BRAINSTORM CELL THERAPEUTICS INC.

Item 1A. Risk Factors.

Other than the additional risk factors below, there have not been any material changes from the risk factors previously disclosed in the Risk Factors section of our Annual Report on Form 10 - K for the fiscal year ended December 31, 2024.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in this Quarterly Report on Form 10-Q, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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We recently transferred the trading of our common stock from The Nasdaq Stock Market to the Our business may TCQB Venture Market after our common stock was delisted from The Nasdaq. Because our common stock is quoted on the OTCQB Venture Market, your ability to sell your shares in the secondary trading market may be limited.

On July 17, 2025, the Company announced that it has received a delisting notification from The Nasdaq, informing the company that its common stock will be impacted by macroeconomic conditions, including fears concerning inflation, rising interest rates and delisted from the Nasdaq Capital Market. Trading of our common stock on Nasdaq was suspended at the open of trading on July 18, 2025.The delisting is a result of our non-compliance with Nasdaq Listing Rule 5550(b)(1), pertaining to its minimum shareholder equity requirement. The Companys shares started trading on the OTCQB Venture Market, a U.S. trading platform operated by OTC Markets Group, under the same symbol, BCLI, beginning at the open of trading on July 18, 2025.

As a result of the transfer of the our common stock from Nasdaq to the OTCQB Venture Market, we anticipate that our stockholders could experience negative consequences related to our securities, including but not limited to: limited availability of market quotations for our securities; a reduced level of trading activity in the secondary trading market for shares of our common stock; a limited amount of analyst coverage; and decreased ability to issue additional securities or obtain additional financing in the future.

Because our common stock is quoted on the OTCQB Venture Market, your ability to sell your shares in the secondary trading market may be limited. Since July 18, 2025, the OTCQB Venture Marke is the only liquidity platform for our common stock. We cannot assure our stockholders that our common stock will continue to trade on this liquidity platform, whether broker-dealers will continue to provide public quotes of our common stock on this liquidity platform, whether the trading volume of our common stock will be sufficient to provide for respective efficient liquidity platforms or whether quotes for our common stock will continue on this liquidity platform in the future, which could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our common stock. As a result, prices for shares of our common stock may be lower than might otherwise prevail if our common stock was listed on a national securities exchange.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered securities. Shares of our common stock were considered to be covered securities because they were listed on the Nasdaq Capital Markets. Because our common stock is no longer listed on the Nasdaq Capital Market, our common stock is not deemed covered securities and we are subject to regulation in each state in which we offer our securities.

Our business may be impacted by macroeconomic conditions, including fears concerning inflation, rising interest rates and volatile market conditions (including as a result of recently announced tariffs or other policy changes by the current U.S. administration), and other uncertainties beyond our control.

Our ability to effectively run our business could be adversely affected by general conditions in the global economy and in the financial services industry. Various macroeconomic factors could adversely affect our business, including fears concerning the banking sector, changes in inflation, interest rates and overall economic conditions and uncertainties (including as a result of recently announced tariffs or other policy changes by the current U.S. administration). Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. A severe or prolonged economic downturn could result in a variety of risks, including our ability to raise additional funding on a timely basis or on acceptable terms. A weak or declining economy could also impact third parties upon whom we depend to run our business. Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general. Moreover, significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations. Changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, in April 2025, the U.S. imposed substantial tariffs on most countries throughout the world. Historically, tariffs have led to increased political and trade tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition or results of operations.

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We Have Incurred Unsecured Indebtedness That Could Adversely Affect Our Financial Condition and Results of Operations.

Between November 2024 and March 2025, we entered into several unsecured short-term loan agreements with third-party lenders in an aggregate principal amount of approximately $1.2 million to finance our working capital. As of the date of this report, we have repaid approximately $300,000 o1.1 million of the principal amount, and approximately $9100,000 in principal remains outstanding. While the proceeds of these loans provide us with additional working capital, the incurrence of indebtedness increases our financial obligations and requires us to dedicate a portion of our cash resources to the payment of principal and interest. Our ability to make payments on this indebtedness will depend on our future financial performance, which is subject to various risks and uncertainties, including those discussed elsewhere in this report. If we are unable to secure sufficient cash flows to service our debt obligations, our business, financial condition, and results of operations could be adversely affected.

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We have identified a material weakness in our system of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to fully not remediated, this material weakness, or if we experience additional could result in material weaknesses in the future or otherwise fail to maintain effective internalmisstatements in our control oversolidated financial reporting in the future, wstatements. We may not be unable to accurately or timely report our financialdevelop, implement and maintain appropriate condition or results of otrols in future perationiods.

Our management identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Our management has concluded that, because of this material weakness, our internal control over financial reporting was not effective as of March 31June 30, 2025. These operational deficiencies related to the Companys reviews and approvals of the execution of certain short term loan agreements. As a result of the material weakness, the Companys management, under the supervision of the Audit Committee and with the participation of the Companys Chief Executive Officer and interim Chief Financial Officer, concluded that the Companys internal control over financial reporting was not effective as of March 31June 30, 2025.

The Company has developed and adopted a Although we are working to remediation plan to addrey the ineffectiveness of the identified material weakness, andCompanys internal control over financial reporting, there can be no assurance as part of to when the remediation plan, has adopt will be fully developed a short-term loan approval policy. Any actions we have taken ond implemented. Until our remediation plan is fully implemented, our may taknagement will continue to remediate the identdevote signified material weakness are subjectcant time, attention and financial resources to continued management review supported by testing, as well as oversight by the Audit Committee. We cannot assure you thatthese efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, the measures we have takenre will continue to date,be and ar increased risk that our future continuing to implsolidated financial statement, will be sufficient to remediates could contain errors the material weaknesses we have identified or avoid poteat will be undetected. Further and contial future manued deterial weaknesses. If the steps we take do not correct the minations that there are one or more material weaknesses in a timely manner, the effectiveness of the accuracy and timing of ouCompanys internal control over financial reporting could be materially adversely affected and we will be unable toalso reduce our ability to obtain financing or concludeuld increase that we maintain effective intere cost of any financing we obtain and require additional control over financialexpenditures of both money and our managements time to comply with applicable reportingquirements. For more information relating to the Companys internal control over financial reporting, the material weakness that existed as of March 31June 30, 2025 and the remediation activities undertaken by us, see Part I, Item 4, Controls and Procedures of this Quarterly Report on Form 10-Q.