You should read the following discussion and analysis of our financial condition and results of operations together with the section titled “Item 3.A.-Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 20-F. This discussion and other parts of this Annual Report on Form 20-F contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in these forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Item 3.D.-Risk Factors” and elsewhere in this Annual Report in Form 20-F. Overview We are a regenerative and aesthetic medicine company focused on medical aesthetics and 3D bioprinting of tissues and organs. Our products are based on our recombinant human collagen (rhCollagen) that is produced with our proprietary plant based genetic engineering technology. These products address indications for the diverse fields of tissue repair, aesthetics and organ manufacturing, and are ushering in a new era in regenerative and aesthetic medicine. We are in collaboration with AbbVie under the AbbVie Development Agreement, pursuant to which dermal and soft tissue filler products are being developed by AbbVie for commercialization in the medical aesthetics market, using our rhCollagen technology and AbbVie’s technology. Our collaborations also include, among others, STEMCELL, the Advanced Regenerative Manufacturing Institute, Stratasys and the RegenMed Development Organization. We are developing a regenerative photocurable dermal soft tissue filler composed of rhCollagen and Hyaluronic Acid. Beyond lifting of the skin, the filler is also designed to enable tissue regeneration and improved contouring. We believe our rhCollagen bioink product line is ideal for 3D bioprinting of tissues and organs. We are developing 3D bioprinted breast implants for regeneration of breast tissue, aim to provide a revolutionary alternative to the current practices. The implants in development are printed and loaded with compositions that are based on rhCollagen and other components. These implants are intended to promote tissue regeneration and degrade in synchronization with the development of a natural breast tissue. In recent years, we have financed our operations primarily with revenues from sales of our products, license of our technology and development milestone achievement payments from business partners, as well as from net proceeds from private and public offerings on Nasdaq. Prior to this, we financed our operations primarily from public offerings of our securities on the TASE, participation of business partners in product development collaborations, and government grants from the IIA. Financial Operations Overview Revenues Our ability to generate significant revenues will depend on the successful commercialization of our rhCollagen-based and bioink products, our strategic partners successful commercialization of the dermal filler product that is in a clinical phase, and on our ability to establish and maintain business collaborations with leading companies for 3D bioprinting of organs and tissues, and for medical aesthetics. In the year ended December 31, 2025, we generated revenues of approximately $2.4 million, mainly attributable to a development milestone achievement relating to the dermal filler product candidate, which triggered a $2 million payment from AbbVie to CollPlant according to the AbbVie Development Agreement. Our revenues are recorded in the amount of consideration to which we expect to be entitled in exchange for performance obligations upon transfer of control to the customer. 87 Cost of Revenues Cost of revenues in our proprietary products and services includes expenses for the manufacturing of products such as raw materials, payroll, utilities, laboratory costs, share-based compensation and depreciation. Cost of revenue also includes royalties to the IIA and provisions for the costs associated with manufacturing scraps and inventory write offs. Our balance sheet liabilities include current obligations regarding royalties that we are obligated to pay to the IIA based on sales of our products for the second half of the year, which were paid in February 2026. Our cost of revenues include royalties expenses regarding royalties on our sales to the IIA. For more information, see “Item 3.D. Risk Factors-Risks Related to Our Financial Condition and Capital Requirements-The IIA grants we have received in the past for research and development expenditures may restrict our ability to manufacture products and transfer know-how outside of Israel and require us to satisfy specified conditions,” and Note 6 in our consolidated financial statements for the year ended December 31, 2025. Operating Expenses Research and Development Expenses Research and development expenses consist of costs incurred for the development of our rhCollagen-based products. Those expenses include: ● employee-related expenses, including salaries and share-based compensation expenses for employees in research and development functions; ● expenses incurred in operating our laboratories; ● expenses incurred under agreements with CROs and investigative sites that conduct our pre-clinical trials; ● expenses relating to outsourced and contracted services, such as external laboratories, consulting, and advisory services; ● supply, development, and manufacturing costs relating to clinical trial materials; ● maintenance of facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and insurance, net of expenses capitalized to inventory; and ● costs associated with preclinical and clinical activities. Research and development activities are the primary focus of our business. Products in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to be significant in absolute dollars in future periods as we continue to invest in research and development activities related to the development of our products. Our total research and development expenses for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 were $8.2 million, $10.5 million and $10.5 million, respectively. We did not apply for grants from the IIA since 2019 and we have charged all research and development expenses to operations as they are incurred. There are numerous factors associated with the successful commercialization of any of our products, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time. Additionally, future commercial and regulatory factors beyond our control will affect our clinical development programs and plans. 88 General, Administrative, and Marketing Expenses Our general and administrative expenses consist principally of: ● employee-related expenses, including salaries, benefits, and related expenses, including share-based compensation expenses; ● legal and professional fees for auditors, investor relations, and other consulting expenses not related to research and development activities; ● cost of offices, communication, and office expenses; ● information technology expenses; ● business development and marketing activities; ● Stock exchange fees and related services; and ● Board members related expenses, including fees and directors’ liability insurance premiums. Financial Income/Financial Expenses Financial income includes interest income regarding short-term deposits and restricted deposits. Financial expenses consist of bank and other fees and exchange rate differences from the depreciation of the U.S. dollars compared to NIS. Taxes on Income We do not generate taxable income in Israel, as we have historically incurred operating losses resulting in carry forward tax losses. As of December 31, 2025, we have incurred operating losses of approximately $54.0 million for CollPlant Biotechnologies Ltd. and $52.6 million for CollPlant Ltd. We anticipate that we will be able to carry forward these tax losses indefinitely to future tax years assuming that we utilize them at the first opportunity. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of our carry forward tax losses. The standard corporate tax rate in Israel is 23%. Under the Investment Law, and other Israeli laws, we may be entitled to certain additional tax benefits, including reduced tax rates, accelerated depreciation, and amortization rates for tax purposes on certain assets and amortization of other intangible property rights for tax purposes. A. Operating Results The table below provides our results of operations for the years ended December 31, 2025, 2024 and 2023. Year ended December 31, 2025 2024 2023 (USD in thousands) Statement of operations data: Revenues $ 2,371 $ 515 $ 10,959 Cost of revenues 835 1,625 1,991 Gross profit (loss) 1,536 (1,110 ) 8,968 Research and development expenses 8,187 10,515 10,484 General, administrative, and marketing expenses 4,832 5,626 5,996 Total operating loss (11,483 ) (17,251 ) (7,512 ) Financial income )expenses), net (6 ) 642 493 Net loss $ (11,489 ) $ (16,609 ) $ (7,019 ) 89 Revenues We generated revenues from the sale of our bioink, rhCollagen, and VergenixSTR in the amount of $2.4 million in the year ended December 31, 2025 compared to $0.5 million in the year ended December 31, 2024. The increase in revenues is mainly attributable to a development milestone achievement relating to the dermal filler product candidate, which triggered a $2 million payment from AbbVie to CollPlant according to the AbbVie Development Agreement. We generated revenues from the sale of our bioink, rhCollagen, and VergenixFG in the amount of $0.5 million in the year ended December 31, 2024 compared to $11.0 million in the year ended December 31, 2023. The decrease in revenues is mainly related to (i) the achievement of a milestone with respect to the AbbVie Development Agreement, which triggered a $10 million payment from AbbVie to us in 2023, and (ii) $0.4 million in sales of rhCollagen products and VergenixFG. Cost of revenues We incurred cost of revenue in the amount of $0.8 million in the year ended December 31, 2025, compared to $1.6 million in the year ended December 31, 2024. The decrease in cost of revenues in the amount of approximately $0.8 million is mainly comprised of: (i) approximately $0.5 million reduction in inventory impairments, (ii) approximately $0.2 million relating to bioinks and rhCollagen sales, and (iii) approximately $0.1 million related to insurance reimbursement received in 2025. We incurred cost of revenue in the amount of $1.6 million in the year ended December 31, 2024, compared to $2.0 million in the year ended December 31, 2023. The decrease in cost of revenues in the amount of approximately $0.4 million is mainly comprised of: (i) approximately $0.3 million in royalty expenses to the IIA, mainly relating to the milestone achievement under the AbbVie Development Agreement, and (ii) approximately $0.3 million relating to bioinks and rhCollagen sales. Research and Development Expenses We incurred research and development expenses amounting to $8.2 million in the year ended December 31, 2025, compared to $10.5 million in the year ended December 31, 2024. The decrease in research and development expenses of approximately $2.3 million is mainly related to the Company’s cost reduction plan with: (i) $1.1 million decrease in workforce and share-based compensation expenses, and (ii) $1.1 million in research and development materials and subcontractor expenses mainly related to the breast implants program. We incurred research and development expenses amounting to $10.5 million in the year ended December 31, 2023 and 2024. General, Administrative, and Marketing Expenses We incurred general, administrative, and marketing expenses of $4.8 million in the year ended December 31, 2025, compared to $5.6 million in the year ended December 31, 2024. The decrease in expenses amounting to approximately $0.8 million is mainly comprised of: (i) a decrease of $0.4 million in employees’ salaries and share-based compensation expenses, (ii) a decrease of $0.1 million in patents expenses as part of the Company’s cost reduction plan, and (iii) insurance reimbursements of approximately $0.1 million received in 2025. We incurred general, administrative, and marketing expenses of $5.6 million in the year ended December 31, 2024, compared to $6.0 million in the year ended December 31, 2023. The decrease in expenses amounting to approximately $0.4 million is mainly comprised of: (i) a decrease of $0.3 million in share based compensation expenses mainly related to options grant in 2022 and 2020, and (ii) a decrease of $0.1 million in insurance policy costs. Financial Income (Expenses), Net Financial expenses, net in the year ended December 31, 2025 totaled $0.01 million compared to financial income, net of $0.6 million in the year ended December 31, 2024. The increase in financial expenses, net of approximately $0.6 million is mainly attributed to: (i) a decrease of $0.4 million in interest received from our short-term cash deposits, and (ii) an increase of approximately $0.3 million in exchange rate differences expenses. 90 Financial income, net in the year ended December 31, 2024 totaled $0.6 million compared to $0.5 million in the year ended December 31, 2023. Financial expenses, net is mainly attributed to interest received from the Company’s short term cash deposits and exchange rate difference expenses. Recent Accounting Pronouncements Certain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statements included in “Item 18. Financial Statements” of this Annual Report. B. Liquidity and Capital Resources Our primary uses of cash are to fund working capital requirements, research and development expenses and capital expenditures. Historically, we have funded our operations primarily through cash flow from operations (including sales of our proprietary products and distribution products), payments received in connection with strategic partnerships (including upfront and milestone payments from collaboration agreements), issuances of ordinary shares and warrants (including public offerings on the TASE, Nasdaq and private placements) and government grants from the IIA. The balance of cash and cash equivalents as of December 31, 2025 and 2024 totaled $5.6 million and $11.9 million, respectively. In June 2023, we announced the achievement of a milestone with respect to the dermal filler product under the AbbVie Development Agreement, which triggered a $10 million payment from AbbVie to us. In February 2025, we announced an additional achievement of a milestone with respect to dermal filler product under the AbbVie Development Agreement, which triggered a $2 million payment from AbbVie to us. Although in the past we have received payments under the AbbVie Development Agreement, there can be no assurance that we will receive any further payments under the AbbVie Development Agreement. In June 2025, we completed a registered direct offering, that resulted in gross proceeds of $3.6 million and in February 2026, we completed a registered direct offering, that resulted in gross proceeds of $2 million. We plan to fund our future operations through continued sales of our proprietary products, commercialization and/or out-licensing of our rhCollagen and bioink products or technology, and raising additional capital through the issuance of equity or debt. During the fourth quarter of 2025, we updated our expense forecast and initiated a contingency plan that included cost cutting and significant workforce reduction. We expect to continue incurring losses and negative cash flows from operations until our products reach commercial profitability. Based on the Company’s cash position as of March 15, 2026, alongside projected continued negative cash flows, the Company’s resources are not sufficient to fund its operation for the next 12 months. Accordingly, our ability to continue as a going concern will require obtaining additional financing to fund its operations, which may include private and/or public offerings of debt or equity securities and/or additional milestone payments that may be received under the AbbVie Development Agreement. There can be no assurance that such funding or milestone payments will be available on acceptable terms, or at all. Our cash requirements from known contractual obligations within the next twelve months include: ● Lease liabilities in the amount of $0.8 million. For more information see Note 5 to our consolidated financial statements for the year ended December 31, 2025; and ● Trade and other payables in the amount of $1.9 million, which include amounts related to suppliers, salaries and other liabilities with payment term of less than one year. Our long-term cash requirements under our various contractual obligations include: ● Lease liabilities in the amount of $2.0 million. For more information, see Note 5 to our consolidated financial statements for the year ended December 31, 2025. 91 Cash Flows The following table summarizes our consolidated statement of cash flows for the years ended December 31 2025, 2024 and 2023. Year ended December 31, 2025 2024 2023 (USD in thousands) Net cash provided by (used in): Operating activities (9,419 ) (14,093 ) (2,763 ) Investing activities (27 ) (539 ) (1,156 ) Financing activities 3,102 9 1,108 Net Cash Provided by (Used in) Operating Activities Net cash provided by or used in operating activities resulted primarily from our net income or losses, adjusted for non-cash changes in components of working capital. Adjustments to net loss for non-cash items include mainly depreciation and amortization, share-based compensation and exchange differences on cash and cash equivalents. This cash flow mainly reflects the cash needed for funding the products and pipeline products development and our management costs during the applicable periods. Net cash used in operating activities in the year ended December 31, 2025 totaled $9.4 million and consisted primarily of (i) net loss of $11.5 million, adjusted for non-cash items including depreciation of $0.9 million, share-based compensation of $1.0 million, and exchange differences on cash and cash equivalents and restricted cash of $0.1 million, and (ii) a net change in operating assets and liabilities of $0.3 million which was mainly attributable to a decrease in operating lease right-of-use assets. Net cash used in operating activities in the year ended December 31, 2024 totaled $14.1 million and consisted primarily of (i) net loss of $16.6 million, adjusted for non-cash items including depreciation of $1.0 million, share-based compensation of $1.7 million, and net financing expenses of $0.1 million, and (ii) a net change in operating assets and liabilities of $0.4 million which was mainly attributable to a decrease in accrued liabilities. Net cash used in operating activities in the year ended December 31, 2023 totaled $2.8 million and consisted primarily of (i) net loss of $7.0 million, adjusted for non-cash items including depreciation of $1.1 million, share-based compensation of $1.9 million and exchange differences on cash and cash equivalents of $0.4 million, and (ii) a net change in operating assets and liabilities of $0.8 million , which was mainly attributable to a decrease in inventories of $0.7 million. Net Cash Used in Investing Activities Net cash used in investing activities was $0.03 million during the year ended December 31, 2025, compared to $0.5 million during the year ended December 31, 2024. The decrease is mainly attributed the purchase of property and equipment as part of the Company’s cost reduction plan. Net cash used in investing activities was $0.5 million during the year ended December 31, 2024, compared to $1.2 million during the year ended December 31, 2023. The decrease is mainly attributed to the purchase of property and equipment. 92 Net Cash Provided by Financing Activities Net cash provided by financing activities was $3.1 million for the year ended December 31, 2025 compared to $0.01 million in the year ended December 31, 2024. In May 2025, we entered into a securities purchase agreement with certain institutional investors providing for the issuance and sale, in a registered direct offering, of 1,200,002 ordinary shares. The ordinary shares have been offered and sold together with warrants to purchase up to an aggregate of 1,200,002 ordinary shares, issued in a concurrent private placement. The combined purchase price per each ordinary share and accompanying warrant sold in the offering is $3.00. In June 2025, we completed the registered direct offering, that resulted in gross proceeds of $3.6 million. In connection therewith, the placement agent or its designees also received warrants, on substantially the same terms as the investors in the offering, to purchase up to 72,000 ordinary shares, at an exercise price of $3.75 per share, which expire 3.5 years from the issuance date. In February 2026, we entered into a securities purchase agreement with certain institutional investors providing for the issuance and sale, in a registered direct offering, of 1,600,000 ordinary shares, at a purchase price of $1.25 per share. The ordinary shares have been offered and sold together with unregistered series A warrants to purchase up to 1,600,000 ordinary shares and unregistered series B warrants to purchase up to 1,600,000 ordinary shares, each, at an exercise price of $1.25 per share, issued in a concurrent private placement. The series A warrants expire five years from the effective date of a registration statement registering the shares issuable upon exercise of the warrants, and the series B warrants expire eighteen months after the effective date of a registration statement registering the shares issuable upon exercise of the warrants. In February 2026 we completed the registered direct offering, that resulted in gross proceeds of $2 million. In connection therewith, the placement agent or its designees also received warrants, on substantially the same terms as the investors in the offering, to purchase up to 96,000 ordinary shares, at an exercise price of $1.5625 per share, which expire 5 years from the date of the commencement of the sales pursuant to the offering. Net cash provided by financing activities was $0.01 million for the year ended December 31, 2024 compared to $1.1 million in the year ended December 31, 2023. Cash provided by financing activities is attributed to proceeds from the issuance of shares and the exercise of warrants and options into shares. Cash and Funding Sources The table below summarizes our sources of funding for the years ended December 31, 2025, 2024 and 2023: Issuance of Ordinary Shares and Warrants Strategic Collaborations Total (USD in thousands) Year ended December 31, 2025 3,102 2,000 5,102 Year ended December 31, 2024 9 - 9 Year ended December 31, 2023 1,108 10,000 11,108 Funding Requirements Since our inception, we have incurred significant losses. Our net loss was $11.5 million and $16.6 million for the years ended December 31, 2025 and 2024, respectively. Our negative cash flows from operating activities as of December 31, 2025 was $9.4 million. Our cash and cash equivalent as of December 31, 2025 totaled $5.6 million. As of December 31, 2025, we had an accumulated deficit of $124.8 million. We expect to continue to incur expenses and operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. Our existing cash and cash equivalents as of March 15, 2026 is approximately $4.3 million. In the first quarter of 2025 we updated our expense forecast and initiated a cost cutting and workforce reduction plan which resulted in a reduction of workforce by approximately 20%. During the fourth quarter of 2025, we further updated our expense forecast and initiated a contingency plan that included cost cutting and significant workforce reduction by additional approximately 27%. 93 We expect to incur future net losses and the transition to profitability is dependent upon, among other things, the successful development and commercialization of our products and product candidates including the dermal filler product being developed by AbbVie, the establishment of contracts for the distribution of new product lines, any of which, or in combination, would contribute to the achievement of a level of revenue adequate to support the cost structure. Until we achieve profitability or generate positive cash flows, we will continue to need to raise additional cash to finance our operations and to fund future operations through existing cash on hand, additional private and/or public offerings of debt or equity securities, any additional milestone payments that may be received under the AbbVie Development Agreement. Notwithstanding, there can be no assurance that we will be able to raise additional funds, receive additional milestone payments or achieve or sustain profitability or positive cash flows from operations, and even if available, whether it will be on terms acceptable to us or in amounts required. The Company’s current cash flow and resources are not sufficient to fund its operation for the next 12 months. Accordingly, the Company’s ability to continue as a going concern will require obtaining additional financing to fund its operations, which may include private and/or public offerings of debt or equity securities and/or additional milestone payments that may be received under the AbbVie Development Agreement. There can be no assurance that such funding or milestone payments will be available on acceptable terms, or at all. Our present and future funding requirements will depend on many factors, including, among other things: ● the number of potential new products we identify and decide to develop; ● the progress, timing, and completion of preclinical testing and clinical trials which are based on our bioink, medical aesthetics, and any future pipeline product; ● selling and marketing activities undertaken in connection with the commercialization of our products; ● the costs of upscaling our manufacturing capabilities; ● costs involved in the development of distribution channels, and for an effective sales and marketing organization, for the commercialization of our products in Europe; ● the time and costs involved in obtaining regulatory approvals and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these products; and ● the costs involved in filing patent applications and maintaining and enforcing patents or defending against claims or infringements raised by third parties. For more information as to the risks associated with our future funding needs, see “Item 3.D. Risk Factors-We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain additional capital when needed may force us to delay, limit, or terminate our product development efforts or other operations.” C. Research and Development, Patents and Licenses See above, under Item 5 - “Research and Development Expenses.” 94 D. Trend Information We are in a development stage with regard to different medical and aesthetics products, and are in early stages of commercialization of our bioink products for customers that develop technologies for 3D-bioprinting of tissues and organs and the medical aesthetics market. It is not possible for us to predict with any degree of accuracy the outcome of our research, development, or commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are in this “Operating and Financial Review and Prospects.” E. Critical Accounting Estimates Our critical accounting estimates include the areas where we have made what we consider to be particularly difficult, subjective or complex judgments in making estimates, and where these estimates can significantly affect our financial results under different assumptions and conditions. We prepare our financial statements in conformity with U.S GAAP. As a result, we are required to make estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates, judgments and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the periods presented. Actual results could be different from these estimates. Critical estimates and assumptions made by management include: Estimates of share-based compensation fair value Share-based compensation reflects the compensation expense of our share award programs granted to employees which compensation expense is measured at the grant date fair value of the award. The grant date fair value of share-based compensation is recognized as an expense over the requisite service period. We recognize compensation expense for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach, and classify these amounts in our statement of operations based on the department to which the related employee reports. Award Valuation We selected the Black-Scholes option pricing model as the most appropriate method for determining the estimated fair value of the share-based compensation. For the purpose of the evaluation of the fair value and the manner of the recognition of share-based compensation, our management is required to estimate, among others, various subjective and complex parameters that are included in the calculation of the fair value of the award as well as our results and the number of awards that will vest. These parameters include the expected volatility of our share price over the expected term of the awards, the risk-free interest rate assumption, and expected dividends. 95