The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
The accompanying notes are an integral
part of the consolidated financial statements.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 1:-
GENERAL
|
a.
|
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”.
|
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”.
|
b.
|
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 $251,004 and incurred
recurring operating losses and negative cash flows from operating activities since inception.
As of June 30, 2019, the Company’s total stockholders’ equity amounted to
$21,821.
|
During
the year ended June 30, 2019, the Company incurred operating losses of $35,532 and its negative cash flow from operating activities
was $29,453. 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
June 30, 2019, the Company’s cash position (cash and cash equivalents, short-term bank deposits and restricted cash and long-term
bank deposits) totaled approximately $24,795. 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 June 30, 2019, together with the funds received under the Open Market Sales
AgreementSM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), as agent, during July
and August 2019, will be sufficient to maintain the Company’s operations into the first 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.
These
conditions raise substantial doubt about the Company’s ability to continue as a going concern. The audited consolidated financial
statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might
be necessary should the Company be unable to continue as a going concern.
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.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 1:- GENERAL (CONT.)
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.
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 250,000 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 year ended June 30, 2018, and reclassified from
other comprehensive income (loss).
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 June 30, 2019, commercial sale of the thawing device by Chart has not yet begun.
In
July 2019, subsequent to the balance sheet date, 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.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
2:- SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial
statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”)
applied on consistent basis.
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.
Most of Pluristem
Therapeutics’ costs and assets are denominated in United States dollars (“dollar”). The Company’s management
believes that the dollar is the primary currency of the economic environment in which the Company operates. Thus, the dollar is
the Company’s functional and reporting currency. Accordingly, non-dollar denominated transactions and balances have been
re-measured into the functional currency in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign
Currency Matters”. All transaction gains and losses from the re-measured monetary balance sheet items are reflected in the
statements of income as financial income or expenses, as appropriate.
|
c.
|
Principles
of consolidation
|
The consolidated
financial statements include the accounts of Pluristem Therapeutics and the Subsidiary. Intercompany transactions and balances
have been eliminated upon consolidation.
|
d.
|
Cash and
cash equivalents
|
Cash
equivalents are short-term highly liquid investments that are readily convertible to cash with maturities of three months or less
at the date acquired.
|
e.
|
Short-term
bank deposit
|
Bank
deposits with original maturities of more than three months but less than one year are presented as part of short-term investments.
Deposits are presented at their cost which approximates market values including accrued interest. Interest on deposits is recorded
as financial income.
|
f.
|
Restricted
cash and short-term bank deposits
|
Short-term restricted
bank deposits and restricted cash used to secure derivative and hedging transactions and the Company’s credit line. The
restricted cash and short-term bank deposits are presented at cost which approximates market values including accrued interest.
|
g.
|
Long-term
restricted bank deposits
|
Long-term
restricted bank deposits with maturities of more than one year used to secure operating lease agreement are presented at cost
which approximates market values including accrued interest.
|
h.
|
Investment
in marketable securities
|
The
Company accounts for its investments in marketable securities in accordance with ASC 320, “Investments – Debt and Equity
Securities”. The Company determines the classification of marketable securities at the time of purchase and re-evaluates
such designations as of each balance sheet date. The Company classifies all of its marketable securities as available-for-sale.
Available-for-sale marketable securities are carried at fair value, with the unrealized gain and loss reported at “accumulated other comprehensive
income (loss)” in the statement of changes in stockholders’ equity.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Realized
gain and loss on sales of marketable securities are included in the Company’s “Financial income, net” and are derived
using the specific identification basis for determining the cost of marketable securities sold. The amortized cost of available
for sale debt marketable securities is adjusted for amortization of premiums and accretion of discount to maturity. Such amortization,
together with coupon interest on available for sale marketable securities, is included in the “Financial income, net”.
The
Company recognizes an impairment charge when a decline in the fair value of its available-for-sale marketable securities below
the cost basis is judged to be other than temporary.
The
Company considers various factors in determining whether to recognize an impairment charge, including the length of time the investment
has been in a loss position, the extent to which the fair value has been less than the Company’s cost basis, the reason for the
decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not
that the Company will be required to sell the investment before recovery of cost basis. ASC 320-10-35, “Investments - Debt
and Equity Securities”, requires other-than-temporary impairment for debt securities to be separated into (a) the amount
representing the credit loss and (b) the amount related to all other factors (provided that the Company does not intend to
sell the security and it is not more likely than not that it will be required to sell it before recovery). For securities that
are deemed other-than-temporarily impaired, the amount of impairment is recognized in “financial income, net”, in the
statement of operations and is limited to the amount related to credit loss, while impairment related to other factors is recognized
in “other comprehensive income (loss)”.
During
the years ended June 30, 2018 and 2017, the Company recognized other-than-temporary impairment loss of $850 and $767, respectively
(see Note 3). During the year ended June 30, 2019, the Company did not recognize any other-than-temporary impairment loss.
On July 1, 2017,
the Company adopted ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method. Results
for reporting periods beginning after July 1, 2017 are presented under ASC 606, while prior period amounts are not adjusted
and continue to be reported in accordance with the Company’s historic accounting under ASC 605.
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 determines revenue recognition
through the following steps:
|
●
|
identification
of the contract with a customer;
|
|
●
|
identification
of the performance obligations in the contract;
|
|
●
|
determination
of the transaction price;
|
|
●
|
allocation
of the transaction price to the performance obligations in the contract; and
|
|
●
|
recognition
of revenue when, or as, the Company satisfies a performance obligation.
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 2:- SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
The Company’s contracts
with its customers are expected to include one type of product and thus have 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 a point in time where the customer obtains control over the product.
The Company’s contract
with Chart includes variable consideration for which the Company estimates the most likely amount that should be included in the
transaction price subject to constraints based on the specific facts and circumstances. Pursuant to the terms of the agreement,
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 June 30, 2019,
commercial sales of the thawing device by Chart have not begun. Based on the Company’s assessment, it is not probable that
a significant reversal in the amount of cumulative revenue recognized will not occur, and therefore the Company is unable to recognize
revenues with respect to the Chart agreement before the uncertainty associated with the variable consideration is subsequently resolved.
|
j.
|
Property
and Equipment
|
Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over
the estimated useful lives of the assets, at the following annual rates:
|
|
%
|
Laboratory equipment
|
|
10-40
|
Computers and peripheral equipment
|
|
33
|
Office furniture and equipment
|
|
15
|
Vehicles
|
|
15
|
Leasehold improvements
|
|
The shorter of the expected useful life or the reasonable
assumed term of the lease.
|
|
k.
|
Impairment
of long-lived assets
|
The
Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”,
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash
flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During fiscal years 2019,
2018 and 2017, no impairment losses have been identified.
|
l.
|
Accounting
for stock-based compensation
|
The Company
accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” (“ASC 718”)
and ASC 505-50, “Equity-Based Payments to Non-Employees” (“ASC 505-50”). ASC 718 requires companies to
estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company estimates
the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The Company accounts for employee’s
share-based payment awards classified as equity awards (restricted stocks (“RS”) or restricted stock units (“RSUs”))
using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the
requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated
future conditions. The Company elected to recognize compensation cost for an award with service conditions and goals achievement
that has a graded vesting schedule using the accelerated method based on the multiple-option award approach.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 2:- SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
The assumptions below are relevant
to RS and RSUs granted in 2019, 2018 and 2017:
In accordance with ASC 718,
RS and RSUs are measured at their fair value. All RS and RSUs to employees and directors granted in 2019, 2018 and 2017, were granted
for no consideration; therefore, their fair value was equal to the share price at the date of grant.
The fair
value of all RS and RSUs was determined based on the close trading price of the Company’s shares known at the grant date.
The weighted average grant date fair value of shares granted during 2019, 2018 and 2017, was $8.70, $14.00 and $14.10 per share,
respectively.
During
fiscal years 2019, 2018 and 2017, there were no options granted to employees or directors.
|
m.
|
Research
and Development expenses and royalty bearing grants
|
Research
and development expenses, net of participations grants, are charged to the statement of operations as incurred. Pluristem receives
grants from the IIA in the Ministry of Economy and Industry (formerly the Office of Chief Scientist’s) for the purpose of partially
funding approved research and development projects. The grants are not to be repaid, but instead Pluristem is obliged to pay royalties
as a percentage of future sales if and when sales from the funded projects are generated. These grants are recognized as a deduction
from research and development costs at the time the Company is entitled to such grants on the basis of the research and development
costs incurred. Since the payment of royalties is not probable when the grants are received, the Company records a liability in
the amount of the estimated royalties for each individual contract, when the related revenues are recognized, as part of Cost
of revenues. For more information regarding such royalties commitments and regarding grants and participation received, see Note
8.
|
n.
|
Non-royalty
bearing grant
|
The
Company participates in European Union research and development consortiums under Horizon 2020. In August 2016, the CLI program
consortium was awarded a Euro 7,600 thousands (approximately $8,700) non-royalty bearing grant, of which, an amount of Euro 1,900
thousands (approximately $2,200) is a direct grant allocated to the Company. In July 2017, the consortium amended the consortium
agreement, pursuant to which the original grant allocation was amended such that the Company received an additional direct grant
of Euro 1,000 thousands (approximately $1,100). The additional direct grant was allocated to the Company from the total amount
of the original grant. In September 2017, the Company’s Phase III study of PLX-PAD cell therapy in the treatment of muscle
injury following surgery for hip fracture was awarded a Euro 7,400 thousands (approximately $8,400) grant, of which, an amount
of Euro 2,550 thousands (approximately $2,900) is a direct grant allocated to the Company. In October 2017, the “nTRACK”,
a collaborative project carried out by an international consortium led by LEITAT, was awarded a Euro 6,800 thousands (approximately
$7,700) non-royalty bearing grant, of which, an amount of Euro 500 thousands (approximately $570) is a direct grant allocated
to the Company.
The
non-royalty bearing grants for funding the projects are recognized at the time the Company is entitled to each such grant on the
basis of the related costs incurred and recorded as a deduction from research and development expenses.
Basic and
diluted net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year.
All outstanding stock options and unvested RSUs have been excluded from the calculation of the diluted loss per common share because
all such securities are anti-dilutive for each of the periods presented.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The
Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This Topic prescribes
the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences
between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that
will be in effect when the differences are expected to reverse.
The Company provides
a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
ASC
740 establishes a single model to address accounting for uncertain tax positions. ASC 740 clarified the accounting for income
taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial
statements.
|
q.
|
Concentration
of credit risk
|
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents,
restricted cash, short-term deposits, long-term deposits and restricted deposits.
The majority
of the Company’s cash and cash equivalents, restricted cash and short-term and long-term deposits are mainly invested in
dollar instruments of major banks in Israel and in the United States. Deposits in the United States may be in excess of insured
limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and therefore bear minimal
risk. The Company invests its surplus cash in cash deposits in financial institutions and has established guidelines, approved
by the Company’s Investment Committee, relating to diversification and maturities to maintain safety and liquidity of the
investments.
The
Company utilizes options and forward contracts to protect against the risk of overall changes in exchange rates. The derivative
instruments hedge a portion of the Company’s non-dollar currency exposure. Counterparties to the Company’s derivative
instruments are all major financial institutions.
A
majority of the Company’s agreements with employees in Israel are subject to Section 14 of the Israeli Severance Pay Law,
1963 (“Severance Pay Law”). The Company’s contributions for severance pay have replaced its severance obligation.
Upon contribution of the full amount of the employee’s monthly salary for each year of employment, no additional calculations
are conducted between the parties regarding the matter of severance pay and no additional payments are made by the Company to
the employee. Further, the related obligation and amounts deposited on behalf of the employee for such obligation are not stated
on the balance sheet, as the Company is legally released from the obligation to employees once the deposit amounts have been paid.
For
some employees, which their agreement is not subject to Section 14 of the Severance Pay Law, the Subsidiary’s liability for severance
pay is calculated pursuant to Israeli Severance Pay Law, based on the most recent salary of the employees multiplied by the number
of years of employment, as of the balance sheet date. Employees are entitled to one month’s salary for each year of employment
or a portion thereof.
The
Company’s liability for all of its employees is fully provided by monthly deposits with insurance policies and by an accrual.
The value of these policies is recorded as an asset in the Company’s balance sheet. The deposited funds include profits or losses
accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant
to the Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these
policies, and includes immaterial profits or losses.
Severance expenses for
the years ended June 30, 2019, 2018 and 2017 were $632, $822 and $524, respectively.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)
|
s.
|
Fair
value of financial instruments
|
The
carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term and
restricted bank deposits, accounts receivable and other current assets, trade payable and other accounts payable and accrued 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 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).
|
t.
|
Derivative
financial instruments
|
The
Company accounts for derivatives and hedging based on ASC 815, “Derivatives and hedging”, 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. The Company enters into 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 June
30, 2019, the fair value of the options contracts was approximately $21 and is presented in “other current assets”
(see Note 4). The net gains (losses) recognized in “Financial income, net” during the years ended June 30, 2019, 2018
and 2017, were $(105), ($264) and $481, respectively.
|
u.
|
Comprehensive
income (loss):
|
The Company accounts
for comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income”.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 2:- SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Comprehensive income
generally represents all changes in stockholders’ equity during the period except those resulting from investments by, or
distributions to, stockholders’. The Company determined that its items of other comprehensive income (loss) relate to unrealized
gains and losses on available for sale marketable securities.
Certain financial statement
data for prior years have been reclassified to conform to current year financial statement presentation.
|
w.
|
Recently
Adopted Accounting Pronouncement
|
ASU
No. 2016-18 – “Statement of Cash Flows” (Topic 230) (“ASU No. 2016-18”):
In November 2016, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18. ASU 2016-18 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 was 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 ASU 2016-18.
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:
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Cash and cash equivalents
|
|
$
|
4,106
|
|
|
$
|
8,821
|
|
|
$
|
4,707
|
|
Restricted cash included in restricted
cash and short-term bank deposits
|
|
|
1,080
|
|
|
|
1,066
|
|
|
|
958
|
|
Cash,
cash equivalents and restricted cash shown in the consolidated statement of cash flows
|
|
$
|
5,186
|
|
|
$
|
9,887
|
|
|
$
|
5,665
|
|
Recently Issued Accounting
Pronouncements
ASU
No. 2016-02 - “Leases” (Topic 842) (“ASU No. 2016-02”):
In February 2016, the FASB issued
ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize assets and liabilities for leases with lease terms of
more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows
arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current
U.S. GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of
leases to be recognized on the balance sheet. ASU No. 2016-02 is effective for interim and annual periods beginning after December
15, 2018, with early adoption permitted.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 2:- SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
A modified retrospective
transition approach is required, applying the new standard to all leases existing at the date of initial application. An
entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in
the financial statements as its date of initial application. If an entity chooses the second option, the entity must recast
its comparative period financial statements and provide disclosures required by the new standard for the comparative periods.
The Company adopted the new standard on July 1, 2019 using the effective date as its date of initial application.
Consequently, financial information will not be updated and disclosures required under the new standard will not be provided
for dates and periods before July 1, 2019. ASU No. 2016-02 provides a number of optional practical expedients in transition.
The Company elected to adopt the ‘package of practical expedients’, which, under the new standard, permits it not
to reassess its prior conclusions about lease identification, lease classification and initial direct costs. The adoption of
this new standard will materially affect the Company’s consolidated balance sheets by recognizing new right-of-use
(“ROU”) assets and lease liabilities for operating leases. The impact on the Company’s results of
operations and cash flows is not expected to be material. Adoption of the standard will result in the recognition of
additional lease liabilities for operating leases of approximately $2,250 - $2,450 and additional ROU which will be adjusted
for the remaining balance of the deferred participation payments in the amounts of approximately $1,650 - $1,850. As of July
1, 2019, the ROU and lease liabilities estimate includes non-cancelable operating lease agreements (see Note 8a and 8b).
ASU No. 2018-07 -
Compensation—Stock Compensation (Topic 718) (“ASU No. 2018-07”):
In June 2018, the FASB
issued ASU 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 the requirements of ASU No. 2018-07 to nonemployee awards except for specific
guidance on inputs to an option pricing model 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. While the Company continues to assess the potential
impact of ASU No. 2018-07, the Company does not expect the adoption of this standard to have a material impact on its consolidated
financial statements.
ASU
No. 2018-18 - “Collaborative Arrangements (Topic 808) - Clarifying the Interaction between Topic 808 and Topic 606”
(“ASU No. 2018-18”):
In November
2018, the FASB issued ASU No. 2018-18, which clarifies the interaction between Topic 808 and Topic 606 by (1) clarifying that
certain transactions between collaborative arrangement participants should be accounted for under Topic 606, (2) adding unit-of-account
guidance in Topic 808 to align with the guidance in Topic 606 and (3) clarifying presentation guidance for transactions with
a collaborative arrangement participant that are not accounted for under Topic 606. ASU 2018-18 is effective for fiscal years
beginning after December 15, 2019, or July 1, 2020 for the Company. The Company is currently evaluating the impact of adopting
the ASU on its consolidated financial statements.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 3:- MARKETABLE SECURITIES
As of June 30, 2019
and 2018, all of the Company’s marketable securities were classified as available-for-sale.
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Amortized
cost
|
|
|
Other-than-temporary
impairment
|
|
|
Fair
value
|
|
|
Amortized
cost
|
|
|
Other-than-temporary
impairment
|
|
|
Fair
value
|
|
Available-for-sale
- matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
and index linked notes
|
|
$
|
850
|
|
|
$
|
(850
|
)
|
|
$
|
-
|
|
|
$
|
850
|
|
|
$
|
(850
|
)
|
|
$
|
-
|
|
Total
|
|
$
|
850
|
|
|
$
|
(850
|
)
|
|
$
|
-
|
|
|
$
|
850
|
|
|
$
|
(850
|
)
|
|
$
|
-
|
|
The Company typically
invests in highly-rated securities. When evaluating the investments for other-than-temporary impairment, the Company reviews factors
such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and
any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment
before recovery of the investment’s amortized cost basis.
The Company recognized
other-than-temporary impairment loss on outstanding securities during the year ended June 30, 2018 and 2017, of $850 and $767,
respectively. The Company did not recognize any other-than-temporary impairment loss on outstanding securities during the year
ended June 30, 2019.
During the year ended
June 30, 2018, the Company sold marketable securities for aggregate net proceeds (including redemptions) 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.
NOTE 4:- FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
June 30,
2019
|
|
|
June 30,
2018
|
|
|
|
Level
2
|
|
|
Level
2
|
|
Foreign
currency derivative instruments not designated as hedge instruments
|
|
$
|
21
|
|
|
($
|
243
|
)
|
Total financial assets (liabilities)
|
|
$
|
21
|
|
|
($
|
243
|
)
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 5:- OTHER
CURRENT ASSETS
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Accounts receivable from the Horizon 2020 grants
|
|
$
|
991
|
|
|
$
|
626
|
|
Prepaid expenses
|
|
|
532
|
|
|
|
602
|
|
Accounts receivable from the IIA
|
|
|
179
|
|
|
|
58
|
|
VAT receivables
|
|
|
125
|
|
|
|
150
|
|
Accounts receivable from the Ministry of Economy and Industry
|
|
|
73
|
|
|
|
6
|
|
Derivatives not designated as hedge instruments
|
|
|
21
|
|
|
|
-
|
|
Other receivables
|
|
|
53
|
|
|
|
7
|
|
Total
|
|
$
|
1,974
|
|
|
$
|
1,449
|
|
NOTE 6:- PROPERTY
AND EQUIPMENT, NET
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cost:
|
|
|
|
|
|
|
Laboratory equipment
|
|
$
|
6,435
|
|
|
$
|
6,395
|
|
Computers and peripheral equipment
|
|
|
1,274
|
|
|
|
1,206
|
|
Office furniture and equipment
|
|
|
681
|
|
|
|
681
|
|
Leasehold
improvements
|
|
|
8,614
|
|
|
|
8,611
|
|
Total Cost
|
|
|
17,004
|
|
|
|
16,893
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
Laboratory equipment
|
|
|
5,634
|
|
|
|
4,903
|
|
Computers and peripheral equipment
|
|
|
1,147
|
|
|
|
1,060
|
|
Office furniture and equipment
|
|
|
600
|
|
|
|
511
|
|
Leasehold
improvements
|
|
|
5,785
|
|
|
|
4,741
|
|
Total accumulated
depreciation
|
|
|
13,166
|
|
|
|
11,215
|
|
Property and
equipment, net
|
|
$
|
3,838
|
|
|
$
|
5,678
|
|
Depreciation expenses
amounted to $1,962, $2,018 and $2,177, for the years ended June 30, 2019, 2018 and 2017, respectively.
NOTE 7:- OTHER
ACCOUNTS PAYABLE
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Accrued vacation
|
|
$
|
974
|
|
|
$
|
911
|
|
Deferred income from the Horizon 2020 grant
|
|
|
-
|
|
|
|
640
|
|
Accrued payroll
|
|
|
486
|
|
|
|
524
|
|
Payroll institutions
|
|
|
433
|
|
|
|
463
|
|
Derivatives not designated as hedge instruments
|
|
|
-
|
|
|
|
243
|
|
Other payables
|
|
|
240
|
|
|
|
240
|
|
Total
|
|
$
|
2,133
|
|
|
$
|
3,021
|
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 8:-
COMMITMENTS AND CONTINGENCIES
|
a.
|
In February 2015,
the Company signed an addendum to its facility operating lease agreement (the “Addendum”)
with the lessor, which extended the lease period to December 2021.
|
The lessor paid a non-refundable
leasehold improvement participation payment, of approximately $947 in October 2015, in addition to the non-refundable payment
of approximately $816 received in January 2013.
The payments are deductible
against lease expenses as they are incurred. The lessor upfront payment is included in the balance sheet as advance payment and
recognized as a deduction from lease expenses over the lease term.
The Company recognizes
lease expense, net of lessor participation, under such arrangements, on a straight-line basis over the lease term.
As of June 30, 2019,
aggregate minimum lease commitments under the active operating lease agreements are as follows:
Fiscal year ending June 30,
|
|
|
|
2020
|
|
$
|
877
|
|
2021
|
|
|
886
|
|
2022
|
|
|
443
|
|
Total
|
|
$
|
2,206
|
|
Lease
expenses, net of lessor participation, amounted to $615, $638 and $781, for the years ended June 30, 2019, 2018 and 2017, respectively.
The
Subsidiary issued a bank guarantee in favor of the lessors in the amount of approximately $388.
|
b.
|
The Subsidiary leases
several motor vehicles under operating lease agreements, which expire in various dates
during the years 2020 through 2022.
|
As of June 30, 2019,
future aggregate minimum lease commitments under operating lease agreements are as follows:
Fiscal year ending June 30,
|
|
|
|
2020
|
|
$
|
233
|
|
2021
|
|
|
157
|
|
2022
|
|
|
45
|
|
Total
|
|
$
|
435
|
|
Lease expenses amounted
to $301, $294 and $233, for the years ended June 30, 2019, 2018 and 2017, respectively.
|
c.
|
An amount of $692
of cash and deposits was pledged by the Subsidiary to secure certain derivatives and
hedging transactions, a credit line and bank guarantees as of June 30, 2019.
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 8:- COMMITMENTS AND
CONTINGENCIES (CONT.)
|
d.
|
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 June 30, 2019,
total grants obtained aggregated to approximately $27,353 and total royalties paid and accrued amounted to $169. As of June 30,
2019, the Company’s liability in respect to royalties to the IIA amounted to $27,184, not including LIBOR interest as described
above.
|
e.
|
The Company has been
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 June 30, 2019,
total grants obtained under this Smart Money program amounted to approximately $112. As of June 30, 2019, the Company’s contingent
liability with respect to royalties for this “Smart Money” program was $112 and no royalties were paid or accrued.
|
f.
|
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. 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 June 30, 2019,
the aggregate amount of grant obtained from this Smart Money program was approximately $26. As of June 30, 2019, the Company’s
contingent liability with respect to royalties for this “Smart Money” program is $26 and no royalties were paid or
accrued.
|
g.
|
In December, 2016,
the Company announced that it will collaborate with the New York Blood Center (“NYBC”)
on pre-clinical studies of its placental expanded R-18 cells (“PLX-R18”)
to enhance the efficacy of umbilical cord blood transplantation. The project has been
selected to receive a conditional award of $900 from Israel-United States Binational
Industrial Research and Development Foundation (“BIRD Foundation”), of which
an amount of $585 is a direct grant allocated to the Company. Per the terms of the project,
the Company provided the PLX-R18 cells and the NYBC were responsible for conducting and
supporting the studies. Amounts received in connection with this award were presented
in “Other long-term liabilities”.
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 8:-
COMMITMENTS AND CONTINGENCIES (CONT.)
As of June 30, 2019, the aggregate
amount of grant obtained from the BIRD Foundation was approximately $264. During the year ended June 30, 2019, the Company and
NYBC mutually agreed to terminate the project and therefore, pursuant to the terms of the agreement with the BIRD Foundation and
NYBC, the Company derecognized the BIRD Foundation liability. The total amounts received in connection with this award were recognized
as a deduction from research and development costs, and an amount to be received of $14 is presented in “other current assets”
as of June 30, 2019.
|
h.
|
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.
|
i.
|
In July, 2018, 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 June 30, 2019,
total grants obtained under the “Shalav” program amounted to approximately $40. As of June 30, 2019, the Company’s
contingent liability with respect to royalties for the “Shalav” program was $40 and no royalties were paid or accrued.
NOTE 9:- STOCKHOLDERS’ EQUITY
The Company’s
authorized common stock consists of 30,000,000 shares with a par value of $0.00001 per share. All shares have equal voting rights
and are entitled to one vote per share in all matters to be voted upon by stockholders. The shares have no pre-emptive, subscription,
conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are
entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board
of Directors out of funds legally available. The Company’s authorized preferred stock consists of 1,000,000 shares of preferred
stock, par value $0.00001 per share, with series, rights, preferences, privileges and restrictions as may be designated from time
to time by the Company’s Board of Directors. No shares of preferred stock have been issued.
In July, 2019, subsequent
to the balance sheet date, 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 split
became effective on July 25, 2019. The reverse stock split will not have any effect on the stated par value of the common stock.
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.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
9:- STOCKHOLDERS’ EQUITY (CONT.)
|
b.
|
On January 25, 2017,
the Company issued, pursuant to an underwriting agreement relating to a firm commitment
public offering, an aggregate of 1,408,163 shares of common stock and warrants to purchase
up to an aggregate of 844,898 shares of common stock, inclusive of the underwriter’s
over-allotment option, which was exercised in full, for aggregate gross proceeds of $17,250.
The net proceeds, after deducting underwriting commissions, discounts and other expenses
related to the offering were approximately $15,718.
|
|
c.
|
In the year ended
June 30, 2018, a total of 828,703 warrants from the January 2017 offering were exercised
by investors at an exercise price of $14.00 per share, resulting in the issuance of 82,871
shares of common stock for net proceeds of approximately $1,160.
|
|
d.
|
In July 2017, pursuant
to a shelf registration statement on Form S-3, declared effective by the Securities and
Exchange Commission (the “SEC”) on June 23, 2017, the Company entered into an At Market Issuance
Sales Agreement (the “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 year ended June 30, 2018, the Company sold 359,941
shares of common stock under the ATM Agreement at an average price of $14.30 per share
for aggregate proceeds of approximately $4,985, net of issuance expenses of $174. During
the year ended June 30, 2019, the Company sold 170,600 shares of common stock under the
ATM Agreement at an average price of $12.30 per share for aggregate proceeds of approximately
$1,952, net of issuance expenses of $148.
|
On February 4, 2019,
the Company notified the Agents of the termination of the ATM Agreement.
|
e.
|
On October 31, 2017,
the Company completed a public offering in Israel, pursuant to the Company’s existing
shelf registration statement on Form S-3 in the United States and a shelf registration
statement filed in Israel, pursuant to which the Company raised aggregate gross proceeds
of $15,051 through the sale of 900,000 shares of the Company’s common stock at
a purchase price of NIS 59 (approximately $16.70) per share. The net proceeds, after
deducting fees and expenses related to the offering, were approximately $13,646.
|
|
f.
|
Pursuant to a shelf
registration on Form S-3 declared effective by the SEC
on June 23, 2017, on February 6, 2019, the Company entered into the Sales Agreement with
Jefferies which provides that, upon the terms and subject to the conditions and limitations
in the sales 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 $50,000 through Jefferies
acting as sales agent. During the year ended June 30, 2019, the Company sold 236,800
shares of common stock under the Sales Agreement at an average price of $9.70 per share
for aggregate net proceeds of approximately $2,051, net of issuance expenses of $255.
|
|
g.
|
On April 8, 2019,
the Company sold, pursuant to an underwriting agreement relating to a firm commitment
public offering (the “Public Offering”), an aggregate of 2,857,143 shares
of common stock and warrants to purchase 2,857,143 shares of common stock, inclusive
of the underwriter’s over-allotment option which was exercised in full, for aggregate
gross proceeds of $20,000. The warrants issued in the Public Offering are exercisable
for a period of five years from issuance and have an exercise price of $7.00 per share.
In addition, on April 8, 2019, the Company sold, pursuant to a subscription agreement
with a certain investor in a registered direct offering (the “Registered Direct
Offering”), 142,857 shares of common stock, for aggregate gross proceeds of $1,000.
The net proceeds from the Public Offering and the Registered Direct Offering, after deducting
underwriting commissions and discounts and other expenses related to the offerings, were
$19,464.
|
As of June 30, 2019,
2,857,143 warrants to purchase share of our common stock are outstanding.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
9:- STOCKHOLDERS’ EQUITY (CONT.)
|
h.
|
Stock options, RS and RSUs to employees, directors and consultants:
|
The Company adopted, after
receiving stockholder approval, the 2005 Stock Option Plan in 2005 (the “2005 Plan”). Under the 2005 Plan, stock options,
RS and RSUs were granted to the Company’s officers, directors, employees and consultants. The 2005 Plan expired on December
31, 2018. The Company adopted, after receiving stockholder approval, the 2016 Equity Incentive Plan in 2016 (the “2016 Plan”).
Under the 2016 Plan, stock options, RS and RSUs may be granted to the Company’s officers, directors, employees and consultants
or the officers, directors, employees and consultants of our Subsidiary. In addition, at the Company’s annual meeting of
its stockholders, held on June 13, 2019, the Company’s stockholders approved the 2019 Equity Compensation Plan (the “2019
Plan”). Under the 2019 Plan, stock options, RS and RSUs may be granted to the Company’s officers, directors, employees
and consultants or the officers, directors, employees and consultants of the Subsidiary.
As of June 30, 2019, the number
of shares of common stock authorized for issuance under the 2016 Plan amounted to 383,400 for calendar year 2016, of which 363,400
are available for future grant under the 2016 Plan. As of June 30, 2019, the number of shares of common stock authorized for issuance
under the 2019 Plan amounted to 3,204,055, all of which are available for future grant under the 2019 Plan.
(1)
Options to employees and directors:
The Company accounts for its
stock options to employees and directors under the fair value method in accordance with ASC 718, “Compensation—Stock
Compensation”. A summary of the Company’s activity for stock options granted to employees and directors under the 2005
Plan is as follows:
|
|
Year
ended June 30, 2019
|
|
|
|
Number
|
|
|
Weighted Average Exercise
Price
|
|
Options outstanding at beginning of period
|
|
|
31,500
|
|
|
$
|
6.20
|
|
Options forfeited
|
|
|
(30,750
|
)
|
|
$
|
6.20
|
|
Options exercised
|
|
|
(750
|
)
|
|
$
|
6.20
|
|
Options outstanding at end of the period
|
|
|
-
|
|
|
|
-
|
|
(2)
Options to non-employees:
A summary of the stock options to
non-employee consultants under the 2005 Plan and 2016 Plan is as follows:
|
|
Year ended June 30, 2019
|
|
|
|
Number
|
|
|
Weighted Average Exercise Price
|
|
|
Weighted Average Remaining Contractual Terms (in years)
|
|
|
Aggregate Intrinsic Value Price
|
|
Stock options outstanding at beginning of period
|
|
|
50,060
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
Stock options granted
|
|
|
40,805
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Stock options exercised
|
|
|
(1,100
|
)
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
Stock options forfeited
|
|
|
(185
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Stock options outstanding at end of the period
|
|
|
89,580
|
|
|
$
|
-
|
|
|
|
7.63
|
|
|
$
|
555
|
|
Stock options exercisable at the end of the period
|
|
|
42,601
|
|
|
$
|
-
|
|
|
|
7.26
|
|
|
$
|
264
|
|
Stock options vested and expected to vest at the end of the period
|
|
|
89,580
|
|
|
$
|
-
|
|
|
|
7.63
|
|
|
$
|
555
|
|
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
9:- STOCKHOLDERS’ EQUITY (CONT.)
Compensation
expenses related to stock options granted to consultants were recorded as follows:
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Research and development expenses
|
|
$
|
117
|
|
|
$
|
107
|
|
|
$
|
7
|
|
General and administrative expenses
|
|
|
167
|
|
|
|
61
|
|
|
|
39
|
|
|
|
$
|
284
|
|
|
$
|
168
|
|
|
$
|
46
|
|
(3)
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 2005 Plan
and 2016 Plan for the year ended June 30, 2019:
|
|
Number
|
|
Unvested at the beginning of period
|
|
|
629,361
|
|
Granted
|
|
|
498,100
|
|
Forfeited
|
|
|
(45,830
|
)
|
Vested
|
|
|
(285,998
|
)
|
Unvested at the end of the period
|
|
|
795,633
|
|
Expected to vest after June 30,
2019
|
|
|
769,922
|
|
Compensation
expenses related to RS and RSUs granted to employees and directors were recorded as follows:
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Research and development expenses
|
|
$
|
1,401
|
|
|
$
|
1,273
|
|
|
$
|
1,558
|
|
General and administrative expenses
|
|
|
3,003
|
|
|
|
4,577
|
|
|
|
1,645
|
|
|
|
$
|
4,404
|
|
|
$
|
5,850
|
|
|
$
|
3,203
|
|
Unamortized
compensation expenses related to RS and RSUs granted to employees and directors to be recognized over an average time of approximately
3.75 years are approximately $4,180.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
9:- STOCKHOLDERS’ EQUITY (CONT.)
(4)
RS and RSUs to consultants:
The
following table summarizes the activity related to unvested RS and RSUs granted to consultants for the year ended June 30, 2019:
|
|
Number
|
|
Unvested at the beginning of period
|
|
|
19,956
|
|
Granted
|
|
|
41,176
|
|
Vested
|
|
|
(31,025
|
)
|
Unvested at the end of the period
|
|
|
30,107
|
|
Compensation
expenses related to RS and RSUs granted to consultants were recorded as follows:
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Research and development expenses
|
|
$
|
48
|
|
|
$
|
43
|
|
|
$
|
19
|
|
General and administrative expenses
|
|
|
410
|
|
|
|
487
|
|
|
|
394
|
|
|
|
$
|
458
|
|
|
$
|
530
|
|
|
$
|
413
|
|
|
i.
|
Summary of warrants
and options:
|
Warrants / Options
|
|
Exercise Price per Share
|
|
|
Options and Warrants for Common
Stock
|
|
|
Options and Warrants Exercisable
for Common Stock
|
|
|
Weighted Average Remaining
Contractual Terms (in years)
|
|
Warrants:
|
|
$
|
7.00
|
|
|
|
2,857,143
|
|
|
|
2,857,143
|
|
|
|
4.77
|
|
|
|
$
|
14.00
|
|
|
|
762,028
|
|
|
|
762,028
|
|
|
|
3.06
|
|
|
|
$
|
28.50
|
|
|
|
408,000
|
|
|
|
408,000
|
|
|
|
1.00
|
|
Total warrants
|
|
|
|
|
|
|
4,027,171
|
|
|
|
4,027,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options:
|
|
$
|
0.00
|
|
|
|
89,580
|
|
|
|
42,601
|
|
|
|
7.62
|
|
Total options
|
|
|
|
|
|
|
89,580
|
|
|
|
42,601
|
|
|
|
|
|
Total warrants and options
|
|
|
|
|
|
|
4,116,751
|
|
|
|
4,069,772
|
|
|
|
|
|
This summary does not include
825,740 RS and RSUs that are not vested as of June 30, 2019.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 10:- OTHER INCOME
In
December 2017, the Subsidiary was awarded approximately $43 (NIS 150 thousand) by the Israeli Ministry of Labor, Social Affairs
and Social Services related to its “Equal Employment” program which aims to reward and honor Israeli employers who
demonstrate and promote gender equality in employment.
NOTE 11:-
FINANCIAL INCOME, NET
|
|
Year
ended June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Foreign currency translation differences,
net
|
|
$
|
(26
|
)
|
|
$
|
52
|
|
|
$
|
182
|
|
Bank and broker commissions
|
|
|
(27
|
)
|
|
|
(62
|
)
|
|
|
(67
|
)
|
Interest income on deposits
|
|
|
385
|
|
|
|
276
|
|
|
|
122
|
|
Gain (loss) related to marketable securities, net
|
|
|
-
|
|
|
|
8,478
|
|
|
|
254
|
|
Other than temporary impairment loss
|
|
|
-
|
|
|
|
(850
|
)
|
|
|
(767
|
)
|
Gain (loss) from derivatives and fair value
hedge derivatives
|
|
|
(105
|
)
|
|
|
(264
|
)
|
|
|
481
|
|
Other financial expense
|
|
|
(2
|
)
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
$
|
225
|
|
|
$
|
7,605
|
|
|
$
|
205
|
|
NOTE 12:- TAXES
ON INCOME
The
Subsidiary has not received final tax assessments since its incorporation; however, the assessments of the Subsidiary are deemed
final through 2013.
|
B.
|
Tax rates applicable
to the Company:
|
|
1.
|
Pluristem Therapeutics:
|
The U.S.
federal tax rate applicable to Pluristem Therapeutics is the corporate federal tax rate of 21%, which is the result of the Tax
Cuts and Jobs Act of 2017 (the “Tax Act”). Such corporate tax rate excludes state tax and local tax, if any, which
rates depend on the state and city in which Pluristem Therapeutics conducts its business.
On December 22, 2017, the Tax
Act was signed into law in the United States, lowering the corporate federal income tax rate from 35% to 21%, effective January
1, 2018.
The Tax Act provided for a
one-time transition tax on certain foreign earnings for the tax year 2017, and taxation of Global Intangible Low-Taxed Income (“GILTI”)
earned by foreign subsidiaries beginning after December 31, 2017. The GILTI tax imposes a tax on foreign income in excess of a
deemed return on tangible assets of foreign corporations. The Tax Act also makes certain changes to the depreciation rules and
implements new limits on the deductibility of certain executive compensation paid by Pluristem Therapeutics. Finally, while the
Tax Act removes the 20 year limitation on net operating losses generated after December 31, 2017, all losses generated after December
31, 2017 can only be used to offset 80% of net income in the year they will be utilized.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE
12:- TAXES ON INCOME (CONT.)
The
Company recognized the income tax effects of the Tax Act in its 2018 annual consolidated financial statements in accordance with
Staff Accounting Bulletin No. 118 (“SAB 118”), which provides SEC staff guidance for the application of ASC 740, “Income
Taxes”, in the reporting period in which the 2017 Tax Act was enacted. In accordance with SAB 118, deferred tax assets and
liabilities were re-measured to reflect the revised corporate income tax rate of 21%. This
re-measurement was fully offset by a valuation allowance, resulting in no impact to the Company’s income tax expense for
the fiscal year ended June 30, 2019. As a result, the Company’s financial results reflect in the income tax effects of the
Tax Act, for which the accounting under ASC 740 is complete.
There was no one-time transition
tax for the Company under the Tax Act, nor will there be GILTI tax due for the current year, since the Subsidiary had losses for
every year to date.
In January 2018, Pluristem
Therapeutics registered as an Israeli resident with the Israel Tax Authority (the “ITA”) and the Israeli Value Added
Tax Authorities. As a result, as of such date, Pluristem Therapeutics is classified as a dual resident for tax purposes, as a resident
in both Israel and the United States.
In June 2018, Pluristem Therapeutics
and the Subsidiary submitted an election notice to the ITA to file a consolidated tax return in Israel commencing with the 2018
tax year.
Taxable income of Israeli companies
is subject to tax at the rate of 23% in 2019, 23% in 2018 and 24% in 2017.
The Subsidiary is filing its
tax reports in dollars based on specific regulations of the ITA which allow, in specific circumstances, filing tax reports in dollars
(“Dollar Regulations”). Under the Dollar Regulations, the Subsidiary calculates its tax liability in dollars according
to certain orders. The tax liability, as calculated in dollars, is translated into NIS according to the exchange rate as of June
30 of each year.
The
Law for the Encouragement of Capital Investments, 1959 (the “Law”):
The Subsidiary
has programs which meet the criteria of a “Beneficiary Enterprise”, in accordance with the Law, under the Alternative
Benefit Track starting with 2007 as the election year (the “2007 Program”) and 2012 as an election year to the expansion
of its “Beneficiary Enterprise” program (the “2012 Program”).
Under
the 2007 Program “Alternative Track”, the Subsidiary, which was located in a National Priority Zone “B” with
respect to the year 2007, is tax exempt in the first six years of the benefit period and subject to tax at the reduced rate of
10%-25% for a period of one to four years for the remaining benefit period (dependent on the level of foreign investments).
Under
the 2012 Program, the Subsidiary, which was located in the “Other National Priority Zone” with respect to the year 2012,
would be tax exempt in the first two years of the benefit period and subject to tax at the reduced rate of 10%-25% for a period
of five to eight years for the remaining benefit period (dependent on the level of foreign investments).
In respect
of expansion programs pursuant to Amendment No. 60 to the Encouragement Law, the duration of the benefit period has been amended,
such that it starts at the later of the election year and the first year the Company earns taxable income provided that 12 years
have not passed since the beginning of the election year and for companies in National Priority Zone A - 14 years have not passed
since the beginning of the election year.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 12:-
TAXES ON INCOME (CONT.)
The benefit
period for the Subsidiary’s 2007 Program expired in 2018 (12 years since the beginning of the election year– 2007)
and the benefit period for the Subsidiary’s 2012 Program is expected to expire in 2023 (12 years since the beginning of the
election year - 2012).
If a dividend
is distributed out of tax exempt profits, as detailed above, the Subsidiary will become liable for taxes at the rate applicable
to its profits from the Beneficiary Enterprise in the year in which the income was earned (tax at the rate of 10-25%, dependent
on the level of foreign investments) and to a withholding tax rate of 15% (or lower, under an applicable tax treaty).
Accelerated
depreciation:
The
Subsidiary is eligible for deduction of accelerated depreciation on buildings, machinery and equipment used by the “Beneficiary
Enterprise” at a rate of 200% (or 400% for buildings but not more than 20% depreciation per year) from the first year of
the assets operation.
Conditions
for the entitlement to the benefits:
The above
mentioned benefits are conditional upon the fulfillment of the conditions stipulated by the Law, regulations promulgated thereunder,
and the Ruling with respect to the beneficiary enterprise. Non-compliance with the conditions may cancel all or part of the benefits
and refund of the amount of the benefits, including interest. The management believes that the Subsidiary is meeting the aforementioned
conditions.
Amendments
to the Law:
In December
2010, the “Knesset” (Israeli Parliament) passed the Law for Economic Policy for 2011 and 2012 (Amended Legislation),
2011 (the “Amendment”), which prescribes, among others, amendments in the Law for the Encouragement of Capital Investments,
1959 (the “Amendment No. 68”). Amendment No. 68 became effective as of January 1, 2011. According to Amendment No.
68, the benefit tracks in the Law were modified and a flat tax rate became applicable to a company for all preferred income under
its status as a preferred company with a preferred enterprise.
On August
5, 2013, the Knesset issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013
and 2014), 2013 which consists of Amendment No. 71 to the Law for the Encouragement of Capital Investments, 1959 (the “Amendment
No. 71”). According to Amendment No. 71, the tax rate on preferred income form a preferred enterprise in 2014 and thereafter
will be 16% (in development area A it will be 9%).
Amendment
No. 71 also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise’s
earnings as above will be subject to tax at a rate of 20%.
The Subsidiary
did not apply Amendment No. 71 with respect to the preferred enterprise status, but may choose to apply Amendment No. 71 in the
future.
Innovation
Box Regime “Technological Preferred Enterprise”:
In December
2016, the Knesset approved amendments to the Law that introduce an innovation box regime (the “Innovation Box Regime”)
for intellectual property (IP)-based companies, enhance tax incentives for certain industrial companies and reduce the standard
corporate tax rate and certain withholding rates starting in 2017.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 12:-
TAXES ON INCOME (CONT.)
The Innovation
Box Regime was tailored by the Israeli government to a post-base erosion and profit shifting (“BEPS”) world, encouraging
multinationals to consolidate IP ownership and profits in Israel along with existing Israeli research and development (“R&D”)
functions. Tax benefits created to achieve this goal include a reduced corporate income tax rate of 6% on IP-based income and on
capital gains from future sale of IP.
The
6% rate would apply to qualifying Israeli companies that are part of a group with global consolidated revenue of over NIS 10 billion
(approximately US $2.9 billion). Other qualifying companies with global consolidated revenue below NIS 10 billion, would be subject
to a 12% tax rate. However, if the Israeli company is located in Jerusalem or in certain northern or southern parts of Israel,
the tax rate is further reduced to 7.5%. Additionally, withholding tax on dividends for foreign investors would be subject to
a reduced rate of 4% for all qualifying companies (unless further reduced by a treaty).
Entering
the regime is not conditioned on making additional investments in Israel, and a company could qualify if it invested at least 7%
of the last three years’ revenue in R&D (or incurred at least NIS 75 million in R&D expenses per year) and met one
of the following three conditions:
1. At least
20% of its employees are R&D employees engaged in R&D (or employs, in total, more than 200 R&D employees);
2. Venture
capital investments in the aggregate of NIS 8 million were previously made in the company; or
3. Average
annual growth over three years of 25% in sales or employees.
Companies
not meeting the above conditions may still be considered as a qualified company at the discretion of the Israeli Innovation Authority
of the Ministry of Economy and Industry (formerly, the “Office of the Chief Scientist”). Companies wishing to exit
from the regime in the future will not be subject to clawback of tax benefits. The Knesset also approved a stability clause in
order to encourage multinationals to invest in Israel. Accordingly, companies will be able to confirm the applicability of tax
incentives for a 10-year period under a pre-ruling process. Further, in line with the new Organization for Economic Co-operation
and Development Nexus Approach, the Israeli Finance Minister will promulgate regulations to ensure companies are benefiting from
the regime to the extent qualifying R&D expenditures are incurred. The regulations were set to be finalized by March 31, 2017,
with new amendments to the Law coming into effect after the regulations have been finalized.
Taxable
income which is not produced as part of “Preferred Enterprise” income will be taxed at the regular tax rate (24% in
2017).
As
of December 31, 2018, the Company’s management believes that the Company meets the conditions mentioned above to be considered
as a Technological Preferred Enterprise.
|
C.
|
Carryforward
losses for tax purposes
|
As of June
30, 2019, Pluristem Therapeutics had U.S. federal net operating loss carryforward for income tax purposes in the amount of approximately
$34,836. Net operating loss carryforward arising in taxable years, can be carried forward
and offset against taxable income for 20 years and expiring between 2023 and 2039.
Utilization
of U.S. net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions
of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating
losses before utilization.
PLURISTEM THERAPEUTICS INC.
AND ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 12:-
TAXES ON INCOME (CONT.)
The Subsidiary
has accumulated losses, for tax purposes, as of June 30, 2019, in the amount of approximately $155,515, which may be carried forward
and offset against taxable business income and business capital gain in the future for an indefinite period.
Deferred
income taxes:
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are
as follows:
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Deferred tax assets:
|
|
|
|
|
|
|
U.S.
net operating loss carryforward
|
|
$
|
7,316
|
|
|
$
|
7,485
|
|
Israeli
net operating loss and research and development expenses carryforward
|
|
|
40,866
|
|
|
|
33,538
|
|
Allowances
and reserves
|
|
|
283
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
|
Total deferred
tax assets before valuation allowance
|
|
|
48,465
|
|
|
|
41,297
|
|
Valuation
allowance
|
|
|
(48,465
|
)
|
|
|
(41,297
|
)
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
As
of June 30, 2019 and 2018, the Company has provided full valuation allowances in respect of deferred tax assets resulting from
tax loss carryforward and other temporary differences, since they have a history of operating losses and current uncertainty concerning
its ability to realize these deferred tax assets in the future.
The
Company accounts for its income tax uncertainties in accordance with ASC 740 which clarifies the accounting for uncertainties
in income taxes recognized in a Company’s financial statements and prescribes a recognition threshold and measurement attribute
for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
As
of June 30, 2019 and 2018, there were no unrecognized tax benefits that if recognized would affect the annual effective tax rate.
Reconciliation
of the theoretical tax expense (benefit) to the actual tax expense (benefit):
In
2019, 2018 and 2017, the main reconciling item of the statutory tax rate of the Company (21% to 35% in 2019, 2018 and 2017) to
the effective tax rate (0%) is tax loss carryforwards, stock-based compensation and other deferred tax assets for which a full
valuation allowance was provided.
PLURISTEM THERAPEUTICS INC. AND
ITS SUBSIDIARY
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
U.S. Dollars
in thousands (except share and per share amounts)
|
NOTE 13:- SUBSEQUENT EVENTS
|
a.
|
As of September 12, 2019, the Company had sold 439,900
shares of common stock at an average price of $4.95 per share under the Sales Agreement (see Note 9f).
|