secrete Neurotrophic Factors'. The allowed claims cover the isolated population of cells, the method of manufacturing the cells,
and the use of the isolated population of cells for preparation of a medicament for treating a disease (consisting of a neurodegenerative
disease, a neurological disease and an immune disease etc.).

In March 2019, the European Patent Office ("EPO") granted a European-wide patent titled 'Mesenchymal Stem Cells for the treatment of
CNS Diseases.' The European Patent Application published in the European Patent Bulletin 19/13 on March 27, 2019, under Patent No.
2620493. The allowed claims cover the isolated cells as well as their use in the manufacture of a medicament for treating a CNS disease
or  disorder,  selected  from  the  group  consisting  of  Parkinson's,  multiple  sclerosis,  epilepsy,  amyotrophic  lateral  sclerosis,  stroke,
autoimmune encephalomyelitis, diabetic neuropathy, glaucomatous neuropathy, Alzheimer's disease and Huntingdon's disease.

On August 27, 2019, the Canadian Intellectual Property Office granted Canadian Patent No. 2,877,223 entitled ‘Methods of Generating
Mesenchymal Stem Cells which secrete Neurotrophic Factors’. The allowed claims cover the method for generating the Mesenchymal
Stem Cells Secreting Neurotrophic Factors (MSC-NTF cells).

On September 16, 2019, the United States Patent and Trademark Office (USPTO) issued a Notice of Allowance for BrainStorm's new
US  Patent  Application,  number:  15/113,105,  titled:  ‘Method  of  Qualifying  Cells'.  The  allowed  claims  cover  a  pharmaceutical
composition  for  MSC-NTF  cells  secreting  neurotrophic  factors  (NurOwn®)  comprising  a  culture  medium  as  a  carrier  and  an  isolated
population of differentiated bone marrow-derived MSCs that secrete neurotrophic factors. US Patent No. 10,564,149 for this application
was granted on February 18, 2020 and titled ‘Populations of Mesenchymal Stem Cells that secrete Neurotrophic Factors’.

On  October  21,  2019,  the  Japan  Patent  Office  (JPO)  issued  a  Decision  to  Grant  Japanese  Patent  Application,  number:  2016-548691,
titled: ‘Method of Qualifying Cells.’ The patent covers cell populations which are therapeutic for the treatment of ALS and the method of
qualifying the cells for therapeutic use.

On December 6, 2019, the Hong Kong patent office granted patent No. HK1182133 titled “Mesenchymal stem cells for the treatment of
CNS  diseases"  which  claims  priority  from  WO  2009/144718.  The  allowed  claims  cover  the  isolated  cells  as  well  as  their  use  in  the
manufacture  of  a  medicament  for  treating  a  CNS  disease  or  disorder,  selected  from  the  group  consisting  of:  Parkinson's,  multiple
sclerosis, epilepsy, amyotrophic lateral sclerosis, stroke, autoimmune encephalomyelitis, diabetic neuropathy, glaucomatous neuropathy,
Alzheimer's disease and Huntingdon's disease.

On  January  9,  2020,  the  European  Patent  Office  (EPO)  communicated  its  intention  to  grant  a  European  patent  titled  'Methods  of
Generating Mesenchymal Stem Cells which secrete Neurotrophic Factors' (Application No. 13767124.4). The allowed claims cover the
method for manufacturing MSC-NTF cells (NurOwn®).

On January 27, 2020, the Israeli Patent Office issued a Notice of Acceptance for Israeli patent application No. 246943 titled ‘Method of
Qualifying Cells'. The allowed claims cover the cells that secrete neurotrophic factors which are qualified to be useful as a therapeutic for
treating ALS and a method for qualifying said cell population.

On January 29, 2020, the European Patent Office (EPO) has communicated its intention to grant a European patent titled 'Methods of
Generating  Mesenchymal  Stem  Cells  which  secrete  Neurotrophic  Factors'.  The  allowed  claims  cover  the  method  for  manufacturing
MSC-NTF cells (NurOwn®).

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On  February  18,  2020,  the  US  Patent  and  Trademark  Office  (USPTO)  issued  US  Patent  No.  10,564,149  titled  ‘Populations  of
Mesenchymal Stem Cells That Secrete Neurotrophic Factors’. The allowed claims cover a pharmaceutical composition for MSC-NTF
cells  secreting  neurotrophic  factors  (NurOwn®)  comprising  a  culture  medium  as  a  carrier  and  an  isolated  population  of  differentiated
bone marrow-derived MSCs that secrete neurotrophic factors.

On  September  16,  2020,  the  Company  announced  that  the  Japanese  Patent  Office  (JPO)  has  granted  Brainstorm's  Japanese  Patent,
number: 6,753,887, titled: "Methods of Generating Mesenchymal Stem Cells Which Secrete Neurotrophic Factors". The allowed claims
cover  a  method  of  generating  cells  which  secrete  neurotrophic  factors  from  human  undifferentiated  mesenchymal  stem  cells  (MSCs)
derived from the bone marrow of a single donor. The said neurotrophic factors includes brain derived neurotrophic factor (BDNF); glial
derived neurotrophic factor (GDNF); hepatocyte growth factor (HGF); and vascular endothelial growth factor (VEGF).

On September 1, 2020, the Israeli Patent Office issued Israeli Patent No. 246943 titled ‘Method of Qualifying Cells’. The granted claims
include a cell population that secretes neurotrophic factors which is qualified useful as a therapeutic for treating ALS, and a method for
qualifying said population.

On  December  15,  2020,  the  Canadian  Patent  office  sealed  Patent  no.  2,937,305  titled  ‘Pharmaceutical  composition  comprising  bone-
marrow  derived  mesenchymal  stem  cells’.  The  granted  claims  include  a  pharmaceutical  composition  for  NurOwn®  (MSC-NTF  cells,
Mesenchymal  Stem  Cells  secreting  Neurotrophic  Factors),  comprising  a  culture  medium  as  a  carrier  and  an  isolated  population  of
differentiated bone marrow-derived MSCs that secrete neurotrophic factors.

Patents protecting NurOwn® have been issued in the United States, Canada, Japan, Europe, Hong-Kong and in Israel.

Additional  PCT  patent  applications  have  been  filed  and  National  phase  applications  are  currently  under  examination  in  several
jurisdictions  worldwide.  Specifically,  International  Patent  Application  WO  2018/015945  was  filed  on  July  17,  2017  and
WO/2019/198077 was filed on April 10, 2019.

The following table provides a description of our key patents and patent applications and is not intended to represent an assessment of
claims, limitations or scope. In some cases, a jurisdiction is listed as both pending and granted for a single patent family. This is due to
pending continuation or divisional applications of the granted case.

Family
No.
1

2

3

4

5

Patent Name/ Int. App. No.
Isolated Cells and Populations Comprising Same
for the Treatment of CNS
Diseases/PCT/IL2006/000699
Mesenchymal Stem Cells for The Treatment of CNS
Diseases PCT/ IL2009/000525

Methods of Generating Mesenchymal Stem Cells
Which Secrete Neurotrophic Factors /
PCT/IL2013/050660
Method of Qualifying Cells /PCT IL2015/050159

Populations of Mesenchymal Stem Cells that secrete
Neurotrophic Factors US 10,564,149
Pharmaceutical composition comprising bone-
marrow derived mesenchymal stem cells Canadian
Patent no. 2,937,305
Methods of treating ALS PCT/IL2017/050801

    Pending
  Jurisdictions

    Allowed
  Jurisdictions

US

    Granted
  Jurisdictions

Europe, US

    Expiry
  Date

2030

US, Israel,
Europe, Hong
Kong
US, Canada,
Japan, Israel,
Europe
US, Japan,
Israel

US

Canada

2032

2038

2040

2042

US

Brazil,

Hong Kong

Europe, Hong
Kong, , Brazil

US, Europe,
Israel, Japan, S.
Korea,
Australia,
Canada

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6

Cell-Type Specific Exosomes and Use Thereof
PCT/IL2019/050401

US, Europe,
Israel, Japan, S.
Korea,
Australia,
Canada

2043

Trademarks

NurOwn® is a registered trademark (application no. 85154891, filed October 18, 2010) for use in connection with “compositions of cells
derived  from  stem  cells  for  medical  purposes;  stem  cells  for  medical  purposes.”  US  Trademark  No.  4641441  for  NurOwn®  was
registered on November 18, 2014.

The patent applications of families #1 and #2 (see table above) as well as relevant know-how and research results are either licensed or
joint with Ramot. We intend to work with Ramot to protect and enhance our mutual intellectual property rights by filing continuations
and divisional patent applications. The current NurOwn® proprietary technology is fully owned by Brainstorm Cell Therapeutics Ltd.,
our  wholly-owned  subsidiary  (the  “Israeli  Subsidiary”).  All  granted  patents  related  to  NurOwn®  (MSC-NTF  cells)  manufacturing
process and clinical development (families #3 through #6) are fully assigned to and owned by Brainstorm Cell Therapeutics Ltd. New
discoveries arising in the course of research and development within the Company were and will be patented by us independently.

Research and License Agreement with Ramot

We have maintained a commercial relationship with Ramot, the technology transfer group within Tel Aviv University, since July 2004,
when the Company and Ramot entered into a Research and License Agreement (the “Original Agreement”). The Original Agreement
was amended in both March and May of 2006, when the parties signed, respectively, an Amended and Restated Research and License
Agreement (the “Amended and Restated Agreement”) and Amendment Number 1 to the Amended and Restated Agreement. Thereafter,
the  Company  and  Ramot  entered  into  a  Letter  Agreement  in  December  2009  which  further  amended  the  Amended  and  Restated
Agreement by releasing the Company from various duties and obligations (including the Company’s commitment to fund three (3) years
of additional Ramot research - a financial commitment of $1,140,000), while converting other payments due and owing to Ramot by the
Company into shares of Common Stock.  In December 2011, the Company assigned the Amended and Restated Agreement (as amended)
to its Israeli Subsidiary with the consent of Ramot, provided the Company agreed to guaranty the performance obligations of its Israeli
Subsidiary  thereunder.  The  Amended  and  Restated  Agreement  was  amended  in  both  April  2014  (Amendment  Number  2)  and  March
2016 (Amendment Number 3).

In  addition  to  the  foregoing,  on  April  30,  2014,  the  Israeli  Subsidiary  executed  a  consulting  agreement  (the  “Offen  Consulting
Agreement”)  with  Professor  Offen  of  Tel  Aviv  University,  which  expressly  replaced  their  previous  agreement  (signed  in  July  2004).
Pursuant to the Offen Consulting Agreement, Professor Offen granted our Israeli Subsidiary exclusive rights, title and interest in and to
all work product and deliverables resulting from the provision of his services thereunder, except that any new intellectual property arising
from  this  agreement  would  be  deemed  a  joint  invention  that  is  jointly  owned  by  both  our  Israeli  Subsidiary  and  Ramot.  No  joint
inventions resulted from this consulting agreement and it was terminated on January 18, 2018.

The primary focus of our agreements (and subsequent amendments) with Ramot has and continues to be the commissioning of a group of
scientists within Tel Aviv University to carry out research in the area of the stem-cell technology referenced above, and the granting of
rights to the Company (and later our Israeli Subsidiary, after the assignment referenced above) in the inventions, know-how and results
procured from such research (the “Ramot IP”).

In consideration for the rights granted to our Israeli Subsidiary in and to the Ramot IP, our Israeli Subsidiary is required to pay Ramot
royalties ranging between three percent (3%) and five percent (5%) of all net sales realized from the exploitation of the Ramot IP, as well
as  remittances  of  between  twenty  percent  (20%)  and  twenty-five  percent  (25%)  on  revenues  received  from  the  sub-licensing  of  the
Ramot IP.

Pursuant  to  the  third  amendment  of  the  Amended  and  Restated  Agreement  referenced  above,  Ramot  agreed  to  convert  the  exclusive
licenses then-existing, to outright transfers and assignments of the Ramot IP, thereby granting our Israeli Subsidiary ownership thereof.

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Government Regulation and Product Approval

We  intend  to  pursue  regulatory  approval  for  our  bone  marrow  derived  differentiated  neurotrophic-factor  secreting  cell  products,
NurOwn®, for autologous transplantation in patients by neurosurgeons in medical facilities in the U.S., Europe, Japan and Israel.

In January 2013, the EMA Committee for Advanced Therapies designated NurOwn® as an Advanced Therapy Medicinal Product.

U.S. Drug Development Process

The  FDA  regulates  drugs  under  the  Federal  Food,  Drug,  and  Cosmetic  Act,  or  FDCA,  and  implementing  regulations.  Drugs  are  also
subject  to  other  federal,  state  and  local  statutes  and  regulations.  Biologics  are  subject  to  regulation  by  the  FDA  under  the  FDCA,  the
Public  Health  Service  Act,  or  the  PHSA,  and  related  regulations  and  other  federal,  state  and  local  laws  and  regulations.  Biological
products include a wide variety of products including vaccines, blood and blood components, gene therapies, tissue and proteins. Unlike
most  prescription  products  made  through  chemical  processes,  biological  products  generally  are  made  from  human  and/or  animal
materials. To be lawfully marketed in interstate commerce, a biologic product must be the subject of a Biological License Application
(“BLA”), issued by the FDA on the basis of a demonstration that the product is safe, pure and potent, and that the facility in which the
product  is  manufactured  meets  standards  to  assure  that  it  continues  to  be  safe,  pure  and  potent.  The  FDA  has  developed  and  is
continuously  updating  the  requirements  with  respect  to  cell  and  gene  therapy  products  and  has  issued  documents  concerning  the
regulation of cellular and tissue-based products. Manufacturers of cell and tissue-based products must comply with the FDA’s current
good tissue practices, or cGTP, which are FDA regulations that govern the methods used in, and the facilities and controls used for, the
manufacture  of  such  products.  The  primary  intent  of  the  cGTP  requirements  is  to  ensure  that  cell  and  tissue-based  products  are
manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease.

The  process  of  obtaining  regulatory  approvals  and  ensuring  compliance  with  appropriate  federal,  state,  local  and  foreign  statutes  and
regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements
at any time during the product development process, approval process, or after approval, may subject an applicant to administrative or
judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical
hold,  warning  letters,  product  recalls,  product  seizures,  product  detention,  total  or  partial  suspension  of  production  or  distribution,
injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. The process required by the
FDA before a biological product or drug may be marketed in the United States generally involves the following:

* Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or

other regulations;

*

*

*

*

Submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical
trials may begin;

Performance of adequate and well-controlled clinical trials according to Good Clinical Practices, or GCP, to establish the safety
and efficacy of the proposed biological product or drug for its intended use;

Submission  to  the  FDA  of  a  new  drug  application,  or  NDA,  for  a  new  drug;  or  a  biologic  license  application  for  a  new
biological product;

Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess
compliance  with  Good  Manufacturing  Practices,  or  cGMP,  to  assure  that  the  facilities,  methods  and  controls  are  adequate  to
preserve the drug’s or biologic’s identity, strength, quality and purity; and

*

FDA review and approval of the BLA or NDA.

The testing and approval process require substantial time, effort and financial resources and we cannot be certain that any approvals for
our stem cell therapies will be granted on a timely basis, if at all.

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All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations.
These regulations include the requirement that all research subjects provide informed consent. Further, an institutional review board, or
IRB,  must  review  and  approve  the  plan  for  any  clinical  trial  before  it  commences  at  any  institution.  An  IRB  considers,  among  other
things, whether the risks to individuals participating in the trials are minimized and are reasonable in relation to anticipated benefits. The
IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or
his or her legal representative and must monitor the clinical trial until completed. Once an IND is in effect, each new clinical protocol
and any amendments to the protocol must be submitted to the IND for FDA review, and to the IRBs for approval.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

*

*

*

Phase 1.  The  product  is  initially  introduced  into  healthy  human  subjects  and  tested  for  safety,  dosage  tolerance,  absorption,
metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the
product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing may be conducted in
patients having the specific disease.

Phase 2. Phase 2 trials involve investigations in a limited patient population to identify possible adverse effects and safety risks,
to  preliminarily  evaluate  the  efficacy  of  the  product  for  specific  targeted  diseases  and  to  determine  dosage  tolerance  and  the
optimal dosage and schedule.

Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population
at geographically dispersed clinical trial sites. These trials are intended to establish the overall risk/benefit ratio of the product
and provide an adequate basis for regulatory approval and product labeling.

Post-approval  studies,  also  called  Phase  4  trials,  may  be  conducted  after  initial  marketing  approvals.  These  studies  are  used  to  obtain
additional experience from the treatment of patients in the intended therapeutic indication and may be required by the FDA as part of the
approval process.

Progress  reports  detailing  the  results  of  the  clinical  trials  must  be  submitted  at  least  annually  to  the  FDA  and  safety  reports  must  be
submitted to the FDA and the investigators for serious and unexpected side effects. Phase 1, Phase 2 and Phase 3 testing may not be
completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time
on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly,
an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with
the IRB’s requirements or if the stem cell therapy has been associated with unexpected serious harm to patients.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about
the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in
accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the stem
cell therapy and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the
final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that
the stem cell therapy does not undergo unacceptable deterioration over its shelf life.

The  results  of  product  development,  preclinical  studies  and  clinical  trials,  along  with  descriptions  of  the  manufacturing  process,
analytical tests conducted on the stem cell therapy, proposed labeling and other relevant information, are submitted to the FDA as part of
an NDA or BLA, requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial
user fees which may be waived under certain limited circumstances.

The approval process is lengthy and difficult and the FDA may refuse to approve a BLA or NDA if the applicable regulatory criteria are
not satisfied or may require additional clinical data or other data and information.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for
use  may  otherwise  be  limited,  which  could  restrict  the  commercial  value  of  the  product.  Further,  the  FDA  may  require  that  certain
contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require Phase 4 testing which
involves clinical trials designed to further assess a drug’s or biologic’s safety and effectiveness after BLA or NDA approval and may
require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

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Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a stem cell therapy intended to treat a rare disease or condition,
which  is  generally  a  disease  or  condition  that  affects  fewer  than  200,000  individuals  in  the  United  States,  or  more  than  200,000
individuals  in  the  United  States  and  for  which  there  is  no  reasonable  expectation  that  the  cost  of  developing  and  making  a  stem  cell
therapy available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan product
designation must be requested before submitting an NDA or BLA. After the FDA grants orphan product designation, the identity of the
therapeutic  agent  and  its  potential  orphan  use  are  disclosed  publicly  by  the  FDA.  Orphan  product  designation  does  not  convey  any
advantage in or shorten the duration of the regulatory review and approval process. However, orphan product designation does provide
the potential for a period of exclusivity and we may be eligible for grant funding of up to $400,000 per year for four years to defray costs
of clinical trial expenses, tax credits for clinical research expenses and potential exemption from the FDA application user fee.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such
designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to
market the same stem cell therapy for the same indication for seven years, except in limited circumstances, such as (i) the drug’s orphan
designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another
applicant’s product; (iv) the orphan exclusivity holder is unable to assure the availability of a sufficient quantity of drug; or (v) a showing
of clinical superiority to the product with orphan exclusivity by a competitor product. Competitors, however, may receive approval of
different  products  for  the  indication  for  which  the  orphan  product  has  exclusivity  or  obtain  approval  for  the  same  product  but  for  a
different indication for which the orphan product has exclusivity. Orphan product exclusivity also could block the approval of one of our
products for seven years if a competitor obtains approval of the same stem cell therapy as defined by the FDA or if our stem cell therapy
is determined to be contained within the competitor's product for the same indication or disease. If a stem cell therapy designated as an
orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product
exclusivity. Orphan drug status in the European Union has similar but not identical benefits in the European Union.

In February 2011, we received Orphan Drug Designation for NurOwn® for the treatment of ALS in the United States. In July 2013, we
received  Orphan  Medicinal  Product  Designation  for  NurOwn®  for  the  treatment  of  ALS  from  the  European  Commission.  Orphan
designation grants a 10-year marketing exclusivity in the EU for the designated indication, as well as several other regulatory incentives.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA marketing approval of our stem cell therapies, some of our U.S. patents may
be  eligible  for  limited  patent  term  extension  under  the  Drug  Price  Competition  and  Patent  Term  Restoration  Act  of  1984,  commonly
referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as
compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration
cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration
period is generally one-half the time between (a) the effective date of an IND and the submission date of a BLA or an NDA plus (b) the
time between the submission date of a BLA or an NDA and the approval of that application. Only one patent applicable to an approved
stem cell therapy is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent
and within 60 days of approval of the stem cell therapy. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews
and approves the application for any patent term extension or restoration.

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Post-Approval Requirements

Any drugs for which we receive FDA approval are subject to continuing regulation by the FDA, including, among other things, record-
keeping requirements, reporting of adverse effects with the product, reporting of changes in distributed products which would require
field alert reports (“FARs”) for drugs and biological product deviation reports (“BPDRs”), providing the FDA with updated safety and
efficacy  information,  product  sampling  and  distribution  requirements,  complying  with  certain  electronic  records  and  signature
requirements and complying with FDA promotion and advertising requirements. In September 2007, the Food and Drug Administration
Amendments  Act  of  2007  was  enacted,  giving  the  FDA  enhanced  post-marketing  authority,  including  the  authority  to  require  post
marketing  studies  and  clinical  trials,  labeling  changes  based  on  new  safety  information,  and  compliance  with  risk  evaluations  and
mitigation strategies, or REMS, approved by the FDA. The FDA strictly regulates labeling, advertising, promotion and other types of
information on products that are placed on the market. Drugs and biologics may be promoted only for the approved indications and in
accordance with the provisions of the approved label. Further, manufacturers of drugs and biologics must continue to comply with cGMP
requirements, which are extensive and require considerable time, resources and ongoing investment to ensure compliance. In addition,
changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the
approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Drug and biologic manufacturers and other entities involved in the manufacturing and distribution of approved drugs and biologics are
required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by
the FDA and certain state agencies for compliance with cGMP, GTP applicable to biologics, and other laws. The cGMP requirements
apply  to  all  stages  of  the  manufacturing  process,  including  the  production,  processing,  sterilization,  packaging,  labeling,  storage  and
shipment  of  the  drug.  Manufacturers  must  establish  validated  systems  to  ensure  that  products  meet  specifications  and  regulatory
standards, and test each product batch or lot prior to its release.

The  FDA  may  withdraw  a  product  approval  if  compliance  with  regulatory  standards  is  not  maintained  or  if  problems  occur  after  the
product  reaches  the  market.  Discovery  of  previously  unknown  problems  with  a  product  subsequent  to  its  approval  may  result  in
restrictions on the product or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with
regulatory requirements may result in administrative or judicial actions, such as fines, warning letters, holds on clinical trials, product
recalls  or  seizures,  product  detention  or  refusal  to  permit  the  import  or  export  of  products,  refusal  to  approve  pending  applications  or
supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties.

From  time  to  time,  legislation  is  drafted,  introduced  and  passed  in  Congress  that  could  significantly  change  the  statutory  provisions
governing  the  approval,  manufacturing  and  marketing  of  products  regulated  by  the  FDA.  In  addition  to  new  legislation,  the  FDA
regulations and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our stem
cell therapies. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented
and what the impact of such changes, if any, may be.

Foreign Regulation

In  addition  to  regulations  in  the  United  States,  we  will  be  subject  to  a  variety  of  foreign  regulations  governing  clinical  trials  and
commercial sales and distribution of our stem cell therapies to the extent we choose to clinically evaluate or sell any products outside of
the  United  States.  Whether  or  not  we  obtain  FDA  approval  for  a  product,  we  must  obtain  approval  of  a  product  by  the  comparable
regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The
approval  process  varies  from  country  to  country  and  the  time  may  be  longer  or  shorter  than  that  required  for  FDA  approval.  The
requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.
As in the United States, post-approval regulatory requirements, such as those regarding product manufacture, marketing, or distribution
would apply to any product that is approved outside the United States.

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Third Party Payor Coverage and Reimbursement

In  the  United  States  and  markets  in  other  countries,  patients  generally  rely  on  third-party  payors  to  reimburse  all  or  part  of  the  costs
associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and
Medicaid, and commercial payors is critical to new product acceptance. Our ability to successfully commercialize our product candidates
will  depend  in  part  on  the  extent  to  which  coverage  and  adequate  reimbursement  for  these  products  and  related  treatments  will  be
available from government health administration authorities, private health insurers and other organizations. Government authorities and
third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and
establish reimbursement levels. The availability of coverage and extent of reimbursement by governmental and private payors is essential
for most patients to be able to afford treatments such as gene therapy products. Sales of these or other product candidates that we may
identify will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid
by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government
health administration authorities, private health coverage insurers and other third-party payors. If coverage and adequate reimbursement
is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if
coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient
to realize a sufficient return on our investment.

Coverage and reimbursement status of any approved therapy carries significant uncertainty and risk related to the insurance coverage and
reimbursement of newly approved products, and coverage may be more limited than the purposes for which the medicine is approved by
the FDA or comparable foreign regulatory authorities. Failure to obtain or maintain adequate coverage and reimbursement for any of our
product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue. In both the
United  States  and  foreign  markets,  our  ability  to  commercialize  our  stem  cell  therapies  successfully,  and  to  attract  commercialization
partners  for  our  stem  cell  therapies,  depends  in  significant  part  on  the  availability  of  adequate  financial  coverage  and  reimbursement
from third party payors, including, in the United States, governmental payors such as the Medicare, Medicaid and the Veterans Affairs
Health  programs.  and  private  health  insurers.  Medicare  is  a  federally  funded  program  managed  by  the  Centers  for  Medicare  and
Medicaid  Services,  or  CMS,  through  local  fiscal  intermediaries  and  carriers  that  administer  coverage  and  reimbursement  for  certain
healthcare items and services furnished to the elderly and disabled. Medicaid is an insurance program for certain categories of patients
whose  income  and  assets  fall  below  state  defined  levels  and  who  are  otherwise  uninsured  that  is  both  federally  and  state  funded  and
managed  by  each  state.  The  federal  government  sets  general  guidelines  for  Medicaid  and  each  state  creates  specific  regulations  that
govern  its  individual  program.  Each  third-party  payor  has  its  own  process  and  standards  for  determining  whether  it  will  cover  and
reimburse a procedure or product. Factors payors consider in determining reimbursement are based on whether the product is:

*

*

*

*

*

a covered benefit under its health plan;

safe, effective and medically necessary;

appropriate for the specific patient;

cost-effective; and

neither experimental nor investigational.

Private payors often rely on the lead of the governmental payors in rendering coverage and reimbursement determinations. Therefore,
achieving favorable CMS coverage and reimbursement is usually a significant gating issue for successful introduction of a new product.
The competitive position of some of our products will depend, in part, upon the extent of coverage and adequate reimbursement for such
products and for the procedures in which such products are used. Prices at which we or our customers seek reimbursement for our stem
cell therapies can be subject to challenge, reduction or denial by the government and other payors.

Possible legislation at the Federal and State levels in the United States focused on cost containment and price transparency may impact
our  ability  to  sell  our  stem  cell  therapies  for  maximum  profitably.  It  appears  likely  that  the  pressure  on  pharmaceutical  pricing  will
continue, especially under the Medicare program, which may also increase our regulatory burdens and operating costs. Moreover,

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additional  changes  could  be  made  to  governmental  healthcare  programs  that  could  significantly  impact  the  success  of  our  stem  cell
therapies.

The 21st Century Cures Act and its regenerative medicine provisions may be beneficial to the development of our stem cell therapy. The
21st Century Cures Act was signed into law on December 13, 2016.  The goal of this landmark legislation is to accelerate the discovery,
development,  and  delivery  of  new  treatments.    It  includes  regenerative  medicines  provisions  aimed  at  bringing  new  innovations  and
advances to patients quicker and more efficiently. The US Food and Drug Administration (FDA) issued a comprehensive regenerative
medicine  policy  framework.   The  final  guidance  issued  by  the  FDA  defines  the  regenerative  medicine  provisions  in  the  21st Century
Cures Act by providing additional information to further the development and access to innovative regenerative medicine therapies.

The  cost  of  pharmaceuticals  continues  to  generate  substantial  governmental  and  third-party  payor  interest.  We  expect  that  the
pharmaceutical  industry  will  experience  pricing  pressures  due  to  the  trend  toward  managed  healthcare,  the  increasing  influence  of
managed  care  organizations  and  additional  legislative  proposals.  Our  results  of  operations  could  be  adversely  affected  by  current  and
future healthcare reforms.

Some third-party payors also require pre-approval of coverage for new or innovative devices, biologics or drug therapies before they will
reimburse healthcare providers that use such therapies. Increasingly, third-party payors are requiring that drug companies provide them
with  predetermined  discounts  from  list  prices  and  are  challenging  the  prices  charged  for  medical  products.  We  cannot  be  sure  that
reimbursement will be available for any therapy that we commercialize and, if reimbursement is available, the level of reimbursement. In
addition,  many  pharmaceutical  manufacturers  must  calculate  and  report  certain  price  reporting  metrics  to  the  government,  such  as
average  sales  price,  or  ASP,  and  best  price.  Penalties  may  apply  in  some  cases  when  such  metrics  are  not  submitted  accurately  and
timely.  Further,  these  prices  for  therapies  may  be  reduced  by  mandatory  discounts  or  rebates  required  by  government  healthcare
programs. While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the
future, the announcement or adoption of these proposals could have a material adverse effect on our ability to obtain adequate prices for
our stem cell therapies and operate profitably. Further, due to the COVID-19 pandemic, millions of individuals have lost or will be losing
employer-based insurance coverage, which may adversely affect our ability to commercialize our stem cell therapies.

Different  pricing  and  reimbursement  schemes  exist  in  other  countries.  In  the  European  Union,  governments  influence  the  price  of
pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part
of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only
be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may
require  the  completion  of  clinical  trials  that  compare  the  cost-effectiveness  of  a  particular  stem  cell  therapy  to  currently  available
therapies.  Other  member  states  allow  companies  to  fix  their  own  prices  for  medicines  but  monitor  and  control  company  profits.  The
downward pressure on health care costs in general, particularly prescription drugs and biologics, has become very intense. As a result,
increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-
priced markets exert a commercial pressure on pricing within a country.

Other Healthcare Laws and Compliance Requirements

In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the
FDA,  including  CMS,  other  divisions  of  the  United  States  Department  of  Health  and  Human  Services  (“HHS”)  (e.g.,  the  Office  of
Inspector General (“OIG”)), the United States Department of Justice and individual United States Attorney offices within the Department
of  Justice,  and  state  and  local  governments.  For  example,  our  clinical  research,  sales,  marketing  and  scientific/educational  grant
programs may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy and
security provisions of the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and similar state laws, each as
amended, as applicable, including:

*

the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering
or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in
kind,  to  induce,  or  in  return  for,  either  the  referral  of  an  individual,  or  the  purchase,  lease,  order,  arrangement  or
recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal
healthcare program, such as the Medicare and Medicaid programs; a person or entity does not need to have actual knowledge of
the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. In addition, the government

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may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a
false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties statute;

*

*

the federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibit,
among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for
payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to
be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to
the  federal  government,  or  knowingly  concealing  or  knowingly  and  improperly  avoiding  or  decreasing  or  concealing  an
obligation to pay money to the federal government. Manufacturers can be held liable under the False Claims Act even when
they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent
claims.  The  False  Claims  Act  also  permits  a  private  individual  acting  as  a  “whistleblower”  to  bring  actions  on  behalf  of  the
federal government alleging violations of the False Claims Act and to share in any monetary recovery;

the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without
limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or
Medicaid  beneficiary  that  the  person  knows  or  should  know  is  likely  to  influence  the  beneficiary’s  selection  of  a  particular
supplier of items or services reimbursable by a federal or state governmental program;

* HIPAA, which includes federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a
scheme  to  defraud  any  healthcare  benefit  program  or  obtain,  by  means  of  false  or  fraudulent  pretenses,  representations,  or
promises,  any  of  the  money  or  property  owned  by,  or  under  the  custody  or  control  of,  any  healthcare  benefit  program,
regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or
device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with
the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-
Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order
to have committed a violation;

* HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective
implementing  regulations,  which  impose  requirements  on  certain  covered  healthcare  providers,  health  plans,  and  healthcare
clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure
of,  individually  identifiable  health  information,  relating  to  the  privacy,  security  and  transmission  of  individually  identifiable
health information;

*

*

*

the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments
Sunshine  Act,  and  its  implementing  regulations,  which  requires  applicable  manufacturers  of  drugs,  devices,  biologics  and
medical  supplies  for  which  payment  is  available  under  Medicare,  Medicaid  or  the  Children’s  Health  Insurance  Program  to
report annually to the U.S. Department of Health and Human Services, CMS, information related to payments or other transfers
of  value  made  to  physicians  (defined  to  include  doctors,  dentists,  optometrists,  podiatrists  and  chiropractors)  and  teaching
hospitals,  as  well  as  ownership  and  investment  interests  held  by  the  physicians  described  above  and  their  immediate  family
members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-
physician providers such as physician assistants and nurse practitioners;

federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and
timely manner to government programs; and

federal  consumer  protection  and  unfair  competition  laws,  which  broadly  regulate  marketplace  activities  and  activities  that
potentially harm consumers.

In addition to the above, on November 20, 2020, the OIG finalized further modifications to the federal Anti-Kickback Statute. Under the
final  rules,  OIG  added  safe  harbor  protections  under  the  Anti-Kickback  Statute  for  certain  coordinated  care  and  value-based
arrangements  among  clinicians,  providers,  and  others,  yet  removed  safe  harbor  protection  for  price  reductions  from  pharmaceutical
manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required
by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain

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fixed fee arrangements between pharmacy benefit managers and manufacturers.  The final rule (with some exceptions) became effective
January 19, 2021. We continue to evaluate what effect, if any, these rules will have on our business.

Additionally,  we  are  subject  to  state  and  foreign  equivalents  of  each  of  the  healthcare  laws  and  regulations  described  above,  among
others, some of which may be broader in scope and may apply regardless of the payor. Many U.S. states have adopted laws similar to the
federal  Anti-Kickback  Statute  and  False  Claims  Act,  and  may  apply  to  our  business  practices,  including,  but  not  limited  to,  research,
distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors,
including  private  insurers.  In  addition,  some  states  have  passed  laws  that  require  pharmaceutical  companies  to  comply  with  the  April
2003 OIG Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of
America’s  Code  on  Interactions  with  Healthcare  Professionals.  Several  states  also  impose  other  marketing  restrictions  or  require
pharmaceutical companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply
with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties. Finally,
there are state and foreign laws governing the privacy and security of health information (e.g., the California Consumer Privacy Act),
many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

We may also be subject to additional privacy restrictions. The collection, use, storage, disclosure, transfer, or other processing of personal
data  regarding  individuals  in  the  European  Economic  Area,  or  EEA,  including  personal  health  data,  is  subject  to  the  General  Data
Protection Regulation 2016/679 (GDPR), which became effective on May 25, 2018 and the United Kingdom General Data Protection
Regulation,  as  tailored  by  the  Data  Protection  Act  2018  (“UK  GDPR”).  The  GDPR  and  UK  GDPR  are  wide-ranging  in  scope  and
imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other
sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data
processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data
breaches,  and  taking  certain  measures  when  engaging  third-party  processors.  The  GDPR/UK  GDPR  also  impose  strict  rules  on  the
transfer of personal data to countries outside the European Economic Area and the United Kingdom, respectively, including to the United
States, and permit data protection authorities to impose large penalties for violations of the GDPR/UK GDPR, including potential fines
of up to €20 million or 4% of annual global revenues, whichever is greater. The GDPR/UK GDPR also confer a private right of action on
data  subjects  and  consumer  associations  to  lodge  complaints  with  supervisory  authorities,  seek  judicial  remedies,  and  obtain
compensation for damages resulting from violations of the GDPR/UK GDPR. In addition, the GDPR/UK GDPR include restrictions on
cross-border data transfers. Compliance with the GDPR/UK GDOR will be a rigorous and time-intensive process that may increase our
cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to
fines and penalties, litigation, and reputational harm in connection with our European and United Kingdom activities.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of
our business activities could be subject to challenge under one or more of such laws.

Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines, imprisonment and/or
exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with
the U.S. government. In addition, private individuals have the ability to bring actions on behalf of the U.S. government under the federal
False Claims Act as well as under the false claims laws of several states.

Law enforcement authorities are increasingly focused on enforcing fraud and abuse laws, and it is possible that some of our practices
may  be  challenged  under  these  laws.  Efforts  to  ensure  that  our  current  and  future  business  arrangements  with  third  parties,  and  our
business  generally,  will  comply  with  applicable  healthcare  laws  and  regulations  will  involve  substantial  costs.  If  our  operations,
including our arrangements with physicians and other healthcare providers are found to be in violation of any of such laws or any other
governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative, civil and criminal
penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, the curtailment
or  restructuring  of  our  operations,  exclusion  from  participation  in  federal  and  state  healthcare  programs  (such  as  Medicare  and
Medicaid), and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

If any of the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance
with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded
healthcare programs, which may also adversely affect our business.

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The risk of our being found in violation of these laws is increased by the fact that many of these laws have not been fully interpreted by
the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of
these  laws,  even  if  we  successfully  defend  against  it,  could  cause  us  to  incur  significant  legal  expenses  and  divert  our  management’s
attention from the operation of our business. The shifting compliance environment and the need to build and maintain a robust system to
comply  with  multiple  jurisdictions  with  different  compliance  and  reporting  requirements  increases  the  possibility  that  a  healthcare
company may violate one or more of the requirements. Efforts to ensure that our business arrangements with third parties will comply
with applicable healthcare laws and regulations will involve substantial cost.

Healthcare reform

A  primary  trend  in  the  U.S.  healthcare  industry  and  elsewhere  is  cost  containment.  Government  authorities  and  other  payors  have
attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products. For example, in March
2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or ACA
was  enacted,  which,  among  other  things,  increased  the  minimum  Medicaid  rebates  owed  by  most  manufacturers  under  the  Medicaid
Drug  Rebate  Program;  introduced  a  new  methodology  by  which  rebates  owed  by  manufacturers  under  the  Medicaid  Drug  Rebate
Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; extended the Medicaid Drug Rebate Program
to utilization of prescriptions of individuals enrolled in Medicaid managed care plans; imposed mandatory discounts for certain Medicare
Part D beneficiaries as a condition for manufacturers’ outpatient drugs coverage under Medicare Part D; subjected drug manufacturers to
new  annual,  nondeductible  fees  based  on  pharmaceutical  companies’  share  of  sales  to  federal  healthcare  programs;  imposed  a  new
federal excise tax on the sale of certain medical devices; expanded healthcare fraud and abuse laws, including the False Claims Act and
the  Anti-Kickback  Statute,  new  government  investigative  powers  and  enhanced  penalties  for  non-compliance;  expanded  eligibility
criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals with income
at  or  below  133%  of  the  federal  poverty  level,  thereby  potentially  increasing  manufacturers’  Medicaid  rebate  liability;  expanded  the
entities  eligible  for  discounts  under  the  Public  Health  Service  Act’s  pharmaceutical  pricing  program,  also  known  as  the  340B  Drug
Pricing Program; created new requirements to report financial arrangements with physicians and teaching hospitals, commonly referred
to as the Physician Payments Sunshine Act; created a new requirement to annually report the identity and quantity of drug samples that
manufacturers and authorized distributors of record provide to physicians; created a new Patient Centered Outcomes Research Institute to
oversee,  identify  priorities  in,  and  conduct  comparative  clinical  effectiveness  research,  along  with  funding  for  such  research;  and
established the Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and
Medicaid spending.

Since  its  enactment,  there  have  been  numerous  judicial,  administrative,  executive,  and  legislative  challenges  to  certain  aspects  of  the
ACA,  and  we  expect  there  will  be  additional  challenges  and  amendments  to  the  ACA  in  the  future.  Various  portions  of  the  ACA  are
currently undergoing legal and constitutional challenges in the United States Supreme Court; the Trump Administration issued various
Executive Orders which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost,
fee,  tax,  penalty  or  regulatory  burden  on  individuals,  healthcare  providers,  health  insurers,  or  manufacturers  of  pharmaceuticals  or
medical  devices;  and  Congress  has  introduced  several  pieces  of  legislation  aimed  at  significantly  revising  or  repealing  the  ACA.  The
United  States  Supreme  Court  is  expected  to  rule  on  a  legal  challenge  to  the  constitutionality  of  the  ACA  in  early  2021.  The
implementation of the ACA is ongoing, the law appears likely to continue the downward pressure on pharmaceutical pricing, especially
under the Medicare program, and may also increase our regulatory burdens and operating costs. Litigation and legislation related to the
ACA  are  likely  to  continue,  with  unpredictable  and  uncertain  results.  It  is  unclear  whether  the  ACA  will  be  overturned,  repealed,
replaced, or further amended. We cannot predict what affect further changes to the ACA would have on our business.

Other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, former President
Obama  signed  into  law  the  Budget  Control  Act  of  2011,  which,  among  other  things,  created  the  Joint  Select  Committee  on  Deficit
Reduction  to  recommend  to  Congress  proposals  in  spending  reductions.  The  Joint  Select  Committee  on  Deficit  Reduction  did  not
achieve  a  targeted  deficit  reduction  of  at  least  $1.2  trillion  for  fiscal  years  2012  through  2021,  triggering  the  legislation’s  automatic
reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal
year, which went into effect beginning on April 1, 2013 and, due to legislation amendments to the statute, including the BBA, will stay in
effect  through  2030  unless  additional  Congressional  action  is  taken.  However,  pursuant  to  the  Coronavirus  Aid,  Relief  and  Economic
Security Act, or CARES Act, and subsequent legislation, these Medicare sequester reductions are suspended from May 1, 2020 through
March  31,  2021  due  to  the  COVID-19  pandemic.  Proposed  legislation,  if  passed,  would  extend  this  suspension  until  the  end  of  the
COVID-19 pandemic. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things,

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further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and
increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing
practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation
designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review
the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for
drugs. At the federal level, the former Trump administration’s budget proposal for fiscal year 2021 included a $135 billion allowance to
support  legislative  proposals  seeking  to  reduce  drug  prices,  increase  competition,  lower  out-of-pocket  drug  costs  for  patients,  and
increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the Trump administration sent “principles” for
drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy
expenses,  provide  an  option  to  cap  Medicare  Part  D  beneficiary  monthly  out-of-pocket  expenses,  and  place  limits  on  pharmaceutical
price increases.  Further, the Trump administration also previously released a “Blueprint”, or plan, to lower drug prices and reduce out of
pocket  costs  of  drugs  that  contains  additional  proposals  to  increase  drug  manufacturer  competition,  increase  the  negotiating  power  of
certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs
of drug products paid by consumers. HHS has implemented certain of these initiatives. For example, in May 2019, CMS issued a final
rule  to  allow  Medicare  Advantage  Plans  the  option  of  using  step  therapy,  a  type  of  prior  authorization,  for  Part  B  drugs  beginning
January 1, 2020.  In addition, there have been several changes to the 340B. Legal challenges to certain 340B reimbursement calculations
are ongoing, and it is unclear how these developments could affect covered hospitals who might purchase our future products and affect
the  rates  we  may  charge  such  facilities  for  our  approved  products  in  the  future,  if  any.  While  a  number  of  these  and  other  proposed
measures  will  require  authorization  through  additional  legislation  to  become  effective,  Congress  has  indicated  that  it  will  continue  to
seek new legislative and/or administrative measures to control drug costs.

Further,  on  July  24,  2020  and  September  13,  2020,  former  President  Trump  signed  several  Executive  Orders  aimed  at  lowering  drug
pricing  that  seek  to  implement  several  of  the  administration's  proposals.  In  response,  the  FDA  released  a  final  rule  on  September  24,
2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from
Canada.  Further,  on  November  20,  2020  CMS  issued  an  Interim  Final  Rule  implementing  the  Most  Favored  Nation,  or  MFN,  Model
 under which Medicare Part B reimbursement rates will be calculated for certain drugs and biologicals based on the lowest price drug
manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per
capita.  The MFN Model regulations mandate participation by identified Part B providers and will apply in all U.S. states and territories
for a seven-year period beginning January 1, 2021 and ending December 31, 2027.  The Interim Final Rule has not been finalized and is
subject to revision and legal challenge by certain industry advocacy groups and participants. Additionally, on November 20, 2020, HHS
finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under
Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a new
safe  harbor  for  price  reductions  reflected  at  the  point-of-sale,  as  well  as  a  safe  harbor  for  certain  fixed  fee  arrangements  between
pharmacy  benefit  managers  and  manufacturers.  Although  a  number  of  these,  and  other  proposed  measures  may  require  authorization
through  additional  legislation  to  become  effective,  and  the  Biden  administration  may  reverse  or  otherwise  change  these  measures,
Congress has indicated that it will continue to seek new legislative measures to control drug costs.

Individual  states  in  the  United  States  have  also  increasingly  passed  legislation  and  implemented  regulations  designed  to  control
pharmaceutical  product  pricing,  including  price  or  patient  reimbursement  constraints,  discounts,  restrictions  on  certain  product  access
and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries
and bulk purchasing.

Compliance with Environmental, Health and Safety Laws

In  addition  to  FDA  regulations,  we  are  also  subject  to  evolving  federal,  state  and  local  environmental,  health  and  safety  laws  and
regulations.  In  the  past,  compliance  with  environmental,  health  and  safety  laws  and  regulations  has  not  had  a  material  effect  on  our
capital  expenditures.  We  believe  that  we  comply  in  all  material  respects  with  existing  environmental,  health  and  safety  laws  and
regulations applicable to us. Compliance with environmental, health and safety laws and regulations in the future may require additional
capital expenditures.

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Manufacturing

We intend to establish and maintain fully-equipped cGMP-certified Cell-Processing Centers in strategic locations to conduct NurOwn®
production and distribution over the broadest geographic area. Each Cell-Processing Center would receive an initial bone marrow sample
of the patient, harvested at a medical center. The patient’s MSC cells would be isolated and expanded, in order to produce an initial dose
of NurOwn® cells. A master cell bank for each individual patient would be cryopreserved and maintained for production of subsequent,
future  NurOwn®  doses  on  a  long-term  basis  for  future  treatments.  These  doses  would  be  produced  as  needed  and  transported  to  the
medical centers, where they would then be transplanted back into the patient.

We have already initiated activities to support commercial launch if our product is approved by regulatory authorities. These activities
include scaling out production capacity, logistics and supply. In support of commercialization and to expand our cGMP capabilities we
are engaged in several strategic partnerships. Our tech transfer to Catalent has already been initiated and will allow for continuous supply
of  NurOwn®  for  future  clinical  trials  and  initial  commercialization.  Our  partnership  with  RR&D,  to  help  us  establish  in-house
manufacturing capabilities, will accelerate once a regulatory pathway is clear. These partnerships will ensure an ongoing cGMP clinical
supply of NurOwn® and enable us to provide rapid treatment access to patients if we obtain regulatory approval.

Competition

There are several clinical trials underway evaluating experimental treatments for ALS, of which only two are stem cell-based trials being
conducted  by  other  commercial  entities.  US-based  Seneca  Biopharma  (Nasdaq:  SNCA,  formally  Neuralstem)  completed  a  Phase  2
intraspinal transplantation trial for its allogeneic, human (fetal) spinal cord derived neural stem cells, it is not clear if the sponsor will
proceed with a further clinical trial. Q Therapeutics has gained FDA clearance for a Phase 1/2 cervical surgical transplantation study with
its Q-Cells®, purified human glial progenitor cells isolated from brain tissue. The study is not recruiting patients yet. Corestem, a Korean
company  has  commercialized  its  NEURONATA-R®  inj.,  an  autologous  bone  marrow  mesenchymal  stem  cell  (BM-MSC)  therapy  for
ALS in South Korea and is searching for a subcontractor for a Phase 3 study in the US. Alexion has submitted an investigational new
drug application (IND) for ULTOMIRIS (ravulizumab) in ALS to the FDA in the fourth quarter of 2019 and initiated a Phase 3 study in
2020.

Several  experimental  ALS  therapies  such  as  Masitinib  (AB  Science),  NP-001  (Neuraltus),  and  Actemra  (Tocilizimab,  Genentech)  are
selectively targeting neuroinflammation. AB Science completed a Phase 3 trial for masitinib in ALS and is now conducting another add-
on trial of masitionib with Riluzole in ALS. Neuraltus Pharma was developing NP001, is a small molecule that modulates macrophages
to promote an anti-inflammatory state in order to reduce the rate of motoneuron loss. NP001 failed to demonstrate efficacy in a phase 2
clinical trial. Cytokinetics is a late-stage biopharmaceutical company that recently completed a Phase 3 clinical trial with tirasemtiv, a
muscle troponin sensitizer. This study failed to demonstrate an improvement in slow vital capacity, a measure of breathing strength or
other  functional  improvement,  and  as  a  consequence,  Cytokinetics  has  suspended  the  development  of  tirasemtiv.  Amylyx
Pharmaceuticals is developing AMX0035, a combination of two compounds, sodium phenylbutyrate and tauroursodeoxycholic acid, that
are  proposed  to  have  a  synergistic  effect  when  administered  together.  Amylyx  recently  published  data  from  its  CENTAUR  trial
demonstrating a clinically meaningful benefit and a favorable safety profile for people living with ALS and possibly a survival advantage
over 2 years compared to placebo. Therapies specifically targeting genetic mutations in a small subset of ALS patents, such as SOD1 and
C9ORF72, are being evaluated using antisense oligonucleotide technology (Biogen, IONIS, and WAVE Therapeutics).

Currently,  there  are  only  two  FDA-approved  ALS  therapies,  Riluzole  and  Radicava,  that  have  demonstrated  modest  improvements  in
survival  and  ALS  function,  respectively.  Riluzole,  approved  by  the  FDA  in  1995,  extends  the  time  to  death  or  ventilation  by  several
months;  however,  it  has  not  been  shown  to  improve  the  daily  functioning  of  ALS  patients.  Radicava  (Edaravone)  is  a  free  radical
scavenger approved by FDA in May 2017 based on a single Phase 3 study carried out in Japan.

Employees

We currently have 40 employees, all of whom are full-time. None of our employees is represented by a labor union.

Human Capital

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing
and new employees, advisors and consultants. The principal purposes of our equity and cash incentive plans are to attract, retain

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and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value
and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Additional Information

We maintain a website at www.brainstorm-cell.com. We make available through our website, free of charge, our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after
we  electronically  file  those  reports  with,  or  furnish  them  to,  the  SEC.  We  also  similarly  make  available,  free  of  charge  through  our
website,  the  reports  filed  with  the  SEC  by  our  executive  officers,  directors  and  10%  stockholders  pursuant  to  Section  16  under  the
Exchange Act. We are not including the information contained at www.brainstorm-cell.com or at any other Internet address as part of, or
incorporating it by reference into, this Annual Report on Form 10-K.

Item 1A.           RISK FACTORS

Summary of our Risks:

Our ability to implement our business strategy is subject to numerous risks that you should be aware of before making an investment
decision.  These  risks  are  described  more  fully  in  the  section  entitled  “Risk  Factors”  in  this  Form  10-K.  These  risks  include,  among
others:

* We will need substantial additional funding to pursue our business objectives and continue our operations. If we are unable to
raise capital when needed, we may be required to delay, limit, reduce or terminate our research or product development efforts
or future commercialization efforts.

* Our Company has a history of losses and we expect to incur losses for the foreseeable future.

*

The continuing effects of the novel coronavirus disease, COVID-19, could adversely impact our business, including our clinical
trials and supply chain.

* Our product development programs are based on novel technologies and are inherently risky. The field of stem cell therapy is

relatively new and our development efforts may not yield an effective treatment of human diseases.

* Our NurOwn® stem cell therapy may not demonstrate safety and efficacy sufficient to obtain regulatory approval, and may not
receive  regulatory  approval.  Our  NurOwn®  stem  cell  therapy,  even  if  approved,  may  not  be  accepted  in  the  marketplace;
therefore, we may not be able to generate significant revenue, if any.

*

If serious or unexpected adverse side effects are identified during the development of our NurOwn® stem cell therapy, we may
need to abandon or limit its development.

* Our success will depend in part on establishing and maintaining effective strategic partnerships and collaborations, which may

impose restrictions on our business and subject us to additional regulation.

* We have never manufactured our NurOwn® stem cell therapy at commercial scale and there can be no assurance that it can be

manufactured in compliance with regulations at a cost or in quantities necessary to make it commercially viable.

*

*

Part of our business. in the foreseeable future will be based on technology licensed from Ramot and if this license were to be
terminated upon failure to make required royalty payments in the future, we would need to change our business strategy and we
may be forced to cease our operations.

Technological and medical developments or improvements in conventional therapies could render the use of stem cells and our
services and planned products obsolete.

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* We face substantial competition in developing cell therapies for ALS and other neurodegenerative diseases, which may result in

others discovering, developing or commercializing products before or more successfully than we do.

*

It is uncertain to what extent the government, private health insurers and third-party payors will approve coverage or provide
reimbursement for the therapies and products to which our services relate. Availability for such reimbursement may be further
limited by an increasing uninsured population and reductions in Medicare and Medicaid funding in the United States.

* We are exposed to fluctuations in currency exchange rates. The dollar cost of our operations in Israel will increase to the extent
increases in the rate of inflation in Israel are not offset by a devaluation of the NIS in relation to the dollar, which would harm
our results of operations.

Risks Related to the COVID-19 Pandemic

The current pandemic of COVID-19 and the future outbreak of other highly infectious or contagious diseases, could have a material
adverse impact on our business, financial condition and results of operations, including our preclinical studies and clinical trials.

The pandemic caused by the novel strain of coronavirus, SARS-CoV 2 (COVID-19) disease has currently impacted and may continue to
adversely  impact  our  business,  including  our  preclinical  studies  and  clinical  trials.  In  December  2019,  a  novel  strain  of  coronavirus,
surfaced in Wuhan, China. Since then, COVID-19 has spread worldwide, significantly impacting the United States, Europe and Israel,
where the Company conducts its operations, as well as its clinical trials for NurOwn®. In response to the spread of COVID-19 and to
ensure safety of employees and continuity of business operations, we closed our offices, with our administrative employees continuing
their work remotely and limited the number of staff in any given research and development laboratory. Our research and development
laboratory in Israel and manufacturing sites in U.S. and in Israel remain open. The full extent to which the COVID 19 pandemic will
directly  or  indirectly  impact  our  business,  results  of  operations  and  financial  condition  will  depend  on  future  developments  that  are
highly uncertain and cannot be accurately predicted at this time, including new information that may emerge concerning COVID 19, the
actions  taken  to  contain  it  or  treat  its  impact  and  the  economic  impact  on  local,  regional,  national  and  international  markets.  Our
management team is actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers,
industry, and workforce.

We  completed  dosing  of  all  participants  in  our  Phase  3  ALS  trial  in  July  2020,  and  we  announced  top-line  data  from  this  trial  on
November 17, 2020. Results from the trial showed that NurOwn® was generally well tolerated in the population of rapidly progressing
ALS patients. While showing a numerical improvement in the treated group compared to placebo across the primary and key secondary
efficacy endpoints, the trial did not reach statistically significant results. In an important, pre-specified subgroup with early disease based
on ALS Functional Rating Score (“ALSFRS-R”) baseline score 35, NurOwn® demonstrated a clinically meaningful treatment response
across the primary and key secondary endpoints and remained consistent with our pre-trial, data-derived assumption. In this subgroup,
there were 34.6% responders who met the primary endpoint definition on NurOwn and 15.6% on Placebo (p=0.288), and the average
change from baseline to week 28 in ALSFRS-R total score was -1.77 on NurOwn and -3.78 on Placebo (p=0.198), an improvement of
2.01 ALSFRS-R points favoring NurOwn.. When following the SAP to implement sensitivity to the primary endpoint, there is a slight
change in the percentage of responders but no P value change. No new safety concerns were identified. Following the completion of our
phase 3 ALS trial, we are diligently pursuing next steps, including active discussions with the FDA to identify regulatory pathways that
may  support  NurOwn®’s  approval  in  ALS.  We  are  also  in  active  dialog  with  the  FDA  around  our  Chemistry,  Manufacturing  and
Controls (CMC) plans for registration, and completed a successful meeting in December 2020.

The U.S. Phase 2 PMS trial faced slight delays in enrollment due to the COVID-19 pandemic, but as of June 2020, all the trial sites were
back on track to continue with the trial. On December 18, 2020, we announced the completion of all dosing in the study participants in
the trial and expects topline clinical trial results by the end of the first quarter of 2021.

We recently announced a new clinical program focused on the development of NurOwn® as a treatment for AD. As part of the newly
announced program, we are planning a multi-national Phase 2 clinical trial in Europe to evaluate the safety and preliminary efficacy of
NurOwn® treatment in patients with prodromal to mild AD.

Two vaccines for COVID-19 were granted Emergency Use Authorization by the FDA in late 2020, and more are likely to be authorized
in the coming months. The resultant demand for vaccines and potential for manufacturing facilities and materials to be commandeered

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under  the  Defense  Production  Act  of  1950,  or  equivalent  foreign  legislation,  may  make  it  more  difficult  to  obtain  materials  or
manufacturing slots for the products needed for our clinical trials, which could lead to delays in these trials.

Risks Related to our Financial Condition and Capital Requirements

We need to raise additional capital. If we are unable to raise additional capital in favorable terms and a timely manner, we will not be
able to execute our business plan and we could be forced to restrict or cease our operations.

Although we have sufficient cash to continue with our operations for at least the next twelve months, we may need to raise additional
funds to meet our anticipated expenses so that we can execute our business plan. We expect to incur substantial and increasing net losses
for the foreseeable future as we increase our spending to execute our development and commercial programs.

The amount of financing required will depend on many factors including our financial requirements to fund any additional research and
clinical  trials,  our  ability  to  secure  partnerships  and  achieve  partnership  milestones  and  our  ability  to  establish  manufacturing  and
delivery processes for our NurOwn® stem cell therapy as well as to fund other working capital requirements. Our ability to access the
capital markets or to enlist partners is mainly dependent on the progress of our research and development and regulatory approval of our
products.

To date, the Company has not generated revenues from its activities and has incurred substantial operating losses. Management expects
the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its
current financial resources and through additional raises of capital.

Management’s  plan  includes  raising  funds  from  outside  potential  investors,  including  under  the  ATM  Program.  However,  there  is  no
assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide
the Company with sufficient funds to meet its objectives. Should we raise additional funds through the issuance of equity, equity-related
or debt securities, these securities may have rights, preferences or privileges (including registrations rights) senior to those of the rights
of our Common Stock and our stockholders will experience additional dilution.

Our Company has a history of losses and we expect to incur losses for the foreseeable future.

As a development stage pre-revenue company, we are in the early stages of executing our business plan. We had no operational revenues
for the fiscal years ended December 31, 2018, December 31, 2019 or December 31, 2020. We are currently in the process of introducing
the Company to strategic partners. In the upcoming three years, the Company will focus on completing its ongoing clinical trials and
commercialization of NurOwn® for ALS, if approved. We are unable, at this time, to foresee when we will generate operational revenues
from  strategic  partnerships.  If  NurOwn®  is  approved  by  the  FDA  for  ALS,  we  hope  to  commercialize  and  start  generating  revenues
shortly thereafter., We expect to incur substantial and increasing operating losses for the next several years as we increase our spending
to  execute  our  development  programs  and  commercialization  efforts.  These  losses  are  expected  to  have  an  adverse  impact  on  our
working capital, total assets and stockholders’ equity.

We are exposed to fluctuations in currency exchange rates.

A significant portion of our business, particularly our research and development, is conducted outside the United States. Therefore, we
are exposed to currency exchange fluctuations in other currencies such as the New Israeli Shekels (“NIS”) and the Euro. Moreover, a
portion of our expenses in Israel and Europe are paid in NIS and Euros, respectively, which subjects us to the risks of foreign currency
fluctuations. Our primary expenses paid in NIS are employee salaries, fees for consultants and subcontractors and lease payments on our
Israeli facilities.

The dollar cost of our operations in Israel will increase to the extent increases in the rate of inflation in Israel are not offset by a
devaluation of the NIS in relation to the dollar, which would harm our results of operations.

Since a considerable portion of our expenses such as employees' salaries are linked to an extent to the rate of inflation in Israel, the dollar
cost  of  our  operations  is  influenced  by  the  extent  to  which  any  increase  in  the  rate  of  inflation  in  Israel  is  or  is  not  offset  by  the
devaluation of the NIS in relation to the dollar. As a result, we are exposed to the risk that the NIS, after adjustment for inflation in Israel,
will appreciate in relation to the dollar. In that event, the dollar cost of our operations in Israel will increase and our dollar-

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measured results of operations will be adversely affected. During the past few years inflation-adjusted NIS appreciated against the dollar,
which raised the dollar cost of our Israeli operations. We cannot predict whether the NIS will appreciate against the dollar or vice versa in
the future. Any increase in the rate of inflation in Israel, unless the increase is offset on a timely basis by a devaluation of the NIS in
relation  to  the  dollar,  will  increase  labor  and  other  costs,  which  will  increase  the  dollar  cost  of  our  operations  in  Israel  and  harm  our
results of operations.

Risks Related to our Cell Therapy Product Development Efforts

If our NurOwn® stem cell therapy does not demonstrate safety and efficacy sufficient to obtain regulatory approval, it may not
receive regulatory approval and we will be unable to market it.

The  therapeutic  treatment  development  and  regulatory  approval  process  is  expensive,  uncertain  and  time-consuming.  As  part  of  the
regulatory process, we are conducting clinical trials, for our NurOwn® stem cell therapy to demonstrate safety and efficacy in humans to
meet the requirements of the FDA and regulatory authorities in other countries. We have recently completed our Phase 3 ALS trial and
are in active discussions with FDA for potential pathways for approval of NurOwn® for ALS. If we fail to obtain regulatory approval for
our NurOwn® stem cell therapy, we will be unable to market and sell it and we may never be profitable.

As of June 23, 2020, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the COVID-19
pandemic in line with its user fee performance goals; however, FDA may not be able to continue its current pace and approval timelines
could  be  extended,  including  where  a  pre-approval  inspection  or  an  inspection  of  clinical  sites  is  required  and  due  to  the  COVID-19
pandemic  and  travel  restrictions  FDA  is  unable  to  complete  such  required  inspections  during  the  review  period.  In  2020,  several
companies  announced  receipt  of  complete  response  letters  due  to  the  FDA's  inability  to  complete  required  inspections  for  their
applications.

A failure of one or more of our clinical trials can occur at any stage of testing. Results of later stage clinical trials may fail to show the
desired safety and efficacy despite acceptable results in earlier clinical trials. Moreover, preclinical and clinical data are often susceptible
to  varying  interpretations  and  analyses  and  many  companies  that  have  believed  their  product  candidates  performed  satisfactorily  in
preclinical and clinical trials have nonetheless failed to obtain marketing approval of their treatments.

Specifically,  we  are  currently  comparing  NurOwn®  stem  cell  therapy  against  placebo.  Comparisons  of  outcomes  of  other  reported
clinical  trials  may  provide  some  insight  into  the  efficacy  of  NurOwn®  stem  cell  therapy,  however,  these  studies  may  be  of  limited
comparative value due to the many factors that affect the outcome of clinical trials, some of which are not apparent in published reports.

Additionally, several of our past, planned and ongoing clinical trials utilize an “open-label” trial design. An “open-label” clinical trial is
one  where  both  the  patient  and  investigator  know  whether  the  patient  is  receiving  the  investigational  product  candidate  or  either  an
existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes
may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect
as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient
bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. In
addition,  open-label  clinical  trials  may  be  subject  to  an  “investigator  bias”  where  those  assessing  and  reviewing  the  physiological
outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group
more favorably given this knowledge. The results from an open-label trial may not be predictive of future clinical trial results with any of
our  product  candidates  for  which  we  include  an  open-label  clinical  trial  when  studied  in  a  controlled  environment  with  a  placebo  or
active control.

Our product development programs are based on novel technologies and are inherently risky.

We are subject to the risks of failure inherent in the development of products based on new technologies. The novel nature of our stem
cell therapy creates significant challenges with regard to product development and optimization, manufacturing, government regulations,
and market acceptance. For example, the FDA has relatively limited experience with stem cell therapies. None have been approved by
them  for  commercial  sale,  and  the  pathway  to  regulatory  approval  for  our  stem  cell  therapies  may  accordingly  be  more  complex  and
lengthy.  As  a  result,  the  development  and  commercialization  pathway  for  our  therapies  may  be  subject  to  increased  uncertainty,  as
compared to the pathway for new conventional drugs.  

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If serious or unexpected adverse side effects are identified during the development of our NurOwn® stem cell therapy, we may need
to abandon or limit its development.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
Undesirable side effects caused by NurOwn® could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could
result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential
product liability claims. If patients treated with our NurOwn® stem cell therapy suffer serious or unexpected adverse effects, we may
need to abandon its development or limit development to certain uses or subpopulations in which these effects are less prevalent, less
severe  or  more  acceptable  from  a  risk-benefit  perspective.  Any  of  these  occurrences  may  harm  our  business,  financial  condition  and
prospects significantly.

Despite our experience conducting and managing clinicals, we may not be able to be conduct and manage future trials successfully
and have limited experience in the application process necessary to obtain regulatory approvals.

Despite  our  prior  experience  in  conducting  and  managing  clinicals,  we  may  not  be  able  to  be  conduct  and  manage  future  trials
successfully. We have limited experience in the application process to obtain regulatory approvals. If our clinical trials are unsuccessful,
or  if  we  do  not  complete  our  clinical  trials,  we  may  not  receive  regulatory  approval  for  or  be  able  to  commercialize  our  stem  cell
therapies.

If  we  do  not  succeed  in  conducting  and  managing  our  preclinical  development  activities  or  clinical  trials,  or  in  obtaining  regulatory
approvals,  we  might  not  be  able  to  commercialize  our  stem  cell  therapies,  or  might  be  significantly  delayed  in  doing  so,  which  will
materially harm our business.

Our  ability  to  generate  revenues  from  any  of  our  stem  cell  therapies  will  depend  on  a  number  of  factors,  including  our  ability  to
successfully complete clinical trials, obtain necessary regulatory approvals and implement our commercialization strategy. We may, and
anticipate that we will need to, transition from a company with a research and development focus to a company capable of supporting
commercial activities and we may not succeed in such a transition.

We may not be able to secure and maintain research institutions to conduct our clinical trials.

We  rely  on  research  institutions  to  conduct  our  clinical  trials.  Our  reliance  upon  research  institutions,  including  hospitals  and  clinics,
provides  us  with  less  control  over  the  timing  and  cost  of  clinical  trials  and  the  ability  to  recruit  subjects.  If  we  are  unable  to  reach
agreements  with  suitable  research  institutions  on  acceptable  terms,  or  if  any  resulting  agreement  is  terminated,  we  may  be  unable  to
quickly replace the research institution with another qualified institution on acceptable terms. Furthermore, we may not be able to secure
and maintain suitable research institutions to conduct our clinical trials.

Risks Related to Our Business Operations and Commercialization of Stem Cell Therapies

The field of stem cell therapy is relatively new and our development efforts may not yield an effective treatment of human diseases.

Our intended cell therapeutic treatment NurOwn® for ALS involves a new approach using stem cells to treat ALS. Cell therapy is still a
developing area of research, with few cell therapy products approved for clinical use. Many of the existing cellular therapy candidates
are  based  on  novel  cell  technologies  that  are  inherently  risky  and  may  not  be  understood  or  accepted  by  the  marketplace.  The  novel
nature  of  our  cell  therapy  technology  creates  significant  challenges  with  respect  to  product  development  and  optimization,
manufacturing, government regulation and approval, third-party reimbursement.

Our NurOwn® stem cell therapy, even if approved, may not be accepted in the marketplace; therefore, we may not be able to generate
significant revenue, if any.

Even if our NurOwn® stem cell therapy is approved for sale, physicians and the medical community may not ultimately use it or may
use it only in applications more restricted than we anticipate. Our NurOwn® stem cell therapy, if successfully developed, will compete
with  a  number  of  traditional  products  manufactured  and  marketed  by  major  pharmaceutical  and  biotechnology  companies.  Our
NurOwn® stem cell therapy may also compete with new products currently under development by such companies and others.

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Physicians will prescribe a treatment only if they determine, based on experience, clinical data, side effect profiles and other factors, that
it  is  beneficial  as  compared  to  other  products  currently  available  and  in  use.  Physicians  also  will  prescribe  a  product  based  on  their
traditional  preferences.  Many  other  factors  influence  the  adoption  of  new  products,  including  patient  perceptions  and  preferences,
marketing  and  distribution  restrictions,  adverse  publicity,  product  pricing,  views  of  thought  leaders  in  the  medical  community  and
reimbursement by government and private payors. Any of these factors could have a material adverse effect on our business, financial
condition, and results of operations.

Adoption of our NurOwn® stem cell therapy for the treatment of patients with ALS, PMS, AD or other neurodegenerative diseases,
even if approved, may be slow or limited. If our NurOwn® stem cell therapy does not achieve broad acceptance as a treatment option
for ALS, PMS, AD or other neurodegenerative diseases, our business would be negatively impact our revenue forecast.

If  approved,  the  rate  of  adoption  of  our  NurOwn®  stem  cell  therapy  as  a  treatment  for  ALS,  PMS,  AD  or  other  neurodegenerative
diseases, and the ultimate sales volume for our treatment, will depend on several factors, including educating treating physicians on how
to use our NurOwn® stem cell therapy. Our NurOwn® stem cell therapy utilizes individualized stem cell therapy, which is significantly
different from the pharmacological approach currently used to treat neurodegenerative diseases. Acceptance of our NurOwn® stem cell
therapy by physicians may require us to provide them with extensive education regarding the mechanism of action of our treatment, the
method of delivery of the treatment, expected side effects and the method of monitoring patients for efficacy and follow-up. In addition,
the  manufacturing  and  delivery  processes  associated  with  our  treatment  will  require  physicians  to  adjust  their  current  treatment  of
patients, which may delay or prevent market adoption of our NurOwn® stem cell therapy as a preferred therapy, even if approved.

Our success will depend in part on establishing and maintaining effective strategic partnerships and collaborations, which may
impose restrictions on our business and subject us to additional regulation.

A key aspect of our business strategy is to establish strategic relationships to expand or complement our research and development or
commercialization  capabilities,  and  to  reduce  the  cost  of  such  activities.  There  can  be  no  assurance  that  we  will  enter  into  such
relationships,  that  the  arrangements  will  be  on  favorable  terms  or  that  such  relationships  will  be  successful.  If  we  are  ultimately
successful in executing our strategy of securing collaborations with companies that would undertake advanced clinical development and
commercialization of our products, we may not have day-to-day control over their activities. Potential collaborators may have significant
discretion in determining the efforts and amount of resources that they dedicate to our collaborations or may be unwilling or unable to
fulfill their obligations to us, including their development and commercialization. Potential collaborators may underfund or not commit
sufficient resources to the testing, marketing, distribution or other development of our products. They may also not properly maintain or
defend  our  intellectual  property  rights  or  they  may  utilize  our  proprietary  information  in  such  a  way  as  to  invite  litigation  that  could
jeopardize or potentially invalidate our proprietary information or expose us to potential liability. Potential collaboration partners may
have  the  right  to  terminate  the  collaboration  on  relatively  short  notice  and  if  they  do  so  or  if  they  fail  to  perform  or  satisfy  their
obligations to us, the development or commercialization of products may be delayed and our ability to realize any potential milestone
payments and royalty revenue would be adversely affected.

We will need to develop or acquire additional capabilities in order to commercialize our NurOwn® stem cell therapy, if approved for
sale, and we may encounter unexpected costs or difficulties in doing so.

We will need to acquire additional capabilities and effectively manage our operations and facilities to successfully pursue and complete
future research, development and, if our NurOwn® stem cell therapy receives regulatory approval, commercialization efforts. Currently,
we  have  no  experience  in  preparing  applications  for  marketing  approval,  commercial-scale  manufacturing,  managing  of  large-scale
information  technology  systems  or  managing  a  large-scale  distribution  system.  We  will  need  to  add  personnel  and  expand  our
capabilities,  which  may  strain  our  existing  managerial,  operational,  regulatory  compliance,  financial  and  other  resources.  To  do  this
effectively, we must:

*

*

*

train, manage and motivate a growing employee base;

accurately forecast demand for our treatment; and

expand existing operational, financial and management information systems.

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We expect to expand our development, regulatory, manufacturing and sales and marketing capabilities, and as a result, we may
encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of
product  development,  regulatory  affairs,  manufacturing  and  sales  and  marketing.  To  manage  our  anticipated  future  growth,  we  must
continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and
train additional qualified personnel. Due to our limited financial resources and our limited experience in managing a company with such
anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified
personnel.  The  physical  expansion  of  our  operations  may  lead  to  significant  costs  and  may  divert  our  management  and  business
development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

We have never manufactured our NurOwn® stem cell therapy at commercial scale and there can be no assurance that it can be
manufactured in compliance with regulations at a cost or in quantities necessary to make it commercially viable.

Although,  several  members  of  our  management  team  have  experience  in  commercial  scale  cell  therapy  manufacturing,  we  have  no
experience in commercial-scale stem cell therapy manufacturing. We may develop our manufacturing capacity in part by expanding our
current  facilities  and/or  by  setting  up  additional  facilities  in  other  regions  of  the  country.  These  activities  would  require  substantial
additional funds and we would need to hire and train significant numbers of qualified employees to staff these facilities.

To this end, we are working with Catalent, a third party manufacturer for producing commercial quantities of NurOwn® to treat patients
with We are also working with RR&D, to help us establish in-house manufacturing capabilities. Our current dependence on others for the
manufacture  of  our  drug  candidates  may  adversely  affect  our  ability  to  develop  and  deliver  such  drug  candidates  on  a  timely  and
competitive  basis.  Any  performance  failure  on  the  part  of  a  third-party  manufacturer  could  delay  clinical  development,  regulatory
approval  or,  ultimately,  sales  of  our  NurOwn®.  Our  third-party  manufacturers  may  encounter  difficulties  involving  production  yields,
regulatory  compliance,  lot  release,  quality  control  and  quality  assurance,  as  well  as  shortages  of  qualified  personnel.  Approval  of  our
NurOwn® could be delayed, limited or denied if the FDA does not approve our or a third-party manufacturer’s processes or facilities.

If any CMO with whom we contract fails to perform its obligations, we may be forced to manufacture the materials ourselves, for which
we may not have the capabilities or resources, or enter into an agreement with a different CMO, which we may not be able to do on
reasonable terms, if at all. In either scenario, our clinical trials supply could be delayed significantly as we establish alternative supply
sources. In some cases, the technical skills required to manufacture our products or product candidates may be unique or proprietary to
the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a
back-up or alternate supplier, or we may be unable to transfer such skills at all. In addition, if we are required to change CMOs for any
reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with
all applicable regulations. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing
process  will  produce  our  product  candidate  according  to  the  specifications  previously  submitted  to  the  FDA  or  another  regulatory
authority. The delays associated with the verification of a new CMO could negatively affect our ability to develop product candidates or
commercialize  our  products  in  a  timely  manner  or  within  budget.  Furthermore,  a  CMO  may  possess  technology  related  to  the
manufacture of our product candidate that such CMO owns independently. This would increase our reliance on such CMO or require us
to  obtain  a  license  from  such  CMO  in  order  to  have  another  CMO  manufacture  our  product  candidates.  In  addition,  changes  in
manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies
between our prior clinical supply used in our clinical trials and that of any new manufacturer. We may be unsuccessful in demonstrating
the comparability of clinical supplies which could require the conduct of additional clinical trials.

In addition, in response to the COVID-19 pandemic, on March 10, 2020 the FDA announced its intention to postpone most inspections
of foreign manufacturing facilities while local, national and international conditions warrant. On March 18, 2020, the FDA announced its
intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding
the conduct of clinical trials which the FDA continues to update. As of June 23, 2020, the FDA noted it was conducting mission critical
domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards. On July 10, 2020, the
FDA announced its goal of restarting domestic on-site inspections during the week of July 20, 2020, but such activities will depend on
data  about  the  virus’  trajectory  in  a  given  state  and  locality  and  the  rules  and  guidelines  that  are  put  in  place  by  state  and  local
governments. The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic
inspections. Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review
cycle due to restrictions on travel, FDA has stated that it generally intends to issue a complete response letter. In 2020, several

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companies  announced  receipt  of  complete  response  letters  due  to  the  FDA's  inability  to  complete  required  inspections  for  their
applications. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-
19  pandemic  and  may  experience  delays  in  their  regulatory  activities.  If  we  are  not  successful  in  establishing  regulatory  compliant,
scaled manufacturing capabilities, our commercialization could be delayed, which would further delay the period when we would be able
to generate revenues from the sale of such of our products.

Furthermore,  we  must  supply  all  necessary  documentation,  including  product  characterization  and  process  validation,  to  regulatory
authorities in support of our BLA on a timely basis and must adhere to cGMP regulations and current Good Tissue Practices (“GTP”)
enforced by the regulatory authority through its facilities inspection program. If the FDA determines that the products used in our clinical
trials are not sufficiently characterized, we may be required to repeat all or a portion of our clinical trials. If our facilities cannot pass a
pre-approval plant inspection, the regulatory approval of the stem cell therapies will not be granted.

Lack of coordination internally among our employees and externally with physicians, hospitals and third-party suppliers and
carriers, could cause manufacturing difficulties, disruptions or delays and cause us to not meet our expected clinical trial
requirements or potential commercial requirements.

Manufacturing our NurOwn® stem cell therapy requires coordination internally among our employees and externally with physicians,
hospitals and third-party suppliers and carriers. For example, a patient’s physician or clinical site will need to coordinate with us for the
shipping  of  a  patient’s  bone  marrow  to  our  manufacturing  facility,  and  we  will  need  to  coordinate  with  them  for  the  shipping  of  the
treatment components to them. Such coordination involves a number of risks that may lead to failures or delays in manufacturing our
NurOwn® stem cell therapy, including:

*

*

*

*

*

*

*

*

*

failure to obtain a sufficient supply of key raw materials of suitable quality;

difficulties in manufacturing our stem cell therapies for multiple patients simultaneously;

difficulties in obtaining adequate patient-specific material, such as bone marrow samples, from physicians;

difficulties  in  completing  the  development  and  validation  of  the  harvested  cells  required  to  ensure  the  consistency  of  our
NurOwn® stem cell therapy;

failure to ensure adequate quality control and assurances in the manufacturing process as we increase production quantities;

difficulties in the timely shipping of patient-specific materials to us or in the shipping of the stem cell therapies to the treating
physicians due to errors by third-party carriers, transportation restrictions or other reasons;

loss or destruction of, or damage to, patient-specific materials or our NurOwn® stem cell therapy during the shipping process
due to improper handling by third-party carriers, hospitals, physicians or us;

loss  or  destruction  of,  or  damage  to,  patient-specific  materials  or  our  NurOwn®  stem  cell  therapy  during  storage  at  our
facilities; and

loss or destruction of, or damage to, patient-specific materials or our NurOwn® stem cell therapy stored at clinical and future
commercial sites due to improper handling or holding by clinicians, hospitals or physicians.

If we are unable to coordinate appropriately, we may encounter delays or additional costs in achieving our clinical and commercialization
objectives, including in obtaining regulatory approvals of our stem cell therapies and supplying products, which could materially damage
our business and financial position.

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We face competition in our efforts to develop cell therapies for ALS and other neurodegenerative diseases.

We face competition in our efforts to develop cell therapies and other treatment or procedures to cure or slow the effects of ALS and
other  neurodegenerative  diseases.  Among  our  competitors  are  companies  that  are  involved  in  the  fetal-derived  cell  transplants  or
embryonic  stem  cell  derived  cell  therapy  and  companies  developing  adult  stem  cells.  Other  companies  are  developing  traditional
chemical compounds, new biological drugs, cloned human proteins and other treatments, which are likely to impact the markets that we
intend  to  target.  Some  of  our  competitors  possess  longer  operating  histories  and  greater  financial,  managerial,  scientific  and  technical
resources than we do, and some possess greater name recognition and established customer bases. Some also have significantly more
experience  in  preclinical  testing,  human  clinical  trials,  product  manufacturing,  the  regulatory  approval  process  and  marketing  and
distribution than we do.

The trend towards consolidation in the pharmaceutical and biotechnology industries may adversely affect us.

There  is  a  trend  towards  consolidation  in  the  pharmaceutical  and  biotechnology  industries.  This  consolidation  trend  may  result  in  the
remaining companies having greater financial resources and discovery technological capabilities, thus intensifying competition in these
industries.  This  trend  may  also  result  in  fewer  potential  collaborators  or  licensees  for  our  stem  cell  therapies.  Also,  if  a  consolidating
company  is  already  doing  business  with  our  competitors,  we  may  lose  existing  licensees  or  collaborators  as  a  result  of  such
consolidation.

There is a scarcity of experienced professionals in the field of cell therapy and we may not be able to retain key personnel or hire new
key personnel needed to implement our business strategy and develop our products and businesses. If we are unable to retain or hire
key personnel, we may be unable to continue to grow our business or to implement our business strategy, and our business may be
materially and adversely affected.

Given the specialized nature of cell therapy and the fact that it is a young field, there is an inherent scarcity of experienced personnel in
the  field.  Our  success  depends  on  a  significant  extent  to  the  continued  services  of  certain  highly  qualified  scientific  and  management
personnel. We face competition for qualified personnel from numerous industry sources, and there can be no assurance that we will be
able to attract and retain qualified personnel on acceptable terms. The loss of service of any of our key personnel could have a material
adverse effect on our operations or financial condition. In the event of the loss of services of such personnel, no assurance can be given
that we will be able to obtain the services of adequate replacement personnel. The future success of the Company also depends upon our
ability  to  attract  and  retain  additional  qualified  personnel  (including  medical,  scientific,  technical,  commercial,  business  and
administrative  personnel)  necessary  to  support  our  anticipated  growth,  develop  our  business,  and  maintain  appropriate  licensure,  on
acceptable terms. There can be no assurance that we will be successful in attracting or retaining personnel required by us to continue and
grow our operations. The loss of a key employee, the failure of a key employee to perform in his or her current position or our inability
to  attract  and  retain  skilled  employees,  as  needed,  could  result  in  our  inability  to  continue  to  grow  our  business  or  to  implement  our
business strategy, or may have a material adverse effect on our business, financial condition and results of operations.

Technological and medical developments or improvements in conventional therapies could render the use of stem cells and our
services and planned products obsolete.

The  pharmaceutical  industry  is  characterized  by  rapidly  changing  markets,  technology,  emerging  industry  standards  and  frequent
introduction of new products. The introduction of new products embodying new technologies, including new manufacturing processes,
and the emergence of new industry standards may render our technologies obsolete, less competitive or less marketable. Advances in
other treatment methods or in disease prevention techniques could significantly reduce or entirely eliminate the need for our stem cell
services,  planned  products  and  therapeutic  efforts.  Additionally,  technological  or  medical  developments  may  materially  alter  the
commercial viability of our technology or services, and require us to incur significant costs to replace or modify equipment in which we
have  a  substantial  investment.  In  either  event,  we  may  experience  a  material  adverse  effect  on  our  business,  results  of  operations  and
financial condition. To date, approved conventional therapies have not shown significant clinical benefit as disease modifying therapies
in the indications that we are currently working on.  

We may expend our limited resources to pursue our NurOwn® stem cell therapy or a specific indication for its use and fail to
capitalize on stem cell therapies or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we have focused development of our NurOwn® stem cell therapy for use in
patients with ALS, PMS and AD. As a result, we may forego or delay pursuit of opportunities with other stem cell therapies or for

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other  indications  that  later  prove  to  have  greater  commercial  potential.  Our  resource  allocation  decisions  also  may  cause  us  to  fail  to
capitalize on a viable commercial treatment, a more viable indication or profitable market opportunities.

We have based our research and development efforts on our NurOwn® stem cell therapy. Notwithstanding our large investment to date
and anticipated future expenditures in our NurOwn® stem cell therapy, we have not yet developed, and may never successfully develop,
any marketed treatments using this approach. As a result of pursuing the development of our NurOwn® stem cell therapy, we may fail to
develop stem cell therapies or address indications based on other scientific approaches that may offer greater commercial potential or for
which there is a greater likelihood of success.

Our NurOwn® stem cell therapy is based on a novel technology, which may raise development issues that we may not be able to
resolve, regulatory issues that could delay or prevent approval or personnel issues that may keep us from being able to develop our
treatments.

Regulatory approval of stem cell therapies that utilize novel technology such as ours can be more expensive and take longer than for
other treatments that are based on more well-known or more extensively studied technology. This may lengthen the regulatory review
process, require us to perform additional studies, including clinical trials, increase our development costs, lead to changes in regulatory
positions and interpretations, delay or prevent approval and commercialization of these stem cell therapies or lead to significant post-
approval  limitations  or  restrictions.  For  example,  the  differentiated  cell  component  of  our  NurOwn®  stem  cell  therapy  is  a  complex
biologic product that is manufactured from the patient’s own bone marrow that must be appropriately harvested, isolated, expanded and
differentiated  so  that  its  identity,  strength,  quality,  purity  and  potency  may  be  characterized  prior  to  release  for  treatment.  No
differentiated cell treatment for ALS has yet been approved for marketing by the FDA or any other regulatory agency.

The novel nature of our NurOwn® stem cell therapy also means that fewer people are trained in or experienced with treatments of this
type, which may make it difficult to recruit, hire and retain capable personnel for the research, development and manufacturing positions
that will be required to continue our development and commercialization efforts.

We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws health information
privacy and security laws, and other health care laws and regulations. If we are unable to comply, or have not fully complied, with
such laws, we could face substantial penalties.

If  we  obtain  FDA  approval  for  any  of  our  product  candidates  and  begin  commercializing  those  products  in  the  United  States,  our
operations will be directly, or indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and
abuse laws and regulations, including, without limitation, the federal Health Care Program Anti-Kickback Statute, the federal civil and
criminal  False  Claims  Act  and  Physician  Payments  Sunshine  Act  and  regulations.  These  laws  will  impact,  among  other  things,  our
proposed  sales,  marketing  and  educational  programs.  In  addition,  we  may  be  subject  to  patient  privacy  laws  by  both  the  federal
government and the states in which we conduct our business. The laws that will affect our operations include, but are not limited to:

*

*

the  federal  Anti-Kickback  Statute,  which  prohibits,  among  other  things,  persons  or  entities  from  knowingly  and  willfully
soliciting,  receiving,  offering  or  paying  any  remuneration  (including  any  kickback,  bribe  or  rebate),  directly  or  indirectly,
overtly or covertly, in cash or in kind, to induce, or in return for, the purchase, lease, order, arrangement, or recommendation of
any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program,
such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-
Kickback Statute or specific intent to violate it to have committed a violation. Violations are subject to civil and criminal fines
and  penalties  for  each  violation,  plus  up  to  three  times  the  remuneration  involved,  imprisonment,  and  exclusion  from
government healthcare programs. In addition, the government may assert that a claim including items or services resulting from
a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims
Act or federal civil money penalties;

the federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, which
impose  criminal  and  civil  penalties  and  authorize  civil  whistleblower  or  qui  tam  actions,  against  individuals  or  entities  for,
among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are
false or fraudulent; knowingly making, using or causing to be made or used, a false statement of record material to a false or
fraudulent  claim  or  obligation  to  pay  or  transmit  money  or  property  to  the  federal  government  or  knowingly  concealing  or
knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government. Manufacturers can

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*

*

be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are
deemed to “cause” the submission of false or fraudulent claims. The federal False Claims Act also permits a private individual
acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims
Act and to share in any monetary recovery;

the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without
limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or
Medicaid  beneficiary  that  the  person  knows  or  should  know  is  likely  to  influence  the  beneficiary’s  selection  of  a  particular
supplier of items or services reimbursable by a federal or state governmental program;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes
that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare
benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property
owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private)
and  knowingly  and  willfully  falsifying,  concealing  or  covering  up  by  any  trick  or  device  a  material  fact  or  making  any
materially  false,  fictitious,  or  fraudulent  statements  or  representations  in  connection  with  the  delivery  of,  or  payment  for,
healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or
entity  does  not  need  to  have  actual  knowledge  of  the  statute  or  specific  intent  to  violate  it  in  order  to  have  committed  a
violation;

* HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH and
their  respective  implementing  regulations,  including  the  Final  Omnibus  Rule  published  in  January  2013,  which  impose
requirements  on  certain  covered  healthcare  providers,  health  plans,  and  healthcare  clearinghouses  as  well  as  their  respective
business  associates,  independent  contractors  or  agents  of  covered  entities,  that  perform  services  for  them  that  involve  the
creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security
and  transmission  of  individually  identifiable  health  information.  HITECH  also  created  new  tiers  of  civil  monetary  penalties,
amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general
new  authority  to  file  civil  actions  for  damages  or  injunctions  in  federal  courts  to  enforce  the  federal  HIPAA  laws  and  seek
attorneys’ fees and costs associated with pursuing federal civil actions. In addition, there  may be additional federal, state and
non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many
of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

*

*

*

The  U.S.  federal  transparency  requirements  under  the  ACA,  including  the  provision  commonly  referred  to  as  the  Physician
Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics
and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to
report  annually  to  CMS,  information  related  to  payments  or  other  transfers  of  value  made  to  physicians  (defined  to  include
doctors,  dentists,  optometrists,  podiatrists  and  chiropractors)  and  teaching  hospitals,  as  well  as  ownership  and  investment
interests  held  by  the  physicians  described  above  and  their  immediate  family  members.  Effective  January  1,  2022,  these
reporting  obligations  will  extend  to  include  transfers  of  value  made  to  certain  non-physician  providers  such  as  physician
assistants and nurse practitioners;

federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and
timely manner to government programs;

federal  consumer  protection  and  unfair  competition  laws,  which  broadly  regulate  marketplace  activities  and  activities  that
potentially harm consumers; and

* Many  states  in  the  United  States  have  enacted  laws  that  regulate  the  privacy  and/or  security  of  certain  types  of  personal
information. For example, in California the California Consumer Protection Act (CCPA), which went into effect on January 1,
2020, establishes a new privacy framework for covered businesses by creating an expanded definition of personal information,
establishing  new  data  privacy  rights  for  consumers  in  the  State  of  California,  imposing  special  rules  on  the  collection  of
consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA
and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches. After a delay,
the CCPA became subject to enforcement as of July 1, 2020. Although clinical trial data and protected health information

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subject to HIPAA are currently exempt from CCPA, we may be subject to the CCPA with respect to other personal information
regarding California residents.

In addition to the above, on November 20, 2020, the Office of Inspector General, or OIG finalized further modifications to the federal
Anti-Kickback Statute. Under the final rules, OIG added safe harbor protections under the Anti-Kickback Statute for certain coordinated
care and value-based arrangements among clinicians, providers, and others, yet removed safe harbor protection for price reductions from
pharmaceutical  manufacturers  to  plan  sponsors  under  Part  D,  either  directly  or  through  pharmacy  benefit  managers,  unless  the  price
reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe
harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. This rule (with exceptions) became
effective January 19, 2021. We continue to evaluate what effect, if any, these rules will have on our business.

Additionally,  we  are  subject  to  state  and  foreign  equivalents  of  each  of  the  healthcare  laws  and  regulations  described  above,  among
others, some of which may be broader in scope and may apply regardless of the payor. Many U.S. states have adopted laws similar to the
federal  Anti-Kickback  Statute  and  False  Claims  Act,  and  may  apply  to  our  business  practices,  including,  but  not  limited  to,  research,
distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors,
including  private  insurers.  In  addition,  some  states  have  passed  laws  that  require  pharmaceutical  companies  to  comply  with  the  April
2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research
and  Manufacturers  of  America’s  Code  on  Interactions  with  Healthcare  Professionals.  Several  states  also  impose  other  marketing
restrictions  or  require  pharmaceutical  companies  to  make  marketing  or  price  disclosures  to  the  state  and  require  the  registration  of
pharmaceutical sales representatives. State and foreign laws, including for example the GDPR in the EEA, also govern the privacy and
security  of  health  information  in  some  circumstances,  many  of  which  differ  from  each  other  in  significant  ways  and  often  are  not
preempted  by  HIPAA,  thus  complicating  compliance  efforts.  There  are  ambiguities  as  to  what  is  required  to  comply  with  these  state
requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties. Finally, there are state
and foreign laws governing the privacy and security of health information, many of which differ from each other in significant ways and
often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of
our business activities could be subject to challenge and may not comply under one or more of such laws, regulations, and guidance. Law
enforcement authorities are increasingly focused on enforcing fraud and abuse laws, and it is possible that some of our practices may be
challenged  under  these  laws.  Efforts  to  ensure  that  our  current  and  future  business  arrangements  with  third  parties,  and  our  business
generally,  will  comply  with  applicable  healthcare  laws  and  regulations  will  involve  substantial  costs.  If  our  operations,  including  our
arrangements  with  physicians  and  other  healthcare  providers,  some  of  whom  receive  share  options  as  compensation  for  services
provided, are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to
penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages,
reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation
in federal and state healthcare programs (such as Medicare and Medicaid), and imprisonment, as well as additional reporting obligations
and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with
these laws, any of which could adversely affect our ability to operate our business and our financial results.

It is uncertain to what extent the government, private health insurers and third-party payors will approve coverage or provide
reimbursement for the therapies and products to which our services relate. Availability for such reimbursement may be further
limited by an increasing uninsured population and reductions in Medicare and Medicaid funding in the United States.

In  the  United  States  and  markets  in  other  countries,  patients  generally  rely  on  third-party  payors  to  reimburse  all  or  part  of  the  costs
associated with their treatment. Our ability to successfully commercialize our human therapeutic products will depend significantly on
our ability to obtain acceptable prices and the availability of reimbursement to the patient from third-party payors, such as government
and private insurance plans. Although we have commenced initial discussions with such parties, pricing for our product, if approved, is
yet to determined. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the
costs of our product candidates will be covered and paid by health maintenance, managed care, pharmacy benefit and similar healthcare
management  organizations,  or  reimbursed  by  government  health  administration  authorities,  private  health  coverage  insurers  and  other
payors.  If  coverage  and  adequate  reimbursement  are  not  available,  or  are  available  only  to  limited  levels,  we  may  not  be  able  to
successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high
enough  to  allow  us  to  establish  or  maintain  pricing  sufficient  to  realize  a  sufficient  return  on  our  investment.  We  may  not  be  able  to
provide data sufficient to gain acceptance with respect to coverage and reimbursement. If reimbursement is not available, or is available

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only  at  limited  levels,  we  may  not  be  able  to  successfully  commercialize  our  product  candidates,  if  approved.  The  process  for
determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that
the payor will pay for the product. Payors may limit coverage to specific products on an approved list, or formulary, which might not
include all of the FDA-approved products for a particular indication. A decision by a payor not to cover our gene therapies could reduce
physician utilization of our products once approved, and have a material adverse effect on our sales, results of operations and financial
condition.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States,
the principal decisions about coverage and reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid
Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS, as CMS decides whether and to what
extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow the CMS to a substantial degree. It
is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no
body of established practices and precedents for these new products. Factors payors consider in determining reimbursement are based on
whether the product is:

*

*

*

*

*

a covered benefit under its health plan;

safe, effective and medically necessary;

appropriate for the specific patient;

cost-effective; and

neither experimental nor investigational.

These  third-party  payors  frequently  require  companies  to  provide  predetermined  discounts  from  list  prices,  and  they  are  increasingly
challenging the prices charged for pharmaceuticals and other medical products. Our human therapeutic products may not be considered
cost-effective, and reimbursement to the patient may not be available or sufficient to allow us to sell our products on a competitive basis.

Further, as cost containment pressures are increasing in the health care industry, government and private payors adopt strategies designed
to limit the amount of reimbursement paid to health care providers. Such cost containment measures may include:

* Reducing reimbursement rates;

* Challenging the prices charged for medical products and services;

*

Limiting services covered;

* Decreasing utilization of services;

* Negotiating prospective or discounted contract pricing;

* Adopting capitation strategies; and

*

Seeking competitive bids.

Similarly,  the  trend  toward  managed  health  care  and  bundled  pricing  for  health  care  services  in  the  United  States  could  significantly
influence the purchase of healthcare services and products, resulting in lower prices and reduced demand for our therapies.

We may not be able to negotiate favorable reimbursement rates for our human therapeutic products. If we fail to obtain acceptable prices
or  an  adequate  level  of  reimbursement  for  our  products,  the  sales  of  our  products  would  be  adversely  affected  or  there  may  be  no
commercially viable market for our products.

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Unintended consequences of recently adopted health reform legislation in the U.S. may adversely affect our business.

The  healthcare  industry  is  undergoing  fundamental  changes  resulting  from  political,  economic  and  regulatory  influences.  In  the  U.S.,
comprehensive programs are under consideration that seek to, among other things, increase access to healthcare for the uninsured and
control the escalation of healthcare expenditures within the economy. Payors, whether domestic or foreign, or governmental or private,
are developing increasingly sophisticated methods of controlling healthcare costs and those methods are not always specifically adapted
for new technologies such as gene therapy and therapies addressing rare diseases such as those we are developing. In both the United
States  and  certain  foreign  jurisdictions,  there  have  been  a  number  of  legislative  and  regulatory  changes  to  the  health  care  system  that
could impact our ability to sell our products profitably. In particular, in 2010, the Patient Protection and Affordable Care Act, as amended
by  the  Health  Care  and  Education  Reconciliation  Act  of  2010,  or  collectively,  the  ACA,  was  enacted,  which,  among  other  things,
subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by
manufacturers  under  the  Medicaid  Drug  Rebate  Program  are  calculated  for  drugs  that  are  inhaled,  infused,  instilled,  implanted  or
injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the
Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected
manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount
program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as
of January 1, 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage
gap  period,  as  a  condition  for  the  manufacturer’s  outpatient  drugs  to  be  covered  under  Medicare  Part  D;  and  provided  incentives  to
programs that increase the federal government’s comparative effectiveness research.

Since  its  enactment,  there  have  been  numerous  judicial,  administrative,  executive,  and  legislative  challenges  to  certain  aspects  of  the
ACA,  and  we  expect  there  will  be  additional  challenges  and  amendments  to  the  ACA  in  the  future.  Various  portions  of  the  ACA  are
currently undergoing legal and constitutional challenges in the United States Supreme Court; the former Trump Administration issued
various Executive Orders which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a
cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or
medical  devices;  and  Congress  has  introduced  several  pieces  of  legislation  aimed  at  significantly  revising  or  repealing  the  ACA.  The
United  States  Supreme  Court  is  expected  to  rule  on  a  legal  challenge  to  the  constitutionality  of  the  ACA  in  early  2021.  The
implementation of the ACA is ongoing, the law appears likely to continue the downward pressure on pharmaceutical pricing, especially
under the Medicare program, and may also increase our regulatory burdens and operating costs. Litigation and legislation related to the
ACA  are  likely  to  continue,  with  unpredictable  and  uncertain  results.  It  is  unclear  whether  the  ACA  will  be  overturned,  repealed,
replaced, or further amended. We cannot predict what affect further changes to the ACA would have on our business.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint
Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.5 trillion for the years 2013
through  2021,  was  unable  to  reach  required  goals,  thereby  triggering  the  legislation’s  automatic  reduction  to  several  government
programs. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April
2013, and will remain in effect through 2030 unless additional Congressional action is taken; however, pursuant to the CARES Act, and
subsequent  legislation,  these  reductions  are  suspended  from  May  1,  2020  through  March  31,  2021  due  to  the  COVID-19  pandemic.
Proposed legislation, if passed, would extend this suspension until the end of the COVID-19 pandemic.  In January 2013, the American
Taxpayer Relief Act of 2012, was signed into law, which, among other things, further reduced Medicare payments to several providers,
including  hospitals  and  cancer  treatment  centers,  and  increased  the  statute  of  limitations  period  for  the  government  to  recover
overpayments to providers from three to five years.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing
practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation
designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review
the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for
drugs. At the federal level, the former Trump administration’s budget proposal for fiscal year 2021 included a $135 billion allowance to
support  legislative  proposals  seeking  to  reduce  drug  prices,  increase  competition,  lower  out-of-pocket  drug  costs  for  patients,  and
increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the U.S. government sent “principles” for drug
pricing  to  Congress,  calling  for  legislation  that  would,  among  other  things,  cap  Medicare  Part  D  beneficiary  out-of-pocket  pharmacy
expenses,  provide  an  option  to  cap  Medicare  Part  D  beneficiary  monthly  out-of-pocket  expenses,  and  place  limits  on  pharmaceutical
price  increases.  Further,  the  Trump  administration  previously  released  a  “Blueprint”,  or  plan,  to  lower  drug  prices  and  reduce  out  of
pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of

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certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs
of drug products paid by consumers. HHS implemented certain of these measures while others are under review. For example, in May
2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part
B  drugs  beginning  January  1,  2020.    In  addition,  there  have  been  several  changes  to  the  340B  drug  pricing  program,  which  imposes
ceilings on prices that drug manufacturers can charge for medications sold to certain health care facilities, though certain changes to the
340B pricing calculations are currently under legal challenge. It is unclear how these developments could affect covered hospitals who
might purchase our future products and affect the rates we may charge such facilities for our approved products in the future, if any.

Further,  on  July  24,  2020  and  September  13,  2020,  former  President  Trump  signed  several  Executive  Orders  aimed  at  lowering  drug
pricing  that  seek  to  implement  several  of  the  administration's  proposals.  The  FDA  also  released  a  final  rule  on  September  24,  2020,
which  went  into  effect  on  November  30,  2020,  providing  guidance  for  states  to  build  and  submit  importation  plans  for  drugs  from
Canada.  Additionally,  on  November  20,  2020  CMS  issued  an  Interim  Final  Rule  implementing  the  Most  Favored  Nation,  or  MFN,
Model  under which  Medicare Part B reimbursement rates will be calculated for certain drugs and biologicals based on the lowest price
drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product
per  capita.    The  MFN  Model  regulations  mandate  participation  by  identified  Part  B  providers  and  will  apply  in  all  U.S.  states  and
territories  for  a  seven-year  period  beginning  January  1,  2021  and  ending  December  31,  2027.    The  Interim  Final  Rule  has  not  been
finalized  and  is  subject  to  revision  and  challenge,  including  legal  challenges  from  industry  advocacy  groups  and  participants.
Additionally,  on  November  20,  2020,  HHS  finalized  a  regulation  removing  safe  harbor  protection  for  price  reductions  from
pharmaceutical  manufacturers  to  plan  sponsors  under  Part  D,  either  directly  or  through  pharmacy  benefit  managers,  unless  the  price
reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe
harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. Although a number of these, and other
proposed  measures  may  require  authorization  through  additional  legislation  to  become  effective,  and  the  Biden  administration  may
reverse or otherwise change these measures, Congress has indicated that it will continue to seek new legislative measures to control drug
costs.

At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, or restrictions on certain product access, and
marketing cost disclosure and transparency measures, which, in some cases, are designed to encourage importation from other countries
and bulk purchasing.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at
broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be
adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of
healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

*

*

*

*

*

the demand for our product candidates, if we obtain regulatory approval;

our ability to set a price that we believe is fair for our products;

our ability to generate revenue and achieve or maintain profitability;

the level of taxes that we are required to pay; and

the availability of capital.

Any denial in coverage or reduction in reimbursement from Medicare or other government programs may result in a similar denial or
reduction in payments from private payors, which may adversely affect our future profitability.

Ethical and other concerns surrounding the use of stem cell therapy may negatively impact the public perception of our stem cell
services, thereby suppressing demand for our services.

Although  our  stem  cell  business  pertains  to  adult  stem  cells  only  and  does  not  involve  the  more  controversial  use  of  embryonic  stem
cells, the use of adult human stem cells for therapy could give rise to similar ethical, legal and social issues as those associated with

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embryonic stem cells, which could adversely affect its acceptance by consumers and medical practitioners. Additionally, it is possible
that  our  business  could  be  negatively  impacted  by  any  stigma  associated  with  the  use  of  embryonic  stem  cells  if  the  public  fails  to
appreciate the distinction between adult and embryonic stem cells. Delays in achieving public acceptance may materially and adversely
affect the results of our operations and profitability.

We may be subject to significant product liability claims and litigation which could adversely affect our future earnings and financial
condition.

Our  business  exposes  us  to  potential  product  liability  risks  inherent  in  the  testing,  processing  and  marketing  of  stem  cell  therapy
products. Specifically, the conduct of clinical trials in humans involves the potential risk that the use of our stem cell therapy products
will result in adverse effects. Such liability claims may be expensive to defend and result in large judgments against us. We currently
maintain liability insurance for our clinical trials; however, such liability insurance may not be adequate to fully cover any liabilities that
arise  from  clinical  trials  of  our  stem  cell  therapy  products.  We  also  maintain  errors  and  omissions,  directors  and  officers,  workers’
compensation and other insurance appropriate to our business activities. If we were to be subject to a claim in excess of this coverage or
to a claim not covered by our insurance and the claim succeeded, we would be required to pay the claim from our own limited resources,
which could have a material adverse effect on our financial condition, results of operations and business. Additionally, liability or alleged
liability could harm our business by diverting the attention and resources of our management and damaging our reputation and that of our
subsidiaries.

Political, economic and military instability in Israel may impede our ability to execute our plan of operations.

Our  principal  operations  and  the  research  and  development  facilities  of  the  scientific  team  funded  by  us  under  the  Second  Ramot
Agreement  are  located  in  Israel.  Accordingly,  political,  economic  and  military  conditions  in  Israel  may  affect  our  business.  Since  the
establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its Arab neighbors. Acts of
random  terrorism  periodically  occur  which  could  affect  our  operations  or  personnel.  Ongoing  or  revived  hostilities  or  other  factors
related to Israel could harm our operations and research and development process and could impede our ability to execute our plan of
operations.

In addition, Israeli-based companies and companies doing business with Israel have been the subject of an economic boycott by members
of  the  Arab  League  and  certain  other  predominantly  Muslim  countries  since  Israel's  establishment.  Although  Israel  has  entered  into
various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in connection
with efforts to resolve some of the economic and political problems in the Middle East, we cannot predict whether or in what manner
these problems will be resolved. Wars and acts of terrorism have resulted in damage to the Israeli economy, including reducing the level
of foreign and local investment.

Furthermore, certain of our officers and employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are
subject  to  being  called  up  for  active  military  duty  at  any  time.  Israeli  citizens  who  have  served  in  the  army  may  be  subject  to  an
obligation to perform reserve duty until they are between 40 and 49 years old, depending upon the nature of their military service.

Man-Made Problems Such as Computer Viruses or Terrorism May Disrupt Our Operations and Harm Our Operating Results

Despite  our  implementation  of  network  security  measures  our  servers  are  vulnerable  to  computer  viruses,  break-ins,  and  similar
disruptions  from  unauthorized  tampering  with  our  computer  systems.  Any  such  event  could  have  a  material  adverse  effect  on  our
business, operating results, and financial condition. Efforts to limit the ability of malicious third parties to disrupt the operations of the
internet or undermine our own security efforts may meet with resistance. In addition, the continued threat of terrorism and heightened
security and military action in response to this threat, or any future acts of terrorism, may cause further disruptions to the economies of
the United States, Israel and other countries and create further uncertainties or otherwise materially harm our business, operating results,
and  financial  condition.  Likewise,  events  such  as  widespread  blackouts  could  have  similar  negative  impacts.  To  the  extent  that  such
disruptions  or  uncertainties  result  in  delays  or  access  to  data  or  personal  information,  our  business,  operating  results,  and  financial
condition could be materially and adversely affected.

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Changes in Tax Law may Adversely Affect our Business and Financial Condition

The laws and rules dealing with U.S. federal, state and local income taxation are routinely being reviewed and modified by governmental
bodies,  officials  and  regulatory  agencies,  including  the  Internal  Revenue  Service  and  the  U.S.  Treasury  Department.  Since  inception,
many such changes have been made and changes are likely to continue to occur in the future. It cannot be predicted whether, when, in
what form, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or issued, that could result in an
increase in our or our stockholders’ tax liability.

Risks Related to Government Regulation

We are subject to a strict regulatory environment. If we fail to obtain and maintain required regulatory approvals for our potential
cell therapy products, our ability to commercialize our potential cell therapy products will be severely limited.

None of our stem cell therapies have received regulatory approval for commercial sale yet.

Numerous  statutes  and  regulations  govern  human  testing  and  the  manufacture  and  sale  of  human  therapeutic  products  in  the  United
States and other countries where we intend to market our products. Such legislation and regulation bears upon, among other things, the
approval of protocols and human testing, the approval of manufacturing facilities, testing procedures and controlled research, review and
approval of manufacturing, preclinical and clinical data prior to marketing approval including adherence to GMP during production and
storage as well as regulation of marketing activities including advertising and labeling.

The  completion  of  the  clinical  testing  of  our  stem  cell  therapies  and  the  obtaining  of  required  approvals  are  expected  to  require  the
expenditure of substantial resources. We may experience numerous unforeseen events during, or as a result of, the clinical trial process
that could delay or prevent regulatory approval and/or commercialization of our stem cell therapies, including the following:

● The FDA or similar foreign regulatory authorities may find that our stem cell therapies are not sufficiently safe or effective

or may find our processes or facilities unsatisfactory;

● Officials at the Israeli MoH, the FDA or similar foreign regulatory authorities may interpret data from preclinical studies

and clinical trials differently than we do;

● Our  clinical  trials  may  produce  negative  or  inconclusive  results  or  may  not  meet  the  level  of  statistical  significance
required by the Israeli MoH, the FDA or other regulatory authorities, and we may decide, or regulators may require us, to
conduct additional preclinical studies and/or clinical trials or to abandon one or more of our development programs;

● The  Israeli  MoH,  the  FDA  or  similar  foreign  regulatory  authorities  may  change  their  approval  policies  or  adopt  new

regulations;

● There may be delays or failure in obtaining approval of our clinical trial protocols from the Israeli MoH, the FDA or other
regulatory authorities or obtaining institutional review board approvals or government approvals to conduct clinical trials at
prospective sites;

● We,  or  regulators,  may  suspend  or  terminate  our  clinical  trials  because  the  participating  patients  are  being  exposed  to

unacceptable health risks or undesirable side effects;

● Enrollment  in  our  clinical  trials  for  our  stem  cell  therapies  may  occur  more  slowly  than  we  anticipate,  or  we  may

experience high drop-out rates of subjects in our clinical trials, resulting in significant delays; and

Investors  should  be  aware  of  the  risks,  problems,  delays,  expenses  and  difficulties  which  may  be  encountered  by  us  in  light  of  the
extensive regulatory environment in which our business operates. In particular, our development costs will increase if we have material
delays in our clinical trials, or if we are required to modify, suspend, terminate or repeat a clinical trial. If we are unable to conduct our
clinical trials properly and on schedule, marketing approval may be delayed or denied by the Israeli MoH or the FDA.

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Even if a stem cell therapy is approved by the Israeli MoH, the FDA or any other regulatory authority, we may not obtain approval for an
indication whose market is large enough to recoup our investment in that stem cell therapy. We may never obtain the required regulatory
approvals for any of our stem cell therapies. Later discovery of previously unknown problems with a product, manufacturer or facility
may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market.

Even if regulatory approvals are obtained for our stem cell therapies, we will be subject to ongoing government regulation. If we or
one or more of our partners or collaborators fail to comply with applicable current and future laws and government regulations, our
business and financial results could be adversely affected.

The healthcare industry is one of the most highly regulated industries in the United States. The federal government, individual state and
local governments and private accreditation organizations all oversee and monitor the activities of individuals and businesses engaged in
the delivery of health care products and services. Even if regulatory authorities approve any of our human stem cell therapies, current
laws, rules and regulations that could directly or indirectly affect our ability and the ability of our strategic partners and customers to
operate each of their businesses could include, without limitation, the following:

*

*

*

*

*

State and local licensing, registration and regulation of laboratories, the collection, processing and storage of human cells and
tissue, and the development and manufacture of pharmaceuticals and biologics;

The federal Clinical Laboratory Improvement Act and amendments of 1988;

Laws  and  regulations  administered  by  the  FDA,  including  the  Federal  Food  Drug  and  Cosmetic  Act  and  related  laws  and
regulations;

The Public Health Service Act and related laws and regulations;

Laws and regulations administered by the United States Department of Health and Human Services, including the Office for
Human Research Protections;

*

State laws and regulations governing human subject research;

* Occupational Safety and Health requirements; and

*

State and local laws and regulations dealing with the handling and disposal of medical waste.

Compliance with such regulation may be expensive and consume substantial financial and management resources. If we, or any future
marketing  collaborators  or  contract  manufacturers,  fail  to  comply  with  applicable  regulatory  requirements,  we  may  be  subject  to
sanctions including fines, product recalls or seizures, injunctions, total or partial suspension of production, civil penalties, withdrawal of
regulatory approvals and criminal prosecution. Any of these sanctions could delay or prevent the promotion, marketing or sale of our
products.

We are subject to environmental, health and safety laws.

We  are  subject  to  various  laws  and  regulations  relating  to  safe  working  conditions,  laboratory  and  manufacturing  practices,  the
experimental  use  of  animals  and  humans,  emissions  and  wastewater  discharges,  and  the  use  and  disposal  of  hazardous  or  potentially
hazardous substances used in connection with our research. We also cannot accurately predict the extent of regulations that might result
from  any  future  legislative  or  administrative  action.  Any  of  these  laws  or  regulations  could  cause  us  to  incur  additional  expense  or
restrict our operations.

Compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our
research, development or production efforts.

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We are subject to significant regulation with respect to manufacturing of our NurOwn® stem cell therapy.

All entities involved in the preparation of a therapeutic biological for clinical trials or commercial sale are subject to extensive regulation.
Our NurOwn® stem cell therapy must be manufactured in accordance with cGMP and GTP before it can be used in our clinical trials or
approved for commercial sale. These regulations govern manufacturing processes and procedures and the implementation and operation
of quality systems to control and assure the quality of investigational stem cell therapies and treatments, including treatment component
characterization  and  process  validation,  approved  for  sale.  Our  facilities  and  quality  systems  and  the  facilities  and  quality  systems  of
some or all of our third party suppliers must pass a pre-approval inspection for compliance with the applicable regulations as a condition
of regulatory approval of our NurOwn® stem cell therapy. If any inspection or audit of our manufacturing facilities identifies a failure to
comply with applicable regulations, or if a violation of applicable regulations occurs independent of an inspection or audit, we or the
relevant  regulatory  authority  may  require  remedial  measures  that  may  be  costly  and/or  time  consuming  for  us  or  a  third  party  to
implement  and  that  may  include  the  temporary  or  permanent  suspension  of  a  clinical  trial  or  commercial  sales  or  the  temporary  or
permanent closure of a facility. Any such remedial measures imposed on us or third parties with whom we contract could materially harm
our business.

Our long-term business plan is to develop our NurOwn® stem cell therapy for the treatment of neurodegenerative diseases, such as ALS,
PMS and AD. Even if we successfully develop our NurOwn® stem cell therapy for use in one indication, we may not be successful in
our efforts to identify or discover additional indications for it. Clinical programs to develop new indications for our NurOwn® stem cell
therapy will require substantial technical, financial and human resources. These development programs may initially show promise in
identifying potential treatment indications, yet fail to obtain regulatory approval for commercial sale.

If  we  do  not  accurately  evaluate  the  commercial  potential  or  target  market  for  our  NurOwn®  stem  cell  therapy,  we  may  relinquish
valuable rights to that treatment through collaboration, licensing or other royalty arrangements in cases in which it would have been more
advantageous for us to retain sole development and commercialization rights.

Risks Related to Our Intellectual Property

Part  of  our  business  in  the  foreseeable  future  will  be  based  on  technology  licensed  from  Ramot  and  if  this  license  were  to  be
terminated upon failure to make required royalty payments in the future, we would need to change our business strategy and we may
be forced to cease our operations.

Agreements we and our Israeli Subsidiary have with Ramot impose on us royalty payment obligations. If we fail to comply with these
obligations, Ramot may have the right to terminate the license under certain circumstances. If Ramot elects to terminate our license, we
would need to change our business strategy and we may be forced to cease our operations. We currently do not owe Ramot any overdue
payments. Royalties are due upon commencement of revenues by the Company.

If  Ramot  is  unable  to  obtain  patents  on  the  patent  applications  and  technology  licensed  to  our  Israeli  Subsidiary  or  if  patents  are
obtained but do not provide meaningful protection, we may not be able to successfully market our proposed products.

We rely upon the patent applications filed by Ramot, the technology licensing company of Tel Aviv University, and the license granted to
us by Ramot, all in accordance with the Second Ramot Agreement dated as of July 26, 2007. We further agreed under the Second Ramot
Agreement  that  Ramot,  in  consultation  with  us,  is  responsible  for  obtaining  patent  protection  for  technology  owned  by  Ramot  and
licensed to us. No assurance can be given that any of our pending or future patent applications will be approved, that the scope of any
patent protection granted will exclude competitors or provide us with competitive advantages, that any of the patents that may be issued
to  us  will  be  held  valid  if  subsequently  challenged,  or  that  other  parties  will  not  claim  rights  to  or  ownership  of  our  patents  or  other
proprietary  rights  that  we  hold  license  to.  Furthermore,  there  can  be  no  assurance  that  others  have  not  developed  or  will  not  develop
similar products, duplicate any of our technology or products or design around any patents that have been or may be issued to us or any
future licensors. Since patent applications in the United States and in Europe are not disclosed until applications are published, there can
be no assurance that others did not first file applications for products covered by our pending patent applications, nor can we be certain
that we will not infringe any patents that may be issued to others. Also, we have abandoned our rights to certain patents of Ramot in
certain countries in connection with the Letter Agreement by and between us and Ramot dated December 24, 2009, which may limit our
ability to fully market our proposed products. All granted patents related to NurOwn® (MSC-NTF cells) manufacturing process are fully
assigned to or owned by BrainStorm Cell Therapeutics Ltd.

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We  also  rely  upon  unpatented  proprietary  technology,  know-how  and  trade  secrets  and  seek  to  protect  them  through  confidentiality
agreements  with  employees,  consultants  and  advisors.  If  these  confidentiality  agreements  are  breached,  we  may  not  have  adequate
remedies  for  the  breach.  In  addition,  others  may  independently  develop  or  otherwise  acquire  substantially  the  same  proprietary
technology as our technology and trade secrets.

We may be unable to protect our intellectual property from infringement by third parties.

Despite  our  efforts  to  protect  our  intellectual  property,  third  parties  may  infringe  or  misappropriate  our  intellectual  property.  Our
competitors  may  also  independently  develop  similar  technology,  duplicate  our  processes  or  services  or  design  around  our  intellectual
property  rights.  We  may  have  to  litigate  to  enforce  and  protect  our  intellectual  property  rights  to  determine  their  scope,  validity  or
enforceability. Intellectual property litigation is costly, time-consuming, diverts the attention of management and technical personnel and
could result in substantial uncertainty regarding our future viability. The loss of intellectual property protection or the inability to secure
or enforce intellectual property protection would limit our ability to develop or market our services in the future. This would also likely
have  an  adverse  effect  on  the  revenues  generated  by  any  sale  or  license  of  such  intellectual  property.  Furthermore,  any  public
announcements related to such litigation or regulatory proceedings could adversely affect the price of our Common Stock.

Third parties may claim that we infringe on their intellectual property.

We  may  be  subject  to  costly  litigation  in  the  event  our  technology  is  claimed  to  infringe  upon  the  proprietary  rights  of  others.  Third
parties may have, or may eventually be issued, patents that would be infringed by our technology. Any of these third parties could make a
claim  of  infringement  against  us  with  respect  to  our  technology.  We  may  also  be  subject  to  claims  by  third  parties  for  breach  of
copyright, trademark or license usage rights. Litigation and patent interference proceedings could result in substantial expense to us and
significant  diversion  of  efforts  by  our  technical  and  management  personnel.  An  adverse  determination  in  any  such  proceeding  or  in
patent litigation could subject us to significant liabilities to third parties or require us to seek licenses from third parties. Such licenses
may not be available on acceptable terms or at all. Adverse determinations in a judicial or administrative proceeding or failure to obtain
necessary  licenses  could  prevent  us  from  commercializing  our  products,  which  would  have  a  material  adverse  effect  on  our  business,
results of operations and financial condition.

As a result of our reliance on consultants, we may not be able to protect the confidentiality of our technology, which, if disseminated,
could negatively impact our plan of operations.

We currently have relationships with academic and industry consultants and subcontractors who are not directly employed by us, and we
may enter into additional relationships of such nature in the future. We have limited control over the activities of these consultants and
can  expect  only  limited  amounts  of  their  time  to  be  dedicated  to  our  activities.  These  persons  may  have  consulting,  employment  or
advisory arrangements with other entities that may conflict with or compete with their obligations to us. Our consultants typically sign
agreements  that  provide  for  confidentiality  of  our  proprietary  information  and  results  of  studies.  However,  in  connection  with  every
relationship, we may not be able to maintain the confidentiality of our technology, the dissemination of which could hurt our competitive
position and results of operations. To the extent that our scientific consultants develop inventions or processes independently that may be
applicable to our proposed products, disputes may arise as to the ownership of the proprietary rights to such information, we may expend
significant resources in such disputes and we may not win those disputes.

We received grants from the Israel Innovation Authority, or IIA, we are subject to on-going restrictions.

We have received royalty-bearing grants from the IIA, for research and development programs that meet specified criteria. The terms of
the  IIA’s  grants  may  limit  various  technology  transfer  know-how  developed  under  an  approved  research  and  development  program
outside of Israel.

Risks related to our Common Stock

The price and trading volume of our stock is expected to be volatile.

The market price and trading volume of our Common Stock has fluctuated significantly over time, and is likely to continue to be highly
volatile. To date, the trading volume and price of our stock has seen significant fluctuations. We expect such fluctuations could occur in
the future. Investors should be aware of the risks of trading in our Common Stock due to such volatility.

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Your percentage ownership will be diluted by future issuances of our securities.

In order to meet our financing needs, we may issue additional significant amounts of our Common Stock and warrants to purchase shares
of  our  Common  Stock.  The  precise  terms  of  any  future  financings  will  be  determined  by  us  and  potential  investors  and  such  future
financings may also significantly dilute your percentage ownership in the Company.

ACCBT holds equity participation rights and other rights that could affect our ability to raise funds.

Pursuant  to  the  Subscription  Agreement  with  ACCBT  Corp.  (“ACCBT”),  a  company  under  the  control  of  Mr.  Chaim  Lebovits,  our
President and Chief Executive Officer, we granted ACCBT the right to acquire additional shares of our Common Stock whenever we
issue additional shares of Common Stock or other securities of the Company, or options or rights to purchase shares of the Company or
other securities directly or indirectly convertible into or exercisable for shares of the Company (including shares of any newly created
class  or  series).  This  participation  right  could  limit  our  ability  to  enter  into  equity  financings  and  to  raise  funds  from  third  parties.
ACCBT is entitled to purchase its pro rata share of any additional securities we offer, so that its percentage ownership of the Company
remains the same after any such issuance of additional securities. Such additional securities will be offered to ACCBT at the same price
and on the same terms as the other investors in the transaction. ACCBT will have 30 days from the date of our notice to ACCBT of any
intended transaction, to decide whether it wishes to exercise its participation rights in the transaction. We also are prohibited from taking
certain  corporate  actions  without  the  consent  of  ACCBT,  including  entering  into  transactions  greater  than  $500,000.  Further,  ACCBT
also  has  the  right  to  appoint  30%  of  our  Board.  In  connection  with  the  Subscription  Agreement,  we  entered  into  a  registration  rights
agreement with ACCBT pursuant to which we granted piggyback registration rights to ACCBT. In addition, we issued ACCBT warrants
to purchase up to 2,016,666 shares of Common Stock, of which 2,016,666 warrants are presently outstanding. The outstanding warrants
contain  cashless  exercise  provisions,  which  permit  the  cashless  exercise  of  up  to  50%  of  the  underlying  shares  of  Common  Stock.
672,222 of such warrants have an exercise price of $3.00 and the remainder have an exercise price of $4.35. We registered 1,920,461
shares of Common Stock and 2,016,666 shares of Common Stock underlying the ACCBT Warrants on registration statement No. 333-
201705  dated  January  26,  2015  pursuant  to  ACCBT’s  registration  rights.  ACCBT  has  waived  its  participation  rights  and  anti-dilution
rights with respect to issuances that were made on or prior to November 2, 2017. In March 2014, we entered into an agreement with
ACCBT  according  to  which  ACCBT  waived  certain  anti-dilution  rights.  On  November  2,  2017,  the  Company  entered  into  a  Warrant
Amendment  Agreement  with  ACCBT,  pursuant  to  which  the  expiration  date  of  each  Warrant  held  by  ACCBT  was  extended  until
November 5, 2022, in consideration of ACCBT having provided a series of waivers of their rights and reduction of rights.

You may experience difficulties in attempting to enforce liabilities based upon U.S. federal securities laws against us and our non-
U.S. resident directors and officers.

Our  principal  operations  are  located  through  our  subsidiary  in  Israel  and  our  principal  assets  are  located  outside  the  U.S.  Our  Chief
Executive  Officer  and  Chief  Business  Officer  and  some  of  our  directors  are  foreign  citizens  and  do  not  reside  in  the  U.S.  It  may  be
difficult  for  courts  in  the  U.S.  to  obtain  jurisdiction  over  our  foreign  assets  or  these  persons  and  as  a  result,  it  may  be  difficult  or
impossible  for  you  to  enforce  judgments  rendered  against  us  or  our  directors  or  executive  officers  in  U.S.  courts.  Thus,  should  any
situation arise in the future in which you have a cause of action against these persons or entities, you are at greater risk in investing in our
Company  rather  than  a  domestic  company  because  of  greater  potential  difficulties  in  bringing  lawsuits  or,  if  successful,  collecting
judgments against these persons or entities as opposed to domestic persons or entities.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of
operations or prevent fraud, and investor confidence and the market price of our Common Stock may be materially and adversely
affected.

As  a  public  company  in  the  United  States,  we  are  subject  to  the  reporting  obligations  under  the  U.S.  securities  laws.  The  SEC,  as
required under Section 404 of the Sarbanes-Oxley Act of 2002, has adopted rules requiring every public company to include a report of
management  on  the  effectiveness  of  such  company’s  internal  control  over  financial  reporting  in  its  annual  report.  In  prior  years,
management has identified material weaknesses in our internal control over financial reporting. If any of our prior material weaknesses
recurs,  or  if  we  identify  additional  weaknesses  or  fail  to  timely  and  successfully  implement  new  or  improved  controls,  our  ability  to
assure  timely  and  accurate  financial  reporting  may  be  adversely  affected,  and  we  could  suffer  a  loss  of  investor  confidence  in  the
reliability of our financial statements, which in turn could negatively impact the trading price of our shares of Common Stock, result in
lawsuits being filed against us by our stockholders, or otherwise harm our reputation. If material weaknesses are identified in the future,
it could be costly to remediate such material weaknesses, which may adversely affect our results of operations. In addition, our auditor

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is not required to attest to the effectiveness of our internal controls over financial reporting due to our status of qualifying as a smaller
reporting company. As a result, current and potential investors could lose confidence in our financial reporting, which could harm our
business and have an adverse effect on our share price.

Delaware  law  could  discourage  a  change  in  control,  or  an  acquisition  of  us  by  a  third  party,  even  if  the  acquisition  would  be
favorable to you, and thereby adversely affect existing stockholders.

The Delaware General Corporation Law contain provisions that may have the effect of making more difficult or delaying attempts by
others to obtain control of our Company, even when these attempts may be in the best interests of stockholders. Delaware law imposes
conditions  on  certain  business  combination  transactions  with  “interested  stockholders.”  These  provisions  and  others  that  could  be
adopted in the future could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions
in which stockholders might otherwise receive a premium for their shares over then current market prices. These provisions may also
limit the ability of stockholders to approve transactions that they may deem to be in their best interests.

We do not expect to pay dividends in the foreseeable future, and accordingly you must rely on stock appreciation for any return on
your investment.

We have paid no cash dividends on our Common Stock to date, and we currently intend to retain our future earnings, if any, to fund the
continued development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future.
Further, any payment of cash dividends will also depend on our financial condition, results of operations, capital requirements and other
factors, including contractual restrictions to which we may be subject, and will be at the discretion of our Board.

Item 1B.           UNRESOLVED STAFF COMMENTS

None.

Item 2.            PROPERTIES

Corporate Headquarters and other office space

Our  United  States  corporate  headquarters  are  located  at  1325  Avenue  of  Americas,  28th  Floor,  New  York,  NY  10019.  Our  Israeli
Subsidiary is party to a lease agreement for the lease of premises in 12 Basel Street, Petach Tikva, Israel, which include approximately
600 square meters of office and laboratory space, including an animal research facility.

In addition, we lease a GMP certified manufacturing facility with two cleanrooms in Jerusalem, Israel, and have recently leased a new
GMP certified facility, which includes three state-of-the-art cleanrooms, at the Tel Aviv Sourasky Medical Center.

We  believe  that  the  current  office,  laboratory  space,  and  cleanrooms  are  adequate  to  meet  our  needs  for  research  and  development,
clinicals trials and administrative operations.

Item 3.           LEGAL PROCEEDINGS

From time to time, we may become involved in litigation relating to claims arising out of operations in the normal course of business,
which we consider routine and incidental to our business. We currently are not a party to any legal proceedings the adverse outcome of
which, in management’s opinion, would have a material adverse effect on our business, results of operation or financial condition.

Item 4.           MINE SAFETY DISCLOSURES.

Not required.

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Item 5.         MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES.

PART II

Market Information

Our Common Stock is currently traded on the Nasdaq Capital Market under the symbol “BCLI”.

Record Holders

As of January 31, 2020, there were approximately 31 holders of record of our Common Stock.

Dividends

We  have  not  paid  or  declared  any  cash  or  other  dividends  on  our  Common  Stock  within  the  last  two  fiscal  years.  Any  future
determination  as  to  the  payment  of  dividends  will  depend  upon  our  results  of  operations,  and  on  our  capital  requirements,  financial
condition and other factors relevant at the time.

Equity Compensation Plans

Information regarding our equity compensation plans and the securities authorized under the plans is included in Item 12 below.

Recent Sales of Unregistered Securities

Exercises of 2018 Amended Warrants:

On June 6, 2018, the Company entered into Warrant Exercise Agreements with certain holders (“2018 Warrant Holders”), pursuant to
which holders were issued warrants to purchase an aggregate 2,458,201 unregistered shares of Common Stock, at an exercise price of $9
per share, with an expiration date of December 31, 2020 (the “2018 Warrants”).  In connection with the issuance of the 2019 Warrants
(described below), certain 2018 Warrants were amended on August 2, 2019 to reduce the exercise price to $7.00 per share and to extend
the expiration date to December 31, 2021 (the “Amended 2018 Warrants”).

Between  July  20,  2020  and  July  24,  2020,  2018  Warrant  Holders  exercised  an  aggregate  of  280,000  shares  of  the  Amended  2018
Warrants (the “2018 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $1.96 million.

The 2018 Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws.
The 2018 Exercised Shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-225995).
The  issuance  of  the  2018  Exercised  Shares  and  2018  Warrants  was  exempt  from  the  registration  requirements  of  the  Securities  Act
pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act. The Company made this determination based on the representations that
each party is an “accredited investor” within the meaning of Rule 501 of Regulation D. The Company expects to use cash received from
exercises for general corporate and working capital purposes.

Exercises of 2019 Warrants:

On  August  2,  2019,  the  Company  entered  into  Warrant  Exercise  Agreements  with  certain  2018  Warrant  Holders  (“2019  Warrant
Holders”),  pursuant  to  which  holders  were  issued  warrants  to  purchase  an  aggregate  842,000  shares  of  Common  Stock  (the  “2019
Warrants”), at an exercise price of $7.00, with an expiration date of December 31, 2021 (the “2019 Warrants”).

Between July 15, 2020 and July 24, 2020, 2019 Warrant Holders exercised an aggregate of 620,000 shares of the 2019 Warrants (the
“2019 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $4.34 million.

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The  2019  Warrants  have  not  been  registered  under  the  Securities  Act,  or  state  securities  laws.  The  2019  Exercised  Shares  have  been
registered for resale on the Company’s registration statement on Form S-3 (File No. 333-233349).  The issuance of the 2019 Exercised
Shares and 2019 Warrants is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions
by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated
under the Securities Act.  The Company made this determination based on the representations that each party is an “accredited investor”
within the meaning of Rule 501 of Regulation D.  The Company expects to use cash received from exercises for general corporate and
working capital purposes.  

Item 6.           SELECTED FINANCIAL DATA

Not required.

Item  7.                    MANAGEMENT’S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND  RESULTS  OF

OPERATIONS

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related
notes  that  appear  elsewhere  in  this  Annual  Report  on  Form  10-K.  This  discussion  contains  forward-looking  statements  reflecting  our
current  expectations  that  involve  risks  and  uncertainties.  Actual  results  may  differ  materially  from  those  discussed  in  these  forward-
looking  statements  due  to  a  number  of  factors,  including  those  set  forth  in  the  section  entitled  “Risk  Factors”  and  elsewhere  in  this
Annual  Report  on  Form  10-K.  For  further  information  regarding  forward-looking  statements,  please  refer  to  the  “Special  Note
Regarding Forward-Looking Statements” at the beginning of Part I of this Annual Report on Form 10-K.

Company Overview

We  are  a  leading  biotechnology  company  engaged  in  the  development  of  best-in-class  autologous  cellular  therapies  derived  from  a
patient’s  own  bone  marrow  cells  for  the  treatment  of  neurodegenerative  diseases.  We  hold  the  rights  to  clinical  development  and
commercialization  of  the  NurOwn®  technology  platform  through  an  exclusive,  worldwide  licensing  agreement  (see  details  herein).
NurOwn® has received Fast Track designation from the FDA in ALS and has additionally been granted Orphan Drug Status by the FDA
and the EMA. For more information, visit our website at www.brainstorm-cell.com.

We are committed to bring innovative central nervous system (“CNS”) adult stem cell therapies to the market to improve the lives of
patients with debilitating neurodegenerative diseases. As a leader in CNS regenerative cellular medicines, we are leveraging NurOwn®,
its proprietary autologous mesenchymal stem cell platform technology, a strong and expanded intellectual property portfolio, as well as
manufacturing and commercialization capabilities, to address growing unmet medical needs across a broad range of neurodegenerative
disorders,  such  as  ALS,  PMS,  AD  and  other  neurodegenerative  diseases.  NurOwn®  uses  proprietary  cell  culture  conditions  to  induce
MSCs to secrete high levels of  multiple neurotrophic factors to modulate neuroinflammatory and neurodegenerative disease processes,
promote neuronal survival and improve neurological function.

Results of Operations

For  the  period  from  inception  (September  22,  2000)  until  December  31,  2020,  we  did  not  generate  any  revenues  from  operations.  In
addition, we incurred operating costs and expenses of approximately $31,811,000 during the year ended December 31, 2020.

Research and Development, net

Our business model calls for significant investments in research and development. Our research and development expenditures, net in the
year ended December 31, 2020 were $22,329,000, an increase of $5,125,000 compared to $17,204,000 for the year ended December 31,
2019.

This  increase  is  due  to  (i)  an  increase  of  $2,135,000  in  connection  with  materials,  consultants,  depreciation,  payroll  and  stock-based
compensation expenses and other activities; (ii) a decrease of $1,481,000 received in connection with the treatment of patients under the
hospital  exemption  regulatory  pathway;  (iii)  a  decrease  of  $2,576,000  in  participation  of  the  Israel  Innovation  Authority  (“IIA”)  and
CIRM in 2020, under various awarded grants and (iv) an increase of $269,000 for costs related to travel, patents and other costs. This
increase was partially offset by a decrease of $1,336,000 in connection with the Phase 3 Clinical Trial. Excluding participation from IIA

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and CIRM under the grants and proceeds received under the hospital exemption regulatory pathway, research and development expenses
decreased by $133,000 from $24,741,000 in 2019 to $24,608,000 in 2020.

General and Administrative

General and administrative expenses for the years ended December 31, 2020 and 2019 were $9,355,000 and $5,797,000, respectively.
The increase of $3,558,000 in general and administrative expenses is mainly due to: (i) an increase of $2,611,000 in payroll and stock-
based compensation expenses; (ii) an increase of $1,031,000 in the rent, the costs of our stock costs, consultants, costs of our investor
relations and public relations activities and various other expenses. This increase was partially offset by a decrease of $84,000 in travel
costs.

Financial Expenses

Financial expense for the year ended December 31, 2020 was $127,000 as compared to financial expense of $252,000 for the year ended
December 31, 2019 as a result of the adoption of the Accounting Standard Update ASU 2016-02 “Leases” and due to interest earned on
our cash, cash equivalents and short-term deposits.

Net Loss

Net loss for the year ended December 31, 2020 was $31,811,000, as compared to a net loss of $23,253,000 for the year ended December
31, 2019. Net loss per share for the year ended December 31, 2020 and December 31, 2019 was $1.07 and $1.06, respectively.

The weighted average number of shares of Common Stock used in computing basic and diluted net loss per share for the year ended
December 31, 2020 was 29,848,217 compared to 21,906,257 for the year ended December 31, 2019.

The  increase  in  the  weighted  average  number  of  shares  of  Common  Stock  used  in  computing  basic  loss  per  share  for  the  year  ended
December 31, 2020 was due to: (i) the issuance of shares to employees and directors, (ii) issuance and sale of shares of Common Stock
pursuant to the Distribution Agreement and (iii) the exercise of options and warrants.

Since  its  inception,  the  Company  has  devoted  substantially  all  of  its  efforts  to  research  and  development.  The  Company  is  still  in  its
development and clinical stage and has not yet generated revenues. The extent of the Company's future operating losses and the timing of
becoming profitable are uncertain.

Additional  funding  will  be  required  to  begin  the  commercialization  efforts  and  to  achieve  a  level  of  sales  adequate  to  support  the
Company's cost structure.

To meet its capital needs, the Company is considering multiple alternatives, including, but not limited to, additional public and private
sales of its Common Stock and warrants, the exercise of warrants, the issuance of convertible promissory notes, sales of Common Stock
via its September 25, 2020 ATM program and other funding transactions. While the Company has been successful in raising financing
recently and in the past, there can be no assurance that it will be able to do so in the future on a timely basis on terms acceptable to the
Company, or at all.

The  COVID-19  pandemic  may  continue  to  adversely  disrupt  the  Company's  operations,  including  the  ability  to  complete  the  ongoing
clinical  trials  and  may  have  other  adverse  effects  on  Company's  business  and  operations.  In  addition,  this  pandemic  has  caused
substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse
effects on Company's business, operations and ability to raise capital.

Management expects that the Company will continue to generate losses from the clinical development and regulatory activities, which
will  result  in  a  negative  cash  flow  from  operating  activity.  The  Company  has  recently  completed  its  Phase  3  ALS  clinical  trial.  The
Company currently has sufficient cash to complete its ongoing Phase 2 PMS and Phase 2 AD clinical trials. Over the longer term, if the
Company  is  granted  a  BLA  approval,  additional  capital  raise  will  be  needed  in  connection  with  strategic  partnerships  and  to
commercialize Nurown® for ALS, and to conduct additional trials for other indications. If the Company is not able to raise additional
capital for these purposes, management may need to slow the pace of commercialization or the Company may not be able to continue

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to function as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from
the outcome of this uncertainty.

Liquidity and Capital Resources

Since inception, the Company has financed its operations primarily through public and private sales of its Common Stock and warrants,
the  exercise  of  warrants,  the  issuance  of  convertible  promissory  notes,  sales  via  the  ATM  programs  and  through  various  grants.  At
December 31, 2020 cash, cash equivalents and short-term bank deposits amounted to $41,936,000.

Net  cash  used  in  operating  activities  for  the  year  ended  December  31,  2020  was  $35,193,000.  Cash  used  for  operating  activities  was
primarily  attributed  to  cost  of  clinical  trials,  rent  of  clean  rooms  and  materials  for  clinical  trials,  payroll  costs,  rent,  outside  legal  fee
expenses and public relations expenses.

Net  cash  used  in  investing  activities  for  the  year  ended  December  31,  2020  was  $4,452,000  representing  primarily  a  net  decrease  in
short-term deposits and purchase of property and equipment.

Net cash provided by financing activities for the year ended December 31, 2020 was $76,938,000 from the exercises of warrants during
the year, issuance of new warrants, sales of common stock under March 6, 2020 registered direct offering and sales of common stock
under the June 11, 2019 ATM, March 6, 2020 ATM and September 25, 2020 ATM programs.

On June 8, 2018, we filed a shelf registration statement on Form S-3 (File No. 333-225517) (the “Shelf Registration Statement”), which
was declared effective by the SEC on June 29, 2018, relating to Common Stock, warrants and units that we may sell from time to time in
one or more offerings, up to a total dollar amount of $100,000,000. Other than the supplements filed on June 11, 2019, March 6, 2020
and  on  September  25,  2020  in  connection  with  the  ATM  offerings  discussed  below,  and  the  prospectus  supplement  filed  on  March  6,
2020 in connection with the registered direct offering discussed below, we have not filed any supplemental prospectus defining particular
terms of securities to be offered under the shelf registration statement.

At-the-market (ATM) Offerings:

On June 11, 2019, the Company entered into the June 11, 2019 ATM in an “at the market” offering as defined in Rule 415 promulgated
under  the  Securities  Act,  including,  without  limitation,  by  sales  made  directly  on  the  Nasdaq  Capital  Market,  on  any  other  existing
trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agent. On February 21, 2020, the
Company completed the sale of all remaining shares issuable under the June 11, 2019 ATM and exhausted its full ATM capacity. Under
the June 11, 2019 ATM, the Company sold an aggregate of 4,141,569 shares of Common Stock at an average price of $4.83 per share,
raising gross proceeds of approximately $20 million.

On March 6, 2020, the Company entered into a new distribution agreement with Raymond James (the “Agent”), pursuant to which the
Company was able to sell from time to time, through the Agent, shares of Common Stock, having an aggregate offering price of up to
$50,000,000  (the  “March  6,  2020  ATM”).  Sales  under  the  March  6,  2020  ATM  were  made  by  any  method  permitted  by  law  that  is
deemed  to  be  an  “at  the  market”  offering  as  defined  in  Rule  415  promulgated  under  the  Securities  Act,  including,  without  limitation,
sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as
otherwise agreed by the Company and Raymond James. Under the March 6, 2020 ATM, the Company sold an aggregate of 2,446,641
shares of Common Stock at an average price of $9.45 per share, raising gross proceeds of approximately $23.11 million.

On September 25, 2020, the Company entered into an Amended and Restated Distribution Agreement (the “Distribution Agreement”)
with  SVB  Leerink  LLC  (“Leerink”)  and  Raymond  James  &  Associates  (together  with  Leerink,  the  “Agents”)  pursuant  to  which  the
Company  may  sell  from  time  to  time,  through  the  Agents,  shares  of  Common  Stock,  having  an  aggregate  offering  price  of  up  to
$45,000,000, which aggregate amount includes amount unsold pursuant to the March 6, 2020 ATM (the “September 25, 2020 ATM”).
Sales  under  the  September  25,  2020  ATM  are  to  be  made  by  any  method  permitted  by  law  that  is  deemed  to  be  an  “at  the  market”
offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on the Nasdaq
Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and
the Agents. The Distribution Agreement amends and restates in its entirety the Company’s prior agreement with Raymond James entered
on March 6, 2020 (the “March 6, 2020 ATM”). The Company previously sold 2,446,641 shares of Common Stock for gross proceeds of
approximately $23.11 million of Common Stock under the March 6, 2020 ATM. During the quarter ended December 31,

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2020, the Company sold an aggregate of 3,564,385 shares of Common Stock pursuant to the September 25, 2020 ATM at an average
price of $6.10 per share, raising gross proceeds of approximately $21.8 million.

The Company has no obligation under the September 25, 2020 ATM to sell any shares and may at any time suspend sales or terminate
the September 25, 2020 ATM in accordance with its terms. Subject to the terms and conditions of the Distribution Agreement, the Agents
will use their commercially reasonable efforts to sell on the Company’s behalf, from time to time consistent with its normal sales and
trading practices, such Shares based upon instructions from the Company (including any price, time or size limits or other customary
parameters or conditions the Company may impose). The Company has provided the Agents with customary indemnification rights, and
the  Agents  will  be  entitled  to  a  fixed  commission  of  3.0%  of  the  aggregate  gross  proceeds  from  the  Shares  sold.  The  Distribution
Agreement contains customary representations and warranties, and the Company is required to deliver customary closing documents and
certificates  in  connection  with  sales  of  the  Shares.  Shares  sold  under  the  ATMs  are  issued  pursuant  to  the  Company’s  existing  Shelf
Registration Statement, and the Prospectus Supplement to the Registration Statements filed June 11, 2019, March 6, 2020 and September
25, 2020, respectively.

Registered Direct Offering:

On March 6, 2020, the Company entered into and closed a $10.0 million registered direct offering of 1,250,000 shares of Common Stock
at a per share purchase price equal to $8.00. Purchaser also received a three-year warrant to purchase up to 250,000 shares of Common
Stock at an exercise price of $15.00 per share.

Recent Sales of Unregistered Securities:

Exercises of 2018 Amended Warrants:  On  June  6,  2018  the  Company  entered  into  Warrant  Exercise  Agreements  with  certain  holders
(“2018  Warrant  Holders”),  pursuant  to  which  holders  were  issued  warrants  to  purchase  an  aggregate  2,458,201  unregistered  shares  of
Common Stock, at an exercise price of $9 per share, with an expiration date of December 31, 2020 (the “2018 Warrants”).  In connection
with the issuance of the 2019 Warrants (described below), certain 2018 Warrants were amended on August 2, 2019 to reduce the exercise
price to $7.00 per share and to extend the expiration date to December 31, 2021 (the “Amended 2018 Warrants”).

Between  July  20,  2020  and  July  24,  2020,  2018  Warrant  Holders  exercised  an  aggregate  of  280,000  shares  of  the  Amended  2018
Warrants (the “2018 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $1.96 million.

The 2018 Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws.
The 2018 Exercised Shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-225995).
The  issuance  of  the  2018  Exercised  Shares  and  2018  Warrants  was  exempt  from  the  registration  requirements  of  the  Securities  Act
pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act. The Company made this determination based on the representations that
each party is an “accredited investor” within the meaning of Rule 501 of Regulation D. The Company expects to use cash received from
exercises for general corporate and working capital purposes.

Exercises of 2019 Warrants:  On  August  2,  2019,  the  Company  entered  into  Warrant  Exercise  Agreements  with  certain  2018  Warrant
Holders (“2019 Warrant Holders”), pursuant to which holders were issued warrants to purchase an aggregate 842,000 shares of Common
Stock (the “2019 Warrants”), at an exercise price of $7.00, with an expiration date of December 31, 2021 (the “2019 Warrants”).

Between July 15, 2020 and July 24, 2020, 2019 Warrant Holders exercised an aggregate of 620,000 shares of the 2019 Warrants (the
“2019 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $4.34 million.

The  2019  Warrants  have  not  been  registered  under  the  Securities  Act,  or  state  securities  laws.  The  2019  Exercised  Shares  have  been
registered for resale on the Company’s registration statement on Form S-3 (File No. 333-233349).  The issuance of the 2019 Exercised
Shares and 2019 Warrants is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions
by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated
under the Securities Act.  The Company made this determination based on the representations that each party is an “accredited investor”
within the meaning of Rule 501 of Regulation D.  The Company expects to use cash received from exercises for general corporate and
working capital purposes.

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With  the  recent  warrant  exercises  in  July  2020,  the  Company  has  reduced  its  outstanding  warrants  shares  to  non-affiliates  by
approximately  37%  and  reduced  its  overall  warrants  shares  outstanding  by  approximately  19%.  In  total,  900,000  of  the  4,724,868
Company  warrant  shares  outstanding  were  exercised  between  July  15  and  July  24,  2020.  2,266,667  of  the  remaining  3,824,868
outstanding warrants shares are owned by affiliates of the Company.

Our material cash needs for the next 12 months, assuming we do not expand our clinical trials beyond our ongoing Phase 2 PMS trials in
the United States, and the Phase 2 AD trials in Europe will include (i) costs of the clinical trial in the U.S. and Europe, (ii) employee
salaries, (iii) payments for rent and operation of the GMP facilities and manufacturing of NurOwn®, and (iv) fees to our consultants and
legal advisors, patents, and fees for facilities to be used in our research and development.

We believe our existing cash will be sufficient to fund our anticipated operating cash requirements for at least twelve months following
the  date  of  this  filing.  We  currently  have  sufficient  cash  to  execute  on  our  ongoing  Phase  2  PMS  and  Phase  2  AD  clinical  trials  and
support  our  operating  activities.  We  expect  that  we  will  continue  to  generate  losses  from  the  clinical  development  and  regulatory
activities, which will result in a negative cash flow from operating activity. If we are granted a BLA approval, additional capital raise will
be needed to commercialize NurOwn® for ALS, and to conduct additional trials that may be needed for other indications. The actual
amount of cash that the Company will need to operate is subject to many factors, including, but not limited to, the timing, design and
conduct of clinical trials for our product candidates along with cost to commercialize these product candidates.

We  anticipate  that  we  will  need  to  raise  substantial  additional  financing  in  the  future  to  fund  our  operations.  In  order  to  meet  these
additional cash requirements, we may incur debt, license certain intellectual property, and seek to sell additional equity or convertible
securities  that  may  result  in  dilution  to  our  stockholders.  If  we  raise  additional  funds  through  the  issuance  of  equity  or  convertible
securities, these securities could have rights or preferences senior to those of our common stock and could contain covenants that restrict
our operations. There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if
at all. Our future capital requirements will depend on many factors, including:

*

*

*

*

*

*

*

*

*

*

*

*

our ability to obtain funding from third parties, including any future collaborative partners;

the scope, rate of progress and cost of our clinical trials and other research and development programs;

the time and costs required to gain regulatory approvals;

the terms and timing of any collaborative, licensing and other arrangements that we may establish;

the  costs  of  filing,  prosecuting,  defending  and  enforcing  patents,  patent  applications,  patent  claims,  trademarks  and  other
intellectual property rights;

any product liability or other lawsuits related to our product candidates;

the expenses needed to attract and retain skilled personnel;

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution,
for any of our product candidates for which we receive marketing approval;

the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

the general and administrative expenses related to being a public company;

the effect of competition and market developments; and

future pre-clinical and clinical trial results.

The  full  extent  to  which  the  COVID  19  pandemic  will  directly  or  indirectly  impact  our  business,  results  of  operations,  financial
condition, liquidity and capital resources will depend on future developments that are highly uncertain and cannot be accurately predicted
at this

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time,  including  new  information  that  may  emerge  concerning  COVID  19,  the  actions  taken  to  contain  it  or  treat  its  impact  and  the
economic impact on local, regional, national and international markets. Our management team is actively monitoring this situation and
the possible effects on our financial condition and liquidity.

Contractual Obligations and Commitments

The following is a table of contractual obligations and commitments as of December 31, 2020 (in thousands):

Operating Leases
Total

Off-Balance Sheet Arrangement

Payments Due by Period

Total

    Less than 1 year    

1-3 years

3-5 years

 6,851  
 6,851  

 2,760  
 2,760  

 3,239  
 3,239  

 852
 852

We have no off balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

Our  consolidated  financial  statements  are  prepared  in  accordance  with  accounting  principles  generally  accepted  in  the  U.S.  The
preparation  of  our  consolidated  financial  statements  and  disclosures  requires  us  to  make  judgments,  estimates,  and  assumptions  that
affect  the  reported  amounts  of  assets  and  liabilities  and  the  disclosure  of  contingent  assets  and  liabilities  at  the  date  of  the  financial
statements as well as the reported revenue and expenses during the reporting periods. We base our estimates on historical experience,
known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the
basis  for  making  judgments  about  the  carrying  values  of  assets  and  liabilities  that  are  not  readily  apparent  from  other  sources.  We
evaluate  our  estimates  and  assumptions  on  an  ongoing  basis.  Our  actual  results  may  differ  from  these  estimates  under  different
assumptions and conditions.

While  our  significant  accounting  policies  are  described  in  more  detail  in  the  notes  to  our  audited  consolidated  financial  statements
appearing elsewhere in this Annual Report on Form 10-K we believe that the following accounting policies are those most critical to the
judgments and estimates used in the preparation of our consolidated financial statements

Accounting for stock-based compensation:

We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using
the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-
Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free
interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected
to vest, and therefore is reduced by expected forfeitures. Changes in assumptions used under the Black-Scholes option valuation model
could materially affect our net loss and net loss per share.

Item 7A.           QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not required.

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Item 8.              FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020

U.S. DOLLARS IN THOUSANDS
(Except share data and exercise prices)

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020

U.S. DOLLARS IN THOUSANDS
(Except share data and exercise prices)

INDEX

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Loss

Statements of Changes in Stockholders' Equity (deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

63

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64

66

67

68

70

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
BRAINSTORM CELL THERAPEUTICS Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Brainstorm Cell Therapeutics Inc. and subsidiaries (the “Company”)
as of December 31, 2020 and 2019 and the related consolidated statements of comprehensive loss, shareholders' equity (deficit) and cash
flows for each of the two years in the period ended December 31, 2020, 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 as of
December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December
31, 2020, in conformity with accounting principles generally accepted in the United States of America.

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.

Critical Audit Matter

The  critical  audit  matter  communicated  below  is  a  matter  arising  from  the  current-period  audit  of  the  financial  statements  that  was
communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to
the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Stock-Based Compensation to Employees and Directors – Stock Options — Refer to Note 11 to the financial statements

Critical Audit Matter Description

The Company issues various types of equity awards, including stock options. During the year ended December 31, 2020, the Company
issued stock options for 590,866 shares and recorded stock option related compensation expense of $1.3 million. The Company estimated
the  fair  value  of  these  stock  options  granted  using  the  Black-Scholes  option  pricing  model.  The  option  pricing  model  required  the
Company to make a number of assumptions, of which the most significant are expected stock price volatility and the expected option
term. Expected volatility was calculated based upon actual historical stock price movements over the period equal to the expected option
term, which was calculated using the simplified method.

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Auditing the Company's accounting for stock options required auditor judgment due to the subjectivity of assumptions used to estimate
the fair value of stock options granted.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the stock-based compensation included the following, among others:

· We assessed the accuracy and completeness of the awards granted during the year by reading the relevant Board of Directors

minutes and grant documents.

· We evaluated the appropriateness of the valuation method used for the stock option grants and whether the method used for

determining fair value was applied consistently with the valuation of similar grants in prior periods.

· We evaluated the significant assumptions used by management to calculate the fair value of stock options granted. Such

evaluation included independent calculation of the expected volatility based upon actual historical stock price movements over
the period equal to the expected option term and independent calculation of the stock option term using the simplified method.

· We developed an independent estimate of the fair value for all the grants during the year and compared our estimate of fair

value to the fair value used by management.

Brightman Almagor Zohar & Co.
Certified Public Accountants
A Firm in the Deloitte Global Network

Tel Aviv, Israel
February 4, 2021

We have served as the Company's auditor since 2008.

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
(Except share data)

December 31, 

2020

2019

U.S. $ in thousands

ASSETS

Current Assets:
Cash and cash equivalents
Short-term deposit (Note 9)
Other accounts receivable (Note 4)
Prepaid expenses and other current assets (Note 5)
Total current assets

Long-Term Assets:
Prepaid expenses and other long-term assets
Operating lease right of use asset (Note 6)
Property and Equipment, Net (Note 7)
Total Long-Term Assets

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:
Accounts payable
Accrued expenses
Operating lease liability (Note 6)
Other accounts payable
Total current liabilities

Long-Term Liabilities:
Operating lease liability (Note 6)
Total long-term liabilities

Total liabilities

$

$

$

$

37,829
4,107
304
1,002
43,242

26
6,872
1,119
8,017

51,259

$

$

5,417
1,261
2,655
1,900
11,233

4,562
4,562

$

15,795

$

Stockholders’ Equity (deficit):
Stock capital: (Note 11)
Common Stock of $0.00005 par value - Authorized: 100,000,000 shares at December 31, 2020 and December 31, 2020
respectively; Issued and outstanding: 35,159,977 and 23,174,228 shares at December 31, 2020 and December 31, 2019
respectively.
Additional paid-in-capital
Treasury stocks
Accumulated deficit
Total stockholders’ equity (deficit)

12

184,655
(116)
(149,087)
35,464

536
33
2,359
432
3,360

32
2,182
960
3,174

6,534

14,677
1,000
1,263
714
17,654

1,103
1,103

18,757

11

105,042
—
(117,276)
(12,223)

Total liabilities and stockholders’ equity

$

51,259

$

6,534

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

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands
(Except share data)

Operating expenses:

Research and development, net (Note 12)
General and administrative

Operating loss

Financial expenses, net

Net loss

Basic and diluted net loss per share

Year ended
December 31, 

2020

2019

U.S. $ in thousands

$

$

$

22,329
9,355

(31,684)

127

(31,811)

(1.07)

$

$

$

17,204
5,797

(23,001)

252

(23,253)

(1.06)

Weighted average number of shares outstanding used in computing basic and diluted net loss per
share

29,848,217

21,906,257

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

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
U.S. dollars in thousands
(Except share data)

Balance as of January 1, 2019

Stock-based compensation related to warrants and stock
granted to service providers
Stock-based compensation related to stock and options
granted to directors and employees
Exercise of options
Exercise and reissuance of warrants
Net loss

Common stock

     Number 
  20,757,816
5,908

107,104

542,736
1,741,999
18,665

     Amount     

$

11
(*)

(*)

(*)
(*)
(*)

—   —  

Additional
paid-in
capital
$ 94,620
25

shares
$ 4,408
—

Receipts on
account of Accumulated

deficit

Total
stockholders’
equity

$ (94,023) $

—

5,016
25

764

—  

—  

764

2,064
7,534
35
—  

—  

(4,408)

—  
—  

—  
—  
—  

(23,253)

2,064
3,126
35
(23,253)

Balance as of December 31, 2019

  23,174,228

$

11

$ 105,042

$

— $ (117,276) $ (12,223)

* Represents an amount less than $1.

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

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
U.S. dollars in thousands
(Except share data)

Balance as of January 1, 2020

Common stock

     Number 
  23,174,228

     Amount     

$

11

Additional
paid-in
capital
$ 105,042

Treasury Accumulated

     stocks     

deficit
— $ (117,276) $

Total
stockholders’
    equity (deficit)
(12,223)

Stock-based compensation related to stock and options
granted to directors and employees
Issuance of shares and warrants in Registered Direct
Offering (Note 11)
Treasury stocks
Issuance of shares in at-the-market (ATM) offering (Note 11) 
Exercise of options
Exercise of warrants
Net loss

227,244

1,250,000
(25,000)
9,609,859
23,646
900,000

*

*
*
1
*
*

—   —  

2,560

  —  

—  

2,560

9,957
—
60,728
68
6,300

—
(116)
  —  
  —  
  —  
—   —  

—
—
—  
—  
—  

(31,811)

9,957
(116)
60,729
68
6,300
(31,811)

Balance as of December 31, 2020

  35,159,977

12

184,655

(116)

(149,087)

35,464

* Represents an amount less than $1.

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

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Cash flows from operating activities:
Net loss

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
Shares and options granted to service providers
Stock-based compensation related to options granted to employees and directors
Change in operating lease liability
Decrease in other accounts receivable and prepaid expenses
Increase(decrease) in accounts payables
Increase in other accounts payable and accrued expenses

December 31, 

2020

2019

U.S. $ in thousands

$

(31,811)

$

(23,253)

219
—  

2,560
161
1,491
(9,260)
1,447

164
25
764
184
690
10,129
50

Total net cash used in operating activities

$

(35,193)

$

(11,247)

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

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BRAINSTORM CELL THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Cash flows from investing activities:
Purchase of property and equipment
Proceeds from (Investment in) short-term deposit
Total net cash provided by (used in) investing activities

Cash flows from financing activities:
Proceeds from exercise of options
Issuance of shares in at-the-market (ATM) offering (Note 11)
Proceeds from issuance of shares and warrants in Registered Direct Offering (Note 11)
Purchase of treasury stock
Proceeds from exercise of warrants
Total net cash provided by financing activities

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at end of the period

Supplemental schedule of non-cash transactions
Right of use lease asset and liability

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

71

Year ended
December 31, 

2020

2019

U.S. $ in thousands

(378) 
(4,074) 
(4,452)

68
60,729
9,957
(116)
6,300
76,938

37,293

536

37,829

$

$

$

$

$

$

$

$

(473)
6,089
5,616

35
2,064
—
—
3,126
5,225

(406)

942

536

(5,857)

(3,197)

    
    
 
   
  
 
 
 
  
 
  
 
 
 
 
 
 
BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 1    -    GENERAL

A.

B.

C.

The Company was incorporated in the State of Delaware on November 15, 2006, and previously was incorporated
in the State of Washington. In October 2004, the Company formed its wholly-owned subsidiary, Brainstorm Cell
Therapeutics Ltd. (“BCT”) in Israel, which currently conducts all of the research and development activities of the
Company. BCT formed wholly-owned subsidiaries Brainstorm Cell Therapeutics UK Ltd., in the United Kingdom
on February 19, 2013 (currently inactive), Advanced Cell Therapies Ltd. in Israel on June 21, 2018 and Brainstorm
Cell Therapeutics Limited in Ireland on October 1, 2019.

The Common Stock is publicly traded on the Nasdaq Capital Market under the symbol “BCLI”.

The Company, through BCT, holds rights to commercialize certain stem cell technology developed by Ramot of
Tel Aviv University Ltd. ("Ramot"), (see Note 3). Using this technology, the Company has been developing novel
adult stem cell therapies for debilitating neurodegenerative disorders such as Amytrophic Lateral Scelorosis (ALS,
also known as Lou Gherig Disease), Progressive Multiple Sclerosis (PMS) and Parkinson’s disease. The Company
developed  a  proprietary  process,  called  NurOwn®,  for  the  propagation  of  Mesenchymal  Stem  Cells  and  their
differentiation  into  neurotrophic  factor  secreting  cells.  These  cells  are  then  transplanted  at  or  near  the  site  of
damage,  offering  the  hope  of  more  effectively  treating  neurodegenerative  diseases.  The  process  is  currently
autologous, or self-transplanted.

Since  its  inception,  the  Company  has  devoted  substantially  all  of  its  efforts  to  research  and  development.  The
Company  is  still  in  its  development  and  clinical  stage  and  has  not  yet  generated  revenues.  The  Company  has
incurred  operating  losses  since  its  inception,  and  expects  to  continue  to  incur  operating  losses  for  the  near-term.
The  extent  of  the  Company's  future  operating  losses  and  the  timing  of  becoming  profitable  are  uncertain.  As  of
December  31,  2020,  the  Company  had  an  accumulated  deficit  of  approximately  $148  million.  The  extent  of  the
Company's future operating losses and the timing of becoming profitable are uncertain.

The Company’s primary sources of cash have been proceeds from the issuance and sale of its Common Stock and
warrants, the exercise of warrants, sales of Common Stock via its ATM program and other funding transactions.
While the Company has been successful in raising financing recently and in the past, there can be no assurance that
it will be able to do so in the future on a timely basis on terms acceptable to the Company, or at all. The Company
has not yet commercialized any of its product candidates. Even if the Company commercializes one or more of its
product candidates, it may not become profitable in the near-term. The Company’s ability to achieve profitability
depends  on  a  number  of  factors,  including  its  ability  to  obtain  regulatory  approval  for  its  product  candidates,
successfully  complete  any  post-approval  regulatory  obligations  and  successfully  commercialize  its  product
candidates alone or in partnership.

The Company believes its existing cash will be sufficient to fund its anticipated operating cash requirements for at
least twelve months following the date of this filing. The Company currently has sufficient cash to execute on its
ongoing Phase 2 PMS and Phase 2 AD clinical trials and support its operating activities. Management expects that
the Company will continue to generate losses from the clinical development and regulatory activities, which will
result in a negative cash flow from operating activity. If the Company is granted a BLA approval, additional capital
raise will be needed to commercialize Nurown® for ALS, and to conduct additional trials that may be needed for
other  indications.  The  actual  amount  of  cash  that  the  Company  will  need  to  operate  is  subject  to  many  factors,
including, but not limited to, the timing, design and conduct of clinical trials for its product candidates along with
cost to commercialize these product candidates.

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NOTE 1    -    GENERAL (Cont.)

In  early  2020,  the  World  Health  Organization  declared  the  rapidly  spreading  coronavirus  disease  (COVID-19)
outbreak  a  pandemic.  This  pandemic  has  resulted  in  governments  worldwide  enacting  emergency  measures  to
combat the spread of the virus. The Company considered the impact of COVID-19 on its operations and determined
that  there  were  no  material  adverse  impacts  on  the  Company’s  results  of  operations  and  financial  position  as  of
December 31, 2020. These estimates may change, as new events occur and additional information is obtained.

NOTE 2    -    SIGNIFICANT ACCOUNTING POLICIES

A.          Basis of presentation:

The consolidated financial statements have been prepared in accordance with United States Generally Accepted
Accounting Principles (“GAAP”) applied on a consistent basis.

B.          Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.

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NOTE 2    -    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

C.          Financial statements in U.S. dollars:

The functional currency of the Company is the U.S dollar ("dollar") since the dollar is the currency of the primary
economic environment in which the Company has operated and expects to continue to operate in the foreseeable
future. Part of the transactions of BCT is recorded in new Israeli shekels ("NIS"); however, a substantial portion
of the costs are incurred in dollars or linked to the dollar. Accordingly, management has designated the dollar as
the currency of BCT’s primary economic environment and thus it is their functional and reporting currency.

Transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions
and  balances  have  been  re-measured  to  dollars  in  accordance  with  the  provisions  of  ASC  830-10  "Foreign
Currency  Translation".  All  transaction  gains  and  losses  from  re-measurement  of  monetary  balance  sheet  items
denominated in non-dollar currencies are reflected in the statement of operations as financial income or expenses,
as appropriate.

D.          Principles of consolidation:

The  consolidated  financial  statements  include  the  accounts  of  the  Company  and  its  wholly-owned  subsidiaries,
Advanced Cell Therapies Ltd, BCT, Brainstorm UK and Brainstorm Cell Therapeutics Limited (Irish Company).
Intercompany balances and transactions have been eliminated upon consolidation.

E.          Cash and cash equivalents:

Cash  and  cash  equivalents  include  cash  in  hand  and  short-term  highly  liquid  investments  that  are  readily
convertible  to  cash  with  maturities  of  three  months  or  less  as  of  the  date  acquired  and  that  are  exposed  to
insignificant risk of change in value.

F.           Short-term deposits:

Short-term deposits are deposits with an original maturity of more than three months from the date of investment
and which do not meet the definition of cash equivalents.

G.          Property and equipment:

Property  and  equipment  are  stated  at  cost,  less  accumulated  depreciation.  Depreciation  is  calculated  by  the
straight-line method over the estimated useful lives of the assets.

The annual depreciation rates are as follows:

Office furniture and equipment
Computer software and electronic equipment
Laboratory equipment
Leasehold improvements

%
7
33
15
Over the shorter of the lease term (including
options if any) or useful life

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NOTE 2    -    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

H.         Accrued post-employment benefit:

The  majority  of  the  Company's  employees  in  Israel  have  agreed  to  Section  14  of  Israel's  Severance  Pay  Law,
5723-1963  (“Section  14”).  Pursuant  to  Section  14,  those  of  the  Company's  employees  that  are  covered  by  this
section  are  entitled  only  to  an  amount  of  severance  pay  equal  to  monthly  deposits,  at  a  rate  of  8.33%  of  their
monthly  salary,  made  on  their  behalf  by  the  Company.  Payments  in  accordance  with  Section  14  release  the
Company from any future severance liabilities in respect of those employees. Neither severance pay liability nor
severance pay funds under Section 14 for such employees is recorded on the Company's balance sheet.

I.          Fair value of financial instruments:

The carrying values of cash and cash equivalents, other accounts receivable, other assets, trade payables and other
accounts payable approximate their fair value due to the short-term maturity of these instruments.

J.           Accounting for stock-based compensation:

In  accordance  with  ASC  718-10  the  Company  estimates  the  fair  value  of  equity-based  payment  awards  on  the
date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to
vest  is  recognized  as  expense  over  the  requisite  service  periods  in  the  Company's  consolidated  statement  of
operations.

The  Company  recognizes  compensation  expense  for  the  value  of  non-employee  awards,  which  have  graded
vesting, based on the straight-line method over the requisite service period of each award.

The Company estimates the fair value of restricted shares based on the market price of the shares at the grant date
and estimates the fair value of stock options granted using a Black-Scholes options pricing model. The option-
pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility
and  the  expected  option  term.  Expected  volatility  was  calculated  based  upon  actual  historical  stock  price
movements over the period, equal to the expected option term, which was calculated using the simplified method.
The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free
interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term.

The Company accounts for shares and warrant grants issued to non-employees using the guidance of ASU No.
2018-07  “Compensation  -  Stock  Compensation  (Topic  718):  Improvements  to  Nonemployee  Share-Based
Payment  Accounting.”  which  expand  the  scope  of  Topic  718,  Compensation  -  Stock  Compensation  (which
currently  only  includes  share-based  payments  to  employees)  to  include  share-based  payments  issued  to
nonemployees for goods or services.

K.           Basic and diluted net loss per share:

Basic  net  loss  per  share  is  computed  based  on  the  weighted  average  number  of  shares  outstanding  during
each year. Diluted net loss per share is computed based on the weighted average number of shares outstanding
during  each  year,  plus  the  dilutive  potential  of  the  Common  Stock  considered  outstanding  during  the  year,  in
accordance with ASC 260-10 "Earnings per Share".

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NOTE 2    -    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

K.           Basic and diluted net loss per share: (Cont.)

All outstanding stock options and warrants have been excluded from the calculation of the diluted loss per share
for  the  years  ended  December  31,  2020  and  December  31,  2019,  since  all  such  securities  have  an  anti-dilutive
effect.

L.          Research and development expenses, net:

Research and development expenses are charged to the statement of operations as incurred.

Royalty-bearing  grants  from  the  Israel  Innovation  Authorities  (“IIA”)  and  a  non-dilutive,  non-royalty-bearing
grant  from  CIRM  for  funding  approved  research  and  development  projects  are  recognized  at  the  time  the
Company is entitled to such grants, on the basis of the costs incurred and applied as a deduction from research
and development expenses.

M.          Income taxes:

The Company accounts for income taxes in accordance with ASC 740-10 "Accounting for Income Taxes". This
Statement requires the use of the liability method of accounting for income taxes, whereby deferred tax asset and
liability account balances are determined based on the differences between financial reporting and tax bases of
assets  and  liabilities  and  are  measured  using  the  enacted  tax  rates  and  laws  that  will  be  in  effect  when  the
differences are expected to reverse. The Company and BCT provide a valuation allowance, if necessary, to reduce
deferred tax assets to their estimated realizable value.

N.         Lease accounting

The Company adopted ASC 842, leases effective January 1, 2019 using the modified retrospective approach. At
the inception of an arrangement, the Company determines whether an arrangement is or contains a lease based on
the facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Arrangements that are determined to be leases at inception are recognized in long-term ROU assets and short and
long-term lease liabilities in the consolidated balance sheet at lease commencement. Operating lease ROU assets
and operating lease liabilities are recognized based on the present value of the future fixed lease payments over
the  lease  term  at  commencement  date.  As  most  of  the  Company’s  leases  do  not  provide  an  implicit  rate,  the
Company applies its incremental borrowing rate based on the economic environment at commencement date in
determining  the  present  value  of  future  payments.  Lease  terms  may  include  options  to  extend  or  terminate  the
lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases
or payments are recognized on a straight-line basis over the lease term.

The Company has elected not to recognize on the balance sheet leases with terms of 12 months or less.

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NOTE 2    -    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

O.         Treasury Stock

The  Company  records  the  aggregate  purchase  price  of  treasury  stock  at  cost  and  includes  treasury  stock  as  a
reduction to stockholders' equity.

P.         Commitments and Contingencies

The  Company  follows  ASC  450-20,  Loss  Contingencies,  to  report  accounting  for  contingencies.  Liabilities  for
loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded
when  it  is  probable  that  a  liability  has  been  incurred  and  the  amount  of  the  assessment  can  be  reasonably
estimated. As of December 31, 2020, the company recorded $600 for known commitments and contingencies.

Q.           Recent Accounting Standards Updates Not Yet Effective:

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting
for  Income  Taxes  (“ASU  2019-12”),  which  is  intended  to  simplify  various  aspects  related  to  accounting  for
income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies
and  amends  existing  guidance  to  improve  consistent  application.  This  standard  will  be  effective  for  the
Company's interim and annual periods beginning with the first quarter of fiscal 2021 and must be applied on a
modified  retrospective  basis.  This  standard  will  not  materially  impact  the  Company's  consolidated  financial
statements.

NOTE 3    -    RESEARCH AND LICENSE AGREEMENT

The  Company  entered  into  a  Research  and  License  Agreement,  as  amended  and  restated,  with  Ramot  (the  “License
Agreement”).  Pursuant  to  the  remuneration  terms  of  the  License  Agreement,  the  Company  has  agreed  to  pay  Ramot
royalties on Net Sales of the Licensed Product as follows:

a)           So long as the making, producing, manufacturing, using, marketing, selling, importing or exporting (collectively,
the “Commercialization”) of such Licensed Product is covered by a Valid Claim or is covered by Orphan Drug
Status, the Company shall pay Ramot a royalty of 5% of the Net Sales received by the Company and resulting
from such Commercialization; and

b)           In the event the Commercialization of the Licensed Product is neither covered by a Valid Claim nor by Orphan
Drug status, the Company shall pay Ramot a royalty of 3% of the Net Sales received by the Company resulting
from such Commercialization. This royalty shall be paid from the First Commercial Sale of the Licensed Product
and for a period of fifteen (15) years thereafter.

Capitalized  terms  set  forth  above  which  are  not  defined  shall  have  the  meanings  attributed  to  them  under  the
License Agreement.

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NOTE 4    -    OTHER ACCOUNTS RECEIVABLE

Composition:

Grants receivable from CIRM (Note 10)
Grants receivable from IIA
Government institutions and other

NOTE 5    -    PREPAID EXPENSES

December 31

2020

2019

U.S. $ in thousands

—
220
84
304

2,200
85
90
2,359

In  November  2017,  the  Company  has  contracted  with  City  of  Hope's  Center  for  Biomedicine  and  Genetics  ("COH")  to
produce  clinical  supplies  of  NurOwn®  adult  stem  cells  for  the  Company’s  ongoing  Phase  3  clinical  study.  In  2017  the
Company paid COH $2,665 advance payment. The advance was recorded as prepaid expense and is amortized over the
term of the agreement. As of December 31, 2019, $276 were recorded as current prepaid expense. As of December 31,
2020, the prepaid expenses from COH advance payment were fully reduced.

As of December 31, 2020, prepaid expenses includes directors insurance of $984.

NOTE 6    -    LEASES

On  January  1,  2019  the  Company  adopted  ASU  2016-02,  Leases  (Topic  842)  (“ASU  2016-02”)  using  the  modified
retrospective approach for all lease arrangements at the beginning of the period of adoption. The Company leases facilities,
clinical research rooms, and vehicles under operating leases.

As of December 31, 2020, the Company’s ROU assets and lease liabilities for operating leases totaled $6,872 and $7,217,
respectively. The impact of adopting the new lease standard was not material to the Company’s condensed consolidated
statement of operations for the periods presented.

As of December 31, 2020, and 2019, total right-of-use assets was approximately $6,872 and $2,182 and the operating lease
liabilities for remaining long term lease was approximately $7,217 and $2,366, respectively. In the year ended December
31,  2020  and  2019,  the  Company  recognized  approximately  $1,423  and  $1,296,  respectively  in  total  lease  costs  for  the
leases. Variable lease costs for the year ended December 31, 2020 were immaterial.

As of December 31, 2020, the Company’s operating leases had a weighted average remaining lease term of 3.93 years and
a weighted average discount rate of 7.00%. Future lease payments under operating leases as of December 31, 2020 were as
follows:

Supplemental cash flow information related to operating leases was as follows:

Cash payments for operating leases
New operating lease assets obtained in exchange for operating lease liabilities

     Twelve Months 

ended
December 31,
2020

1,423

5,857

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NOTE 6    -    LEASES (Cont.)

As of December 31, 2020, the Company’s operating leases had a weighted average remaining lease term of 3.93 years and
a weighted average discount rate of 7.00%. Future lease payments under operating leases as of December 31, 2020 were as
follows:

2021
2022
2023
2024
2025
Total future lease payments
Less imputed interest
Total lease liability balance

79

Operating
Leases

2,760
1,422
1,437
1,406
1,265
8,290
(1,073)
7,217

    
 
 
 
 
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NOTE 7    -    PROPERTY AND EQUIPMENT

Composition:

Cost:
Office furniture and equipment
Computer software and electronic equipment
Laboratory equipment
Leasehold improvements

Accumulated depreciation:
Office furniture and equipment
Computer software and electronic equipment
Laboratory equipment
Leasehold improvements

Depreciated cost

December 31

2020

2019

U.S. $ in thousands

75
237
1,949
811
3,072

38
210
964
741
1,953
1,119

73
209
1,617
795
2,694

33
196
777
728
1,734
960

Depreciation expenses for the years ended December 31, 2020 and December 31, 2019 were $219 and $164, respectively.

NOTE 8    -    COMMITMENTS AND CONTINGENCIES

A.          Commitments to pay royalties to the IIA:

BCT  obtained  from  the  Chief  Scientist  of  the  Israel  Innovation  Authority  (“IIA”)  grants  for  participation  in
research  and  development  for  the  years  2007  through  2019,  and,  in  return,  BCT  is  obligated  to  pay  royalties
amounting to 3%-3.5% of its future sales up to the amount of the grant. The grant is linked to the exchange rate of
the  dollar  and  bears  interest  of  Libor  per  annum.  Through  the  year  ended  December  31,  2020,  total  grants
obtained amounted to $1,025.

B.           In addition to the royalties which the Company is required to pay to Ramot on its Commercialization of the
Licensed Product as described in Note 3 hereof, the Company has other financial obligations under the License
Agreement,  including  without  limitation,  certain  research  funding  commitments  as  well  as  a  commitment  to
reimburse  Ramot  for  all  of  its  documented  Licensed  Product  patent-related  expenses.  Pursuant  to  the  License
Agreement,  in  the  event  the  Company  elects  not  to  reimburse  Ramot  for  any  specific  patent  expenses,  the
Company’s  corresponding  Commercialization  rights  will  be  terminated  by  Ramot.  By  way  of  example,  if  the
Company  elects,  in  its  sole  discretion,  not  to  reimburse  Ramot’s  patent  expenses  which  are  incurred  in  a
particular jurisdiction, the Company’s right to Commercialize the Licensed Product in the same jurisdiction may
be  terminated  by  Ramot.  As  of  December  31,  2020,  there  are  no  outstanding  obligations  owed  to  Ramot  in
connection with the above.

NOTE 9    -    SHORT TERM DEPOSITS

Short term investments on December 31, 2020 and December 31, 2019 include bank deposits bearing annual interest rates
varying from 0.05% to 0.83%, with maturities of up to 4 months as of December 31, 2020 and 2019.

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NOTE 10   -    GRANTS RECEIVABLE

In July 2017 the Company received an award in the amount of $15,912 from CIRM to aid in funding the Company’s Phase
3 study of NurOwn®, for the treatment of ALS. An aggregate amount of $3,362 and $12,550 related to the project was
received through the year ended December 31, 2020 and December 31, 2019, respectively. As of December 31, 2020, there
are no additional grants receivable from CIRM. The award does not bear a royalty payment commitment nor is the award
otherwise refundable. $1,162 and $4,058 was recorded as participation by CIRM in research and development expenses
during the year ended in December 31, 2020 and during the year ended December 31, 2019, respectively (see Note 12).

NOTE 11   -    STOCK CAPITAL

The rights of Common Stock:

Holders of Common Stock have the right to receive notice to participate and vote in general meetings of the Company, the
right to a share in the excess of assets upon liquidation of the Company and the right to receive dividends, if declared.

The Common Stock is publicly traded on the Nasdaq Capital Market under the symbol BCLI.

Private placements and public offerings:

The  Company  is  party  to  a  July  2,  2007  subscription  agreement  and  related  registration  rights  agreement  and  warrants,
amended  July  31,  2009,  May  10,  2012,  May  19,  2014  and  November  2,  2017  (together  as  amended,  the  “ACCBT
Documents”)  with  ACCBT  Corp.  (“ACCBT”),  a  company  under  the  control  of  Mr.  Chaim  Lebovits,  the  Company’s
President and Chief Executive Officer, pursuant to which, for an aggregate purchase price of approximately $5.0 million,
the Company sold to ACCBT 1,920,461 shares of its Common Stock and warrants to purchase up to 2,016,666 shares of
its Common Stock (the “ACCBT Warrants”). The ACCBT Warrants contain cashless exercise provisions, which permit the
cashless  exercise  of  up  to  50%  of  the  underlying  shares  of  Common  Stock.  672,222  of  the  ACCBT  Warrants  have  an
exercise  price  of  $3  and  the  remainder  has  an  exercise  price  of  $4.35.  All  of  the  ACCBT  Warrants  are  presently
outstanding.  The  Company  registered  1,920,461  shares  of  Common  Stock  and  2,016,666  shares  of  Common  Stock
underlying the ACCBT Warrants on registration statement No. 333-201705 dated January 26, 2015 pursuant to registration
rights in the ACCBT Documents.

ACCBT  has  Board  appointment  rights,  preemptive  rights  and  consents  rights  pursuant  to  the  ACCBT  Documents.  The
foregoing description reflects the November 2, 2017 Warrant Amendment Agreement between the Company and ACCBT,
pursuant  to  which  the  rights  and  privileges  of  the  ACCBT  Entities  relating  to  the  management  of  the  Company  were
reduced, in exchange for a five (5) year extension of the expiration of the Company warrants held by the ACCBT Entities.
Pursuant to the amendment, the ACCBT Documents were amended as follows: (i) the ACCBT Entities existing right to
appoint  50.1%  of  the  Board  of  Directors  of  the  Company  and  its  subsidiaries  was  reduced  to  30%;  (ii)  the  ACCBT
Entities’  consent  rights  regarding  Company  matters  pursuant  to  the  ACCBT  Documents  were  limited  to  transactions
greater than $500,000 (previous to the amendment the consent right was for transactions of $25,000 or more); and (iii) the
expiration date of each of the ACCBT Warrants was extended until November 5, 2022 (the previous expiration date was
November 5, 2017).

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NOTE 11   -    STOCK CAPITAL (Cont.)

2018 Warrant Exercise Agreement:

On June 6, 2018, the Company entered into a Warrant Exercise Agreement (the “2018 Warrant Exercise Agreement”) with
certain  holders  (the  “2018  Warrant  Holders”)  of  warrants  (the  “2015  Warrants”)  to  purchase  Common  Stock.  The  2015
Warrants  were  originally  issued  in  the  Company’s  January  8,  2015  private  placement.  Pursuant  to  the  2018  Warrant
Exercise Agreement, the 2018 Warrant Holders exercised their 2015 Warrants for a total of 2,458,201 shares of Common
Stock at an amended exercise price of $5 per share. The warrant exercises generated gross cash proceeds to the Company
of  $12.3  million.  In  addition,  the  Company  issued  new  warrants  to  the  2018  Warrant  Holders  to  purchase  an  aggregate
2,458,201 unregistered shares of Common Stock, at an exercise price of $9.00, with an expiration date of December 31,
2020  (the  “2018  Warrants”).  In  connection  with  the  issuance  of  the  2019  Warrants  (described  below),  certain  2018
Warrants were amended on August 2, 2019 to reduce the exercise price to $7.00 per share and to extend the expiration date
to December 31, 2021 (the “Amended 2018 Warrants”).

Between July 20, 2020 and July 24, 2020, 2018 Warrant Holders exercised an aggregate of 280,000 shares of the Amended
2018  Warrants  (the  “2018  Exercised  Shares”),  which  exercises  generated  gross  cash  proceeds  to  the  Company  of
$1,960,000.

The 2018 Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state
securities laws. The shares issuable upon exercise of the Amended 2018 Warrants have been registered for resale on the
Company’s  registration  statement  on  Form  S-3  (File  No.  333-225995).    The  exercised  shares  have  been  registered  for
resale on the Company’s registration statement on Form S-3 (File No. 333-201704). The issuance of the exercised shares
and  2018  Warrants  was  exempt  from  the  registration  requirements  of  the  Securities  Act  pursuant  to  the  exemption  for
transactions  by  an  issuer  not  involving  any  public  offering  under  Section  4(a)(2)  of  the  Securities  Act  and  Rule  506  of
Regulation D promulgated under the Securities Act. The Company made this determination based on the representations
that each party is an “accredited investor” within the meaning of Rule 501 of Regulation D.

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NOTE 11   -    STOCK CAPITAL (Cont.)

Private placements and public offerings: (Cont.)

2019 Warrant Exercise Agreement:

On August 2, 2019, the Company entered into a Warrant Exercise Agreement which generated gross cash proceeds to the
Company of approximately $3.3 million. Pursuant to the agreement, certain holders (the “2019 Warrant Holders”) of the
2018 Warrants agreed to exercise 842,000 shares of Common Stock of their 2018 Warrants, at an amended exercise price
of  $3.90  per  share,  and  the  Company  agreed  to  issue  new  warrant  shares  to  the  Holders  to  purchase  842,000  shares  of
Common Stock (the “2019 Warrants”), at an exercise price of $7.00, with an expiration date of December 31, 2021. The
2018 Warrants held by the 2019 Warrant Holders, to the extent not exercised, were also amended to reduce the exercise
price to $7.00 per share and to extend the expiration date to December 31, 2021 (the “Amended 2018 Warrants”).

Between July 15, 2020 and July 24, 2020, 2019 Warrant Holders exercised an aggregate of 620,000 shares of the 2019
Warrants (the “2019 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $4,340,000.

The Amended 2018 Warrants and 2019 Warrants have not been registered under the Securities Act of 1933, as amended
(the Securities Act), or state securities laws. The shares issuable upon exercise of the 2019 Warrants have been registered
for  resale  on  the  Company’s  registration  statement  on  Form  S-3  (File  No.  333-233349),  and  the  shares  issuable  upon
exercise of the Amended 2018 Warrants have been registered for resale on the Company’s registration statement on Form
S-3 (File No. 333-225995). The exercised shares have been registered for resale on the Company’s registration statement
on Form S-3 (File No. 333-225995). The issuance of the exercised shares, Amended 2018 Warrants and 2019 Warrants is
exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under
the Securities Act. The Company made this determination based on the representations that each party is an “accredited
investor” within the meaning of Rule 501 of Regulation D.

Warrants:

The  following  table  sets  forth  the  number,  exercise  price  and  expiration  date  of  Company  warrants  outstanding  as  of
December 31, 2020:

Issuance Date

Aug 2007‑ Jan 2011
Jun‑2018
Aug ‑ 2019
March - 2020
Total

Exercise
price
3 - 4.35
7
7
15

Exercisable
  Through
Nov‑2022
Dec-2021
Dec‑2021
March‑2023

Outstanding
As Of
  December 31,
2020

2,016,666  
877,999  
222,000  
250,000
3,366,665  

83

    
    
    
 
 
 
 
 
 
 
   
  
BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11   -    STOCK CAPITAL (Cont.)

At-the-market (ATM) Offering:

On June 11, 2019, the Company entered into a distribution agreement with Raymond James & Associates, Inc. ("Raymond
James"), pursuant to which the Company sold, through the Raymond James, shares of Common Stock having an aggregate
offering  amount  of  $20,000,000  (the  "June  11,  2019  ATM")  in  an  "at  the  market"  offering  as  defined  in  Rule  415
promulgated under the Securities Act, including, without limitation, by sales made directly on the Nasdaq Capital Market,
on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and
Raymond James.

On March 6, 2020, the Company entered into a new distribution agreement with Raymond James (the “Agent”), pursuant
to  which  the  Company  was  able  to  sell  from  time  to  time,  through  the  Agent,  shares  of  Common  Stock,  having  an
aggregate  offering  price  of  up  to  $50,000,000  (the  “March  6,  2020  ATM”).  Sales  under  the  March  6,  2020  ATM  were
made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated
under  the  Securities  Act,  including,  without  limitation,  sales  made  directly  on  the  Nasdaq  Capital  Market,  on  any  other
existing  trading  market  for  the  Shares,  through  a  market  maker  or  as  otherwise  agreed  by  the  Company  and  Raymond
James.  Under  the  March  6,  2020  ATM,  the  Company  sold  an  aggregate  of  2,446,641  shares  of  Common  Stock  at  an
average price of $9.45 per share, raising gross proceeds of approximately $23.11 million.

On September 25, 2020, the Company entered into an Amended and Restated Distribution Agreement (the “Distribution
Agreement”) with SVB Leerink LLC (“Leerink”) and Raymond James & Associates (together with Leerink, the “Agents”)
pursuant  to  which  the  Company  may  sell  from  time  to  time,  through  the  Agents,  shares  of  Common  Stock,  having  an
aggregate offering price of up to $45,000,000, which aggregate amount includes amount unsold pursuant to the March 6,
2020 ATM (the “September 25, 2020 ATM”). Sales under the September 25, 2020 ATM are to be made by any method
permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities
Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market
for  the  Shares,  through  a  market  maker  or  as  otherwise  agreed  by  the  Company  and  the  Agents.  The  Distribution
Agreement amends and restates in its entirety the Company’s prior agreement with Raymond James entered on March 6,
2020 (the “March 6, 2020 ATM”). The Company previously sold 2,446,641 shares of Common Stock for gross proceeds of
approximately $23.11 million of Common Stock under the March 6, 2020 ATM. During the quarter ended December 31,
2020, the Company sold an aggregate of 3,564,385 shares of Common Stock pursuant to the September 25, 2020 ATM at
an average price of $6.10 per share, raising gross proceeds of approximately $21.8 million.

The Company has no obligation under the September 25, 2020 ATM to sell any shares and may at any time suspend sales
or  terminate  the  September  25,  2020  ATM  in  accordance  with  its  terms.  Subject  to  the  terms  and  conditions  of  the
Distribution Agreement, the Agents will use their commercially reasonable efforts to sell on the Company’s behalf, from
time to time consistent with its normal sales and trading practices, such Shares based upon instructions from the Company
(including  any  price,  time  or  size  limits  or  other  customary  parameters  or  conditions  the  Company  may  impose).  The
Company  has  provided  the  Agents  with  customary  indemnification  rights,  and  the  Agents  will  be  entitled  to  a  fixed
commission  of  3.0%  of  the  aggregate  gross  proceeds  from  the  Shares  sold.  The  Distribution  Agreement  contains
customary  representations  and  warranties,  and  the  Company  is  required  to  deliver  customary  closing  documents  and
certificates  in  connection  with  sales  of  the  Shares.  Shares  sold  under  the  ATMs  are  issued  pursuant  to  the  Company’s
existing Shelf Registration Statement, and the Prospectus Supplement to the Registration Statements filed June 11, 2019,
March 6, 2020 and September 25, 2020, respectively.

84

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U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11   -    STOCK CAPITAL (Cont.)

Registered Direct Offering:

On March 6, 2020, the Company entered into and closed a $10.0 million registered direct offering of 1,250,000 shares of
common stock at a per share purchase price equal to $8.00.  The purchaser also received a three-year warrant to purchase
up to 250,000 shares of Common Stock at any exercise price of $15.00 per share.

Capital Raised Since Inception:

Since its inception the Company and as of December 31, 2020, the Company has raised approximately $143,000 gross in
cash in consideration for issuances of Common Stock and warrants in private placements and public offerings as well as
proceeds from warrants exercises.

Stock Plans:

During  the  fiscal  year  ended  December  31,  2020,  the  Company  had  outstanding  awards  for  stock  options  under  four
stockholder  approved  plans:  (i)  the  2004  Global  Stock  Option  Plan  and  the  Israeli  Appendix  thereto  (the  “2004  Global
Plan”) (ii) the 2005 U.S. Stock Option and Incentive Plan (the “2005 U.S. Plan,” and together with the 2004 Global Plan,
the  “Prior  Plans”);  (iii)  the  2014  Global  Share  Option  Plan  and  the  Israeli  Appendix  thereto  (which  applies  solely  to
participants who are residents of Israel) (the “2014 Global Plan”); and (iv) the 2014 Stock Incentive Plan (the “2014 U.S.
Plan” and together with the 2014 Global Plan, the “2014 Plans”).

The 2004 Global Plan and 2005 U.S. Plan expired on November 25, 2014 and March 28, 2015, respectively. Grants that
were  made  under  the  Prior  Plans  remain  outstanding  pursuant  to  their  terms.  The  2014  Plans  were  approved  by  the
stockholders on August 14, 2014 (at which time the Company ceased to issue awards under each of the 2005 U.S. Plan and
2004 Global Plan) and amended on June 21, 2016 and November 29, 2018. Unless otherwise stated, option grants prior to
August 14, 2014 were made pursuant to the Company’s Prior Plans, and grants issued on or after August 14, 2014 were
made pursuant to the Company’s 2014 Plans, and expire on the tenth anniversary of the grant date.

The  2014  Plans  have  a  shared  pool  of  5,600,000  shares  of  Common  Stock  available  for  issuance.  As  of  December  31,
2020, 3,018,413 shares were available for future issuances under the 2014 Plans. The exercise price of the options granted
under  the  2014  Plans  may  not  be  less  than  the  nominal  value  of  the  shares  into  which  such  options  are  exercised.  Any
options  under  the  2014  Plans  that  are  canceled  or  forfeited  before  expiration  become  available  for  future  grants.  The
Governance,  Nominating  and  Compensation  Committee  (the  “GNC  Committee”)  of  the  Board  of  Directors  of  the
Company administers the Company’s stock incentive compensation and equity-based plans.

85

BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11   -    STOCK CAPITAL (Cont.)

Stock-based compensation to employees and directors:

Stock Options:

Under  the  2014  Plans,  the  Company  may  award  stock  options  to  certain  employees,  officers,  directors,  and  service
providers. The stock options vest in accordance with such conditions and restrictions determined by the GNC Committee.
These conditions and restrictions may include the achievement of certain performance goals and/or continued employment
with  the  Company  through  a  specified  period.  Stock  options  awarded  are  valued  based  upon  the  Black-Scholes  option
pricing model and the Company recognizes this value as stock compensation expense over the periods in which the options
vest.  Use  of  the  Black  Scholes  option-pricing  model  requires  that  the  Company  make  certain  assumptions,  including
expected  volatility,  risk-free  interest  rate,  expected  dividend  yield,  and  the  expected  life  of  the  options.  The  Company
granted stock options to purchase 590,866 and 204,167 shares in 2020 and 2019, respectively.

The fair value of the options is estimated at the date of grant using Black-Scholes options pricing model with the following
assumptions used in the calculation:

Expected volatility
Risk-free interest
Dividend yield
Expected life of up to (years)
Fair Value

57%-66 %  
0.31%-0.57 %  
%  

Year ended December 31, 
2019
2020
60
1.44
0
5.5
$1.728-$4.020

0
5.04-7.0
$3.951-$9.183 

%
%
%

A summary of the Company's option activity related to options to employees and directors, and related information is as
follows:

For the year ended December 31

2020
Weighted
average
exercise

Amount
of

     options*      price

$

Aggregate
intrinsic
value
$

Outstanding at beginning of period
Granted
Exercised
Cancelled
Outstanding at end of period
Vested at end of period
* Represents Employee Stock Options only (not including RSUs)

1,293,007
590,866
(23,646)
(105,333)
1,754,894
998,527

3.0142  
8.7411  
2.8692  
3.9731  
4.8869  
2.3859  

2,344,107
2,186,920

2019
Weighted
average
exercise

Amount
of

     options*      price

1,496,287
204,167
(18,665)
(388,782)
1,293,007
840,579

$

3.0581  
4.8937  
1.8943  
4.2239  
3.0142  
2.3765  

Aggregate
intrinsic
value 
$

1,636,630
2,048,529

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market
value of the Company's shares on December 31, 2020, multiplied by the number of in-the-money options on those dates)
that would have been received by the option holders had all option holders exercised their options on those dates.

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BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11   -    STOCK CAPITAL (Cont.)

Stock-based compensation to employees and directors: (Cont.)

As of December 31, 2020, there was $2,386 of total unrecognized compensation cost related to non-vested options under
the  Plan.    The  cost  is  expected  to  be  recognized  over  a  weighted  average  period  of  1.88  years.  Compensation  expense
recorded by the Company in respect of its stock-based employees and directors compensation awards in accordance with
ASC 718-10 for the year ended December 31, 2020 and 2019 amounted to $1,293 and $372, respectively.

The options outstanding as of December 31, 2020 and December 31, 2019, have been separated into exercise prices, as
follows:

Options outstanding
As of December 31, 
2019
2020
222,833  
311,499  
43,222  
56,555  
369,619  
369,619  
78,667  
58,354  
13,333  
10,000  

100,000
200,000  
60,000  
100,000  
80,000  

100,000
162,200  
80,000  
80,000
1,754,894  

100,000
200,000  
150,000  
100,000  
—  
—
—  
—  
—

1,293,007  

Weighted average
remaining
contractual
Life - Years
As of December 31, 
2020

2019

6.73  
1.29  
4.75  
3.16  
2.59  
8.68
7.66  
0.21  
8.69  
9.19  
9.81
9.81  
9.69  
9.75
6.97  

6.78  
1.98  
5.75  
3.71  
2.59  
9.69
8.66  
8.53  
9.69  
—  
—
—  
—  
—
7.32  

Options
exercisable as of
As of December 31, 

2020
294,832  
43,222  
369,619  
58,354  
10,000  
31,250
100,000  
60,000  
31,250  
—  
—
—  
—  
—

998,527  

2019
222,833
56,555
369,619
78,667
13,333
—
50,000
30,000
—
—
—
—
—
—
823,007

Exercise
 price
$
0.75
2.25
2.45
2.70
3.90
3.96
3.98
4.21
6.00
7.33
7.67
9.51
12.58
14.95

Restricted Stock:

The  Company  awards  stock  and  restricted  stock  to  certain  employees,  officers,  directors,  and/or  service  providers.  The
restricted  stock  vests  in  accordance  with  such  conditions  and  restrictions  determined  by  the  GNC  Committee.  These
conditions and restrictions may include the achievement of certain performance goals and/or continued employment with
the Company through a specified restricted period. The purchase price (if any) of shares of restricted stock is determined
by  the  GNC  Committee.  If  the  performance  goals  and  other  restrictions  are  not  attained,  the  grantee  will  automatically
forfeit their unvested awards of restricted stock to the Company. Compensation expense for restricted stock is based on fair
market value at the grant date.

87

    
    
  
    
    
  
    
  
    
    
    
    
    
    
BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11   -    STOCK CAPITAL (Cont.)

Stock-based compensation to employees and directors: (Cont.)

Restricted Stock:(Cont.)

Nonvested as of December 31, 2018

Granted
Vested

Nonvested as of December 31, 2019

Granted
Vested

Nonvested as of December 31, 2020

Number of 
Restricted
Stock
152,908  

Weighted 
Average Grant

Weighted 
Average
Remaining
Contractual
   Date Fair Value    Term (Years)
1.56

3.96  

113,012  
64,535  
201,385  

227,410  
140,714  
288,081  

3.98  
3.88  
4.00  

9.07  
5.09  
7.71  

1.95

1.10

The total compensation expense recorded by the Company in respect of its restricted stock awards to certain employees,
officers, directors, and service providers for the year ended December 31, 2020 and 2019 amounted to $1,267 and $392,
respectively.

As of December 31, 2020, there was $1,211 of total unrecognized compensation cost related to non-vested restricted stock
under the Plan.  The cost is expected to be recognized over a weighted average period of 1.52 years.

On August 17, 2017 the Company issued to Anthony Fiorino, the former CEO of the Company, for consulting services
rendered,  a  grant  of  4,327  shares  of  restricted  stock  under  the  2014  U.S.  Plan,  which  vests  in  eight  equal  quarterly
installments (starting November 17, 2017) until fully vested on the second anniversary of the date of grant.

On May 23, 2019, the Company granted to a former director, in consideration for services rendered to the Company, an
option under the 2014 Global Plan to purchase up to 4,167 shares of Common Stock with an exercise price per share of
$0.75. The option was fully vested and exercisable as of the date of grant.

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BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 11    -    STOCK CAPITAL (Cont.)

Shares and warrants issued to service providers:

Compensation expense recorded by the Company in respect of its stock-based service provider compensation awards for
the year ended December 31, 2020 and 2019 amounted to $0 and $25, respectively.

Share-based compensation to employees, directors and service providers:

Total Stock-Based Compensation Expense:

The total stock-based compensation expense, related to shares, options and warrants granted to employees, directors and
service providers was comprised, at each period, as follows:

Research and development
General and administrative
Total stock-based compensation expense

Treasury Stock

December 31

2020

2019

U.S. $ in thousands
1,173
1,387
2,560

123
666
789

The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their
individual payroll tax withholding upon vesting of restricted stock awards in connection with the Company’s incentive
plans. The Company’s repurchases of common stock are recorded at the stock price on the vesting date of the common
stock. The Company repurchased 25,000 shares of its common stock for $116 thousands for the year ended December 31,
2020.

NOTE 12   -   RESEARCH AND DEVELOPMENT, NET

Composition:

Research and development
Less : Participation by CIRM
Less: Participation by Israeli Hospital Exemption regulatory pathway
Less : Participation by the Israel Innovation Authorities
Less: Participation by other grants

Year ended
December 31

2020

2019

U.S. $ in thousands
25,808
(1,162)
(900)
(1,143)
(274)
22,329

24,741
(4,058)
(2,381)
(732)
(366)
17,204

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U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 13   -   TAXES ON INCOME

A.          Tax rates applicable to the income of the Israeli subsidiary:

BCT is taxed according to Israeli tax laws.

The Israeli corporate tax rate was 24% in the year 2017 and reduced to 23% in the year 2018 and onwards. Such
tax rate changes had no significant impact on the Company’s financial statements.

B.          Tax rates applicable to the income of the US company:

BrainStorm Cell Therapeutics Inc. is taxed according to U.S. tax laws.

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions,
reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018.

The Act did not have an effect on the financial results and position of the Company.

The Company is subject to state tax of 13%.

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U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 13   -   TAXES ON INCOME (Cont.)

C.          Deferred income taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets
and  liabilities  for  financial  reporting  purposes  and  the  amounts  used  for  income  tax  purposes.  Significant
components of the Company’s deferred tax assets are as follows:

Operating loss carryforward

Net deferred tax asset before valuation allowance
Valuation allowance
Net deferred tax asset

December 31

2020

2019

U.S. $ in thousands
99,818

73,260

26,664
(26,664)
—

19,911
(19,911)
—

As  of  December  31,  2020,  the  Company  has  provided  a  full  valuation  allowances  of  $26,664  in  respect  of
deferred tax assets resulting from tax loss carryforward and other temporary differences. Management currently
believes  that  because  the  Company  has  a  history  of  losses,  it  is  more  likely  than  not  that  the  deferred  tax
regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future.

D.          Available carryforward tax losses:

As  of  December  31,  2020,  the  Company  has  an  accumulated  tax  loss  carryforward  of  approximately  $99,818.
Carryforward tax losses in Israel are of unlimited duration. Under the Tax Cut and Jobs Act of 2017, or the Tax
Act  (subject  to  modifications  under  the  Coronavirus  Aid,  Relief,  and  Economic  Security  Act),  federal  net
operating  losses  (NOL)  incurred  in  taxable  years  ending  after  December  31,  2017  and  in  future  years  may  be
carried forward indefinitely, but the deductibility of such federal net operating losses is limited. It is uncertain if
and to what extent various states will conform to the newly enacted federal tax law.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions
of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50
percentage point change, by value, in its equity ownership over a three-year period, the corporation’s ability to
use  its  pre-change  NOL  carryforwards  and  other  pre-change  tax  attributes  to  offset  its  post-change  income  or
taxes may be limited. Such limitations may result in the expiration of net operating losses before utilization.

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BRAINSTORM CELL THERAPEUTICS INC.
U.S. dollars in thousands
(Except share data and exercise prices)
Notes to Consolidated Financial Statements

Table of Contents

NOTE 13   -   TAXES ON INCOME (Cont.)

E.           Loss from continuing operations, before taxes on income, consists of the following:

United States
Israel

Year ended
December 31

2020

2019

U.S. $ in thousands
(8,578)
(23,233)
(31,811)

(4,378)
(18,875)
(23,253)

F.          Due to the Company’s cumulative losses, the effect of ASC 740 as codified from ASC 740-10 is not material.

NOTE 14   -   TRANSACTIONS WITH RELATED PARTIES

Other than transactions and balances related to cash and share based compensation to officers and directors, the Company
did not have any transactions and balances with related parties and executive officers during 2020 and 2019.

NOTE 15   -    SUBSEQUENT EVENTS

From January 1, 2021 through January 31, 2021, the Company sold an aggregate of 679,443 additional shares of Common
Stock  pursuant  to  the  September  25,  2020  ATM,  at  an  average  price  of  $6.54  per  share,  raising  gross  proceeds  of
approximately $4.45 million.

In  accordance  with  ASC  855  “Subsequent  Events”  the  Company  evaluated  subsequent  events  through  the  date  the
condensed consolidated financial statements were issued. The Company concluded that no other subsequent events have
occurred that would require recognition or disclosure in the condensed consolidated financial statements.

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Item 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

Item 9A.        CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our
disclosure  controls  and  procedures  (as  defined  in  Rule  13a-15(e)  and  15d-15(e)  of  the  Securities  Exchange  Act)  as  of  the  end  of  the
period  covered  by  this  report.  Based  on  that  evaluation,  our  Chief  Executive  Officer  and  Chief  Financial  Officer  concluded  that  our
disclosure controls and procedures as of December 31, 2020 were effective in ensuring that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in  the  SEC’s  rules  and  forms,  and  that  the  information  is  accumulated  and  communicated  to  our  management,  including  our  Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal
control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by,
or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of
directors,  management  and  other  personnel,  to  provide  reasonable  assurance  regarding  the  reliability  of  financial  reporting  and  the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those
policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets
of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any
evaluation  of  effectiveness  to  future  periods  are  subject  to  the  risk  that  controls  may  become  inadequate  because  of  changes  in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making
this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control—Integrated 1992 Framework.

Based on our assessment, management concluded that, as of December 31, 2020, the Company’s internal control over financial reporting
is effective based on those criteria.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Item 9B.        OTHER INFORMATION.

None.

Item 10.        DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Executive Officers and Directors

PART III

The  following  table  lists  our  current  executive  officers  and  directors.  Our  executive  officers  are  elected  annually  by  our  Board  of
Directors (“Board”) and serve at the discretion of the Board. Each current director is serving a term that will expire at our Company’s
next annual meeting. There are no family relationships among any of our directors or executive officers.

Name
Chaim Lebovits
Ralph Kern, MD, MHSc
David Setboun, PharmD, MBA
Preetam Shah, PhD, MBA
Uri Yablonka
Arturo O. Araya
Stacy Lindborg, PhD
Anthony Waclawski, Ph.D
Prof. Jacob Frenkel, PhD, MA
Irit Arbel, PhD
June S. Almenoff, MD, PhD
Anthony Polverino, PhD
Malcolm Taub
Sankesh Abbhi

Age
50
63
46
48
44
50
50
59
77
61
64
58
75
34

    Position
  Chief Executive Officer
  President and Chief Medical Officer
  EVP, Chief Operating Officer
  EVP, Chief Financial Officer and Treasurer
  EVP, Chief Business Officer, Secretary and Director
  Chief Commercial Officer
  EVP, Head of Global Clinical Research
  EVP, Global Head of Regulatory Affairs
  Chairperson and Director
  Director
  Director
  Director
  Director
  Director

Chaim  Lebovits  has  been  serving  as  our  Chief  Executive  Officer  since  September  of  2015.    Mr.  Lebovits  joined  the  Company  as
President  in  connection  with  his  arrangement  of  an  equity  investment  by  ACC  Biotech  in  the  Company  in  July  2007.    On  August  1,
2013, the Company appointed Mr. Lebovits as its Principal Executive Officer, and he assumed the duties and responsibilities of the Chief
Executive Officer on an interim basis until June 2014. During his tenure with the Company, Mr. Lebovits has been instrumental in the
various capital raises undertaken by the Company and in his capacity as President Mr. Lebovits managed relatively low burn rates and
was  very  instrumental  in  the  major  decisions  of  the  Company’s  focus  and  direction,  including  the  decision  to  focus  on  Amyotrophic
Lateral Sclerosis (ALS, also known as Lou Gehrig’s Disease) as a first indication. Mr. Lebovits led efforts to attract the clinical sites first
in  Israel  and  later  in  the  United  States,  building  strong  relationships  for  the  Company  with  many  leading  Key  Opinion  Leaders  and
Centers of Excellence for ALS in the United States.  Mr. Lebovits controls ACC Holdings International, and its subsidiaries including
ACC BioTech, which is focused on the biotechnology sector. He has been at the forefront of natural resource management and has spent
years  leading  the  exploration  and  development  of  resources  in  Israel  and  served  as  a  member  of  the  boards  of  directors  of  several
companies  in  the  industry.  Mr.  Lebovits  has  also  held  senior  positions  for  the  worldwide  Chabad  Lubavitch  organization,  the  largest
Jewish organization in the world today.

Dr. Ralph Kern joined the Company on March 6, 2017 as Chief Operating Officer and Chief Medical Officer. He currently serves as
President  and  Chief  Medical  Officer  since  April  2020.  Prior  to  joining  the  Company,  Dr.  Kern  was  Senior  Vice  President,  Head
Worldwide Medical at Biogen Inc. since 2016. Prior positions at Biogen Inc. include Vice President, Head of Global Therapeutic Areas
from 2015 to 2016 and Vice President, Head of Global Medical Neurology in 2015. Dr. Kern has also served Novartis Pharmaceuticals
Corporation as Vice President, Head Neuroscience Medical Unit from 2014 to 2015 and as Vice President, Head MS Medical Unit from
2011 to 2014. He also worked for Genzyme Corporation from 2006 to 2011 where he served as Global Medical Director, Personalized
Genetic Health (2010-2011), Head of Medical Affairs, Canada (2006-2008), General Manager, Fabry Disease (2008-2010) and Head of
Medical  Affairs,  Canada  (2006-2008).  He  also  served  as  University  Neurology  Program  Director  at  the  University  of  Toronto  (2003-
2006), Consultant Neurologist at Mount Sinai Hospital (2001-2006) and Director, EMG, EEG and Evoked Potential Laboratory at The
Credit Valley Hospital (1988-2001).

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Dr.  David  Setboun  joined  the  Company  on  April  7,  2020  at  Executive  Vice  President,  Chief  Operating  Officer.  Most  recently,  Dr.
Setboun served as VP Corporate Development, Strategy & Business at Life Biosciences from July 2018 to April 2020. From June 2015
to June 2018, he served as President, Biogen, France where he launched Biogen’s rare disease franchise. Prior to his tenure at Biogen, Dr.
Setboun,  served  as  President,  AstraZeneca,  Portugal  from  2012  to  2015.  Prior  to  this  role,  Dr.  Setboun  led  the  European  Sales  &
Marketing function as AstraZeneca’s VP Europe from 2002 to 2009. Dr. Setboun directed national and international teams and projects
for Eli Lilly and Company in France and the USA. Dr. Setboun received his Pharmaceutical Doctorate (Pharm.D.) from University Paris
XI in 1997 and his MBA from H.E.C Paris in 2001.

Dr. Preetam Shah joined the Company on September 6, 2019 as Executive Vice President, Chief Financial Officer and Treasurer. Prior
to joining the Company, Preetam Shah served as Director, Healthcare Investment Banking at Barclays Capital Plc. since June 2016. He
has  also  served  as  Vice  President,  Healthcare  Investment  Banking  at  Canaccord  Genuity  Inc.  from  2013  to  2016.  Dr.  Shah  founded
Saisarva  LLC.  and  was  a  financial  consultant  from  2010-2013  for  healthcare-focused  private  equity  firms,  hedge  funds,  and  global
pharmaceutical  companies.  From  2006-2009,  Dr.  Shah  served  as  Vice  President,  U.S.  Operations  and  Investments  at  Reliance  Capital
USA  Ventures  LLC,  an  affiliate  of  Reliance  ADA  Group  Companies.  Dr.  Shah  completed  his  post-doctoral  fellowship  in  Infectious
Diseases from Stanford University School of Medicine. He holds a Ph.D. in Microbiology from the University of Mississippi Medical
Center and a M.B.A. in Finance from the Wharton School, University of Pennsylvania.

Uri Yablonka joined the Company on June 6, 2014 as Chief Operating Officer and as a member of the Board. On March 6, 2017 he was
appointed  Executive  Vice  President,  Chief  Business  Officer  and  ceased  to  serve  as  the  Company’s  Chief  Operating  Officer.  Prior  to
joining  the  Company,  Mr.  Yablonka  served  since  December  2010  as  owner  and  General  Manager  of  Uri  Yablonka  Ltd.,  a  business
consulting  firm.  He  also  served  since  January  2011  to  May  2014  as  Vice  President,  Business  Development  at  ACC  International
Holdings Ltd. (Holdings). Holdings is also an affiliate of ACCBT Corp. Prior to serving with Holdings, Mr. Yablonka served as Senior
Partner of PM-PR Media Consulting Ltd. From 2008 to January 2011, Mr. Yablonka was Senior Partner at PM-PR Media Consulting
Ltd., where he led public relations and strategy consulting for a wide range of governmental and private organizations.  From 2002 to
2008, he served as a correspondent at the Maariv Daily News Paper, including extensive service as a Diplomatic Correspondent.  We
believe  that  Mr.  Yablonka’s  skills  and  experience  provide  the  variety  and  depth  of  knowledge,  judgment  and  vision  necessary  for  the
effective oversight of the Company.  His experience in business consulting and development and media experience are expected to be
valuable to the Company in its current stage of growth and beyond, and his governmental experience can provide valuable insight into
issues faced by companies in regulated industries such as ours. We believe that these skills and experiences qualify Mr. Yablonka to serve
as a director and secretary of the Company.

Arturo O. Araya has served as the Chief Commercial Officer of the Company since August 2018. He also served as a director of the
Company  from  February,  2017  to  November,  2018.  From  2002  to  2016,  Mr.  Araya  worked  for  Novartis  Pharmaceutical  Corporation,
where he served as the Vice President and Head of Global Commercial for Novartis’ Cell and Gene Therapies Unit (June 2014 to July
2016), where he led a cross-functional team to globally commercialize a portfolio of cell and gene therapies. In his prior role as Novartis’
Global Brand Leader for CTL019 (September 2012-May 2014), a CAR-T therapy, he was responsible for developing early launch plans,
including  worldwide  and  multiple  indication  forecasts  and  resource  modeling.  He  has  led  the  Oncology  Unit  for  Novartis  in  seven
countries (March 2002-August 2012). Prior to his tenure at Novartis, Mr. Araya was with Bristol-Myers Squibb Company (1999-2002),
most  recently  as  Associate  Director  of  Marketing  Intelligence,  Business  Development  &  Licensing.  He  earned  an  M.B.A.  from  the
University of Michigan, and an M.A. and B.S. in Engineering from the University of Connecticut.

Dr. Stacy Lindborg joined the Company on June 1, 2020 at Executive Vice President, Head of Global Clinical Research. Dr. Lindborg is
an  experienced  healthcare  executive  and  globally  recognized  medical  statistician  with  over  2  decades  of  multinational  experience  in
R&D,  regulatory,  strategy  development,  analytics  and  big  data.    Her  experience  includes  senior  roles  at  Eli  Lilly  &  Company  and
Biogen. Dr. Lindborg served at Biogen Inc. from 2012 to 2020, where she was most recently Vice President, Analytics and Data Science.
She also served on the R&D governance team during a time of significant growth for Biogen and was active in guiding the firm's long-
term  vision  for  growth  through  analytics  and  by  stimulating  innovative  development  platforms  to  increase  productivity.  Her  team
motivated  novel  analytic  and  development  approaches,  that  contributed  in  material  ways  to  products  such  as  Spinraza®  and
Aducanumab®. At Eli Lilly & Company, she held positions of increasing responsibility including Head of R&D strategy, where she was
responsible for characterizing the productivity of the portfolio and driving key R&D strategy projects including the annual R&D Long-
Range Plan.  In this role, she created seminal insights into R&D productivity by connecting individual drug program-based development
decisions  to  portfolio  risk  practices,  driving  fundamental  R&D  decisions  to  increase  number  of  drug  launches.  Additionally,  she  was
Leader  of  Zyprexa  Product  Management  in  which  she  was  responsible  for  R&D,  Commercial  and  Manufacturing  plans.  She  was
accountable for driving market share through product differentiation, global registration and launching of an injectable

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form of Zyprexa, working through regulatory manufacturing inspections and 483 citations. Dr. Lindborg holds a Ph.D. in statistics from
Baylor University.

Dr. Anthony Waclawski joined the Company in September 2020 as Executive Vice President, Global Head of Regulatory Affairs. Dr.
Waclawski  is  an  experienced  healthcare  professional  and  a  globally  recognized  regulatory  leader  with  over  35  years  of  multinational
experience  in  FDA  regulatory  approvals,  biologics  license  applications  (BLAs),  New  Drug  Applications  (NDAs),  and  FDA  Advisory
Committees. Prior to his appointment at BrainStorm, Dr. Waclawski spent 35 years of increasing responsibility. From November 2016 to
September  2020,  Dr.  Waclawski  served  as  Vice  President,  Head  Regulatory  and  Pharmaceutical  Sciences,  Cardiovascular,
Immunosciences,  Fibrosis,  and  Genetically-defined  diseases  at  Bristol-Myers  Squibb.  In  this  role,  he  was  responsible  for  the  strategic
and operational deliverables of regulatory, biostatistics, clinical pharmacology, and pharmacometrics for the development assets in these
areas.  Dr.  Waclawski’s  experience  spans  a  broad  range  of  regulatory  capabilities  across  multiple  therapeutic  areas  and  geographies,
guiding successful FDA interactions and establishing and executing successful global regulatory strategies. From June 2014 to October
2016, he served as Vice President, Global Submissions and Regulatory Policy at Bristol-Myers Squibb. Dr. Waclawski earned a Ph.D.
and M.S. in pharmaceutical sciences and a B.S. in pharmacy from Rutgers University.

Dr.  Jacob  Frenkel  joined  the  Company  in  March  2020  as  a  director  and  Chairperson.  Dr.  Frenkel  serves  Chairman  of  the  Board  of
Trustees of the Group of Thirty, which is a private, nonprofit, Consultative Group on International Economic and Monetary Affairs. Dr.
Frenkel  served  as  Chairman  of  JPMorgan  Chase  International  from  2009  to  2020  and  is  currently  serving  as  a  Senior  Advisor  to
JPMorgan Chase. From 2001 to 2011 he served as Chairman and CEO of the G-30, from 2004 to 2009 as Vice Chairman of American
International Group, Inc., and from 2000 to 2004 as Chairman of Merrill Lynch International. Between 1991 and 2000 he served two
terms as the Governor of the Bank of Israel. Dr. Frenkel serves as Chairman of the Board of Governors of Tel Aviv University, where he
is also Chairman of the Frenkel-Zuckerman Institute for Global Economics. He holds a B.A. in economics and political science from the
Hebrew University of Jerusalem, and an M.A. and Ph.D. in economics from the University of Chicago. We believe Dr. Frenkel possesses
specific attributes that qualify her to serve on our Board, including his valuable leadership skills and his deep knowledge of the financial
industry.

Dr.  Irit  Arbel,  one  of  the  Company's  co-founders,  joined  the  Company  in  May  2004  as  a  director  and  served  as  President  of  the
Company for six months. Currently, Dr. Arbel is the Vice-Chairperson of the Board and the Chair of the Governance, Nominating and
Compensation Committee. Dr. Arbel serves as CEO of Neurochords, a biotechnology firm developing graphene- based scaffold for nerve
reconstruction  in  acute  spinal  cord  and  peripheral  nerve  injury,  a  position  she  has  held  since  August  2018.  Prior  to  Neurochords,  Dr.
Arbel  served  as  Executive  Vice  President,  Research  and  Development  at  Savicell  Diagnostic  Ltd  from  July  2012  until  August  2018.
From  2009  through  2011,  Dr.  Arbel  served  as  Chairperson  of  Real  Aesthetics  Ltd.,  a  company  specializing  in  cellulite  ultrasound
treatment,  and  BRH  Medical,  developer  of  medical  devices  for  wound  healing.  She  was  also  Director  of  M&A  at  RFB  Investment
House, a private investment firm focusing on early stage technology related companies. Previously, Dr. Arbel was President and Chief
Executive  Officer  of  Pluristem  Life  Systems,  a  biotechnology  company,  and  prior  to  that,  Israeli  Sales  Manager  of  Merck,  Sharp  &
Dohme, a pharmaceutical company. Dr. Arbel earned her Post Doctorate degree in 1997 in Neurobiology, after performing research in
the area of Multiple Sclerosis. Dr. Arbel also holds a Chemical Engineering degree from the Technion, Israel's Institute of Technology.
We believe Dr. Arbel possesses specific attributes that qualify her to serve on our Board including Dr. Arbel’s extensive experience in the
biotechnology  field  and  significant  leadership  skills  as  a  chief  executive  officer.  Dr.  Arbel  previously  served  as  our  President,  which
service has given her a deep knowledge of the Company and its business and directly relevant management experience.

Sankesh Abbhi joined the Company in March 2020 as a director. Since 2016, Mr. Abbhi has been with ArisGlobal, a leading provider of
cloud-based, end-to-end, drug development technology solutions for over 250 of the world’s leading life sciences companies, CROs and
government health authorities, serving as the President and CEO since December 2017. Mr. Abbhi also advises Abbhi Capital, his wholly
owned family office, in its corporate investments in life sciences, healthcare and technology companies. Prior to leading ArisGlobal and
Abbhi Capital, Mr. Abbhi founded Synowledge, a knowledge process outsourcing company. Mr. Abbhi earned a BA in Economics from
Columbia University. We believe Mr. Abbhi possesses specific attributes that qualify him to serve on our Board including his valuable
leadership skills and his deep knowledge of financial matters.

Dr. Anthony Polverino joined the Company on February 5, 2018 as a director. Dr. Polverino is currently Executive Vice President Early
Development and Chief Scientific Officer of Zymeworks Inc., which he joined in September of 2018, and where he is responsible for
establishing  the  vision,  strategy,  and  general  management  of  the  organization  and  overseeing  the  advancement  of  products  from
discovery  research  through  translational  research/early  development  to  create  a  seamless  link  to  clinical  development.  Prior  to
Zymeworks Dr. Polverino was the interim chief scientific officer of Kite (now a wholly-owned subsidiary of Gilead Sciences), which

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he joined in 2015, and where he was responsible for establishing Kite's strategic non-clinical R&D roadmap to support its current and
future portfolio. Prior to this, he was the Vice President of research at Kite, where his responsibilities included corporate goal setting,
budget allocation, scientific and investor interactions, business development in-licensing and partnership deals. Dr. Polverino spent 20
years in positions of increasing responsibilities at Amgen, Inc., most recently as executive director of its Therapeutic Innovation Unit,
where he managed research programs in oncology, metabolic disease, inflammatory disease and schizophrenia. Prior to Amgen, he was a
postdoctoral scientist at Cold Spring Harbor Laboratory, where he worked primarily on oncology research. Dr. Polverino is an author of
several patents, and has been published in nearly 40 scientific and peer-reviewed journals. He earned a B.Sc. in Biochemistry/Physiology
and a B.Sc. (Honors) in Pharmacology, both from Adelaide University in Adelaide, Australia and a Ph.D. in Biochemistry from Flinders
University, also in Adelaide. We believe Dr. Polverino possesses specific attributes that qualify him to serve on our Board including his
deep knowledge of the pharmaceutical industry.

Dr. June S. Almenoff joined the Company on February 26, 2017 as a director. Dr. Almenoff has served as the Chief Scientific Officer of
RedHill Biopharma Ltd. since May 2019. Dr. Almenoff is an accomplished executive with 20+ years of experience in the pharmaceutical
industry.  She  has  broad  therapeutic  development  and  strategic  experience  including  gastroenterology,  rare  disease,  immune-
inflammation, infectious diseases, CNS. She served as President and CMO of Furiex Pharmaceuticals from 2010 to 2014. During her 4-
year tenure, the company’s valuation increased ~10-fold, culminating in its acquisition by Actavis plc for ~$1.2B in 2014. Furiex’s lead
product, eluxadoline (Viberzi TM), a novel gastrointestinal drug, is approved and marketed in US and EU. Prior to joining Furiex, Dr.
Almenoff was at GlaxoSmithKline (GSK) from 1997 to 2010, where she held various positions of increasing responsibility in the R&D
organization. During her 12 years at GSK, she was a Vice President in the Clinical Safety organization, chaired a PhRMA-FDA working
group and worked in the area of scientific licensing. Dr. Almenoff also led the development of pioneering systems for minimizing risk in
drug development which have been widely adapted by industry and regulators. Dr. Almenoff is currently an independent Board Director
and  drug  development  consultant  with  broad  therapeutic  expertise.  She  has  served  as  Executive  Chair  of  RDD  Pharma,  a  private,  GI
clinical  stage  biopharma  company  (2015-18)  where  she  helped  the  company  secure  Series  B  as  well  as  US  Govt.  Dept  of  Defense
funding. She was a Director of Tigenix NV (Nasdaq: TIG) from 2016-18, until its acquisition for ~$600M. Dr. Almenoff currently serves
on the investment advisory board of the Harrington Discovery Institute, a venture philanthropy (since 2015), and Kurome Therapeutics, a
venture-backed oncology company (since 2020). She is a consultant and advisor to numerous biopharma companies and investors in the
areas of translational medicine, clinical development, and commercial strategy in product development. Dr. Almenoff received her B.A.
cum  laude  from  Smith  College  and  graduated  with  AOA  honors  from  the  M.D.-Ph.D.  program  at  the  Icahn  (Mt.  Sinai)  School  of
Medicine. She completed post-graduate medical training at Stanford University Medical Center (Internal Medicine, Infectious Diseases)
and served on the faculty of Duke University School of Medicine. She is an adjunct Professor at Duke and a Fellow of the American
College of Physicians (FACP) and has authored more than 55 publications. We believe Dr. Almenoff possesses specific attributes that
qualify  her  to  serve  on  our  Board  including  her  valuable  leadership  skills  and  her  deep  knowledge  of  pharmaceutical  product
development.

Malcolm Taub joined the Company in March 2009 as a director. Since October 2010, Mr. Taub has been a Partner at Davidoff Malito &
Hutcher LLP, a full-service law and government relations firm. From 2001 to September 30, 2010, Mr. Taub was the Managing Member
of Malcolm S. Taub LLP, a law firm which practiced in the areas of commercial litigation, among other practice areas. Mr. Taub also
works on art transactions, in the capacity as an attorney and a consultant. Mr. Taub has also served as a principal of a firm which provides
consulting services to private companies going public in the United States. Mr. Taub has acted as a consultant to the New York Stock
Exchange in its Market Surveillance Department. Mr. Taub acts as a Trustee of The Gateway Schools of New York and The Devereux
Glenholme  School  in  Washington,  Connecticut.  Mr.  Taub  has  served  as  an  adjunct  professor  at  Long  Island  University,  Manhattan
Marymount  College  and  New  York  University  Real  Estate  Institute.  Mr.  Taub  holds  a  B.A.  from  Brooklyn  College  and  a  J.D.  from
Brooklyn  Law  School.  Mr.  Taub  formerly  served  on  the  Board  of  Directors  of  Safer  Shot,  Inc.  (formerly  known  as  Monumental
Marketing Inc.). We believe that Mr. Taub possesses specific attributes that qualify him to serve on our Board including Mr. Taub’s vast
law experience and his demonstrated leadership skills as a managing member of a law firm.

Qualifications of Directors

The Board believes that each director has valuable individual skills and experiences that, taken together, provide the variety and depth of
knowledge,  judgment  and  vision  necessary  for  the  effective  oversight  of  the  Company.  As  indicated  in  the  foregoing  biographies,  the
directors  have  extensive  experience  in  a  variety  of  fields,  including  biotechnology  (Drs.  Arbel,  Almenoff  and  Polverino),  financial
markets and accounting (Dr. Frenkel, Mr. Taub, Mr. Abbhi), business consulting and development (Dr. Polverino. Mr. Abbhi, and Mr.
Yablonka), media (Mr. Yablonka) and law (Mr. Taub and Mr. Yablonka), each of which the Board believes provides valuable knowledge
about important elements of our business. Most of our directors have leadership experience at major companies or firms with operations

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inside  and  outside  the  United  States  and/or  experience  on  other  companies’  boards,  which  provides  an  understanding  of  ways  other
companies  address  various  business  matters,  strategies  and  issues.  As  indicated  in  the  foregoing  biographies,  the  directors  have  each
demonstrated significant leadership skills, including as Chairman (Dr. Frenkel), a chief executive officer (Drs. Arbel, Dr. Frenkel, Mr.
Abbhi), executive officer (Drs. Almenoff and Polverino, Mr. Abbhi, and Mr. Yablonka), as a managing member of a law firm (Mr. Taub),
as general manager of a business consulting firm (Mr. Yablonka) or as a valuable leader with deep knowledge of the financial industry
and  capital  markets  (Dr.  Frenkel,  Mr.  Abbhi).  A  number  of  the  directors  have  extensive  public  policy,  government  or  regulatory
experience, which can provide valuable insight into issues faced by companies in regulated industries such as the Company. One of the
directors (Dr. Arbel) has served as the President of the Company and one is currently serving as Chief Business Officer (Mr. Yablonka),
which  service  has  given  each  a  deep  knowledge  of  the  Company  and  its  business  and  directly  relevant  management  experience.  The
Board believes that these skills and experiences qualify each individual to serve as a director of the Company.

Certain Arrangements

On June 1, 2015 pursuant to the Company’s First Amendment to the Second Amended and Restated Director Compensation Plan, we
granted  a  stock  option  to  Irit  Arbel,  the  Company’s  Vice  Chairperson  of  the  Board  of  Directors,  to  purchase  up  to  6,667  shares  of
Common Stock at a purchase price of $0.75 per share.  On February 26, 2017 pursuant to the Company’s Second Amendment to the
Second Amended and Restated Director Compensation Plan, we granted a stock option to Dr. Arbel to purchase up to 6,667 shares of
Common Stock at a purchase price of $0.75 per share. On July 13, 2017 pursuant to the Company’s Third Amendment to the Second
Amended and Restated Director Compensation Plan, we granted a stock option to Dr. Arbel to purchase up to 12,000 shares of Common
Stock at a purchase price of $0.75 per share. Each option was fully vested and exercisable on the date of grant.

Pursuant to a February 26, 2017 resolution of the Board, Dr. Almenoff receives the following compensation for her service on the Board:
an  annual  cash  award  in  the  amount  of  $30,000,  paid  in  biannual  installments.  Dr.  Almenoff  will  not  receive  annual  director  awards
under the Director Compensation Plan, but in the event that Dr. Almenoff serves as a member of any committee of the Board she will be
entitled to committee compensation under the Director Compensation Plan. Dr. Almenoff is a member of the Audit Committee.

On  March  6,  2020,  the  Company  entered  into  a  Securities  Purchase  Agreement  with  Abbhi  Investments,  LLC  pursuant  to  which  the
Company sold 1,250,000 shares of the Company’s Common Stock in a registered direct offering, at a purchase price per share of $8.00
for  a  total  purchase  price  of  $10,000,000.  In  connection  therewith,  the  Company  also  issued  a  warrant  to  purchase  250,000  shares  of
Common  Stock  at  an  exercise  price  of  $15.00  per  share,  with  an  expiration  date  of  the  third  anniversary  of  the  date  of  issuance.  The
offering was made pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-225517) and related March
6, 2020 prospectus supplement. Pursuant to the Securities Purchase Agreement, Abbhi Investments, LLC was entitled to appoint Sankesh
Abbhi to serve as a member of the Board at any time prior to April 30, 2020 by giving notice to the Company of such appointment, and
Mr. Abbhi shall continue to serve for so long as Abbhi Investments, LLC remains the beneficial owner of Common Stock.

Uri Yablonka serves as the Company’s EVP, Chief Business Officer, Director and Secretary and is compensated for all services as an
officer and director of the Company pursuant to an employment agreement with the Company and related compensation described under
“Executive Employment Agreements” in the Executive Compensation section below.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has during the past ten years:

● been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and

other minor offenses);

● had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or
within two years prior to that time;

● been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting,

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his  involvement  in  any  type  of  business,  securities,  futures,  commodities,  investment,  banking,  savings  and  loan,  or
insurance activities, or to be associated with persons engaged in any such activity;

● been  found  by  a  court  of  competent  jurisdiction  in  a  civil  action  or  by  the  Securities  and  Exchange  Commission  or  the
Commodity  Futures  Trading  Commission  to  have  violated  a  federal  or  state  securities  or  commodities  law,  and  the
judgment has not been reversed, suspended, or vacated;

● been  the  subject  of,  or  a  party  to,  any  federal  or  state  judicial  or  administrative  order,  judgment,  decree,  or  finding,  not
subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants),
relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation
respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction,
order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

● been  the  subject  of,  or  a  party  to,  any  sanction  or  order,  not  subsequently  reversed,  suspended  or  vacated,  of  any  self-
regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section
1(a)(29)  of  the  Commodity  Exchange  Act  (7  U.S.C.  1(a)(29))),  or  any  equivalent  exchange,  association,  entity  or
organization that has disciplinary authority over its members or persons associated with a member.

Committees of the Board of Directors

Audit Committee

On February 7, 2008, the Board of Directors (“Board”) established a standing Audit Committee in accordance with Section 3(a)(58)(A)
of the Securities Exchange Act of 1934, which assists the Board in fulfilling its responsibilities to stockholders concerning our financial
reporting  and  internal  controls,  and  facilitates  open  communication  among  the  Audit  Committee,  Board,  outside  auditors  and
management. The Audit Committee discusses with management and our outside auditors the financial information developed by us, our
systems of internal controls and our audit process. The Audit Committee is solely and directly responsible for appointing, evaluating,
retaining  and,  when  necessary,  terminating  the  engagement  of  the  independent  auditor.  The  independent  auditors  meet  with  the  Audit
Committee (both with and without the presence of management) to review and discuss various matters pertaining to the audit, including
our financial statements, the report of the independent auditors on the results, scope and terms of their work, and their recommendations
concerning  the  financial  practices,  controls,  procedures  and  policies  employed  by  us.  The  Audit  Committee  preapproves  all  audit
services to be provided to us, whether provided by the principal auditor or other firms, and all other services (review, attest and non-
audit) to be provided to us by the independent auditor. The Audit Committee coordinates the Board’s oversight of our internal control
over  financial  reporting,  disclosure  controls  and  procedures  and  code  of  conduct.  The  Audit  Committee  is  charged  with  establishing
procedures for (i) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or
auditing  matters;  and  (ii)  the  confidential,  anonymous  submission  by  employees  of  the  Company  of  concerns  regarding  questionable
accounting or auditing matters. The Audit Committee reviews all related party transactions on an ongoing basis, and all such transactions
must  be  approved  by  the  Audit  Committee.  The  Audit  Committee  is  authorized,  without  further  action  by  the  Board,  to  engage  such
independent  legal,  accounting  and  other  advisors  as  it  deems  necessary  or  appropriate  to  carry  out  its  responsibilities.  The  Board  has
adopted  a  written  charter  for  the  Audit  Committee,  which  is  available  in  the  corporate  governance  section  of  our  website  at
www.brainstorm-cell.com. The Audit Committee currently consists of Mr. Taub (Chair), Dr. Arbel and Dr Almenoff, each of whom is
independent within the meaning of The Nasdaq Marketplace Rules and Rule 10A-3 under the Exchange Act. Mr. Schor, who was not
independent,  served  on  the  Audit  Committee  in  accordance  with  Nasdaq  Rule  5605(c)(2)(B)  until  November  13,  2019.  Dr.  Almenoff
joined the Audit Committee November 14, 2019. The Board of Directors has determined that Dr. Arbel is an “audit committee financial
expert” as defined in Item 407(d)(5) of Regulation S-K. The Audit Committee held four meetings during the fiscal year ended December
31, 2020.

GNC Committee

On June 27, 2011, the Board established a standing Governance, Nominating and Compensation Committee (the “GNC Committee”),
which assists the Board in fulfilling its responsibilities relating to (i) compensation of the Company’s executive officers, (ii) the director
nomination process and (iii) reviewing the Company’s compliance with SEC corporate governance requirements. The Board has adopted

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a  written  charter  for  the  GNC  Committee,  which  is  available  in  the  corporate  governance  section  of  our  website  at  www.brainstorm-
cell.com.  The  GNC  Committee  currently  consists  of  Dr.  Arbel  (Chair),  Dr.  Polverino  and  Mr.  Taub,  each  of  whom  is  independent  as
defined under applicable Nasdaq listing standards. The GNC Committee held four meetings during the fiscal year ended December 31,
2020.

The GNC Committee determines salaries, incentives and other forms of compensation for the Chief Executive Officer and the executive
officers  of  the  Company  and  reviews  and  makes  recommendations  to  the  Board  with  respect  to  director  compensation.  The  GNC
Committee meets without the presence of executive officers when approving or deliberating on executive officer compensation but may
invite  the  Chief  Executive  Officer  to  be  present  during  the  approval  of,  or  deliberations  with  respect  to,  other  executive  officer
compensation. In addition, the GNC Committee administers the Company’s stock incentive compensation and equity-based plans.

The GNC Committee makes recommendations to the Board concerning all facets of the director nominee selection process. Generally,
the GNC Committee identifies candidates for director nominees in consultation with management and the independent members of the
Board, through the use of search firms or other advisers, through the recommendations submitted by stockholders or through such other
methods as the GNC Committee deems to be helpful to identify candidates. Once candidates have been identified, the GNC Committee
confirms that the candidates meet the independence requirements and qualifications for director nominees established by the Board. The
GNC  Committee  may  gather  information  about  the  candidates  through  interviews,  questionnaires,  background  checks,  or  any  other
means that the GNC Committee deems to be helpful in the evaluation process. The GNC Committee meets to discuss and evaluate the
qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board.
Upon selection of a qualified candidate, the GNC Committee would recommend the candidate for consideration by the full Board.

In  considering  whether  to  include  any  particular  candidate  in  the  Board’s  slate  of  recommended  director  nominees,  the  Board  will
consider  the  candidate’s  integrity,  education,  business  acumen,  knowledge  of  the  Company’s  business  and  industry,  age,  experience,
diligence, conflicts of interest and the ability to act in the interests of all stockholders. The Board believes that experience as a leader of a
business or institution, sound judgment, effective interpersonal and communication skills, strong character and integrity, and expertise in
areas relevant to our business are important attributes in maintaining the effectiveness of the Board. As a matter of practice, the Board
considers the diversity of the backgrounds and experience of prospective directors as well as their personal characteristics (e.g., gender,
ethnicity, age) in evaluating, and making decisions regarding, Board composition, in order to facilitate Board deliberations that reflect a
broad range of perspectives. The Board does not assign specific weights to particular criteria and no particular criterion is a prerequisite
for  each  prospective  nominee.  The  Company  believes  that  the  backgrounds  and  qualifications  of  its  directors,  considered  as  a  group,
should provide a significant breadth of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.

Stockholder Nominations

During the fourth quarter of fiscal year 2020, we made no material changes to the procedures by which stockholders may recommend
nominees to our Board, as described in our most recent proxy statement.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our
Common Stock (collectively, the “Reporting Persons”), to file reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such
forms received by us, or written representations from the Reporting Persons, we believe that during the fiscal year ended December 31,
2020 all Reporting Persons complied with the applicable requirements of Section 16(a) of the Exchange Act other than late Form 4s filed
by  Dr.  Irit  Arbel,  Dr.  June  Almenoff,  Dr.  Anthony  Polverino,  Uri  Yablonka  and  Malcolm  Taub  on  February  14,  2020  and  ACC
International Holdings on July 16, 2020, reporting an aggregate seven transactions late. There are no known failures to file a required
Form 3, Form 4 or Form 5.

Code of Ethics

On  May  27,  2005,  our  Board  adopted  a  Code  of  Ethics  that  applies  to,  among  other  persons,  members  of  our  Board,  officers  and
employees.  A  copy  of  our  Code  of  Ethics  is  posted  on  our  website  at  www.brainstorm-cell.com.  We  intend  to  satisfy  the  disclosure
requirement regarding any amendment to, or waiver of, a provision of the Code of Ethics applicable to our Principal Executive Officer

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or our senior financial officers (Principal Financial Officer and Controller or Principal Accounting Officer, or persons performing similar
functions) by posting such information on our website.

Item 11.        EXECUTIVE COMPENSATION.

Summary Compensation

The  following  table  sets  forth  certain  summary  information  with  respect  to  the  compensation  paid  during  the  fiscal  years  ended
December 31, 2020 and 2019 earned by Chief Executive Officer, President and Chief Medical Officer, and our Chief Operating Officer
(the  “Named  Executive  Officers”).  In  the  table  below,  columns  required  by  the  regulations  of  the  SEC  have  been  omitted  where  no
information was required to be disclosed under those columns.

Summary Compensation Table

Name and Principal Position
Chaim Lebovits (*), Chief Executive Officer (4)

Ralph Kern, President & Chief Medical Officer (9)

Anthony Paul Waclawski, EVP, Global Head
of Regulatory (14)

  Year  
  2020  
  2019  
  2020  
  2019  
2020
  2019  

Salary
($)
 500,000  
 500,000  
 500,000  
 500,000  
 87,500

 —  

Bonus
($)

 860,000 (5)  
 250,000 (6)  
 290,000 (10)  
 150,000 (11)  
 —
 —  

Option and 
Stock Awards 
($) (1) (2)
 486,174 (7)  
 125,364 (8)  
 684,065 (12)  
 139,000 (13)  
 950,331
 —

All Other
Compensation
($)(3)
 279,680  
 180,912  
 54,216  
 63,145  
 33,957

 —  

Total ($)
 2,125,854
 1,056,276
 1,528,281
 852,145
 1,071,788
 —

(*) These Named Executive Officers were paid in NIS; the amounts above are the U.S. dollar equivalent. The conversion rate used was
the average of the 2019 and 2020 daily rates between the U.S. dollar and the NIS as published by the Bank of Israel, the central bank
of Israel.

(1) The amounts shown in the “Option and Stock Awards” column represent the aggregate grant date fair value of awards computed in
accordance with ASC 718, not the actual amounts paid to or realized by the Named Executive Officer during fiscal 2019 and fiscal
2020. ASC 718 fair value amount as of the grant date for stock options generally is spread over the number of months of service
required for the grant to vest.

(2) The fair value of each stock option award is estimated as of the date of grant using the Black-Scholes valuation model. Additional
information  regarding  the  assumptions  used  to  estimate  the  fair  value  of  all  stock  option  awards  is  included  in  Note  11  to
Consolidated Financial Statements.

(3) Includes  management  insurance  (which  includes  pension,  disability  insurance  and  severance  pay),  payments  towards  such
employee’s education fund, Israeli social security and amounts paid for use of a Company car. Each Named Executive Officer also
receives gross-up payments for the taxes on these benefits.

(4) On September 22, 2015, the Company appointed Chaim Lebovits as its Chief Executive Officer.

(5) During 2020, the Company paid Mr. Lebovits a discretionary cash bonus payment of $860,000 in recognition of his contributions to

the Company’s performance in fiscal year 2020.

(6) During 2019, the Company paid Mr. Lebovits a discretionary cash bonus payment of $250,000 in recognition of his contributions to

the Company’s performance in fiscal year 2019.

(7) On July 26, 2020 Mr. Lebovits received a grant of 31,185 shares of restricted Common Stock.

(8) On July 26, 2019 Mr. Lebovits received a grant of 31,185 shares of restricted Common Stock.

(9) Dr. Kern’s employment with the Company began on March 6, 2017.

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(10) During 2020, the Company paid Dr. Kern a discretionary cash bonus payment of $290,000 in recognition of his contributions to the

Company’s performance in fiscal year 2020.

(11) In August 2019, the Company paid Dr. Kern a discretionary cash bonus payment of $150,000 in recognition of his contributions to

the Company’s performance in fiscal year 2019.

(12) On March 6, 2020 Dr. Kern received a grant of 35,885 shares of restricted Common Stock.

(13) On March 6, 2019 Dr. Kern received a grant of 35,885 shares of restricted Common Stock.

(14) Mr. Waclawski's employment with the Company began on September 8, 2020.

Executive Employment Agreements

Chaim Lebovits

On  September  28,  2015,  Chaim  Lebovits,  the  Company’s  Chief  Executive  Officer  and  President,  and  the  Company’s  wholly  owned
subsidiary Brainstorm Cell Therapeutics Ltd. (the “Subsidiary”), entered into an employment agreement, which was amended on March
7, 2016, July 26, 2017 and June 23, 2020 (as amended, the “Lebovits Employment Agreement”). Pursuant to the Lebovits Employment
Agreement, Chaim Lebovits is paid a salary at the annual rate of $500,000 (the “Base Salary”).  Mr. Lebovits also receives other benefits
that are generally made available to the Subsidiary’s employees.  In addition, he is provided with a cellular phone and a company car,
with all costs including taxes borne by the Subsidiary.

Pursuant  to  the  Lebovits  Employment  Agreement,  Mr.  Lebovits  was  granted  a  stock  option  under  the  Company’s  2014  Global  Share
Option Plan on September 28, 2015 for the purchase of up to 369,619 shares of the Company’s Common Stock at a per share exercise
price  of  $2.45,  which  grant  is  fully  vested  and  exercisable  and  shall  be  exercisable  for  a  period  of  two  years  after  termination  of
employment. Pursuant to the Lebovits Employment Agreement, Mr. Lebovits will receive an annual cash bonus equal to 50% of his base
salary.

Pursuant to the Lebovits Employment Agreement, Mr. Lebovits received on July 26, 2017, and is entitled to receive on each anniversary
thereafter (provided he remains Chief Executive Officer), a grant of restricted stock under the Company’s 2014 Global Share Option Plan
(or any successor or other equity plan then maintained by the Company) comprised of a number of shares of Common Stock with a fair
market value (determined based on the price of the Common Stock at the end of normal trading hours on the business day immediately
preceding the Effective Date according to Nasdaq) equal to 30% of Mr. Lebovits’ Base Salary. Each grant shall vest as to twenty-five
percent (25%) of the award on each of the first, second, third and fourth anniversary of the date of grant, provided Mr. Lebovits remains
continuously  employed  by  the  Company  from  the  date  of  grant  through  each  applicable  vesting  date.  Each  grant  shall  be  subject  to
accelerated vesting upon a Change of Control (as defined in the Lebovits Employment Agreement) of the Company. In the event of Mr.
Lebovits’ termination of employment, any portion of a grant that is not yet vested (after taking into account any accelerated vesting) shall
automatically be immediately forfeited to the Company, without the payment of any consideration to Mr. Lebovits.

Pursuant to the Lebovits Employment Agreement, on July 26, 2017, Mr. Lebovits also received a fully vested and exercisable option to
purchase up to 41,580 shares of Common Stock, with an exercise price per share of $4.81. The option was fully-vested and exercisable
until the 2nd anniversary of the date of grant, when it expired unexercised.

The Lebovits Employment Agreement contains termination provisions, pursuant to which if the Company terminates the Employment
Agreement  or  Mr.  Lebovits’  employment  without  Cause  (as  defined  in  the  agreement)  or  if  Mr.  Lebovits  terminates  the  employment
agreement or his employment thereunder with Good Reason (as defined in the agreement), the Company shall: (i) within 90 days pay Mr.
Lebovits, as severance pay, a lump sum equal to six (6) months of Base Salary (which shall increase to nine (9) months after July 26,
2019  and  twelve  (12)  months  after  July  26,  2020)  (provided  Mr.  Lebovits  is  actively  employed  by  the  Company  on  such  dates)  (the
“Payment Period”); (ii) pay Mr. Lebovits within 30 days of his termination of employment any bonus compensation that Mr. Lebovits
would  be  entitled  to  receive  during  the  Payment  Period  in  the  absence  of  his  termination  without  Cause  or  for  Good  Reason;  (iii)
immediately vest such number of equity or equity based awards that would have vested during the six (6) months following the date of
termination of employment; and (iv) shall continue to provide to Mr. Lebovits health insurance benefits during the Payment Period,

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unless otherwise provided by a subsequent employer. The foregoing severance payments are conditional upon Mr. Lebovits executing a
waiver and release in favor of the Company in a form reasonably acceptable to the Company.

Dr. Ralph Kern

On February 28, 2017, the Company and Dr. Ralph Kern entered into an employment agreement, effective March 6, 2017, which sets
forth the terms of Dr. Kern’s employment (as amended by Amendment No. 1 dated March 3, 2017, the “Agreement”). Pursuant to the
Agreement, Dr. Kern is paid an annual salary of $500,000 (the “Base Salary”), which may be increased (but not decreased) at the sole
discretion  of  the  Board.  Dr.  Kern  is  also  eligible  to  receive  an  annual  cash  bonus  equal  to  30%  of  his  base  salary,  subject  to  his
satisfaction  of  pre-established  performance  goals  to  be  mutually  agreed  upon  by  the  Board  and  Dr.  Kern.  Performance  is  evaluated
through a performance management framework and a bonus range based on the target bonus. Dr. Kern also receives other benefits that
are generally made available to the Company’s employees.

Pursuant to the Agreement, Dr. Kern received on March 6, 2017, and is entitled to receive on each anniversary thereafter (provided he
remains employed by the Company), a grant of restricted stock under the Company’s 2014 Stock Incentive Plan (or any successor or
other equity plan then maintained by the Company) comprised of a number of shares of common stock of the Company, $0.00005 par
value (“Common Stock”) with a fair market value (determined based on the price of the Common Stock at the end of normal trading
hours on the business day immediately preceding March 6, 2017 according to Nasdaq) equal to 30% of Dr. Kern’s Base Salary. Each
equity grant vests as to twenty-five percent (25%) of the award on each of the first, second, third and fourth anniversary of the date of
grant, provided Dr. Kern remains continuously employed by the Company from the date of grant through each applicable vesting date.
Each equity grant is subject to accelerated vesting upon a Change of Control (as defined in the Agreement) of the Company. In the event
of Dr. Kern’s termination of employment, any portion of an equity grant that is not yet vested (after taking into account any accelerated
vesting) shall automatically be immediately forfeited to the Company, without the payment of any consideration to Dr. Kern.

Pursuant to the Agreement, on March 6, 2017, Dr. Kern also received an option under the 2014 U.S. Plan to purchase up to 47,847 shares
of Common Stock with an exercise price per share of $4.18. The option was fully vested and exercisable until the 2nd anniversary of the
date of grant, when it expired unexercised.

Pursuant to the Agreement, on March 9, 2020, Dr. Kern also received an option under the 2014 U.S. Plan to purchase up to 80,000 shares
of  Common  Stock  with  an  exercise  price  per  share  of  $7.33.  The  option  was  fully  vested  and  exercisable  This  option  will  vest  and
become  exercisable  as  to  25%  of  the  number  of  Shares  on  each  of  the  first  four  anniversaries  of  the  grant  date  until  fully  vested  and
exercisable on the fourth anniversary of the grant date.

The Agreement contains termination provisions, pursuant to which if the Company terminates the Agreement or Dr. Kern’s employment
without Cause (as defined in the Agreement) or if Dr. Kern terminates the Agreement or his employment thereunder with Good Reason
(as defined in the Agreement), the Company shall: (i) within 90 days pay Dr. Kern, as severance pay, a lump sum equal to six (6) months
of Base Salary (which shall increase to nine (9) months after the second anniversary of March 6, 2017 and twelve (12) months after the
third anniversary of March 6, 2017) (provided Dr. Kern is actively employed by the Company on such dates) (the “Payment Period”); (ii)
pay Dr. Kern within 30 days of his termination of employment any bonus compensation that Dr. Kern would be entitled to receive during
the Payment Period in the absence of his termination without Cause or for Good Reason; (iii) immediately vest such number of equity or
equity based awards that would have vested during the six (6) months following the date of termination of employment; and (iv) shall
continue  to  provide  to  Dr.  Kern  health  insurance  benefits  during  the  Payment  Period,  unless  otherwise  provided  by  a  subsequent
employer. The foregoing severance payments are conditional upon Dr. Kern executing a waiver and release in favor of the Company in a
form reasonably acceptable to the Company.

David Setboun

Dr. David Setboun, PharmD., MBA, the Company’s EVP and Chief Operating Officer is party to a April 1, 2020 employment agreement
with the Company, pursuant to which Dr. Setboun receives an annual base compensation of $400,000 and is eligible to receive an annual
cash bonus equal to 40% of his base salary, subject to satisfaction of pre-established performance goals to be mutually agreed upon by
the Chief Executive Officer and the Board based on an assessment of Dr. Setboun’s performance each year. Performance is evaluated
through a performance management framework and a bonus range based on the target bonus. Pursuant to the agreement, Dr. Setboun
received a one-time grant under the 2014 Stock Incentive Plan of 50,000 shares of restricted common stock of the Company, which shall
vest as to 100% of the award on the one-year anniversary of the grant date, provided Dr. Setboun remains continuously employed by

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the Company from the date of grant through the vesting date. In the event of Dr. Setboun’s termination of employment is prior to the
vesting  date,  the  restricted  stock  grant  shall  automatically  be  immediately  forfeited  to  the  Company,  without  the  payment  of  any
consideration to Dr. Setboun.

Pursuant  to  the  agreement,  Dr.  Setboun  is  entitled  to  receive  a  one-time  sign-on  and  relocation  bonus  of  $40,000.  In  addition,
commencing with the first anniversary of Dr. Setboun’s employment, he is eligible to receive an annual grant of an option to purchase
20,000 shares of Common Stock under the Company’s 2014 Stock Incentive Plan, at an exercise price per share equal to the closing price
of Company’s stock price on day of the grant. Vesting and exercisability of the options will be subject to pre-established performance
goals as determined by the Board (or committee thereof), provided that he remains continuously employed by the Company from the
date of grant through each applicable vesting date.

Preetam Shah

On September 5, 2019, the Company and Preetam Shah, PhD, MBA, the Company’s Executive Vice President, Chief Financial Officer
and Treasurer, entered into an employment agreement, pursuant to which Dr. Shah receives an annual salary of $350,000 and is eligible
to receive an annual cash bonus equal to 40% of his base salary, subject to the satisfaction of performance goals to be established each
year. Dr. Shah also receives other benefits that are generally made available to the Company’s employees. Pursuant to the agreement, Dr.
Shah received on September 6, 2019, a one-time grant of stock options under the Company’s 2014 Stock Incentive Plan (i) to purchase
up  to  100,000  shares  of  Common  Stock,  at  an  exercise  price  equal  to  $3.96  per  share,  and  (ii)  to  purchase  up  to  100,000  shares  of
Common Stock at an exercise price per share equal to $6.00 per share. Each option shall vest and become exercisable as follows: 25% of
the shares underlying the option shall vest and become exercisable on the first anniversary of the date of grant, and the remaining shares
underlying the option shall vest and become exercisable in equal quarterly installments thereafter, until fully vested and exercisable on
the  fourth  anniversary  of  the  date  of  grant,  provided  that  Dr.  Shah  remains  continuously  employed  by  the  Company  from  the  date  of
grant through each applicable vesting date. Each option shall have a ten (10) year term. Any unvested shares underlying the options as of
the date of Dr. Shah’s employment termination shall automatically terminate.

Pursuant to the agreement, Dr. Shah received on September 6, 2019, a one-time grant under the 2014 Stock Incentive Plan of 25,000
shares of restricted common stock of the Company, which shall vest as to 100% of the award on the one-year anniversary of the grant
date, provided Dr. Shah remains continuously employed by the Company from the date of grant through the vesting date. In the event of
Dr. Shah’s termination of employment prior to the one-year anniversary of the grant date, the restricted stock grant shall automatically be
immediately forfeited to the Company, without the payment of any consideration to Dr. Shah.

The agreement contains termination provisions, pursuant to which if the Company terminates the agreement or Dr. Shah’s employment
without Cause (as defined in the agreement) or if Dr. Shah terminates the agreement or his employment thereunder with Good Reason (as
defined in the agreement), the Company shall: (i) pay Dr. Shah, as severance pay, a lump sum equal to three (3) months of Base Salary;
(ii) pay Dr. Shah any bonus compensation that Dr. Shah would be entitled to receive during the period of employment in that fiscal year;
(iii) immediately vest such number of equity or equity based awards that would have vested during the three (3) months following the
date  of  termination  of  employment;  and  (iv)  continue  to  provide  Dr.  Shah’s  health  insurance  benefits  during  the  three  (3)  months
following  the  date  of  termination  of  employment,  unless  otherwise  provided  by  a  subsequent  employer.  The  foregoing  severance
payments are conditional upon Dr. Shah executing a waiver and release in favor of the Company in a form reasonably acceptable to the
Company.

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Uri Yablonka

Uri  Yablonka,  the  Company’s  Executive  Vice  President,  Chief  Business  Officer,  Director  and  Secretary,  is  party  to  a  June  6,  2014
employment  agreement  with  the  Subsidiary,  which  was  amended  July  26,  2017.  Pursuant  to  the  agreement,  Uri  Yablonka  is  paid  a
monthly salary of 41,000 NIS (approximately $11,300 per month). This agreement was further amended on June 23, 2020 under which
Uri Yablonka is paid a monthly salary of 53,334 NIS (approximately $15,538 per month). Mr. Yablonka also receives other benefits that
are generally made available to the Company’s employees, including pension and education fund benefits. The Company provides Mr.
Yablonka with a Company car and cellular phone, and a gross-up payment for any taxes relating thereto. Pursuant to the agreement, Mr.
Yablonka also was granted a stock option on June 6, 2014 under the Company’s Amended and Restated 2004 Global Share Option Plan
(the “Global Plan”) for the purchase of 33,333 shares of the Company’s Common Stock, which was fully vested and exercisable upon
grant. The exercise price for the grant is $2.70 per share. In addition, the Company agreed to grant Mr. Yablonka a stock option under the
Global Plan (or the applicable successor option plan) for the purchase of up to 13,333 shares of Common Stock (subject to appropriate
adjustment  in  the  case  of  stock  splits,  reverse  stock  splits  and  the  like)  of  the  Company  on  the  first  business  day  after  each  annual
meeting of stockholders (or special meeting in lieu thereof) of the Company beginning with the 2014 annual meeting, and provided that
Mr. Yablonka remains an employee of the Company on each such date. The exercise price per share of the Common Stock subject to
each additional option shall be equal to $0.75 (subject to appropriate adjustment in the case of stock splits, reverse stock splits and the
like, or changes to the Israeli Annual Option Award under the Company’s Director Compensation Plan as amended from time to time).
Each additional option vests and becomes exercisable on each monthly anniversary date as to 1/12th the number of shares subject to the
option, over a period of twelve months from the date of grant, such that each additional option will be fully vested and exercisable on the
first anniversary of the date of grant, provided that Mr. Yablonka remains an employee of the Company on each such vesting date. Mr.
Yablonka  was  granted  5,543  shares  of  Common  Stock  under  the  2014  Global  Plan  on  July  13,  2017.  In  addition,  Mr.  Yablonka  was
granted 10,000 shares on Common Stock under the 2014 Global Plan on June 23, 2020.

Arturo Araya

Arturo  Araya,  the  Company’s  Chief  Commercial  Officer,  is  party  to  an  August  28,  2018  employment  agreement  with  the  Company,
pursuant to which Mr. Araya receives an annual base compensation of $300,000 and is eligible to receive an annual cash bonus equal to
20%  of  his  base  salary,  subject  to  satisfaction  of  pre-established  performance  goals.  On  August  28,  2018  he  also  received  a  one-time
grant of an option to purchase 200,000 shares of Common Stock under the Company’s 2014 Stock Incentive Plan, at an exercise price of
$3.98 per share. 25% of the grant shall vest and become exercisable on each of the first, second, third and fourth anniversaries of the
grant  date,  so  that  the  grant  becomes  fully  vested  and  exercisable  on  the  fourth  anniversary  of  the  grant  date.  The  grant  is  subject  to
accelerated vesting upon a Change of Control, as defined in the agreement, and has a 10-year term.  Any unvested shares underlying the
grant  as  of  the  date  of  the  termination  of  his  employment  with  the  Company  shall  automatically  terminate.    In  connection  with  the
employment agreement Mr. Araya resigned from the GNC Committee, and the restricted stock previously granted to him in connection
with his service on the Board and the GNC Committee ceased vesting. He ceased serving as a member of the Board on November 29,
2018.

Stacy Lindborg

Dr. Stacy Lindborg, PhD, the Company’s EVP and Global Head of Clinical Research is party to a May 26, 2020 employment agreement
with  the  Company,  pursuant  to  which  Dr.  Lindborg  receives  an  annual  base  compensation  of  $375,000  and  is  eligible  to  receive  an
annual  cash  bonus  equal  to  35%  of  her  base  salary,  subject  to  satisfaction  of  pre-established  performance  goals.  Pursuant  to  the
agreement, she received on June 1 2020, a one-time grant under the 2014 Stock Incentive Plan of 25,000 shares of restricted common
stock of the Company, which shall vest as to 100% of the award on December 31, 2020, provided Dr. Lindborg remains continuously
employed by the Company from the date of grant through the vesting date. In the event of Dr. Lindborg’s termination of employment is
prior to the vesting date, the restricted stock grant shall automatically be immediately forfeited to the Company, without the payment of
any consideration to Dr. Lindborg.

Pursuant to the agreement, Dr. Lindborg also received a one-time grant of an option to purchase 100,000 shares of Common Stock under
the Company’s 2014 Stock Incentive Plan, at an exercise price of $7.67 per share. 50% of the grant shall vest and become exercisable on
February  28,  2021  and  the  remaining  50,000  shares  underlying  the  Option  shall  vest  and  become  exercisable  in  equal  quarterly
installments thereafter until fully vested and exercisable on the second anniversary of the First Vesting Date, provided that she remains
continuously employed by the Company from the date of grant through each applicable vesting date. Each option shall have a ten (10)

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year  term.  Any  unvested  shares  underlying  the  options  as  of  the  date  of  Dr.  Lindborg’s  employment  termination  shall  automatically
terminate.

Anthony Waclawski

Anthony Waclawski, the Company’s Executive Vice President, Global Head of Regulatory Affairs, is party to a September 2, 2020 offer
letter with the Company, pursuant to which Dr. Waclawski receives an annual base compensation of $300,000 and is eligible to receive
an annual cash bonus equal to 30% of his base salary, subject to satisfaction of pre-established performance goals to be mutually agreed
upon by the Chief Executive Officer and the Board based on an assessment of Dr. Waclawski’s performance each year. Performance is
evaluated through a performance management framework and a bonus range based on the target bonus. On September 8, 2020 he also
received a one-time grant of an option to purchase 80,000 shares of Common Stock under the Company’s 2014 Stock Incentive Plan, at
an exercise price of $12.58 per share. 100% of the grant shall vest and become exercisable on the first anniversary of the date of the
grant,  provided  Dr.  Waclawski  remains  continuously  employed  by  the  Company  from  the  date  of  grant  through  the  vesting  date.  The
grant is subject to accelerated vesting upon a Change of Control, as defined in the agreement, and has a 10-year term. The grant contains
termination provisions, as set forth in the offer letter.

Terms of Option Awards

Stock option grants to the Named Executive Officers are described in the summaries of their executive employment agreements above
and incorporated herein. Unless otherwise stated, option grants issued to Named Executive Officers prior to August 14, 2014 were made
pursuant to the Company’s 2004 Global Share Option Plan and grants issued to Named Executive Officers on or after August 14, 2014
were made pursuant to the Company’s 2014 Global Share Option Plan, and expire on the tenth anniversary of the grant date.

Outstanding Equity Awards

The following table sets forth information regarding equity awards granted to the Named Executive Officers that are outstanding as of
December 31, 2020. In the table below, columns required by the regulations of the SEC have been omitted where no information was
required to be disclosed under those columns.

Outstanding Equity Awards at December 31, 2020

Option Awards

Stock Awards

Name
Chaim Lebovits

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

Option
Exercise
Price
($)

Option
Expiration
Date

 369,619     

 —     

 2.45      9/28/2025     

Ralph Kern

 —  

 80,000  

 7.33  

03/09/2030  

Anthony Paul Waclawski

 —  

 80,000

 12.58  

09/07/2030  

(1) Based on the fair market value of our Common Stock on December 31, 2020 ($4.53 per share).

Number
of Shares
or Units
of Stock
That Have
Not Vested
(#)
 7,796 (2)  
 15,593 (3)  
 23,389 (4)  
 31,185 (5)  
 8,971 (6)  
 17,943 (7)  
 26,914 (8)  
 35,885 (9)  
 35,000 (10)  

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
 35,317
 70,634
 105,951
 141,268
 40,639
 81,282
 121,920
 162,559
 158,550

(2) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd and 4th anniversary of date of grant (July 26, 2017), provided that Chaim

Lebovits remains continuously employed by the Company from the date of grant through each applicable vesting date.

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(3) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd and 4th anniversary of date of grant (July 26, 2018), provided that Chaim

Lebovits remains continuously employed by the Company from the date of grant through each applicable vesting date.

(4) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd and 4th anniversary of date of grant (July 26, 2019), provided that Chaim

Lebovits remains continuously employed by the Company from the date of grant through each applicable vesting date.

(5) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd and 4th anniversary of date of grant (July 26, 2020), provided that Chaim

Lebovits remains continuously employed by the Company from the date of grant through each applicable vesting date.

(6) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd  and  4th  anniversary  of  date  of  grant  (March  6,  2017),  provided  that

Ralph Kern remains continuously employed by the Company from the date of grant through each applicable vesting date.

(7) Restricted  stock  award  vests  25%  on  each  of  the  1st, 2nd, 3rd  and  4th  anniversary  of  date  of  grant  (March  6,  2018),  provided  that

Ralph Kern remains continuously employed by the Company from the date of grant through each applicable vesting date.

(8) Restricted  stock  award  vests  25%  on  each  of  the  1st, 2nd, 3rd  and  4th  anniversary  of  date  of  grant  (March  6,  2019),  provided  that

Ralph Kern remains continuously employed by the Company from the date of grant through each applicable vesting date.

(9) Restricted stock award vests 25% on each of the 1st, 2nd, 3rd  and  4th  anniversary  of  date  of  grant  (March  6,  2020),  provided  that

Ralph Kern remains continuously employed by the Company from the date of grant through each applicable vesting date.

(10) Restricted  stock  award  shall  vest  as  to  100%  of  the  award  on  July  1,  2021,  provide  Anthony  Waclawski  remains  continuously

employed by the Company from the date of grant through the vesting date.

Stock Incentive Plans

During the fiscal year ended December 31, 2020, the Company had outstanding awards for stock options under four plans: (i) the 2004
Global Stock Option Plan and the Israeli Appendix thereto (the “2004 Global Plan”) (ii) the 2005 U.S. Stock Option and Incentive Plan
(the “2005 U.S. Plan,” and together with the 2004 Global Plan, the “Prior Plans”); (iii) the 2014 Global Share Option Plan and the Israeli
Appendix  thereto  (which  applies  solely  to  participants  who  are  residents  of  Israel)  (the  “2014  Global  Plan”);  and  (iv)  the  2014  Stock
Incentive Plan (the “2014 U.S. Plan” and together with the 2014 Global Plan, the 2014 Plans).

The  2004  Global  Plan  and  2005  U.S.  Plan  expired  on  November  25,  2014  and  March  28,  2015,  respectively.  Grants  that  were  made
under the Prior Plans remain outstanding pursuant to their terms. The 2014 Plans were approved by the stockholders on August 14, 2014
(at which time the Company ceased to issue awards under each of the 2005 U.S. Plan and 2004 Global Plan) and amended on June 21,
2016 and November 29, 2018. Unless otherwise stated, option grants prior to August 14, 2014 were made pursuant to the Company’s
Prior Plans, and grants issued on or after August 14, 2014 were made pursuant to the Company’s 2014 Plans, and expire on the tenth
anniversary of the grant date.

The 2014 Plans have a shared pool of 5,600,000 shares of common stock available for issuance. The exercise price of the options granted
under the 2014 Plans may not be less than the nominal value of the shares into which such options are exercised. Any options under the
2014 Plans that are canceled or forfeited before expiration become available for future grants.

Compensation of Directors

The following table sets forth certain summary information with respect to the compensation paid during the fiscal year ended December
31, 2020 earned by each of the directors of the Company. In the table below, columns required by the regulations of the SEC have been
omitted where no information was required to be disclosed under those columns.

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Name
Dr. Jacob Frenkel
Dr. Irit Arbel
Dr. June S. Almenoff
Dr. Anthony Polverino
Mr. Chen Schor
Mr. Malcolm Taub
Uri Yablonka
Sankesh Abbhi

Director Compensation Table for Fiscal 2020

Fees
Earned or
Paid in
Cash ($)

Stock
Awards
($)(1)

 —
 —
 30,000 (4)  
 —
 3,125 (6)  
—
—
 —

 —
 —
 —
 12,499 (5)  
—
 —
—
 21,655 (8)  

Option
Awards
($)
(1)(2)
 200,353 (9)  
 — (3)  

—
—
—
 — (7)  
 —

Total
($)
 200,353
 —
 30,000
 12,499
 3,125
 —
 —
 21,655

(1) The amounts shown in the “Stock Awards” and “Option Awards” columns represent the aggregate grant date fair value of awards

computed in accordance with ASC 718, not the actual amounts paid to or realized by the directors during fiscal 2020.

(2) The fair value of each stock option award is estimated as of the date of grant using the Black-Scholes valuation model. Additional
information regarding the assumptions used to estimate the fair value of all stock option awards is included in Note 11 – Share-based
compensation to employees and to directors to Consolidated Financial Statements.

(3) At December 31, 2020, Dr. Arbel had options (vested and unvested) to purchase 220,554 shares of Common Stock.

(4) Represents the amount paid to Dr. Almenoff for her services as a director.

(5) At December 31, 2020, Dr. Polverino had 3,071 shares of (vested and unvested) restricted Common Stock.

(6) Represents the amount paid to Mr. Schor for his services as a director.

(7) At December 31, 2020, Mr. Yablonka had options (vested and unvested) to purchase 113,331 shares of Common Stock.

(8) At December 31, 2020, Mr. Sankesh Abbhi had 4,657 shares of (vested and unvested) restricted Common Stock.

(9) At December 31, 2020, Dr. Frenkel had options (vested and unvested) to purchase 50,000 shares of Common Stock.

Director Compensation Plan

We review the level of compensation of our non-employee directors on a periodic basis. To determine how appropriate the current level
of  compensation  for  our  non-employee  directors  is,  we  have  historically  obtained  data  from  a  number  of  different  sources,  including
publicly available data describing director compensation in peer companies and survey data collected by an independent compensation
consultant. Those of our directors who are not employees of Brainstorm receive compensation for their services as directors as follows:

The Company’s Second Amended and Restated Director Compensation Plan was approved July 9, 2014 and amended on April 29, 2015,
February  26,  2017  and  July  13,  2017  (as  amended,  the  “Director  Compensation  Plan”).  Under  the  Director  Compensation  Plan,  each
eligible director is granted an annual award immediately following each annual meeting of stockholders beginning with the 2014 annual
meeting. For non-U.S. directors, this annual award consists of a nonqualified stock option to purchase 13,333 shares of Common Stock.
For U.S. directors, at their option, this annual award is either (i) a nonqualified stock option to purchase 6,666 shares of Common Stock
or (ii) 6,666 shares of restricted stock. Additionally, each member of the GNC Committee or Audit Committee of the Board receives (i) a
nonqualified stock option to purchase 2,000 shares of Common Stock or (ii) in the case of U.S. directors and at their option, 2,000 shares
of  restricted  stock.  The  chair  of  the  GNC  Committee  or  Audit  Committee  will  instead  of  the  above  committee  award  receive  (i)  a
nonqualified stock option to purchase 3,333 shares of Common Stock or (ii) in the case of U.S. directors and at their option, 3,333 shares
of restricted stock. Any eligible participant who is serving as chairperson of the Board shall also receive (i) a nonqualified stock option to
purchase 6,666 shares of Common Stock or (ii) in the case of U.S. directors and at their option, 6,666 shares of restricted stock.

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Awards are granted on a pro rata basis for directors serving less than a year at the time of grant. The exercise price for options for U.S.
directors will be equal to the closing price per share of the Common Stock on the grant date as reported on the Over-the-Counter Bulletin
Board  or  the  national  securities  exchange  on  which  the  Common  Stock  is  then  traded.  The  exercise  price  for  options  for  non-U.S.
directors is $0.75. Every option and restricted stock award will vest monthly as to 1/12 the number of shares subject to the award over a
period of twelve months from the date of grant, provided that the recipient remains a member of the Board on each such vesting date, or,
in the case of a committee award, remains a member of the committee on each such vesting date. Every non-employee director of the
Company is eligible to participate in the Director Compensation Plan, except that Chen Schor, Dr. June S. Almenoff, Arturo O. Araya
(until he commenced service as an employee in August, 2018) and Dr. Anthony Polverino are not entitled receive annual director awards
under the Director Compensation Plan, but are entitled to committee compensation under the Director Compensation Plan in the event
that they qualify for and serve as a member of any committee of the Board. Chen Schor, Dr. Almenoff, Mr. Araya and Dr. Polverino’s
director compensation is further discussed below.

Pursuant to a February 26, 2017 resolution of the Board, Dr. Almenoff receives the following compensation for her service on the Board:
an  annual  cash  award  in  the  amount  of  $30,000,  paid  in  biannual  installments.  Dr.  Almenoff  will  not  receive  annual  director  awards
under the Director Compensation Plan, but in the event that Dr. Almenoff serves as a member of any committee of the Board she will be
entitled to committee compensation under the Director Compensation Plan. Dr. Almenoff serves as a member of the Audit Committee.

Pursuant  to  resolutions  of  the  Board,  Dr.  Polverino  receives  the  following  compensation  for  his  service  on  the  Board:  an  annual  cash
award in the amount of $12,500, paid in biannual installments, and an annual restricted stock award valued at $12,500 on the date of
grant, as determined based on the closing price of the Company’s common stock at the end of normal trading hours on the date of grant,
or the previous closing price in the event the grant date does not fall on a business day. The grant vests in 12 consecutive, equal monthly
installments  commencing  on  the  one-month  anniversary  of  the  date  of  grant,  until  fully  vested  on  the  first  anniversary  of  the  date  of
grant. Dr. Polverino does not receive annual director awards under the Director Compensation Plan, but in the event that he serves as a
member of any committee of the Board he is entitled to committee compensation under the Director Compensation Plan. Dr. Polverino
serves  on  the  GNC  Committee.  In  November  2018  he  received  a  grant  of  1,667  shares  of  Common  Stock  for  prior  GNC  Committee
services.

Pursuant resolution of the Board, Mr. Araya received the following compensation for his service on the Board: an annual cash award in
the amount of $12,500, paid in biannual installments, and an annual restricted stock award valued at $12,500 on the date of grant, as
determined based on the closing price of the Company’s common stock at the end of normal trading hours on the date of grant, or the
previous  closing  price  in  the  event  the  grant  date  does  not  fall  on  a  business  day.  Mr.  Araya  also  received  a  grant  of  1,249  shares  of
restricted  stock  for  his  service  on  the  GNC  Committee.  All  grants  ceased  vesting  and  Mr.  Araya  resigned  as  a  member  of  the  GNC
effective August 28, 2018, in connection with Mr. Araya commencing employment with the Company as its Chief Commercial Officer.
Mr. Araya ceased serving as a member of the Board on November 29, 2018.

On February 26, 2017 the Amended and Restated Executive Director Agreement between the Company and Chen Schor dated November
11, 2011 was terminated by mutual agreement of Chen Schor and the Company, and the Board approved that Chen Schor will receive the
following compensation for his service on the Board: an annual cash award in the amount of $30,000, paid in biannual installments; that
Mr.  Schor  will  not  receive  annual  director  awards  under  the  Director  Compensation  Plan,  but  in  the  event  that  Mr.  Schor  serves  as  a
member of any committee of the Board he will be entitled to committee compensation under the Director Compensation Plan; and that
the restricted stock grant (the “Schor Grant”) of 60,000 shares of restricted Common Stock previously granted to Mr. Schor under the
Company’s 2014 Stock Incentive Plan will continue to vest as previously agreed: 20,000 on: (a) August 22, 2015 (b) 20,000 on August
22,  2016  and  (c)  20,000  on  August  22,  2017  (at  which  time  the  Grant  was  fully  vested).  Mr.  Schor  served  as  a  member  of  the  audit
committee from November 2017 to November 2019.

On July 13, 2017 pursuant to the Company’s Third Amendment to the Second Amended and Restated Director Compensation Plan, we
granted a stock option to Dr. Arbel to purchase up to 12,000 shares of Common Stock at a purchase price of $0.75 per share, which was
fully vested and exercisable on the date of grant.

On  December  12,  2019,  the  following  grants  were  made  under  the  Director  Compensation  Plan  to  the  eligible  directors:  Dr.  Arbel
received a stock option to purchase 25,333 shares of Common Stock for her service as a director, chairperson of the Board, chair of the
GNC  Committee  and  a  member  of  the  Audit  Committee;  Dr.  Almenoff  received  2,000  shares  of  restricted  stock  for  her  service  as  a
member of the Audit Committee; Dr. Polverino received 2,000 shares of restricted stock for his service as a member of the GNC

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Committee;  and  Mr.  Taub  received  12,000  shares  of  restricted  stock  for  his  service  as  a  director,  chair  of  the  Audit  Committee  and  a
member of the GNC Committee.

On April 7, 2020, the following grants were made under the Director Compensation Plan to the eligible directors: Mr. Sankesh Abbhi
received  4,657  shares  of  restricted  stock  for  his  service  as  a  director;  Dr  Jacob  Frenkel  received  a  stock  option  to  purchase  50,0000
shares of Common Stock for his service as Chairperson of the Board.

Item 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners and Management

The  following  table  sets  forth  certain  information  as  of  December  31,  2020  with  respect  to  the  beneficial  ownership  of  our  Common
Stock by the following: (i) each of our current directors; (ii) the Named Executive Officers; (iii) all of the current executive officers and
directors as a group; and (iv) each person known by the Company to own beneficially more than five percent (5%) of the outstanding
shares of our Common Stock.

For purposes of the following table, beneficial ownership is determined in accordance with the rules of the SEC and the information is
not  necessarily  indicative  of  beneficial  ownership  for  any  other  purpose.  Except  as  otherwise  noted  in  the  footnotes  to  the  table,  we
believe that each person or entity named in the table has sole voting and investment power with respect to all shares of our Common
Stock shown as beneficially owned by that person or entity (or shares such power with his or her spouse). Under the SEC’s rules, shares
of our Common Stock issuable under options that are exercisable on or within 60 days after February 14, 2020 (“Presently Exercisable
Options”)  or  under  warrants  that  are  exercisable  on  or  within  60  days  after  February  14,  2020  (“Presently  Exercisable  Warrants”)  are
deemed outstanding and therefore included in the number of shares reported as beneficially owned by a person or entity named in the
table and are used to compute the percentage of the Common Stock beneficially owned by that person or entity. These shares are not,
however,  deemed  outstanding  for  computing  the  percentage  of  the  Common  Stock  beneficially  owned  by  any  other  person  or  entity.
Unless  otherwise  indicated,  the  address  of  each  person  listed  in  the  table  is  c/o  Brainstorm  Cell  Therapeutics  Inc.,  1325  Avenue  of
Americas, 28th Floor, New York, NY 10019.

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The percentage of the Common Stock beneficially owned by each person or entity named in the following table is based on 35,159,977
shares of Common Stock outstanding as of December 31, 2020, plus any shares issuable upon exercise of Presently Exercisable Options
and Presently Exercisable Warrants held by such person or entity.

Name of Beneficial Owner
Directors and Named Executive Officers
Chaim Lebovits(1)
Ralph Kern
Preetam Shah
Uri Yablonka
June Almenoff
Irit Arbel
Sankesh Abbhi
Anthony Polverino
Malcolm Taub
Jacob Frenkel
David Setboun
Stacy Lindborg
Anthony Wacalawski
All current directors and executive officers as a group (13 persons)
5% Shareholders (other than listed above)
N/A (see FN1)

Shares Beneficially Owned
 (Includes Common Stock, Presently 
Exercisable Options and Presently 
Exercisable Warrants)

# of Shares

     % of Class

 4,511,872 (1)  
 151,540  
 74,100
 130,874 (2)  
 9,175 (3)  
 376,387 (4)  
 2,419,187 (5)  
 15,862
 53,332
 89,995 (6)  
 55,000 (7)  
 45,000 (8)  
 35,000 (9)  
 7,967,324 (10)  

 12.0 %
*
*
 * 
*
1.06 %
 6.80 %
*
*
*
*
*
*
 21.8 %

(1) Includes (i) 1,933,794 shares of Common Stock owned by ACCBT Corp. acquired through an investment into the Company and (ii)
2,016,666 shares of Common Stock issuable to ACCBT Corp. upon the exercise of Presently Exercisable Warrants acquired through
an  investment  into  the  Company,  (iii)  67,053  shares  of  Common  Stock  owned  by  ACC  International  Holdings  Ltd.,  (iv)  369,619
shares of Common Stock issuable to Chaim Lebovits upon the exercise of Presently Exercisable Options and (v) 124,740 shares of
restricted stock. Chaim Lebovits, our Chief Executive Officer, may be deemed the beneficial owner of these shares. The address of
ACCBT Corp. and ACC International Holdings Ltd.is Morgan & Morgan Building, Pasea Estate, Road Town, Tortola, British Virgin
Islands.

(2) Includes 113,331 of shares of Common Stock issuable upon the exercise of Presently Exercisable Options.

(3) Consists  of  7,175  shares  owned  by  Meadowlark  Management  LLC  and  2,000  shares  of  restricted  stock.    Dr.  Almenoff  disclaims
beneficial ownership of the shares owned by Meadowlark Management LLC except to the extent of any pecuniary interest therein.

(4) Includes  220,554  shares  of  Common  Stock  issuable  upon  the  exercise  of  Presently  Exercisable  Options.  Dr.  Arbel’s  address  is  6

Hadishon Street, Jerusalem, Israel.

(5) Mr. Abbhi joined the board of directors of the Company on March 31, 2020. Includes (i) 2,164,530 shares of Common Stock owned
by  Abbhi  Investments,  LLC,  (ii)  250,000  shares  of  Common  Stock  issuable  to  Abbhi  Investments,  LLC  upon  the  exercise  of
Presently Exercisable Warrants and (iii) 4,657 shares of restricted stock. Sankesh Abbhi is the manager of Abbhi Investments, LLC
and  maintains  sole  voting  and  investment  power  with  respect  to  the  Common  Stock  and  Presently  Exercisable  Warrants  held  by
Abbhi Investments, LLC. The address of Abbhi Investments, LLC is 2821 S Bayshore Drive, Miami FL 33133.

(6) Dr.  Jacob  Frenkel  joined  the  board  of  directors  of  the  Company  on  March  31,  2020.  Includes  56,667  shares  of  Common  Stock

owned prior to joining the board and 33,328 issuable upon the exercise of Presently Exercisable Options.

(7) Dr. Setboun's employment with the Company commenced on April 7, 2020.

(8) Dr. Linborg's employment with the Company commenced on June 1, 2020.

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(9) Dr. Waclawski's employment with the Company commenced on September 8, 2020.

(10) Includes  (i)  2,266,666  shares  of  Common  Stock  issuable  upon  the  exercise  of  Presently  Exercisable  Warrants  and  (ii)    899,332

shares of Common Stock issuable upon the exercise of Presently Exercisable Options.

*     Less than 1%.

Equity Compensation Plan Information

The following table summarizes certain information regarding our equity compensation plans as of December 31, 2020:

Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total

  Weighted-

average
exercise
price of
outstanding
options,
warrants
and rights

     Number of
securities
to be
issued upon
exercise of
outstanding
options,
warrants
and rights
 1,754,894 (2)$
 —  
$

 1,754,894

     Number of
securities
remaining
available for
future
issuance

  under equity
  compensation

plans

 4.8869 (3)  3,018,413 (3)

 —  
 4.8869  

 —

 3,018,413 (1)

(1) Includes 1,754,894 shares of common stock issuable upon the exercise of outstanding options only.

(2)  Since  restricted  stock  units  do  not  have  any  exercise  price,  such  units  are  not  included  in  the  weighted  average  exercise  price

calculation.

(3) A total of 4,773,307 shares of our Common Stock are reserved for issuance in aggregate under the Equity Plans and the Prior Plans.
Any awards granted under either the 2014 Global Plan or the 2014 U.S. Plan will reduce the total number of shares available for
future issuance under the other plan.

Item 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Certain Relationships and Related Transactions

The Audit Committee of our Board reviews and approves all related-party transactions. A “related-party transaction” is a transaction that
meets  the  minimum  threshold  for  disclosure  under  the  relevant  SEC  rules  (transactions  involving  amounts  exceeding  the  lesser  of
$120,000  or  one  (1)  percent  of  the  average  of  the  smaller  reporting  company's  total  assets  at  year-end  for  the  last  two  fiscal  years  in
which a “related person” or entity has a direct or indirect material interest). “Related persons” include our executive officers, directors,
5% or more beneficial owners of our Common Stock, immediate family members of these persons and entities in which one of these
persons has a direct or indirect material interest. When a potential related-party transaction is identified, management presents it to the
Audit Committee to determine whether to approve or ratify it.

The Audit Committee reviews the material facts of any related-party transaction and either approves or disapproves of the entry into the
transaction. If advance approval of a related-party transaction is not feasible, then the transaction will be considered and, if the Audit
Committee determines it to be appropriate, ratified by the Audit Committee. No director may participate in the approval of a transaction
for which he or she is a related party.

Research and License Agreement with Ramot

The  Company  has  maintained  a  commercial  relationship  with  Ramot,  the  technology  transfer  group  within  Tel  Aviv  University,  since
July  2004,  when  the  Company  and  Ramot  entered  into  a  Research  and  License  Agreement  (the  “Original  Agreement”).  The  Original
Agreement was amended in both March and May of 2006, when the parties signed, respectively, an Amended and Restated Research

112

    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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and License Agreement (the “Amended and Restated Agreement”) and Amendment Number 1 to the Amended and Restated Agreement.
Thereafter,  the  Company  and  Ramot  entered  into  a  Letter  Agreement  in  December  2009  which  further  amended  the  Amended  and
Restated Agreement by releasing the Company from various duties and obligations (including the Company’s commitment to fund three
(3)  years  of  additional  Ramot  research  -  a  financial  commitment  of  $1,140,000),  while  converting  other  payments  due  and  owing  to
Ramot by the Company into shares of Common Stock. In December 2011, the Company assigned the Amended and Restated Agreement
(as amended) to its Israeli Subsidiary with the consent of Ramot, provided the Company agreed to guaranty the performance obligations
of its Israeli Subsidiary thereunder. The Amended and Restated Agreement was amended in both April 2014 (Amendment Number 2)
and March 2016 (Amendment Number 3).

In  addition  to  the  foregoing,  on  April  30,  2014,  the  Israeli  Subsidiary  executed  a  consulting  agreement  (the  “Offen  Consulting
Agreement”)  with  Professor  Offen  of  Tel  Aviv  University,  which  expressly  replaced  their  previous  agreement  (signed  in  July  2004).
Pursuant to the Offen Consulting Agreement, Professor Offen granted our Israeli Subsidiary exclusive rights, title and interest in and to
all work product and deliverables resulting from the provision of his services thereunder, except that any new intellectual property arising
from this agreement would be deemed a joint invention that is jointly owned by both our Israeli Subsidiary and Ramot. No such joint
inventions have resulted from this consulting agreement and it was terminated on January 18, 2018.

The primary focus of our agreements (and subsequent amendments) with Ramot has and continues to be the commissioning of a group of
scientists within Tel Aviv University to carry out research in the area of the stem-cell technology referenced above, and the granting of
rights to the Company (and later our Israeli Subsidiary, after the assignment referenced above) in the inventions, know-how and results
procured from such research (the “Ramot IP”).

In consideration for the rights granted to our Israeli Subsidiary in and to the Ramot IP, our Israeli Subsidiary is required to pay Ramot
royalties ranging between three percent (3%) and five percent (5%) of all net sales realized from the exploitation of the Ramot IP, as well
as  remittances  of  between  twenty  percent  (20%)  and  twenty-five  percent  (25%)  on  revenues  received  from  the  sub-licensing  of  the
Ramot IP.

Pursuant  to  the  third  amendment  of  the  Amended  and  Restated  Agreement  referenced  above,  Ramot  agreed  to  convert  the  exclusive
licenses then-existing, to outright transfers and assignments of the Ramot IP, thereby granting our Israeli Subsidiary ownership thereof.

Investment Agreement with ACCBT Corp.

We are party to a July 2, 2007 subscription agreement and related registration rights agreement and warrants, amended July 31, 2009,
May 10, 2012, May 19, 2014 and November 2, 2017 (together as amended, the “ACCBT Documents”) with ACCBT, a company under
the  control  of  Mr.  Chaim  Lebovits,  our  President  and  Chief  Executive  Officer,  pursuant  to  which,  for  an  aggregate  purchase  price  of
approximately  $5.0  million,  we  sold  to  ACCBT  1,920,461  shares  of  our  Common  Stock  (the  “Subscription  Shares”)  and  warrants  to
purchase  up  to  2,016,666  shares  of  our  Common  Stock  (the  “ACCBT  Warrants”).  The  ACCBT  Warrants  contain  cashless  exercise
provisions,  which  permit  the  cashless  exercise  of  up  to  50%  of  the  underlying  shares  of  Common  Stock.  672,222  of  the  ACCBT
Warrants have an exercise price of $3.00 and the remainder have an exercise price of $4.35. All of the ACCBT Warrants are presently
outstanding.

Pursuant to the terms of the ACCBT Documents, ACCBT has the following rights for so long as ACCBT or its affiliates hold at least 5%
of our issued and outstanding share capital:

● Board Appointment Right: ACCBT has the right to appoint 30% of the members of our Board and any of our committees

and the Board of Directors of our subsidiaries.

● Preemptive  Right:  ACCBT  has  the  right  to  receive  thirty  days’  notice  of,  and  to  purchase  a  pro  rata  portion  (or  greater
under  certain  circumstances  where  offered  shares  are  not  purchased  by  other  subscribers)  of,  securities  issued  by  us,
including  options  and  rights  to  purchase  shares.  This  preemptive  right  does  not  include  issuances  under  our  equity
incentive plans.

● Consent Right: ACCBT’s written consent is required for Brainstorm transactions greater than $500,000.

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Table of Contents

In addition, ACCBT is entitled to demand and piggyback registration rights, whereby ACCBT may request, upon 15 days’ written notice,
that we file, or include within a registration statement to be filed, with the Securities and Exchange Commission for ACCBT’s resale of
the Subscription Shares, as adjusted, and the shares of our Common Stock issuable upon exercise of the ACCBT Warrants.

We  registered  1,920,461  shares  of  Common  Stock  and  2,016,666  shares  of  Common  Stock  underlying  the  ACCBT  Warrants  on
registration statement No. 333-201705 dated January 26, 2015 pursuant to ACCBT’s registration rights.

The foregoing description reflects the November 2, 2017 Warrant Amendment Agreement between the Company and ACCBT, pursuant
to which the rights and privileges of the ACCBT Entities relating to the management of the Company were reduced, in exchange for a
five (5) year extension of the expiration of the Company warrants held by the ACCBT Entities. Pursuant to the amendment, the ACCBT
Documents were amended as follows: (i) the ACCBT Entities existing right to appoint 50.1% of the Board of Directors of the Company
and its subsidiaries was reduced to 30%; (ii) the ACCBT Entities’ consent rights regarding Company matters pursuant to the ACCBT
Documents  were  limited  to  transactions  greater  than  $500,000  (previous  to  the  amendment  the  consent  right  was  for  transactions  of
$25,000  or  more);  and  (iii)  the  expiration  date  of  each  of  the  ACCBT  Warrants  was  extended  until  November  5,  2022  (the  previous
expiration date was November 5, 2017).

Mr.  Lebovits,  the  Company’s  Chief  Executive  Officer,  is  deemed  to  control  ACCBT.  Mr.  Lebovits  employment  agreement  with  the
Company and related employee compensation are described under “Executive Employment Agreements” in the Executive Compensation
section above.

Independence of the Board of Directors

The Board of Directors of the Company (the “Board”) has determined that each of Dr. Frenkel, Dr. Arbel, Dr. Almenoff, Dr. Polverino,
Mr. Abbhi and Mr. Taub satisfies the criteria for being an “independent director” under the standards of the Nasdaq Stock Market, Inc.
(“Nasdaq”)  and  has  no  material  relationship  with  the  Company  other  than  by  virtue  of  service  on  the  Board.  Mr.  Yablonka  is  not
considered an “independent director.”

The Board of Directors is comprised of a majority of independent directors and the Audit and GNC Committees are comprised entirely
of independent directors.

Item 14.          PRINCIPAL ACCOUNTING FEES AND SERVICES.

Independent Registered Public Accounting Firm

Principal Accountant Fees and Services

The following table presents fees for professional audit services rendered by Brightman Almagor Zohar & Co., a Firm in the Deloitte
Global Network (“Deloitte”) for the audit of our financial statements for the fiscal years ended December 31, 2020 and 2019 and fees
billed for other services rendered by Deloitte during those periods.

December 31,

Audit Fees (1)
Audit-Related Fees (2)
Tax Fees (3)
All Other Fees
Total Fees

     $
$
$
$
$

2019
 55,000      $
 — $
$
 — $
$

 66,000

 11,000

2020
 75,000
 30,000
 11,000
 —
 116,000

(1) Audit fees are comprised of fees for professional services performed by Deloitte for the audit of our annual financial statements and
the  review  of  our  quarterly  financial  statements,  as  well  as  other  services  provided  by  Deloitte  in  connection  with  statutory  and
regulatory filings or engagements.

(2) Audit-related  fees  are  comprised  of  fees  for  professional  services  performed  by  Deloitte  in  connection  with  comfort  letters  and

consents.

114

 
 
Table of Contents

(3) Tax fees are comprised of tax compliance services to the Company performed by Deloitte.

We  did  not  use  Deloitte  for  financial  information  system  design  and  implementation.  These  services,  which  include  designing  or
implementing a system that aggregates source data underlying the financial statements and generates information that is significant to our
financial statements, are provided internally or by other service providers. We did not engage Deloitte to provide compliance outsourcing
services.

Pre-approval Policies

Our Audit Committee is responsible for pre-approving all services provided by our independent auditors. All of the above services and
fees were reviewed and approved by the Audit Committee before the services were rendered.

The Board of Directors has considered the nature and amount of fees billed by Deloitte and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining Deloitte’s independence.

115

Table of Contents

Item 15.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 (1) Financial Statements.

PART IV

The financial statements listed in the Index to Consolidated Financial Statements are filed as part of this report.

 (2) Financial Statement Schedules.

All  financial  statement  schedules  have  been  omitted  as  they  are  either  not  required,  not  applicable,  or  the  information  is  otherwise
included.

(3) Exhibits.

Exhibit
Number Description

Incorporated by
Reference Herein

Filed 
(or
Furnished) 
with 
this 
Form 10-K Form

Exhibit
& File No.

Date 
Filed

2.1

3.1

3.2

3.3

Agreement and Plan of Merger, dated as of November
28, 2006, by and between Brainstorm Cell
Therapeutics Inc., a Washington corporation, and
Brainstorm Cell Therapeutics Inc., a Delaware
corporation.

Certificate of Incorporation of Brainstorm Cell
Therapeutics Inc.

Certificate of Amendment of Certificate of
Incorporation of Brainstorm Cell Therapeutics
Inc. dated September 15, 2014.

Certificate of Amendment of Certificate of
Incorporation of Brainstorm Cell Therapeutics Inc.
dated August 31, 2015.

3.4

ByLaws of Brainstorm Cell Therapeutics Inc.

3.5

4.1

Amendment No. 1 to ByLaws of Brainstorm Cell
Therapeutics Inc., dated as of March 21, 2007.

Specimen Certificate of Common Stock of Brainstorm
Cell Therapeutics Inc.

116

Definitive
Schedule
14A

Appendix
A File No.
333-61610

November 20, 2006

Definitive
Schedule
14A

Appendix
B File No.
333-61610

November 20, 2006

Form 8-K Exhibit 3.1

September 16, 2014

File No.
000-54365

Form 8-K Exhibit 3.1

September 4, 2015

File No.
001-
366641

Definitive
Schedule
14A

Appendix
C File No.
333-61610

Form 8-K Exhibit 3.1

File No.
333-61610
Form 8-K Exhibit 4.1

File

November 20, 2006

March 27, 2007

September 16, 2014

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.1

10.2

10.3

10.4

10.5

10.6

Research and License Agreement, dated as of July 8,
2004, by and between the Company and Ramot at Tel
Aviv University Ltd.

Research and License Agreement, dated as of March
30, 2006, by and between the Company and Ramot at
Tel Aviv University Ltd.

Amendment Agreement, dated as of May 23, 2006, to
Research and License Agreement, by and between the
Company and Ramot at Tel Aviv University Ltd.

Amendment Agreement, dated as of March 31, 2006,
among the Company, Ramot at Tel Aviv University
Ltd. and certain warrantholders.

Second Amended and Restated Research and License
Agreement, dated July 26, 2007, by and between the
Company and Ramot at Tel Aviv University Ltd.

Second Amended and Restated Registration Rights
Agreement, dated August 1, 2007, by and between the
Company and Ramot at Tel Aviv University Ltd.

10.7 Waiver and Release, dated August 1, 2007, executed
by Ramot at Tel Aviv University Ltd. in favor of the
Company.

10.8

10.9

Letter Agreement, dated December 24, 2009, by and
between the Company and Ramot at Tel Aviv
University Ltd.

Amendment No. 1, dated December 24, 2009, to the
Second Amended and Restated Research and License
Agreement dated July 26, 2007 by and between
Brainstorm Cell Therapeutics Ltd. and Ramot at Tel
Aviv University Ltd.

10.10 Assignment Agreement, dated December 20, 2011, by
and between the Company and Brainstorm Cell
Therapeutics Ltd.

Form 8-K

Form 8-K

Form 8-
K/A

Form 8-K

Form 10-
QSB

Form 10-
QSB

Form 10-
QSB

Form 8-K

Form 8-K

No. 000-
54365

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.2 File
No. 333-
61610

Exhibit
10.4 File
No. 333-
61610

Exhibit
10.5 File
No. 333-
61610

Exhibit
10.6 File
No. 333-
61610
Exhibit
10.1 File
No. 333-
61610

Exhibit
10.2 File
No. 333-
61610

July 16, 2004

April 4, 2006

May 23, 2006

April 4, 2006

August 20, 2007

August 20, 2007

August 20, 2007

December 31, 2009

December 31, 2009

Form S-1

Exhibit
10.12 File
No. 333-
179331

February 3, 2012

117

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.11

10.12

Amendment No. 2, dated April 30, 2014, to the
Second Amended and Restated Research and License
Agreement dated July 26, 2007 by and between
Brainstorm Cell Therapeutics Ltd. and Ramot at Tel
Aviv University Ltd.

Amendment No. 3, effective February 18, 2016, to the
Second Amended and Restated Research and License
Agreement dated July 26, 2007 by and between
Brainstorm Cell Therapeutics Ltd. and Ramot at Tel
Aviv University Ltd.

10.13

Consulting Agreement, dated as of April 30, 2014, by
and between Brainstorm Cell Therapeutics Ltd. and
Dr. Daniel Offen.

Form S-1

10.14* Brainstorm Cell Therapeutics Inc. 2014 Stock

Form 8-K

Incentive Plan.

10.15* Amendment No. 1 to the Brainstorm Cell Therapeutics

Inc. 2014 Stock Incentive Plan.

10.16* Amendment No. 2 to the Brainstorm Cell Therapeutics

Inc. 2014 Stock Incentive Plan.

Schedule
14A

Form 8-K

10.17* Brainstorm Cell Therapeutics Inc. 2014 Global Share

Form 8-K

Option Plan.

Form 10-K Exhibit

March 9, 2016

10.11 File
No. 001-
36641

Form 10-K Exhibit

March 9, 2016

10.12 File
No. 001-
36641

Exhibit
10.15 File
No. 333-
179331

Exhibit
10.1 File
No. 000-
54365

Appendix
A File No.
001-36641
Exhibit
10.1 File
No. 001-
36641

Exhibit
10.2 File
No. 000-
54365

June 29, 2012

August 15, 2014

May 11, 2016

November 30, 2018

August 15, 2014

10.18* Amendment No. 1 to the Brainstorm Cell Therapeutics

Inc. 2014 Global Share Option Plan.

Schedule
14A

Appendix
B File No.
001-36641

May 11, 2016

10.19* Amendment No. 2 to the Brainstorm Cell Therapeutics

8-K

Inc. 2014 Global Share Option Plan.

10.20*

Form of Incentive Stock Option Agreement under the
Brainstorm Cell Therapeutics Inc. 2014 Stock
Incentive Plan.

10.21*

Form of Nonstatutory Stock Option Agreement under
the Brainstorm Cell Therapeutics Inc. 2014 Stock
Incentive Plan.

Form 8-K

Form 8-K

November 30, 2018

November 4, 2014

November 4, 2014

Exhibit
10.2 File
No. 001-
36641

Exhibit
10.1 File
No. 001-
36641

Exhibit
10.2 File
No. 001-
36641

118

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.22*

Form of Restricted Stock Agreement under the
Brainstorm Cell Therapeutics Inc. 2014 Stock
Incentive Plan.

10.23*

Form of Option Agreement under the Brainstorm Cell
Therapeutics Inc. 2014 Global Share Option Plan.

10.24

Subscription Agreement, dated July 2, 2007, by and
between the Company and ACCBT Corp.

10.25

Amendment to Subscription Agreement, dated as of
July 31, 2009, by and between the Company and
ACCBT Corp.

10.26

Form of Common Stock Purchase Warrant issued by
the Company to ACCBT Corp.

10.27

Form of Registration Rights Agreement by and
between the Company and ACCBT Corp.

10.28

Form of Security Holders Agreement, by and between
ACCBT Corp. and certain security holders of the
Company.

10.29 Warrant Amendment Agreement, dated as of May 10,

2012, by and between Brainstorm Cell Therapeutics
Inc. and ACCBT Corp.

10.30

10.31

10.32

Amendment of Warrants dated May 19, 2014 by and
among Brainstorm Cell Therapeutics Inc., ACCBT
Corp. and ACC International Holdings Ltd.

2017 Amendment of Warrants and Subscription
Agreement dated November 2, 2017 by and among
Brainstorm Cell Therapeutics Inc., ACCBT Corp. and
ACC International Holdings Ltd.

Clinical Trial Agreement, entered into as of February
17, 2010, among Brainstorm Cell Therapeutics Ltd.,
Prof. Dimitrios Karousis and Hadasit Medical
Research Services and Development Ltd.

119

Form 8-K

Form 8-K

Form 8-K

Form 8-K

Form 8-K

Form 8-K

Form 8-K

Exhibit
10.3 File
No. 001-
36641
Exhibit
10.4 File
No. 001-
36641

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.2 File
No. 333-
61610

Exhibit
10.3 File
No. 333-
61610

Exhibit
10.4 File
No. 333-
61610

Form 10-Q Exhibit
10.1 File
No. 000-
54365

Form 10-Q Exhibit
10.4 File
No. 000-
54365
Exhibit
10.1 File
No. 001-
36641

Form 8-K

Form 10-Q Exhibit
10.1 File
No. 000-
54365

November 4, 2014

November 4, 2014

July 5, 2007

August 24, 2009

July 5, 2007

July 5, 2007

July 5, 2007

May 11, 2012

August 12, 2014

November 3, 2017

August 15, 2011

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.33

Amendment to the Clinical Trial Agreement, entered
into as of June 27, 2011, among Brainstorm Cell
Therapeutics Ltd., Prof. Dimitrios Karousis and
Hadasit Medical Research Services and Development
Ltd.

10.34* Amended and Restated Executive Director Agreement,
dated November 11, 2011, by and between the
Company and Chen Schor.

10.35* Employment Agreement dated June 6, 2014 between
Brainstorm Cell Therapeutics Ltd. and Uri Yablonka.

10.36* Restricted Stock Award Agreement under the

Brainstorm Cell Therapeutics Inc. 2014 Global Share
Option Plan, regarding July 26, 2017 grant to Chaim
Lebovits.

Form 10-Q Exhibit
10.2 File
No. 000-
54365

Form 8-
K/A

Form 8-K

Exhibit
10.1 File
No. 333-
61610

Exhibit
10.1 File
No. 000-
54365

Form 10-Q Exhibit
10.2 File
No. 001-
36641

August 15, 2011

November 16, 2011

June 9, 2014

October 17, 2017

10.37

Form of Securities Purchase Agreement.

Form 8-K

10.38

Form of Warrant.

Form 8-K

10.39

Form of Registration Rights Agreement.

Form 8-K

10.40

Form of Warrant.

Form 8-K

10.41 Warrant Exercise Agreement, dated as of January 8,

Form 8-K

2015.

10.42

Form of Warrant.

Form 8-K

10.43 Warrant Exercise Agreement.

Form 8-K

120

Exhibit
10.1 File
No. 000-
54365

Exhibit
10.2 File
No. 000-
54365
Exhibit
10.3 File
No. 000-
54365

Exhibit
4.1 File
No. 001-
36641

Exhibit
10.2 File
No. 001-
36641

Exhibit
4.1 File
No. 001-
36641

Exhibit
10.1 File

June 13, 2014

June 13, 2014

June 13, 2014

January 8, 2015

January 8, 2015

June 7, 2018

June 7, 2018

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.44

Leak-Out Agreement.

Form 8-K

No. 001-
36641

Exhibit
10.2 File
No. 001-
36641

10.45

Share Cap Agreement.

10.46* Employment Agreement dated September 28, 2015

between Brainstorm Cell Therapeutics Inc. and Chaim
Lebovits.

10.47*

First Amendment to Employment Agreement dated
March 7, 2016 between Brainstorm Cell Therapeutics
Inc. and Chaim Lebovits.

10.48*

Second Amendment to Employment Agreement dated
July 26, 2017 between the Company and Chaim
Lebovits.

10.49* Employment Agreement dated February 28, 2017
between Brainstorm Cell Therapeutics Inc. and Dr.
Ralph Kern, as amended by Amendment No. 1 dated
March 3, 2017.

10.50* Employment Agreement by and between Brainstorm
Cell Therapeutics Ltd. and Eyal Rubin, dated October
31, 2017.

June 7, 2018

July 23, 2018

September 28, 2015

Form 10-Q Exhibit
10.4 File
No. 001-
36641
Exhibit
10.1 File
No. 001-
36641

Form 8-K

Form 10-K Exhibit

March 9, 2016

10.53 File
No. 001-
36641

Form 10-Q Exhibit
10.3 File
No. 001-
36641

Form 8-K

Form 8-K

Exhibit
10.1 File
No. 001-
36641

Exhibit
10.2 File
No. 001-
36641

October 17, 2017

March 6, 2017

November 3, 2017

10.51* Restricted Stock Award Agreement under the

Form 10-K Exhibit

March 8, 2018

Brainstorm Cell Therapeutics Inc. 2014 Global Share
Option Plan, regarding November 20, 2017 grant to
Eyal Rubin.

10.45 File
No. 001-
36641

10.52* Employment Agreement by and between Brainstorm

Form 10-K Exhibit

March 29, 2019

Cell Therapeutics Inc. and Arturo Araya effective
August 28, 2018.

10.53* Brainstorm Cell Therapeutics Inc. Second Amended
and Restated Director Compensation Plan.

Form 8-K

10.52 File
No. 001-
36641

Exhibit
10.1 File
No. 001-
36641

July 10, 2014

121

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents

10.54* Brainstorm Cell Therapeutics Inc. First Amendment to
the Second Amended and Restated Director
Compensation Plan.

10.55* Brainstorm Cell Therapeutics Inc. Second Amendment
to the Second Amended and Restated Director
Compensation Plan dated February 26, 2017.

10.56* Brainstorm Cell Therapeutics Inc. Third Amendment

to the Second Amended and Restated Director
Compensation Plan.

10.57

Notice of Award - CLIN2: Partnering Opportunity for
Clinical Trial Stage Projects California Institute for
Regenerative Medicine, August 25, 2017.

10.58

Distribution Agreement, dated June 11, 2019, by and
between Brainstorm Cell Therapeutics Inc. and
Raymond James & Associates, Inc.

10.59

Form of Warrant

10.60 Warrant Exercise Agreement

Form 10-Q Exhibit
10.2 File
No. 001-
36641

May 14, 2015

Form 10-K Exhibit

March 29, 2017

10.54 File
No. 001-
36641

Form 10-Q Exhibit
10.1 File
No. 001-
36641

October 17, 2017

Form 10-K Exhibit

March 8, 2018

10.50 File
No. 001-
36641

Exhibit
1.1

Exhibit
4.1

Exhibit
10.1

Form 8-K

Form 8-K

Form 8-K

June 11, 2019

August 2, 2019

August 2, 2019

10.61* Offer letter, dated September 5, 2019, by and between

Form 10-Q Exhibit

November 14, 2019

Brainstorm Cell Therapeutics Inc. and Preetam Shah

10.62* Offer letter, dated April 1, 2020, by and between

Form 8-K

Brainstorm Cell Therapeutics Inc. and David Setboun

10.3

Exhibit
10.1

April 3, 2020

10.63*‡ Offer letter, dated May 26, 2020, by and between

Brainstorm Cell Therapeutics Inc. and Stacey
Lindborg

10.64* Third Amendment to Employment Agreement dated

Form 10-Q Exhibit

August 5, 2020

June 23, 2020 between the Company and Chaim
Lebovits.

10.1

10.65* Amendment to Employment Agreement dated June
23, 2020 between the Company and Uri Yablonka.

10.66* Offer letter, dated September 3, 2020, by and between

Form 8-K

Brainstorm Cell Therapeutics Inc. and Anthony
Waclawski

122

Form 10-Q Exhibit

August 5, 2020

10.2

Exhibit
10.1

September 3, 2020

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit
1.1

September 25, 2020

Table of Contents

10.67* Amended and Restated Distribution Agreement, dated

Form 8-K

‡

‡

‡

‡

‡‡

‡‡

‡
‡

‡

‡

‡

September 25, 2020, by and among Brainstorm Cell
Therapeutics, Inc., SVB Leerink LLC and Raymond
James & Associates, Inc.

21

Subsidiaries of the Company.

23.1

31.1

31.2

32.1

32.2

Consent of Brightman Almagor Zohar & Co., a Firm
in the Deloitte Global Network.

Certification by the Principal Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

Certification by the Principal Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

Certification of Principal Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH Inline XBRL Taxonomy Extension Document.
101.CAL Inline XBRL Taxonomy Extension Calculation

Linkbase.

101.LAB Inline XBRL Taxonomy Extension Label Linkbase

Document.

101.PRE Inline XBRL Taxonomy Extension Presentation Label

Linkbase Document.

101 DEF Inline XBRL Taxonomy Extension Definition

Linkbase Document.
Cover Page Interactive Data File (formatted in inline
XBRL with applicable taxonomy extension
information contained in Exhibits 101)
Management contract or compensatory plan or
arrangement filed in response to Item 15(a)(3) of Form
10-K.
Filed herewith.
Furnished herewith.

104

*

‡
‡‡

Item 16.         FORM 10-K SUMMARY.

Not required.

123

 
 
 
 
 
 
 
 
Table of Contents

In accordance with Section 13 or 15(d) 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.

SIGNATURES

Date: February 4, 2021

BRAINSTORM CELL THERAPEUTICS INC.

By:    /s/ Chaim Lebovits

Name: Chaim Lebovits
Title: Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature

/s/ Chaim Lebovits
Chaim Lebovits

/s/ Preetam Shah
Preetam Shah

/s/ Irit Arbel
Irit Arbel

/s/ June S. Almenoff
June S. Almenoff

/s/ Jacob Frenkel
Jacob Frenkel

/s/ Anthony Polverino
Anthony Polverino

/s/ Malcolm Taub  
Malcolm Taub

/s/ Uri Yablonka
Uri Yablonka  

/s/ Sankesh Abbhi
Sankesh Abbhi

  Title

  Chief Executive Officer

(Principal Executive Officer)

Date

February 4, 2021

  Chief Financial Officer and Treasurer

February 4, 2021

(Principal Financial and Accounting Officer)

February 4, 2021

February 4, 2021

February 4, 2021

February 4, 2021

February 4, 2021

February 4, 2021

February 4, 2021

  Director

  Director

  Director

  Director

  Director

  Director

Director

124

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXHIBIT 10.63

May 26, 2020

Stacy Lindborg

Re:  Offer of Employment

Dear Dr. Lindborg:

I am pleased to confirm an offer for you, by way of this offer letter (this “Letter”), to join BRAINSTORM CELL
THERAPEUTICS INC., a Delaware corporation (the “Company”), on a full-time basis, in the position of Executive Vice
President, Head of Global Clinical Research.  Your employment commencement date shall be June 1, 2020 (the “Effective
Date”) and shall continue until terminated pursuant to the terms hereof (collectively, the “Employment Period”).

The terms of your employment and compensation will consist of the following:

(i)         Hours Commitment: You will be expected to work those days and hours to be mutually agreed upon by the
parties  (other  than  weeks  that  include  Company  recognized  holidays  or  weeks  during  which  you  take
vacation days).  You may be required to travel in connection with your position.  Your office shall be located
at  the  Company’s  office  suite  in  New  Jersey  or  Manhattan.    Additionally,  you  agree  to  travel  to  the
Company’s other offices and to other destinations in connection with the provision of services by you as the
Company’s, including as and when you are directed to do so, from time to time, by your direct supervisor.

(ii)         Title: Executive Vice President, Head of Global Clinical Research.

(iii)       Nature of Services: You will directly report to our Chief Executive Officer, and your primary responsibilities
will  consist  of  those  listed  on  Exhibit  A  (collectively,  the  “Executive  Duties”)  or  as  may  otherwise  be
directed from time to time by your manager.

(iv)        Compensation*:

a.   In consideration of the performance of the Executive Duties, you shall be entitled to receive an annual
base  compensation  of  Three  Hundred  Seventy-Five  Thousand  U.S.  Dollars  (USD$375,000.00)  (the
“Base  Salary”),  payable  in  installments  in  accordance  with  the  general  payroll  practices  of  the
Company  in  effect  at  the  time  such  payment  is  made,  during  the  Employment  Period  (e.g.,  timing  of
payments  and  standard  employee  deductions,  such  as  income  and  employment  tax  withholdings).  No
additional compensation shall be payable to you by reason of the number of hours worked or any hours
worked on Saturdays, Sundays or holidays, by reason of special responsibilities assumed (whether on
behalf of the Company or any of its subsidiaries or affiliates), special projects completed, or otherwise.

b.    You shall be eligible to receive an annual cash bonus during the Employment Period

Confidential
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equal to 35% of the Base Salary, subject to your satisfaction of pre-established performance goals to be
mutually agreed upon by you and the Board of Directors (the “Board”) of the Company (or a committee
thereof)  each  year  during  the  Employment  Period.  Performance  shall  be  evaluated  through  a
performance  management  framework  and  a  bonus  range  based  on  the  target  bonus.   Your  bonus  for
2020 fiscal year shall be pro-rated based on the number of days you worked in fiscal year 2020.

c.    Upon the Effective Date you shall receive a one-time grant under the 2014 Stock Incentive Plan or 2014
Global Share Option Plan, as applicable, or successor plan thereto (collectively, the “Plan”) of 25,000
shares of restricted common stock of the Company (the “Restricted Stock Grant”). The Restricted Stock
Grant shall vest in full on the 31st of December 2020, provided that you remain continuously employed
by the Company. The Restricted Stock Grant shall be contingent upon your execution of one or more
restricted  stock  agreements  in  such  form  and  substance  as  may  reasonably  be  determined  by  the
Company.  In the event of your termination of employment for any reason prior to December 31, 2020,
the  Restricted  Stock  Grant  shall  automatically  be  immediately  forfeited  to  the  Company,  without  the
payment of any consideration to you.

d.   Upon the Effective Date you shall receive a one-time grant of a stock option under the Plan to purchase
up to 100,000 shares of Company common stock, at an exercise price per share equal to the fair market
value  on  the  date  of  grant,  as  determined  based  on  the  closing  price  per  share  of  Company  common
during  normal  trading  hours  on  the  Effective  Date,  according  to  Nasdaq  (the  “Option”).    The  Option
shall vest and become exercisable as follows: 50,000 of the shares underlying the Option shall vest and
become  exercisable  on  February  28,  2021  (“First  Vesting  Date”),  and  the  remaining  50,000  shares
underlying the Option shall vest and become exercisable in equal quarterly installments thereafter until
fully  vested  and  exercisable  on  the  second    anniversary  of  the  First  Vesting  Date,  provided  that  you
remain continuously employed by the Company from the date of grant through each applicable vesting
dates.  The Option shall have a ten (10) year term.  Any unvested shares underlying the Option as of the
date of your employment termination shall automatically terminate.  Unless otherwise provided in the
Plan, you shall have 90 days after termination of employment with the Company to exercise the Option
to the extent then vested. The grant of the Option is   contingent upon the prior approval of the Board or
the Compensation Committee of the Board and your execution of one or more stock option agreements
in such form and substance as may reasonably be determined by the Company, which the parties will
endeavor  to  execute  within  ten  (10)  days  from  the  Effective  Date.    Immediately  prior  to  a  Change  of
Control  (as  defined  below)  during  the  Employment  Period,  any  then  unvested  shares  underlying  the
Option shall vest and become exercisable in full.

e.    You hereby acknowledge that you are responsible for obtaining the advice of the your own tax advisors

with respect to the acquisition of the Option and Restricted Stock

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BrainStorm Cell Therapeutics Inc., 1325 Avenue of Americas, 28th Floor, New York, NY 10019
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Grant  and  are  relying  solely  on  such  advisors  and  not  on  any  statements  or  representations  of  the
Company or any of its agents with respect to the tax consequences relating thereto. You acknowledge
that you understand that you (and not the Company) shall be responsible for your tax liability that may
arise in connection with the acquisition, vesting and/or disposition of the Restricted Stock Grant and any
accrued  dividends  with  respect  thereto.  You  acknowledge  that  you  have  been  informed  of  the
availability of making an election under Section 83(b) of the Internal Revenue Code, as amended, with
respect to the issuance of the Restricted Stock Grant.

f.    Upon presentation of vouchers and similar receipts, you shall be entitled to receive reimbursement in
accordance  with  the  policies  and  procedures  of  the  Company  maintained  from  time  to  time  for  all
reasonable business expenses actually incurred in the performance of the Executive Duties.

*Subject to all mandatory withholdings required by applicable law.

(v)              Employee  Benefits:  You  shall  be  entitled  to  participate  in  such  employment  benefits,  including  but  not
limited to a Section 401(k) retirement plan, health, dental, and long term disability plans as are established
by the Company and as in effect from time to time applicable to executives of the Company.  The Company
shall  provide  health  and  dental  insurance  plans  or,  if  the  Company  is  unable  to  provide  such  plans,  the
Company will reimburse you for your health and dental insurance costs.  The Company shall not be required
to  establish,  continue  or  maintain  any  other  specific  benefits  or  benefit  plans  other  than  health  and  dental
insurance.

(vi)            Other  Employee  Benefits;  Vacation:  You  shall  be  entitled  to  those  other  employee  benefits  which  are
generally  offered 
law.
  Notwithstanding,  you  shall  also  be  entitled  to  vacation  during  each  year  of  the  Employment  Period  in
accordance with the policies and procedures of the Company maintained from time to time; provided that
you shall be entitled to 20 days of vacation per fiscal year.

the  Company’s  full-time  employees,  and  as  required  by  applicable 

to 

(vii)          No  Additional  Compensation.    Except  as  provided  herein  or  as  determined  in  the  discretion  of  the
Compensation  Committee  of  the  Board,  you  shall  not  be  entitled  to  any  other  compensation,  salary  or
bonuses for services as an employee of Company.

(viii)     Confidentiality; Work for Hire: You will be required to execute the Company’s standard Assignment, Non-
Competition, Non-Solicitation and Confidentiality Agreement on or prior to your Start Date. A copy of this
Assignment, Non-Competition, Non-Solicitation and Confidentiality Agreement has been appended to this
Letter for your review and execution.

(ix)        Termination and Consequences.

Confidential
BrainStorm Cell Therapeutics Inc., 1325 Avenue of Americas, 28th Floor, New York, NY 10019
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(a)  Notwithstanding any other provision of this Agreement to the contrary, you may terminate this Agreement at
any  time  during  the  Employment  Period,  (i)  for  Good  Reason  (as  defined  below),  or  (ii)  without  Good
Reason  on  (A)  thirty  (30)  days’  prior  written  notice  to  the  Company  through  the  first  anniversary  of  the
Effective  Date;  or  (B)  sixty  (60)  days’  prior  written  notice  following  the  first  anniversary  of  the  Effective
Date.

(b)    Notwithstanding  any  other  provision  of  this  Agreement  to  the  contrary,  the  Company  may  terminate  this

Agreement at any time during the Employment Period, upon notice to you.

(c)  If the Company terminates this Agreement or your employment hereunder without Cause or if you terminate
this Agreement or your employment hereunder with Good Reason, the Company shall: pay you, as severance
pay, an amount equal to three (3) months of your Base Salary payable in a lump sum payment within ninety
(90) days following the termination date; and (ii) pay you within thirty (30) days of the termination of your
employment  any portion of the bonus that you would otherwise be entitled to receive during the period of
employment  in  that  fiscal  year  (giving  you  credit  for  those  milestones  and  performance  goals  that  you
successfully completed through the effective termination date); and (iii) shall continue to provide to or pay
the cost of continuation of your and your eligible dependents’ health insurance benefits for three (3) months
following  termination  date.  Should  you  become  eligible  for  health  insurance  benefits  provided  by  a  new
employer,  then  the  Company’s  obligation  to  pay  for  or  reimburse  you  for  health  insurance  costs  will
terminate  when  your  new  health  insurance  benefit  begins.  Notwithstanding  anything  to  the  contrary,  no
compensation of any kind shall be payable to you under  this section unless or until you execute and deliver a
full and general waiver and release to the Company (in favor of the Company, its successors, assigns, Board
members,  officers,  employees,  affiliates,  subsidiaries,  parent  companies  and  representatives),  in  a  form
reasonably acceptable to the Company and you, such waiver and release to be delivered by you within ten
(10) days after the termination of your employment (unless applicable law requires a longer time period, in
which case this date will be extended to the minimum time required by applicable law).

(d)  If the Company terminates this Agreement or your employment hereunder with Cause or you terminate this
Agreement  or  your  employment  hereunder  without  Good  Reason,  then  (i)  your  Base  Salary  shall  be
discontinued  upon  the  termination  of  the  Agreement  or  your  employment  hereunder,  (ii)  no  bonus
compensation,  accrued  or  otherwise,  shall  be  payable  for  the  year  in  which  the  termination  with  Cause  or
without Good Reason occurs, (iii) to the extent permitted by applicable law,  you shall cease to be entitled to
participate in any benefit plans or programs maintained by the Company, and (iv) you shall forfeit all rights
to  any  Company  stock  options  if  terminated  by  the  Company  for  Cause  and  shall  forfeit  all  rights  with
respect to any Company unvested restricted stock if terminated by the Company for Cause or if terminated by
you without Good Reason. You shall be entitled to receive payment for all accrued Base Salary and benefits
earned through and including the date of termination, including, but not limited to all bonus earned, but not
yet paid, for the year preceding the year in which such termination occurs, payment for all accrued, unused
vacation,  reimbursement  of  all  business  expenses  incurred  through  the  date  of  termination,  and  all  vested
benefits to which the employee is entitled. In addition, you and your eligible

Confidential
BrainStorm Cell Therapeutics Inc., 1325 Avenue of Americas, 28th Floor, New York, NY 10019
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dependents  shall  be  entitled  to  continue  all  group  health  benefits  at  your  or  their  expense,  pursuant  to
applicable law.

(e)  If you die or are unable to perform your duties and/or any other obligations hereunder because of a Disability
(as  defined  herein)  during  the  term  of  this  Agreement,  then  the  Agreement  shall  terminate,  except  that  the
Company  shall  pay  within  thirty  (30)  days  of  such  event  all  accrued  Base  Salary  and  any  bonus  that  you
would otherwise have been entitled to receive through the date that your employment with the Company is
terminated and for a period of three (3) months thereafter. In the case of a Disability, you shall also receive
any applicable payments and benefits pursuant to any disability plan or policy sponsored or maintained by
the  Company.  The  unvested  Options  shall  remain  outstanding  in  accordance  with  their  existing  terms  and
conditions.

(f)    “Good  Reason”  means  (i)  a  material  reduction  of  your  base  salary  and  benefits  from  the  levels  in  effect
immediately prior to the reduction, (ii) a material reduction of your duties and responsibilities from those in
effect  immediately  prior  to  the  reduction,  or  (iii)  material  breach  by  the  Company  of  any  provision  of  this
Agreement after receipt of written notice thereof from the you and failure by the Company to cure the breach
within thirty (30) days thereafter. A termination by you will not be considered a termination for Good Reason
unless within thirty (30) days of the later of the last event relied upon by you to establish Good Reason or
knowledge thereof, you furnish the Company with a written statement specifying the reason or reasons why
you believe you are entitled to terminate employment for Good Reason and afford the Company at least thirty
(30) days during which to remedy the cause thereof.  Such 30 day notice period may run concurrently with
the 30 day notice specified in (ix)(a) above.  Any termination for Good Reason shall not be deemed a breach
of  the  Agreement.    If  the  Company  timely  cures  the  condition  giving  rise  to  Good  Reason  for    your
 resignation, the notice of termination shall become null and void. If the Company does not timely cure the
condition  giving  rise  to  Good  Reason,  your  termination  of  employment  shall  be  effective  as  of  the  end  of
such cure period.

(g)  “Cause” means a good faith finding by the Company of: (i) gross negligence or willful misconduct by you in
connection  with  the  your  duties,  (ii)  your  indictment  for,  conviction  of,  or  entry  of  a  plea  of  guilty  or  no
contest  or  similar  plea  with  respect  to  any  felony,  acts  of  fraud,  misrepresentation,  embezzlement,  theft,
dishonesty or breach of fiduciary duty of loyalty to the Company or any of its subsidiaries, or a material and
intentional breach of any material term of this Agreement, (iii) willful or repeated failure to follow specific
directives  of  your  manager,  the  CEO  and/or  the  Board  (or  its  committees  or  other  designees),  (iv)  willful
failure by you (except where due to Disability or where performance of  your duties is prohibited by law) or
refusal to perform the your Duties, which failure or refusal is not corrected by you within ten (10) business
days  following  receipt  by  the  you  of  written  notice  from  the  Company  of  such  failure  or  refusal,  and  the
actions required to correct the same, to the satisfaction of your manager, (v) misappropriation by you of the
assets  or  business  opportunities  of  the  Company  or  its  affiliates,  (vi)  any  intentionally  wrongful  act  or
omission by you that has a material adverse effect on the reputation or business of the Company or any of its
subsidiaries or affiliates, (vii) a willful and/or knowing breach by you of any representations or warranties
included in this Agreement, or (viii) you

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knowingly allowing any third party to commit any of the acts described in any of the preceding clause (v)
against the Company.

(h)  “Disability” means your inability  to perform  your duties pursuant to the terms of this Agreement, because
of physical or mental disability where such disability shall have existed for a period of more than ninety (90)
consecutive days in any two hundred and seventy (270) day period. The existence of a Disability means that
you cannot perform the essential functions of your position with or without reasonable accommodation. The
fact of whether or not a Disability exists hereunder shall be determined by a professionally qualified medical
expert reasonably chosen by the Company.

(x)         Special Payment Provision.  Notwithstanding any provision herein to the contrary:

a.      This  agreement  is  intended  to  comply  with  the  requirements  of  Section  409A  of  the  Code  (“Section
409A”)  and  regulations  promulgated  thereunder  such  that  no  payment  provided  hereunder  shall  be
subject to an “additional tax” within the meaning of Section 409A.  To the extent that any provision in
this agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such
a manner so that all payments due under this agreement shall not be subject to any additional tax. For
purposes  of  Section  409A,  each  payment  made  under  this  agreement  shall  be  treated  as  a  separate
payment.  In  no  event  may  you,  directly  or  indirectly,  designate  the  calendar  year  of  payment.  All
reimbursements  provided  under  this  agreement  shall  be  made  or  provided  in  accordance  with  the
requirements of section 409A, including, where applicable, the requirement that (i) any reimbursement
is  for  expenses  incurred  during  your  lifetime  (or  during  a  shorter  period  of  time  specified  in  this
agreement),  (ii)  the  amount  of  expenses  eligible  for  reimbursement  during  a  calendar  year  may  not
affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year following the year in which
the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for
another benefit.

b.   If payment or provision of any amount or other benefit that is a “deferral of compensation” subject to
section 409A of the Code at the time otherwise specified in this agreement or elsewhere would subject
such amount of benefit to additional tax pursuant to section 409A(a)(1)(B) of the Code, and if payment
or provision thereof at a later date would avoid any such additional tax, then the payment or provision
thereof shall be postponed to the earliest date on which such amount or benefit can be paid or provided
without  incurring  such  additional  tax.  In  the  event  this  Section  11(o)(ii)  requires  a  deferral  of  any
payment,  such  payment  shall  be  accumulated  and  paid  in  a  single  lump  sum  on  such  earliest  date
together  with  interest  for  the  period  of  delay,  compounded  annually,  equal  to  the  prime  rate  (as
published in The Wall Street Journal), and in effect as of the date of the payment should otherwise have
been provided.

c.   If any payment or benefit permitted or required under this agreement is reasonably determined by either
party to be subject for any reason to a material risk of additional tax pursuant to section 409A(a)(1)(B)
of the Code, then the parties shall promptly agree in good faith on appropriate provisions to avoid such
risk without materially changing the economic value of this agreement to either party.

As you are aware, you will be a full-time employee with the Company and must devote your full

Confidential
BrainStorm Cell Therapeutics Inc., 1325 Avenue of Americas, 28th Floor, New York, NY 10019
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attention  and  efforts  to  the  Company  during  regular  work  hours;  your  employment  with  the  Company  is  "at  will,"  which
means  your  employment  may  be  terminated  at  any  time  for  any  reason,  by  either  party,  with  or  without  notice;  and  this
Letter is an outline of the terms of our offer and is not intended to create a contract of employment between you and the
Company.

This Letter will be governed solely by the laws of the State of New York without giving effect to the conflict of laws
principles thereof.  You further agree to submit to the exclusive jurisdiction of the courts situated in the State of New York in
respect of any issue and/or dispute which arises hereunder and/or in connection with your employment with the Company.

By  signing  this  Letter,  you  confirm  that  you  are  not  subject  to  any  agreements  or  other  restrictions  that  would
prevent you from working for the Company and carrying out the services described above. You further confirm that your
employment with the Company will not violate or breach any confidential relationship between you and any third party, and
that you will not disclose to the Company or use for the Company’s benefit any confidential or trade secret information of
any  third  party.  You  agree  that  at  no  time  during  the  period  of  your  employment  with  the  Company  will  you  undertake
responsibilities or obligations which will present a conflict of interest with, or limit your ability to fulfill the duties of your
position with the Company.

You  are  required  by  law  to  provide  documentation  necessary  to  complete  U.S.  Government  Form  I-9.  Your
employment  will  not  commence  until  the  Company  has  received  such  materials/documentation.    In  addition,  this  offer  is
contingent on verification of the information you have provided on your employment application and in your job interview.

We look forward to having you join the Brainstorm team, and we are confident that you’ll contribute to its overall

success.  If you should have any questions, please feel free to contact me at your earliest convenience.

    Sincerely,

BRAINSTORM CELL THERAPEUTICS INC.

By:
Name: Chaim Lebovits
Title: Chief Executive Officer

ACKNOWLEDGED AND AGREED
AS OF THE DATE SET FORTH BELOW:

By:
Name: Stacy Lindborg
Title:

In her individual capacity

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EXHIBIT A

Executive Duties and Responsiblities

Title: Executive Vice President, Head of Global Clinical Research

·  Drive  the  creation  of  clinical  development  strategies  from  first-in-human  (FIH)  through  registration  –  including  framing
innovative  development  paths  and  identifying  the  best  opportunities,  ensuring  evidence  is  generated  as  required  by  key
constituents (scientific community, regulatory, commercial/payer) and resourcing them adequately so they can be realized.  

· Oversee execution of clinical development strategy, biometrics, regulatory, and other related functions as needed.  Contribute to
effective  practices  and  a  culture  that  will  ensure  high  quality  and  regulatory  compliance  while  maintaining  high  integrity  and
ethical standards.

· Drive an analytics strategy that is fit-for-purpose and leverages quantitative approaches to optimize allocation of capital across
global clinical development opportunities.

· Serve as a member of the Executive Leadership team, contributing to overall corporate strategy, including but not limited to: long
term business model, M&A, business development strategy and outreach, HR, and culture.

·  Establish  and  maintain  relationships  and  serve  as  a  liaison  between  the  Company  and  its  external  scientific  advisors,  public
media, and the investment community in support of global development efforts.

· Identify opportunities and lead new global clinical development collaborations to gain access to key capabilities.

Confidential
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ASSIGNMENT, NON-COMPETITION, NON-SOLICITATION
AND CONFIDENTIALITY AGREEMENT

This Assignment, Non-Competition, Non-Solicitation and Confidentiality Agreement (this “Agreement”) is hereby
effective  as  of  June  1,  2020.  As  a  condition  of  my  employment  with  BRAINSTORM  CELL  THERAPEUTICS  INC.,  its
subsidiaries, affiliates, successors or assigns (collectively, the "Company"), and in consideration of my employment with the
Company and my receipt of the compensation now and hereinafter paid to me by the Company, I, the undersigned, agree to
the following:

1.

At-Will  Employment.    I  understand  and  acknowledge  that,  unless  I  enter  into  a  written  employment
agreement  with  the  Company  my  employment  with  the  Company  is  for  an  unspecified  duration  and
constitutes "at-will" employment.  I also understand that any representation to the contrary is unauthorized
and  not  valid  unless  obtained  in  writing  and  signed  by  an  authorized  representative  of  the  Company.    I
acknowledge that this employment relationship may be terminated at any time, with or without good cause
or for any or no cause, at the option either of the Company or me, with or without notice.

2.          Confidential Information.

2.1       Company Information.  I recognize that the Company has devoted substantial money, time and resources in
developing Confidential Information, and that the Company pays its employees, among other things, to develop and preserve
its  business  information.   Accordingly,  I  agree  at  all  times  during  the  term  of  my  employment  and  thereafter,  to  hold  in
strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation
without written authorization of an authorized representative of the Company, any Confidential Information of the Company.
  I  understand  that  "Confidential  Information"  means  any  Company  technology  or  economic  competitively  valuable
proprietary information, technical data, patients advocacy strategies, communications relating to patients (both internal and
external), trade secrets or know-how, including, but not limited to, research, product plans, company business or working
plans, products, Public Relations & Investor Relation strategies or communications, pricing and pricing methods, services,
customer lists and customers (including, but not limited to, prospective and actual customers of the Company on whom I
called or with whom I became acquainted during the term of my employment), markets, software, developments, inventions,
processes,  technology,  designs,  drawings,  models,  engineering,  marketing,  finances,  employee  compensation  data  or  other
business  information  disclosed  to  me  by  the  Company  either  directly  or  indirectly  in  writing,  orally  or  by  drawings  or
observation  of  parts  or  equipment.    In  addition,  I  agree  not  to  do  any  of  the  following:  (a)  disclose  or  disseminate
Confidential Information to anyone, including any Company employee or volunteer, who lacks a need to know; (b) remove
proprietary information from the Company's premises without the express written authorization from Company; and (c) use
the Confidential Information for my own or any third party's benefit.  I further understand that Confidential Information does
not  include  any  of  the  foregoing  items  which  have  become  publicly  known  and  made  generally  available  through  no
wrongful  act  of  mine  or  of  others  who  were  under  confidentiality  obligations  as  to  the  item  or  items  involved  or
improvements or new versions thereof.

2.2            Former  Employer  Information.    I  agree  that  I  will  not,  during  my  employment  with  the  Company,
improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person
or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information
belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

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2.3        Third Party Information.  I recognize that the Company has received and in the future will receive from
third  parties  their  confidential  or  proprietary  information  subject  to  a  duty  on  the  Company's  part  to  maintain  the
confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except
as necessary in carrying out my work for the Company consistent with the Company's agreement with such third party.

2.4        Governmental Limitations.  Nothing set forth in the Agreement or in any other agreement or policy of the
Company  shall  prohibit  any  person  from  reporting  possible  violations  of  federal  or  state  law  or  regulation  to  any
governmental  agency  or  entity,  including  but  not  limited  to  the  Department  of  Justice,  the  Securities  and  Exchange
Commission,  the  Congress,  and  any  agency  Inspector  General,  or  making  other  disclosures  that  are  protected  under  the
whistleblower  provisions  of  federal  or  state  law  or  regulation.  No  person  shall  require  prior  authorization  of  any  party  to
make any such reports or disclosures, and no person shall be required to notify the Company that he or she has made such
reports  or  disclosures.    Furthermore,  nothing  in  the  Agreement  shall  prohibit  or  limit  a  person  from  receiving  a
whistleblower award or other financial benefit for participating in a government investigation.

3.          Inventions.

3.1        Assignment of Inventions.  I agree that I will promptly make full written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right,
title, and interest in and to: (a) any and all inventions, developments, concepts, designs, discoveries, ideas, patents, patent
applications,  improvements,  and  all  other  worldwide  rights  of  inventorship;  (b)  all  copyrights  in  copyrightable  works,  all
copyright  registrations  and/or  applications,  all  original  works  of  authorship,  any  derivations  thereof  and  all  moral  rights
appurtenant  thereto;    (c)  all  trademarks,  service  marks,  trade  names,  trade  dress,  product  names  and  slogans  and  any
common law rights and good will appurtenant thereto, and all applications and registrations thereof; (d) all registered and
unregistered domain names, uniform resource locators and keywords; (e) all computer and electronic data, documentation
and  software,  including  both  source  and  object  code,  computer  and  database  applications  and  operating  programs;  (f)  all
trade  secrets  and  Confidential  Information,  including  ideas,  research  notes,  client  lists,  development  notes,  know-how,
formulas, business methods and techniques and marketing, financial and pricing data; and (g) all other intellectual property
rights  relating  to  any  or  all  of  the  foregoing,  including  any  renewals,  continuations  or  extensions  thereof,  whether  or  not
patentable or registrable under copyright, trademark or similar laws (collectively hereinafter, the "Inventions"), which I may
solely  or  jointly  conceive  or  develop  or  reduce  to  practice,  or  cause  to  be  conceived  or  developed  or  reduced  to  practice,
during the period of time I am in the employ of the Company.  I further acknowledge that all original works of authorship, as
mentioned  in  this  Section  3,  which  are  or  have  been  made  by  me  (solely  or  jointly  with  others)  within  the  scope  of  and
during the period of my employment with the Company and which are protectible by copyright, patent and/or trademark are
"works made for hire," as that term is defined in the United States Copyright Act. I understand and agree that the decision
whether  or  not  to  commercialize  or  market  any  Invention  developed  by  me  solely  or  jointly  with  others  is  within  the
Company's  sole  discretion  and  for  the  Company's  sole  benefit  and  that  no  royalty  will  be  due  to  me  as  a  result  of  the
Company's efforts to commercialize or market any such Invention.

3.2                Maintenance  of  Records.    I  agree  to  keep  and  maintain  adequate  and  current  written  records  of  all
Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records
will be in the form of notes, sketches, drawings, and any other format that

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may be specified by the Company. The records will be deemed Confidential Information and will be available to and remain
the sole property of the Company at all times.

3.3        Patent, Copyright and Trademark Registrations.  I agree to assist the Company, or its designee, at the
Company's expense, in every proper way to secure the Company's rights in the Inventions and any copyrights, trademarks,
patents,  mask  work  rights  or  other  intellectual  property  rights  relating  thereto  in  any  and  all  countries,  including  the
disclosure  to  the  Company  of  all  pertinent  information  and  data  with  respect  thereto,  the  execution  of  all  applications,
specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for
and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and
exclusive rights, title and interest in and to such Inventions, and any copyrights, trademarks, patents, mask work rights or
other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when
it  is  in  my  power  to  do  so,  any  such  instrument  or  papers  shall  continue  after  the  termination  of  this  Agreement.  If  the
Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for
or  to  pursue  any  application  for  any  United  States  or  foreign  patents  or  copyright  registrations  covering  Inventions  or
original  works  of  authorship  assigned  to  the  Company  as  above,  then  I  hereby  irrevocably  designate  and  appoint  the
Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead
to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of
patent,  trademark,  copyright  or  other  intellectual  property  registrations  thereon  with  the  same  legal  force  and  effect  as  if
executed by me.

4.                    Solicitation  of  Customers.    I  recognize  that  the  Company  pays  its  employees,  among  other  things,  to
develop and preserve customer and client goodwill, customer loyalty and customer and client contacts for and on behalf of
the Company.  Accordingly, for the period of twelve (12) months after the date of termination of my employment with the
Company  for  any  reason,  whether  with  or  without  cause,  I  will  not  solicit  the  business  of  any  client  or  customer  of  the
Company, directly or indirectly, who is such on or prior to the date of such termination. In addition, I will not solicit the
business  of  any  defined  prospective  client  or  customer.    A  defined  prospective  client  or  customer  is  one  that  is  (a)  an
assigned account of any Company employee or (b) on an account list in any employee's sales or pipeline report within the
last year from the termination date.  I expressly agree that the limitation of this Section protects a legitimate business interest
of the Company.  Nevertheless, in the event that any of the restrictions and limitations contained in this Section are deemed
unreasonable or to otherwise exceed the time and/or geographic limitations permitted by applicable law, such provisions of
this Section shall be reformed to the maximum time and/or geographic limitations permitted by applicable law.

5.          Conflicting Employment.  I agree that, during the term of my employment with the Company and for a
period of three (3)  months after the date of termination of my employment with the Company for any reason, whether with
or with cause, I will not engage in any other employment, occupation, consulting or other business activity directly related to
the  business  in  which  the  Company  is  now  involved  or  becomes  involved  during  the  term  of  my  employment,  nor  will  I
engage in any other activities that conflict with my obligations to the Company. I expressly agree that the limitation of this
Section protects a legitimate business interest of the Company.  Nevertheless, in the event that any of the restrictions and
limitations contained in this Section are deemed unreasonable or to otherwise exceed the time and/or geographic limitations
permitted  by  applicable  law,  such  provisions  of  this  Section  shall  be  reformed  to  the  maximum  time  and/or  geographic
limitations  permitted  by  applicable  law.    Further,  the  non-competition  provision  in  this  Section  shall  not  apply  to
employment and other statuses set forth in

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this Section in any other jurisdiction in which they are prohibited.  The remainder of this Agreement shall apply within and
outside of such jurisdictions.

6.          Returning Company Property.  I agree that, at the time of leaving the employ of the Company, I will
deliver  and  return  to  the  Company  (and  will  not  keep  in  my  possession,  recreate  or  deliver  to  anyone  else)  any  and  all
Company-owned  devices,  records,  data,  files,  notes,  reports,  proposals,  lists,  correspondence,  specifications,  drawings,
blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the aforementioned items
developed by me or in my possession, including, without limitation, those records maintained pursuant to paragraph 3.3.

7.         Notification of New Employer.  In the event that I leave the employ of the Company, I hereby grant to the

Company the right to notify my new employer about my rights and obligations under this Agreement.

8.                    Solicitation  of  Employees.    I  agree  that  for  a  period  of  twelve  (12)  months  immediately  following  the
termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or
indirectly  solicit,  induce,  recruit,  hire,  offer  employment  or  encourage  any  of  the  Company's  employees,  independent
contractors  or  vendors  to  leave  their  employment  /  engagement,  either  for  myself  or  for  any  other  person  or  entity.    I
expressly agree that the limitation of this Section protects a legitimate business interest of the Company.  Nevertheless, in the
event that any of the restrictions and limitations contained in this Section are deemed unreasonable or to otherwise exceed
the time and/or geographic limitations permitted by applicable law, such provisions of this Section shall be reformed to the
maximum time and/or geographic limitations permitted by applicable law.

9.          Representations.  I agree to execute any proper oath or verify any proper document required to carry out
the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any prior
agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment
by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict with this
Agreement.

10.       Equitable Relief.  I acknowledge and agree that it is impossible to measure in money the damages which
will accrue to the Company if I should breach or be in default of any of my representations or agreements set forth in this
Agreement.  Accordingly, if I breach or am in default of any such representations or agreements, the Company shall have the
full right to seek injunctive relief, in addition to any other existing rights provided in this Agreement or by operation of law,
without the requirement of posting bond.  If any action or proceeding is instituted by or on behalf of the Company to enforce
any term of this Agreement, I hereby waive any claim or defense thereto that the Company has an adequate remedy at law or
that the Company has not been, or is not being, irreparably injured by my breach or default.  The rights and remedies of the
Company  pursuant  to  this  Section  are  cumulative,  in  addition  to,  and  shall  not  be  deemed  to  exclude,  any  other  right  or
remedy which the Company may have pursuant to this Agreement or otherwise, at law or in equity.

11.        Governing Law; Venue.  This Agreement will be governed solely by the laws of the State of New York
without giving effect to the conflict of laws principles thereof.  I further agree to submit to the exclusive jurisdiction of the
courts situated in the State of New York in respect of any issue and/or dispute which arises hereunder.

12.                Entire  Agreement.    This  Agreement  sets  forth  the  entire  agreement  and  understanding  between  the

Company and me relating to the subject matter herein and supersedes all prior discussions

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between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be
effective  unless  in  writing  signed  by  the  party  to  be  charged.  Any  subsequent  change  or  changes  in  my  duties,  salary  or
compensation will not affect the validity or scope of this Agreement.

13.        Full Knowledge and Volition.  I acknowledge and agree that I have received a copy of this Agreement, that
I  have  read  and  understood  all  of  the  terms  and  conditions  of  this  Agreement,  and  that  I  have  had  full  opportunity  to  be
advised of my right and to discuss all aspects of this Agreement with counsel of my own choosing prior to execution hereof.

14.                  Severability.    If  one  or  more  of  the  provisions  in  this  Agreement  are  deemed  void  by  law,  then  the

remaining provisions will continue in full force and effect.

15.        Waiver.  No course of dealing or omission on the party of the Company in asserting or exercising any right,
power or remedy conferred by this Agreement shall constitute or operate as a waiver thereof or otherwise prejudice its rights,
powers and remedies conferred by this Agreement or shall preclude any other or further exercise thereof of any other right,
power and remedy.

16.       Successors  and  Assigns.    This  Agreement  will  be  binding  upon  my  heirs,  executors,  administrators  and

other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

17.        Attorney’s Fees.  Should I be found liable for any action taken to enforce this Agreement, I will reimburse

the Company for all reasonable attorney’s fees and court costs.

18.            Waiver.    No  act  or  failure  to  act  by  Company  waives  any  rights  herein.   To  be  effective,  any  waiver  by

Company must be in writing and executed by an executive officer of the Company.

19.       Headings.  Section and other headings contained in this Agreement are for reference purposes only and are

not intended to describe, interpret, define or limit the scope or intent of this Agreement or any provision hereof.

20.                Counterparts.    This  Agreement  may  be  executed  in  one  or  more  counterparts  each  of  which  shall  be

deemed one in the same original instrument.

Signature Page Follows

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BRAINSTORM CELL THERAPEUTICS INC.

By:
Name: Chaim Lebovits
Title:

Chief Executive Officer and President

EMPLOYEE

By:
Name:
Title:

Stacy Lindborg
In her individual capacity

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Subsidiaries of Brainstorm Cell Therapeutics Inc.

Subsidiary
BrainStorm Cell Therapeutics Ltd.
Advanced Cell Therapies Ltd.*
BrainStorm Cell Therapeutics UK Ltd.*
Brainstorm Cell Therapeutics Limited*

     Jurisdiction of Incorporation

Israel
Israel

  United Kingdom

Ireland

* Wholly owned subsidiary of BrainStorm Cell Therapeutics Ltd.

EXHIBIT 21

 
 
 
Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We  consent  to  the  incorporation  by  reference  in  Registration  Statement  No.  333-201704,  333-201705,    333-225517,  333-225995  and
333-233349 on Form S-3 and Registration Statement Nos. 333- 333-131880, 333-168763, 333-175460, 333-182546, 333-198391, 333-
213714  and  333-228981  on  Form  S-8  of  our  report  dated  February  4,  2021,  relating  to  the  financial  statements  of  Brainstorm  Cell
Therapeutics Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2020

Brightman Almagor Zohar & Co.
Certified Public Accountants
A Firm in the Deloitte Global Network

Tel Aviv, Israel
February 4, 2021

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.

EXHIBIT 31.1

I, Chaim Lebovits, certify that:

1. I have reviewed this Annual Report on Form 10-K of Brainstorm Cell Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.

February 4, 2021

Name:
Title:

      /s/ Chaim Lebovits
Chaim Lebovits
President and Chief Executive Officer (Principal
Executive Officer)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.

EXHIBIT 31.2

I, Preetam Shah, certify that:

1. I have reviewed this Annual Report on Form 10-K of Brainstorm Cell Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.

February 4, 2021

/s/ Preetam Shah

Name: Preetam Shah
Title: Chief Financial Officer (Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

In connection with the accompanying Annual Report on Form 10-K of Brainstorm Cell Therapeutics Inc.(the “Company”) for the year
ended December 31, 2020, the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:

(1) such Annual Report on Form 10-K for the year ended December 31, 2020 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Annual Report on Form 10-K for the year ended December 31, 2020 fairly presents, in all material
respects, the financial condition and results of operations of the Company.

February 4, 2021   

/s/ Chaim Lebovits

Name: Chaim Lebovits
Title: President and Chief Executive Officer
(Principal Executive Officer)

 
 
 
EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

In connection with the accompanying Annual Report on Form 10-K of Brainstorm Cell Therapeutics Inc.(the “Company”) for the year
ended December 31, 2020 the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) such Annual Report on Form 10-K for the year ended December 31, 2020 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Annual Report on Form 10-K for the year ended December 31, 2020 fairly presents, in all material
respects, the financial condition and results of operations of the Company.

February 4, 2021  

/s/ Preetam Shah

Name: Preetam Shah
Title: Chief Financial Officer

(Principal Financial Officer)