10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

¨ TRANSITION REPORT PURSUANT TO 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	20-7273918
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

3 University Plaza Drive, Suite 320
Hackensack, NJ	07601
(Address of principal executive offices)	(Zip Code)

(201) 488-0460

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 past 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 x   No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
		(Do not check if a smaller reporting company)

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

As of August 8, 2016, the number of shares outstanding of the registrant’s Common Stock, $0.00005 par value per share, was 18,654,040.

TABLE OF CONTENTS

	Page Number
PART I
Item 1.  Financial Statements	3
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.  Controls and Procedures	29
PART II	29
Item 1.  Legal Proceedings	29
Item 1A.  Risk Factors	30
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.  Other Information	30
Item 6.  Exhibits	30
SIGNATURES	31
EXHIBIT INDEX	32

2

Item 1. Financial Statements

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2016

U.S. DOLLARS IN THOUSANDS

(Except share data and exercise prices)

(UNAUDITED)

3

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2016

U.S. DOLLARS IN THOUSANDS

(Except share data and exercise prices)

(UNAUDITED)

INDEX

	Page
Interim Condensed Consolidated Balance Sheets	5
Interim Condensed Consolidated Statements of Operations	6
Interim Condensed Statements of Changes in Stockholders' Equity	7-8
Interim Condensed Consolidated Statements of Cash Flows	9-10
Notes to Interim Condensed Consolidated Financial Statements	11-23

4

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

(Except share data)

	June 30,			December 31,
	2 0 1 6			2 0 1 5
	U.S. $ in thousands
	Unaudited			Audited
ASSETS
Current Assets:
Cash and cash equivalents	$	944		$	428
Short-term deposit (Note 4)		10,537			15,527
Account receivable		1,265			759
Prepaid expenses and other current assets		67			74
Total current assets		12,813			16,788
Long-Term Assets:
Prepaid expenses and other long-term assets		23			21
Property and Equipment, Net		318			271
Total Long-Term Assets		341			292
Total assets	$	13,154		$	17,080
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payables	$	355		$	1,169
Accrued expenses		652			1,500
Other accounts payable		275			283
Total current liabilities		1,282			2,952
Stockholders' Equity:
Stock capital: (Note 5)		11			11
Common stock of $0.00005 par value - Authorized: 100,000,000 shares at June 30, 2016 and December 31, 2015 respectively; Issued and outstanding: 18,654,040 and 18,643,288 shares at June 30, 2016 and December 31, 2015 respectively.
Additional paid-in-capital		84,754			84,258
Accumulated deficit		(72,893	)		(70,141	)
Total stockholders' equity		11,872			14,128
Total liabilities and stockholders' equity	$	13,154		$	17,080

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

5

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

U.S. dollars in thousands

(Except share data)

	Six months ended						Three months ended
	June 30,						June 30,
	2016			2015			2 0 1 6			2 0 1 5
	Unaudited						Unaudited
Operating expenses:
Research and development, net	$	1,137		$	2,620		$	151		$	1,375
General and administrative		1,658			1,948			832			988
Operating loss		(2,795	)		(4,568	)		(983	)		(2,363	)
Financial (income) expenses, net		(43	)		(67	)		(21	)		(98	)
Net loss	$	(2,752	)	$	(4,501	)	$	(962	)	$	(2,265	)
Basic and diluted net profit (loss) per share	$	(0.15	)	$	(0.24	)	$	(0.05	)	$	(0.12	)
Weighted average number of shares outstanding used in computing basic and diluted net loss per share		18,653,922			18,290,343			18,654,040			18,450,464

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

6

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY (AUDITED)

U.S. dollars in thousands

(Except share data)

	Common stock					Additional paid-in		Accumulated			Total stockholders'
	Number		Amount			capital		deficit			equity
Balance as of January 1, 2015		15,281,497	$	11		$	68,317	$	(61,653	)	$	6,675
Stock-based compensation related to warrants and stock granted to service providers		27,411		-			108		-			108
Stock-based compensation related to stock and options granted to directors and employees		77,332		-			835		-			835
Exercise and reissuance of warrants		2,546,667		(*	)		12,409		-			12,409
Exercise of liability classified warrants		29,000		(*	)		145		-			145
Exercise of equity classified warrants		536,382		(*	)		2,333		-			2,333
Exercise of options		44,999		(*	)		109		-			109
Exercise of warrants by Hadasit (Note 7.B.3.(B))		100,000		(*	)		2		-			2
Net loss		-		-			-		(8,488	)		(8,488	)
Balance as of December 31, 2015		18,643,288	$	11		$	84,258	$	(70,141	)	$	14,128

* Represents an amount less than $1.

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

7

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

U.S. dollars in thousands

(Except share data)

	Common stock					Additional paid-in		Accumulated			Total stockholders'
	Number		Amount			capital		deficit			equity
Balance as of January 1, 2016		18,643,288	$	11		$	84,258	$	(70,141	)	$	14,128
Stock-based compensation related to warrants and stock granted to service providers		10,752		(*	)		31		-			31
Stock-based compensation related to stock and options granted to directors and employees		-		-			465		-			465
Net loss		-		-			-		(2,752	)		(2,752	)
Balance as of June 30, 2016		18,654,040	$	11		$	84,754	$	(72,893	)	$	11,872

* Represents an amount less than $1.

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

8

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended						Three months ended
	June 30,						June 30,
	2016			2015			2016			2015
Cash flows from operating activities:
Net loss	$	(2,752	)	$	(4,501	)	$	(962	)	$	(2,265	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		38			47			22			24
Expenses related to shares and options granted to service providers		31			108			-			108
Amortization of deferred stock-based compensation related to options granted to employees and directors		465			668			262			321
Decrease (increase) in accounts receivable and prepaid expenses		(499	)		671			(768	)		362
Increase (decrease) in trade payables		(814	)		(787	)		74			(167	)
Increase (decrease) in other accounts payable and accrued expenses		(856	)		200			(34	)		(33	)
Revaluation of warrants		-			7			-			-
Total net cash used in operating activities	$	(4,387	)	$	(3,587	)	$	(1,406	)	$	(1,650	)

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

9

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended						Three months ended
	June 30,						June 30,
	2 0 1 6			2 0 1 5			2 0 1 6			2 0 1 5
Cash flows from investing activities:
Purchase of property and equipment		(85	)		(16	)		(59	)		16
Changes in short-term deposit		4,990			(14,104	)		196			(539	)
Investment in lease deposit		(2	)		-			-			-
Total net cash provided by (used in) investing activities	$	4,903		$	(14,120	)	$	137		$	(555	)
Cash flows from financing activities:
Proceeds from issuances of common stock through equity warrants and options exercises		-			2,348			-			-
Proceeds from issuance of Common stock, net		-
Proceeds from equity offering through issuances of equity warrants and common stock through the exercise of previously issued equity warrants		-			12,409			-			12
Redemption of warrants in cash		-			-			-			-
Total net cash provided by financing activities	$	-			14,757		$	-			12
Increase (decrease) in cash and cash equivalents		516			(2,950	)		(1,269	)		(2,193	)
Cash and cash equivalents at the beginning of the period	$	428			4,251			2,213			3,494
Cash and cash equivalents at end of the period	$	944		$	1,301		$	944		$	1,301
Non-cash financing activities:
Stock issued for warrants exchange		-						-			-
Warrants liability classified as equity		-			130			-			-
Total non-cash financing activities	$	-		$	130			-		$	-

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

10

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 1 - GENERAL

A. Brainstorm Cell Therapeutics Inc. (formerly: Golden Hand Resources Inc. - the "Company") was incorporated in the State of Washington on September 22, 2000. The Company currently holds two wholly owned subsidiaries; Brainstorm Cell Therapeutics Ltd. ("BCT"), an Israeli Company which currently conducts all of the research and development activities of the Company, and Brainstorm Cell Therapeutics UK Ltd. (“Brainstorm UK”). Brainstorm UK acts on behalf of the parent Company in the EU. Brainstorm UK is currently inactive.

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

B. 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), Multiple Sclerosis (MS) 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.

C. NurOwn is in clinical development for the treatment of ALS. The Company has completed two single dose clinical trials of NurOwn in Israel, a phase 1/2 trial with 12 patients and a phase 2a trial with additional 12 patients. In July 2016 the Company announced the results of its phase 2 trial which was conducted in three major medical centers in the US. This single dose trial included 48 patients randomized in a 3:1 ratio to receive NuOwn or placebo. Future development of NurOwn for ALS will require additional clinical trials typically required to provide an adequate basis for regulatory approval and product labeling. These additional trials will include the administration of repeated doses to ALS patients enrolled in these trials.

D. On September 15, 2014 the Company completed a reverse stock split of the Company’s shares of Common Stock by a ratio 1-for-15. The Company adjusted all ordinary shares, options, warrants, per share data and exercise prices included in these financial statements for all periods presented to reflect the reverse stock split. On August 26, 2015 the shareholders of the Company approved a reduction of the number of authorized shares of Common Stock of the Company from 800,000,000 to 100,000,000.

GOING CONCERN:

To date the Company has not generated any 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. As of June 30, 2016 the Company’s liquid resources which include cash, cash equivalents and short term bank deposits amounted to $11,481. Management believes that, if necessary, the Company’s current resources would be sufficient to fund its operations for the next 24 months, however additional financial resources will be needed to conduct our future clinical trials as well as fund other long term operations and there can be no assurance that such additional funds will be available on terms acceptable to the Company, or that the Company will not incur additional unforeseen costs or expenses. Such conditions raise substantial doubts about the Company's long term ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.

11

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

A. Unaudited Interim Financial Statements

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. 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 considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).

For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Operating results for the three months and the six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ended December 31, 2016.

B. Significant Accounting Policies

The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.

C. Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for us beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. As the Company has not incurred revenues to date, it is unable to determine to expected impact of the new standard on its consolidated financial statements.

In January 2016, the FASB issued an amended standard requiring changes to recognition and measurement of certain financial assets and liabilities. The standard primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This standard is effective beginning in the first quarter of 2018. Certain provisions allow for early adoption. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In February 2016, the FASB issued a new lease accounting standard requiring that we recognize lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company have not yet determined the impact of the new standard on its consolidated financial statements.

12

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Cont.):

C. Recent Accounting Standards (Cont.):

In March 2016, the FASB issued an accounting standard update aimed at simplifying the accounting for share-based payment transactions. Included in the update are modifications to the accounting for income taxes upon vesting or settlement of awards, employer tax withholding on shared-based compensation, forfeitures, and financial statement presentation of excess tax benefits. This standard is effective beginning in the first quarter of 2017; early adoption is permitted. The Company does not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In June 2016, the FASB issued a new standard requiring measurement and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This standard is effective for us in the first quarter of 2020; early adoption is permitted beginning in the first quarter of 2019 and we are evaluating whether we will early adopt. It is required to be applied on a modified-retrospective approach with certain elements being adopted prospectively. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

D. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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.

NOTE 3 - RESEARCH AND LICENSE AGREEMENT

The Company has a Research and License Agreement, as amended and restated, with Ramot. The Company obtained a waiver and release from Ramot pursuant to which Ramot agreed to an amended payment schedule regarding the Company's payment obligations under the Research and License Agreement and waived all claims against the Company resulting from the Company's previous defaults and non-payment under the Research and License Agreement. The waiver and release amended and restated the original payment schedule under the original agreement providing for payments during the initial research period and additional payments for any extended research period.

The Company is to pay Ramot royalties on Net Sales on a Licensed Product by Licensed Product and jurisdiction by jurisdiction basis as follows:

a) So long as the making, producing, manufacturing, using, marketing, selling, importing or exporting of such Licensed Product is covered by a Valid Claim or is covered by Orphan Drug Status in such jurisdiction – 5% of all Net Sales.

b) In the event the making, producing, manufacturing, using, marketing, selling, importing or exporting of such Licensed Product is not covered by a Valid Claim and not covered by Orphan Drug status in such jurisdiction – 3% of all Net Sales until the expiration of 15 years from the date of the First Commercial Sale of such Licensed Product in such jurisdiction.

NOTE 4 - SHORT TERM INVESTMENTS

Short term investments on June 30, 2016 and December 31, 2015 include bank deposits bearing annual interest rates varying from 0.15% to 1.34%, with maturities of up to 3 and 6 months as of June 30, 2016 and December 31, 2015.

13

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 - STOCK CAPITAL

A. The rights of Common Stock are as follows:

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.

B. Issuance of shares, warrants and options:

1. Private placements and public offering:

In July 2007, the Company entered into an investment agreement, that was amended in August 2009 with ACCBT Corp. a company under the control of the Company’s current Chief Executive Officer, according to which for an aggregate consideration of approximately $5 million the Company issued 2,777,777 shares of Common Stock and a warrant to purchase 672,222 shares of Common Stock at an exercise price of $3 per share and a warrant to purchase 1,344,444 shares of common stock at an exercise price of $4.35 per share. The warrants are exercisable, through November 5, 2017.

Our current Chief Executive Officer has served as the President of the Company since July 2007 and in addition has served as Chief Executive Officer from August 2013 until June 2014. On September 28, 2015 he was reappointed and currently serves as Chief Executive Officer of the Company.

In February 2010, the Company issued an aggregate 399,999 shares of Common Stock and warrants to purchase an aggregate of 199,998 shares of Common Stock with an exercise price of $7.50 per share for aggregate proceeds of $1.5 million.

On July 17, 2012, the Company raised a $5.7 million of gross proceeds through a public offering (“2012 Public Offering”) of its common stock and warrants to purchase common stock. The Company issued a total of 1,321,265 shares of common stock ($4.35 per share), and thirty month warrants to purchase 990,949 shares of Common Stock at an exercise price of $4.35 per share.

After deducting closing costs and fees, the Company received net proceeds of approximately $4.9 million.

The Company paid to the placement agent, a cash fee and a corporate finance fee equal to 7% of the gross proceeds of the offering. In addition, the Company issued to the placement agent a two year warrant to purchase up to 32,931 shares of Common Stock, with an exercise price equal to $5.22.

14

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 - STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

1. Private placements and public offering: (Cont.):

On February 7, 2013, the Company issued 55,556 units to a private investor for total proceeds of $250. Each unit consisted of one share of Common Stock and a warrant to purchase one share of Common Stock at $7.5 per share exercisable for 32 months. On October 7, 2015 the warrants were cancelled.

On August 16, 2013, the Company raised $4 million, gross, through a registered public offering (“2013 Public Offering”) of its Common Stock and the issuance of warrants to purchase Common Stock. The Company issued a total of 1,568,628 Common Stock, ($2.55 per share) and three year warrants to purchase 1,176,471 shares of Common Stock, at an exercise price of $3.75 per share (the “2013 Warrants”). The Warrants also included, subject to certain exceptions, full ratchet anti-dilution protection in the event of the issuance of any Common Stock, securities convertible into common stock, or certain other issuances at a price below the then-current exercise price of the Warrants, which would result in an adjustment to the exercise price of the Warrants. After deducting closing costs and fees, the Company received net proceeds of approximately $3.3 million.

In accordance with the provisions of ASC 815 (formerly FAS 133) the proceeds related to the warrants at the amount of $829 were recorded to liabilities at the fair value of such warrants as of the date of issuance, and the proceeds related to common stocks of 2,496 were recorded to equity.

On April 25, 2014, the Company entered into agreements with some of holders of the 2013 Warrants to exchange warrants to purchase an aggregate of 777,471 shares of Company common stock for an aggregate of 388,735 unregistered shares of Common Stock.

On May 27, 2014 the Company entered into agreements with certain warrant holders to redeem “2013 warrants” to purchase 333,235 shares of Company common stock, in consideration for approximately $600 payable in cash ($1.80 per Warrant).

In May 2014, certain holders of 2013 Warrants which did not participate in the redemption, and whose 2013 Warrants therefore remained outstanding, waived the anti-dilution provisions of their 2013 Warrants.

In July 2014, the Company agreed to adjust the exercise price of the remaining “2013 Warrants”, to $0.525 per share.

On January 6, 2015, the remaining “2013 Warrants” holders that did not provide a waiver of their anti-dilution rights, exercised their warrants. Therefore, the liability related to the 2013 Warrants has been cancelled.

On June 13, 2014, the Company raised gross proceeds of $10.5 million through a private placement of the Company’s Common Stock and warrants purchase Common Stock. The Company issued 2.8 million shares of Common Stock at a price per share of $3.75 and three year warrants to purchase up to 2.8 million shares of Common Stock at an exercise price of $5.22 per share.

15

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 - STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

1. Private placements and public offering: (Cont.):

Pursuant to a Warrant Exercise Agreement, dated January 8, 2015, holders of the Company’s warrants (issued in June 2014) to purchase an aggregate of 2,546,667 shares of the Company’s Common Stock at an exercise price of $5.22 per share, agreed to exercise their 2014 Warrants in full and the Company agreed to issue new warrants to the holders to purchase up to an aggregate of approximately 3.8 million unregistered shares of Common Stock at an exercise price of $6.50 per share. The $6.50 warrants expire in June 2018. Gross proceeds from the exercise of the warrants were approximately $13.3 million. In connection with the Exercise Agreement, the Company agreed to pay to the Placement Agency a cash fee equal to 6.0% of the Exercise Proceeds, as well as fees and expenses of the Placement Agency of $20. In addition, the Company issued the Placement Agency a warrant to purchase 38,000 shares of Common Stock upon substantially the same terms as the New Warrants. Net of fees and related expenses the proceeds from the warrant exercise amounted to approximately $12.4 million.

Since its inception the Company has raised approximately $46.6M, net in cash in consideration for issuances of common stock and warrants in private placements and public offerings as well as proceeds from warrants exercises.

2. Share-based compensation to employees and to directors:

On November 25, 2004, the Company's stockholders approved the 2004 Global Stock Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) and on March 28, 2005, the Company's stockholders approved the 2005 U.S. Stock Option and Incentive Plan, and the reservation of 609,564 shares of Common Stock for issuance in the aggregate under these stock plans.

In June 2008, June 2011, June 2012 and in June 2016, the Company's stockholders approved increases in the number of shares of common stock available for issuance under these stock option plans by 333,333, 333,333 , 600,000 and 1,600,000 shares, respectively

Each option granted under the plans is exercisable until the earlier of ten years from the date of grant of the option or the expiration dates of the respective option plans. The 2004 and 2005 options plans expired on November 25, 2014 and March 28, 2015, respectively.

On August 14, 2014, the Company's stockholders approved the 2014 Global Share Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) and the 2014 Stock Incentive Plan (The Plans).

A total 600,000 shares of Common Stock were reserved for issuance in the aggregate under the Plans. On June 21, 2016 the Company’s stockholders approved an amendment to the Plans which increased the shared pool of shares of common stock available for issuance under the Plans by 1,600,000, from 600,000 to 2,200,000.

The exercise price of the options granted under the plans may not be less than the nominal value of the shares into which such options are exercised. Any options that are canceled or forfeited before expiration become available for future grants.

16

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 -STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

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

From 2005 through 2009, the Company granted its directors options to purchase an aggregate of 53,333 shares of Common Stock of the Company at an exercise price of $2.25 per share. The options are fully vested and will expire 10 years from the date of issuance.

On April 13, 2010, the Company, Abraham Israeli and Hadasit Medical Research Services and Development Ltd. (“Hadasit”) entered into an Agreement (as amended, the “Hadasit Agreement”) pursuant to which Prof. Israeli agreed, during the term of the Hadasit Agreement, to serve as (i) the Company’s Clinical Trials Advisor and (ii) a member of the Company’s Board of Directors. 

Accordingly, the Company granted to Prof. Israeli in each of April 2010, June 2011, April 2012 and April 2013, an option to purchase 11,111 shares of Common Stock at an exercise price equal to $0.00075 per share.

In addition, the Company granted Hadasit, in each of April 2010, June 2011, April 2012, and April 2013, a warrant to purchase 2,222 shares of Common Stock at an exercise price equal to $0.00075 per share.

In addition, on April 13, 2014, pursuant to the Hadasit Agreement, and pursuant to the December 2013 letter from the Company to Prof. Israeli, the Company issued to Prof. Israeli, an option to purchase 20,000 shares of its Common Stock at an exercise price of $0.00075 per share.

On April 25, 2014 the Agreement among the Company, Prof. Abraham Israeli and Hadasit was terminated. As a result of the termination, Prof. Israeli and Hadasit will no longer receive annual grants to purchase shares of Common Stock, and any outstanding and unvested grants made pursuant to the Agreement ceased to vest. The grants were valid until and exercisable only on or before October 25, 2014.

In October 2014, Prof Israeli exercised his option to purchase 44,444 shares of Common Stock of the Company, and Hadasit exercised its warrants to purchase 8,889 shares of Common Stock of the Company.

On December 16, 2010, the Company granted to two of its directors fully vested options to purchase an aggregate of 26,667 shares of Common Stock at an exercise price of $2.25 per share.

On August 22, 2011, the Company entered into an agreement with one of its directors pursuant to which the Company granted the director 61,558 restricted shares of Common Stock of the Company. The shares vested through August 22, 2014. In addition, the Company is paying the director $15 per quarter his services.

On May 3, 2015 the Company granted to this director 60,000 shares of restricted Common Stock. The shares will vest in three installments through August 22, 2017.

On August 1, 2012, the Company granted to three of its directors options to purchase an aggregate of 30,667 shares of Common Stock of the Company at $2.25 per share. In addition the Company issued to two of its directors and four of its Advisory Board members a total of 59,000 restricted shares of Common Stock. The Options and restricted shares vested over 12 months.

17

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 -STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

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

On April 19, 2013, the Company granted to three of its directors options to purchase an aggregate of 30,667 shares of Common Stock of the Company at $2.25 per share. In addition the Company issued to two of its directors and four of its Advisory Board members a total of 50,667 restricted shares of Common Stock. The Options and restricted shares vested over 12 months.

On June 6, 2014, the Company granted its Chief Operating Officer a fully vested option to purchase 33,333 shares of the Company’s common stock. The exercise price of the grant was $2.70 per share. 

On June 9, 2014, the Company’s former Chief Executive Officer was granted a stock option for the purchase of 380,000 shares of the Company’s common stock, vesting over four years, with an exercise price of $4.5 per share. On November 10, 2015 the Company and the former CEO agreed that the unvested portion of the option as of October 30, 2015 (to purchase 253,333 shares) will be forfeited and that the vested potion of the option (to purchase 126,667 shares) will terminate on September 30, 2016.

On August 15, 2014, the Company issued to two of its directors and four of its Advisory Board members a total of 50,667 restricted shares of Common Stock. The shares vested over 12 months.

On October 31, 2014, the Company granted to four of its directors options to purchase an aggregate of 70,666 shares of Common Stock of the Company at $0.75 per share. The options vest over 12 months.

On June 1, 2015, the Company granted to a director fully vested options to purchase an aggregate of 6,667 shares of Common Stock of the Company at $0.75 per share.

On July 30, 2015 the Company’s newly appointed Chief Financial Officer was granted an option to purchase 165,000 shares of Common Stock at an exercise price of $3.17 per share. The option will vest over 3 years. Effective December 1, 2015 the Company and the Chief Financial Officer agreed to amend the option agreement. Pursuant to the amendment, 82,500 shares were cancelled. The 82,500 remaining shares continue to vest and become exercisable in accordance with the terms of the grant: 20,625 shares vest and become exercisable on July 30, 2016 and 2.08333% of the 82,500 shares vest and become exercisable on each monthly anniversary date starting on August 30, 2016 through the fourth anniversary of the grant, so that the 82,500 shares will become fully vested and exercisable on July 30, 2019.

18

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 -STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

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

On August 27, 2015 the Company granted to four of its seven directors options to purchase an aggregate of 70,665 shares of Common Stock at an exercise price of $0.75 per share, and granted to two of its directors an aggregate of 17,332 restricted shares of Common Stock. The options and restricted shares of Common Stock vest over 12 months until fully vested on August 27, 2016.

On September 28, 2015 the Company granted to its newly appointed Chief Executive Officer an option to purchase 369,619 shares of Common Stock at an exercise price of $2.45 per share. The option vest over 12 months until fully vested on August 28, 2016.

After the balance sheet date, on July 14, 2016 the Company granted to four of its seven directors options to purchase an aggregate of 70,665 shares of Common Stock at an exercise price of $0.75 per share, and is currently in the process of granting to two of its directors an aggregate of 17,332 restricted shares of Common Stock. The options and restricted shares of Common Stock vest over 12 months until fully vested on June 22, 2017.

The Company accounts for shares and warrant grants issued to non-employees using the guidance of ASC 505-50, "Equity-Based Payments to Non-Employees" (EITTF 96-18, "Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services"), whereby the fair value of such option and warrant grants is determined using a Black-Scholes options pricing model at the earlier of the date at which the non-employee's performance is completed or a performance commitment is reached.

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

	For the six months ended June 30, 2016
	Amount of options			Weighted average exercise price		Aggregate intrinsic value
				$		$
Outstanding at beginning of period		1,002,451			2.6072
Granted		-			-
Exercised		-			-
Cancelled		(14,889	)		3.8284
Outstanding at end of period		987,562			2.5888		-
Vested and expected-to-vest at end of period		824,350			2.5662		-

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 June 30, 2016 and the exercise price, 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.

19

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 -STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.)

3. Shares and warrants to investors and service providers:

The Company accounts for shares and warrant grants issued to non-employees using the guidance of ASC 505-50, "Equity-Based Payments to Non-Employees" (EITTF 96-18, "Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services"), whereby the fair value of such option and warrant grants is determined using a Black-Scholes options pricing model at the earlier of the date at which the non-employee's performance is completed or a performance commitment is reached.

20

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 -STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.)

3. Shares and warrants to investors and service providers: (Cont.)

(a) Warrants to investors and service providers:

The fair value for the warrants to service providers was estimated on the measurement date determined using a Black-Scholes option pricing model, with the following weighted-average assumptions for the year ended December 31, 2010; weighted average volatility of 140%, risk free interest rates of 2.39%-3.14%, dividend yields of 0% and a weighted average life of the options of 5-5.5 and 1-9 years. There were no grants to service providers since 2010.

Issuance date	Number of warrants issued		Exercised		Forfeited		Outstanding		Exercise Price $		Warrants exercisable		Exercisable through
Nov-Dec 2004		973,390		959,734		13,656		-		0.00075 - 0.15		-	-
Feb-Dec 2005		203,898		32,011		171,887		-		2.25 - 37.5		-	-
Feb-Dec 2006		112,424		48,513		63,911		-		0.075 – 22.5		-	-
Mar-Nov 2007		180,220		-		66,887		113,333		2.25 - 7.05		113,333	Mar 2017 – Oct 2017
Nov 2008		6,667		-		-		6,667		2.25		6,667	Sep-18
Apr-Oct  2009		26,667		6,667		-		20,000		1.005 – 1.5		20,000	Apr 2019 – Oct 2019
Aug 2007- Jan 2011		2,016,667		-		-		2,016,667		3 - 4.35		2,016,667	Nov-17
Jan 2010		83,333		-		83,333		-		7.5		-	-
Feb 2010		8,333		8,333		-		-		0.15		-	-
Feb 2010		200,000		-		200,000		-		7.5		-	-
Feb 2010		100,000		100,000		-		-		0.015		-	-
Feb 2011		42,735		-		42,735		-		5.85		-	-
Feb 2011		427,167		63,122		364,044		-		4.2		-	-
Feb 2011		854,333		-		854,333		-		7.5		-	-
Jul 2012		32,931		-		32,931		-		5.22		-	-
Jul 2012		990,949		687,037		303,911		-		4.35		-	-
Feb 2013		55,556		-		55,556		-		7.5		-	-
April 2010-2014		12,889		8,889		4,000		-		0.00075		-	-
Aug 2013		1,147,471		-		1,110,706		36,764		3.75		36,764	Aug-16
Aug 2013		29,000		29,000		-		-		0.525		-	-
Jun 2014		2,800,000		2,546,667		-		253,333		5.22		253,333	Jun-17
Jun 2014		84,000		-		-		84,000		4.5		84,000	Jun-17
Jan 2015		3,858,201		-		-		3,858,201		6.5		3,858,201	Jun-18
		14,246,831		4,489,973		3,367,890		6,388,965				6,388,965

21

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 - STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

3. Shares and warrants to service providers: (Cont.):

(b) Shares:

On December 30, 2009, the Company issued to Ramot 74,667 shares of Common Stock (See Note 3).

On December 31, 2011, the Company issued to Hadasit warrants to purchase up to 100,000 restricted shares of Common Stock at an exercise price of $0.015 per share, exercisable for a period of 5 years.  The warrants vested over the course of the trials and were exercised in 2015.

On January 16, 2013, the Company granted an aggregate of 14,400 shares of Common Stock of the Company to two consultants, for services rendered through December 31, 2012. Related compensation expense in the amount of $54 was recorded as research and development expense.

On February 4, 2013, the Company issued 8,408 shares of Common Stock to an investor, according to a settlement agreement, for the correction of the conversion

rate of a $200 convertible loan. The convertible loan was issued in 2006 and converted in 2010.

On March 11, 2013, the Company granted to its legal advisor 12,913 shares of Common Stock for 2013 legal services. The related compensation expense in the amount of $44.5 was recorded as general and administrative expense.

On November 13, 2013, the Company approved a grant of 30,000 shares of Common Stock to the Consultants, for services rendered during January 1, 2013 through September 30, 2013 (the “2013 Shares”). On March 24, 2014, the Company approved grants of an aggregate of 6,000 shares of Common Stock to the Consultants for services rendered in 2014, and issued such shares together with the 2013 Shares.

On March 11, 2013, the Company granted to two of its service providers an aggregate of 26,667 shares of Common Stock. The shares were issued as compensation for public relations services. The related compensation expense in the amount of $92 was recorded as general and administrative expense.

On July 28, 2014, the Company granted to its legal advisor 10,752 shares of Common Stock for 2014 legal services. The related compensation expense in the amount of $50 was recorded as general and administrative expense.

On April 29, 2015, the Company approved grants of an aggregate of 27,411 shares of Common Stock to the Consultants for services rendered in 2014. The related compensation expense was recorded as research and development expense.

On January 2, 2016, the Company granted to its legal advisor 10,752 shares of Common Stock for 2015 legal services. The related compensation expense of $31 was recorded as general and administrative expense.

22

BRAINSTORM CELL THERAPEUTICS INC. AND SUBSIDIARIES

U.S. dollars in thousands

(Except share data and exercise prices)

Notes to the Interim Condensed Consolidated Financial Statements

NOTE 5 - STOCK CAPITAL (Cont.):

B. Issuance of shares, warrants and options: (Cont.):

4. 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:

	Six months ended				Three months ended
	June 30,				June 30,
	2 0 1 6		2 0 1 5		2 0 1 6		2 0 1 5
	Unaudited				Unaudited
Research and development		4		14		1		6
General and administrative		492		654		261		315
Total stock-based compensation expense		496		668		262		321

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains numerous statements, descriptions, forecasts and projections, regarding Brainstorm Cell Therapeutics Inc. and its potential future business operations and performance, including statements regarding the market potential for treatment of neurodegenerative disorders such as ALS, the sufficiency of our existing capital resources for continuing operations in 2016, 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. 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.” Some of these are described under “Risk Factors” in this report and in our annual report on Form 10-K for the fiscal year ended December 31, 2015. 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,” “estimates,” “predicts,” “likely,” “potential,” or “continue” or the negative of any of these terms or similar words. 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 addition to the other information set forth herein and elsewhere in our other public filings with the Securities and Exchange Commission.

Company Overview  

We are a biotechnology company developing novel adult stem cell therapies for debilitating neurodegenerative disorders such as Amyotrophic Lateral Sclerosis (“ALS”, also known as Lou Gehrig’s disease), Multiple Sclerosis (“MS”), and Parkinson’s disease (“PD”) among others. These diseases for the most part have no or limited treatment options and as such represent unmet medical needs. We believe that NurOwn®, our proprietary process for the propagation of Mesenchymal Stem Cells (“MSC”) and their differentiation into neurotrophic factor-(“NTF”) secreting cells (“MSC-NTF”), and their transplantation at, or near, the site of damage, offers the hope of more effectively treating neurodegenerative diseases. Our core technology was developed in collaboration with Prof. Daniel Offen of the Felsenstein Medical Research Center of Tel Aviv University and the late Prof. Eldad Melamed, who passed away in October 2015, and was former head of Neurology of the Rabin Medical Center and former member of the Scientific Committee of the Michael J. Fox Foundation for Parkinson's Research. Our wholly-owned Israeli subsidiary, Brainstorm Cell Therapeutics Ltd. (the “Israeli Subsidiary”), holds rights to commercialize the technology, through a licensing agreement with Ramot at Tel Aviv University Ltd. (“Ramot”), the technology transfer company of Tel Aviv University, Israel. We currently employ 17 employees in Israel and 2 in the United States.

Our Proprietary Technology

Our NurOwn® technology is based on a novel differentiation protocol which induces differentiation of the bone marrow-derived mesenchymal stem cells into neuron-supporting cells, MSC-NTF cells, capable of releasing several neurotrophic factors, including Glial-derived neurotrophic factor (“GDNF”), Brain-derived neurotrophic factor (“BDNF”), Vascular endothelial growth factor (“VEGF”) and Hepatocyte growth factor (“HGF”) which are critical for the growth, survival and differentiation of developing neurons. GDNF is one of the most potent survival factors known for peripheral neurons. VEGF and HGF have been reported to have important neuro-protective effects in ALS and are currently evaluated in other clinical trials for ALS patients.

Our approach to treatment of neurodegenerative diseases with autologous adult stem cells includes a multi-step process beginning with harvesting of undifferentiated stem cells from the patient's own bone marrow, and concluding with transplantation of differentiated, neurotrophic factor-secreting mesenchymal stem cells (MSC-NTF) into the same patient – intrathecally and/or intramuscularly. Intrathecal (injection into the cerebrospinal fluid) transplantation consists of injection by a standard lumbar puncture; there is no need for a laminectomy, which is an invasive, orthopedic spine operation to remove a portion of the vertebral bone, as required by technologies in which cells are implanted directly into the spinal cord. Intramuscular (injection directly into muscle) transplantation is performed via a standard injection procedure as well.

Our proprietary, production process for induction of differentiation of human bone marrow derived mesenchymal stem cells into differentiated cells that produce NTF (MSC-NTF) for clinical use is conducted in full compliance with current Good Manufacturing Practice (“cGMP”).

24

Our proprietary technology is licensed to and developed by our Israeli Subsidiary.

The NurOwn® Transplantation Process

• Bone marrow aspiration from patient;

• Isolation and propagation of the mesenchymal stem cells;

• Differentiation of the mesenchymal stem cells into neurotrophic-factor secreting (MSC-NTF) cells; and

• Autologous transplantation into the patient’s spinal cord and/or muscle tissue.

Differentiation before Transplantation

The ability to induce differentiation of autologous adult mesenchymal stem cells into MSC-NTF cells before transplantation is unique to NurOwn®, making it the first-of-its-kind for treating neurodegenerative diseases.

The specialized cells secrete neurotrophic factors that may lead to:

• Protection of existing motor neurons;

• Promotion of motor neuron growth; and

• Re-establishment of nerve-muscle interaction.

Autologous (Self-transplantation)

The NurOwn® approach is autologous, or self-transplanted, using the patient’s own stem cells. In autologous transplantation there is 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 controversy associated with the use of embryonic stem cells in some countries.

Cryopreservation

We have developed a proprietary method for cryopreservation, or freezing, of cells, which enables long-term storage, for the production of repeat patient doses of NurOwn® without the need for additional bone marrow aspirations. Cryopreservation enables us to create a personalized NurOwn® stem cell "bank" for each patient, for, repeated treatments. 

The ALS Program

NurOwn® is in clinical development for the treatment of ALS. It has been granted Fast Track designation by the U.S. Food and Drug Administration (the “FDA”) and Orphan Drug Designation in both the United States and in Europe for this indication. To date we have completed three clinical trials for ALS patients. Two open label studies were carried out at the Hadassah Medical center (“Hadassah”) in Israel and an FDA approved Phase 2, double blind, placebo controlled study was performed at three prestigious U.S. medical centers.

Phase 1/2 Study at Hadassah

We have an agreement with Hadasit Medical Research Services and Development Ltd., a subsidiary of the Hadassah Medical Organization, pursuant to which Hadassah provides the Israeli Subsidiary with lab services relating to studies of NurOwn®.

The Principal Investigator (PI) for the Israeli studies was Professor Dimitrios Karussis, MD, PhD, head of the Unit of Neuroimmunology and Cell Therapies at Hadassah's Department of Neurology.

In June 2010, we initiated the first-in-man Phase 1/2 study evaluating the safety and efficacy of NurOwn® in ALS patients after receiving approval from the Israeli Ministry of Health (“MoH”). In March 2013, Professor Karussis presented some of the data from this trial at the American Academy of Neurology Annual Meeting. The trial results demonstrated the safety of NurOwn®, as well as early signs of efficacy on both the ALS Functional Rating Score (“ALSFRS-R”) and Forced Vital Capacity (“FVC”).  

Phase 2a Study at Hadassah

In January 2013, the Israeli MoH approved our Phase 2a dose escalation study evaluating combined intramuscular and intrathecal treatment with NurOwn® with Prof. Karussis as PI. On January 5, 2015, the Company presented top line data from this study in a press release and investor conference call. The results of this study confirmed the safety profile observed in the earlier Phase 1/2 trial, with the vast majority of adverse events being low-grade. There were two deaths and two serious adverse events, all of which were deemed by the investigators to be unrelated to treatment. Subjects in this study showed a meaningful reduction in the rate of disease progression for the three and six months after treatment, compared to the three months prior to treatment.

25

In January 2016, the Company announced that the results from the Phase 1/2 and Phase 2a studies conducted in Israel were published in the Journal of the American Medical Association (JAMA) Neurology. The results of these studies show that intrathecal administration of NurOwn^® can slow disease progression in ALS.

U.S. Phase 2 Study

On April 28, 2014, we initiated an FDA-approved randomized, double-blind, placebo controlled multi-center U.S. Phase 2 clinical trial evaluating NurOwn® in ALS patients. The trial was conducted at the Massachusetts General Hospital (MGH) in Boston, Massachusetts, at the University of Massachusetts Memorial Hospital (UMass) in Worcester, Massachusetts and at the Mayo Clinic in Rochester, Minnesota. The Principal Investigators for the study were Drs. Merit Cudkowicz and James Berry at MGH, Dr. Robert Brown, at UMass and Dr. Anthony Windebank, at the Mayo clinic. For this study, NurOwn® was manufactured at the Connell and O’Reilly Cell Manipulation Core Facility at the Dana Farber Cancer Institute in Boston, Massachusetts and at the Human Cellular Therapy Lab at the Mayo Clinic. In the study 48 patients were randomized 3:1 to receive NurOwn® or placebo.

On July 18, 2016 the Company presented top line data from this study in a press release and investor conference call. The Company announced that the study achieved its primary objective, demonstrating that NurOwn^® was safe and well tolerated. NurOwn^® also achieved multiple secondary efficacy endpoints, showing clear evidence of a clinically meaningful benefit. Notably, response rates were higher for NurOwn^®-treated subjects compared to placebo at all time points in the study out to 24 weeks.

Planned Multi Dose Phase 2 Study at Hadassah

In January 2016, the Company entered into a collaborative agreement with Hadassah to conduct the planned multi dose Phase 2 trial with NurOwn® in ALS. The agreement was signed with Hadassah, through its technology transfer company Hadasit Medical Research Services and Development Co. Ltd. The Principal Investigator will be Professor Dimitrios Karussis, who served as Principal Investigator in the Company’s prior ALS studies. 

This planned Phase 2 multi dose study will be the Company’s third clinical trial conducted at Hadassah and is designed to provide guidance in preparing a Phase 3 program for NurOwn^®.  The trial is expected to enroll up to 24 ALS patients who will receive three consecutive stem cell transplantations in order to explore the safety and efficacy of a multi dose treatment.  The trial was submitted to the Hadassah's Helsinki Committee and is now awaiting the approval of the Israeli MoH. The Company is currently considering the possibility of increasing the number of patients and participating clinical sites in this trial in order to increase the statistical power of the study. The advantage of a higher sample size would be that, if NurOwn^® shows a clinical benefit in ALS patients, there is a better probability for an efficacy outcome that is statistically significant.

Future development of NurOwn® in ALS will require additional clinical trials, including a Phase 3 FDA-approved multi dose trial. 

Future Development Plans

In addition to its active clinical program in ALS, the Company is reviewing the potential clinical development of NurOwn® in other neurodegenerative disorders, such as Progressive Multiple Sclerosis, Parkinson’s disease, and Huntington’s disease. The Company has conducted preclinical research in additional neurologic disease areas, including autism. In January 2015, the Company announced positive results from preclinical studies of NurOwn^® in the BTBR mouse model of autism. The BTBR mouse exhibits several stereotypical behavioral characteristics that resemble behaviors seen in autism spectrum disorders, including repetitive behaviors, altered social interactions, cognitive rigidity and impaired adaption to environment.

In addition, the Company is engaged in a number of research initiatives to improve the scale and efficiency of NurOwn® production and to improve the stability of NurOwn^®, which is currently produced in clean room facilities close to the clinical trial sites, where the cells are administered to patients.

We are currently developing technology for the long distance shipping of NurOwn^®. This technology will enable the Company to transport the NurOwn^® from central production facilities to clinics around the world.

26

We are also engaged in a collaboration with Octane Biotech Inc. (“Octane”), a Canadian firm that focuses on culture systems for cell and tissue therapy, to develop a NurOwn® bioreactor. On June 27, 2014, the Company announced that this collaboration has successfully developed a sophisticated Alpha prototype of the NurOwn® Bioreactor, utilizing a customized disposable cartridge that is dedicated to the intricacies of the Company's NurOwn® process.  Based on this first working prototype, the Company and Octane are advancing to the next stage of development with a goal of eventually qualifying a bioreactor for full clinical use. In December 2015, the Company and Octane announced that they have made significant progress toward the development of a novel bioreactor for industrial-scale manufacture of NurOwn® and had completed key development activities related to the customization of specific features of Octane’s Cocoon™ instrumentation platform to enable efficient delivery of NurOwn® stem cell therapy.

Corporate Information

We are incorporated under the laws of the State of Delaware. Our principal executive offices are located at 3 University Plaza Drive, Suite 320, Hackensack, NJ 07601, and our telephone number is (201) 488-0460. We maintain an Internet website at http://www.brainstorm-cell.com. The information on our website is not incorporated into this Quarterly Report on Form 10-Q.

Results of Operations

For the period from inception (September 22, 2000) until June 30, 2016, the Company has not earned any revenues from operations. The Company does not expect to earn revenues from operations until at least 2020, if ever. In addition, the Company has incurred operating costs and other expenses of approximately $983,000 during the three months ended June 30, 2016.

Research and Development, net:

Research and development expenses, net for the three months ended June 30, 2016 and 2015 were $151,000 and $1,375,000, respectively, representing a decrease of $1,224,000. During the three months ended June 20, 2016 we recorded Chief Scientists grants of $776,000 an increase of $472,000 compared to $304,000 recorded in the three months ended June 30, 2015.

Research and development expenses for the three months ended June 30, 2016 before participation of the Chief Scientist declined by $903,000 compared with the second quarter of 2015. This decrease is due to a decrease of $897,000 for costs of activities related to the U.S. Clinical Trial which were winding down in the first half of 2016 including fees to PRC Clinical and regulatory consultants, fees to DFCI and fees to the Mayo Clinic, offset by an increase of $136,000 in costs associated with the clinical trial, planned to be conducted in Israel and a net increase of $9,000 of other research and development expenses.

General and Administrative:

General and administrative expenses for the three months ended June 30, 2016 and 2015 were $832,000 and $988,000, respectively. The decrease in general and administrative expenses of $156,000 is primarily due to: a decrease of $85,000 in stock-based compensation expenses and, a decrease of $98,000 for travel and public relations and office expenses offset by an increase of $27,000 in payroll costs.

Financial Expenses:

Financial income for the three months ended June 30, 2016 was $21,000, as compared to $98,000 for the three months ended June 30, 2015. The main reason for high level of financial income in the three months ended June 30, 2015 was the impact of the 5% strengthening of the New Israeli Shekel vs. the U.S. Dollar on the Company’s deposits denominated in New Israeli Shekels.

Net Loss:

Net loss for the three months ended on June 30, 2016 was $962,000, as compared to a net loss of $2,265,000 for the three months ended June 30, 2015. Net loss per share for the three months ended June 30, 2016 and 2015 was $0.05 and $0.12, respectively.

The weighted average number of shares of Common Stock used in computing basic and diluted net loss per share for the three months ended June 30, 2016 was 18,654,040, compared to 18,450,464 for the three months ended June 30, 2015.

27

Liquidity and Capital Resources

The Company has financed its operations since inception primarily through public and private sales of its Common Stock and warrants and the issuance of convertible promissory notes. At June 30, 2016, the Company had net working capital of $11,531 including cash, cash equivalents and short term bank deposits amounting to $11,481.

Net cash used in operating activities was $1,406,000 for the three months ended June 30, 2016. 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 provided by investing activities was $137,000 for the three months ended June 30, 2016, representing net change in short term interest bearing bank deposits. There were no financing activities during the three months ended June 30, 2016.

On June 4, 2015, we filed a shelf registration statement, effective June 10, 2015, 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. We have not filed any supplemental prospectus defining particular terms of securities to be offered under the shelf registration statement.

Our material cash needs for the next 24 months, assuming we do not expand our clinical trials beyond the upcoming multi dose clinical trial in Israel, will include (i) costs of the clinical trial in the U.S. which are winding down in 2016 (ii) employee salaries, (iii) costs expected for the upcoming multi-dose clinical trial in Israel, (iv) payments to Hadassah for rent and operation of the GMP facilities, and (v) fees to our consultants and legal advisors, patents, and fees for facilities to be used in our research and development.

Future operations are expected to be highly capital intensive and will require substantial capital raisings. We expect our current cash position will allow us to meet our obligations in the upcoming 24 months (assuming the multi dose clinical trial will include 24 patients and will not be expanded into a power trial).

Over the longer term if we are not able to raise substantial additional capital, we may not be able to continue to function as a going concern and may have to cease operations or the Company will reduce its costs, including curtailing its current plan to pursue larger clinical trials in ALS and move new indications into clinical testing. We will be required to raise a substantial amount of capital in the future in order to reach profitability and to complete the commercialization of our products. Our ability to fund these future capital requirements will depend on many factors, including the following: 

• 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;

• the effect of competition and market developments; and

•  future pre-clinical and clinical trial results.

Critical Accounting Policies 

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements 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 continually evaluate our judgments, estimates and assumptions. We base our estimates on the terms of underlying agreements, our expected course of development, historical experience and other factors we believe are reasonable based on the circumstances, the results of which form our management’s basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

There were no significant changes to our critical accounting policies during the quarter ended June 30, 2016. For information about critical accounting policies, see the discussion of critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

28

Off Balance Sheet Arrangements

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

This information has been omitted as the Company qualifies as a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures 

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report, to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by us in such reports 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.

Changes In Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. 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 material 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.

29

Item 1A. Risk Factors.

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, 2015. 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, 2015, 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, 2015, 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 5. Other Information.

During the quarter ended June 30, 2016, we made no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors, as described in our most recent proxy statement.

Item 6. Exhibits.

The Exhibits listed in the Exhibit Index immediately preceding such Exhibits are filed with or incorporated by reference in this report.

30

SIGNATURES

Pursuant to the requirements 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.

	BRAINSTORM CELL THERAPEUTICS INC.
Date: August 11, 2016	By:	/s/ Yoram Bibring
		Name: Yoram Bibring
		Title: Chief Financial Officer (Principal Financial Officer)

31

EXHIBIT INDEX

Exhibit
No.	Description
10.1	Amendment No. 1 to the Brainstorm Cell Therapeutics Inc. 2014 Stock Incentive Plan is incorporated herein by reference to Appendix A to the Company’s Definitive Schedule 14A filed May 11, 2016 (File No. 000-36641).
10.2	Amendment No. 1 to the Brainstorm Cell Therapeutics Inc. 2014 Global Share Option Plan is incorporated herein by reference to Appendix B to the Company’s Definitive Schedule 14A filed May 11, 2016 (File No. 000-36641).
31.1*	Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1‡	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2‡	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Documen
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

‡ Furnished herewith

32

EX-31.1

EXHIBIT 31.1

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.

I, Chaim Lebovits, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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.

Date: August 11, 2016	/s/ Chaim Lebovits
	Name: Chaim Lebovits
	Title: President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

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.

I, Yoram Bibring, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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.

Date: August 11, 2016	/s/ Yoram Bibring
	Name: Yoram Bibring
	Title: Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

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 Quarterly Report on Form 10-Q of Brainstorm Cell Therapeutics Inc. for the period ended June 30, 2016, 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) the Quarterly Report on Form 10-Q for the period ended June 30, 2016 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 the Quarterly Report on Form 10-Q for the period ended June 30, 2016 fairly presents, in all material respects, the financial condition and results of operations.

August 11, 2016	/s/ Chaim Lebovits
	Name: Chaim Lebovits
	Title: President and Chief Executive Officer
	(Principal Executive Officer)

The foregoing certification is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and is not to be incorporated by reference into any filing of Brainstorm Cell Therapeutics Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

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 Quarterly Report on Form 10-Q of Brainstorm Cell Therapeutics Inc. for the period ended June 30, 2016, 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) the Quarterly Report on Form 10-Q for the period ended June 30, 2016 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 the Quarterly Report on Form 10-Q for the period ended June 30, 2016 fairly presents, in all material respects, the financial condition and results of operations.

August 11, 2016	/s/ Yoram Bibring
	Name: Yoram Bibring
	Title: Chief Financial Officer
	(Principal Financial Officer)

The foregoing certification is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and is not to be incorporated by reference into any filing of Brainstorm Cell Therapeutics Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	BRAINSTORM CELL THERAPEUTICS INC.
Entity Central Index Key	0001137883
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	BCLI
Entity Common Stock, Shares Outstanding		18,654,040

XML

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 944	$ 428
Short-term deposit (Note 4)	10,537	15,527
Account receivable	1,265	759
Prepaid expenses and other current assets	67	74
Total current assets	12,813	16,788
Long-Term Assets:
Prepaid expenses and other long-term assets	23	21
Property and Equipment, Net	318	271
Total Long-Term Assets	341	292
Total assets	13,154	17,080
Current Liabilities:
Accounts payables	355	1,169
Accrued expenses	652	1,500
Other accounts payable	275	283
Total current liabilities	1,282	2,952
Stockholders' Equity:
Stock capital: (Note 5) Common stock of $0.00005 par value - Authorized: 100,000,000 shares at June 30, 2016 and December 31, 2015 respectively; Issued and outstanding: 18,654,040 and 18,643,288 shares at June 30, 2016 and December 31, 2015 respectively.	11	11
Additional paid-in-capital	84,754	84,258
Accumulated deficit	(72,893)	(70,141)
Total stockholders' equity	11,872	14,128
Total liabilities and stockholders' equity	$ 13,154	$ 17,080

XML

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Common stock, par value (in dollars per share)	$ 0.00005	$ 0.00005
Common stock, shares Authorized	100,000,000	100,000,000
Common stock, shares Issued	18,654,040	18,643,288
Common stock, shares outstanding	18,654,040	18,643,288

XML

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Operating expenses:
Research and development, net	$ 151	$ 1,375	$ 1,137	$ 2,620
General and administrative	832	988	1,658	1,948
Operating loss	(983)	(2,363)	(2,795)	(4,568)
Financial (income) expenses, net	(21)	(98)	(43)	(67)
Net loss	$ (962)	$ (2,265)	$ (2,752)	$ (4,501)
Basic and diluted net profit (loss) per share (in dollars per share)	$ (0.05)	$ (0.12)	$ (0.15)	$ (0.24)
Weighted average number of shares outstanding used in computing basic and diluted net loss per share (in shares)	18,654,040	18,450,464	18,653,922	18,290,343

XML

INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]		Additional Paid-in Capital [Member]	Accumulated deficit [Member]
Balance at Dec. 31, 2014	$ 6,675	$ 11		$ 68,317	$ (61,653)
Balance (in shares) at Dec. 31, 2014		15,281,497
Stock-based compensation related to warrants and stock granted to service providers	108	$ 0		108	0
Stock-based compensation related to warrants and stock granted to service providers (in shares)		27,411
Stock-based compensation related to stock and options granted to directors and employees	835	$ 0		835	0
Stock-based compensation related to stock and options granted to directors and employees (in shares)		77,332
Exercise and reissuance of warrants	12,409		[1]	12,409	0
Exercise and reissuance of warrants (in shares)		2,546,667
Exercise of liability classified warrants	145		[1]	145	0
Exercise of liability classified warrants (in shares)		29,000
Exercise of equity classified warrants	2,333		[1]	2,333	0
Exercise of equity classified warrants (in shares)		536,382
Exercise of options	109		[1]	109	0
Exercise of options (in shares)		44,999
Exercise of warrants by Hadasit (Note 7.B.3.(B))	2		[1]	2	0
Exercise of warrants by Hadasit (Note 7.B.3.(B)) (in shares)		100,000
Net loss	(8,488)	$ 0		0	(8,488)
Balance at Dec. 31, 2015	14,128	$ 11		84,258	(70,141)
Balance (in shares) at Dec. 31, 2015		18,643,288
Stock-based compensation related to warrants and stock granted to service providers	31		[1]	31	0
Stock-based compensation related to warrants and stock granted to service providers (in shares)		10,752
Stock-based compensation related to stock and options granted to directors and employees	465	$ 0		465	0
Stock-based compensation related to stock and options granted to directors and employees (in shares)		0
Net loss	(2,752)	$ 0		0	(2,752)
Balance at Jun. 30, 2016	$ 11,872	$ 11		$ 84,754	$ (72,893)
Balance (in shares) at Jun. 30, 2016		18,654,040

[1] Represents an amount less than $1.

XML

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss	$ (962)	$ (2,265)	$ (2,752)	$ (4,501)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	22	24	38	47
Expenses related to shares and options granted to service providers	0	108	31	108
Amortization of deferred stock-based compensation related to options granted to employees and directors	262	321	465	668
Decrease (increase) in accounts receivable and prepaid expenses	(768)	362	(499)	671
Increase (decrease) in trade payables	74	(167)	(814)	(787)
Increase (decrease) in other accounts payable and accrued expenses	(34)	(33)	(856)	200
Revaluation of warrants	0	0	0	7
Total net cash used in operating activities	(1,406)	(1,650)	(4,387)	(3,587)
Cash flows from investing activities:
Purchase of property and equipment	(59)	16	(85)	(16)
Changes in short-term deposit	196	(539)	4,990	(14,104)
Investment in lease deposit	0	0	(2)	0
Total net cash provided by (used in) investing activities	137	(555)	4,903	(14,120)
Cash flows from financing activities:
Proceeds from issuances of common stock through equity warrants and options exercises	0	0	0	2,348
Proceeds from issuance of Common stock, net			0
Proceeds from equity offering through issuances of equity warrants and common stock through the exercise of previously issued equity warrants	0	12	0	12,409
Redemption of warrants in cash	0	0	0	0
Total net cash provided by financing activities	0	12	0	14,757
Increase (decrease) in cash and cash equivalents	(1,269)	(2,193)	516	(2,950)
Cash and cash equivalents at the beginning of the period	2,213	3,494	428	4,251
Cash and cash equivalents at end of the period	944	1,301	944	1,301
Non-cash financing activities:
Stock issued for warrants exchange	0	0	0
Warrants liability classified as equity	0	0	0	130
Total non-cash financing activities	$ 0	$ 0	$ 0	$ 130

XML

GENERAL

6 Months Ended

Jun. 30, 2016

General and Going Concern Disclosure [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1 - GENERAL

A.

Brainstorm Cell Therapeutics Inc. (formerly: Golden Hand Resources Inc. - the "Company") was incorporated in the State of Washington on September 22, 2000. The Company currently holds two wholly owned subsidiaries; Brainstorm Cell Therapeutics Ltd. ("BCT"), an Israeli Company which currently conducts all of the research and development activities of the Company, and Brainstorm Cell Therapeutics UK Ltd. (“Brainstorm UK”). Brainstorm UK acts on behalf of the parent Company in the EU. Brainstorm UK is currently inactive.

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

B. 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), Multiple Sclerosis (MS) 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.

C. NurOwn is in clinical development for the treatment of ALS. The Company has completed two single dose clinical trials of NurOwn in Israel, a phase 1/2 trial with 12 patients and a phase 2a trial with additional 12 patients. In July 2016 the Company announced the results of its phase 2 trial which was conducted in three major medical centers in the US. This single dose trial included 48 patients randomized in a 3:1 ratio to receive NuOwn or placebo. Future development of NurOwn for ALS will require additional clinical trials typically required to provide an adequate basis for regulatory approval and product labeling. These additional trials will include the administration of repeated doses to ALS patients enrolled in these trials.

D. On September 15, 2014 the Company completed a reverse stock split of the Company’s shares of Common Stock by a ratio 1-for-15. The Company adjusted all ordinary shares, options, warrants, per share data and exercise prices included in these financial statements for all periods presented to reflect the reverse stock split. On August 26, 2015 the shareholders of the Company approved a reduction of the number of authorized shares of Common Stock of the Company from 800,000,000 to 100,000,000.

GOING CONCERN:

To date the Company has not generated any 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. As of June 30, 2016 the Company’s liquid resources which include cash, cash equivalents and short term bank deposits amounted to $11,481. Management believes that, if necessary, the Company’s current resources would be sufficient to fund its operations for the next 24 months, however additional financial resources will be needed to conduct our future clinical trials as well as fund other long term operations and there can be no assurance that such additional funds will be available on terms acceptable to the Company, or that the Company will not incur additional unforeseen costs or expenses. Such conditions raise substantial doubts about the Company's long term ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.

XML

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

A. Unaudited Interim Financial Statements

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. 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 considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).

For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Operating results for the three months and the six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ended December 31, 2016.

B. Significant Accounting Policies

The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.

C. Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for us beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. As the Company has not incurred revenues to date, it is unable to determine to expected impact of the new standard on its consolidated financial statements.

In January 2016, the FASB issued an amended standard requiring changes to recognition and measurement of certain financial assets and liabilities. The standard primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This standard is effective beginning in the first quarter of 2018. Certain provisions allow for early adoption. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In February 2016, the FASB issued a new lease accounting standard requiring that we recognize lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company have not yet determined the impact of the new standard on its consolidated financial statements.

In March 2016, the FASB issued an accounting standard update aimed at simplifying the accounting for share-based payment transactions. Included in the update are modifications to the accounting for income taxes upon vesting or settlement of awards, employer tax withholding on shared-based compensation, forfeitures, and financial statement presentation of excess tax benefits. This standard is effective beginning in the first quarter of 2017; early adoption is permitted. The Company does not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In June 2016, the FASB issued a new standard requiring measurement and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This standard is effective for us in the first quarter of 2020; early adoption is permitted beginning in the first quarter of 2019 and we are evaluating whether we will early adopt. It is required to be applied on a modified-retrospective approach with certain elements being adopted prospectively. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

D. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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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RESEARCH AND LICENSE AGREEMENT

6 Months Ended

Jun. 30, 2016

Research and License Agreement [Abstract]

Research and License Agreement [Text Block]

NOTE 3 - RESEARCH AND LICENSE AGREEMENT

 

The Company has a Research and License Agreement, as amended and restated, with Ramot. The Company obtained a waiver and release from Ramot pursuant to which Ramot agreed to an amended payment schedule regarding the Company's payment obligations under the Research and License Agreement and waived all claims against the Company resulting from the Company's previous defaults and non-payment under the Research and License Agreement. The waiver and release amended and restated the original payment schedule under the original agreement providing for payments during the initial research period and additional payments for any extended research period.

The Company is to pay Ramot royalties on Net Sales on a Licensed Product by Licensed Product and jurisdiction by jurisdiction basis as follows:

a) So long as the making, producing, manufacturing, using, marketing, selling, importing or exporting of such Licensed Product is covered by a Valid Claim or is covered by Orphan Drug Status in such jurisdiction – 5% of all Net Sales.

b) In the event the making, producing, manufacturing, using, marketing, selling, importing or exporting of such Licensed Product is not covered by a Valid Claim and not covered by Orphan Drug status in such jurisdiction – 3% of all Net Sales until the expiration of 15 years from the date of the First Commercial Sale of such Licensed Product in such jurisdiction.

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SHORT TERM INVESTMENTS

6 Months Ended

Jun. 30, 2016

Cash and Cash Equivalents [Abstract]

Short Term Investments [Text Block]

NOTE 4 - SHORT TERM INVESTMENTS

 

Short term investments on June 30, 2016 and December 31, 2015 include bank deposits bearing annual interest rates varying from 0.15% to 1.34%, with maturities of up to 3 and 6 months as of June 30, 2016 and December 31, 2015.

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STOCK CAPITAL

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5 - STOCK CAPITAL

A. The rights of Common Stock are as follows:

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.

B. Issuance of shares, warrants and options:

1. Private placements and public offering:

In July 2007, the Company entered into an investment agreement, that was amended in August 2009 with ACCBT Corp. a company under the control of the Company’s current Chief Executive Officer, according to which for an aggregate consideration of approximately $5 million the Company issued 2,777,777 shares of Common Stock and a warrant to purchase 672,222 shares of Common Stock at an exercise price of $3 per share and a warrant to purchase 1,344,444 shares of common stock at an exercise price of $4.35 per share. The warrants are exercisable, through November 5, 2017.

Our current Chief Executive Officer has served as the President of the Company since July 2007 and in addition has served as Chief Executive Officer from August 2013 until June 2014. On September 28, 2015 he was reappointed and currently serves as Chief Executive Officer of the Company.

In February 2010, the Company issued an aggregate 399,999 shares of Common Stock and warrants to purchase an aggregate of 199,998 shares of Common Stock with an exercise price of $7.50 per share for aggregate proceeds of $1.5 million.

On July 17, 2012, the Company raised a $5.7 million of gross proceeds through a public offering (“2012 Public Offering”) of its common stock and warrants to purchase common stock. The Company issued a total of 1,321,265 shares of common stock ($4.35 per share), and thirty month warrants to purchase 990,949 shares of Common Stock at an exercise price of $4.35 per share.

After deducting closing costs and fees, the Company received net proceeds of approximately $4.9 million.

The Company paid to the placement agent, a cash fee and a corporate finance fee equal to 7% of the gross proceeds of the offering. In addition, the Company issued to the placement agent a two year warrant to purchase up to 32,931 shares of Common Stock, with an exercise price equal to $5.22.

On February 7, 2013, the Company issued 55,556 units to a private investor for total proceeds of $250. Each unit consisted of one share of Common Stock and a warrant to purchase one share of Common Stock at $7.5 per share exercisable for 32 months. On October 7, 2015 the warrants were cancelled.

On August 16, 2013, the Company raised $4 million, gross, through a registered public offering (“2013 Public Offering”) of its Common Stock and the issuance of warrants to purchase Common Stock. The Company issued a total of 1,568,628 Common Stock, ($2.55 per share) and three year warrants to purchase 1,176,471 shares of Common Stock, at an exercise price of $3.75 per share (the “2013 Warrants”). The Warrants also included, subject to certain exceptions, full ratchet anti-dilution protection in the event of the issuance of any Common Stock, securities convertible into common stock, or certain other issuances at a price below the then-current exercise price of the Warrants, which would result in an adjustment to the exercise price of the Warrants. After deducting closing costs and fees, the Company received net proceeds of approximately $3.3 million.

In accordance with the provisions of ASC 815 (formerly FAS 133) the proceeds related to the warrants at the amount of $829 were recorded to liabilities at the fair value of such warrants as of the date of issuance, and the proceeds related to common stocks of 2,496 were recorded to equity.

On April 25, 2014, the Company entered into agreements with some of holders of the 2013 Warrants to exchange warrants to purchase an aggregate of 777,471 shares of Company common stock for an aggregate of 388,735 unregistered shares of Common Stock.

On May 27, 2014 the Company entered into agreements with certain warrant holders to redeem “2013 warrants” to purchase 333,235 shares of Company common stock, in consideration for approximately $600 payable in cash ($1.80 per Warrant).

In May 2014, certain holders of 2013 Warrants which did not participate in the redemption, and whose 2013 Warrants therefore remained outstanding, waived the anti-dilution provisions of their 2013 Warrants.

In July 2014, the Company agreed to adjust the exercise price of the remaining “2013 Warrants”, to $0.525 per share.

On January 6, 2015, the remaining “2013 Warrants” holders that did not provide a waiver of their anti-dilution rights, exercised their warrants. Therefore, the liability related to the 2013 Warrants has been cancelled.

On June 13, 2014, the Company raised gross proceeds of $10.5 million through a private placement of the Company’s Common Stock and warrants purchase Common Stock. The Company issued 2.8 million shares of Common Stock at a price per share of $3.75 and three year warrants to purchase up to 2.8 million shares of Common Stock at an exercise price of $5.22 per share.

Pursuant to a Warrant Exercise Agreement, dated January 8, 2015, holders of the Company’s warrants (issued in June 2014) to purchase an aggregate of 2,546,667 shares of the Company’s Common Stock at an exercise price of $5.22 per share, agreed to exercise their 2014 Warrants in full and the Company agreed to issue new warrants to the holders to purchase up to an aggregate of approximately 3.8 million unregistered shares of Common Stock at an exercise price of $6.50 per share. The $6.50 warrants expire in June 2018. Gross proceeds from the exercise of the warrants were approximately $13.3 million. In connection with the Exercise Agreement, the Company agreed to pay to the Placement Agency a cash fee equal to 6.0% of the Exercise Proceeds, as well as fees and expenses of the Placement Agency of $20. In addition, the Company issued the Placement Agency a warrant to purchase 38,000 shares of Common Stock upon substantially the same terms as the New Warrants. Net of fees and related expenses the proceeds from the warrant exercise amounted to approximately $12.4 million.

Since its inception the Company has raised approximately $46.6M, net in cash in consideration for issuances of common stock and warrants in private placements and public offerings as well as proceeds from warrants exercises.

2. Share-based compensation to employees and to directors:

On November 25, 2004, the Company's stockholders approved the 2004 Global Stock Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) and on March 28, 2005, the Company's stockholders approved the 2005 U.S. Stock Option and Incentive Plan, and the reservation of 609,564 shares of Common Stock for issuance in the aggregate under these stock plans.

In June 2008, June 2011, June 2012 and in June 2016, the Company's stockholders approved increases in the number of shares of common stock available for issuance under these stock option plans by 333,333, 333,333 , 600,000 and 1,600,000 shares, respectively

Each option granted under the plans is exercisable until the earlier of ten years from the date of grant of the option or the expiration dates of the respective option

plans. The 2004 and 2005 options plans expired on November 25, 2014 and March 28, 2015, respectively.

On August 14, 2014, the Company's stockholders approved the 2014 Global Share Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) and the 2014 Stock Incentive Plan (The Plans).

A total 600,000 shares of Common Stock were reserved for issuance in the aggregate under the Plans. On June 21, 2016 the Company’s stockholders approved an amendment to the Plans which increased the shared pool of shares of common stock available for issuance under the Plans by 1,600,000, from 600,000 to 2,200,000.

The exercise price of the options granted under the plans may not be less than the nominal value of the shares into which such options are exercised. Any options that are canceled or forfeited before expiration become available for future grants.

From 2005 through 2009, the Company granted its directors options to purchase an aggregate of 53,333 shares of Common Stock of the Company at an exercise price of $2.25 per share. The options are fully vested and will expire 10 years from the date of issuance.

On April 13, 2010, the Company, Abraham Israeli and Hadasit Medical Research Services and Development Ltd. (“Hadasit”) entered into an Agreement (as amended, the “Hadasit Agreement”) pursuant to which Prof. Israeli agreed, during the term of the Hadasit Agreement, to serve as (i) the Company’s Clinical Trials Advisor and (ii) a member of the Company’s Board of Directors. 

Accordingly, the Company granted to Prof. Israeli in each of April 2010, June 2011, April 2012 and April 2013, an option to purchase 11,111 shares of Common Stock at an exercise price equal to $0.00075 per share.

In addition, the Company granted Hadasit, in each of April 2010, June 2011, April 2012, and April 2013, a warrant to purchase 2,222 shares of Common Stock at an exercise price equal to $0.00075 per share.

In addition, on April 13, 2014, pursuant to the Hadasit Agreement, and pursuant to the December 2013 letter from the Company to Prof. Israeli, the Company issued to Prof. Israeli, an option to purchase 20,000 shares of its Common Stock at an exercise price of $0.00075 per share.

On April 25, 2014 the Agreement among the Company, Prof. Abraham Israeli and Hadasit was terminated. As a result of the termination, Prof. Israeli and Hadasit will no longer receive annual grants to purchase shares of Common Stock, and any outstanding and unvested grants made pursuant to the Agreement ceased to vest. The grants were valid until and exercisable only on or before October 25, 2014.

In October 2014, Prof Israeli exercised his option to purchase 44,444 shares of Common Stock of the Company, and Hadasit exercised its warrants to purchase 8,889 shares of Common Stock of the Company.

On December 16, 2010, the Company granted to two of its directors fully vested options to purchase an aggregate of 26,667 shares of Common Stock at an exercise price of $2.25 per share.

On August 22, 2011, the Company entered into an agreement with one of its directors pursuant to which the Company granted the director 61,558 restricted shares of Common Stock of the Company. The shares vested through August 22, 2014. In addition, the Company is paying the director $15 per quarter his services.

On May 3, 2015 the Company granted to this director 60,000 shares of restricted Common Stock. The shares will vest in three installments through August 22, 2017.

On August 1, 2012, the Company granted to three of its directors options to purchase an aggregate of 30,667 shares of Common Stock of the Company at $2.25 per share. In addition the Company issued to two of its directors and four of its Advisory Board members a total of 59,000 restricted shares of Common Stock. The Options and restricted shares vested over 12 months.

  

On April 19, 2013, the Company granted to three of its directors options to purchase an aggregate of 30,667 shares of Common Stock of the Company at $2.25 per share. In addition the Company issued to two of its directors and four of its Advisory Board members a total of 50,667 restricted shares of Common Stock. The Options and restricted shares vested over 12 months.

On June 6, 2014, the Company granted its Chief Operating Officer a fully vested option to purchase 33,333 shares of the Company’s common stock. The exercise price of the grant was $2.70 per share. 

On June 9, 2014, the Company’s former Chief Executive Officer was granted a stock option for the purchase of 380,000 shares of the Company’s common stock, vesting over four years, with an exercise price of $4.5 per share. On November 10, 2015 the Company and the former CEO agreed that the unvested portion of the option as of October 30, 2015 (to purchase 253,333 shares) will be forfeited and that the vested potion of the option (to purchase 126,667 shares) will terminate on September 30, 2016.

On August 15, 2014, the Company issued to two of its directors and four of its Advisory Board members a total of 50,667 restricted shares of Common Stock. The shares vested over 12 months.

On October 31, 2014, the Company granted to four of its directors options to purchase an aggregate of 70,666 shares of Common Stock of the Company at $0.75 per share. The options vest over 12 months.

On June 1, 2015, the Company granted to a director fully vested options to purchase an aggregate of 6,667 shares of Common Stock of the Company at $0.75 per share.

On July 30, 2015 the Company’s newly appointed Chief Financial Officer was granted an option to purchase 165,000 shares of Common Stock at an exercise price of $3.17 per share. The option will vest over 3 years. Effective December 1, 2015 the Company and the Chief Financial Officer agreed to amend the option agreement. Pursuant to the amendment, 82,500 shares were cancelled. The 82,500 remaining shares continue to vest and become exercisable in accordance with the terms of the grant: 20,625 shares vest and become exercisable on July 30, 2016 and 2.08333% of the 82,500 shares vest and become exercisable on each monthly anniversary date starting on August 30, 2016 through the fourth anniversary of the grant, so that the 82,500 shares will become fully vested and exercisable on July 30, 2019.

On August 27, 2015 the Company granted to four of its seven directors options to purchase an aggregate of 70,665 shares of Common Stock at an exercise price of $0.75 per share, and granted to two of its directors an aggregate of 17,332 restricted shares of Common Stock. The options and restricted shares of Common Stock vest over 12 months until fully vested on August 27, 2016.

On September 28, 2015 the Company granted to its newly appointed Chief Executive Officer an option to purchase 369,619 shares of Common Stock at an exercise price of $2.45 per share. The option vest over 12 months until fully vested on August 28, 2016.

After the balance sheet date, on July 14, 2016 the Company granted to four of its seven directors options to purchase an aggregate of 70,665 shares of Common Stock at an exercise price of $0.75 per share, and is currently in the process of granting to two of its directors an aggregate of 17,332 restricted shares of Common Stock. The options and restricted shares of Common Stock vest over 12 months until fully vested on June 22, 2017.

The Company accounts for shares and warrant grants issued to non-employees using the guidance of ASC 505-50, "Equity-Based Payments to Non-Employees" (EITTF 96-18, "Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services"), whereby the fair value of such option and warrant grants is determined using a Black-Scholes options pricing model at the earlier of the date at which the non-employee's performance is completed or a performance commitment is reached.

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

	For the six months ended June 30, 2016
	Amount of options			Weighted average exercise price		Aggregate intrinsic value
				$		$
Outstanding at beginning of period		1,002,451			2.6072
Granted		-			-
Exercised		-			-
Cancelled		(14,889	)		3.8284
Outstanding at end of period		987,562			2.5888		-
Vested and expected-to-vest at end of period		824,350			2.5662		-

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 June 30, 2016 and the exercise price, 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.

3. Shares and warrants to investors and service providers:

The Company accounts for shares and warrant grants issued to non-employees using the guidance of ASC 505-50, "Equity-Based Payments to Non-Employees" (EITTF 96-18, "Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services"), whereby the fair value of such option and warrant grants is determined using a Black-Scholes options pricing model at the earlier of the date at which the non-employee's performance is completed or a performance commitment is reached.

(a) Warrants to investors and service providers:

The fair value for the warrants to service providers was estimated on the measurement date determined using a Black-Scholes option pricing model, with the following weighted-average assumptions for the year ended December 31, 2010; weighted average volatility of 140%, risk free interest rates of 2.39%-3.14%, dividend yields of 0% and a weighted average life of the options of 5-5.5 and 1-9 years. There were no grants to service providers since 2010.

Issuance date	Number of warrants issued		Exercised		Forfeited		Outstanding		Exercise Price $		Warrants exercisable		Exercisable through
Nov-Dec 2004		973,390		959,734		13,656		-		0.00075 - 0.15		-	-
Feb-Dec 2005		203,898		32,011		171,887		-		2.25 - 37.5		-	-
Feb-Dec 2006		112,424		48,513		63,911		-		0.075 – 22.5		-	-
Mar-Nov 2007		180,220		-		66,887		113,333		2.25 - 7.05		113,333	Mar 2017 – Oct 2017
Nov 2008		6,667		-		-		6,667		2.25		6,667	Sep-18
Apr-Oct  2009		26,667		6,667		-		20,000		1.005 – 1.5		20,000	Apr 2019 – Oct 2019
Aug 2007- Jan 2011		2,016,667		-		-		2,016,667		3 - 4.35		2,016,667	Nov-17
Jan 2010		83,333		-		83,333		-		7.5		-	-
Feb 2010		8,333		8,333		-		-		0.15		-	-
Feb 2010		200,000		-		200,000		-		7.5		-	-
Feb 2010		100,000		100,000		-		-		0.015		-	-
Feb 2011		42,735		-		42,735		-		5.85		-	-
Feb 2011		427,167		63,122		364,044		-		4.2		-	-
Feb 2011		854,333		-		854,333		-		7.5		-	-
Jul 2012		32,931		-		32,931		-		5.22		-	-
Jul 2012		990,949		687,037		303,911		-		4.35		-	-
Feb 2013		55,556		-		55,556		-		7.5		-	-
April 2010-2014		12,889		8,889		4,000		-		0.00075		-	-
Aug 2013		1,147,471		-		1,110,706		36,764		3.75		36,764	Aug-16
Aug 2013		29,000		29,000		-		-		0.525		-	-
Jun 2014		2,800,000		2,546,667		-		253,333		5.22		253,333	Jun-17
Jun 2014		84,000		-		-		84,000		4.5		84,000	Jun-17
Jan 2015		3,858,201		-		-		3,858,201		6.5		3,858,201	Jun-18
		14,246,831		4,489,973		3,367,890		6,388,965				6,388,965

(b) Shares:

On December 30, 2009, the Company issued to Ramot 74,667 shares of Common Stock (See Note 3).

On December 31, 2011, the Company issued to Hadasit warrants to purchase up to 100,000 restricted shares of Common Stock at an exercise price of $0.015 per share, exercisable for a period of 5 years.  The warrants vested over the course of the trials and were exercised in 2015.

On January 16, 2013, the Company granted an aggregate of 14,400 shares of Common Stock of the Company to two consultants, for services rendered through December 31, 2012. Related compensation expense in the amount of $54 was recorded as research and development expense.

On February 4, 2013, the Company issued 8,408 shares of Common Stock to an investor, according to a settlement agreement, for the correction of the conversion

rate of a $200 convertible loan. The convertible loan was issued in 2006 and converted in 2010.

On March 11, 2013, the Company granted to its legal advisor 12,913 shares of Common Stock for 2013 legal services. The related compensation expense in the amount of $44.5 was recorded as general and administrative expense.

On November 13, 2013, the Company approved a grant of 30,000 shares of Common Stock to the Consultants, for services rendered during January 1, 2013 through September 30, 2013 (the “2013 Shares”). On March 24, 2014, the Company approved grants of an aggregate of 6,000 shares of Common Stock to the Consultants for services rendered in 2014, and issued such shares together with the 2013 Shares.

On March 11, 2013, the Company granted to two of its service providers an aggregate of 26,667 shares of Common Stock. The shares were issued as compensation for public relations services. The related compensation expense in the amount of $92 was recorded as general and administrative expense.

On July 28, 2014, the Company granted to its legal advisor 10,752 shares of Common Stock for 2014 legal services. The related compensation expense in the amount of $50 was recorded as general and administrative expense.

On April 29, 2015, the Company approved grants of an aggregate of 27,411 shares of Common Stock to the Consultants for services rendered in 2014. The related compensation expense was recorded as research and development expense.

On January 2, 2016, the Company granted to its legal advisor 10,752 shares of Common Stock for 2015 legal services. The related compensation expense of $31 was recorded as general and administrative expense.

4. 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:

	Six months ended				Three months ended
	June 30,				June 30,
	2 0 1 6		2 0 1 5		2 0 1 6		2 0 1 5
	Unaudited				Unaudited
Research and development		4		14		1		6
General and administrative		492		654		261		315
Total stock-based compensation expense		496		668		262		321

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Unaudited Interim Financial Statements [Policy Text Block]

A. Unaudited Interim Financial Statements

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. 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 considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).

For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Operating results for the three months and the six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ended December 31, 2016.

Basis of Accounting, Policy [Policy Text Block]

B. Significant Accounting Policies

The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.

New Accounting Pronouncements, Policy [Policy Text Block]

C. Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for us beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. As the Company has not incurred revenues to date, it is unable to determine to expected impact of the new standard on its consolidated financial statements.

In January 2016, the FASB issued an amended standard requiring changes to recognition and measurement of certain financial assets and liabilities. The standard primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This standard is effective beginning in the first quarter of 2018. Certain provisions allow for early adoption. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In February 2016, the FASB issued a new lease accounting standard requiring that we recognize lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company have not yet determined the impact of the new standard on its consolidated financial statements.

In March 2016, the FASB issued an accounting standard update aimed at simplifying the accounting for share-based payment transactions. Included in the update are modifications to the accounting for income taxes upon vesting or settlement of awards, employer tax withholding on shared-based compensation, forfeitures, and financial statement presentation of excess tax benefits. This standard is effective beginning in the first quarter of 2017; early adoption is permitted. The Company does not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

In June 2016, the FASB issued a new standard requiring measurement and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This standard is effective for us in the first quarter of 2020; early adoption is permitted beginning in the first quarter of 2019 and we are evaluating whether we will early adopt. It is required to be applied on a modified-retrospective approach with certain elements being adopted prospectively. The Company do not expect that the adoption of this standard will have a significant impact on the financial position or results of operations.

Use of Estimates, Policy [Policy Text Block]

D. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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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STOCK CAPITAL (Tables)

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

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

	For the six months ended June 30, 2016
	Amount of options			Weighted average exercise price		Aggregate intrinsic value
				$		$
Outstanding at beginning of period		1,002,451			2.6072
Granted		-			-
Exercised		-			-
Cancelled		(14,889	)		3.8284
Outstanding at end of period		987,562			2.5888		-
Vested and expected-to-vest at end of period		824,350			2.5662		-

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Issuance date	Number of warrants issued		Exercised		Forfeited		Outstanding		Exercise Price $		Warrants exercisable		Exercisable through
Nov-Dec 2004		973,390		959,734		13,656		-		0.00075 - 0.15		-	-
Feb-Dec 2005		203,898		32,011		171,887		-		2.25 - 37.5		-	-
Feb-Dec 2006		112,424		48,513		63,911		-		0.075 – 22.5		-	-
Mar-Nov 2007		180,220		-		66,887		113,333		2.25 - 7.05		113,333	Mar 2017 – Oct 2017
Nov 2008		6,667		-		-		6,667		2.25		6,667	Sep-18
Apr-Oct  2009		26,667		6,667		-		20,000		1.005 – 1.5		20,000	Apr 2019 – Oct 2019
Aug 2007- Jan 2011		2,016,667		-		-		2,016,667		3 - 4.35		2,016,667	Nov-17
Jan 2010		83,333		-		83,333		-		7.5		-	-
Feb 2010		8,333		8,333		-		-		0.15		-	-
Feb 2010		200,000		-		200,000		-		7.5		-	-
Feb 2010		100,000		100,000		-		-		0.015		-	-
Feb 2011		42,735		-		42,735		-		5.85		-	-
Feb 2011		427,167		63,122		364,044		-		4.2		-	-
Feb 2011		854,333		-		854,333		-		7.5		-	-
Jul 2012		32,931		-		32,931		-		5.22		-	-
Jul 2012		990,949		687,037		303,911		-		4.35		-	-
Feb 2013		55,556		-		55,556		-		7.5		-	-
April 2010-2014		12,889		8,889		4,000		-		0.00075		-	-
Aug 2013		1,147,471		-		1,110,706		36,764		3.75		36,764	Aug-16
Aug 2013		29,000		29,000		-		-		0.525		-	-
Jun 2014		2,800,000		2,546,667		-		253,333		5.22		253,333	Jun-17
Jun 2014		84,000		-		-		84,000		4.5		84,000	Jun-17
Jan 2015		3,858,201		-		-		3,858,201		6.5		3,858,201	Jun-18
		14,246,831		4,489,973		3,367,890		6,388,965				6,388,965

Schedule Stock Awards Activity Related To Service Providers [Table Text Block]

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:

	Six months ended				Three months ended
	June 30,				June 30,
	2 0 1 6		2 0 1 5		2 0 1 6		2 0 1 5
	Unaudited				Unaudited
Research and development		4		14		1		6
General and administrative		492		654		261		315
Total stock-based compensation expense		496		668		262		321

XML

GENERAL (Details Textual) - USD ($) $ in Thousands	1 Months Ended
	Sep. 15, 2014	Jun. 30, 2016	Dec. 31, 2015	Aug. 26, 2015	Dec. 31, 2014
General And Going Concern [Line Items]
Stockholders Equity, Reverse Stock Split	1-for-15
Common Stock, Shares Authorized		100,000,000	100,000,000	100,000,000	800,000,000
Cash, Cash Equivalents, and Short-term Investments, Total		$ 11,481

XML

RESEARCH AND LICENSE AGREEMENT (Details Textual)	6 Months Ended
	Jun. 30, 2016
Research And License Agreement [Line Items]
Percentage Of Royalty Payment If Licensed Product Covered By Valid Claim Or Orphan Drug Status	5.00%
Percentage Of Royalty Payment If Licensed Product Not Covered By Valid Claim Or Orphan Drug Status	3.00%
Validity Of Royalty Payment Not Covered By Valid Claim Or Orphan Drug Status	15 years

XML

SHORT TERM INVESTMENTS (Details Textual)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Cash and Cash Equivalents [Line Items]
Maturity of Time Deposits	3 months	6 months
Minimum [Member]
Cash and Cash Equivalents [Line Items]
Percentage Of Interest Bearing Bank Deposits	0.15%
Maximum [Member]
Cash and Cash Equivalents [Line Items]
Percentage Of Interest Bearing Bank Deposits	1.34%

XML

STOCK CAPITAL (Details) - Employee Stock Option [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount of options, Outstanding at beginning of period | shares	1,002,451
Amount of options, Granted | shares	0
Amount of options, Exercised | shares	0
Amount of options, Cancelled | shares	(14,889)
Amount of options, Outstanding at end of period | shares	987,562
Amount of options, Vested and expected-to-vest at end of period | shares	824,350
Weighted average exercise price, Outstanding at beginning of period (in dollars per share) | $ / shares	$ 2.6072
Weighted average exercise price, Granted (in dollars per share) | $ / shares	0
Weighted average exercise price, Exercised (in dollars per share) | $ / shares	0
Weighted Average exercise Price, Cancelled (in dollars per share) | $ / shares	3.8284
Weighted average exercise price, Outstanding at end of period (in dollars per share) | $ / shares	2.5888
Weighted average exercise price, Vested and expected-to-vest at end of period (in dollars per share) | $ / shares	$ 2.5662
Aggregate intrinsic value, Outstanding at end of period (in dollars) | $	$ 0
Aggregate intrinsic value, Vested and expected-to-vest at end of period (in dollars) | $	$ 0

XML

STOCK CAPITAL (Details 1)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Issuance Date Nov - Dec 2004 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	$ 0.00075
Issuance Date Nov - Dec 2004 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	0.15
Issuance Date Feb - Dec 2005 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	2.25
Issuance Date Feb - Dec 2005 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	37.5
Issuance Date Feb - Dec 2006 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	0.075
Issuance Date Feb - Dec 2006 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	22.5
Issuance Date Mar - Nov 2007 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	2.25
Issuance Date Mar - Nov 2007 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	7.05
Issuance Date Apr - Oct 2009 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	1.005
Issuance Date Apr - Oct 2009 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	1.5
Issuance Date Aug 2007 - Jan 2011 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	3
Issuance Date Aug 2007 - Jan 2011 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share) | $ / shares	$ 4.35
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	14,246,831
Exercised	4,489,973
Forfeited	3,367,890
Outstanding	6,388,965
Warrants Exercisable	6,388,965
Warrant [Member] | Issuance Date Nov - Dec 2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	973,390
Exercised	959,734
Forfeited	13,656
Outstanding	0
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb - Dec 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	203,898
Exercised	32,011
Forfeited	171,887
Outstanding	0
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb - Dec 2006 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	112,424
Exercised	48,513
Forfeited	63,911
Outstanding	0
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Mar - Nov 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	180,220
Exercised	0
Forfeited	66,887
Outstanding	113,333
Warrants Exercisable	113,333
Exercisable through	Mar 2017 – Oct 2017
Warrant [Member] | Issuance Date Nov 2008 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	6,667
Exercised	0
Forfeited	0
Outstanding	6,667
Exercise Price (in dollars per share) | $ / shares	$ 2.25
Warrants Exercisable	6,667
Exercisable through	Sep-18
Warrant [Member] | Issuance Date Apr - Oct 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	26,667
Exercised	6,667
Forfeited	0
Outstanding	20,000
Warrants Exercisable	20,000
Exercisable through	Apr 2019 – Oct 2019
Warrant [Member] | Issuance Date Aug 2007 - Jan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	2,016,667
Exercised	0
Forfeited	0
Outstanding	2,016,667
Warrants Exercisable	2,016,667
Exercisable through	Nov-17
Warrant [Member] | Issuance Date Jan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	83,333
Exercised	0
Forfeited	83,333
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 7.5
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	8,333
Exercised	8,333
Forfeited	0
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 0.15
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2010 One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	200,000
Exercised	0
Forfeited	200,000
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 7.5
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2010 Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	100,000
Exercised	100,000
Forfeited	0
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 0.015
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	42,735
Exercised	0
Forfeited	42,735
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 5.85
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2011 One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	427,167
Exercised	63,122
Forfeited	364,044
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 4.2
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2011 Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	854,333
Exercised	0
Forfeited	854,333
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 7.5
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date July 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	32,931
Exercised	0
Forfeited	32,931
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 5.22
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date July 2012 One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	990,949
Exercised	687,037
Forfeited	303,911
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 4.35
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Feb 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	55,556
Exercised	0
Forfeited	55,556
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 7.5
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Apr 2010-2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	12,889
Exercised	8,889
Forfeited	4,000
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 0.00075
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date Aug 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	1,147,471
Exercised	0
Forfeited	1,110,706
Outstanding	36,764
Exercise Price (in dollars per share) | $ / shares	$ 3.75
Warrants Exercisable	36,764
Exercisable through	Aug-16
Warrant [Member] | Issuance Date Aug 2013 One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	29,000
Exercised	29,000
Forfeited	0
Outstanding	0
Exercise Price (in dollars per share) | $ / shares	$ 0.525
Warrants Exercisable	0
Exercisable through	-
Warrant [Member] | Issuance Date June 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	2,800,000
Exercised	2,546,667
Forfeited	0
Outstanding	253,333
Exercise Price (in dollars per share) | $ / shares	$ 5.22
Warrants Exercisable	253,333
Exercisable through	Jun-17
Warrant [Member] | Issuance Date June 2014 One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	84,000
Exercised	0
Forfeited	0
Outstanding	84,000
Exercise Price (in dollars per share) | $ / shares	$ 4.5
Warrants Exercisable	84,000
Exercisable through	Jun-17
Warrant [Member] | Issuance Date Jan 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants issued	3,858,201
Exercised	0
Forfeited	0
Outstanding	3,858,201
Exercise Price (in dollars per share) | $ / shares	$ 6.5
Warrants Exercisable	3,858,201
Exercisable through	Jun-18

XML

STOCK CAPITAL (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 262	$ 321	$ 496	$ 668
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1	6	4	14
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 261	$ 315	$ 492	$ 654

XML

STOCK CAPITAL (Details Textual) - USD ($)																	1 Months Ended																													3 Months Ended		6 Months Ended		12 Months Ended		60 Months Ended	189 Months Ended
	Jul. 14, 2016	Jan. 02, 2016	Nov. 10, 2015	Jun. 02, 2015	May 03, 2015	Jan. 08, 2015	Aug. 14, 2014	Jun. 13, 2014	Jun. 09, 2014	Jun. 06, 2014	Apr. 13, 2014	Nov. 13, 2013	Mar. 11, 2013	Feb. 07, 2013	Feb. 04, 2013	Aug. 01, 2012	Jun. 30, 2016	Jun. 21, 2016	Sep. 28, 2015	Aug. 27, 2015	Jul. 30, 2015	Apr. 29, 2015	Oct. 31, 2014	Aug. 15, 2014	Jul. 31, 2014	Jul. 28, 2014	May 27, 2014	Apr. 25, 2014	Mar. 24, 2014	Aug. 16, 2013	Apr. 30, 2013	Apr. 19, 2013	Jan. 16, 2013	Jul. 17, 2012	Jun. 30, 2012	Apr. 30, 2012	Aug. 22, 2011	Jun. 30, 2011	Dec. 16, 2010	Apr. 30, 2010	Feb. 28, 2010	Dec. 30, 2009	Jun. 30, 2008	Jul. 31, 2007	Nov. 25, 2004	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2016	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from issuance of Common stock, net																																																$ 0
Stock Issued During Period, Shares, Conversion of Convertible Securities																																										74,667
Proceeds From Issuance Or Sale Of Equity																																														$ 0	$ 12,000	0	$ 12,409,000				$ 46,600,000
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from issuance of Common stock, net																																																2,496,000
Proceeds from Issuance of Warrants																																																$ 829,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross																																																14,246,831
Fair Value Assumptions, Weighted Average Volatility Rate																																																			140.00%
Fair Value Assumptions, Expected Dividend Rate																																																			0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period																																																3,367,890
Legal Advisor [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Based Compensation Recorded In General and Administrative Expenses													$ 44,500
Stock Issued During Period, Shares, Issued for Services		10,752											12,913													10,752
Stock Based Compensation Will Be Recorded In General And Administrative Expenses		$ 31,000																								$ 50,000
Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues																																	14,400
Stock Issued During Period, Shares, Issued for Services												30,000										27,411							6,000
Stock Based Compensation Recorded In Research Development Expenses																																	$ 54,000
Service Provider [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Issued for Services													26,667
Stock Based Compensation Will Be Recorded In General And Administrative Expenses													$ 92,000
Placement Agent [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment Warrants, Exercise Price																																		$ 5.22
Warrants Issued To Placement Agent For Purchase Of Common Stock																																		32,931
Percentage Of Cash Fee On Gross Proceeds Of Offering																																		7.00%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues																59,000																					61,558
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period																12 months
Restricted Stock [Member] | Scientific Advisory Board [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures																								50,667								50,667
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment Warrants, Exercise Price																																																				$ 2.25
Investment Options, Exercise Price																$ 2.25							$ 0.75									$ 2.25							$ 2.25
Stock Option Expiration Term																																																				10 years
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross																30,667				70,665			70,666									30,667							26,667													53,333
Shares Issued, Price Per Share																				$ 0.75																	$ 15
Director [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross	70,665
Shares Issued, Price Per Share	$ 0.75
Director [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues					60,000															17,332
Director [Member] | Restricted Stock [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues	17,332
Director One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment Options, Exercise Price				$ 0.75
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross				6,667
Hadasit [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock																							8,889								2,222					2,222		2,222		2,222
Investment Warrants, Exercise Price																															$ 0.00075					$ 0.00075		$ 0.00075		$ 0.00075
Hadasit [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock																																																		100,000
Investment Warrants, Exercise Price																																																		$ 0.015
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period																																																		5 years
Mr. Israeli [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment Options, Exercise Price											$ 0.00075																				$ 0.00075					$ 0.00075		$ 0.00075		$ 0.00075
Number of options granted											20,000																				11,111					11,111		11,111		11,111
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross																							44,444
Chief Operating Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross										33,333
Share-Based Compensation Arrangements By Share-Based Payment Award, Options, Grants In Period, Weighted Average Exercise Price										$ 2.70
Share Based Compensation Arrangement By Share Based Payment Award Unvested Portion to Purchase			253,333
Share Based Compensation Arrangement By Share Based Payment Award vested Portion Share			126,667
Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross									380,000										369,619
Share-Based Compensation Arrangements By Share-Based Payment Award, Options, Grants In Period, Weighted Average Exercise Price									$ 4.5
Shares Issued, Price Per Share																			$ 2.45
Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period																					3 years
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross																					165,000
Shares Issued, Price Per Share																					$ 3.17
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights																					20,625 shares vest and become exercisable on July 30, 2016 and 2.08333% of the 82,500 shares vest and become exercisable on each monthly anniversary date starting on August 30, 2016 through the fourth anniversary of the grant, so that the 82,500 shares will become fully vested and exercisable on July 30, 2019.
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares																					82,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period																					82,500
Global Share Option Plan 2004 and U S Stock Option and Incentive Plan 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase In Number Of Shares Available For Issuance																	1,600,000																		600,000			333,333					333,333
Shares Reserved For Issuance Under Stock Option Plan																																													609,564
Global Share Option Plan 2014 and U S Stock Option and Incentive Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase In Number Of Shares Available For Issuance							600,000											1,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized																		2,200,000																																				600,000
Investor [Member] | Settlement Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities															8,408
Stock Issued During Period, Value, Conversion of Convertible Securities															$ 200,000
Holders of Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock																											333,235
Stock Repurchased During Period, Value																											$ 600,000
Warrants Repurchase Price																											$ 1.80
Maxim Group LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock						38,000
Maximum [Member] | Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Risk Free Interest Rate																																																			3.14%
Fair Value Assumptions, Expected Term																																																			5 years 6 months
Maximum [Member] | Warrant Issued One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Expected Term																																																			9 years
Minimum [Member] | Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Risk Free Interest Rate																																																			2.39%
Fair Value Assumptions, Expected Term																																																			5 years
Minimum [Member] | Warrant Issued One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Expected Term																																																			1 year
Private Placement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues														55,556																											399,999
Proceeds from issuance of Common stock, net														$ 250,000																											$ 1,500,000
Warrants Issued To Purchase Of Common Stock																																									199,998
Investment Warrants, Exercise Price														$ 7.5																											$ 7.50
Deferred Compensation Arrangement with Individual, Maximum Contractual Term														32 months
Private Placement [Member] | Investment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues																																												2,777,777
Stock Issued During Period, Value, New Issues																																												$ 5,000,000
Private Placement [Member] | Warrant Issued One [Member] | Investment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock																																												672,222
Investment Warrants, Exercise Price																																												$ 3
Private Placement [Member] | Warrant Issued Two [Member] | Investment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock																																												1,344,444
Investment Warrants, Exercise Price																																												$ 4.35
Private Placement [Member] | Unregistered Shares of Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Issuance of Common Stock, Net						$ 12,400,000
Public Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of Stock, Shares Converted																												777,471
Proceeds from Issuance of Common Stock, Net																																		$ 4,900,000
Public Offering [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues																														1,568,628				1,321,265
Proceeds from issuance of Common stock, net																																		$ 5,700,000
Common Stock Purchase Price																														$ 2.55
Warrants Issued To Purchase Of Common Stock																														1,176,471				990,949
Investment Warrants, Exercise Price																														$ 3.75				$ 4.35
Stock Issued During Period, Value, New Issues																														$ 4,000,000
Shares Issued, Price Per Share																																		$ 4.35
Proceeds from Issuance of Common Stock, Net																														$ 3,300,000
Public Offering [Member] | Unregistered Shares of Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of Stock, Shares Converted																												388,735
Public Offering [Member] | 2013 Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment Warrants, Exercise Price																									$ 0.525
Investors Private Placement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues								2,800,000
Proceeds from issuance of Common stock, net								$ 10,500,000
Warrants Issued To Purchase Of Common Stock						2,546,667		2,800,000
Investment Warrants, Exercise Price						$ 5.22		$ 5.22
Warrant Expiry Term						warrants expire in June 2018
Shares Issued, Price Per Share								$ 3.75
Proceeds from Warrant Exercises						$ 13,300,000
Exercise Agreement, Fees and Expenses, Amount						$ 20,000
Investors Private Placement [Member] | Maxim Group LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Agreement, Maxim Cash Fee, Percentage						6.00%
Investors Private Placement [Member] | Unregistered Shares of Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Issued To Purchase Of Common Stock						3,800,000
Investment Warrants, Exercise Price						$ 6.50