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General

6 Months Ended

Dec. 31, 2019

NOTE 1:- GENERAL

Pluristem Therapeutics Inc., a Nevada corporation ("Pluristem Therapeutics"), was incorporated on May 11, 2001. Pluristem Therapeutics has a wholly owned subsidiary, Pluristem Ltd. (the "Subsidiary"), which is incorporated under the laws of the State of Israel. Pluristem Therapeutics and the Subsidiary are referred to as the "Company" or "Pluristem". In January 2020, subsequent to the period end, the Subsidiary established a fully owned subsidiary, Pluristem GMBH (the "German Subsidiary") which is incorporated under the laws of Germany.

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, inflammatory and hematologic conditions. The Company has incurred an accumulated deficit of approximately $264,513 and incurred recurring operating losses and negative cash flows from operating activities since inception. As of December 31, 2019, the Company's total stockholders' equity amounted to $15,910.

During the six-month period ended December 31, 2019, the Company incurred operating losses of $13,563 and its negative cash flow from operating activities was $13,542. 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 December 31, 2019, the Company's cash position (cash and cash equivalents, short-term bank deposits and restricted cash and long-term bank deposits) totaled approximately $17,060. 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 Israeli Innovation Authority (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 December 31, 2019, together with the funds received under the Open Market Sales Agreement^SM (the "Sales Agreement") with Jefferies LLC ("Jefferies"), as agent, during January 2020, will be sufficient to maintain the Company's operations into the second quarter of the Company's fiscal year 2021. 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 was a Phase II trial in Intermittent Claudication.

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.

Chart Industries Agreement

In November 2018, the Company entered into a license agreement with a subsidiary of Chart Industries, Inc. ("Chart"), regarding the Company's thawing device for cell-based therapies. Pursuant to the terms of the agreement, Chart obtained the exclusive rights to manufacture and market the thawing device in all territories worldwide, excluding Greater China, and the Company is entitled to receive royalties from sales of the product and supply of an agreed upon number of thawing devices. Royalties shall commence on the date of Chart's first commercial sale of the thawing device. As of December 31, 2019, commercial sale of the thawing device by Chart has not yet begun.

Reverse stock split

In July 2019, the Board of Directors approved a 1-for-10 reverse stock split of the Company's (a) authorized shares of common stock; (b) issued and outstanding shares of common stock and (c) authorized shares of preferred stock. The reverse stock split became effective on July 25, 2019. All shares of common stock, options, warrants and securities convertible or exercisable into shares of common stock, as well as loss per share, have been adjusted to give retroactive effect to this reverse stock split for all periods presented.

An additional 1,292 shares of common stock were included in the Company's issued and outstanding shares as a result of rounding fractional shares into whole shares as a result of the reverse stock split.