0001178913-18-002846.txt : 20181107 0001178913-18-002846.hdr.sgml : 20181107 20181107162210 ACCESSION NUMBER: 0001178913-18-002846 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 50 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181107 DATE AS OF CHANGE: 20181107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLURISTEM THERAPEUTICS INC CENTRAL INDEX KEY: 0001158780 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 980351734 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-31392 FILM NUMBER: 181166643 BUSINESS ADDRESS: STREET 1: MATAM ADVANCED TECHNOLOGY PARK STREET 2: BUILDING NO. 5 CITY: HAIFA STATE: L3 ZIP: 31905 BUSINESS PHONE: 972-74-710-7171 MAIL ADDRESS: STREET 1: MATAM ADVANCED TECHNOLOGY PARK STREET 2: BUILDING NO. 5 CITY: HAIFA STATE: L3 ZIP: 31905 FORMER COMPANY: FORMER CONFORMED NAME: PLURISTEM LIFE SYSTEMS INC DATE OF NAME CHANGE: 20030701 FORMER COMPANY: FORMER CONFORMED NAME: AI SOFTWARE INC DATE OF NAME CHANGE: 20010906 10-Q 1 zk1822215.htm 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from

__________ to __________

Commission file number 001-31392

PLURISTEM THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

Nevada		98-0351734
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

MATAM Advanced Technology Park, Building No. 5, Haifa, Israel 31905

(Address of principal executive offices)

011-972-74-7108607

(Registrant’s telephone number)

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 registration was required to submit files).

Yes ☒ No ☐

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


Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

State the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 115,800,504 shares of common stock issued and outstanding as of November 4, 2018.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2018

(Unaudited)

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2018

U.S. DOLLARS IN THOUSANDS

(Unaudited)

INDEX

	Page

Interim Condensed Consolidated Balance Sheets	F - 2 - F - 3

Interim Condensed Consolidated Statements of Operations	F - 4

Interim Condensed Consolidated Statements of Comprehensive Loss	F - 5
Interim Condensed Statements of Changes in Stockholders' Equity	F - 6 - F - 7

Interim Condensed Consolidated Statements of Cash Flows	F - 8 - F - 9

Notes to Interim Condensed Consolidated Financial Statements	F - 10 - F - 21

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands (except share and per share data)

		September 30, 2018		June 30, 2018
	Note	Unaudited
ASSETS

CURRENT ASSETS:

Cash and cash equivalents		$	8,433	$	8,821
Short-term bank deposits			13,283		21,079
Restricted cash and short-term bank deposits			777		687
Accounts receivable from the Israeli Innovation Authority (“IIA”)			37		58
Other current assets			1,921		1,391
Total current assets			24,451		32,036

LONG-TERM ASSETS:

Long-term deposits and restricted bank deposits			385		383
Severance pay fund			858		846
Property and equipment, net			5,186		5,678
Other long-term assets			13		17
Total long-term assets			6,442		6,924

Total assets		$	30,893	$	38,960

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

F - 2

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands (except share and per share data)

			September 30, 2018			June 30, 2018
	Note		Unaudited
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Trade payables			$	2,133		$	3,261
Accrued expenses				3,048			2,266
Other accounts payable				2,217			3,021
Total current liabilities				7,398			8,548

LONG-TERM LIABILITIES

Accrued severance pay				1,141			1,127
Other long-term liabilities				825			778
Total long-term liabilities				1,966			1,905

COMMITMENTS AND CONTINGENCIES		5

STOCKHOLDERS’ EQUITY

Share capital:		6
Common stock $0.00001 par value per share: Authorized: 200,000,000 shares Issued and outstanding: 114,649,702 shares as of September 30, 2018, 113,565,780 shares as of June 30, 2018				1			1
Additional paid-in capital				246,011			244,203
Accumulated deficit				(224,483	)		(215,697	)
Total stockholders' equity				21,529			28,507

Total liabilities and stockholders' equity			$	30,893		$	38,960

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

F - 3

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

U.S. Dollars in thousands (except share and per share data)

	Three months ended September 30,
	2018			2017

Revenues	$	4		$	-
Cost of revenues		(*	)		-
Gross profit		4			-
Operating Expenses:
Research and development expenses	$	(7,765	)	$	(5,192	)
Less: participation by the IIA and other parties		1,001			515
Research and development expenses, net		(6,764	)		(4,677	)
General and administrative expenses, net		(2,210	)		(2,763	)

Operating loss		(8,970	)		(7,440	)

Financial income, net		184			55

Net loss	$	(8,786	)	$	(7,385	)

Loss per share:
Basic and diluted net loss per share	$	(0.08	)	$	(0.08	)

Weighted average number of shares used in computing basic and diluted net loss per share		113,658,261			97,321,866

(*) Less than $1

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

F - 4

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

U.S. Dollars in thousands

	Three months ended September 30,
	2018			2017
Net loss	$	(8,786	)	$	(7,385	)
Other comprehensive loss, net:
Unrealized loss on available-for-sale marketable securities, net		-			(1,133	)
Reclassification adjustment of available-for-sale marketable securities losses realized in net loss, net		-			78
Other comprehensive loss		-			(1,055	)
Total comprehensive loss	$	(8,786	)	$	(8,440	)

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

F - 5

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

U.S. Dollars in thousands (except share and per share data)

	Common Stock					Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount			Capital		Income (Loss)			Deficit			Equity
Balance as of July 1, 2017		96,938,789	$	1		$	217,822	$	1,999		$	(189,571	)	$	30,251
Stock-based compensation to employees, directors and non-employee consultants		394,096		(*	)		1,503		-			-			1,503
Issuance of common stock under At-The Market (“ATM”) Agreement, net of issuance costs of $80 (see Note 6a)		834,040		(*	)		1,026		-			-			1,026
Exercise of warrants by investors		16,800		(*	)		24		-			-			24
Other comprehensive loss, net		-		-			-		(1,055	)		-			(1,055	)
Net loss		-		-			-		-			(7,385	)		(7,385	)

Balance as of September 30, 2017 (unaudited)		98,183,725	$	1		$	220,375	$	944		$	(196,956	)	$	24,364

(*) Less than $1

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

F - 6

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

U.S. Dollars in thousands (except share and per share data)

	Common Stock					Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount			Capital		Deficit			Equity
Balance as of July 1, 2018		113,565,780	$	1		$	244,203	$	(215,697	)	$	28,507
Stock-based compensation to employees, directors and non-employee consultants		695,422		(*	)		1,327		-			1,327
Issuance of common stock under ATM Agreement, net of issuance costs of $27 (see Note 6a)		376,000		(*	)		473		-			473
Exercise of options by employees and non-employee consultants		12,500		(*	)		8		-			8
Net loss		-		-			-		(8,786	)		(8,786	)

Balance as of September 30, 2018 (unaudited)		114,649,702	$	1		$	246,011	$	(224,483	)	$	21,529

(*) Less than $1

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

F - 7

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. Dollars in thousands

	Three months ended September 30,
	2018			2017
				as adjusted, see note 2
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss	$	(8,786	)	$	(7,385	)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation		503			515
Accretion of discount, amortization of premium and changes in accrued interest of marketable securities		-			13
Gain from sale of investments of available-for-sale marketable securities		-			)928(
Other-than-temporary loss of available-for-sale marketable securities (see Note 3)		-			850
Stock-based compensation to employees, directors and non-employee consultants		1,327			1,503
Decrease in accounts receivable from the IIA		21			1,011
Increase in other current assets and other long-term assets		(526	)		(170	)
Decrease in trade payables		(962	)		(354	)
Decrease in other accounts payable, accrued expenses, other current liabilities and other long-term liabilities		(82	)		(290	)
Decrease (increase) in interest receivable on short-term deposits		(7	)		45
Linkage differences and interest on short and long-term deposits and restricted bank deposits		-			3
Accrued severance pay, net		2			(3	)
Net cash used by operating activities	$	(8,510	)	$	(5,190	)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment	$	(177	)	$	(148	)
Repayment of short-term deposits		7,801			4,042
Proceeds from sale of available-for-sale marketable securities		-			9,010
Proceeds from redemption of available-for-sale marketable securities		-			9
Investment in available-for-sale marketable securities		-			(1,146	)
Net cash provided by investing activities	$	7,624		$	11,767

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

F - 8

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. Dollars in thousands

	Three months ended September 30,
	2018			2017
				as adjusted, see note 2
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds related to issuance of common stock, net of issuance costs	$	473		$	1,026
Proceeds with respect to Israel-United States Binational Industrial Research and Development Foundation liability		107			-
Exercise of options		8			24
Net cash provided by financing activities	$	588		$	1,050

Increase (decrease) in cash and cash equivalents and restricted cash		(298	)		7,627
Cash and cash equivalents and restricted cash at the beginning of the period		9,508			5,266
Cash and cash equivalents and restricted cash at the end of the period	$	9,210		$	12,893


(a) Supplemental disclosure of cash flow activities:
Cash paid during the period for:
Taxes paid due to non-deductible expenses	$	2	$	3


(b) Supplemental disclosure of non-cash activities:
Purchase of property and equipment on credit	$	5	$	29

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

F - 9

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 1:-GENERAL

Pluristem Therapeutics Inc., a Nevada corporation, was incorporated on May 11, 2001. Pluristem Therapeutics Inc. has a wholly owned subsidiary, Pluristem Ltd. (the “Subsidiary”), which is incorporated under the laws of the State of Israel. Pluristem Therapeutics Inc. and the Subsidiary are referred to as the “Company” or “Pluristem”.

The Company’s shares of common stock are traded on the Nasdaq Capital Market under the symbol “PSTI” and on the Tel-Aviv Stock Exchange under the symbol “PLTR”.

The Company is a bio-therapeutics company developing placenta-based cell therapy product candidates for the treatment of multiple ischemic and inflammatory conditions. The Company has incurred an accumulated deficit of approximately $224,483 and incurred recurring operating losses and negative cash flows from operating activities since inception. As of September 30, 2018, the Company’s total stockholders' equity amounted to $21,529.

During the three month period ended September 30, 2018, the Company incurred operating losses of $8,970 and its negative cash flow from operating activities was $8,510. The Company will be required to identify additional liquidity resources in the near term in order to support the commercialization of its products and maintain its research and development and clinical trials activities.

As of September 30, 2018, the Company's cash position (cash and cash equivalents and short-term bank deposits) totaled approximately $21,716. The Company is addressing its liquidity issues by implementing initiatives to allow the continuation of its activities. The Company's current operating plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures. The Company's ability to successfully carry out its business plan, which includes a cost-reduction plan should it be unable to raise sufficient additional capital, is primarily dependent upon its ability to (1) obtain sufficient additional capital, (2) enter into license agreements to use or commercialize the Company’s products and (3) receive other sources of funding, including non-diluting sources such as the IIA grants, the European Union's Horizon 2020 program (“Horizon 2020”) grants and other grants. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its products.

According to management estimates, liquidity resources as of September 30, 2018, will be sufficient to maintain the Company's operations into the first quarter of the Company's fiscal year 2020. The Company's inability to raise funds to carry out its business plan will have a severe negative impact on its ability to remain a viable company.

CHA Agreement

On June 26, 2013, Pluristem entered into an exclusive license and commercialization agreement (the “CHA Agreement”) with CHA Biotech Co. Ltd. (“CHA”), for conducting clinical trials and commercialization of Pluristem's PLX-PAD product in South Korea in connection with two indications: the treatment of Critical Limb Ischemia (“CLI”), and Intermediate Claudication (collectively with CLI, the “Indications”). Under the terms of the CHA Agreement, CHA will receive exclusive rights in South Korea for conducting clinical trials with respect to the Indications and the Company will continue to retain rights to its proprietary manufacturing technology and cell-related intellectual property.

The first clinical study as part of the CHA Agreement is a Phase II trial in Intermittent Claudication. South Korea’s Ministry of Food and Drug Safety approved this study in November 2013.

F - 10

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 1:-GENERAL (CONT.)

Upon the first regulatory approval for a PLX product in South Korea, for the specified Indications, Pluristem and CHA will establish an equally owned joint venture to commercialize PLX cell products in South Korea. Pluristem will be able to use the data generated by CHA to pursue the development of PLX product candidates outside of South Korea.

The CHA Agreement contains customary termination provisions, including in the event the parties do not reach an agreement upon development plan for conducting the clinical trials. Upon termination of the CHA Agreement, the license granted thereunder will terminate and all rights included therein will revert to the Company, and the Company will be free to enter into agreements with any other third parties for the granting of a license in or outside South Korea or to deal in any other manner with such rights as it shall see fit at its sole discretion.

In addition, and as contemplated by the CHA Agreement, in December 2013, Pluristem and CHA executed the mutual investment pursuant to which Pluristem issued 2,500,000 shares of its common stock in consideration for 1,011,504 shares of CHA, which reflects total consideration to each of Pluristem and CHA of approximately $10,414. The parties also agreed to give an irrevocable proxy to the other party’s management with respect to the voting power of the shares issued.

In March 2015, the Company sold a portion of the CHA shares received in December 2013. In January 2018, the Company sold its remaining investment in the CHA shares, for aggregate net proceeds of approximately $10,500, representing a net gain of $6,200, which is recorded in “Financial income, net” for the fiscal year ended June 30, 2018, and reclassified from other comprehensive loss.

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information

The accompanying unaudited interim condensed consolidated 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 GAAP 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 June 30, 2018.

Operating results for the three month periods ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending June 30, 2019.

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.

F - 11

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that are reasonable based upon information available at the time they are made.

These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair value of financial instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, short-term and restricted bank deposits, accounts receivable and other current assets, trade payable and other accounts payable, accrued expenses and other liabilities, approximate fair value because of their generally short term maturities.

The Company measures its investments in marketable securities and derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Unobservable inputs for the asset or liability.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy (see Note 4).

Derivative financial instruments

The Company accounts for derivatives and hedging based on ASC 815, “Derivatives and hedging” (“ASC 815”), as amended and related interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for fair value hedge transactions) or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings (for cash flow hedge transactions).

The ineffective portion of a derivative's change in fair value is recognized in earnings. If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities.

F - 12

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with expenses mainly incurred in New Israeli Shekels (“NIS”). Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as "financial income, net".

The Company measured the fair value of the contracts in accordance with ASC 820. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

As of September 30, 2018, the fair value of the options contracts was approximately ($120), presented in “other accounts payable” (see Note 4). The net income (losses) recognized in “Financial income, net” during the three month periods ended September 30, 2018 and 2017 were ($123) and ($143), respectively.

Recently Adopted Accounting Pronouncement

ASC 606 - Revenue from Contracts with Customers (“ASC 606”):

On July 1, 2017, the Company adopted ASC 606, using the modified retrospective transition method. Prior periods were not retrospectively adjusted. As the Company did not have any contracts with customers that were incomplete as of June 30, 2017, the adoption of ASC 606 did not, and does not, have a material impact on the Company's consolidated financial statements upon adoption, including the presentation of revenues in the Company's consolidated statements of operations.

Revenue Recognition from sales of products:

Revenues are recognized when control of the promised goods is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.

The Company's current contract with its customer includes one type of product and thus has only one performance obligation, which is the transfer of control of the product. The Company's PLX cells have an alternative use and, as such, the performance obligation is considered to be satisfied at the point in time when the customer obtains control over the product.

ASU No. 2016-15 - “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-15”):

In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-15, which addresses the classification of eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU No. 2016-15 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-15 in the first quarter of fiscal year 2019 and it did not have a material impact on the Company's consolidated financial statements and related disclosures.

F - 13

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

ASU No. 2016-18 – "Statement of Cash Flows" (Topic 230) (“ASU No. 2016-18”):

In November 2016, the FASB issued ASU 2016-18. The ASU requires that the consolidated statement of cash flows include the change in total cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. ASU No. 2016-18 also requires a reconciliation between the total of cash and cash equivalents and restricted cash presented on the consolidated statement of cash flows and the cash and cash equivalents balance presented on the consolidated balance sheet. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The standard requires application using a retrospective transition method. The Company adopted this standard effective July 1, 2018 using the retrospective transition method, as required by the new standard.

The following table provides a reconciliation of cash and cash equivalents, and long term restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Cash and cash equivalents	$	8,433	$	12,294
Restricted cash included in Restricted cash and short-term bank deposits		777		599
Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows	$	9,210	$	12,893

Recently Issued Accounting Pronouncements

ASU No. 2016-02 - “Leases” (“Topic 842”):

In February 2016, the FASB issued guidance on the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether a lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting treatment requirements under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. Topic 842 supersedes the previous leases standard, ASC 840, “Leases”. The guidance is effective for the interim and annual periods beginning on or after December 15, 2018. Early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach.

F - 14

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements - Leases (Topic 842)", which further updated Topic 842. This update provides an optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented.

If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.

ASU No. 2017-12 - “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities” (“ASU No. 2017-12”):

In August 2017, the FASB issued ASU No. 2017-12, which is intended to simplify and amend the application of hedge accounting to more clearly portray the economics of an entity’s risk management strategies in its financial statements. The ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting, reduce complexity in fair value hedges of interest rate risk and ease certain documentation and assessment requirements of hedge effectiveness. It also changes how companies assess effectiveness of the hedge and amends the presentation and disclosure requirements relating to hedging activities. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the potential impact of adopting the ASU on its consolidated financial statements.

ASU No. 2018-07 – “Compensation—Stock Compensation” (Topic 718) (“ASU No. 2018-07”):

In June 2018, the FASB issued ASU No. 2018-07. The ASU expands the scope of ASU No. 2018-07 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply ASU No. 2018-07 to nonemployee awards except with respect to option pricing models and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASU No. 2018-07 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.

NOTE 3:- MARKETABLE SECURITIES

During the year ended June 30, 2018, the Company sold marketable securities for aggregate net proceeds (including redemptions of certain bonds) of approximately $21,890, representing a net gain of $8,440. The proceeds from the sale of such marketable securities are included in “Financial income, net”, for the year ended June 30, 2018.

In addition, during the year ended June 30, 2018, the Company recognized an other-than-temporary impairment loss on an outstanding security of $850, and the value of the outstanding security was amortized in full.

F - 15

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 4:- FAIR VALUE OF FINANCIAL INSTRUMENTS

	September 30, 2018 (Unaudited)					June 30, 2018
	Level 1		Level 2			Level 1		Level 2
Foreign currency derivative instruments		-		(120	)		-		(243	)
Total financial liabilities	$	-	$	(120	)	$	-	$	(243	)

NOTE 5: - COMMITMENTS AND CONTINGENCIES

As of September 30, 2018, an amount of $1,159 of cash and deposits was pledged by the Subsidiary to secure the derivatives and hedging transactions, credit line and bank guarantees.

Under the Law for the Encouragement of Industrial Research and Development, 1984, (the “Research Law”), research and development programs that meet specified criteria and are approved by the IIA are eligible for grants of up to 50% of the project’s expenditures, as determined by the research committee, in exchange for the payment of royalties from the sale of products developed under the program.

Regulations under the Research Law generally provide for the payment of royalties to the IIA of 3% on sales of products and services derived from a technology developed using these grants until 100% of the dollar-linked grant is repaid. The Company’s obligation to pay these royalties is contingent on its actual sale of such products and services. In the absence of such sales, no payment is required.

Outstanding balance of the grants will be subject to interest at a rate equal to the 12 month LIBOR applicable to dollar deposits that is published on the first business day of each calendar year. Following the full repayment of the grant, there is no further liability for royalties.

Through September 30, 2018, total grants obtained from the IIA aggregated to approximately $26,990 and total royalties paid and accrued amounted to $168. As of September 30, 2018, the Company's contingent liability in respect to royalties to the IIA amounted to $26,822, not including LIBOR interest as described above.

The Company was awarded a marketing grant under the "Smart Money" program of the Israeli Ministry of Economy and Industry. The program’s aim is to assist companies to extend their activities in international markets. The goal market that was chosen was Japan. The Israeli government granted the Company budget resources that are intended to be used to advance the Company’s product candidate towards marketing in Japan and for regulatory activities there. As part of the program, the Company will repay royalties of 5% from the Company’s income in Japan during five years, starting the year in which the Company will not be entitled to reimbursement of expenses under the program and will be spread for a period of up to 5 years or until the amount of the grant is fully paid.

As of September 30, 2018, total grants obtained under this Smart Money program amounted to approximately $112. As of September 30, 2018, the Company's contingent liability with respect to royalties for this “Smart Money” program was $112 and no royalties were paid or accrued.

The Company was awarded an additional “Smart Money” grant of approximately $229 from Israel’s Ministry of Economy and Industry to facilitate certain marketing and business development activities with respect to its advanced cell therapy products in the Chinese market, including Hong Kong.

F - 16

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 5: - COMMITMENTS AND CONTINGENCIES (CONT.)

The Israeli government granted the Company budget resources that are intended to be used to advance the Company’s product candidate towards marketing in the China-Hong Kong markets.

The Company will also receive close support from Israel’s trade representatives stationed in China, including Hong Kong, along with experts appointed by the Smart Money program. As part of the program, the Company will repay royalties of 5% from the Company’s revenues in the region for a five year period, beginning the year in which the Company will not be entitled to reimbursement of expenses under the program and will be spread for a period of up to 5 years or until the amount of the grant is fully paid.

As of September 30, 2018, the aggregate amount of grant obtained from this Smart Money program was approximately $23. As of September 30, 2018, the Company's contingent liability with respect to royalties for this “Smart Money” program is $23 and no royalties were paid or accrued.

In September 2017, the Company signed an agreement with the Tel-Aviv Sourasky Medical Center (Ichilov Hospital) to conduct a Phase I/II trial of PLX-PAD cell therapy for the treatment of Steroid-Refractory Chronic Graft-Versus-Host-Disease (“GvHD”).

As part of the agreement with the Tel-Aviv Sourasky Medical Center (Ichilov Hospital), the Company will pay royalties of 1% from its net sales of the PLX-PAD product relating to GvHD, with a maximum aggregate royalty amount of approximately $250.

The Company currently collaborates with the New York Blood Center (“NYBC”) on preclinical studies of its placental expanded R-18 cells (“PLX-R18”) to enhance the efficacy of umbilical cord blood transplantation. The project was selected to receive a conditional award of $900 from the Israel-United States Binational Industrial Research and Development Foundation (the “BIRD Foundation”), of which an amount of $585 is a direct grant allocated to the Company.

Per the terms of the project, the Company will provide the PLX-R18 cells and the NYBC will be responsible for conducting and supporting the studies. Amounts received in connection with this award are presented in “Other long-term liabilities”, as the Company does not expect to repay the liability in the next 12 months.

In accordance with the agreement between the Company and NYBC, if only one party elects to proceed with the development of the product, such party shall be responsible for all repayment obligations to the BIRD Foundation for both parties, if applicable. In addition, in case of conclusion of project development which will trigger the grant repayment to the BIRD Foundation, if the Company will elect to pursue the development of the product, and NYBC elects not to pursue the development of the product, then, unless otherwise agreed by the parties, the Company shall pay NYBC royalties in the amount of 2.5% from its revenues of the product, up to an aggregate royalty amount of approximately $550.

As of September 30, 2018, the aggregate amount of grant obtained from the BIRD Foundation was approximately $264. As of September 30, 2018, the Company's contingent liability with respect to royalties for the BIRD Foundation was $264 and no royalties were paid or accrued.

F - 17

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 5: - COMMITMENTS AND CONTINGENCIES (CONT.)

The Company was awarded a marketing grant of approximately $52 under the "Shalav" program of the Israeli Ministry of Economy and Industry. The grant is intended to facilitate certain marketing and business development activities with respect to the Company’s advanced cell therapy products in the U.S. market.

As part of the program, the Company will repay royalties of 3%, but only with respect to the Company’s revenues in the U.S. market in excess of $250 of its revenues in fiscal year 2018, upon the earlier of the five year period beginning the year in which the Company will not be entitled to reimbursement of expenses under the program and/or until the amount of the grant, which is linked to the Consumer Price Index, is fully paid. As of September 30, 2018, no funds have been received.

NOTE 6: - STOCKHOLDERS' EQUITY

Pursuant to a shelf registration on Form S-3 declared effective by the Securities and Exchange Commission on June 23, 2017, in July 2017 the Company entered into an At Market Issuance Sales Agreement (“ATM Agreement”) with FBR Capital Markets & Co., MLV & Co. LLC and Oppenheimer & Co. Inc. (collectively, the “Agents”), which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock having an aggregate offering price of up to $80,000 through the Agents acting as sales agent. During the three month period ended September 30, 2018, the Company sold 376,000 shares of common stock under the ATM Agreement at an average price of $1.33 per share for aggregate net proceeds of approximately $473, net of issuance expenses of $27.

Options, warrants, restricted stocks (“RS”) and restricted stock units (“RSU”) to employees, directors and consultants:

Options to employees and directors:

The Company accounts for its options to employees and directors under the fair value method in accordance with ASC 718, “Compensation—Stock Compensation” (“ASC 718”). A summary of the Company’s activity for options granted to employees and directors under its 2005 incentive option plan is as follows:

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		315,000		$	0.62
Options exercised		(7,500	)	$	0.62
Options outstanding at end of the period		307,500		$	0.62		0.082	$	209
Options exercisable at the end of the period		307,500		$	0.62		0.082	$	209
Options vested		307,500		$	0.62		0.082	$	209

F - 18

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 6: - STOCKHOLDERS' EQUITY (CONT.)

Intrinsic value of exercisable options (the difference between the Company’s closing stock price on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the employee and director option holders had all option holders exercised their options on September 30, 2018. This amount changes based on the fair market value of the Company’s common stock.

Options, warrants, restricted stocks and restricted stock units to employees, directors and consultants (cont.):

Options to non-employees:

The Company accounts for its options to non-employees under the fair value method in accordance with ASC 718. A summary of the options to non-employee consultants under its 2005 and 2016 incentive option plans is as follows:

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		500,600		$	0.01
Options granted		20,000			-
Options exercised		(5,000	)		0.62
Options forfeited		(1,850	)		-
Options outstanding at end of the period		513,750		$	-		6.84	$	668

Options exercisable at the end of the period		228,000		$	-		6.14	$	296
Options vested and expected to vest		513,750		$	-		6.84	$	668

Compensation expenses related to options granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	84	$	3
General and administrative expenses	$	6	$	15
	$	90	$	18

F - 19

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 6: - STOCKHOLDERS' EQUITY (CONT.)

Options, warrants, restricted stock and restricted stock units to employees, directors and consultants (cont.):

RS and RSUs to employees and directors:

The following table summarizes the activity related to unvested RS and RSUs granted to employees and directors under the Company’s 2005 and 2016 incentive option plans for the three month period ended September 30, 2018 (Unaudited):

	Number
Unvested at the beginning of period		6,293,608
Granted		9,000
Forfeited		(51,470	)
Vested		(673,363	)
Unvested at the end of the period		5,577,775
Expected to vest after September 30, 2018		5,432,336

Compensation expenses related to RS and RSUs granted to employees and directors were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	318	$	144
General and administrative expenses		731		1,290
	$	1,049	$	1,434

Unamortized compensation expenses related to RSUs granted to employees and directors to be recognized over an average time of approximately 3.25 years are approximately $3,950.

F - 20

PLURISTEM THERAPEUTICS INC. AND ITS SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share amounts)

NOTE 6: - STOCKHOLDERS' EQUITY (CONT.)

Options, warrants, restricted stock and restricted stock units to employees, directors and consultants (cont.):

RS and RSUs to consultants:

The following table summarizes the activity related to unvested RS and RSUs granted to consultants under the Company’s 2005 and 2016 incentive option plans for the three month period ended September 30, 2018 (Unaudited):

	Number
Unvested at the beginning of period		199,559
Granted		34,388
Vested		(22,059	)
Unvested at the end of the period		211,888

Compensation expenses related to RS and RSUs granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	26	$	-
General and administrative expenses		162		51
	$	188	$	51

NOTE 7:-SUBSEQUENT EVENTS

During October 2018, the Company sold 1,130,000 shares of common stock under the ATM Agreement at an average price of $1.21 per share.

F - 21

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

Forward - Looking Statements

This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. Forward-looking statements may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. These statements are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Such forward-looking statements appear in this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and may appear elsewhere in this quarterly report on Form 10-Q and include, but are not limited to, statements regarding the following:

the expected development and potential benefits from our products in treating various medical conditions;

the clinical trials to be conducted according to our license agreement with CHA Biotech Co. Ltd.;

our plan to execute our strategy independently, using our own personnel, and through relationships with research and clinical institutions or in collaboration with other companies;

the prospects of entering into additional license agreements, or other forms of cooperation with other companies and medical institutions;

our pre-clinical and clinical trials plans, including timing of initiation, enrollment and conclusion of trials;

achieving regulatory approvals, including under accelerated paths;

receipt of future funding from the Israel Innovation Authority, or IIA;

our marketing plans, including timing of marketing our first product candidate, PLX-PAD;

developing capabilities for new clinical indications of placenta expanded (PLX) cells and new products;

the timing and development of our PLX-Immune product candidate;

our estimations regarding the size of the global market for our product candidates;

our expectations regarding our production capacity;

our expectation to demonstrate a real-world impact and value from our pipeline, technology platform and commercial-scale manufacturing capacity;

our expectations regarding our short- and long-term capital requirements;

the proposed joint venture to be established with Sosei Corporate Venture Capital Ltd. for the clinical development and commercialization of Pluristem’s PLX-PAD cell therapy product in Japan, the plan to enter into definitive agreements and the timing of entering such agreements;

our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; and

information with respect to any other plans and strategies for our business.

Our business and operations are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report.

In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would not suggest different conclusions. Also, historic results referred to in this periodic report would be interpreted differently in light of additional research, clinical and preclinical trials results. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2018, or the 2018 Annual Report. Readers are also urged to carefully review and consider the various disclosures we have made in that report.

As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “Pluristem” mean Pluristem Therapeutics Inc. and our wholly owned subsidiary, Pluristem Ltd., unless otherwise indicated or as otherwise required by the context.

Overview

Pluristem Therapeutics Inc. is a leading developer of placenta-based cell therapy product candidates for the treatment of multiple ischemic, inflammatory and hematologic conditions. Our lead indications are critical limb ischemia, or CLI, recovery following surgery for hip fracture, and acute radiation syndrome, or ARS. Each of these indications is a severe unmet medical need. We were incorporated in Nevada in 2001, and have a wholly owned subsidiary in Israel called Pluristem Ltd.. We operate in one segment and our operations are focused on the research, development, clinical trials and manufacturing of cell therapeutics and related technologies.

PLX cells are derived from a class of placental cells that are harvested from donated placenta at the time of full term healthy delivery of a baby. PLX cell products require no tissue matching prior to administration. They are produced using our proprietary three-dimensional expansion technology. Our manufacturing facility complies with the European, Japanese, Israeli and U.S. Food and Drug Administration, or FDA’s, current Good Manufacturing Practice requirements and has been approved by the European and Israeli regulators for production of PLX-PAD for late stage trials and marketing. In December 2017, after an audit of our facilities, we were granted manufacturer/importer authorization and Good Manufacturing Practice Certification by Israel’s Ministry of Health. If we obtain FDA and other regulatory approvals to market PLX cells, we expect to have in-house production capacity to grow clinical-grade PLX cells in commercial quantities.

Our goal is to make significant progress with our robust clinical pipeline and our anticipated pivotal trials in order to ultimately bring innovative, potent therapies to patients who need new treatment options. We expect to demonstrate a real-world impact and value from our pipeline, technology platform and commercial-scale manufacturing capacity. Our business model for commercialization and revenue generation includes, but is not limited to, direct sale of our products, partnerships, licensing deals, and joint ventures with pharmaceutical companies.

We aim to shorten the time to commercialization of our product candidates by leveraging unique accelerated regulatory pathways that exist in the United States, Europe and Japan to bring innovative products that address life-threatening diseases to the market efficiently. We believe that these accelerated pathways create substantial opportunities for us and for the cell therapy industry as a whole.

Two pivotal, Phase III multinational clinical trials are currently being conducted with our PLX-PAD product candidate: one in CLI, and the other in recovery following surgery for hip fracture.

Our PLX-PAD cell program in CLI had been selected for the Adaptive Pathways pilot project of the European Medicines Agency, or EMA, Japan’s Pharmaceuticals and Medical Devices Agency, or PMDA accelerated pathway, the FDA Fast Track Approval and FDA Expanded Access Program, or EAP, in the United States. The CLI program in the European Union was awarded a Euro 7,600,000 (approximately $8,900,000) grant as part of the European Union’s Horizon 2020 program and to date we have received a portion of such grant.

Our PLX-PAD cell program in recovery following surgery for hip fracture was also selected for the Adaptive Pathways pilot project of EMA and was awarded a Euro 7,400,000 (approximately $8,600,000) grant as part of the European Union’s Horizon 2020 program and to date we have received a portion of such grant.

Our second product candidate, PLX-R18, is under development in the United States for ARS via the FDA Animal Rule regulatory pathway, which may result in approval without the prior performance of human efficacy trials. The National Institutes of Health’s National Institute of Allergy and Infectious Diseases, has completed a dose selection trial with our PLX-R18 product candidate in the hematologic component of ARS.

In July 2018, we entered into a strategic collaboration agreement with Thermo Fisher Scientific Inc. with the aim of advancing the fundamental knowledge of cell therapy industrialization and to improve quality control of the end-to-end supply chain. The collaboration will combine Thermo Fisher’s experience in cell therapy development and bio production scale up with our expertise in cell therapy manufacturing, clinical development and quality control.

In September 2018, we announced that the FDA granted Orphan Drug Designation to our PLX cell therapy for the treatment of graft failure and incomplete hematopoietic recovery following hematopoietic cell transplantation.

In October 2018, we announced that the FDA approved cost recovery for our PLX-PAD under our EAP in the treatment of CLI. Under the terms of the EAP, an initial 100 Rutherford-5 CLI patients who are ineligible for inclusion under our ongoing Phase 3 study protocol, and whose condition is life-threatening, will be enrolled.

RESULTS OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30, 2018 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2017.

Revenues

Revenues for the three month period ended September 30, 2018 were $4,000 as compared to no revenues generated in the three month period ended September 30, 2017. All revenues in the three month period ended September 30, 2018 were related to the sale of our PLX cells for research use.

Research and Development Expenses, Net

Research and development expense, net (costs less participation and grants by the IIA and other parties) for the three month period ended September 30, 2018 increased by 45% from $4,677,000 for the three month period ended September 30, 2017 to $6,764,000. The increase is mainly attributed to: (1) an increase in subcontractor expenses related to some of our clinical studies, (2) an increase in materials consumption, (3) an increase in payroll expenses related to increases in average salaries, (4) an increase in stock-based compensation expenses due to the amount of restricted stock units granted, and (5) a decrease in IIA participation ($3,300,000 was approved in calendar year 2016 compared to $1,500,000 that was approved in calendar year 2017 and compared to $900,000 approved in calendar year 2018). The increase was partially offset by a higher participation by the European Union with respect to the Horizon 2020 grants which commenced in calendar year 2017.

General and Administrative Expenses

General and administrative expenses for the three month period ended September 30, 2018 decreased by 20% from $2,763,000 for the three month period ended September 30, 2017 to $2,210,000 for the three month period ended September 30, 2018. This decrease is attributed to a decrease in stock-based compensation expenses related to the amount of restricted stock units granted and their vesting schedules, and a decrease in corporate activities expenses.

Financial Income, Net

Financial income, net, increased from a net financial income of $55,000 for the three month period ended September 30, 2017 to a net financial income of $184,000 for the three month period ended September 30, 2018. This increase is mainly attributable to changes in the fair value of our hedging instruments related to the strength of the U.S. dollar against the NIS, and an increase in interest on deposits due to our investments in short-term deposits.

Net Loss

Net loss for the three month period ended September 30, 2018 was $8,786,000, as compared to net loss of $7,385,000 for the three month period ended September 30, 2017. The change was mainly due to the increase in research and development expenses, as described above. Net loss per share for each of the three month periods ended September 30, 2018 and September 30, 2017, was $0.08.

For the three month periods ended September 30, 2018 and September 30, 2017, we had weighted average shares of common stock outstanding of 113,658,261 and 97,321,866, respectively, which were used in the computations of net loss per share for the three month periods.

The increase in weighted average common shares outstanding reflects the issuance of additional shares mainly related to the issuances of shares from a public offering we conducted in October 2017, issuances of shares to employees and consultants, issuances of shares pursuant to our At Market Issuance Sales Agreement, or the ATM Agreement, and shares issued as a result of exercises of options and warrants.

Liquidity and Capital Resources

As of September 30, 2018, our total current assets were $24,451,000 and total current liabilities were $7,398,000. On September 30, 2018, we had a working capital surplus of $17,053,000, stockholders' equity of $21,529,000 and an accumulated deficit of $224,483,000. We finance our operations, and plan to continue doing so, from our existing cash, issuances of our securities and funds from grants from the IIA, European Union’s Horizon 2020 program, Israel’s Ministry of Economy, and other research grants.

Our cash and cash equivalents as of September 30, 2018 amounted to $8,433,000 compared to $12,294,000 as of September 30, 2017, and compared to $8,821,000 as of June 30, 2018. Cash balances changed in the three months ended September 30, 2018 and 2017 for the reasons presented below.

Operating activities used cash of $8,510,000 in the three months ended September 30, 2018, compared to $5,190,000 in the three months ended September 30, 2017. Cash used in operating activities in the three months ended September 30, 2018 and 2017 consisted primarily of payments of salaries to our employees and payments of fees to our consultants, suppliers, subcontractors, and professional services providers, including the costs of clinical studies, offset by grants from the IIA, Horizon 2020, Israel’s Ministry of Economy and other research grants.

Investing activities provided cash of $7,624,000 in the three months ended September 30, 2018, compared to cash provided of $11,767,000 for the three months ended September 30, 2017. The investing activities in the three month period ended September 30, 2018 consisted primarily of the withdrawal of $7,801,000 of short term deposits, offset by payments of $177,000 related to investment in property and equipment. The investing activities in the three month period ended September 30, 2017 consisted primarily of $9,019,000 provided from the sale and redemption of marketable securities, and the withdrawal of $4,002,000 of short term deposits, offset by investment of $1,146,000 in marketable securities and payments of $148,000 related to investment in property and equipment.

Financing activities generated cash of $588,000 during the three months ended September 30, 2018, compared to $1,050,000 for the three months ended September 30, 2017. The cash generated in the three months ended September 30, 2018 from financing activities is related to net proceeds of $473,000 from issuing shares of our common stock under our ATM Agreement, proceeds of $107,000 related to a grant received from the Israel-United States Binational Industrial Research and Development Foundation and net proceeds of $8,000 from the exercise of options. The cash generated in the three months ended September 30, 2017 from financing activities is related to net proceeds of $1,026,000 from issuing shares of our common stock under our ATM Agreement and $24 from the exercise of warrants.

In July 2017, we entered into the ATM Agreement with FBR Capital Markets & Co., MLV & Co. LLC and Oppenheimer & Co. Inc., each an Agent, which provides that, upon the terms and subject to the conditions and limitations set forth in the ATM Agreement, we may elect, from time to time, to issue and sell shares of common stock having an aggregate offering price of up to $80,000,000 through any of the Agents. We are not obligated to make any sales of common stock under the ATM Agreement. From July 2017 through September 30, 2018, we sold an aggregate of 3,975,408 shares of common stock pursuant to the ATM Agreement at an average price of $1.42 per share.

During the three months ended September 30, 2018, we received cash of approximately $186,000 from the IIA towards our research and development expenses. According to the IIA grant terms, we are required to pay royalties at a rate of 3% on sales of products and services derived from technology developed using this and other IIA grants until 100% of the dollar-linked grants amount plus interest are repaid. In the absence of such sales, no payment is required. Through September 30, 2018, total grants obtained from the IIA aggregated to approximately $26,990,000 and total royalties paid and accrued amounted to $168,000.

The IIA has supported our activity in the past thirteen years. Our previous program, for the twelfth year, was approved by the IIA in 2017 and relates to a grant of approximately $1,500,000. The grant was used to cover research and development expenses for the period of January 1, 2017 to December 31, 2017. Our most recent program, for the thirteenth year, was approved by the IIA in 2018 and relates to a grant of approximately $900,000. The grant has been used, and will continue to be used, to cover research and development expenses for the period of January 1, 2018 to December 31, 2018.

As of September 30, 2018, we received total grants of approximately $3,230,000 in cash from the European Union research and development consortiums pursuant to the Horizon 2020 program.

The currency of our financial portfolio is mainly in U.S. dollars and we use options contracts in order to hedge our exposures to currencies other than the U.S. dollar. For more information, please see Item 7A. - “Quantitative and Qualitative Disclosures about Market Risk” in the 2018 Annual Report on form 10-K for the fiscal year ended June 30, 2018.

We have an effective Form S-3 registration statement, filed under the Securities Act of 1933, as amended, or the Securities Act, with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration process, we may, from time to time, sell common stock, preferred stock and warrants to purchase common stock, and units of two or more of such securities in one or more offerings up to a total dollar amount of $200,000,000. As of November 6, 2018, we have been deemed to have sold $80,000,000 pursuant to our existing shelf under our ATM Agreement and $15,051,000 relating to our public offering which closed on October 31, 2017 pursuant to which we raised aggregate gross proceeds of $15,051,000 through the sale of 9,000,000 shares of our common stock at a purchase price of NIS 5.90 (approximately $1.67 per share).

Outlook

We have accumulated a deficit of $224,483,000 since our inception in May 2001. We do not expect to generate any revenues from sales of products in the next twelve months. Our cash needs will increase in the foreseeable future. We expect to generate revenues, which in the short and medium terms will unlikely exceed our costs of operations, from the sale of licenses to use our technology or products.

We will be required to obtain additional liquidity resources in order to support the commercialization of our products and maintain our research and development and clinical trials activities.

We are continually looking for sources of funding, including non-diluting sources such as the IIA grants, the European Union grant and other research grants, and sales of our common stock.

As of September 30, 2018, our cash position (cash and cash equivalents and short-term bank deposits) totaled approximately $21,716,000. We are addressing our liquidity issues by implementing initiatives to allow the continuation of our activities. Our current operating plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures. Our ability to successfully carry out our business plan, which includes a cost-reduction plan should we be unable to raise sufficient additional capital, is primarily dependent upon our ability to (1) obtain sufficient additional capital, (2) enter into license agreements to use or commercialize our products and (3) receive other sources of funding, including non-diluting sources such as the IIA grants, the Horizon 2020 grant and other grants. There are no assurances, however, that we will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of our products.

According to management’s estimates, liquidity resources as of September 30, 2018 will be sufficient to maintain our operations into the first quarter of fiscal year 2020. Our inability to raise funds to carry out our business plan will have a severe negative impact on our ability to remain a viable company.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures - We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers, or Co-CEOs, and our Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Co-CEOs and our CFO, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on that evaluation, our Co-CEOs and CFO concluded that our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting - There has been no change in our internal control over financial reporting during the first quarter of fiscal year 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6. Exhibits.


31.1*	Rule 13a-14(a) Certification of Co-Chief Executive Officer.

31.2*	Rule 13a-14(a) Certification of Co-Chief Executive Officer.

31.3*

Rule 13a-14(a) Certification of Chief Financial Officer.

32.1**	Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2**	Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.3**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101 *	The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Interim Condensed Consolidated Balance Sheets, (ii) the Interim Condensed Consolidated Statements of Operations, (iii) the Interim Condensed Consolidated Statements of Comprehensive Loss, (iv) the Interim Condensed Statements of Changes in Equity, (v) the Interim Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Interim Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.

*Filed herewith.

** Furnished herewith.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PLURISTEM THERAPEUTICS INC.

By: /s/ Zami Aberman
Zami Aberman, Co-Chief Executive Officer
(Principal Executive Officer)
Date: November 7, 2018

By: /s/ Yaky Yanay
Yaky Yanay, Co-Chief Executive Officer and President
(Principal Executive Officer)
Date: November 7, 2018

By: /s/ Erez Egozi
Erez Egozi, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: November 7, 2018

EX-31.1 2 exhibit_31-1.htm EXHIBIT 31.1

Exhibit 31.1

CERTIFICATION

I, Zami Aberman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pluristem 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(s) 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 13(a)-15(f) and 15d-15(f)) of 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(s) 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: November 7, 2018

/s/ Zami Aberman
——————————————
Zami Aberman
Co-Chief Executive Officer
(Principal Executive Officer)

EX-31.2 3 exhibit_31-2.htm EXHIBIT 31.2

Exhibit 31.2

CERTIFICATION

I, Yaky Yanay, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pluristem Therapeutics Inc.;

(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: November 7, 2018

/s/ Yaky Yanay
——————————————
Yaky Yanay
Co-Chief Executive Officer and President
(Principal Executive Officer)

EX-31.3 4 exhibit_31-3.htm EXHIBIT 31.3

Exhibit 31.3

CERTIFICATION

I, Erez Egozi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pluristem Therapeutics Inc.;

(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: November 7, 2018

/s/ Erez Egozi
——————————————
Erez Egozi
Chief Financial Officer
(Principal Financial Officer)

EX-32.1 5 exhibit_32-1.htm EXHIBIT 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Quarterly Report (the “Report”) of Pluristem Therapeutics Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof, I, Zami Aberman, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The Report 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2018

By: /s/ Zami Aberman
——————————————
Zami Aberman
Co-Chief Executive Officer

EX-32.2 6 exhibit_32-2.htm EXHIBIT 32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Quarterly Report (the “Report”) of Pluristem Therapeutics Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof, I, Yaky Yanay, Co-Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The Report 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2018

By: /s/ Yaky Yanay
——————————————
Yaky Yanay
Co-Chief Executive Officer and President

EX-32.3 7 exhibit_32-3.htm EXHIBIT 32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Quarterly Report (the “Report”) of Pluristem Therapeutics Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof, I, Erez Egozi, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The Report 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2018

By: /s/ Erez Egozi
——————————————
Erez Egozi
Chief Financial Officer

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<div><div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 36pt; text-indent: -36pt">NOTE 1:-GENERAL</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z1f8abee4baa44c35800a5403b5a90933" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">a.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">Pluristem Therapeutics Inc., a Nevada corporation, was incorporated on May 11, 2001. Pluristem Therapeutics Inc. has a wholly owned subsidiary, Pluristem Ltd. (the “Subsidiary”), which is incorporated under the laws of the State of Israel. Pluristem Therapeutics Inc. and the Subsidiary are referred to as the “Company” or “Pluristem”.</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">The Company’s shares of common stock are traded on the Nasdaq Capital Market under the symbol “PSTI” and on the Tel-Aviv Stock Exchange under the symbol “PLTR”.</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z56a8ebdd1d004038b309757316c7e609" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">b.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">The Company is a bio-therapeutics company developing placenta-based cell therapy product candidates for the treatment of multiple ischemic and inflammatory conditions. The Company has incurred an accumulated deficit of approximately $224,483 and incurred recurring operating losses and negative cash flows from operating activities since inception. As of September 30, 2018, the Company’s total stockholders' equity amounted to $21,529.</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">During the three month period ended September 30, 2018, the Company incurred operating losses of $8,970 and its negative cash flow from operating activities was $8,510. The Company will be required to identify additional liquidity resources in the near term in order to support the commercialization of its products and maintain its research and development and clinical trials activities.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">As of September 30, 2018, the Company's cash position (cash and cash equivalents and short-term bank deposits) totaled approximately $21,716. The Company is addressing its liquidity issues by implementing initiatives to allow the continuation of its activities. The Company's current operating plan includes various assumptions concerning the level and timing of cash outflows for operating activities and capital expenditures. The Company's ability to successfully carry out its business plan, which includes a cost-reduction plan should it be unable to raise sufficient additional capital, is primarily dependent upon its ability to (1) obtain sufficient additional capital, (2) enter into license agreements to use or commercialize the Company’s products and (3) receive other sources of funding, including non-diluting sources such as the IIA grants, the <font style="font: 10pt Times New Roman, Times, serif">European Union's Horizon 2020 program (“Horizon 2020”)</font> grants and other grants. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its products.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">According to management estimates, liquidity resources as of September 30, 2018, will be sufficient to maintain the Company's operations into the first quarter of the Company's fiscal year 2020. The Company's inability to raise funds to carry out its business plan will have a severe negative impact on its ability to remain a viable company.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt"><u>CHA Agreement</u></div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">On June 26, 2013, Pluristem entered into an exclusive license and commercialization agreement (the “CHA Agreement”) with CHA Biotech Co. Ltd. (“CHA”), for conducting clinical trials and commercialization of Pluristem's PLX-PAD product in South Korea in connection with two indications: the treatment of Critical Limb Ischemia (“CLI”), and Intermediate Claudication (collectively with CLI, the “Indications”). Under the terms of the CHA Agreement, CHA will receive exclusive rights in South Korea for conducting clinical trials with respect to the Indications and the Company will continue to retain rights to its proprietary manufacturing technology and cell-related intellectual property.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">The first clinical study as part of the CHA Agreement is a Phase II trial in Intermittent Claudication. South Korea’s Ministry of Food and Drug Safety approved this study in November 2013.</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt"></div> <div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">Upon the first regulatory approval for a PLX product in South Korea, for the specified Indications, Pluristem and CHA will establish an equally owned joint venture to commercialize PLX cell products in South Korea. Pluristem will be able to use the data generated by CHA to pursue the development of PLX product candidates outside of South Korea.</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">The CHA Agreement contains customary termination provisions, including in the event the parties do not reach an agreement upon development plan for conducting the clinical trials. Upon termination of the CHA Agreement, the license granted thereunder will terminate and all rights included therein will revert to the Company, and the Company will be free to enter into agreements with any other third parties for the granting of a license in or outside South Korea or to deal in any other manner with such rights as it shall see fit at its sole discretion.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">In addition, and as contemplated by the CHA Agreement, in December 2013, Pluristem and CHA executed the mutual investment pursuant to which Pluristem issued 2,500,000 shares of its common stock in consideration for 1,011,504 shares of CHA, which reflects total consideration to each of Pluristem and CHA of approximately $10,414. The parties also agreed to give an irrevocable proxy to the other party’s management with respect to the voting power of the shares issued.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt; margin-right: 5.9pt">In March 2015, the Company sold a portion of the CHA shares received in December 2013. In January 2018, the Company sold its remaining investment in the CHA shares, for aggregate net proceeds of approximately $10,500, representing a net gain of $6,200, which is recorded in “Financial income, net” for the fiscal year ended June 30, 2018, and reclassified from other comprehensive loss.</div> </div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: left; line-height: 1.25"><table id="z40ccf3f0cb6047fb9ef2bf98f0e52a6c" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">a.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Unaudited Interim Financial Information</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The accompanying unaudited interim condensed consolidated 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 GAAP 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).</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 36pt; text-indent: -0.55pt">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 June 30, 2018.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">Operating results for the three month periods ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending June 30, 201<font style="font: 10pt Times New Roman, Times, serif">9</font>.</div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: left; line-height: 1.25"><table id="z840d337481c94669b4560d4847c94361" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">b.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Significant Accounting Policies</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">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.</div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: left; line-height: 1.25"><table id="zba55d24f54ac4efaa9e4ef8f138e7305" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">c.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Use of estimates</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that are reasonable based upon information available at the time they are made.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.</div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: justify; line-height: 1.25"><table id="zb994e044c0e34da180eed41a6f5b6d0c" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">d.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Fair value of financial instruments</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The carrying amounts of the Company's financial instruments, including cash and cash equivalents, short-term and restricted bank deposits, accounts receivable and other current assets, trade payable and other accounts payable, accrued expenses and other liabilities, approximate fair value because of their generally short term maturities.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The Company measures its investments in marketable securities and derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 1</font> - Quoted prices (unadjusted) in active markets for identical assets or liabilities;</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 2</font> - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 3 </font>- Unobservable inputs for the asset or liability.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy (see Note 4).</div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: justify; line-height: 1.25"><table id="z03d9565ede344ac897bca009291b3db6" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="vertical-align: top; width: 18pt"><font style="font: italic 10pt Times New Roman, Times, serif">e</font><font style="font: italic 10pt Times New Roman, Times, serif">.</font></td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Derivative financial instruments</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><font style="font: 10pt Times New Roman, Times, serif">The Company accounts for derivatives and hedging based on ASC 815, </font><font style="font: 10pt Times New Roman, Times, serif">“Derivatives and hedging” </font>(“ASC 815”)<font style="font: 10pt Times New Roman, Times, serif">, as amended and related interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for fair value hedge transactions) or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings (for cash flow hedge transactions).</font></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The ineffective portion of a derivative's change in fair value is recognized in earnings. If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities.</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"> </div> <div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><font style="font: 10pt Times New Roman, Times, serif">The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with expenses mainly incurred in </font>New Israeli Shekels (“<font style="font: 10pt Times New Roman, Times, serif">NIS</font>”)<font style="font: 10pt Times New Roman, Times, serif">. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as "financial income, net".</font></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company measured the fair value of the contracts in accordance with ASC 820. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">As of September 30, 2018, the fair value of the<font style="font: 10pt Times New Roman, Times, serif"> </font>options contracts was approximately ($120), presented in “other accounts payable” (see Note 4). The net income (losses) recognized in “Financial income, net” during the three month periods ended September 30, 2018 and 2017 were ($123) and ($14<font style="font: 10pt Times New Roman, Times, serif">3</font>), respectively.</div></div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="text-align: justify; line-height: 1.25"><table id="z545cb669ca4747149bd2a3cd0756f940" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"><tr><td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">f.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Recently Adopted Accounting Pronouncement</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><u>ASC 606 - Revenue from Contracts with Customers (“ASC 606”):</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">On July 1, 2017, the Company adopted ASC 606, using the modified retrospective transition method. Prior periods were not retrospectively adjusted. As the Company did not have any contracts with customers that were incomplete as of June 30, 2017, the adoption of ASC 606 did not, and does not, have a material impact on the Company's consolidated financial statements upon adoption, including the presentation of revenues in the Company's consolidated statements of operations.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><u>Revenue Recognition from sales of products:</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">Revenues are recognized when control of the promised goods is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company's current contract with its customer includes one type of product and thus has only one performance obligation, which is the transfer of control of the product. The Company's PLX cells have an alternative use and, as such, the performance obligation is considered to be satisfied at the point in time when the customer obtains control over the product.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-15 - “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-15”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-15, which addresses the classification of eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU No. 2016-15 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-15 in the first quarter of fiscal year 2019 and it did not have a material impact on the Company's consolidated financial statements and related disclosures.</div> <div style="line-height: 1.25"></div> <div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-18 – "Statement of Cash Flows" (Topic 230) (“ASU No. 2016-18”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In November 2016, the FASB issued ASU 2016-18. The ASU requires that the consolidated statement of cash flows include the change in total cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. ASU No. 2016-18 also requires a reconciliation between the total of cash and cash equivalents and restricted cash presented on the consolidated statement of cash flows and the cash and cash equivalents balance presented on the consolidated balance sheet. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The standard requires application using a retrospective transition method.  The Company adopted this standard effective July 1, 2018 using the retrospective transition method, as required by the new standard.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The following table provides a reconciliation of cash and cash equivalents, and long term restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows:</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="z3b4a1d6422834d88bd9b53b243dc7019" cellspacing="0" cellpadding="0" align="right" border="0" style="font: 10pt Times New Roman, Times, serif; width: 94%"> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended</div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">September 30,</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2017</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">(Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Cash and cash equivalents</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">8,433</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">12,294</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 76%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Restricted cash included in Restricted cash and short-term bank deposits</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">777</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">599</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">9,210</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">12,893</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="clear: both; line-height: 1.25"> </div> <div style="font: italic bold 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 36pt">Recently Issued Accounting Pronouncements</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-02 - “Leases” (“Topic 842”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In February 2016, the FASB issued guidance on the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether a lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting treatment requirements under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. Topic 842 supersedes the previous leases standard, ASC 840, “Leases”. The guidance is effective for the interim and annual periods beginning on or after December 15, 2018. Early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach.</div> <div style="line-height: 1.25"> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 35.45pt">In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements - Leases (Topic 842)", which further updated Topic 842. This update provides an optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 35.45pt">If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: 0pt"><u>ASU No. 2017-12 - “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities” (“ASU No. 2017-12”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In August 2017, the FASB issued ASU No. 2017-12, which is intended to simplify and amend the application of hedge accounting to more clearly portray the economics of an entity’s risk management strategies in its financial statements. The ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting, reduce complexity in fair value hedges of interest rate risk and ease certain documentation and assessment requirements of hedge effectiveness. It also changes how companies assess effectiveness of the hedge and amends the presentation and disclosure requirements relating to hedging activities. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the potential impact of adopting the ASU on its consolidated financial statements.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2018-07 – “Compensation—Stock Compensation” (Topic 718) (“ASU No. 2018-07”):</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In June 2018, the FASB issued ASU No. 2018-07. The ASU expands the scope of ASU No. 2018-07 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply ASU No. 2018-07 to nonemployee awards except with respect to option pricing models and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASU No. 2018-07 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.</div></div></div></div></div></div>

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<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 18pt">NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES</div> <div style="line-height: 1.25"> </div> <div style="text-align: left; line-height: 1.25"> <table id="z40ccf3f0cb6047fb9ef2bf98f0e52a6c" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">a.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Unaudited Interim Financial Information</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The accompanying unaudited interim condensed consolidated 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 GAAP 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).</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 36pt; text-indent: -0.55pt">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 June 30, 2018.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">Operating results for the three month periods ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending June 30, 201<font style="font: 10pt Times New Roman, Times, serif">9</font>.</div> <div style="line-height: 1.25"> </div> <div style="text-align: left; line-height: 1.25"> <table id="z840d337481c94669b4560d4847c94361" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 17.45pt"></td> <td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">b.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Significant Accounting Policies</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">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.</div> <div style="line-height: 1.25"> </div> <div style="text-align: left; line-height: 1.25"> <table id="zba55d24f54ac4efaa9e4ef8f138e7305" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">c.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Use of estimates</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that are reasonable based upon information available at the time they are made.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="zb994e044c0e34da180eed41a6f5b6d0c" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">d.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Fair value of financial instruments</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The carrying amounts of the Company's financial instruments, including cash and cash equivalents, short-term and restricted bank deposits, accounts receivable and other current assets, trade payable and other accounts payable, accrued expenses and other liabilities, approximate fair value because of their generally short term maturities.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The Company measures its investments in marketable securities and derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 1</font> - Quoted prices (unadjusted) in active markets for identical assets or liabilities;</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 2</font> - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><font style="font: bold 10pt Times New Roman, Times, serif"> Level 3 </font>- Unobservable inputs for the asset or liability.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt">The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy (see Note 4).</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z03d9565ede344ac897bca009291b3db6" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="vertical-align: top; width: 18pt"><font style="font: italic 10pt Times New Roman, Times, serif">e</font><font style="font: italic 10pt Times New Roman, Times, serif">.</font></td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Derivative financial instruments</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><font style="font: 10pt Times New Roman, Times, serif">The Company accounts for derivatives and hedging based on ASC 815, </font><font style="font: 10pt Times New Roman, Times, serif">“Derivatives and hedging” </font>(“ASC 815”)<font style="font: 10pt Times New Roman, Times, serif">, as amended and related interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for fair value hedge transactions) or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings (for cash flow hedge transactions).</font></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The ineffective portion of a derivative's change in fair value is recognized in earnings. If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities.</div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"> </div> <div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><font style="font: 10pt Times New Roman, Times, serif">The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with expenses mainly incurred in </font>New Israeli Shekels (“<font style="font: 10pt Times New Roman, Times, serif">NIS</font>”)<font style="font: 10pt Times New Roman, Times, serif">. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as "financial income, net".</font></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company measured the fair value of the contracts in accordance with ASC 820. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">As of September 30, 2018, the fair value of the<font style="font: 10pt Times New Roman, Times, serif"> </font>options contracts was approximately ($120), presented in “other accounts payable” (see Note 4). The net income (losses) recognized in “Financial income, net” during the three month periods ended September 30, 2018 and 2017 were ($123) and ($14<font style="font: 10pt Times New Roman, Times, serif">3</font>), respectively.</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z545cb669ca4747149bd2a3cd0756f940" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: italic 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">f.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: italic bold 10pt Times New Roman, Times, serif">Recently Adopted Accounting Pronouncement</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><u>ASC 606 - Revenue from Contracts with Customers (“ASC 606”):</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">On July 1, 2017, the Company adopted ASC 606, using the modified retrospective transition method. Prior periods were not retrospectively adjusted. As the Company did not have any contracts with customers that were incomplete as of June 30, 2017, the adoption of ASC 606 did not, and does not, have a material impact on the Company's consolidated financial statements upon adoption, including the presentation of revenues in the Company's consolidated statements of operations.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt"><u>Revenue Recognition from sales of products:</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">Revenues are recognized when control of the promised goods is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company's current contract with its customer includes one type of product and thus has only one performance obligation, which is the transfer of control of the product. The Company's PLX cells have an alternative use and, as such, the performance obligation is considered to be satisfied at the point in time when the customer obtains control over the product.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-15 - “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-15”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-15, which addresses the classification of eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU No. 2016-15 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-15 in the first quarter of fiscal year 2019 and it did not have a material impact on the Company's consolidated financial statements and related disclosures.</div> <div style="line-height: 1.25"></div> <div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-18 – "Statement of Cash Flows" (Topic 230) (“ASU No. 2016-18”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In November 2016, the FASB issued ASU 2016-18. The ASU requires that the consolidated statement of cash flows include the change in total cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. ASU No. 2016-18 also requires a reconciliation between the total of cash and cash equivalents and restricted cash presented on the consolidated statement of cash flows and the cash and cash equivalents balance presented on the consolidated balance sheet. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The standard requires application using a retrospective transition method.  The Company adopted this standard effective July 1, 2018 using the retrospective transition method, as required by the new standard.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The following table provides a reconciliation of cash and cash equivalents, and long term restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows:</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="z3b4a1d6422834d88bd9b53b243dc7019" cellspacing="0" cellpadding="0" align="right" border="0" style="font: 10pt Times New Roman, Times, serif; width: 94%"> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended</div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">September 30,</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2017</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">(Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Cash and cash equivalents</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">8,433</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">12,294</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 76%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Restricted cash included in Restricted cash and short-term bank deposits</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">777</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">599</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">9,210</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">12,893</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="clear: both; line-height: 1.25"> </div> <div style="font: italic bold 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 36pt">Recently Issued Accounting Pronouncements</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2016-02 - “Leases” (“Topic 842”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In February 2016, the FASB issued guidance on the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether a lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting treatment requirements under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. Topic 842 supersedes the previous leases standard, ASC 840, “Leases”. The guidance is effective for the interim and annual periods beginning on or after December 15, 2018. Early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach.</div> <div style="line-height: 1.25"> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 35.45pt">In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements - Leases (Topic 842)", which further updated Topic 842. This update provides an optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 35.45pt">If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.</div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: 0pt"><u>ASU No. 2017-12 - “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities” (“ASU No. 2017-12”):</u></div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In August 2017, the FASB issued ASU No. 2017-12, which is intended to simplify and amend the application of hedge accounting to more clearly portray the economics of an entity’s risk management strategies in its financial statements. The ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting, reduce complexity in fair value hedges of interest rate risk and ease certain documentation and assessment requirements of hedge effectiveness. It also changes how companies assess effectiveness of the hedge and amends the presentation and disclosure requirements relating to hedging activities. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the potential impact of adopting the ASU on its consolidated financial statements.</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt; text-indent: -1.35pt"><u>ASU No. 2018-07 – “Compensation—Stock Compensation” (Topic 718) (“ASU No. 2018-07”):</u></div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">In June 2018, the FASB issued ASU No. 2018-07. The ASU expands the scope of ASU No. 2018-07 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply ASU No. 2018-07 to nonemployee awards except with respect to option pricing models and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASU No. 2018-07 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.</div></div></div></div></div></div>

<div><div id="DSPFPageBreakArea" style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="line-height: 1.25"><div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"><div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: left">NOTE 6: - STOCKHOLDERS' EQUITY</div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="zceaa150e95c84c2489f9eb6ba47d0c8a" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">a.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">Pursuant to a shelf registration on Form S-3 declared effective by the Securities and Exchange Commission on June 23, 2017, in July 2017 the Company entered into an At Market Issuance Sales Agreement (“ATM Agreement”) with FBR Capital Markets & Co., MLV & Co. LLC and Oppenheimer & Co. Inc. (collectively, the “Agents”), which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock having an aggregate offering price of up to $80,000 through the Agents acting as sales agent. During the three month period ended September 30, 2018, the Company sold 376,000 shares of common stock under the ATM Agreement at an average price of $1.33 per share for aggregate net proceeds of approximately $473, net of issuance expenses of $27.</div> </td> </tr> </table> </div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="text-align: left; line-height: 1.25"> <table id="za45e7ada8a114caa9acb595e295bd523" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 18pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">b.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: bold 10pt Times New Roman, Times, serif">Options, warrants, restricted stocks (“RS”) and restricted stock units (“RSU”) to employees, directors and consultants:</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z91225003f9164a5b927b63c102ceb3a2" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 36pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">1.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">Options to employees and directors:</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 54pt">The Company accounts for its options to employees and directors under the fair value method in accordance with ASC 718, “Compensation—Stock Compensation” (“ASC 718”). A summary of the Company’s activity for options granted to employees and directors under its 2005 incentive option plan is as follows:</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="z7b52cf6f10f44126a14ecf5645b02cf6" cellspacing="0" cellpadding="0" align="right" border="0" style="font: 10pt Times New Roman, Times, serif; width: 92%"> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="14" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended September 30, 2018 (Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Number</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Weighted Average Exercise Price</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Weighted Average Remaining Contractual Terms (in years)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Aggregate Intrinsic Value Price</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr style="height: 19px"> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options outstanding at beginning of period</div> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">315,000</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options exercised</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(7,500</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 52%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options outstanding at end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">307,500</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.082</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">209</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 52%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options exercisable at the end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">307,500</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.082</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">209</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: middle; padding-bottom: 4px; width: 52%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options vested</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">307,500</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.082</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">209</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: justify; clear: both"> </div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: justify"> </div> <div style="margin-bottom: 10pt; clear: both; margin-top: 10pt"> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 35.45pt">Intrinsic value of exercisable options (the difference between the Company’s closing stock price on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the employee and director option holders had all option holders exercised their options on September 30, 2018. This amount changes based on the fair market value of the Company’s common stock.</div> <div style="line-height: 1.25"></div> </div> <div style="line-height: 1.25"><table id="z36dcc4ff9ca3442380586fc1a36a3449" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr><td style="width: 36pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">2.</td> <td style="vertical-align: top; text-align: left; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">Options to non-employees:</div> </td> </tr> </table> </div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 54pt">The Company accounts for its options to non-employees under the fair value method in accordance with ASC 718. A summary of the options to non-employee consultants under its 2005 and 2016 incentive option plans is as follows:</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="zd9f37f21ff7647feaa058dde3f130df3" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="14" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended September 30, 2018 (Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Number</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Weighted Average Exercise Price</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Weighted Average Remaining Contractual Terms (in years)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Aggregate Intrinsic Value Price</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options outstanding at beginning of period</div> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">500,600</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.01</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options granted</div> </td> <td style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">20,000</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options exercised</div> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(5,000</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">0.62</div> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options forfeited</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(1,850</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 52%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options outstanding at end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">513,750</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">6.84</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">668</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 52%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 52%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options exercisable at the end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">228,000</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">6.14</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">296</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 52%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Options vested  and expected to vest</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">513,750</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">6.84</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">668</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 72pt; text-indent: -36pt">Compensation expenses related to options granted to consultants were recorded as follows:</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="zde944d9117ae4618a278623233d3b3b1" cellspacing="0" cellpadding="0" align="center" border="0" style="font: 10pt Times New Roman, Times, serif; width: 75%"> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: top; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended</div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">September 30,</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">2017</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">(Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Research and development expenses</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">84</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">3</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 76%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">General and administrative expenses</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">6</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">15</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 76%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">90</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">18</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="line-height: 1.25"> </div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z972ced1c06cb453aa3b9dbe26d5c2628" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 36pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">3.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">RS and RSUs to employees and directors:</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 54pt; margin-right: 36pt">The following table summarizes the activity related to unvested RS and RSUs granted to employees and directors under the Company’s 2005 and 2016 incentive option plans for the three month period ended September 30, 2018 (Unaudited):</div> <div style="line-height: 1.25"><br style="line-height: 1.25" /> </div> <table id="ze3e4be7914e1483989c2ac0534d3854a" cellspacing="0" cellpadding="0" align="right" border="0" style="font: 10pt Times New Roman, Times, serif; width: 80%"> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Number</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 88%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Unvested at the beginning of period</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">6,293,608</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 88%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Granted</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">9,000</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 88%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Forfeited</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(51,470</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 88%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Vested</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(673,363</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 88%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Unvested at the end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">5,577,775</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 88%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Expected to vest after September 30, 2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">5,432,336</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="clear: both; line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 36pt; margin-right: 56.15pt">Compensation expenses related to RS and RSUs granted to employees and directors were recorded as follows:</div> <div style="line-height: 1.25"> </div> <table id="z72198724979440a590b40255cdc041dd" cellspacing="0" cellpadding="0" align="center" border="0" style="font: 10pt Times New Roman, Times, serif; width: 80%"> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended</div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">September 30,</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">2017</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">(Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Research and development expenses</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">318</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">144</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 76%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">General and administrative expenses</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">731</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">1,290</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 76%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">1,049</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">1,434</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 36pt; text-indent: -0.55pt">Unamortized compensation expenses related to RSUs granted to employees and directors to be recognized over an average time of approximately 3.25 years are approximately $3,950.</div> <div style="line-height: 1.25"></div> </div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z5dde8fa0f7e04983a653ef6c5c0a598c" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 36pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">4.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">RS and RSUs to consultants:</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <div style="text-align: justify; line-height: 1.25"> <table id="z7b44191adeab4ef5ad1bc8916be0c731" class="DSPFListTable" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, serif; width: 100%"> <tr> <td style="width: 36pt"></td> <td style="font: 10pt Times New Roman, Times, serif; vertical-align: top; width: 18pt">5.</td> <td style="vertical-align: top; text-align: justify; width: auto"> <div style="font: 10pt Times New Roman, Times, serif">The following table summarizes the activity related to unvested RS and RSUs granted to consultants under the Company’s 2005 and 2016 incentive option plans for the three month period ended September 30, 2018 (Unaudited):</div> </td> </tr> </table> </div> <div style="line-height: 1.25"> </div> <table id="z039538b6af2b48c6962d87874feeaa94" cellspacing="0" cellpadding="0" align="center" border="0" style="font: 10pt Times New Roman, Times, serif; width: 80%"> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Number</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 88%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Unvested at the beginning of period</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">199,559</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 88%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Granted</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">34,388</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 88%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Vested</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">(22,059</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">)</div> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 88%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Unvested at the end of the period</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">211,888</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> </table> <div style="line-height: 1.25"> </div> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: justify; margin-left: 56.7pt; margin-right: 20.7pt">Compensation expenses related to RS and RSUs granted to consultants were recorded as follows:</div> <div style="line-height: 1.25"> </div> <table id="z2a8ab3f8fd1243e399c01adb3b4eb885" cellspacing="0" cellpadding="0" align="center" border="0" style="font: 10pt Times New Roman, Times, serif; width: 80%"> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">Three months ended</div> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">September 30,</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2018</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center; text-indent: 2pt">2017</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: top; padding-bottom: 2px; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; vertical-align: bottom"> </td> <td colspan="6" style="vertical-align: bottom; border-bottom: #000000 2px solid; vertical-align: bottom"> <div style="font: bold 10pt/1.25 Times New Roman, Times, serif; text-align: center">(Unaudited)</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; width: 76%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">Research and development expenses</div> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">26</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">-</div> </td> <td style="vertical-align: bottom; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 2px; width: 76%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif; text-align: left; margin-left: 8.65pt; text-indent: 0.7pt">General and administrative expenses</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">162</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 2px; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; width: 9%; background-color: #ffffff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">51</div> </td> <td style="vertical-align: bottom; padding-bottom: 2px; text-align: left; width: 1%; background-color: #ffffff; vertical-align: bottom; white-space: nowrap"> </td> </tr> <tr> <td style="vertical-align: bottom; padding-bottom: 4px; width: 76%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">188</div> </td> <td style="vertical-align: bottom; padding-bottom: 4px; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom; white-space: nowrap"> </td> <td style="vertical-align: bottom; padding-bottom: 4px; width: 1%; background-color: #cceeff; vertical-align: bottom"> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; width: 1%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">$</div> </td> <td style="vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; width: 9%; background-color: #cceeff; vertical-align: bottom"> <div style="font: 10pt/1.25 Times New Roman, Times, serif">51</div> </td></tr></table></div></div></div></div></div>

21890000

8440000

Less than $1

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Individual [Axis] Employees and Directors [Member] Non-employee Consultants [Member] Options [Member] Income Statement Location [Axis] Research and development expenses [Member] General and administrative expenses [Member] Equity Components [Axis] Common Stock [Member] Additional Paid-in Capital [Member] Accumulated Deficit [Member] Accumulated Other Comprehensive Income (Loss) [Member] Smart Money Grant [Member] Related Party Transaction [Axis] ATM Agreement [Member] Smart Money [Member] CHA [Member] BIRD [Member] NYBC [Member] Smart Money One [Member] Shalav [Member] Subsequent Event Type [Axis] Subsequent Event [Member] Document and Entity Information [Abstract] Document Type Amendment Flag Document Period End Date Entity Registrant Name Entity Central Index Key Current Fiscal Year End Date Document Fiscal Year Focus Document Fiscal Period Focus Entity Filer Category Entity Small Business Entity Emerging Growth Company Entity Common Stock, Shares Outstanding Statement of Financial Position [Abstract] ASSETS CURRENT ASSETS: Cash and cash equivalents Short-term bank deposits Restricted cash and short-term bank deposits Marketable securities Accounts receivable from the Israeli Innovation Authority ("IIA") Other current assets Total current assets LONG-TERM ASSETS: Long-term deposits and restricted bank deposits Severance pay fund Property and equipment, net Other long-term assets Total long-term assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade payables Accrued expenses Other accounts payable Other current liabilities Total current liabilities LONG-TERM LIABILITIES Accrued severance pay Other long-term liabilities Total long-term liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock $0.00001 par value per share: Authorized: 200,000,000 shares Issued and outstanding: 114,649,702 shares as of September 30, 2018, 113,565,780 shares as of June 30, 2018 Additional paid-in capital Accumulated deficit Other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity Common stock, par value per share Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenues Cost of revenues Gross profit Operating Expenses: Research and development expenses Less: participation by the IIA and other parties Research and development expenses, net General and administrative expenses, net Other income Operating loss Financial income, net Net loss Loss per share: Basic and diluted net loss per share Weighted average number of shares used in computing basic and diluted net loss per share Statement of Comprehensive Income [Abstract] Net loss Other comprehensive loss, net: Unrealized gain (loss) on derivative instruments Unrealized loss on available-for-sale marketable securities, net Reclassification adjustment of derivative instruments losses realized in net loss, net Reclassification adjustment of available-for-sale marketable securities losses realized in net loss, net Other comprehensive loss Total comprehensive loss Statement [Table] Statement [Line Items] Balance Balance, shares Exercise of options by employees Exercise of options by employees, shares Stock-based compensation to employees, directors and non-employee consultants Stock-based compensation to employees, directors and non-employee consultants, shares Issuance of common stock under At-The Market ("ATM") Agreement, net of issuance costs of $80 (see Note 6a) Issuance of common stock under At-The Market ("ATM") Agreement, net of issuance costs of $80 (see Note 6a), shares Issuance of common stock under ("ATM") Agreement, net of issuance costs of $27 (see Note 6a) Issuance of common stock under ("ATM") Agreement, net of issuance costs of $27 (see Note 6a), shares Issuance of common stock and warrants related to January 2017 offering, net of issuance costs of $1,532 (Note 6a) Issuance of common stock and warrants related to January 2017 offering, net of issuance costs of $1,532 (Note 6a), shares Issuance of common stock, net of issuance costs of $1,405 (Note 6d) Issuance of common stock, net of issuance costs of $1,405 (Note 6d), shares Exercise of warrants by investors Exercise of warrants by investors, shares Other comprehensive loss, net Exercise of options by employees and non-employee consultants Exercise of options by employees and non-employee consultants, shares Balance Balance, shares Statement of Stockholders' Equity [Abstract] Issuance of common stock and warrants, issuance costs Statement of Cash Flows [Abstract] CASH FLOWS FROM OPERATING ACTIVITIES: Adjustments to reconcile net loss to net cash used in operating activities: Depreciation Gain from sale of property and equipment, net Accretion of discount, amortization of premium and changes in accrued interest of marketable securities Gain from sale of investments of available-for-sale marketable securities Other-than-temporary loss of available-for-sale marketable securities (see Note 3) Stock-based compensation to employees, directors and non-employee consultants Decrease in accounts receivable from the IIA Increase in other current assets and other long-term assets Decrease in trade payables Decrease in other accounts payable, accrued expenses, other current liabilities and other long-term liabilities Decrease in deferred revenues Decrease in advance payment from United Decrease (increase) in interest receivable on short-term deposits Linkage differences and interest on short and long-term deposits and restricted bank deposits Accrued severance pay, net Net cash used by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment Proceeds from sale of property and equipment Repayment of short-term deposits Repayment of long-term deposits and restricted bank deposits Proceeds from sale of available-for-sale marketable securities Proceeds from redemption of available-for-sale marketable securities Investment in available-for-sale marketable securities Net cash provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds related to issuance of common stock, net of issuance costs Proceeds with respect to Israel-United States Binational Industrial Research and Development Foundation liability Exercise of options Net cash provided by financing activities Increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at the beginning of the period Cash and cash equivalents and restricted cash at the end of the period (a) Supplemental disclosure of cash flow activities: Cash paid during the period for: Taxes paid due to non-deductible expenses (b) Supplemental disclosure of non-cash activities: Purchase of property and equipment on credit Share consideration to contractor GENERAL [Abstract] GENERAL Accounting Policies [Abstract] SIGNIFICANT ACCOUNTING POLICIES Marketable Securities [Abstract] MARKETABLE SECURITIES Fair Value Disclosures [Abstract] FAIR VALUE OF FINANCIAL INSTRUMENTS Commitments and Contingencies Disclosure [Abstract] COMMITMENTS AND CONTINGENCIES Stockholders' Equity Note [Abstract] STOCKHOLDERS' EQUITY Subsequent Events [Abstract] SUBSEQUENT EVENTS Unaudited Interim Financial Information Significant Accounting Policies Use of estimates Fair value of financial instruments Derivative financial instruments Recently Adopted Accounting Standards EX-101.PRE 13 psti-20180930_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 14 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Nov. 04, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Entity Registrant Name	PLURISTEM THERAPEUTICS INC
Entity Central Index Key	0001158780
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		115,800,504

XML 15 R2.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 8,433	$ 8,821
Short-term bank deposits	13,283	21,079
Restricted cash and short-term bank deposits	777	687
Accounts receivable from the Israeli Innovation Authority ("IIA")	37	58
Other current assets	1,921	1,391
Total current assets	24,451	32,036
LONG-TERM ASSETS:
Long-term deposits and restricted bank deposits	385	383
Severance pay fund	858	846
Property and equipment, net	5,186	5,678
Other long-term assets	13	17
Total long-term assets	6,442	6,924
Total assets	30,893	38,960
CURRENT LIABILITIES
Trade payables	2,133	3,261
Accrued expenses	3,048	2,266
Other accounts payable	2,217	3,021
Total current liabilities	7,398	8,548
LONG-TERM LIABILITIES
Accrued severance pay	1,141	1,127
Other long-term liabilities	825	778
Total long-term liabilities	1,966	1,905
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock $0.00001 par value per share: Authorized: 200,000,000 shares Issued and outstanding: 114,649,702 shares as of September 30, 2018, 113,565,780 shares as of June 30, 2018	1	1
Additional paid-in capital	246,011	244,203
Accumulated deficit	(224,483)	(215,697)
Total stockholders' equity	21,529	28,507
Total liabilities and stockholders' equity	$ 30,893	$ 38,960

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INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Sep. 30, 2018	Jun. 30, 2018
Statement of Financial Position [Abstract]
Common stock, par value per share	$ 0.00001	$ 0.00001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	114,649,702	113,565,780
Common stock, shares outstanding	114,649,702	113,565,780

XML 17 R4.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
$ in Thousands

3 Months Ended

Sep. 30, 2018

Sep. 30, 2017

Income Statement [Abstract]

Revenues

$ 4

Cost of revenues

^[1]

Gross profit

Operating Expenses:

Research and development expenses

(7,765)

(5,192)

Less: participation by the IIA and other parties

1,001

515

Research and development expenses, net

(6,764)

(4,677)

General and administrative expenses, net

(2,210)

(2,763)

Operating loss

(8,970)

(7,440)

Financial income, net

184

Net loss

$ (8,786)

$ (7,385)

Loss per share:

Basic and diluted net loss per share

$ (0.08)

Weighted average number of shares used in computing basic and diluted net loss per share

113,658,261

97,321,866

[1]	Less than $1

XML 18 R5.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (8,786)	$ (7,385)
Other comprehensive loss, net:
Unrealized loss on available-for-sale marketable securities, net		(1,133)
Reclassification adjustment of available-for-sale marketable securities losses realized in net loss, net		78
Other comprehensive loss		(1,055)
Total comprehensive loss	$ (8,786)	$ (8,440)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

XML 19 R6.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands

Common Stock [Member]

Additional Paid-in Capital [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Accumulated Deficit [Member]

Total

Balance at Jun. 30, 2017

$ 1

$ 217,822

$ 1,999

$ (189,571)

$ 30,251

Balance, shares at Jun. 30, 2017

96,938,789

Stock-based compensation to employees, directors and non-employee consultants

^[1]

1,503

Stock-based compensation to employees, directors and non-employee consultants, shares

394,096

Issuance of common stock under At-The Market ("ATM") Agreement, net of issuance costs of $80 (see Note 6a)

^[1]

1,026

Issuance of common stock under At-The Market ("ATM") Agreement, net of issuance costs of $80 (see Note 6a), shares

834,040

Exercise of warrants by investors

^[1]

Exercise of warrants by investors, shares

16,800

Other comprehensive loss, net

(1,055)

Net loss

(7,385)

Balance at Sep. 30, 2017

$ 1

220,375

$ 944

(196,956)

$ 24,364

Balance, shares at Sep. 30, 2017

98,183,725

Balance at Jun. 30, 2018

$ 1

244,203

(215,697)

$ 28,507

Balance, shares at Jun. 30, 2018

113,565,780

Stock-based compensation to employees, directors and non-employee consultants

^[1]

1,327

$ 1,327

Stock-based compensation to employees, directors and non-employee consultants, shares

695,422

Issuance of common stock under ("ATM") Agreement, net of issuance costs of $27 (see Note 6a)

^[1]

473

Issuance of common stock under ("ATM") Agreement, net of issuance costs of $27 (see Note 6a), shares

376,000

Exercise of options by employees and non-employee consultants

^[1]

Exercise of options by employees and non-employee consultants, shares

12,500

Net loss

(8,786)

Balance at Sep. 30, 2018

$ 1

$ 246,011

$ (224,483)

$ 21,529

Balance, shares at Sep. 30, 2018

114,649,702

[1]	Less than $1

XML 20 R7.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement of Stockholders' Equity [Abstract]
Issuance of common stock and warrants, issuance costs	$ 27	$ 80

XML 21 R8.htm IDEA: XBRL DOCUMENT

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (8,786)	$ (7,385)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	503	515
Accretion of discount, amortization of premium and changes in accrued interest of marketable securities		13
Gain from sale of investments of available-for-sale marketable securities		(928)
Other-than-temporary loss of available-for-sale marketable securities (see Note 3)		850
Stock-based compensation to employees, directors and non-employee consultants	1,327	1,503
Decrease in accounts receivable from the IIA	21	1,011
Increase in other current assets and other long-term assets	(526)	(170)
Decrease in trade payables	(962)	(354)
Decrease in other accounts payable, accrued expenses, other current liabilities and other long-term liabilities	(82)	(290)
Decrease (increase) in interest receivable on short-term deposits	(7)	45
Linkage differences and interest on short and long-term deposits and restricted bank deposits		3
Accrued severance pay, net	2	(3)
Net cash used by operating activities	(8,510)	(5,190)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(177)	(148)
Repayment of short-term deposits	7,801	4,042
Proceeds from sale of available-for-sale marketable securities		9,010
Proceeds from redemption of available-for-sale marketable securities		9
Investment in available-for-sale marketable securities		(1,146)
Net cash provided by investing activities	7,624	11,767
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds related to issuance of common stock, net of issuance costs	473	1,026
Proceeds with respect to Israel-United States Binational Industrial Research and Development Foundation liability	107
Exercise of options	8	24
Net cash provided by financing activities	588	1,050
Increase (decrease) in cash and cash equivalents and restricted cash	(298)	7,627
Cash and cash equivalents and restricted cash at the beginning of the period	9,508	5,266
Cash and cash equivalents and restricted cash at the end of the period	9,210	12,893
(a) Supplemental disclosure of cash flow activities:
Cash paid during the period for: Taxes paid due to non-deductible expenses	2	3
(b) Supplemental disclosure of non-cash activities:
Purchase of property and equipment on credit	$ 5	$ 29

XML 22 R9.htm IDEA: XBRL DOCUMENT

GENERAL

3 Months Ended

Sep. 30, 2018

GENERAL [Abstract]

GENERAL

NOTE 1:-GENERAL

The Company’s shares of common stock are traded on the Nasdaq Capital Market under the symbol “PSTI” and on the Tel-Aviv Stock Exchange under the symbol “PLTR”.

CHA Agreement

The first clinical study as part of the CHA Agreement is a Phase II trial in Intermittent Claudication. South Korea’s Ministry of Food and Drug Safety approved this study in November 2013.

XML 23 R10.htm IDEA: XBRL DOCUMENT

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information

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 June 30, 2018.

Operating results for the three month periods ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending June 30, 2019.

Significant Accounting Policies

Use of estimates

These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair value of financial instruments

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Unobservable inputs for the asset or liability.

Derivative financial instruments

Recently Adopted Accounting Pronouncement

ASC 606 - Revenue from Contracts with Customers (“ASC 606”):

Revenue Recognition from sales of products:

ASU No. 2016-15 - “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-15”):

ASU No. 2016-18 – "Statement of Cash Flows" (Topic 230) (“ASU No. 2016-18”):

	Three months ended September 30,
	2018		2017
	(Unaudited)
Cash and cash equivalents	$	8,433	$	12,294
Restricted cash included in Restricted cash and short-term bank deposits		777		599
Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows	$	9,210	$	12,893

Recently Issued Accounting Pronouncements

ASU No. 2016-02 - “Leases” (“Topic 842”):

If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.

ASU No. 2017-12 - “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities” (“ASU No. 2017-12”):

ASU No. 2018-07 – “Compensation—Stock Compensation” (Topic 718) (“ASU No. 2018-07”):

XML 24 R11.htm IDEA: XBRL DOCUMENT

MARKETABLE SECURITIES	3 Months Ended
MARKETABLE SECURITIES	Sep. 30, 2018
Marketable Securities [Abstract]
MARKETABLE SECURITIES	NOTE 3:- MARKETABLE SECURITIES During the year ended June 30, 2018, the Company sold marketable securities for aggregate net proceeds (including redemptions of certain bonds) of approximately $21,890, representing a net gain of $8,440. The proceeds from the sale of such marketable securities are included in “Financial income, net”, for the year ended June 30, 2018. In addition, during the year ended June 30, 2018, the Company recognized an other-than-temporary impairment loss on an outstanding security of $850, and the value of the outstanding security was amortized in full.

XML 25 R12.htm IDEA: XBRL DOCUMENT

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 4:- FAIR VALUE OF FINANCIAL INSTRUMENTS

	September 30, 2018 (Unaudited)					June 30, 2018
	Level 1		Level 2			Level 1		Level 2
Foreign currency derivative instruments		-		(120	)		-		(243	)
Total financial liabilities	$	-	$	(120	)	$	-	$	(243	)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

XML 26 R13.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 5: - COMMITMENTS AND CONTINGENCIES

As of September 30, 2018, an amount of $1,159 of cash and deposits was pledged by the Subsidiary to secure the derivatives and hedging transactions, credit line and bank guarantees.

The Israeli government granted the Company budget resources that are intended to be used to advance the Company’s product candidate towards marketing in the China-Hong Kong markets.

XML 27 R14.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY

3 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

NOTE 6: - STOCKHOLDERS' EQUITY

Options, warrants, restricted stocks (“RS”) and restricted stock units (“RSU”) to employees, directors and consultants:

Options to employees and directors:

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		315,000		$	0.62
Options exercised		(7,500	)	$	0.62
Options outstanding at end of the period		307,500		$	0.62		0.082	$	209
Options exercisable at the end of the period		307,500		$	0.62		0.082	$	209
Options vested		307,500		$	0.62		0.082	$	209

Options to non-employees:

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		500,600		$	0.01
Options granted		20,000			-
Options exercised		(5,000	)		0.62
Options forfeited		(1,850	)		-
Options outstanding at end of the period		513,750		$	-		6.84	$	668

Options exercisable at the end of the period		228,000		$	-		6.14	$	296
Options vested and expected to vest		513,750		$	-		6.84	$	668

Compensation expenses related to options granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	84	$	3
General and administrative expenses	$	6	$	15
	$	90	$	18

RS and RSUs to employees and directors:

	Number
Unvested at the beginning of period		6,293,608
Granted		9,000
Forfeited		(51,470	)
Vested		(673,363	)
Unvested at the end of the period		5,577,775
Expected to vest after September 30, 2018		5,432,336

Compensation expenses related to RS and RSUs granted to employees and directors were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	318	$	144
General and administrative expenses		731		1,290
	$	1,049	$	1,434

Unamortized compensation expenses related to RSUs granted to employees and directors to be recognized over an average time of approximately 3.25 years are approximately $3,950.

RS and RSUs to consultants:

	Number
Unvested at the beginning of period		199,559
Granted		34,388
Vested		(22,059	)
Unvested at the end of the period		211,888

Compensation expenses related to RS and RSUs granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	26	$	-
General and administrative expenses		162		51
	$	188	$	51

XML 28 R15.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7:-SUBSEQUENT EVENTS During October 2018, the Company sold 1,130,000 shares of common stock under the ATM Agreement at an average price of $1.21 per share.

XML 29 R16.htm IDEA: XBRL DOCUMENT

SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Unaudited Interim Financial Information

a.	Unaudited Interim Financial Information

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 June 30, 2018.

Operating results for the three month periods ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending June 30, 2019.

Significant Accounting Policies

b.	Significant Accounting Policies

Use of estimates

c.	Use of estimates

These estimates, judgments and assumptions can affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair value of financial instruments

d.	Fair value of financial instruments

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Unobservable inputs for the asset or liability.

Derivative financial instruments

e.	Derivative financial instruments

Recently Adopted Accounting Pronouncement

f.	Recently Adopted Accounting Pronouncement

ASC 606 - Revenue from Contracts with Customers (“ASC 606”):

Revenue Recognition from sales of products:

ASU No. 2016-15 - “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-15”):

ASU No. 2016-18 – "Statement of Cash Flows" (Topic 230) (“ASU No. 2016-18”):

	Three months ended September 30,
	2018		2017
	(Unaudited)
Cash and cash equivalents	$	8,433	$	12,294
Restricted cash included in Restricted cash and short-term bank deposits		777		599
Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows	$	9,210	$	12,893

Recently Issued Accounting Pronouncements

ASU No. 2016-02 - “Leases” (“Topic 842”):

If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The Company is currently evaluating the potential impact of the guidance on its consolidated financial statements.

ASU No. 2017-12 - “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities” (“ASU No. 2017-12”):

ASU No. 2018-07 – “Compensation—Stock Compensation” (Topic 718) (“ASU No. 2018-07”):

XML 30 R17.htm IDEA: XBRL DOCUMENT

SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Reconciliation of Cash and Cash Equivalents, and Long Term Restricted Cash

	Three months ended September 30,
	2018		2017
	(Unaudited)
Cash and cash equivalents	$	8,433	$	12,294
Restricted cash included in Restricted cash and short-term bank deposits		777		599
Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows	$	9,210	$	12,893

XML 31 R18.htm IDEA: XBRL DOCUMENT

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Financial Instruments

September 30, 2018 (Unaudited)					June 30, 2018
	Level 1		Level 2			Level 1		Level 2
Foreign currency derivative instruments		-		(120	)		-		(243	)
Total financial liabilities	$	-	$	(120	)	$	-	$	(243	)

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

XML 32 R19.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Sep. 30, 2018

Employees and Directors [Member]

Stockholders Equity Note [Line Items]

Schedule of Stock Option Activity

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		315,000		$	0.62
Options exercised		(7,500	)	$	0.62
Options outstanding at end of the period		307,500		$	0.62		0.082	$	209
Options exercisable at the end of the period		307,500		$	0.62		0.082	$	209
Options vested		307,500		$	0.62		0.082	$	209

Non-employee Consultants [Member]

Stockholders Equity Note [Line Items]

Schedule of Stock Option Activity

	Three months ended September 30, 2018 (Unaudited)
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		500,600		$	0.01
Options granted		20,000			-
Options exercised		(5,000	)		0.62
Options forfeited		(1,850	)		-
Options outstanding at end of the period		513,750		$	-		6.84	$	668

Options exercisable at the end of the period		228,000		$	-		6.14	$	296
Options vested and expected to vest		513,750		$	-		6.84	$	668

Schedule of Stock-based Compensation Expenses

Compensation expenses related to options granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	84	$	3
General and administrative expenses	$	6	$	15
	$	90	$	18

Restricted stock units [Member] | Employees and Directors [Member]

Stockholders Equity Note [Line Items]

Schedule of Unvested Restricted Stock Units

	Number
Unvested at the beginning of period		6,293,608
Granted		9,000
Forfeited		(51,470	)
Vested		(673,363	)
Unvested at the end of the period		5,577,775
Expected to vest after September 30, 2018		5,432,336

Schedule of Stock-based Compensation Expenses

Compensation expenses related to RS and RSUs granted to employees and directors were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	318	$	144
General and administrative expenses		731		1,290
	$	1,049	$	1,434

Restricted stock units [Member] | Non-employee Consultants [Member]

Stockholders Equity Note [Line Items]

Schedule of Unvested Restricted Stock Units

	Number
Unvested at the beginning of period		199,559
Granted		34,388
Vested		(22,059	)
Unvested at the end of the period		211,888

Schedule of Stock-based Compensation Expenses

Compensation expenses related to RS and RSUs granted to consultants were recorded as follows:

	Three months ended September 30,
	2018		2017
	(Unaudited)
Research and development expenses	$	26	$	-
General and administrative expenses		162		51
	$	188	$	51

XML 33 R20.htm IDEA: XBRL DOCUMENT

GENERAL (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
GENERAL (Details) - USD ($) $ in Thousands	Jan. 31, 2018	Dec. 31, 2013	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accumulated deficit			$ 224,483		$ 215,697
Stockholders' equity			21,529	$ 24,364	$ 28,507	$ 30,251
Operating loss			8,970	7,440
Operating activities			8,510	5,190
Cash and cash equivalents, short-term bank deposits and marketable securities			21,716
Issuance of common stock under CHA agreement		2,500,000
CHA shares classified as marketable securities		1,011,504
Total consideration reflected under the CHA agreement		$ 10,414
Aggregate net proceeds			$ 473	$ 1,026
CHA [Member]
Net gain	$ 6,200
Aggregate net proceeds	$ 10,500

XML 34 R21.htm IDEA: XBRL DOCUMENT

SIGNIFICANT ACCOUNTING POLICIES (Derivative Financial Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Fair value of cash flow hedge derivatives	$ (120)
Net gain (loss) realized on derivatives	$ (123)	$ (143)

XML 35 R22.htm IDEA: XBRL DOCUMENT

SIGNIFICANT ACCOUNTING POLICIES (Reconciliation of Cash and Cash Equivalents, and Long Term Restricted Cash) (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Cash and cash equivalents	$ 8,433	$ 12,294
Restricted cash included in Restricted cash and short-term bank deposits	777	599
Cash, cash equivalents and long term restricted cash shown in the consolidated statement of cash flows	$ 9,210	$ 12,893

XML 36 R23.htm IDEA: XBRL DOCUMENT

MARKETABLE SECURITIES (Narrative) (Details) $ in Thousands	12 Months Ended
MARKETABLE SECURITIES (Narrative) (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Marketable Securities [Abstract]
Proceeds from sale of marketable securities	$ 21,890
Gain from sale of marketable securities	8,440
Amortized cost	$ 850

XML 37 R24.htm IDEA: XBRL DOCUMENT

FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Fair Value of Financial Instruments) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative instruments
Total financial liabilities
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative instruments	(120)	(243)
Total financial liabilities	$ (120)	$ (243)

XML 38 R25.htm IDEA: XBRL DOCUMENT

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands			3 Months Ended
	Sep. 27, 2017	Jul. 31, 2017	Sep. 30, 2018
Other Commitments [Line Items]
Cash pledged			$ 1,159
Grants received			$ 26,990
Percentage of qualified expenditures eligible for grant			50.00%
Royalty rate	1.00%	5.00%	3.00%
Royalty payable based on grants received			100.00%
Accrued and paid royalties			$ 168
Contingent liability amount	$ 250		$ 26,822
Agreement term period		5 years	5 years
Royalty paid on revenue			$ 250
Smart Money Grant [Member]
Other Commitments [Line Items]
Additonal grant awarded		$ 229
Smart Money [Member]
Other Commitments [Line Items]
Grants received			$ 112
Royalty rate			5.00%
Contingent liability amount			$ 112
Agreement term period			5 years
Smart Money One [Member]
Other Commitments [Line Items]
Grants received			$ 23
Royalty rate			5.00%
Contingent liability amount			$ 23
Agreement term period			5 years
Shalav [Member]
Other Commitments [Line Items]
Grants received			$ 52
Royalty rate			3.00%
Agreement term period			5 years
BIRD [Member]
Other Commitments [Line Items]
Grants received			$ 264
Contingent liability amount			264
Amount of grants received conditional award			900
Amount of direct grant allocated to the Company			$ 585
NYBC [Member]
Other Commitments [Line Items]
Royalty payable based on grants received			2.50%
Contingent liability amount			$ 550

XML 39 R26.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Jul. 31, 2017	Sep. 30, 2018	Sep. 30, 2017
Proceeds related to issuance of common stock and warrants, net of issuance costs		$ 473	$ 1,026
Net of issuance expenses		27	$ 80
ATM Agreement [Member]
Value of common stock company can periodically issue through Agents, per terms of ATM Agreement	$ 80,000
Proceeds related to issuance of common stock and warrants, net of issuance costs		473
Net of issuance expenses		$ 27
Number of shares issued		376,000
Share price		$ 1.33

XML 40 R27.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Summary of Option Activity to Employees and Directors) (Details) - Employees and Directors [Member] $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Number
Options outstanding at beginning of period \| shares	315,000
Options exercised \| shares	(7,500)
Options outstanding at end of the period \| shares	307,500
Options exercisable at the end of the period \| shares	307,500
Options vested \| shares	307,500
Weighted Average Exercise Price
Options outstanding at beginning of period \| $ / shares	$ 0.62
Options exercised \| $ / shares	0.62
Options outstanding at end of the period \| $ / shares	0.62
Options exercisable at the end of the period \| $ / shares	0.62
Options vested \| $ / shares	$ 0.62
Weighted Average Remaining Contractual Terms (in years)
Weighted Average Remaining Contractual Terms (in years)	9 months 25 days
Options exercisable at the end of the period	9 months 25 days
Options vested	9 months 25 days
Aggregate Intrinsic Value Price
Options outstanding at end of the period \| $	$ 209
Options exercisable at the end of the period \| $	209
Options vested \| $	$ 209

XML 41 R28.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Summary of Option Activity to Non-employee Consultants) (Details) - Non-employee Consultants [Member] $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Number
Options outstanding at beginning of period \| shares	500,600
Options granted \| shares	20,000
Options exercised \| shares	(5,000)
Options forfeited \| shares	(1,850)
Options outstanding at end of the period \| shares	513,750
Options exercisable at the end of the period \| shares	228,000
Options vested and expected to vest \| shares	513,750
Weighted Average Exercise Price
Options outstanding at beginning of period \| $ / shares	$ 0.01
Options granted \| $ / shares
Options exercised \| $ / shares	0.62
Options forfeited \| $ / shares
Options outstanding at end of the period \| $ / shares
Options exercisable at the end of the period \| $ / shares
Options vested and expected to vest \| $ / shares
Weighted Average Remaining Contractual Terms (in years)
Weighted Average Remaining Contractual Terms (in years)	6 years 10 months 3 days
Options exercisable at the end of the period	6 years 1 month 20 days
Options vested and expected to vest	6 years 10 months 3 days
Aggregate Intrinsic Value Price
Options outstanding at end of the period \| $	$ 668
Options exercisable at the end of the period \| $	296
Options vested and expected to vest \| $	$ 668

XML 42 R29.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Summary of RSU Activity to Employees and Directors) (Details) - Restricted stock units [Member] - Employees and Directors [Member]	3 Months Ended
	Sep. 30, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at the beginning of period	6,293,608
Granted	9,000
Forfeited	(51,470)
Vested	(673,363)
Unvested at the end of the period	5,577,775
Expected to vest after September 30, 2018	5,432,336

XML 43 R30.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Schedule of Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Options [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	$ 90	$ 18
Restricted stock units [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	188	51
Restricted stock units [Member] \| Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	1,049	1,434
Unrecognized compensation expense	$ 3,950
Unrecognized compensation expense, recognition period	3 years 3 months
Research and development expenses [Member] \| Options [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	$ 84	3
Research and development expenses [Member] \| Restricted stock units [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	26
Research and development expenses [Member] \| Restricted stock units [Member] \| Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	318	144
General and administrative expenses [Member] \| Options [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	6	15
General and administrative expenses [Member] \| Restricted stock units [Member] \| Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	162	51
General and administrative expenses [Member] \| Restricted stock units [Member] \| Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expenses	$ 731	$ 1,290

XML 44 R31.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Summary of RSU Activity to Consultants) (Details) - Restricted stock units [Member] - Non-employee Consultants [Member]	3 Months Ended
	Sep. 30, 2018 shares
Share-based Goods and Nonemployee Services Transaction [Line Items]
Unvested at the beginning of period	199,559
Granted	34,388
Vested	(22,059)
Unvested at the end of the period	211,888

XML 45 R32.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS (Details) - ATM Agreement [Member] - $ / shares	1 Months Ended	3 Months Ended
	Oct. 31, 2018	Sep. 30, 2018
Number of shares issued		376,000
Share price		$ 1.33
Subsequent Event [Member]
Number of shares issued	1,130,000
Share price	$ 1.21

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