Note 11 – Commitments and Contingencies

Yeda Research and License Agreement

On October 3, 2011, the Company entered into a Research and License Agreement (the “Agreement”) with Yeda Research and Development Company Limited (“Yeda”) for Veto Cell technology and an exclusive option to negotiate an additional license for organ regeneration technology. Yeda is the technology transfer and commercial arm of the Weizmann Institute, for research conducted at the Weizmann Institute for an invention comprising methods of bone marrow transplantation and cell therapy utilizing Veto Cells. As Yeda is a founder and a significant shareholder of the Company, it is a related party. If the Company fails to achieve any of the milestones by the dates set forth in the Agreement, Yeda is entitled to terminate the license upon written notice to the Company. In December 2021, the Company and Yeda amended the agreement to extend the next milestone to January 1, 2025. To date, the Company has been deemed to have met all of the milestones. Either Yeda or the Company may terminate the agreement and the license after the commitment of a material breach by the other party and in certain other instances as detailed in the agreement. The Company paid no consideration to Yeda during the years ended December 31, 2024 and 2023.

During the years ended December 31, 2024 and 2023, the Company recorded research and development expenses of $58,000 related to the Agreement. As of December 31, 2024 and 2023, the Company had $130,500 and $72,500, respectively, of accrued research and development expenses pursuant to the Agreement with Yeda, which are included within accrued expenses-related parties on the consolidated balance sheets.

MD Anderson Sponsored Research Agreements

In October 2021, the Sponsored Research Agreement with The University of Texas M.D. Anderson Cancer Center (“MD Anderson”) dated November 2018 was amended to extend the agreement by one year to November 27, 2022 and define the budget during such one-year period to be approximately $1,300,000. On November 15, 2022 the Company and MD Anderson agreed to extend the Sponsored Research Agreement by one year to November 27, 2023. Under the amendment, the research budget for the additional year is approximately $1,300,000. On November 6, 2023, the Company and MD Anderson agreed to extend the Sponsored Research Agreement by one year to November 27, 2024. Under the amendment, the research budget for the additional year is approximately $1,296,000. Subsequent to December 31, 2024, the Company and MD Anderson agreed to extend the Sponsored Research Agreement by three months to May 27, 2025. Under the amendment, the research budget for the additional three months is $327,000. The Agreement was then amended by three additional months to August 31, 2025. Under the amendment, the research budget for the additional three months is $296,000. The Agreement has since been amended through March 31, 2026, as if the previous term had never expired.

The Company recognized $1,759,872 and $1,406,193 of research and development expenses during the years ended December 31, 2024 and 2023, respectively, associated with services provided by MD Anderson, under the two agreements dated November 2018 and February 2019. As of December 31, 2024, the Company had $16,545 of accrued research and development expenses pursuant to the agreements with MD Anderson and $1,189,372 of accounts payable due pursuant to the agreements with MD Anderson, which is included within accounts payable on the consolidated balance sheets.

Litigation

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed.

CELL SOURCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In January 2019, the holder of a promissory note in the principal amount of $250,000 due on March 16, 2016 instituted a collection action in the Supreme Court of the State of New York, County of New York. On June 12, 2019, the plaintiff served a motion for summary judgment through the Secretary of State which was heard on July 12, 2019 and granted. The Company contended that it was not given sufficient notice under the applicable statute and did not have an opportunity to oppose the motion. Judgment was entered in October 2019 in the amount of $267,680. The Company brought a motion to vacate based on the jurisdictional defect of the motion in not providing the required amount of time, but that motion was denied in February 2021 without properly addressing the jurisdictional issues raised by the Company. The Company appealed the denial and then filed a motion to Renew and Reargue the motion to vacate based on the Court’s failure to address critical issues. That motion was also denied on April 15, 2021 without addressing the Company’s arguments. The Company appealed the second denial as well and pursued both appeals in a consolidated manner so as to resolve all issues together. Each of the appeals was denied and there is no further opportunity to appeal. While the Company’s motions were pending, the plaintiff commenced steps to collect judgment. During the year ended December 31, 2021, $103,088 of a $250,000 deposit made with the court by a third party on behalf of the Company was released to an officer of the court and has been accounted for as partial note repayment, with an additional $146,912 due under the note repaid by a release of the remaining deposit to an officer of the court during the year ended December 31, 2022, which was also accounted for as a note repayment. In August 2023, a supplemental judgment of $38,838 was entered against the Company. Inasmuch, as there were no further opportunities to appeal, in June 2024, the Company resolved this matter by making a final payment of $135,000 and the plaintiff agreed to cease the pursuit of additional sanctions against the Company and filed a satisfaction of judgment.

In August 2022, a holder of 360,000 shares of the Company’s common stock filed a complaint against the Company, its President and legal counsel in the United States District Court, Southern District of New York, claiming unspecified damages for an alleged wrongful refusal to authorize the Company’s transfer agent to remove restrictive legends from the shares held by the shareholder. The complaints against the Company’s legal counsel and President were dismissed by the Court. Effective December 29, 2023, the parties reached a settlement agreement whereby the Company, in exchange for the dismissal with prejudice of the claims made by the plaintiff against the Company, agreed to (i) cause the Company’s transfer agent to remove the restrictive legend on the shares held by the plaintiff and (ii) issue the following securities to the plaintiff: 180,000 shares of its common stock (which was issued subsequent to December 31, 2023), a warrant to purchase 180,000 shares of its common stock at an exercise price of $0.75 per share and a convertible promissory note in the principal amount of $50,000. The Company recorded a loss on legal settlement of $142,600 during 2023 in connection with this matter on the consolidated statement of operations.

See Note 8, Notes Payable for details associated with the issuance of the convertible note payable in connection with the settlement.

Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Aside from the matters discussed above, there are no other known contingencies through the date of this filing.