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 DecemberMarch 31, 20172024
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from
Commission file number 001-31392
| (Exact name of registrant as specified in its charter) |
| Nevada | 98-0351734 | |
| (State or other jurisdiction of incorporation or organization) | ( Identification No.) |
| MATAM Advanced Technology Park, Building No. 5, Haifa, Israel | 3508409 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number 011-972-74-7108600
Securities registered pursuant to Section 12(b) of the Act:
| Trading Symbol | Name of each exchange on which registered | |||
| PLUR | The Nasdaq Capital Market |
Securities registered pursuant to Section 12(g) of the Act:
| None. |
| (Title of class) |
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.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 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 stockshares as of the latest practicable date: 110,097,0875,388,792 common shares of common stock issued and outstanding as of February 1, 2018.May 3, 2024.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of DecemberMarch 31, 2017
U.S. DOLLARS IN THOUSANDS
(Unaudited)
INDEX
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| 3 | ||
| 4-5 | ||
| 6-7 | ||
| 8-14 |
i
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
| December 31, 2017 | June 30, 2017 | |||||||||||
| Note | Unaudited | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 8,581 | $ | 4,707 | ||||||||
| Short-term bank deposits | 15,975 | 6,235 | ||||||||||
| Restricted cash and short-term bank deposits | 566 | 559 | ||||||||||
| Marketable securities | 3 | 10,736 | 15,164 | |||||||||
| Accounts receivable from the Israeli Innovation Authority (“IIA”) | 172 | 1,036 | ||||||||||
| Other current assets | 1,044 | 1,315 | ||||||||||
Total current assets | 37,074 | 29,016 | ||||||||||
| LONG-TERM ASSETS: | ||||||||||||
| Long-term deposits and restricted bank deposits | 403 | 403 | ||||||||||
| Severance pay fund | 856 | 804 | ||||||||||
| Property and equipment, net | 6,367 | 7,277 | ||||||||||
| Other long-term assets | 33 | 34 | ||||||||||
Totallong-term assets | 7,659 | 8,518 | ||||||||||
Total assets | $ | 44,733 | $ | 37,534 | ||||||||
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Note | March 31, 2024 | June 30, 2023 | ||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | $ | 7,081 | $ | 5,360 | ||||||
| Short-term bank deposits | 18,926 | 34,811 | ||||||||
| Restricted cash | 273 | 269 | ||||||||
| Prepaid expenses and other current assets | 1,087 | 969 | ||||||||
| Total current assets | 27,367 | 41,409 | ||||||||
| LONG-TERM ASSETS: | ||||||||||
| Restricted bank deposits | 637 | 627 | ||||||||
| Severance pay fund | 459 | 439 | ||||||||
| Property and equipment, net | 769 | 688 | ||||||||
| Operating lease right-of-use asset | 7,151 | 7,633 | ||||||||
| Long-term deposit and other long-term assets | 7 | 1 | ||||||||
| Total long-term assets | 9,023 | 9,388 | ||||||||
| Total assets | $ | 36,390 | $ | 50,797 | ||||||
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Note | March 31, 2024 | June 30, 2023 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Trade payables | $ | 1,030 | $ | 1,812 | ||||||
| Accrued expenses | 958 | 1,209 | ||||||||
| Operating lease liability | 675 | 627 | ||||||||
| Accrued vacation and recuperation | 810 | 873 | ||||||||
| Advances from customers | 101 | 7 | ||||||||
| Other accounts payable | 952 | 1,093 | ||||||||
| Total current liabilities | 4,526 | 5,621 | ||||||||
| LONG-TERM LIABILITIES | ||||||||||
| Accrued severance pay | 611 | 598 | ||||||||
| Operating lease liability | 5,343 | 5,748 | ||||||||
| Loan from the European Investment Bank (“EIB”) | 4 | 24,065 | 23,530 | |||||||
| Total long-term liabilities | 30,019 | 29,876 | ||||||||
| COMMITMENTS AND CONTINGENCIES | 3 | |||||||||
| SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||
| Share capital (**): | 5 | |||||||||
| Common shares, $0.00001 par value per share: Authorized: 37,500,000 as of March 31, 2024, and June 30, 2023; Issued and outstanding: 5,228,737 and 5,155,687 shares as of March 31, 2024, and June 30, 2023, respectively | * | * | ||||||||
| Additional paid-in capital | 414,387 | 412,939 | ||||||||
| Accumulated deficit | (414,743 | ) | (399,584 | ) | ||||||
| Total shareholders’ (deficit) equity | (356 | ) | 13,355 | |||||||
| Non-controlling interests | 2,201 | 1,945 | ||||||||
| Total equity | 1,845 | 15,300 | ||||||||
| Total liabilities and equity | $ | 36,390 | $ | 50,797 | ||||||
| (*) | Less than $1 | |
| December 31, 2017 | June 30, 2017 | |||||||||||
| Note | Unaudited | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Trade payables | $ | 1,808 | $ | 1,966 | ||||||||
| Accrued expenses | 1,714 | 1,465 | ||||||||||
| Other accounts payable | 2,275 | 1,983 | ||||||||||
Total current liabilities | 5,797 | 5,414 | ||||||||||
| LONG-TERM LIABILITIES | ||||||||||||
| Accrued severance pay | 1,078 | 940 | ||||||||||
| Other long-term liabilities | 897 | 929 | ||||||||||
Total long-term liabilities | 1,975 | 1,869 | ||||||||||
| COMMITMENTS AND CONTINGENCIES | 5 | |||||||||||
| STOCKHOLDERS’ EQUITY | 6 | |||||||||||
| Share capital: | ||||||||||||
Common stock $0.00001 par value per share: Authorized: 200,000,000 shares Issued and outstanding: 109,337,556 shares as of December 31, 2017, 96,938,789 shares as of June 30, 2017 | 1 | 1 | ||||||||||
| Additional paid-in capital | 236,767 | 217,822 | ||||||||||
| Accumulated deficit | (205,185 | ) | (189,571 | ) | ||||||||
| Other comprehensive income | 5,378 | 1,999 | ||||||||||
Total stockholders' equity | 36,961 | 30,251 | ||||||||||
Total liabilities and stockholders' equity | $ | 44,733 | $ | 37,534 | ||||||||
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Nine months ended March 31 | Three months ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 230 | $ | 176 | $ | 71 | $ | 87 | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | $ | (10,066 | ) | $ | (13,412 | ) | $ | (3,362 | ) | $ | (4,333 | ) | ||||
| Less: participation by the National Institute of Allergy and Infectious Diseases (“NIAID”), the Israeli Innovation Authority (“IIA”), Horizon Europe and other parties | 1,015 | 1,189 | 268 | 166 | ||||||||||||
| Research and development expenses, net | (9,051 | ) | (12,223 | ) | (3,094 | ) | (4,167 | ) | ||||||||
| General and administrative expenses | (7,303 | ) | (8,655 | ) | (2,511 | ) | (3,020 | ) | ||||||||
| Operating loss | (16,124 | ) | (20,702 | ) | (5,534 | ) | (7,100 | ) | ||||||||
| Interest expenses | (648 | ) | (623 | ) | (218 | ) | (217 | ) | ||||||||
| Other financial income (expenses), net | 1,290 | (956 | ) | 362 | (441 | ) | ||||||||||
| Total financial income (expenses), net | 642 | (1,579 | ) | 144 | (658 | ) | ||||||||||
| Net loss | $ | (15,482 | ) | $ | (22,281 | ) | $ | (5,390 | ) | $ | (7,758 | ) | ||||
| Net loss attributed to non-controlling interest | $ | (323 | ) | $ | (419 | ) | $ | (97 | ) | $ | (134 | ) | ||||
| Net loss attributed to shareholders | $ | (15,159 | ) | $ | (21,862 | ) | $ | (5,293 | ) | $ | (7,624 | ) | ||||
| Loss per share: | ||||||||||||||||
| Basic and diluted net loss per share | $ | (2.92 | ) | $ | (5.04 | ) | $ | (1.01 | ) | $ | (1.52 | ) | ||||
| Weighted average number of shares used in computing basic and diluted net loss per share (**) | 5,193,808 | 4,402,130 | 5,221,162 | 4,993,451 | ||||||||||||
| (**) |
Six months ended December 31 | Three months ended December 31, | |||||||||||||||||||
| Note | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Revenues | 2f | $ | 50 | - | $ | 50 | - | |||||||||||||
| Cost of revenues | (2 | ) | - | (2 | ) | - | ||||||||||||||
| Gross profit | 48 | - | 48 | - | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||
| Research and development expenses | (11,451 | ) | (11,512 | ) | (6,259 | ) | (5,481 | ) | ||||||||||||
| Less: participation by the IIA and other parties | 1,136 | 1,312 | 621 | 279 | ||||||||||||||||
| Research and development expenses, net | (10,315 | ) | (10,200 | ) | (5,638 | ) | (5,202 | ) | ||||||||||||
| General and administrative expenses, net | (5,683 | ) | (3,010 | ) | (2,920 | ) | (1,446 | ) | ||||||||||||
| Other income | 7 | 43 | - | 43 | - | |||||||||||||||
| Operating loss | (15,907 | ) | (13,210 | ) | (8,467 | ) | (6,648 | ) | ||||||||||||
| Financial income, net | 293 | 276 | 238 | 38 | ||||||||||||||||
| Net loss for the period | $ | (15,614 | ) | $ | (12,934 | ) | $ | (8,229 | ) | $ | (6,610 | ) | ||||||||
| Loss per share: | ||||||||||||||||||||
| Basic and diluted net loss per share | $ | (0.15 | ) | $ | (0.16 | ) | $ | (0.08 | ) | $ | (0.08 | ) | ||||||||
| Weighted average number of shares used in computing basic and diluted net loss per share | 101,224,325 | 80,856,219 | 105,130,191 | 81,038,879 | ||||||||||||||||
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Shareholders’ Equity | ||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in | Accumulated | Total Shareholders’ | Non-controlling | Total | |||||||||||||||||||||||
| Shares (**) | Amount | Capital | Deficit | Equity | Interests | Equity | ||||||||||||||||||||||
| Balance as of July 1, 2022 | 4,063,437 | $ | (* | ) | $ | 401,302 | $ | (371,263 | ) | $ | 30,039 | $ | 2,147 | $ | 32,186 | |||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | 51,104 | (* | ) | 2,224 | - | 2,224 | 718 | 2,942 | ||||||||||||||||||||
| Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $435 | 1,019,487 | (* | ) | 8,034 | - | 8,034 | - | 8,034 | ||||||||||||||||||||
| Modification of warrants to non-controlling interests | - | - | (385 | ) | - | (385 | ) | 385 | - | |||||||||||||||||||
| Expiration of warrants in Ever After | - | - | 1,014 | - | 1,014 | (1,014 | ) | - | ||||||||||||||||||||
| Net loss | - | - | - | (21,862 | ) | (21,862 | ) | (419 | ) | (22,281 | ) | |||||||||||||||||
| Balance as of March 31, 2023 | 5,134,028 | $ | (* | ) | $ | 412,189 | $ | (393,125 | ) | $ | 19,064 | $ | 1,817 | $ | 20,881 | |||||||||||||
| Shareholders’ Equity | ||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in | Accumulated | Total Shareholders’ | Non-controlling | Total | |||||||||||||||||||||||
| Shares (**) | Amount | Capital | Deficit | Equity | Interests | Equity | ||||||||||||||||||||||
| Balance as of January 1, 2023 | 4,786,394 | $ | (* | ) | $ | 408,692 | $ | (385,501 | ) | $ | 23,191 | $ | 1,775 | $ | 24,966 | |||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | 21,912 | (* | ) | 869 | - | 869 | 176 | 1,045 | ||||||||||||||||||||
| Issuance of common shares and warrants related to December 2022 private placement, net of issuance costs of $74 | 325,722 | (* | ) | 2,628 | - | 2,628 | - | 2,628 | ||||||||||||||||||||
| Net loss | - | - | - | (7,624 | ) | (7,624 | ) | (134 | ) | (7,758 | ) | |||||||||||||||||
| Balance as of March 31, 2023 | 5,134,028 | $ | (* | ) | $ | 412,189 | $ | (393,125 | ) | $ | 19,064 | $ | 1,817 | $ | 20,881 | |||||||||||||
| (*) | Less than $1 |
| (**) | |
Six months ended December 31, | Three months ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net loss | $ | (15,614 | ) | $ | (12,934 | ) | $ | (8,229 | ) | $ | (6,610 | ) | ||||
| Other comprehensive income (loss), net: | ||||||||||||||||
| Unrealized gain (loss) on available-for-sale marketable securities, net | 4,307 | (999 | ) | 5,440 | (1,585 | ) | ||||||||||
| Reclassification adjustment of available-for-sale marketable securities losses realized in net loss, net | (928 | ) | (20 | ) | (1,006 | ) | (16 | ) | ||||||||
| Other comprehensive income (loss) | 3,379 | (1,019 | ) | 4,434 | (1,601 | ) | ||||||||||
| Total comprehensive loss | $ | (12,235 | ) | $ | (13,953 | ) | $ | (3,795 | ) | $ | (8,211 | ) | ||||
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in | Accumulated | Total Shareholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares (**) | Amount | Capital | Deficit | Equity (Deficit) | Interests | Equity | ||||||||||||||||||||||
| Balance as of July 1, 2023 | 5,155,687 | $ | (* | ) | $ | 412,939 | $ | (399,584 | ) | $ | 13,355 | $ | 1,945 | $ | 15,300 | |||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | 73,050 | (* | ) | 1,448 | - | 1,448 | 579 | 2,027 | ||||||||||||||||||||
| Net loss | - | - | - | (15,159 | ) | (15,159 | ) | (323 | ) | (15,482 | ) | |||||||||||||||||
| Balance as of March 31, 2024 | 5,228,737 | $ | (* | ) | $ | 414,387 | $ | (414,743 | ) | $ | (356 | ) | $ | 2,201 | $ | 1,845 | ||||||||||||
| Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in | Accumulated | Total Shareholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares (**) | Amount | Capital | Deficit | Equity (Deficit) | Interests | Equity | ||||||||||||||||||||||
| Balance as of January 1, 2024 | 5,210,003 | $ | (* | ) | $ | 413,849 | $ | (409,450 | ) | $ | 4,399 | $ | 2,218 | $ | 6,617 | |||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | 18,734 | (* | ) | 538 | - | 538 | 80 | 618 | ||||||||||||||||||||
| Net loss | - | - | - | (5,293 | ) | (5,293 | ) | (97 | ) | (5,390 | ) | |||||||||||||||||
| Balance as of March 31, 2024 | 5,228,737 | $ | (* | ) | $ | 414,387 | $ | (414,743 | ) | $ | (356 | ) | $ | 2,201 | $ | 1,845 | ||||||||||||
| (*) | Less than $1 |
| (**) | See note 1d regarding reverse stock split |
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Income (Loss) | Deficit | Equity | |||||||||||||||||||
| Balance as of July 1, 2016 | 80,268,999 | $ | 1 | $ | 198,432 | $ | 1,480 | $ | (161,757 | ) | $ | 38,156 | ||||||||||||
| Exercise of options by employees | 6,000 | (* | ) | 4 | - | - | 4 | |||||||||||||||||
Stock-based compensation to employees, directors and non-employee consultants | 1,030,952 | (* | ) | 907 | - | - | 907 | |||||||||||||||||
| Other comprehensive loss, net | - | - | - | (1,019 | ) | - | (1,019 | ) | ||||||||||||||||
| Net loss | - | - | - | - | (12,934 | ) | (12,934 | ) | ||||||||||||||||
Balance as of December 31, 2016 (unaudited) | 81,305,951 | $ | 1 | $ | 199,343 | $ | 461 | $ | (174,691 | ) | $ | 25,114 | ||||||||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Nine months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (15,482 | ) | $ | (22,281 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 192 | 285 | ||||||
| Share-based compensation to employees, directors and non-employee consultants | 2,027 | 2,942 | ||||||
| Increase in prepaid expenses, other current assets and other long-term assets | (124 | ) | (510 | ) | ||||
| Decrease in trade payables | (742 | ) | (393 | ) | ||||
| Decrease in other accounts payable and accrued expenses | (455 | ) | (1,135 | ) | ||||
| Increase in advances from customers | 94 | 7 | ||||||
| Increase (decrease) in operating lease right-of-use asset and liability, net | 125 | (2 | ) | |||||
| Decrease (increase) in interest receivable on deposits | 218 | (786 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents, deposits and restricted cash | (89 | ) | 278 | |||||
| Long term interest payable and exchange rate differences relate to EIB loan | 535 | 1,668 | ||||||
| Accrued severance pay, net | (7 | ) | (33 | ) | ||||
| Net cash used for operating activities | $ | (13,708 | ) | $ | (19,960 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | $ | (313 | ) | $ | (165 | ) | ||
| Proceeds from short-term deposits, net | 15,702 | 5,539 | ||||||
| Net cash provided by investing activities | $ | 15,389 | $ | 5,374 | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Issuance of common shares and warrants, net of issuance costs | - | 8,034 | ||||||
| Net cash provided by financing activities | $ | - | $ | 8,034 | ||||
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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 | Deficit | Equity | |||||||||||||||||||
| Balance as of July 1, 2017 | 96,938,789 | $ | 1 | $ | 217,822 | $ | 1,999 | $ | (189,571 | ) | $ | 30,251 | ||||||||||||
| Exercise of options by employees | 5,000 | - | 5 | - | - | 5 | ||||||||||||||||||
Stock-based compensation to employees, directors and non-employee consultants | 1,731,024 | (* | ) | 3,108 | - | - | 3,108 | |||||||||||||||||
Issuance of common stock under At-The Market (“ATM”) Agreement, net of issuance costs of $80 (Note 6a) | 834,040 | (* | ) | 1,026 | - | - | 1,026 | |||||||||||||||||
Issuance of common stock, net of issuance costs of $1,405 (Note 6b) | 9,000,000 | (* | ) | 13,646 | - | - | 13,646 | |||||||||||||||||
Exercise of warrants by investors (Note 6c) | 828,703 | (* | ) | 1,160 | - | - | 1,160 | |||||||||||||||||
| Other comprehensive income, net | - | - | - | 3,379 | - | 3,379 | ||||||||||||||||||
| Net loss | - | - | - | - | (15,614 | ) | (15,614 | ) | ||||||||||||||||
Balance as of December 31, 2017 (unaudited) | 109,337,556 | $ | 1 | $ | 236,767 | $ | 5,378 | $ | (205,185 | ) | $ | 36,961 | ||||||||||||
| Nine months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $ | 54 | $ | (278 | ) | |||
| Increase (decrease) in cash, cash equivalents and restricted cash | 1,735 | (6,830 | ) | |||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 6,256 | 11,413 | ||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 7,991 | $ | 4,583 | ||||
| Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: | ||||||||
| Cash and cash equivalents | 7,081 | 3,677 | ||||||
| Restricted cash | 273 | 273 | ||||||
| Long-term restricted bank deposits | 637 | 633 | ||||||
| Total cash, cash equivalents, restricted cash and restricted bank deposits | $ | 7,991 | $ | 4,583 | ||||
| (a) Supplemental disclosure of non-cash activities: | ||||||||
| Purchase of property and equipment on credit | $ | 34 | $ | 87 | ||||
| Accrued expenses related to issuance of common shares and warrants | 100 | - | ||||||
| Lease liabilities arising from obtaining right-of-use assets | $ | 82 | $ | - | ||||
| 216 | 87 | |||||||
The accompanying notes are an integral part of thethese unaudited interim condensed consolidated financial statements.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 1: - GENERAL
| Six months ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (15,614 | ) | $ | (12,934 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 1,023 | 1,110 | ||||||
| Gain from sale of property and equipment, net | - | (4 | ) | |||||
| Accretion of discount, amortization of premium and changes in accrued interest of marketable securities | 12 | (154 | ) | |||||
| Gain from sale of investments of available-for-sale marketable securities | (928 | ) | (20 | ) | ||||
| Other-than-temporary loss of available-for-sale marketable securities | 850 | - | ||||||
| Stock-based compensation to employees, directors and non-employees consultants | 3,108 | 907 | ||||||
| Decrease in accounts receivable from the IIA | 864 | 1,941 | ||||||
| Decrease (increase) in other current and long-term assets | 272 | (105 | ) | |||||
| Increase (decrease) in trade payables | (86 | ) | 160 | |||||
| Increase (decrease) in other accounts payable, accrued expenses and other long-term liabilities | 421 | (588 | ) | |||||
| Increase in interest receivable on short-term deposits | (28 | ) | - | |||||
| Linkage differences and interest on short and long-term deposits and restricted bank deposits | 2 | (1 | ) | |||||
| Accrued severance pay, net | 86 | (11 | ) | |||||
| Net cash used by operating activities | $ | (10,018 | ) | $ | (9,699 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | $ | (185 | ) | $ | (273 | ) | ||
| Proceeds from sale of property and equipment | - | 6 | ||||||
| Repayment of (investment in) short-term deposits | (9,721 | ) | 8,542 | |||||
| Proceeds from sale of available-for-sale marketable securities | 9,010 | 3,813 | ||||||
| Proceeds from redemption of available-for-sale marketable securities | 9 | 280 | ||||||
| Investment in available-for-sale marketable securities | (1,146 | ) | (1,562 | ) | ||||
| Net cash provided by (used in) investing activities | $ | (2,033 | ) | $ | 10,806 | |||
| Six months ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds related to issuance of common stock, net of issuance costs | $ | 14,672 | $ | - | ||||
| Exercise of warrants and options | 1,165 | 4 | ||||||
| Proceeds with respect to BIRD liability | 88 | - | ||||||
| Net cash provided by financing activities | $ | 15,925 | $ | 4 | ||||
| Increase in cash and cash equivalents | 3,874 | 1,111 | ||||||
| Cash and cash equivalents at the beginning of the period | 4,707 | 6,223 | ||||||
| Cash and cash equivalents at the end of the period | $ | 8,581 | $ | 7,334 | ||||
| (a) Supplemental disclosure of cash flow activities: | ||||||||
| Cash paid during the period for: | ||||||||
| Taxes paid due to non-deductible expenses | $ | 6 | $ | 16 | ||||
| (b) Supplemental disclosure of non-cash activities: | ||||||||
| Purchase of property and equipment on credit | $ | 16 | $ | 36 | ||||
| a. | Pluri Inc. (formally known as Pluristem Therapeutics Inc.), a Nevada corporation, was incorporated on May 11, 2001. |
| b. | The Company is a |
| c. | The Company has incurred an accumulated deficit of approximately As of March 31, 2024, the Company’s cash position (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled $26,917. The Company plans to continue to finance its operations from its current resources, by entering into licensing or other commercial, and collaboration agreements, by providing CDMO services to clients, from grants and contracts to support its research and development activities and from sales of its equity securities. The Company’s management believes that its current resources, together with its existing operating plan, are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the date of the issuance of these condensed consolidated financial statements. There is no assurance, however, that the Company will be able to obtain the adequate level of financial resources that is required for the long-term development and commercialization of its products. |
Reverse stock split In March 2024, the Company’s Board of Directors approved a 1-for-8 reverse stock split of the Company’s (a) authorized common shares; and (b) issued and outstanding common shares. The reverse stock split became effective on April 1, 2024, subsequent to the balance sheet date. All common shares, options, warrants and securities convertible or exercisable into common shares, as well as loss per share, have been adjusted to give retroactive effect to this reverse stock split for all periods presented. |
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES
| a. | Unaudited Interim Financial Information |
The accompanying interim unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"(“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 presentationstatement have been included (consisting only of normal recurring adjustments except as otherwise discussed)adjustments).
Operating results for the three and six month periodsnine-month period ended DecemberMarch 31, 2017,2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2018.
| b. | Significant Accounting Policies |
The significant accounting policies followed in the preparation of these interim unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.
| c. | 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.
| d. | Fair value of financial instruments |
The carrying amounts of the Company'sCompany’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank deposits, long-term bank deposit and restricted bank deposits accounts receivable and other current assets, trade payable and other accounts payable and accrued expenses, and other liabilities, approximate their fair value because of their generally short termshort-term maturities.
The Company measures its investments in marketable securities and derivative instruments at fair value under ASC 820,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. |
PLURI INC. AND ITS SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 2: - Quoted prices (unadjusted) in active markets for identical assets or liabilities;SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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 hierarchyhierarchy.
On April 30, 2020, the German Subsidiary entered into a finance contract (the “Finance Contract”) with the EIB, pursuant to which the German Subsidiary can obtain a loan in the amount of up to €50 million, subject to certain milestones being reached (the “Loan”).
During June 2021, Pluri received €20 million under the Finance Contract. The amount received is due on June 1, 2026, and bears annual interest of 4% to be paid with the principal of the Loan.
The Company measures its liability pursuant to the Finance Contract with the EIB based on the aggregate outstanding amount of the combined principal and accrued interest thereunder. As of March 31, 2024, the Company does not reflect its liability for future royalty payments pursuant to the Finance Contract with the EIB since the accrual liability pertaining to royalties to EIB is immaterial (see Notealso note 4).
ASU No. 2016-13 - “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”)
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)
The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company meets the SEC definition of a smaller reporting company and adopted the new accounting standard effective July 1, 2023. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
| ii. | Recently issued accounting pronouncements, not yet adopted |
ASU No. 2023-07 - “Segment Reporting (Topic 280): Improvements to reportable segment disclosures” (“ASU 2023-07”):
In November 2023, the FASB issued ASU 2023-07. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition of other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The guidance is effective for the fiscal year beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted.
The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.
PLURI INC. AND ITS SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES (CONT.)
ASU No. 2023-09 - “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”):
In December 2023, the FASB issued ASU 2023-09. This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and regarding income tax paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retroactive application are permitted. The Company is currently evaluating this guidance to determine the potential impact of the guidanceit may have on its consolidated financial statements.statements disclosures.
NOTE 3:- MARKETABLE SECURITIES
| December 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gain | Gross unrealized loss | Other-than-temporary impairment | Fair value | Amortized cost | Gross unrealized gain | Gross unrealized loss | Other-than-temporary impairment | Fair value | |||||||||||||||||||||||||||||||
Available-for-sale - matures within one year: | ||||||||||||||||||||||||||||||||||||||||
Stock and index linked notes | $ | 6,208 | $ | 5,378 | $ | - | $ | (850 | ) | $ | 10,736 | $ | 11,988 | $ | 2,014 | $ | (47 | ) | $ | (767 | ) | $ | 13,188 | |||||||||||||||||
Government debentures – fixed interest rate | - | - | - | - | - | 157 | 1 | - | - | 158 | ||||||||||||||||||||||||||||||
Corporate debentures – fixed interest rate | - | - | - | - | - | 47 | 1 | - | - | 48 | ||||||||||||||||||||||||||||||
| $ | 6,208 | $ | 5,378 | $ | - | $ | (850 | ) | $ | 10,736 | $ | 12,192 | $ | 2,016 | $ | (47 | ) | $ | (767 | ) | $ | 13,394 | ||||||||||||||||||
Available-for-sale - matures after one year through five years: | ||||||||||||||||||||||||||||||||||||||||
Government debentures – fixed interest rate | - | - | - | - | - | 468 | 23 | - | - | 491 | ||||||||||||||||||||||||||||||
Corporate debentures – fixed interest rate | - | - | - | - | - | 1,255 | 7 | (1 | ) | - | 1,261 | |||||||||||||||||||||||||||||
| $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1,723 | $ | 30 | $ | (1 | ) | $ | - | $ | 1,752 | ||||||||||||||||||||
Available-for-sale - matures after five years through ten years: | ||||||||||||||||||||||||||||||||||||||||
Corporate debentures – fixed interest rate | - | - | - | - | - | 17 | 1 | - | - | 18 | ||||||||||||||||||||||||||||||
| $ | - | $ | - | $ | - | $ | - | $ | - | $ | 17 | $ | 1 | $ | - | $ | - | $ | 18 | |||||||||||||||||||||
Total | $ | 6,208 | $ | 5,378 | $ | - | $ | (850 | ) | $ | 10,736 | $ | 13,932 | $ | 2,047 | $ | (48 | ) | $ | (767 | ) | $ | 15,164 | |||||||||||||||||
| December 31, 2017 (Unaudited) | June 30, 2017 | |||||||||||||||
| Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||
Marketable securities | $ | 8,440 | $ | 2,296 | $ | 10,523 | $ | 4,641 | ||||||||
Foreign currency derivative instruments | - | 77 | - | 295 | ||||||||||||
Total financial assets | $ | 8,440 | $ | 2,373 | $ | 10,523 | $ | 4,936 | ||||||||
| a. | As of |
| b. | 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 U.S. 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. |
As of DecemberMarch 31, 2017,2024, the Company'sCompany’s contingent liability in respect to royalties to the IIA amounted to $25,806,$27,746, not including LIBOR (from January 1, 2024, SOFR) interest as described above.
| c. |
| 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 (“ |
| d. | As to royalties to the EIB, see note 4. |
NOTE 4: - LOAN FROM THE EIB
On April 30, 2020, the German Subsidiary entered into a Finance Contract with the EIB, pursuant to which the German Subsidiary can obtain a loan in the amount of up to €50 million, subject to certain milestones being reached, for a period of 36 months from the signing of the agreementFinance Contract.
During June 2021, Pluri received €20 million of the Finance Contract. The amount received is due on June 1, 2026, and bears annual interest of 4% to be paid with the Tel-Aviv Sourasky Medical Center (Ichilov Hospital),principal of the Loan. As of March 31, 2024, the linked principal balance in the amount of $21,620 and the interest accrued in the amount of $2,445 are presented among long-term liabilities. Since the project period ended on December 31, 2022, the Company will paydoes not expect to receive additional funds pursuant to the Finance Contract.
In addition to interest payable on the Loan, the EIB is entitled to receive royalties from revenues for a period of 1% fromseven years starting at the beginning of fiscal year 2024 and continuing up to and including its net salesfiscal year 2030 in an amount equal to between 0.2% to 2.3% of the PLX-PAD product relatingCompany’s consolidated revenues, pro-rated to GvHD,the amount disbursed from the Loan. As of March 31, 2024, the accrual liability pertaining to royalties to EIB is immaterial.
The Finance Contract also contains certain limitations such as the use of proceeds received from the EIB, limitations related to disposal of assets, substantive changes in the nature of the Company’s business, changes in holding structure, distributions of future potential dividends and engaging with a maximum aggregate royalty amount of approximately $250.other banks and financing entities for other loans.
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 5: - SHAREHOLDERS’ EQUITY
Between December 13, 2022 and December 27, 2022, the Company entered into a series of securities purchase agreements with several purchasers for an aggregate of 1,019,488 common shares and warrants, (the “Warrants”) to purchase up to 1,019,488 common shares (the “December 2022 Private Placement”). On December 13, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $8.24 per share, up to 697,486 common shares and Warrants to purchase up to 697,486 common shares, with an exercise price of $8.24 per share and a term of three years. On December 14, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $8.4 per share, up to 258,565 common shares and Warrants to purchase up to 258,565 common shares, with an exercise price of $8.4 per share and a term of three years. On December 15, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $8.48 per share, up to 29,688 common shares and Warrants to purchase up to 29,688 common shares, with an exercise price of $8.48 per share and a term of three years. On December 19, 2022, the Company executed a securities purchase agreement to sell, at a purchase price of $8.72 per share, up to 16,875 common shares and Warrants to purchase up to 16,875 common shares, with an exercise price of $8.72 per share and a term of three years. On December 27, 2022, the Company executed a securities purchase agreement to sell, at a purchase price of $8.96 per share, up to 16,875 common shares and Warrants to purchase up to 16,875 common shares, with an exercise price of $8.96 per share and a term of three years. The Warrants sold in the December 2022 Private Placement are exercisable upon the later of six months from their issuance date, or from the date the Company increased its authorized shares. The Company issued 1,019,488 common shares and Warrants that relate to the December 2022 Private Placement and received $8,034 as of that date net of $435 from issuance expenses.
On August 31, 2023, and as amended and restated as of October 9, 2023, Ever After entered into a Simple Agreement for Future Equity (the “SAFE Agreement”) with an investor. Pursuant to the terms of the SAFE Agreement, Ever After will receive an aggregate amount of $2,500 (the “SAFE Amount”). As of December 31, 2023, the SAFE Agreement had been terminated and the SAFE Amount was not received.
Pursuant to a shelf registration on Form S-3 declared effective by the SEC on September 21, 2023, on February 13, 2024 the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) 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 common shares having an aggregate offering price of up to $10,000 through A.G.P. acting as sales agent. During April 2024, and after the balance sheet date, the Company sold 42,729 common shares under the Sales Agreement at an average price of $5.93 per share.
| Options to |
A summary of the Company’s activity for options granted to employees and directors under its 2005 incentive option plan is as follows:
| Six months ended December 31, 2017 (Unaudited) | ||||||||||||||||
| Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value Price | |||||||||||||
Options outstanding at beginning of period | 815,650 | $ | 2.98 | |||||||||||||
Options exercised | (5,000 | ) | $ | 1.04 | ||||||||||||
Options forfeited | (450,150 | ) | $ | 4.86 | ||||||||||||
Options outstanding at end of the period | 360,500 | $ | 0.643 | 0.820 | $ | 266 | ||||||||||
Options exercisable at the end of the period | 360,500 | $ | 0.643 | 0.820 | $ | 266 | ||||||||||
Options vested | 360,500 | $ | 0.643 | 0.820 | $ | 266 | ||||||||||
| Six months ended December 31, 2017 (Unaudited) | ||||||||||||||||
| Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value Price | |||||||||||||
Options outstanding at beginning of period | 177,200 | $ | 0.72 | |||||||||||||
Options granted | 47,400 | $ | 0.00 | |||||||||||||
Options forfeited | (15,000 | ) | $ | 4.38 | ||||||||||||
Options outstanding at end of the period | 209,600 | $ | 0.30 | 5.46 | $ | 275 | ||||||||||
Options exercisable at the end of the period | 173,825 | $ | 0.36 | 4.54 | $ | 209 | ||||||||||
Options vested and expected to vest | 209,600 | $ | 0.30 | 5.46 | $ | 275 | ||||||||||
| Nine months ended March 31, 2024 | ||||||||||||||||
| Number (**) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value Price | |||||||||||||
| Share options outstanding at the beginning of the period | 8,100 | $ | 7.44 | 6.24 | $ | 234 | ||||||||||
| Share options granted | 9,375 | 4.40 | 4.81 | 156 | ||||||||||||
| Share options outstanding at the end of the period | 17,475 | $ | 5.80 | 5.12 | $ | 390 | ||||||||||
| Share options exercisable at the end of the period | 8,100 | $ | 7.41 | 5.49 | $ | 234 | ||||||||||
| Share options unvested at the end of the period | 9,375 | 4.40 | 4.81 | 156 | ||||||||||||
| (**) | See note 1d regarding reverse stock split |
Compensation expenses recorded in general and administrative expenses related to options granted to consultants for the nine months ended March 31, 2024 and 2023 were $5 and $5, respectively. Compensation expenses recorded as follows:in general and administrative expenses related to options granted to consultants for the three months ended March 31, 2024 and 2023 were $4 and $1, respectively.
| Six months ended December 31, | Three months ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Research and development expenses | $ | 6 | $ | 3 | $ | 3 | $ | 3 | ||||||||
General and administrative expenses | $ | 28 | $ | 14 | $ | 13 | $ | 14 | ||||||||
| $ | 34 | $ | 17 | $ | 16 | $ | 17 | |||||||||
PLURI INC. AND ITS SUBSIDIARYSUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 5: - SHAREHOLDERS’ EQUITY (CONT.)
A summary of the share options granted to the Chief Executive Officer and Director under equity incentive plans of Pluri Inc. is as follows:
| Nine months ended March 31, 2024 | ||||||||||||
| Number (**) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | ||||||||||
| Share options outstanding at the beginning of the period | 229,353 | $ | 15.20 | 3.47 | ||||||||
| Share options granted | 12,500 | 6.08 | 6.91 | |||||||||
| Share options outstanding at the end of the period | 241,853 | $ | 14.77 | 2.69 | ||||||||
| Share options exercisable at the end of the period | 235,603 | $ | 15.00 | 2.58 | ||||||||
| Share options unvested | 6,250 | $ | 6.08 | 7.16 | ||||||||
| Share options vested and expected to vest at the end of the period | 241,853 | $ | 14.77 | 2.69 | ||||||||
As of March 31, 2024, the aggregate intrinsic value of these options was $0.
Compensation expenses recorded in general and administrative expenses related to options granted to the Chief Executive Officer and a director for the nine months ended March 31, 2024 and 2023, were $223 and $310, respectively.
Compensation expenses recorded in general and administrative expenses related to options granted to the Chief Executive Officer and a director for the three months ended March 31, 2024 and 2023, were $10 and $310, respectively.
| c. | Restricted Stock (“RS”) and |
The following table summarizes the activity related to unvested RS and RSUs granted to employees, directors and directorsofficers under its 2005 and 2016equity incentive option plans of Pluri Inc. for the six month periodnine-month periods ended DecemberMarch 31, 2017 (Unaudited) is as follows:
| Nine months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Number (**) | ||||||||
| Unvested at the beginning of the period | 207,199 | 241,877 | ||||||
| Granted | 395,150 | 41,853 | ||||||
| Forfeited | (129,622 | ) | (6,424 | ) | ||||
| Vested | (55,121 | ) | (48,448 | ) | ||||
| Unvested at the end of the period | 417,606 | 228,858 | ||||||
| Expected to vest after the end of the period | 378,911 | 226,414 | ||||||
| (**) | ||||
| See note 1d regarding reverse stock split | ||||
PLURI INC. AND ITS SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. Dollars in thousands (except share and per share amounts)
NOTE 5: - SHAREHOLDERS’ EQUITY (CONT.)
Compensation expenses related to RS and RSUs granted to employees, directors and directorsofficers were recorded as follows:
| Six months ended December 31, | Three months ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Research and development expenses | $ | 331 | $ | 210 | $ | 187 | $ | 100 | ||||||||
General and administrative expenses | 2,567 | 439 | 1,277 | 177 | ||||||||||||
| $ | 2,898 | $ | 649 | $ | 1,464 | $ | 277 | |||||||||
| Nine months ended March 31, | Three months ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Research and development expenses | $ | 172 | $ | 35 | $ | 110 | $ | (82 | ) | |||||||
| General and administrative expenses | 931 | 1,725 | 371 | 586 | ||||||||||||
| $ | 1,103 | $ | 1,760 | $ | 481 | $ | 504 | |||||||||
As of March 31, 2024, unamortized compensation expenses related to RS and RSUs granted to employees, directors and directorsofficers by Pluri Inc. are approximately $3,801, to be recognized over an average timeby the end of approximately 3.5 years are approximately $7,822.
| RS and RSUs to consultants: |
The following table summarizes the activity related to unvested RS and RSUs granted to consultants under its 2005 and 2016 incentive option plan for the six month periodnine-month periods ended DecemberMarch 31, 2017, (Unaudited) is as follows:
| Nine months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Number (**) | ||||||||
| Unvested at the beginning of the period | 2,500 | 5,157 | ||||||
| Granted | 19,831 | - | ||||||
| Vested | (17,929 | ) | (2,657 | ) | ||||
| Unvested at the end of the period | 4,402 | 2,500 | ||||||
| (**) | ||||
| See note 1d regarding reverse stock split | ||||
Compensation expenses related to RS and RSUs granted to consultants by Pluri Inc. were recorded as follows:
| Nine months ended March 31, | Three months ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Research and development expenses | $ | - | $ | 1 | $ | - | $ | 1 | ||||||||
| General and administrative expenses | 117 | 148 | 43 | 55 | ||||||||||||
| $ | 117 | $ | 149 | $ | 43 | $ | 56 | |||||||||
| Six months ended December 31, | Three months ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Research and development expenses | $ | 3 | $ | 7 | $ | 3 | $ | 3 | ||||||||
General and administrative expenses | 173 | 234 | 122 | 125 | ||||||||||||
| $ | 176 | $ | 241 | $ | 125 | $ | 128 | |||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
This quarterly reportQuarterly 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 reportQuarterly Report on Form 10-Q and include, but are not limited to, statements regarding the following:
| ● | the expected development, time-to-market and potential benefits from our products in |
| ● | our |
| ● | the prospects of entering into additional license agreements, or other forms of cooperation or strategic partnerships with other companies, research organizations and medical |
| ● | our pre-clinical and clinical |
| ● | achieving regulatory |
| ● | receipt of future funding from the Israel Innovation Authority, or |
| developing capabilities for new clinical indications of placenta expanded, |
| our expectation to solve medicine’s unmet needs and demonstrate a real-world impact and value from our pipeline, technology platform and commercial-scale manufacturing capacity; |
| ● | the possible impacts of cybersecurity incidents on our business and operations; |
| ● | our expectations regarding our short- and long-term capital requirements; |
| our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; |
| ● | information with respect to any other plans and strategies for our |
| ● | general market, political and economic conditions in the countries in which we operate including those related to recent unrest in the Middle East and armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations from the Gaza Strip and Lebanon. |
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 and development, clinical and preclinical trials do not guarantee that the conclusions of future research and development 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, development, 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, 2016,2023, or the 20162023 Annual Report, as well as Item 1A of this Quarterly 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,Quarterly Report on Form 10-Q, the terms “we”, “us”, “our”, the “Company” and “Pluristem”“Pluri” mean Pluristem TherapeuticsPluri Inc. and our wholly owned subsidiaries, Pluri Biotech Ltd. and Pluristem GmbH, and our subsidiary PluristemEver After Foods Ltd., or Ever After, unless otherwise indicated or as otherwise required by the context.
All references to common shares, or price per common share, in this Quarterly Report on Form 10-Q, reflect the 1-for-8 reverse stock split effectuated by us on April 1, 2024.
Overview
We are a leading developerbiotechnology company with an advanced cell-based technology platform. We have developed a unique three-dimensional, or 3D, technology platform for cell expansion with an industrial scale in-house Good Manufacturing Practice, or GMP, cell manufacturing facility. We are utilizing our technology in the field of regenerative medicine, food tech, Contract Development and Manufacturing Organization, or CDMO, and agtech and plan to utilize it in industries and verticals that have a need for our mass scale and cost-effective cell expansion platform.
Our operations are focused on the research, development and manufacturing of cells and cell-based products, and business development of cell therapeutics and cell-based technologies and cell-based products.
Cell Therapy
We use our advanced cell-based technology platform in the field of regenerative medicine to develop placenta-based cell therapy product candidates for the treatment of multiple ischemic, inflammatory, muscle injuries and hematologic conditions. Our leadPLX cells are adherent stromal cells that are expanded using our 3D platform. Our PLX cells can be administered to patients off-the-shelf, without blood or tissue matching or additional manipulation prior to administration. PLX cells are believed to release a range of therapeutic proteins in response to the patient’s condition.
In the pharmaceutical area, we have focused on several indications areutilizing our product candidates, including, but not limited to, muscle recovery following surgery for hip fracture, incomplete recovery following bone marrow transplantation, critical limb ischemia, or CLI, recovery after surgeryChronic Graft versus Host Disease and a potential treatment for femoral neck fracture, and acute radiation syndrome,Hematopoietic Acute Radiation Syndrome, or ARS. A pivotal, multinational clinical trialH-ARS. Some of these studies have been completed while others are still ongoing. We believe that each of these indications is currently being conducteda severe unmet medical need.
In July 2023, we announced that we signed a three-year $4.2 million contract with our PLX-PAD product candidate in CLI. In addition, pivotal, multinational clinical trial is planned for our PLX-PAD product candidate in femoral neck fractures. The National Institutes of Health’sthe U.S. National Institute of Allergy and Infectious Diseases, or NIAID, recently completed a dose selection trial with PLX-R18 in the hematologic component of ARS and a pivotal study is planned under the U.S. Food and Drug Administration, or FDA, animal rule once funding will be secured for this project. Each of these indications is a severe unmet medical need.
In April 2024, we unveiled a novel method for expansion of immune cells using proprietary technology and announced we were granted a new U.S. patent titled, “System and Methods for Immune Cells Expansion and Activation in Large Scale”. This innovative approach ensures that the produced immune cells retain their integrity, functionality, and therapeutic efficacy, thus offering a promising solution to meet the escalating demand for advanced cell-based therapies for immune disorders and neurodegenerative diseases.
In May 2024, we launched a novel immunotherapy platform based on Placental Mucosal Associated Invariant T, or MAIT, cell for solid tumors – a significant medical need which currently lacks effective treatments. We believe that our MAIT platform, isolated from the human placenta, offers substantial potential benefits compared to conventional T cells. Our MAIT cells are potent effector cells, potentially targeting tumors through multiple mechanisms while expressing high levels of various chemokine receptors, which facilitate their migration directly to tumor sites. Furthermore, unlike conventional T cells typically collected from peripheral blood, our MAIT cells demonstrate a lower alloreactivity profile. This characteristic not only minimizes their likelihood of inducing Graft versus Host Disease (GvHD) - a significant advantage over other potential allogeneic products - but also under development in a Phase I trialsuggests that they may persist in the United Statesbody for a longer duration, enhancing their therapeutic efficacy.
PluriCDMO™
On January 8, 2024, we announced that we are launching a new business division offering cell therapy manufacturing services as a CDMO: PluriCDMO™. PluriCDMO™ offers services relating to early preclinical development, through late-stage clinical trials and Israelcommercialization, with a mission to deliver high-quality, essential therapies to patients.
AgTech
On January 23, 2024, we announced that we are launching cell-based coffee business activity through a new business vertical, PluriAgtech. PluriAgtech’s new cell-based coffee business activity is leveraged by Pluri’s 3D cell expansion and has been developed to address the growing global demand for incomplete hematopoietic recovery following hematopoietic cell transplantation, or HCT. sustainable, high-quality coffee at mass scale production.
We initiated the trial in fiscal year 2017 in the United States. signed an innovative proof of concept collaboration with ICL Group, a leading global specialty minerals company, to revolutionize bio stimulant delivery and enhance yield sustainably.
In October 2017,March 2024, we receivedannounced an important expansion to our intellectual property portfolio with a new patent approval from the Israeli MinistryIsrael Patent Office, that is designed to reshape the agricultural technology landscape. The patent represents a major breakthrough in our proprietary 3D bioreactor technology, enabling efficient cultivation of Healthplant cells across various applications, from sustainable agriculture to initiate this Phase I trialcritical healthcare solutions.
Food Tech
On January 5, 2022, we signed definitive collaboration agreements with Tnuva Food Industries – Agricultural Cooperative in Israel as well.Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva. Under the definitive collaboration agreements, or the Joint Venture Agreement, we established a new company, Ever After, with the purpose of developing cultivated meat products of all types and kinds. Ever After is engaged in the development, manufacturing and commercialization of technology, know-how and products that will be based on licensed products relating to the field of cultivated meat.
Our joint venture successfully completed proof of concept in its development of cultivated meat based on our cell-based technology platform. Ever After is also using PluriMatrix for producing cultivated meat.
RESULTS OF OPERATIONS – SIXTHREE AND THREENINE MONTHS ENDED DECEMBERMARCH 31, 20172024 COMPARED TO SIXTHREE AND THREENINE MONTHS ENDED DECEMBERMARCH 31, 2016.2023.
Revenues
Revenues
Research and Development Expenses, Net
Research and development, expense,or R&D, expenses, net (costs less participation and grants by the IIA, Horizon Europe and other parties)the NIAID) for the six monthsnine-month period ended DecemberMarch 31, 2017 increased2024 decreased by 1%26% from $10,200,000$12,223,000 for the six monthsnine-month period ended DecemberMarch 31, 20162023 to $10,315,000. This increase$9,051,000. The decrease is mainly attributed to: (1) an increasea decrease in payrollclinical studies expenses related to differences in exchange rates, an increase infollowing the numbercompletion of employeesour CLI, COVID-19 and increases in average salaries, andmuscle regeneration following hip fracture clinical studies, (2) 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). The increase was partially offset by a decrease in subcontractors’salaries and related expenses related to clinical studies such as our CLI and IC studies. In addition, it was also offset by participation of $485,000 of the European Union with respectdue to the Horizon 2020 grants which commenced in calendar year 2017.
R&D expenses, net (costs less participation by the IIA, Horizon Europe and the NIAID) for the three-month period ended March 31, 2024 decreased by 26% from our marketable securities$4,167,000 for the three-month period ended March 31, 2023 to $3,094,000. The decrease is mainly attributableattributed to an expense of $850,000 resulting from other-than-temporary impairment loss recognizedthe same reasons described in the six months ended December 31, 2017.preceding paragraph.
General and Administrative Expenses
General and administrative expenses for the three monthsnine-month period ended DecemberMarch 31, 2016 to a net financial income of $238,0002024 decreased by 16% from $8,655,000 for the three monthsnine-month period ended DecemberMarch 31, 2017. This increase is2023 to $7,303,000 mainly attributable to increased income from exchange rates, since during the three months ended December 31, 2017, there wasdue to: (1) a decrease of 1.8% ofin salaries and related expenses due to the U.S. dollar against the NIS compared to an increase of 2.3% of the U.S. dollar against the NIS during the three months ended December 31, 2016, and from our hedging instruments relatedexchange rate differences relates to the strength of the U.S. dollar against the NIS.NIS and as a result of our cost reduction and efficiency plan, (2) the reduction of our CEO’s salary, whereby he waived 75% of his salary and converted it to restricted stock units, or RSUs, and options, from January 2023 through December 2023, (3) a decrease in premium expenses related to our directors and officers insurance policy, and (4) a decrease in share-based compensation expenses related RSU expenses amortization over time.
General and administrative expenses for the three-month period ended March 31, 2024 decreased by 17% from $3,020,000 for the three-month period ended March 31, 2023 to $2,511,000 mainly due to a decrease in share-based compensation expenses related to employee terminations and RSU expenses amortization over time, partially offset by lowerincreased expenses related to corporate activities such as investor relations and public relations.
Other Financial Income (expenses), net
Other financial income (expenses), net, changed from ($956,000) in financial expenses for the nine-month period ended March 31, 2023 to $1,290,000 in financial income for the nine-month period ended March 31, 2024. This change is mainly attributed to a decrease in exchange rate differences expenses related to the European Investment Bank, or EIB, loan following fluctuation between the U.S. dollar against the EURO, exchange rates income related to NIS deposits following the strength of the U.S. dollar against the NIS, and from increased income related to interest on deposits, due to an increase in interest rates and income from hedging transactions.
Other financial income (expenses), net, changed from ($441,000) in financial expenses for the three-month period ended March 31, 2023 to $362,000 in financial income for the three-month period ended March 31, 2024. This change is mainly attributable to a reduction in exchange rate differences expenses related to the saleEIB loan following fluctuation between the U.S. dollar against the EURO, and increased income related to interest on deposits, due to an increase in interest rates.
Interest Expenses
Interest expenses related to our outstanding loan received from the EIB and all changes during the nine-month and three-months periods ended March 31, 2024 versus March 31, 2023 are attributable solely to exchange rate differences of our marketable securities which occurred inEuro versus the three months ended September 30, 2017.U.S. dollar.
Net Loss
Net loss for the sixnine-month and three monththree-month periods ended DecemberMarch 31, 20172024 was $15,614,000$15,482,000 and $8,229,000,$5,390,000, respectively, as compared to net loss of $12,934,000$22,281,000 and $6,610,000$7,758,000 for the sixnine-month and three monththree-month periods ended DecemberMarch 31, 2016, respectively.2023. The changes were mainlydecrease was due to the increasesa decrease in general and administrative expenses and R&D expenses, as described above.part of the implementation of our business strategy, our efforts to reduce costs pursuant to an efficiency plan, and due to an increase in income due to the launch of new businesses such as CDMO and agtech. Net loss per share attributed to shareholders for the sixnine-month and three monththree-month periods ended DecemberMarch 31, 20172024 was $0.15$2.92 and $0.08,$1.01, respectively, as compared to $0.16$5.04 and $0.08$1.52 for the sixnine-month and three monththree-month periods ended DecemberMarch 31, 2016.2023. We had net loss attributed to our non-controlling interest in Ever After for the nine-month and three-month periods ended March 31, 2024 of $323,000 and $97,000, respectively.
For the sixnine-month and three monththree-month periods ended DecemberMarch 31, 20172024 and December 31, 2016,2023, we had weighted average shares of common stockshares outstanding of 101,224,325, 105,130,1915,193,808, 5,221,162 and 80,856,219, 81,038,879,4,402,130, 4,993,451, respectively, which were used in the computations of net loss per share for the sixnine-month and three monththree-month periods.
The increase in weighted average common shares outstanding reflects the issuance of additional shares mainly relatedpursuant to the issuances of shares from a public offeringsprivate placement offering we conducted in JanuaryDecember 2022, or the December 2022 Private Placement, and October 2017, issuancesthe issuance of additional shares upon the vesting of RSUs and restricted shares issued to directors, 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.consultants.
Liquidity and Capital Resources
As of DecemberMarch 31, 2017,2024, our total current assets were $37,074,000$27,367,000 and total current liabilities were $5,797,000.$4,526,000. On DecemberMarch 31, 2017,2024, we had a working capital surplus of $31,277,000, stockholders'$22,841,000, total equity of $36,961,000$1,845,000, out of which $2,201,000 is attributed to the non-controlling interest in Ever After, and an accumulated deficit of $205,185,000. We finance our operations, and plan to continue doing so, from our existing cash, issuances of our securities, sales of the marketable securities we hold and funds from grants from the IIA, Israel’s Ministry of Economy, European Union and other research grants.$414,743,000.
Our cash and cash equivalents as of DecemberMarch 31, 20172024 amounted to $8,581,000$7,081,000, compared to $7,334,000$3,677,000 as of DecemberMarch 31, 2016,2023, and compared to $4,707,000$5,360,000 as of June 30, 2017.2023. Cash balances changed in the sixnine months ended DecemberMarch 31, 2017 and 20162024 compared to the nine months ended March 31, 2023 for the reasons presented below.
Net cash used for operating activities used cash of $10,018,000was $13,708,000 in the sixnine months ended DecemberMarch 31, 2017,2024, compared to $9,699,000$19,960,000 in the sixnine months ended DecemberMarch 31, 2016.2023. The decrease is mainly attributed to a decrease in net loss following the completion of clinical studies and the implementation of our cost reduction and efficiency plan, including a temporary reduction in the scope of roles and salaries of executive officers. Cash used in operating activities in the sixnine months ended DecemberMarch 31, 20172024 and 20162023 consisted primarily of payments to suppliers, subcontractors, professional services providers and consultants, and 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,partially offset by grants from the IIA, Israel’s Ministry of Economythe Horizon Europe program, and Horizon 2020.funds received from the NIAID contract.
Investing activities usedprovided cash of $2,033,000$15,389,000 in the sixnine months ended DecemberMarch 31, 2017,2024, compared to cash provided of $10,806,000$5,374,000 for the sixnine months ended DecemberMarch 31, 2016.2023. The investing activities in the six monthsnine-month period ended DecemberMarch 31, 2017 consisted primarily of $9,721,000 related to investment in short term deposits, investment of $1,146,000 in marketable securities2024 and payments of $185,000 related to investment in property and equipment, offset by cash provided from the sale and redemption of marketable securities of $9,019,000. The investing activities in the six months ended DecemberMarch 31, 20162023 consisted primarily of the withdrawal of $8,542,000short-term deposits, net of short term deposits$15,702,000 and $4,093,000 provided from the sale and redemption of marketable securities, offset by investment of $1,562,000 in marketable securities and payments of $273,000 related to investment in property and equipment.$5,539,000, respectively.
We had no financing activities generated cash of $15,925,000 duringin the sixnine months ended DecemberMarch 31, 2017, compared to $4,000 for2024. The cash provided in the sixnine months ended DecemberMarch 31, 2016. The cash generated in the six months ended December 31, 2017 from2023 by financing activities iswas related to net proceeds of $13,646,000 from issuing$8,034,000 related to issuances of common shares of our common stock in a public offering we conducted in October 2017, net proceeds of $1,160,000 from issuing shares of our common stock from the exercise ofand warrants, net proceeds of $1,026,000 from issuing shares of our common stock under our ATM Agreement, proceeds of $88,000 related to grant received from the Israel-United States Binational Industrial Research and Development Foundation and exercises of options by employees. Theissuance cost that were paid in cash, generated in the six months ended December 31, 2016 from financing activities was related2022 Private Placement.
Between December 13, 2022 and December 27, 2022, we entered into a series of securities purchase agreements with several purchasers for an aggregate of 1,019,488 common shares and warrants, or the Warrants, to exercises of options by employees.
The Warrants sold in the December 2022 Private Placement were $13,646,000.exercisable upon the later of six months from their issuance date, or from the date we increased our authorized shares. On April 27, 2023, our shareholders approved an amendment to our articles of incorporation to increase the number of authorized common shares from 7,500,000 shares to 37,500,000 shares and such increase was effectuated on May 1, 2023 when the Company filed its amendment to its articles of incorporation reflecting such increase. As such, the Warrants became exercisable on May 1, 2023.
On December 14, 2022, Yaky Yanay, our Chief Executive Officer, agreed to forgo, starting January 1, 2023, $375,000 of his annual cash salary for the next twelve months in return for equity grants, issuable under our existing equity compensation plans. In that regard, we granted Mr. Yanay (i) 41,853 RSUs, vesting ratably each month, and (ii) options to purchase 41,853 common shares, vesting ratably each month, with a term of 3 years, at an exercise price of $8.96 per share. In addition, the Board of Directors also agreed to grant Mr. Yanay options to purchase 187,500 common shares, with a term of 3 years, with the following terms: (i) options to purchase 62,500 common shares at an exercise price of $12.48 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 62,500 common shares at an exercise price of $16.64 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase 62,500 common shares at an exercise price of $20.8 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023. All options were granted in January 2023 and will expire three years from the later of the vesting date or the date which the Company increased its authorized share capital.
In December 2023, in light of the ongoing conflict in Israel and challenges in predicting its resolution and the subsequent impact on the Company’s operations, and in order to ensure the Company’s financial stability, the Board approved, at the recommendation of the Company’s management, (i) a 20% monthly cash salary reduction in the amount of 39,600 NIS to Mr. Yanay, our Chief Executive Officer, or CEO, for the months of January 2024 and February 2024, (ii) a 20% cash salary reduction in the amount of 39,000 NIS to Mrs. Franco – Yehuda, our Chief Financial Officer, or CFO, for the months of December 2023, January 2024 and February 2024, and (iii) a 20% monthly fee reduction to the fees that are paid to each of the Company’s directors for the months of December 2023 through February 2024.
In July 2017,April 2020, we entered intoand our subsidiaries, Pluri Biotech Ltd. and Pluristem GmbH, executed the ATMEIB Finance 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 pricefor non–dilutive funding of up to $80,000,000 through any of€50 million in the Agents. We are not obligated to make any sales of common stock under the ATM Agreement. During the six month period ended December 31, 2017, we sold an aggregate, of 834,040 shares of common stock pursuant to the ATM Agreement at an average price of $1.33 per share.
During June 2021, we received the first tranche in the amount of €20 million pursuant to the EIB Finance Agreement. The amount received is due to be repaid on June 1, 2026 and bears annual interest of 4% to be paid together with the principal of the loan. As of March 31, 2024, the interest accrued was in the amount of €2,263,000. In addition to the interest payable, the EIB is also entitled to royalty payments, pro-rated to the amount disbursed from the EIB loan, on the Company’s consolidated revenues beginning in the fiscal year 2024 up to and including its fiscal year 2030, in an amount equal to up to 2.3% of the Company’s consolidated revenues below $350 million, 1.2% of the Company’s consolidated revenues between $350 million and $500 million and 0.2% of the Company’s consolidated revenues exceeding $500 million. As the project term ended on December 31, 2022, we do not expect to receive additional funds pursuant to the EIB Finance Agreement.
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 DecemberMarch 31, 2017,2024, total grants obtained from the IIA aggregated to approximately $25,974,000$27,925,000 and total royalties paid and accrued amounted to $168,000.$179,000.
In June 2020, we announced that we were selected as a member of the CRISPR-IL consortium, a group funded by the IIA. CRISPR-IL brings together the leading experts in life science and computer science from academia, medicine, and industry, to develop Artificial Intelligence, or AI, based end-to-end genome-editing solutions. These next-generation, multi-species genome editing products for human, plant, and animal DNA, have applications in the past twelve years. Our last program, for the twelfth year, was approvedpharma, agriculture, and aquaculture industries. CRISPR-IL is funded by the IIA in 2017 and relateswith a total budget of approximately $10,000,000 of which, an amount of approximately $480,000 was a direct grant allocated to aus, for the initial period of 18 months. During October 2021, we received an approval for an additional grant of approximately $1,500,000. The grant was used$583,000 from the IIA pursuant to cover research and development expensesthe CRISPR-IL consortium program, for thean additional period of eighteen months. During January 1, 20172023, we received approval for an extension of an additional 2 months to Decemberfinish the program until June 30, 2023. The CRISPR-IL consortium program does not include any obligation to pay royalties.
Through March 31, 2017.
On September 6, 2022, we announced that a €7.5 million non-dilutive grant from the European Union researchUnion’s Horizon program was awarded to Advanced PeRsOnalized Therapies for Osteoarthritis (PROTO), an international collaboration led by Charité Berlin Institute of Health Center for Regenerative Therapies. The goal of the PROTO project is to utilize our PLX-PAD cells in a Phase I/IIa study for the treatment of mild to moderate knee osteoarthritis. An amount of approximately Euro 500,000 (approximately $540,000) will be a direct grant that will be allocated to us. Through March 31, 2024, we received a payment of approximately $185,000 in cash, which relates to the PROTO program.
The Phase I/II study will be carried out by Charité, together with us and developmentother members of the international consortium under our CLI program in the Horizon 2020.leadership of Professor Tobias Winkler, Principal Investigator, at the Berlin Institute of Health Center of Regenerative Therapies, Julius Wolff Institute and Center for Musculoskeletal Surgery. The initiation of the PROTO clinical study is subject to regulatory approval which has not yet been received.
On July 11, 2023, we signed a three-year $4,200,000 contract with the six months ended DecemberNIAID, which is part of the NIH. We will collaborate with the U.S. Department of Defense’s, or DoD’s, AFRRI and USUHS to further advance the development of our PLX-R18 cell therapy as a potential novel treatment for H-ARS. H-ARS is a deadly disease that can result from nuclear disasters and radiation exposure. The period of performance of this contract will be from July 1, 2023 through June 30, 2024, which may be extended for an additional two-year period. As of March 31, 2017,2024, we have received cashfrom the NIAID approximately $790,000 and as of March 31 2024 we expect to receive an additional amount of approximately $50,000$162,000 for activities conducted by that date.
On February 13, 2024, we entered into a sales agreement, or the Sales Agreement, with A.G.P./Alliance Global Partners, or A.G.P., as agent, pursuant to which we may issue and sell our common shares having an aggregate offering price of up to $10,000,000, from time to time through A.G.P. As of May 9, 2024, we have sold an aggregate of 42,729 common shares pursuant to the Sales Agreement at an average price of $5.93 per share.
We have an effective Form S-3 registration statement (File No. 333-273347), filed under the Securities Act of 1933, as amended, with the SEC using a third party“shelf” registration process. Under this shelf registration process, we may, from time to time, sell our common shares, preferred stock and warrants to purchase common shares, and of two or more of such securities, in one or more offerings for an aggregate initial offering price of $200,000,000 (including amounts sold under the sale of our PLX cells for research use.Sales Agreement).
The currency of our financial portfolio is mainly in U.S. dollars and we use options contracts and other financial instruments 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 ourthe 2023 Annual Report on form 10-K for the fiscal year ended June 30, 2017.Report.
Outlook
We have accumulated a deficit of $205,185,000$414,743,000 since our inception in May 2001. We do not expect to generate any significant 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 shortfrom collaborations and medium terms will unlikely exceed our costs of operations, from the salesales of licenses to use our technology or products.products, but in the short and medium terms these will unlikely exceed our costs of operations.
We willmay be required to obtain additional liquidity resources in order to support the commercialization of our products and technology and maintain our research and development and clinical trials activities.
We are continually looking for sources of funding, including non-diluting sources such as collaboration with other companies via licensing agreements, service agreements under our CDMO business, joint venture and partnerships, R&D contracts such as our agreement with the NIAID, research grants such as the IIA grants and the European Union grant, and other research grants, and sales of our common stock.shares.
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) entering 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,believe that we will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of our products.
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 ourAs 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-CEOsCEO 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-CEOsCEO 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 thePART II -– OTHER INFORMATION
Item 6. Exhibits.1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, “Item 1A. Risk Factors” in our 2023 Annual Report, which could materially affect our business, financial condition or future results.
Failure to meet Nasdaq’s continued listing requirements could result in the delisting of our common shares, negatively impact the price of our common shares and negatively impact our ability to raise additional capital.
As of March 31, 2024, our shareholders’ deficit totaled $356. The minimum shareholders’ equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain shareholders’ equity of at least $2.5 million. As a result, we do not believe we are in compliance with the shareholders’ equity standard and anticipate receiving a deficiency letter from Nasdaq. Upon receipt of such deficiency letter, we will have a period of time to resolve such deficiency and, if necessary, will have the opportunity to present a plan to regain compliance.
There can be no assurance that Nasdaq will accept our plan to regain compliance or that we will meet the minimum shareholders’ equity requirement during any compliance period, if one is provided to us. If our common shares are de-listed from Nasdaq, it will have material negative impact on the actual and potential liquidity of our securities, as well as material negative impact on our ability to raise future capital.
If, for any reason, Nasdaq should delist our common shares from trading on its exchange and we are unable to obtain listing on another national securities exchange or take action to restore our compliance with the Nasdaq continued listing requirements, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:
| ● | the liquidity of our common shares; |
| ● | the market price of our common shares; |
| ● | our ability to obtain financing for the continuation of our operations; |
| ● | the number of institutional and general investors that will consider investing in our common shares; |
| ● | the number of investors in general that will consider investing in our common shares; |
| ● | the number of market makers in our Common Shares; |
| ● | the availability of information concerning the trading prices and volume of our common shares; and |
| ● | the number of broker-dealers willing to execute trades in shares of our common shares. |
We conduct our operations in Israel. Conditions in Israel, including the armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations from the Gaza Strip and Lebanon.
Our offices are located in Haifa, Israel, thus, political, economic, and military conditions in Israel may directly affect our business. On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active duty. At the same time, and because of the war declaration against Hamas, the clash between Israel and Hezbollah in Lebanon has escalated to an armed conflict and there is a possibility that it will turn into a greater regional conflict in the future.
As of today, there is no material impact on the Company’s operations. According to the recent guidelines of the Israeli government, the Company’s offices are open and functioning as usual. However, if the war will escalate and expand further to the Northern border with Lebanon, and the Israeli government will impose additional restrictions on movement and travel, our management and employees’ ability to effectively perform their daily tasks might be temporarily disrupted, which may result in delays in some of our projects.
The Company currently has the supply of raw materials needed for its regular operations. While there may be some possible delays in supply, those are currently not anticipated to be material to the Company’s operations. However, if the war continues for a significant amount of time, this situation may change.
Any hostilities involving Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport between Israel and its trading partners could make it more difficult for us to raise capital, if needed in the future, and adversely affect our operations and results of operations and the market price of our common shares. In addition, to the extent the IIA no longer makes grants similar to those we have received in the past, it could adversely affect our financial results.
Our insurance does not cover damage or losses that may occur as a result of the current war by Israel against Hamas. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business, financial condition, and results of operations.
Further, many Israeli citizens are obligated to perform several days, and in some cases, more, of annual military reserve duty each year until they reach the age of 40 (or older for certain reservists) and, in the event of an escalated military conflict, may be called to active duty. In response to the series of attacks on civilian and military targets in October 2023, there have been significant call-ups of military reservists. During the third quarter of fiscal year 2024, three of our employees in military service have been called up. However, if there will be call-ups for reservists in our Company, our operations could be disrupted by such call-ups.
It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial condition. The ongoing conflict is rapidly evolving and developing, and could disrupt our business and operations, and adversely affect our ability to raise additional funds or sell our securities, among other impacts.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the third quarter of fiscal year 2024, we issued an aggregate of 7,867 restricted common shares to certain of our service providers as compensation in lieu of cash compensation owed to them for services rendered.
We claimed exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, for the foregoing transactions under Section 4(a)(2) of the Securities Act.
| 31.2* | Rule 13a-14(a) Certification of Chief Financial Officer. |
| 32.1** | Certification of | |
| Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | ||
| The following materials from our Quarterly Report on Form 10-Q for the quarter ended | ||
| 104* | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
| * | 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.
| PLURI INC. | ||
| By: | /s/ Yaky Yanay | |
| Yaky Yanay, Chief Executive Officer and President | ||
| (Principal Executive Officer) | ||
| Date: | May 9, 2024 | |
| By: | /s/ Chen Franco-Yehuda | |
| Chen Franco-Yehuda, Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
| Date: | May 9, 2024 | |
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