x |
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
o |
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
PLURISTEM
LIFE SYSTEMS, INC.
|
(Exact
name of small business issuer as specified in its
charter)
|
Nevada
|
98-0351734
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
MATAM
Advanced Technology Park, Building No. 20, Haifa, Israel
31905
|
(Address
of principal executive offices)
|
+972-74-710-7171
|
(Issuer's
telephone number)
|
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Page
|
|
Consolidated
Balance Sheet
|
2-3
|
Consolidated
Statements of Operations
|
4
|
Statements
of changes in Stockholders’ Equity (Deficiency)
|
5-12
|
Consolidated
Statements of Cash Flows
|
13-14
|
Notes
to Consolidated Financial Statements
|
15-30
|
September
30,
|
||||
2007
|
||||
ASSETS
|
||||
CURRENT
ASSETS:
|
||||
Cash
and cash equivalents
|
$
|
562
|
||
Marketable
securities
|
3,693
|
|||
Prepaid
expenses
|
253
|
|||
Accounts
receivable from the OCS
|
733
|
|||
Other
accounts receivables
|
429
|
|||
Total
current assets
|
5,670
|
|||
LONG-TERM
ASSETS:
|
||||
Long-term
restricted deposit
|
124
|
|||
Severance
pay fund
|
102
|
|||
Property
and equipment, net
|
611
|
|||
Total
long-term assets
|
837
|
|||
Total
assets
|
$
|
6,507
|
||
September
30,
|
||||
2007
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Trade
payables
|
$
|
532
|
||
Accrued
expenses
|
106
|
|||
Other
accounts payable
|
177
|
|||
Total
current liabilities
|
815
|
|||
LONG-TERM
LIABILITIES
|
||||
Long-term
loan
|
36
|
|||
Accrued
severance pay
|
120
|
|||
156
|
||||
STOCKHOLDERS’
EQUITY
|
||||
Share
capital:
|
||||
Common
stock $0.00001 par value:
Authorized:
1,400,000,000 shares
Issued
and Outstanding: 1,244,109,853 shares
|
12
|
|||
Additional
paid-in capital
|
23,406
|
|||
Other
comprehensive loss
|
(84
|
)
|
||
Deficit
accumulated during the development stage
|
(17,798
|
)
|
||
5,536
|
||||
$
|
6,507
|
|||
CONSOLIDATED
BALANCE SHEET (UNAUDITED)
|
In
thousands U.S. Dollars
|
Three
months ended
September
30,
|
Period
from May 11, 2001
(Inception)
through
September
30,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Research
and development costs
|
$
|
1,246
|
$
|
393
|
$
|
8,534
|
||||
Less
participation by the Office of the Chief Scientist
|
(409
|
)
|
(3
|
)
|
(1,324
|
)
|
||||
Research
and development costs, net
|
837
|
390
|
7,210
|
|||||||
General
and administrative expenses
|
1,557
|
406
|
9,477
|
|||||||
Know
how write-off
|
-
|
-
|
2,474
|
|||||||
2,394
|
796
|
19,161
|
||||||||
Financial
income, net
|
114
|
512
|
1,363
|
|||||||
Net
loss for the period
|
2,280
|
$
|
284
|
$
|
17,798
|
|||||
Basic
and diluted net loss per share
|
$
|
(0.002
|
)
|
$
|
(0.004
|
)
|
||||
Weighted
average number of shares used in
computing basic and diluted net loss per
share:
|
1,158,912,570
|
69,160,410
|
||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except shares
data)
|
Deficit
|
|||||||||||||||||||
Accumulated
|
Total
|
||||||||||||||||||
Additional
|
Receipts
|
during
the
|
Stockholders’
|
||||||||||||||||
Common
Stock
|
paid-in
|
On
account
|
Development
|
Equity
|
|||||||||||||||
Shares
|
Amount
|
Capital
|
of
shares
|
Stage
|
(Deficiency)
|
||||||||||||||
Issuance
of common stock on July 9, 2001
|
35,000,000
|
$
|
1
|
$
|
2
|
$
|
-
|
$
|
-
|
$
|
3
|
||||||||
Balance
as of June 30, 2001
|
35,000,000
|
1
|
2
|
-
|
-
|
3
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(78
|
)
|
(78
|
)
|
|||||||||||
Balance
as of June 30, 2002
|
35,000,000
|
1
|
2
|
-
|
(78
|
)
|
(75
|
)
|
|||||||||||
Issuance
of common stock on October 14, 2002,
|
|||||||||||||||||||
Net
of issuance expenses of $17
|
14,133,000
|
(*
|
)
|
83
|
-
|
-
|
83
|
||||||||||||
Forgiveness
of debt
|
-
|
-
|
12
|
-
|
-
|
12
|
|||||||||||||
Stocks
cancelled on March 19, 2003
|
(27,300,000
|
)
|
(*
|
)
|
(*
|
)
|
-
|
-
|
-
|
||||||||||
Receipts
on account of stock and warrants, net of finders and legal fees of
$56
|
-
|
-
|
-
|
933
|
-
|
933
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(463
|
)
|
(463
|
)
|
|||||||||||
Balance
as of June 30, 2003
|
21,833,000
|
$
|
1
|
$
|
97
|
$
|
933
|
$
|
(541
|
)
|
$
|
490
|
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
|||||||||||||||||||
accumulated
|
Total
|
||||||||||||||||||
Additional
|
Receipts
|
During
the
|
Shareholders’
|
||||||||||||||||
Common
Stock
|
paid-in
|
on
account
|
development
|
Equity
|
|||||||||||||||
Shares
|
Amount
|
Capital
|
of
shares
|
stage
|
(Deficiency)
|
||||||||||||||
Balance
as of July 1, 2003
|
21,833,000
|
$
|
1
|
$
|
97
|
$
|
933
|
$
|
(541
|
)
|
$
|
490
|
|||||||
Issuance
of common stock on July 16, 2003,
|
|||||||||||||||||||
net
of issuance expenses of $70
|
725,483
|
(*
|
)
|
1,236
|
(933
|
)
|
-
|
303
|
|||||||||||
Issuance
of common stock on January 20, 2004
|
3,000,000
|
(*
|
)
|
-
|
-
|
-
|
(*
|
)
|
|||||||||||
Issuance
of warrants on January 20, 2004 for finder’s fee
|
-
|
-
|
192
|
-
|
-
|
192
|
|||||||||||||
Common
stock granted to consultants on
February
11, 2004
|
1,000,000
|
(*
|
)
|
800
|
-
|
-
|
800
|
||||||||||||
Stock
based compensation related to warrants granted to consultants on
December
31, 2003
|
-
|
-
|
358
|
-
|
-
|
358
|
|||||||||||||
Exercise
of warrants on
|
|||||||||||||||||||
April
19, 2004
|
300,000
|
(*
|
)
|
225
|
-
|
-
|
225
|
||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(2,011
|
)
|
(2,011
|
)
|
|||||||||||
Balance
as of June 30, 2004
|
26,858,483
|
$
|
1
|
$
|
2,908
|
$
|
-
|
$
|
(2,552
|
)
|
$
|
357
|
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
||||||||||||||||
accumulated
|
Total
|
|||||||||||||||
Additional
|
During
the
|
Shareholders’
|
||||||||||||||
Common
Stock
|
paid-in
|
development
|
Equity
|
|||||||||||||
Shares
|
Amount
|
capital
|
stage
|
(Deficiency)
|
||||||||||||
Balance
as of July 1, 2004
|
26,858,483
|
$
|
1
|
$
|
2,908
|
$
|
(2,552
|
)
|
$
|
357
|
||||||
Stock-based
compensation related to warrants
|
||||||||||||||||
granted
to consultants on September 30, 2004
|
-
|
-
|
162
|
-
|
162
|
|||||||||||
Issuance
of common stock and warrants on November 30, 2004 related to the
October
2004 Agreement
net of issuance costs of $29
|
3,250,000
|
(*
|
)
|
296
|
-
|
296
|
||||||||||
Issuance
of common stock and warrants on
|
||||||||||||||||
January
26, 2005 related to the October 2004 Agreement
net of issuance costs of $5
|
4,300,000
|
(*
|
)
|
425
|
-
|
425
|
||||||||||
|
||||||||||||||||
Issuance
of common stock and warrants on
|
||||||||||||||||
January
31, 2005 related to the January 31, 2005 Agreement
|
7,000,000
|
(*
|
)
|
-
|
-
|
(*
|
)
|
|||||||||
Issuance
of common stock and options on February 15, 2005 to former director
of the
Company
|
50,000
|
(*
|
)
|
14
|
-
|
14
|
||||||||||
Issuance
of common stock and warrants on
|
||||||||||||||||
February
16, 2005 related to the January 31, 2005 Agreement
|
5,000,000
|
(*
|
)
|
-
|
-
|
(*
|
)
|
|||||||||
(*)
Less than one thousand dollars
|
||||||||||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
||||||||||||||||
accumulated
|
Total
|
|||||||||||||||
Additional
|
During
the
|
Shareholders’
|
||||||||||||||
Common
Stock
|
paid-in
|
development
|
Equity
|
|||||||||||||
Shares
|
Amount
|
capital
|
stage
|
(Deficiency)
|
||||||||||||
Issuance
of warrants on February 16, 2005 for finder fee related to the January
31,
2005 Agreement
|
-
|
-
|
144
|
-
|
144
|
|||||||||||
Issuance
of common stock and warrants on
|
||||||||||||||||
March
3, 2005 related to the January 24, 2005 Agreement
net of issuance costs of $24
|
12,000,000
|
(*
|
)
|
1,176
|
-
|
1,176
|
||||||||||
Issuance
of common stock on March 3, 2005 for finder fee related to the January
24,
2005 Agreement
|
1,845,000
|
(*
|
)
|
(*
|
)
|
-
|
-
|
|||||||||
Issuance
of common stock and warrants on
|
||||||||||||||||
March
3, 2005 related to the October 2004 Agreement
net of issuance costs of $6
|
750,000
|
(*
|
)
|
69
|
-
|
69
|
||||||||||
Issuance
of common stock and warrants to the Chief Executive Officer on March
23,
2005
|
2,400,000
|
(*
|
)
|
696
|
-
|
696
|
||||||||||
Issuance
of common stock on March 23, 2005 related to the October 2004
Agreement
|
200,000
|
(*
|
)
|
20
|
-
|
20
|
||||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
||||||||||||||||
accumulated
|
Total
|
|||||||||||||||
Additional
|
during
the
|
Shareholders’
|
||||||||||||||
Common
Stock
|
paid-in
|
development
|
Equity
|
|||||||||||||
Shares
|
Amount
|
capital
|
stage
|
(Deficiency)
|
||||||||||||
Classification
of a liability in respect of warrants to additional paid in capital,
net
of issuance costs of $ 178
|
-
|
-
|
542
|
-
|
542
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
(2,098
|
)
|
(2,098
|
)
|
|||||||||
Balance
as of June 30, 2005
|
63,653,483
|
1
|
6,452
|
(4,650
|
)
|
1,803
|
||||||||||
Exercise
of warrants on November 28,
|
||||||||||||||||
2005
to finders related to the January 24,
|
||||||||||||||||
2005
agreement
|
80,000
|
(*
|
)
|
-
|
-
|
-
|
||||||||||
Exercise
of warrants on January 25 ,2006
|
||||||||||||||||
To
finders related to the January 25, 2005
|
||||||||||||||||
Agreement
|
10,000
|
(*
|
)
|
-
|
-
|
-
|
||||||||||
Reclassification
of warrants from equity
|
||||||||||||||||
To
liabilities due to application of EITF
|
||||||||||||||||
00-19
|
-
|
-
|
(8
|
)
|
-
|
(8
|
)
|
|||||||||
Net
loss for the year
|
-
|
-
|
-
|
(2,439
|
)
|
(2,439
|
)
|
|||||||||
Balance
as of June 30, 2006
|
63,743,483
|
$
|
1
|
$
|
6,444
|
$
|
(7,089
|
)
|
$
|
(644
|
)
|
|||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
|||||||||||||||||||||||||
Accumulated
|
Total
|
||||||||||||||||||||||||
Additional
|
Receipts
|
Other
|
During
the
|
Total
|
Shareholders’
|
||||||||||||||||||||
Common
Stock
|
paid-in
|
on
account
|
comprehensive
|
Development
|
Comprehensive
|
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
of
shares
|
loss
|
stage
|
loss
|
loss
|
||||||||||||||||||
Balance
as of July 1, 2006
|
63,743,483
|
$
|
1
|
$
|
6,444
|
$
|
-
|
$
|
-
|
$
|
(7,089
|
)
|
$
|
-
|
$
|
(644
|
)
|
||||||||
Conversion
of convertible debenture,
net of issuance costs
of $440
|
203,952,201
|
2
|
1,785
|
-
|
-
|
-
|
-
|
1,787
|
|||||||||||||||||
Classification
of a liability in respect
of warrants
|
-
|
-
|
360
|
-
|
-
|
-
|
-
|
360
|
|||||||||||||||||
Classification
of deferred issuance expenses
|
-
|
-
|
(379
|
)
|
-
|
-
|
-
|
-
|
(379
|
)
|
|||||||||||||||
Classification
of a liability in respect
of options granted to
consultants
|
-
|
-
|
116
|
-
|
-
|
-
|
-
|
116
|
|||||||||||||||||
Compensation
related to options
granted to employees
|
-
|
-
|
2,386
|
-
|
-
|
-
|
-
|
2,386
|
|||||||||||||||||
Compensation
related to options
granted to Consultants
|
-
|
-
|
938
|
-
|
-
|
-
|
-
|
938
|
|||||||||||||||||
Exercise
of warrants related
to the April 3, 2006
agreement
|
15,138,261
|
(*
|
)
|
1,022
|
-
|
-
|
-
|
-
|
1,022
|
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
|||||||||||||||||||||||||
Accumulated
|
Total
|
||||||||||||||||||||||||
Additional
|
Receipts
|
Other
|
During
the
|
Total
|
Shareholders’
|
||||||||||||||||||||
Common
Stock
|
paid-in
|
on
account
|
comprehensive
|
Development
|
Comprehensive
|
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
of
shares
|
loss
|
stage
|
loss
|
loss
|
||||||||||||||||||
Cashless
exercise of warrants
related to the April
3, 2006 agreement
|
9,334,712
|
(*
|
)
|
(*
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Issuance
of common stock on May and June 2007 related to the May 14, 2007
agreement, net of issuance costs of $64
|
625,235,040
|
6
|
7,745
|
-
|
-
|
-
|
-
|
7,751
|
|||||||||||||||||
Receipts
on account of shares
|
-
|
-
|
-
|
368
|
-
|
-
|
-
|
368
|
|||||||||||||||||
Cashless
exercise of warrants
related to the May
14, 2007 issuance
|
73,306,773
|
1
|
(1
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Issuance
of warrants to the
investors related to the
May 14, 2007 agreement
|
-
|
-
|
651
|
-
|
-
|
-
|
-
|
651
|
|||||||||||||||||
Unrealizd
loss on available for
sale securities
|
-
|
-
|
-
|
-
|
(30
|
)
|
-
|
(30
|
)
|
(30
|
)
|
||||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
-
|
(8,429
|
)
|
-
|
(8,429
|
)
|
|||||||||||||||
Balance
as of June 30, 2007
|
990,710,470
|
$
|
10
|
$
|
21,067
|
$
|
368
|
$
|
(30
|
)
|
$
|
(15,518
|
)
|
$
|
(30
|
)
|
$
|
5,897
|
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(UNAUDITED)
|
In
thousands U.S. Dollars (except share and per share
data)
|
Deficit
|
|||||||||||||||||||||||||
Accumulated
|
Total
|
||||||||||||||||||||||||
Additional
|
Receipts
|
Other
|
During
the
|
Total
|
Shareholders’
|
||||||||||||||||||||
Common
Stock
|
paid-in
|
on
account
|
comprehensive
|
Development
|
Comprehensive
|
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
of
shares
|
loss
|
stage
|
loss
|
loss
|
||||||||||||||||||
Balance
as of July 1, 2007
|
990,710,470
|
$
|
10
|
$
|
21,067
|
$
|
368
|
$
|
(30
|
)
|
$
|
(15,518
|
)
|
$
|
(30
|
)
|
$
|
5,897
|
|||||||
Issuance
of common stock related to investors relation agreement
|
2,000,000
|
(*
|
)
|
71
|
-
|
-
|
-
|
-
|
71
|
||||||||||||||||
Issuance
of common stock related to the May 14, 2007 agreement
|
54,765,000
|
(*
|
)
|
684
|
(368
|
)
|
-
|
-
|
-
|
316
|
|||||||||||||||
Cashless
exercise of warrants
related to the May
14, 2007 issuance
|
196,634,383
|
2
|
(2
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Compensation
related to options
granted to employees
|
-
|
-
|
1,268
|
-
|
-
|
-
|
-
|
1,268
|
|||||||||||||||||
Compensation
related to options
granted to Consultants
|
-
|
-
|
318
|
-
|
-
|
-
|
-
|
318
|
|||||||||||||||||
Unrealized
loss on available for
sale securities
|
-
|
-
|
-
|
-
|
(54
|
)
|
-
|
(54
|
)
|
(54
|
)
|
||||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
-
|
-
|
(2,280
|
)
|
-
|
(2,280
|
)
|
|||||||||||||||
Balance
as of September 30, 2007
|
1,244,109,853
|
$
|
12
|
$
|
23,406
|
$
|
-
|
$
|
(84
|
)
|
$
|
(17,798
|
)
|
$
|
(84
|
)
|
$
|
5,536
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
In
thousands U.S. Dollars
|
Three
months ended
September
30,
|
Period
from May 11, 2001 (inception)
through
September
30
|
|||||||||
2007
|
2006
|
2007
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
Net
loss
|
$
|
(2,280
|
)
|
$
|
(284
|
)
|
$
|
(17,798
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
Depreciation
and amortization
|
21
|
11
|
264
|
|||||||
Capital
gain
|
-
|
-
|
4
|
|||||||
Know-how
write-off
|
-
|
-
|
2,474
|
|||||||
Amortization
of deferred issuance costs
|
-
|
137
|
604
|
|||||||
Stock-based
compensation to employees
|
1,268
|
148
|
3,654
|
|||||||
Stock-based
compensation to consultants
|
336
|
39
|
1,924
|
|||||||
Shares
compensation to consultants
|
71
|
-
|
863
|
|||||||
Know-how
licensors - imputed interest
|
-
|
-
|
55
|
|||||||
Salary
grant in shares and warrants
|
-
|
-
|
711
|
|||||||
Decrease
(increase) in accounts receivable
|
(577
|
)
|
48
|
(1,151
|
)
|
|||||
Decrease
(increase) in prepaid expenses
|
(211
|
)
|
20
|
(163
|
)
|
|||||
Increase
(decrease) in trade payables
|
167
|
(176
|
)
|
522
|
||||||
Increase
(decrease) in other accounts payable and accrued expenses
|
(91
|
)
|
2
|
(205
|
)
|
|||||
Increase
in accrued interest due to related parties
|
-
|
-
|
3
|
|||||||
Linkage
differences and interest on long-term restricted lease
deposit
|
-
|
(2
|
)
|
|||||||
Change
in fair value of liability in respect of warrants
|
-
|
(656
|
)
|
(2,696
|
)
|
|||||
Fair
value of warrants granted to investors
|
-
|
-
|
652
|
|||||||
Amortization
of discount and accrued interest on convertible debentures
|
-
|
63
|
128
|
|||||||
Amortization
of discount and accrued interest on marketable securities
|
11
|
-
|
6
|
|||||||
Accrued
severance pay, net
|
2
|
2
|
18
|
|||||||
Net
cash used in operating activities
|
(1,283
|
)
|
(646
|
)
|
(10,133
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Acquisition
of Pluristem Ltd. (1)
|
-
|
-
|
32
|
|||||||
Purchase
of property and equipment
|
(164
|
)
|
(4
|
)
|
(697
|
)
|
||||
Proceed
from sale of property and equipment
|
-
|
-
|
29
|
|||||||
Purchase
of long-term restricted lease deposit
|
(2
|
)
|
(23
|
)
|
(126
|
)
|
||||
Repayment
of long-term restricted lease deposit
|
-
|
-
|
20
|
|||||||
Purchase
of marketable securities
|
-
|
-
|
(3,784
|
)
|
||||||
Purchase
of know-how
|
-
|
-
|
(2,062
|
)
|
||||||
Net
cash used in investing activities
|
(166
|
)
|
(27
|
)
|
(6,588
|
)
|
||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
In
thousands U.S. Dollars
|
Three
months ended
September
30,
|
Period
from May 11, 2001 (inception)
through
September
30
|
|||||||||
2007
|
2006
|
2007
|
||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Issuance
of common stock, net of issuance costs
|
316
|
-
|
13,121
|
|||||||
Issuance
of warrants
|
-
|
-
|
1,246
|
|||||||
Exercise
of warrants
|
-
|
-
|
1,022
|
|||||||
Issuance
of convertible debenture
|
-
|
-
|
2,584
|
|||||||
Issuance
expenses related to convertible debentures
|
-
|
-
|
(440
|
)
|
||||||
Repayment
of know-how licensors
|
-
|
-
|
(300
|
)
|
||||||
Repayment
of notes and loan payable to related parties
|
-
|
-
|
(70
|
)
|
||||||
Proceeds
from notes and loan payable to related parties
|
-
|
-
|
78
|
|||||||
Purchase
of long-term loan
|
43
|
-
|
43
|
|||||||
Repayment
of long-term loan
|
(1
|
)
|
-
|
(1
|
)
|
|||||
Net
cash provided by financing activities
|
358
|
-
|
17,283
|
|||||||
Increase
(decrease) in cash and cash equivalents
|
(1,091
|
)
|
(673
|
)
|
562
|
|||||
Cash
and cash equivalents at the beginning of the period
|
1,653
|
2,374
|
-
|
|||||||
Cash
and cash equivalents at the end of the period
|
$
|
562
|
$
|
1,701
|
$
|
562
|
Non-cash
investing and financing information:
|
||||||||||
Classification
of liabilities and deferred issuance expenses into
equity
|
$
|
-
|
$
|
-
|
$
|
97
|
||||
Decrease
in fair value of marketable securities
|
$
|
54
|
$
|
-
|
$
|
84
|
||||
Conversion
of convertible debenture
|
$
|
-
|
$
|
255
|
$
|
2,227
|
||||
Issuance
of common stock as a result of cash less exercise of
warrants
|
$
|
2
|
$
|
-
|
$
|
3
|
||||
(1)
Acquisition of Pluristem Ltd.
|
||||||||||
Fair
value of assets acquired and
|
||||||||||
liabilities
assumed at the acquisition date:
|
||||||||||
Working
capital (excluding cash and cash
|
||||||||||
equivalents)
|
$
|
(427
|
)
|
|||||||
Long-term
restricted lease deposit
|
19
|
|||||||||
Property
and equipment
|
130
|
|||||||||
In-process
research and development write-off
|
246
|
|||||||||
$
|
(32
|
)
|
||||||||
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
A. |
Pluristem
Life Systems, Inc. ("the Company"), a Nevada corporation, was incorporated
and commenced operations on May 11, 2001, under the name A. I. Software
Inc. that was changed as of June 30, 2003 to Pluristem Life Systems
Inc.
The Company has a wholly owned subsidiary, Pluristem Ltd. (“the
subsidiary”) that was incorporated under the laws of
Israel.
|
B. |
The
Company is devoting substantially all of its efforts towards conducting
research and development of Mesenchymal stem cell production technology
and the commercialization of cell therapy products. In the course
of such
activities, the Company and its subsidiary have sustained operating
losses
and expect such losses to continue in the foreseeable future. The
Company
and its subsidiary have not generated any revenues or product sales
and
have not achieved profitable operations or positive cash flows from
operations. The Company's deficit accumulated during the development
stage
aggregated to $17,798 through September 30, 2007 and incurred net
loss of
$2,280 and negative cash flow from operating activities in the amount
of $
1,283 for the three months ended September 30, 2007. There is no
assurance
that profitable operations, if ever achieved, could be sustained
on a
continuing basis.
|
C. |
The
Company’s shares of common stock are currently traded on the OTC Bulletin
Board under the trading symbol “PLRS.OB”. On May 7, 2007, the Company’s
shares also began trading on Europe's Frankfurt Stock Exchange, under
the
symbol PJT. In September of 2007, the Company applied to list its
shares
on the Nasdaq Capital Market.
|
D. |
The
accompanying unaudited interim consolidated financial statements
of the
Company have been prepared as of September 30, 2007, in accordance
with
United States generally accepted accounting principles relating to
the
preparation of financial statements for interim periods. Accordingly,
they
do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included.
Operating results for the three-month period ended September 30,
2007 are
not necessarily indicative of the results that may be expected for
the
year ended June 30, 2008. For further information, refer to the
consolidated financial statements and footnotes thereto included
in the
Company’s Annual report on Form 10-K for the year ended June 30,
2007.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
1. |
The
significant accounting policies applied in the annual consolidated
financial statements of the Company as of June 30, 2007 are applied
consistently in these consolidated financial
statements.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
2. |
Impact
of recently issued accounting
standards
|
1. |
SFAS
No. 157:
|
2.
|
SFAS
No. 159:
|
3.
|
EITF
07-3
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
A. |
The
Company's authorized common stock consists of 1,400,000,000 shares
with a
par value of $0.00001 per share. All shares have equal voting rights
and
are entitled to one vote per share in all matters to be voted upon
by
stockholders. The shares have no pre-emptive, subscription, conversion
or
redemption rights and may be issued only as fully paid and non-assessable
shares. Holders of the common stock are entitled to equal ratable
rights
to dividends and distributions with respect to the common stock,
as may be
declared by the Board of Directors out of funds legally available.
|
B. |
On
July 9, 2001, the Company issued 35,000,000 shares of common stock in
consideration for $2,500, which was received on July 27,
2001.
|
C. |
On
March 19, 2003, two directors each returned 13,650,000 shares of
common
stock with a par value of $0.01 per share, for cancellation for no
consideration.
|
D. |
On
March 27, 2003 the Company's Board of Directors authorized a 14:1
split of
the common stock. Accordingly, all references to number of shares,
common
stock and per share data in the accompanying financial statements
have
been adjusted to reflect the stock split on a retroactive
basis.
|
E. |
In
July 2003, the Company issued an aggregate of 725,483 units comprised
of
725,483 common stock and 1,450,966 warrants to a group of investors,
for
total consideration of $1,236 (net of issuance costs of $70), under
a
private placement. The consideration was paid partly in the year
ended
June 30, 2003 ($933) and the balance was paid in the year ended June
30,
2004.
|
F. |
On
January 20, 2004, the Company consummated a private equity placement
with
a group of investors (the "investors"). The Company issued 3,000,000
units
in consideration for net proceeds of $1,273 (net of issuance costs
of
$227), each unit is comprised of 3,000,000 common stock and 3,000,000
warrants. Each warrant is exercisable into one common stock at a
price of
$0.75 per stock, and may be exercised until January 31, 2007. On
March 18,
2004, a registration statement on Form SB-2 has been declared effective
and the above-mentioned common stocks have been registered for trading.
If
the effectiveness of the Registration Statement is suspended subsequent
to
the effective date of registration (March 18, 2004), for more than
certain
permitted periods, as described in the private equity placement agreement,
the Company shall pay penalties to the investors in respect of the
liquidated damages.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
F. |
(cont.)
|
G. |
In
October 2004 the Company commenced a private placement offering (“the
October 2004 Agreement”) according to which it issued 8,500,000 units.
Each unit is compromised of one common stock and one warrant. The
warrant
is exercisable for one common stock at an exercise price of $0.30
per
stock, subject to certain adjustments. The units were issued as follows:
|
H. |
On
January 24, 2005 the Company commenced a private placement offering
(the
“January 24, 2005 Agreement”) which was closed on March 3, 2005 and issued
12,000,000 units in consideration for $1,176 (net of cash issuance
costs
of $24). Each unit is compromised of one common stock and one warrant.
The
warrant is exercisable for one common stock at a price of $0.30 per
stock.
On November 30, 2006, all the warrants were expired unexercised.
Under
this agreement the Company issued to finders 1,845,000 shares and
475,000
warrants with exercise price of $2.5 per stock exercisable until
November
2007.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
I. |
On
January 31, 2005, the Company consummated a private equity placement
offering (the “January 31, 2005 Agreement”) with a group of investors (the
"Investors") according to which it issued 12,000,000 units in
consideration for net proceeds of $1,137 (net of issuance costs of
$63).
Each unit is comprised of one common stock and one warrant. Each
warrant
is exercisable into one common stock at a price of $0.30 per stock.
If the
Registration Statement covering the Registrable Securities was not
filed
as contemplated by 70 days and if the Registration Statement covering
the
Registrable Securities was not effective until August 31, 2005, the
Company would have paid the Investor 2% of the purchase price for
each 30
day period beyond the applicable date until the filing or the registration
is completed. The January 31, 2005 Agreement includes a finder’s fee of a
cash amount equal to 5% of the amount invested ($60) and issuance
of
warrants for number of shares equal to 5% of the number of shares
that
were issued (600,000) with an exercise price of $0.1 per stock, subject
to
certain adjustments, exercisable until November 30,
2006.
|
J. |
On
March 23, 2005, the Company issued 2,400,000 shares of common stock
and
2,400,000 options as a bonus to the chief executive officer, Dr.
Shai
Meretzki, in connection with the issuance of a Notice of Allowance
by the
United States Patent Office for patent application number 09/890,401.
Salary expenses of $696 were recognized in respect of this bonus
based on
the quoted market price of the Company’s stock and the fair value of the
options granted using the Black - Scholes valuation model. On November
30,
2006, all the warrants were expired
unexercised.
|
K. |
On
February 11, 2004, the Company issued an aggregate amount of 1,000,000
common stock to a consultant and service provider as compensation
for
carrying out investor relations activities during the year 2004.
Total
compensation, measured as the grant date fair market value of the
stock,
amounted to $800 and was recorded as an operating expense in the
statement
of operations in the year ended June 30,
2004.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
L. |
On
November 28, 2005, 80,000 warrants, which were issued to finders
as finder
fees in related to the “January 24, 2005 Agreement”, were exercised to
shares.
|
M. |
On
January 25, 2006, 10,000 warrants, which were issued to finders as
finder
fees in related to the “January 24, 2005 Agreement”, were exercised to
shares.
|
N. |
Convertible
Debenture
|
1. |
On
April 3, 2006, the Company issued Senior Secured Convertible Debentures
(the “Debentures “), for gross proceeds of $3,000. In conjunction with
this financing, the Company issued 47,393,364 warrants exercisable
for
three years at an exercise price of $0.075. The Company paid a finder's
fee of 10% in cash and issued 9,478,672 warrants exercisable for
three
years, half of which are exercisable at $0.075 and half of which
are
exercisable at $0.077. The Company also issued 1,000,000 warrants
in
connection with the separate finder's fee agreement related to the
issuance of the debenture exercisable for three years at an exercise
price
of $0.075.
|
1a. |
The
Debentures, which mature on April 3, 2008, are convertible to common
shares at the lower of 75% of the volume weighted average trading
price
for the 20 days prior to issuance of a notice of conversion by a
holder of
a Debentures or, if while the Debentures remain outstanding the Company
enters into one or more financing transactions involving the issuance
of
common stock or securities convertible or exercisable for common
stock,
the lowest transaction price for those new
transactions.
|
1b. |
The
Warrants, issued as of April 3, 2006, become first exercisable on
the
earliest of (i) the 65th day after issuance or (ii) the effective
date of
the Registration Statement. Holders of the Warrants are entitled
to
exercise their warrants on a cashless basis following the first
anniversary of issuance if the Registration Statement is not in effect
at
the time of exercise.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
N. |
Convertible
Debenture (cont.):
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
O. |
On
May 14, 2007, the Company consummated a private equity placement
with a
group of investors (the “investors”) for an equity investment. The
investors shall invest a minimum of $7,000 and up to a maximum of
$13,500
for shares of the Company's common stock, $.00001 par value at a
per share
price of $0.0125, and warrants to purchase shares at an exercise
price of
$0.025 exercisable until five years after the closing date of the
agreement.
|
P.
|
The
Company issued 5,677,501 warrants to the investors related to the
May 14,
2007 agreement as compensation to investors who delivered the invested
amount previous to the closing date of the placement. The warrants
are
exercisable for five years at an exercise price of $0.0125. The Company
recorded the fair value of the warrants as financial expenses in
the
amount of $652 in the year ended June 30, 2007. The fair value of
these
warrants was determined using the Black- Scholes pricing model, assuming
a
risk free rate of 4.8%, a volatility factor of 128%, dividend yield
of 0%
and expected life of 5 years.
|
Q.
|
On
July and September 2007, the Company issued 2,000,000 common stocks
to
service providers according to an investor relation’s agreements, whereby
the services will be provided to the Company for a period of 6 month
in
consideration for a monthly retainer and for the issuance of 2,000,000
shares of common stock of the Company. Total compensation, measured
as the
grant date fair market value of the stock, amounted to $149. According
to
EITF 00-18 “Accounting Recognition for Certain Transactions Involving
Equity Instruments Granted to Other Than Employees” the Company should
recognize expense and offsetting credits to equity as services are
received. Consequently, an amount of $71was recorded as an operating
expense in the statement of operations for the three months period
ended
September 30, 2007.
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and
consultants:
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and consultants
(cont.):
|
Three
months ended September 30,
|
|||||||||||||
2007
|
|||||||||||||
Weighted
|
|||||||||||||
average
|
|||||||||||||
Weighted
|
remaining
|
Aggregate
|
|||||||||||
Average
|
contractual
|
intrinsic
|
|||||||||||
Exercise
|
terms
|
value
|
|||||||||||
Number
|
Price
|
(in
years)
|
price
|
||||||||||
Options
outstanding at beginning of year
|
251,997,560
|
$
|
0.025
|
||||||||||
Options
granted
|
11,000,000
|
0.041
|
|||||||||||
Options
forfeited
|
(364,588
|
)
|
0.018
|
||||||||||
Options
outstanding at end of the period
|
262,632,972
|
$
|
0.026
|
9.25
|
$
|
4,616
|
|||||||
Options
exercisable at the end of the period
|
85,398,813
|
$
|
0.019
|
8.96
|
$
|
1,675
|
|||||||
Options
vested and expected to vest
|
253,771,264
|
$
|
0.026
|
9.25
|
$
|
4,469
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and consultants
(cont.):
|
Three
months ended September 30,
|
|||||||||||||
2007
|
|||||||||||||
Weighted
|
|||||||||||||
average
|
|||||||||||||
Weighted
|
remaining
|
Aggregate
|
|||||||||||
Average
|
contractual
|
intrinsic
|
|||||||||||
Exercise
|
terms
|
value
|
|||||||||||
Number
|
Price
|
(in
years)
|
price
|
||||||||||
Options
outstanding at beginning of year
|
-
|
$
|
-
|
||||||||||
Options
granted
|
2,000,000
|
0.041
|
|||||||||||
Options
outstanding at end of the period
|
2,000,000
|
$
|
0.041
|
9.92
|
$
|
-
|
|||||||
Options
exercisable at the end of the period
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||
Options
vested and expected to vest
|
1,900,000
|
$
|
0.041
|
9.92
|
$
|
-
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and consultants
(cont.):
|
Issuance
date
|
Options
for
Ordinary
Shares
|
Exercise
Price
per
Share
|
Options
Exercisable
|
Weighted
average remaining
contractual
terms
|
|||||||||
January
2003- June 2005
|
2,587,560
|
$
|
0.022-0.12
|
2,587,560
|
3.67
|
||||||||
January
2006-March 2006
|
11,079,579
|
$
|
0.022-0.1
|
9,353,750
|
7.86
|
||||||||
September
2006 - October 2006
|
8,500,000
|
$
|
0.022
|
3,750,002
|
9.06
|
||||||||
November
2006 -December 2006
|
6,820,000
|
$
|
0.019-0.022
|
2,561,668
|
9.24
|
||||||||
January
2007
|
201,145,833
|
$
|
0.0175
|
67,145,833
|
9.3
|
||||||||
May
2007
|
21,500,000
|
$
|
0.1
|
-
|
9.63
|
||||||||
August
2007
|
13,000,000
|
$
|
0.041
|
-
|
9.92
|
Three
months ended
September
30,
|
Period
from inception
through
September
30,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Research
and development expenses
|
$
|
550
|
26
|
$
|
1,253
|
|||||
General
and administrative expenses
|
718
|
122
|
2,401
|
|||||||
$
|
1,268
|
148
|
$
|
3,654
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and consultants
(cont.):
|
Three
months ended September 30,
|
|||||||||||||
2007
|
|||||||||||||
Weighted
|
|||||||||||||
average
|
|||||||||||||
Weighted
|
remaining
|
Aggregate
|
|||||||||||
Average
|
contractual
|
intrinsic
|
|||||||||||
Exercise
|
terms
|
value
|
|||||||||||
Number
|
Price
|
(in
years)
|
price
|
||||||||||
Options
outstanding at beginning of year
|
32,919,189
|
$
|
0.055
|
||||||||||
Options
granted
|
5,000,000
|
0.0125
|
|||||||||||
Options
outstanding at end of the period
|
37,919,189
|
$
|
0.05
|
6.51
|
$
|
523
|
|||||||
Options
exercisable at the end of the period
|
16,094,198
|
$
|
0.02
|
4.39
|
$
|
364
|
|||||||
Options
vested and expected to vest
|
34,802,939
|
$
|
0.05
|
7.01
|
$
|
515
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
R. |
Options
to employees and consultants
(cont.):
|
Issuance
date
|
Options
for
Ordinary
Shares
|
Exercise
Price
per
Share
|
Options
Exercisable
|
Weighted
average
remaining
contractual
terms
|
|||||||||
December
31, 2003
|
169,189
|
$
|
0.4
|
169,189
|
0.72
|
||||||||
October
- November, 2005
|
250,000
|
$
|
0.022-0.13
|
250,000
|
0.67
|
||||||||
January
17, 2006
|
1,250,000
|
$
|
0.022-0.1
|
1,050,009
|
8.03
|
||||||||
October
18, 2006
|
750,000
|
$
|
0.022
|
750,000
|
3.05
|
||||||||
December
27,2006
|
1,000,000
|
$
|
0.019
|
375,000
|
9.25
|
||||||||
January
24, 2007
|
10,500,000
|
$
|
0.0175
|
3,500,000
|
9.32
|
||||||||
January
28, 2007
|
5,000,000
|
0.0125
|
5,000,000
|
2.33
|
|||||||||
May
17, 2007
|
14,000,000
|
0.1
|
-
|
7.38
|
|||||||||
August
1, 2007
|
5,000,000
|
0.0125
|
5,000,000
|
2.42
|
Three
months ended
September
30,
|
Period
from inception
through
September
30,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Research
and development expenses
|
$
|
116
|
$
|
39
|
$
|
1,454
|
||||
General
and administrative expenses
|
220
|
-
|
470
|
|||||||
$
|
336
|
$
|
39
|
$
|
1,924
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
In
thousands U.S. Dollars (except per share
amounts)
|
a.
|
On
November 6, 2007, the Company received $1,000 for 80 million shares
and 80
million warrants to purchase the Company’s shares. This investment was
made as part and under the terms of the private placement from May
14,
2007, whereby $5,000 of the Private Placement proceeds were to be
received
in installments starting six months from closing of the Private Placement
(see note 3 o).
|
b.
|
On
November 13, 2007, The Company sent Nasdaq a notice announcing that
it
will effect a reverse split of its shares of common stock in a ratio
of 1
for 200 effective on November 23, 2007.
|
·
|
To
start the first Phase I clinical trial with PLX-I after Food and
Drug
Administration approval.
|
· |
Optimize
our 3-D PluriXTM
Bioreactor
System - We have made progress using the 3-D environment of the
PluriXTM
Bioreactor
System to produce a dense population of stromal supporting cells;
however,
we must continue to try to optimize the system in order to achieve
real
production capabilities.
|
·
|
Improve
the analytical methods of our technology and
processes;
|
(31)
|
Rule
13a-14(a)/15d-14(a)
Certifications
|
31.1*
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Zami
Aberman
|
31.2*
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Yaky
Yanay
|
(32)
|
Section
1350 Certifications
|
32.1**
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
* |
Filed
herewith.
|
** |
Furnished
herewith.
|