UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For the quarterly period ended
For the transition period from __________ to __________
Commission file number
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| The |
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit files).
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 | ☐ | ☒ | |
| 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 shares as of the latest practicable date:
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2023
U.S. DOLLARS IN THOUSANDS
(Unaudited)
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2023
U.S. DOLLARS IN THOUSANDS
(Unaudited)
INDEX
i
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Note | March 31, 2023 | June 30, 2022 | ||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||
| Short-term bank deposits | ||||||||||||
| Restricted cash | ||||||||||||
| Prepaid expenses and other current assets | ||||||||||||
| Total current assets | ||||||||||||
| LONG-TERM ASSETS: | ||||||||||||
| Restricted bank deposits | ||||||||||||
| Severance pay fund | ||||||||||||
| Property and equipment, net | ||||||||||||
| Operating lease right-of-use asset | ||||||||||||
| Other long-term assets | ||||||||||||
| Total long-term assets | ||||||||||||
| Total assets | $ | $ | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Note | March 31, 2023 | June 30, 2022 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Trade payables | $ | $ | ||||||||||
| Accrued expenses | ||||||||||||
| Operating lease liability | ||||||||||||
| Accrued vacation and recuperation | ||||||||||||
| Other accounts payable | ||||||||||||
| Total current liabilities | ||||||||||||
| LONG-TERM LIABILITIES | ||||||||||||
| Accrued severance pay | ||||||||||||
| Operating lease liability | ||||||||||||
| Loan from the European Investment Bank (“EIB”) | 4 | |||||||||||
| Total long-term liabilities | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | 3 | |||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Share capital: | 5 | |||||||||||
| Common shares, $ | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Total shareholders’ equity | ||||||||||||
| Non-controlling interests | ||||||||||||
| Total equity | ||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||
| (*) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
PLURI INC. AND ITS SUBSIDIARIES
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, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: participation by the Israeli Innovation Authority (IIA), Horizon Europe and other parties | ||||||||||||||||
| Research and development expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other financial income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Total financial income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss attributed to non-controlling interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss attributed to shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per share: | ||||||||||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (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, 2021 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | ) | |||||||||||||||||||||||||||
| Establishment of Ever After Ltd. (“Ever After”) and non-controlling interest in Ever After | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2022 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| (*) |
| 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, 2022 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | ) | |||||||||||||||||||||||||||
| Establishment of Ever After and non-controlling interest in Ever After | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2022 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| (*) | Less than $1 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (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 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | ) | |||||||||||||||||||||||||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $ | ) | |||||||||||||||||||||||||||
| Modification of warrants to non-controlling interests (note 1c) | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Expiration of warrants in Ever After (note 1c) | - | ( | ) | |||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2023 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| (*) | Less than $1 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
U.S. Dollars in thousands (except share and per share data)
| Shareholders’ Equity | ||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in | Accumulated | Total Shareholder s’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Interests | Equity | ||||||||||||||||||||||
| Balance as of January 1, 2023 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| Share-based compensation to employees, directors, and non-employee consultants | ) | |||||||||||||||||||||||||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $ | ) | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2023 | $ | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
| (*) | Less than $1 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. Dollars in thousands
| Nine months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Share-based compensation to employees, directors and non-employee consultants | ||||||||
| Increase in prepaid expenses and other current assets and other long-term assets | ( | ) | ( | ) | ||||
| Decrease in trade payables | ( | ) | ( | ) | ||||
| Decrease in other accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Decrease in operating lease right-of-use asset and liability | ( | ) | ( | ) | ||||
| Increase in interest receivable on deposits | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ||||||||
| Long term interest payable and exchange rate differences relate to EIB loan | ( | ) | ||||||
| Accrued severance pay, net | ( | ) | ( | ) | ||||
| Net cash used for operating activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | $ | ( | ) | $ | ( | ) | ||
| Proceeds from withdrawal of (investment in) short-term deposits | ( | ) | ||||||
| Proceeds from withdrawal of long-term deposits | ||||||||
| Net cash provided by investing activities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
PLURI INC. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. Dollars in thousands
| Nine months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Issuance of common shares and warrants, net of issuance costs | ||||||||
Proceeds related to investment in subsidiary by non-controlling interest | - | |||||||
| Net cash provided by financing activities | $ | $ | ||||||
| EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $ | ( | ) | $ | ( | ) | ||
| Decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash at the beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Long-term restricted bank deposits | ||||||||
| Total cash, cash equivalents, restricted cash and restricted bank deposits | $ | $ | ||||||
| (a) Supplemental disclosure of non-cash activities: | ||||||||
| Purchase of property and equipment on credit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
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 1: - GENERAL
| a. |
Effective July 26, 2022, Pluri Inc., a Nevada corporation (“Pluri”), changed its name from Pluristem Therapeutics Inc. The Company also changed its symbol on the Nasdaq Global Market and Tel-Aviv Stock Exchange From “PSTI” to “PLUR”.
Pluri was incorporated on May 11, 2001. Pluri has a wholly owned subsidiary, Pluri Biotech Ltd. (the “Subsidiary”), which is incorporated under the laws of the State of Israel. In January 2020, the Subsidiary established a wholly owned subsidiary, Pluristem GmbH (the “German Subsidiary”) which is incorporated under the laws of Germany. In January 2022, the Subsidiary established a new subsidiary, Ever After Foods Ltd. (“Ever After”) which underwent a rebranding and changed its name from Plurinuva Ltd. to Ever After Foods Ltd. Ever After is incorporated under the laws of Israel, which followed the execution of the collaboration agreement with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership (“Tnuva”). Pluri, the Subsidiary, the German Subsidiary and Ever After are referred to as the “Company” or “Pluri.” The Subsidiary, the German Subsidiary and Ever After are referred to as the “Subsidiaries.” |
| b. | The Company is a bio-technology company with an advanced cell-based technology platform, which operates in one business segment. The Company has developed a unique three-dimensional (“3D”) technology platform for cell expansion with an industrial scale in-house Good Manufacturing Practice cell manufacturing facility. Pluri currently uses its technology in the field of regenerative medicine and food tech and plans to utilize it in other industries and verticals that have a need for a mass scale and cost-effective cell expansion platform such as cellular agriculture and biologics. Pluri is focused on the research, development and manufacturing of cell-based products, conducting clinical studies and the business development of cell therapeutics and cell-based technologies providing potential solutions for various industries. |
The Company has incurred an accumulated
deficit of approximately $
As of March 31, 2023, the Company’s cash position (cash and cash
equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled $
9
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 1: - GENERAL (CONT.)
| c. | On January 5, 2022, the Subsidiary entered into definitive agreements (the “Agreements”) with Tnuva pursuant to which the Subsidiary and Tnuva established Ever After, with the purpose of developing cultured meat products. Ever After received exclusive, global, royalty bearing licensing rights to use Pluri’s proprietary technology, intellectual property and knowhow in the field of cultured meat. Tnuva invested $ |
The first warrant (the “First
Warrant”) issued to Tnuva permits Tnuva to purchase up to
The Company determined the fair value of the ordinary shares and the warrants utilizing a Monte Carlo simulation model (Level 3 classification), which incorporates various assumptions including expected stock price volatility, risk-free interest rate, and the expected date of a qualifying event. The Company estimated the volatility of the ordinary shares of Ever After based on data from similar companies operating in the food tech field.
The consideration allocated to the shares issued was divided between the non-controlling interests (“NCI”) and the Company’s shareholders as this transaction is a transaction with the NCI.
The consideration allocated to the warrants was recognized against the NCI.
On August 23, 2022, (“Amendment Date”), Ever After and Tnuva executed an amendment to the warrant agreement (“Amendment”), extending the exercise period of the First Warrant from six months to nine months from the Closing Date. All other terms remained unchanged.
Following the Amendment, the Company recalculated the fair value of the warrants utilizing the same Monte Carlo simulation model (Level 3 classification) before and after the Amendment Date, which incorporates various assumptions including expected stock price volatility, risk-free interest rate, and the expected date of a qualifying event.
10
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 1: - GENERAL (CONT.)
The main assumptions used in the Monte Carlo simulation model are as follows:
| Risk-free interest rate | % | |||
| Expected stock price volatility | % |
The Company estimated the volatility
of the ordinary shares of Ever After based on data from similar companies operating in the food tech field. The additional fair value
determined was $
On November 22, 2022, the warrants in
Ever After expired unexercised and $
NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES
| a. | Unaudited Interim Financial Information |
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair statement have been included (consisting only of normal recurring adjustments). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022. The year-end balance sheet data was derived from the audited consolidated financial statements as of June 30, 2022, but not all disclosures required by U.S. GAAP are included.
Operating results for the nine-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023.
| b. | Significant Accounting Policies |
The significant accounting policies followed in the preparation of these interim unaudited 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.
11
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.)
| d. | Fair value of financial instruments |
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank deposits and other current assets, trade payable and other accounts payable, approximate their fair value because of their generally short-term maturities.
The Company measures its derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
The Company measures its liability pursuant to the Finance Agreement with the EIB based on the aggregate outstanding amount of the combined principal and accrued interest. The Company does not reflect its liability for future royalty payments pursuant to the Finance Agreement with the EIB since the royalty payments are to be paid as a percentage of the Company’s future consolidated revenues, pro-rated to the amount disbursed, beginning in the fiscal year 2024 and continuing up to and including its fiscal year 2030, which cannot be measured at this time.
12
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.)
| e. | New Accounting Pronouncements |
| i. | Recently adopted accounting pronouncements |
ASU 2021-04-Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).
In May 2021, the FASB issued ASU 2021-04 that provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company has adopted ASU 2021-04, which has had an impact on the modification of the warrants to the non-controlling interest in Ever After (see also note 1c).
ASU No. 2021-10-“Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”):
In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021.
The adoption of this standard does not have a material impact on the Company’s consolidated financial statements.
13
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.)
| ii. | Recently issued accounting pronouncements, not yet adopted |
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”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. The guidance also requires increased disclosures. The amendments contained in ASU 2016-13 were originally effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company. In November 2019, the FASB issued ASU No. 2019-10, which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the U.S. Securities and Exchange Commission rules (“SRC”)) to fiscal years beginning after December 15, 2022, including interim periods.
Early adoption is permitted. The Company meets the definition of an SRC and is adopting the deferral period for ASU 2016-13. 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 is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements but does not expect that the adoption of this standard will have a material impact on its consolidated financial statements.
NOTE 3: - COMMITMENTS AND CONTINGENCIES
| a. | As of March 31, 2023, an amount 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 |
As of March 31, 2023, the Company’s
contingent liability in respect to royalties to the IIA amounted to $
14
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 3: - COMMITMENTS AND CONTINGENCIES (CONT.)
| 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 (“cGVHD”). As part of the agreement with Ichilov Hospital, the Company will pay royalties of |
| d. | The Company was awarded a marketing grant of approximately $ |
NOTE 4: - LOAN FROM THE EIB
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 (the “Loan”)
in the amount of up to €
The tranches will be treated independently,
each with its own interest rate and maturity period. The annual interest rate is
In addition to any interest payable
on the Loan, the EIB is entitled to receive royalties from future revenues for a period of seven years starting at the beginning of fiscal
year 2024 and continuing up to and including its fiscal year 2030 in an amount equal to between
During June 2021, Pluri received the first tranche in an amount of
€
15
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 4: - LOAN FROM THE EIB (CONT.)
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 other banks and financing entities for other loans.
NOTE 5: - SHAREHOLDERS’ EQUITY
Pursuant to a shelf registration statement
on Form S-3 declared effective by the SEC on July 23, 2020, in July 2020 the Company entered into an Open Market Sale Agreement (“ATM
Agreement”) with Jefferies LLC (“Jefferies”), which provided that, upon the terms and subject to the conditions and
limitations in the ATM Agreement, the Company could elect, from time to time, to offer and sell common shares having an aggregate offering
price of up to $
On September 21, 2022, as a result of
General Instruction I.B.6 of Form S-3, and in accordance with the terms of the ATM Agreement, the Company reduced the amount available
to be sold under the ATM Agreement to a maximum aggregate offering price of up to $
During the nine-month period ended March 31, 2023, the Company did not sell any common shares under the ATM Agreement.
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
16
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.)
| a. | Options to consultants: |
A summary of the options to non-employee consultants under the Company’s equity incentive plans is as follows:
| Nine months ended March 31, 2023 | ||||||||||||||||
| Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value Price | |||||||||||||
| Options outstanding at the beginning of the period | $ | $ | ||||||||||||||
| Options forfeited | ( | ) | $ | |||||||||||||
| Options outstanding at the end of the period | $ | $ | ||||||||||||||
| Options exercisable at the end of the period | $ | $ | ||||||||||||||
| Options unvested | $ | |||||||||||||||
| Options vested and expected to vest | $ | $ | ||||||||||||||
Compensation expenses recorded in General
and administration expenses related to options granted to consultants for the nine months ended March 31, 2023 and 2022 were $
| b. | Options to employees: |
A summary of the options to employees under the Company’s equity incentive plans is as follows:
| Nine months ended March 31, 2023 | ||||||||||||||||
| Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value Price | |||||||||||||
| Options outstanding at the beginning of the period | $ | $ | ||||||||||||||
| Options granted | ||||||||||||||||
| Options outstanding at the end of the period | $ | $ | ||||||||||||||
| Options exercisable at the end of the period | $ | $ | ||||||||||||||
| Options unvested | $ | |||||||||||||||
| Options vested and expected to vest | $ | $ | ||||||||||||||
17
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.)
On December 14, 2022, Yaky Yanay, the Company’s Chief Executive
Officer, agreed to forgo, starting January 1, 2023, $
Compensation expenses recorded in general and administration expenses
related to options granted to the Chief Executive Officer for the nine and three months ended March 31, 2023 were $
| c. | Restricted shares units (“RSUs”) to employees, directors and consultants: |
| 1. | RSUs to employees and directors: |
The following table summarizes the activity related to RSUs granted to employees and directors under the Company’s equity incentive plans for the nine-month periods ended March 31, 2023 and 2022:
| Nine months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Number | ||||||||
| Unvested at the beginning of the period | ||||||||
| Granted | ||||||||
| Forfeited | ( | ) | ( | ) | ||||
| Vested | ( | ) | ( | ) | ||||
| Unvested at the end of the period | ||||||||
| Expected to vest after the end of the period | ||||||||
18
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 RSUs granted to employees and directors were recorded as follows:
| Nine months ended March 31, | Three months ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Research and development expenses | $ | $ | $ | ( | ) | $ | ||||||||||
| General and administrative expenses | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Unamortized compensation expenses related
to RSUs granted to employees and directors is approximately $
| 2. | RSUs to consultants: |
The following table summarizes the activity related to unvested RSUs granted to consultants under the Company’s equity incentive plans for the nine-month periods ended March 31, 2023 and 2022:
| Nine months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Number | ||||||||
| Unvested at the beginning of the period | ||||||||
| Vested | ( | ) | ( | ) | ||||
| Unvested at the end of the period | ||||||||
Compensation expenses related to RSUs granted to consultants were recorded as follows:
| Nine months ended March 31, | Three months ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Research and development expenses | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
19
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 6: - SUBSEQUENT EVENT
| a. | On
April 19, 2023, the Company received a letter (the “Notice”) from The Nasdaq
Stock Market (“Nasdaq”) advising that for 30 consecutive trading days preceding the date of the Notice, the bid price of
the Company’s common shares had closed below the $ |
Under Nasdaq Listing Rule 5810(c)(3)(A),
if during the 180 calendar day period following the date of the Notice the closing bid price of the common shares is at or above $
If the Company does not regain compliance with the MBPR by the end of the Compliance Period, then under Nasdaq Listing Rule 5810(c)(3)(A)(i), the Company may transfer to The Nasdaq Capital Market, provided that the Company meets the applicable market value of publicly held shares requirement for continued listing as well as all other standards for initial listing of the common shares on the Nasdaq Capital Market (other than the MBPR), and notifies Nasdaq of the Company’s intention to cure the deficiency. Following a transfer to The Nasdaq Capital Market, the Company may be afforded an additional 180-days to regain compliance with the MBPR.
The Company intends to monitor the closing bid price of its common shares and may, if appropriate, consider implementing available options to regain compliance with the MBPR under the Nasdaq Listing Rules, including initiating a reverse stock split.
| b. | On May 1, 2023, following the approval by the Company’s
shareholders at its annual meeting, the Company increased its authorized common shares from |
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. Forward-looking statements may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. These statements are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Such forward-looking statements appear in this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and may appear elsewhere in this Quarterly Report on Form 10-Q and include, but are not limited to, statements regarding the following:
| ● | the expected development and potential benefits from our products in regenerative medicine, biologics and food tech, as well as potentially in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform; |
| ● | the prospects of entering into additional license agreements, or other forms of cooperation with other companies, research organizations and medical institutions, including, without limitation Tnuva (as defined below); |
| ● | our pre-clinical and clinical study plans, including timing of initiation, expansion, enrollment, results, and conclusion of trials; |
| ● | achieving regulatory approvals; |
| ● | receipt of future funding from the Israel Innovation Authority, or IIA, the European Union’s Horizon programs, as well as grants from other independent third parties; |
| ● | developing capabilities for new clinical indications of placenta expanded, or PLX, cells and new products; |
| ● | our expectation to 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 business; |
| ● | our expectations regarding the impact of the COVID-19 pandemic, including on our clinical trials and operations; and |
| ● | the Israeli government is currently pursuing extensive changes to Israel’s judicial system, which may negatively impact the business environment in Israel with reluctance for investments or transactions as well as lead to increased currency fluctuations, downgrades in credit rating and increased interest rates. |
21
Our business and operations are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report.
In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would not suggest different conclusions. Also, historic results referred to in this periodic report would be interpreted differently in light of additional research, clinical and preclinical trials results. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, or the 2022 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 on Form 10-Q, the terms “we”, “us”, “our”, the “Company” and “Pluri” mean Pluri Inc. and our wholly owned subsidiaries, Pluri Biotech Ltd. and Pluristem GmbH, and our subsidiary Ever After Foods Ltd., or Ever After, formerly known as Plurinuva Ltd., unless otherwise indicated or as otherwise required by the context.
Overview
We are a biotechnology 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 and food tech and plan to utilize it in other industries and verticals that have a need for our mass scale and cost-effective cell expansion platform.
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 inflammatory, muscle injuries and hematologic conditions. Our placental expanded, or PLX, 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.
Our operations are focused on the research, development and manufacturing of cells and cell-based products, conducting clinical studies and the business development of cell therapeutics and cell-based technologies, such as our collaboration with Tnuva Food Industries – Agricultural Cooperative in Israel Ltd., through its fully owned subsidiary, Tnuva Food-Tech Incubator (2019), Limited Partnership, or Tnuva, to use our technology to establish a cultivated food platform and the recent collaboration agreement we signed with a leading European manufacturer of active pharmaceutical ingredients, or APIs, to use our expansion technology, which aims to revolutionize the production of biologics by enabling a cost-effective, sustainable and cruelty-free ingredient.
We expect to demonstrate a real-world impact and value from our cell-based technology platform, our current PLX pipeline and from other cell-based product candidates that may be developed based on our platform. Our business model for commercialization and revenue generation includes, but is not limited to, licensing deals, joint ventures, partnerships, joint development agreements and direct sale of our products.
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In the pharmaceutical area, we have focused on a number of indications utilizing 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, Chronic Graft versus Host Disease and a potential treatment for Acute Radiation Syndrome. Some of these studies have been completed while others are still ongoing. We believe that each of these indications is a severe unmet medical need.
In April 2023, we unveiled a breakthrough in cell manufacturing that potentially solves one of the biggest hurdles facing cell-based industries: cost-effective, industrial scale cell manufacturing. PluriMatrix, built upon our platform 3D cell expansion technology, significantly scales high-quality cell production, potentially having a catalytic impact across numerous industries that require mass-scale cell production including pharma, biologics, foodtech and agri-tech.PluriMatrix is also used by our majority-owned subsidiary Ever After, to produce cultivated meat ..
Food Tech
On February 24, 2022, we announced the closing of the joint venture pursuant to joint venture agreement, or the Joint Venture Agreement, with Tnuva through the Subsidiary. Under the Joint Venture Agreement, we established a new company, Ever After, with the purpose of developing cultivated meat products of all types and kinds.
Pursuant to the Joint Venture Agreement, Tnuva entered into a share purchase agreement, or the SPA, with Ever After and the Subsidiary, pursuant to which Ever After issued on the closing date of the SPA, or the Closing Date, 187,500 ordinary shares, representing 15.79% of its share capital, to Tnuva, as well as a warrant to purchase additional shares of Ever After, in consideration of an aggregate of $7.5 million in cash.
In December 2022, we reported that our joint venture successfully completed proof of concept in its development of cultivated meat based on our cell-based technology platform.
Technology Collaboration the Biologics Field
In September 2022, we entered into a collaboration agreement with a leading European manufacturer of APIs for liver and gastroenterological diseases, or API Collaboration. As part of our collaboration, our platform is being utilized to develop and manufacture a unique biologic API used in drugs that treat liver and gastroenterological diseases. The current source of this API is derived from animals that are sacrificed during the extraction process. The joint goal of the collaboration is to grow the specific cells needed for this API in our 3D cell expansion bioreactor systems that secrete the biological molecule without harming animals. As of March 31, 2023 we recorded revenues of $160,000 relates to API Collaboration.
We believe that proof of concept with this agreement and APIs will open opportunities for us to serve additional API manufacturers in the rapidly growing biologics market.
23
RESULTS OF OPERATIONS – THREE AND NINE MONTHS ENDED MARCH 31, 2023 COMPARED TO THREE AND NINE MONTHS ENDED MARCH 31, 2022.
Revenues
Revenues for each of the nine-month and three-month periods ended March 31, 2023 were $176,000 and $87,000, respectively, as compared to $234,000 in revenues during the nine-month and three-month periods ended March 31, 2022. Revenues for the nine-month and three-month periods ended March 31, 2023 were mainly related to our API Collaboration.
Research and Development Expenses, Net
Research and development, or R&D, expense, net (costs less participation by the IIA, Horizon 2020, Horizon Europe and other parties) for the nine-month period ended March 31, 2023 decreased by 36% from $19,016,000 for the nine-month period ended March 31, 2022 to $12,223,000. The decrease is mainly attributed to: (1) a decrease in clinical studies subcontractor expenses following the completion of our critical limb ischemia and ARDS associated with COVID-19 studies and the end of enrollment of our muscle regeneration following hip fracture study in November 2021, (2) a decrease in materials purchases in accordance with our manufacturing needs and plan, (3) a decrease in salaries and related expenses as part of our efficiency cost-reduction plan, specifically a reduction of 29 R&D employees (107 on March 31, 2023, compared to 136 on March 31, 2022), (4) a decrease in share-based compensation expenses and (5) higher participation by the European Union with respect to the Horizon 2020 grants, which relate to our critical limb ischemia and muscle regeneration following hip fracture studies.
R&D expense, net (costs less participation by the IIA, Horizon 2020, Horizon Europe and other parties) for the three-month period ended March 31, 2023 decreased by 32% from $6,156,000 for the three-month period ended March 31, 2022 to $4,167,000. The decrease is mainly attributed to: (1) a decrease in clinical studies subcontractor expenses following the completion of our critical limb ischemia and ARDS associated with COVID-19 studies and the end of enrollment of our muscle regeneration following hip fracture study in November 2021, (2) a decrease in salaries and related expenses as part of our efficiency cost reduction plan, specifically a reduction of 29 R&D employees (107 on March 31, 2023, compared to 136 on March 31, 2022) and (3) a decrease in share-based compensation expenses.
General and Administrative Expenses
General and administrative expenses for the nine-month period ended March 31, 2023 decreased by 38% from $13,929,000 for the nine-month period ended March 31, 2022 to $8,655,000. The decrease is mainly attributed to a decrease in share-based compensation expenses related to market based vesting conditioned restricted stock units, or RSUs, granted to our Chief Executive Officer and Chairman which was recorded as an expense of $7,283,000 between September 11, 2020 and October 30, 2021, decrease in share-based compensation expenses related to allocation of shares of Ever After to our Chief Executive Officer, Chief Financial Officer and Chairman of our board of directors pursuant to their employment or consulting agreement, employee terminations and RSU expenses amortization over time. Offset by an increase in share-based compensation expenses related to the amount of RSUs granted to employees.
General and administrative expenses for the three-month period ended March 31, 2023 decreased by 34% from $4,553,000 for the three-month period ended March 31, 2022 to $3,020,000. The decrease is mainly attributed to a decrease in share-based compensation expenses related to allocation of shares of Ever After to our Chief Executive Officer, Chief Financial Officer and chairman of our board of directors pursuant to their employment or consulting agreement, offset by an increase in share-based compensation expenses related to the amount of RSUs granted to employees.
Other Financial Income (Expenses), net
Other financial income (expenses) decreased from $1,097,000 in financial income for the nine-month period ended March 31, 2022 to $956,000 in financial expenses for the nine-month period ended March 31, 2023. This decrease is mainly attributable to expenses relating to exchange rate differences related to the EIB loan provided to us in June 2021 pursuant to the finance agreement executed with the EIB, or the EIB Finance Agreement. During the nine-month period ended March 31, 2023, the strength of the Euro against the U.S. dollar, increased by 4% compared to a decrease of 6% during the nine-month period ended March 31, 2022.
Other financial income (expenses) decreased from $780,000 in financial income for the three-month period ended March 31, 2022 to $441,000 in financial expenses for the three-month period ended March 31, 2023. This decrease is mainly attributable to expenses from exchange rate differences related to the EIB loan provided to us in June 2021 pursuant to the EIB Finance Agreement. During the three-month period ended March 31, 2023, the strength of the Euro against the U.S. dollar, increased by 2% compared to a decrease of 2% during the three-month period ended March 31, 2022.
24
Interest Expenses
Interest expenses decreased from $676,000 for the nine-month period ended March 31, 2022 to interest expenses of $623,000 for the nine-month period ended March 31, 2023. This decrease is attributable solely to exchange rate differences due to the strength of the Euro against the U.S. dollar.
Interest expenses decreased from $223,000 for the three-month period ended March 31, 2022 to interest expenses of $217,000 for the three-month period ended March 31, 2023. This decrease is attributable solely to exchange rate differences due to the strength of the Euro against the U.S. dollar.
Net Loss
Net loss for nine-month and three-month periods ended March 31, 2023 was $22,281,000 and $7,759,000, respectively, as compared to net loss of $32,290,000 and $9,918,000 for the nine-month and three-month periods ended March 31, 2022. The decrease was due to a decrease in general and administrative expenses and research and development expenses, as a result of our efficiency cost reduction plan and the implementation of our new business strategy, alongside the completion or termination of several clinical studies (in critical limb ischemia, ARDS associated with COVID 19, incomplete recovery following bone marrow transplantation and completion of enrollment of muscle regeneration following hip fracture). Net loss per share attributed to shareholders for the nine-month and three-month periods ended March 31, 2023 was $0.63 and $0.19, respectively, as compared to $1.00 and $0.31 for the nine-month and three-month periods ended March 31, 2022. We had net loss attributed to our non-controlling interest in Ever After for the nine-month and three-month periods ended March 31, 2023 of $419,000 and $135,000, respectively.
For the nine-month and three-month periods ended March 31, 2023 and 2022, we had weighted average common shares outstanding of 35,217,037, 39,947,602, and 32,131,503, 32,261,628, respectively, which were used in the computations of net loss per share for the nine and three-month periods.
The increase in weighted average common shares outstanding reflects the issuance of additional shares pursuant to a private placement offering we conducted in December 2022, or the December 2022 Private Placement, and the issuance of additional shares upon the vesting of RSUs issued to directors, employees and consultants.
Liquidity and Capital Resources
As of March 31, 2023, our total current assets were $46,687,000 and total current liabilities were $5,377,000. On March 31, 2023, we had a working capital surplus of $41,310,000, total equity of $20,881,000, out of which $1,817,000 is attributed to the non-controlling interest in Ever After, and an accumulated deficit of $393,125,000.
Our cash and cash equivalents as of March 31, 2023 amounted to $3,677,000, compared to $23,791,000 as of March 31, 2022, and compared to $9,772,000 as of June 30, 2022. Cash balances changed in the nine months ended March 31, 2023 and 2022 for the reasons presented below.
Net cash used for operating activities was $19,960,000 in the nine months ended March 31, 2023, compared to $28,074,000 in the nine months ended March 31, 2022. The decrease is mainly attributed to a decrease in net loss following the completion of clinical trials and the implementation of our cost reduction and efficiency plan that we initiated in order to align with the change in our business strategy. Cash used in operating activities in the nine months ended March 31, 2023 and 2022 consisted primarily of payments of fees to our suppliers, subcontractors, professional services providers and consultants, and payments of salaries to our employees, partially offset by grants from the IIA, the EU’s Horizon 2020 and 2022 programs, Israel’s Ministry of Economy and other research grants.
Investing activities provided cash of $5,374,000 in the nine months ended March 31, 2023, compared to cash used of $14,738,000 for the nine months ended March 31, 2022. The investing activities in the nine-month period ended March 31, 2023 consisted primarily of the withdrawal of $5,539,000 of short-term deposits. The investing activities in the nine-month period ended March 31, 2022 consisted primarily of the investment of $4,233,000 in short-term deposits and proceeds of $19,052,000 from withdrawal of long-term deposits.
Financing activities provided cash of $8,034,000 in the nine months ended March 31, 2023, compared to $7,500,000 for the nine months ended March 31, 2022. The financing activities in the nine-month period ended March 31, 2023 related to issuances of common shares and warrants, net of issuance cost, that were paid in cash, in the December 2022 Private Placement. The financing activities in the nine-month period ended March 31, 2022 were related to proceeds of $7,500,000 we received from Tnuva as an investment in Ever After.
25
Between December 13, 2022 and December 27, 2022, we entered into a series of securities purchase agreements with several purchasers for an aggregate of 8,155,900 common shares and warrants, or the Warrants, to purchase up to 8,155,900 common shares. On December 13, 2022, we executed securities purchase agreements to sell, at a purchase price of $1.03 per share, up to 5,579,883 common shares and Warrants to purchase up to 5,579,833 common shares, with an exercise price of $1.03 per share and a term of three years. On December 14, 2022, we executed securities purchase agreements to sell, at a purchase price of $1.05 per share, up to 2,068,517 common shares and Warrants to purchase up to 2,068,517 common shares, with an exercise price of $1.05 per share and a term of three years. On December 15, 2022, we executed securities purchase agreements to sell, at a purchase price of $1.06 per share, up to 237,500 common shares and Warrants to purchase up to 237,500 common shares, with an exercise price of $1.06 per share and a term of three years. On December 19, 2022, we executed a securities purchase agreement to sell, at a purchase price of $1.09 per share, up to 135,000 common shares and Warrants to purchase up to 135,000 common shares, with an exercise price of $1.09 per share and a term of three years. On December 27, 2022, we executed a securities purchase agreement to sell, at a purchase price of $1.12 per share, up to 135,000 common shares and Warrants to purchase up to 135,000 common shares, with an exercise price of $1.12 per share and a term of three years. The Warrants sold in the December 2022 Private Placement will be exercisable upon the later of six months from their issuance date, or from the date the authorized shares increased. As March 31, 2023, the Company issued 8,155,900 common shares and warrants that relate to the December 2022 Private Placement and received $8,034,000 as of that date net of $435 from issuance expenses.
In addition, the purchasers in the December 2022 Private Placement agreed to execute proxies permitting our Chief Executive Officer and Chief Financial Officer to vote the securities purchased in the December 2022 Private Placement in favor of any shareholder vote relating to a future increase of our authorized shares. Pursuant to the securities purchase agreements executed with the purchasers, we agreed to hold a meeting of shareholders within 200 days of the execution of the securities purchase agreements for the purpose of increasing our authorized shares.
On April 27, 2023, our shareholders approved an amendment to our articles of incorporation of to increase the number of authorized common shares from 60,000,000 shares to 300,000,000 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) 334,821 RSUs, vesting ratably each month, and (ii) options to purchase 334,821 common shares, vesting ratably each month, with a term of 3 years, at an exercise price of $1.12 per share. In addition, the Board of Directors also agreed to grant Mr. Yanay options to purchase 1,500,000 common shares, with a term of 3 years, with the following terms: (i) options to purchase 500,000 common shares at an exercise price of $1.56 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 500,000 common shares at an exercise price of $2.08 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase 500,000 common shares at an exercise price of $2.60 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.
On July 16, 2020, we entered into an Open Market Sale AgreementSM, or the ATM Agreement, with Jefferies LLC, or Jefferies, pursuant to which we were able to issue and sell our common shares having an aggregate offering price of up to $75,000,000 from time to time through Jefferies. Upon entering into the ATM Agreement, we filed a new shelf registration statement on Form S-3, which was declared effective by the SEC on July 23, 2020.
On September 21, 2022, as a result of General Instruction I.B.6 of Form S-3, and in accordance with the terms of the Sales Agreement, we reduced the amount available to be sold under the ATM Agreement to a maximum aggregate offering price of up to $11,800,000 of our common shares from time to time through Jefferies.
During the nine-month period ended March 31, 2023, we did not sell of our any common shares under the ATM Agreement.
26
In April 2020, we and our subsidiaries, Pluri Biotech Ltd. and Pluristem GmbH, executed the EIB Finance Agreement for non–dilutive funding of up to €50 million in the aggregate, payable in three tranches. The proceeds from the EIB Finance Agreement were intended to support our research and development in the European Union to further advance our regenerative cell therapy platform, and to bring the products in our pipeline to market. The term of the project was three years commencing on January 1, 2020.
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, 2023, the interest accrued was in the amount of €1,463,000. 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 March 31, 2023, total grants obtained from the IIA aggregated to approximately $27,760,000 and total royalties paid and accrued amounted to $169,000.
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 pharma, agriculture, and aquaculture industries. CRISPR-IL is funded by the IIA with a total budget of approximately $10,000,000 of which, an amount of approximately $480,000 was a direct grant allocated to us, for the initial period of 18 months. During October 2021, we received an approval for an additional grant of approximately $583,000 from the IIA pursuant to the CRISPR-IL consortium program, for an additional period of eighteen months. During January 2023, we received approval for an extension of an additional 2 months to finish the program until June 30, 2023. The CRISPR-IL consortium program does not include any obligation to pay royalties.
Through March 31, 2023, we received total grants of approximately $775,000 in cash from the IIA pursuant to the CRISPR-IL consortium program, out of which an amount of $80,000 was received during the nine-months ended March 31, 2023.
As of March 31, 2023, we received total grants of approximately $6,614,000 in cash from the European Union research and development consortiums pursuant to the Horizon programs. During December 2022, we received an approval for an additional budget allocation of approximately $735,000 to us, relates to PLX-PAD program for muscle recovery following surgery for hip fracture. The full amount was received by us in April 2023.
On September 6, 2022, we announced that a €7.5 million non-dilutive grant from the European Union’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. Final approval of the grant is subject to completion of the consortium agreement. An amount of approximately Euro 500,000 (approximately $533,745) will be a direct grant that will be allocated to us. Through March 31, 2023, we received a payment of approximately $185,000 in cash, which relates to the PROTO program.
27
The Phase I/II study will be carried out by Charité, together with us and other members of the international consortium under the 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 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 the 2022 Annual Report.
We have an effective Form S-3 registration statement (File No. 333-239890), filed under the Securities Act of 1933, as amended, with the SEC using a “shelf” registration process. Under this shelf registration process, we may, from time to time, sell our common shares, preferred shares and warrants to purchase common shares, and units of two or more of such securities in one or more offerings up to a total dollar amount of $250,000,000. As of February 13, 2022, other than the $11,800,000 of common shares we are eligible to sell pursuant to the ATM Agreement, and the $30,000,000 of common shares we sold in a registered direct offering in February 2021, no securities have been sold pursuant to our effective Form S-3 registration statement.
Outlook
We have accumulated a deficit of $393,125,000 since our inception in May 2001. We do not expect to generate any significant revenues from sales of products in the next twelve months. We expect to generate revenues, from the sale of licenses to use our technology or products, but in the short and medium terms will unlikely exceed our costs of operations.
We may 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 study activities.
We are continually looking for sources of funding, including non-diluting sources such as collaboration with other companies via licensing agreements, joint venture and partnerships, research grants such as the IIA grants and the European Union grant, and sales of our common shares.
We believe that we have sufficient cash to fund our operations for at least the next twelve months.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures - We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosures.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO 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 CEO and CFO concluded that our disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting - There has been no change in our internal control over financial reporting during the third quarter of fiscal year 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2022 Annual Report, which could materially affect our business, financial condition or future results.
We could fail to maintain the listing of our common shares on the Nasdaq Global Market, which could harm the liquidity of our shares and our ability to raise capital or complete a strategic transaction.
On April 19, 2023, we received a letter, or Notice, from The Nasdaq Stock Market, or Nasdaq, advising us that for 30 consecutive trading days preceding the date of the Notice, the bid price of our common shares had closed below the $1.00 per share minimum required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1), or MBPR. The Notice has no effect on the listing of our common shares at this time, and our common shares continue to trade on Nasdaq under the symbol “PLUR.”
Under Nasdaq Listing Rule 5810(c)(3)(A), if during the 180 calendar days period following the date of the Notice the closing bid price of our common shares is at or above $1.00 for a minimum of 10 consecutive business days, we will regain compliance with the MBPR and our common shares will continue to be eligible for listing on Nasdaq, absent noncompliance with any other requirement for continued listing. The compliance period, or Compliance Period, to comply with the MBPR will expire on October 16, 2023.
If we do not regain compliance with the MBPR by the end of the Compliance Period, then under Nasdaq Listing Rule 5810(c)(3)(A)(i) we may transfer to The Nasdaq Capital Market, provided that we meet the applicable market value of publicly held shares requirement for continued listing as well as all other standards for initial listing of our common shares on the Nasdaq Capital Market (other than the MBPR) and notify Nasdaq of our intention to cure the deficiency. Following a transfer to The Nasdaq Capital Market, we may be afforded an additional 180-days to regain compliance with the MBPR.
As of the date of this filing, our common shares are trading below $1.00 per share. If we do not regain compliance with the MBPR by the end of the Compliance Period (or the Compliance Period as may be extended), our common shares will be subject to delisting. A delisting from Nasdaq would likely result in a reduction in some or all of the following, each of which could have a material adverse effect on shareholders:
| ● | the liquidity of our common shares; |
| ● | the market price of our common shares; |
| ● | the availability of information concerning the trading prices and volume of our common shares; |
| ● | our ability to obtain financing or complete a strategic transaction; |
| ● | the number of institutional and other investors that will consider investing in our common shares; and |
| ● | the number of market markers or broker-dealers for our common shares. |
We intend to monitor the closing bid price of our common shares and may, if appropriate, consider implementing available options to regain compliance with the MBPR under the Nasdaq Listing Rules, including initiating a reverse stock split.
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PART II—OTHER INFORMATION
| Item 6. | Exhibits. | |
| 3.1* | Composite Copy of the Company’s Articles of Incorporation as amended on May 1, 2023. | |
| 3.2* | Composite Copy (marked) of the Company’s Articles of Incorporation as amended on May 1, 2023. | |
| 31.1* | Rule 13a-14(a) Certification of Chief Executive Officer. | |
| 31.2* | Rule 13a-14(a) Certification of Chief Financial Officer. | |
| 32.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | |
| 32.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | |
| 101* | The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Interim Condensed Consolidated Balance Sheets, (ii) the Interim Condensed Consolidated Statements of Operations, (iii) the Interim Condensed Statements of Changes in Shareholders’ Equity, (iv) the Interim Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Interim Condensed Consolidated Financial Statements, tagged as blocks of text and in detail. | |
| 104* | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished herewith. |
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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, 2023 | |
| By: | /s/ Chen Franco-Yehuda | |
| Chen Franco-Yehuda, Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
||
| Date: | May 9, 2023 |
31
Exhibit 3.1
PLURI INC.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
As amended as of May 1, 2023
FIRST
The name of this corporation is PLURI INC.
SECOND
Its principal office in the State of Nevada is located at 502 East John Street, Carson City, Nevada, 89706. The name and address of its resident agent is CSC Services of Nevada, Inc., at the above address.
THIRD
The purpose or purposes for which the corporation is organized:
To engage in and carry on any lawful business activity or trade, and any activities necessary, convenient, or desirable to accomplish such purposes, not forbidden by law or by these articles of incorporation.
FOURTH
The aggregate number of shares which the corporation shall have authority to issue is: (i) Three Hundred Million (300,000,000) shares of Common Stock, par value $0.00001 each (the “Common Stock”), and (ii) One Million (1,000,000) shares of preferred stock, par value $0.00001 each, which may be issued in one or more series at the discretion of the Board of Directors (the “Preferred Stock”). The Board of Directors is hereby vested with authority to fix by resolution or resolutions the designations and the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of shares of Preferred Stock, and to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series. All shares of any one series shall be alike in every particular except as otherwise provided by these Articles of Incorporation or the Nevada Revised Statues.
FIFTH
The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the bylaws of this corporation.
There are two members of the Board of Directors at the date of filing these Restated Articles of Incorporation and their names and postal addresses are:
| NAME | POST OFFICE ADDRESS | |
| Harvey M.J. Lawson | 464 Somerset St., North Vancouver, B.C., Canada V7N1G3 | |
| John Carl Guterres | #1408 - 1327 E. Keith Rd., North Vancouver, B.C., Canada V7J 3T5 |
The number of members of the Board of Directors shall not be less than one nor more than thirteen.
SIXTH
The capital stock, after the amount of the subscription price, or par value, has been paid in shall not be subject to assessment to pay the debts of the corporation.
SEVENTH
The corporation is to have perpetual existence.
EIGHTH
In furtherance, and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders, to make, alter, amend or repeal the bylaws of the corporation.
To fix the amount to be reserved as working capital over and above its capital stock paid in, to authorize and cause to be executed mortgages and liens upon the real and personal property of this corporation.
To authorize the guaranty by the corporation of the securities, evidences of indebtedness and obligations of other persons, corporations or business entities.
To set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve.
By resolution passed by a majority of the whole board, to designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the corporation, which, to the extent provided in the resolution or in the bylaws of the corporation, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the bylaws of the corporation or as may be determined from time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of stockholders holding stock entitling them to exercise at least a majority of the voting power given at a stockholders’ meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the board of directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of directors deem expedient and for the best interests of the corporation.
All the corporate powers of the corporation shall be exercised by the board of directors except as otherwise herein or in the bylaws or by law.
NINTH
Meeting of stockholders may be held outside the State of Nevada, if the bylaws so provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Nevada at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation.
2
TENTH
This corporation reserves the right to amend alter, change or repeal any provision contained in the Restated Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Restated Articles of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.
ELEVENTH
The corporation shall indemnify its officers, directors, employees and agents to the full extent permitted by the laws of the State of Nevada.
A director or officer of the corporation shall not be personally liable to the corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, but this article shall not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law or (ii) the unlawful payment of dividends. Any repeal or modification of this article by stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification.
TWELFTH
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys’ fees, judgments, fines, and amounts paid or to be paid in a settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.
Without limiting the application of the foregoing, the board of directors may adopt by-laws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the corporation to purchase or maintain insurance on behalf of any person who is or was a director or officer.
3
Exhibit 3.2
PLURISTEM THERAPEUTICS
PLURI INC.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
As amended as of July
2, 2020 May 1, 2023
FIRST
The name of this corporation
is PLURISTEM THERAPEUTICS PLURI INC.
SECOND
Its principal office in the State of Nevada is located at 502 East John Street, Carson City, Nevada, 89706. The name and address of its resident agent is CSC Services of Nevada, Inc., at the above address.
THIRD
The purpose or purposes for which the corporation is organized:
To engage in and carry on any lawful business activity or trade, and any activities necessary, convenient, or desirable to accomplish such purposes, not forbidden by law or by these articles of incorporation.
FOURTH
The aggregate number of shares which the corporation
shall have authority to issue is: (i) Sixty Million (60,000,000) Three Hundred Million (300,000,000) shares
of Common Stock, par value $0.00001 each (the “Common Stock”), and (ii) One Million (1,000,000) shares
of preferred stock, par value $0.00001 each, which may be issued in one or more series at the discretion of the Board of Directors (the “Preferred
Stock”). The Board of Directors is hereby vested with authority to fix by resolution or resolutions the designations and
the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions
thereof, including without limitation the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of
any series of shares of Preferred Stock, and to fix the number of shares constituting any such series, and to increase or decrease the
number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares
of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption
of the resolution or resolutions originally fixing the number of shares of such series. All shares of any one series shall be alike
in every particular except as otherwise provided by these Articles of Incorporation or the Nevada Revised Statues.
FIFTH
The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the bylaws of this corporation.
There are two members of the Board of Directors at the date of filing these Restated Articles of Incorporation and their names and postal addresses are:
| NAME | POST OFFICE ADDRESS | |
| Harvey M.J. Lawson | 464 Somerset St., North Vancouver, B.C., Canada V7N1G3 | |
| John Carl Guterres | #1408 - 1327 E. Keith Rd., North Vancouver, B.C., Canada V7J 3T5 |
The number of members of the Board of Directors shall not be less than one nor more than thirteen.
SIXTH
The capital stock, after the amount of the subscription price, or par value, has been paid in shall not be subject to assessment to pay the debts of the corporation.
SEVENTH
The corporation is to have perpetual existence.
EIGHTH
In furtherance, and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders, to make, alter, amend or repeal the bylaws of the corporation.
To fix the amount to be reserved as working capital over and above its capital stock paid in, to authorize and cause to be executed mortgages and liens upon the real and personal property of this corporation.
To authorize the guaranty by the corporation of the securities, evidences of indebtedness and obligations of other persons, corporations or business entities.
To set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve.
By resolution passed by a majority of the whole board, to designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the corporation, which, to the extent provided in the resolution or in the bylaws of the corporation, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the bylaws of the corporation or as may be determined from time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of stockholders holding stock entitling them to exercise at least a majority of the voting power given at a stockholders’ meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the board of directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of directors deem expedient and for the best interests of the corporation.
All the corporate powers of the corporation shall be exercised by the board of directors except as otherwise herein or in the bylaws or by law.
NINTH
Meeting of stockholders may be held outside the State of Nevada, if the bylaws so provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Nevada at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation.
2
TENTH
This corporation reserves the right to amend alter, change or repeal any provision contained in the Restated Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Restated Articles of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.
ELEVENTH
The corporation shall indemnify its officers, directors, employees and agents to the full extent permitted by the laws of the State of Nevada.
A director or officer of the corporation shall not be personally liable to the corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, but this article shall not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law or (ii) the unlawful payment of dividends. Any repeal or modification of this article by stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification.
TWELFTH
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys’ fees, judgments, fines, and amounts paid or to be paid in a settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.
Without limiting the application of the foregoing, the board of directors may adopt by-laws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the corporation to purchase or maintain insurance on behalf of any person who is or was a director or officer.
3
Exhibit 31.1
CERTIFICATION
I, Yaky Yanay, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Pluri Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 9, 2023
| /s/ Yaky Yanay | |
| Yaky Yanay | |
| Chief Executive Officer and President | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
I, Chen Franco-Yehuda, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Pluri Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 9, 2023
| /s/ Chen Franco-Yehuda | |
| Chen Franco-Yehuda | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q of Pluri Inc., or the Company, for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Yaky Yanay, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, that, to my knowledge:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 9, 2023
| /s/ Yaky Yanay | |
| Yaky Yanay | |
| Chief Executive Officer and President | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q of Pluri Inc., or the Company, for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Chen Franco-Yehuda, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, that, to my knowledge:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 9, 2023
| /s/ Chen Franco-Yehuda | |
| Chen Franco-Yehuda | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Interim Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common shares, par value per share (in Dollars per share) | $ 0.00001 | $ 0.00001 |
| Common shares, authorized | 60,000,000 | 60,000,000 |
| Common shares, issued | 41,072,224 | 32,507,491 |
| Common shares, outstanding | 41,072,224 | 32,507,491 |
Interim Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||||
| Revenues | $ 87 | $ 234 | $ 176 | $ 234 |
| Operating expenses: | ||||
| Research and development expenses | (4,333) | (6,273) | (13,412) | (19,205) |
| Less: participation by the Israeli Innovation Authority (IIA), Horizon Europe and other parties | 166 | 117 | 1,189 | 189 |
| Research and development expenses, net | (4,167) | (6,156) | (12,223) | (19,016) |
| General and administrative expenses | (3,020) | (4,553) | (8,655) | (13,929) |
| Operating loss | (7,100) | (10,475) | (20,702) | (32,711) |
| Interest expenses | (217) | (223) | (623) | (676) |
| Other financial income (expenses), net | (441) | 780 | (956) | 1,097 |
| Total financial income (expenses), net | (658) | 557 | (1,579) | 421 |
| Net loss | (7,758) | (9,918) | (22,281) | (32,290) |
| Net loss attributed to non-controlling interest | (134) | (53) | (419) | (53) |
| Net loss attributed to shareholders | $ (7,624) | $ (9,865) | $ (21,862) | $ (32,237) |
| Loss per share: | ||||
| Basic and diluted net loss per share (in Dollars per share) | $ (0.19) | $ (0.31) | $ (0.63) | $ (1) |
| Weighted average number of shares used in computing basic and diluted net loss per share (in Shares) | 39,947,602 | 32,261,628 | 35,217,037 | 32,131,503 |
Interim Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||||
| Diluted net loss per share | $ (0.19) | $ (0.31) | $ (0.63) | $ (1.00) |
| Weighted average number of shares used in computing diluted net loss per share (in Shares) | 39,947,602 | 32,261,628 | 35,217,037 | 32,131,503 |
Interim Condensed Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands |
Common Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Equity |
Non- controlling interests |
Total |
|||
|---|---|---|---|---|---|---|---|---|---|
| Balance at Jun. 30, 2021 | [1] | $ 387,172 | $ (330,021) | $ 57,151 | $ 57,151 | ||||
| Balance (in Shares) at Jun. 30, 2021 | 31,957,782 | ||||||||
| Share-based compensation to employees, directors, and non-employee consultants | [1] | 7,522 | 7,522 | 260 | 7,782 | ||||
| Share-based compensation to employees, directors, and non-employee consultants (in Shares) | 384,614 | ||||||||
| Establishment of Ever After and Non-controlling interest in Ever After | 5,657 | 5,657 | 1,843 | 7,500 | |||||
| Net loss | (32,237) | (32,237) | (53) | (32,290) | |||||
| Balance at Mar. 31, 2022 | [1] | 400,351 | (362,258) | 38,093 | 2,050 | 40,143 | |||
| Balance (in Shares) at Mar. 31, 2022 | 32,342,396 | ||||||||
| Balance at Dec. 31, 2021 | [1] | 392,233 | (352,393) | 39,840 | 39,840 | ||||
| Balance (in Shares) at Dec. 31, 2021 | 32,225,102 | ||||||||
| Share-based compensation to employees, directors, and non-employee consultants | [1] | 2,461 | 2,461 | 260 | 2,721 | ||||
| Share-based compensation to employees, directors, and non-employee consultants (in Shares) | 117,294 | ||||||||
| Establishment of Ever After and Non-controlling interest in Ever After | 5,657 | 5,657 | 1,843 | 7,500 | |||||
| Net loss | (9,865) | (9,865) | (53) | (9,918) | |||||
| Balance at Mar. 31, 2022 | [1] | 400,351 | (362,258) | 38,093 | 2,050 | 40,143 | |||
| Balance (in Shares) at Mar. 31, 2022 | 32,342,396 | ||||||||
| Balance at Jun. 30, 2022 | [1] | 401,302 | (371,263) | 30,039 | 2,147 | 32,186 | |||
| Balance (in Shares) at Jun. 30, 2022 | 32,507,491 | ||||||||
| Share-based compensation to employees, directors, and non-employee consultants | [1] | 2,224 | 2,224 | 718 | 2,942 | ||||
| Share-based compensation to employees, directors, and non-employee consultants (in Shares) | 408,833 | ||||||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $435 | [1] | 8,034 | 8,034 | 8,034 | |||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $435 (in Shares) | 8,155,900 | ||||||||
| Modification of warrants to non-controlling interests (note 1c) | (385) | (385) | 385 | ||||||
| Expiration of warrants in Ever After (note 1c) | 1,014 | 1,014 | (1,014) | ||||||
| Net loss | (21,862) | (21,862) | (419) | (22,281) | |||||
| Balance at Mar. 31, 2023 | [1] | 412,189 | (393,125) | 19,064 | 1,817 | 20,881 | |||
| Balance (in Shares) at Mar. 31, 2023 | 41,072,224 | ||||||||
| Balance at Dec. 31, 2022 | [1] | 408,692 | (385,501) | 23,191 | 1,775 | 24,966 | |||
| Balance (in Shares) at Dec. 31, 2022 | 38,291,151 | ||||||||
| Share-based compensation to employees, directors, and non-employee consultants | [1] | 869 | 869 | 176 | 1,045 | ||||
| Share-based compensation to employees, directors, and non-employee consultants (in Shares) | 175,294 | ||||||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $435 | [1] | 2,628 | 2,628 | 2,628 | |||||
| Issuance of common shares and warrants related to December 2022 Private Placement, net of issuance costs of $435 (in Shares) | 2,605,779 | ||||||||
| Net loss | (7,624) | (7,624) | (134) | (7,758) | |||||
| Balance at Mar. 31, 2023 | [1] | $ 412,189 | $ (393,125) | $ 19,064 | $ 1,817 | $ 20,881 | |||
| Balance (in Shares) at Mar. 31, 2023 | 41,072,224 | ||||||||
| |||||||||
Interim Condensed Statements of Changes in Shareholders’ Equity (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2023 |
|
| Statement of Stockholders' Equity [Abstract] | ||
| Issuance costs | $ 74 | $ 435 |
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Net loss | $ (7,758) | $ (9,918) | $ (22,281) | $ (32,290) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Depreciation | 285 | 915 | ||
| Share-based compensation to employees, directors and non-employee consultants | 2,942 | 7,782 | ||
| Increase in prepaid expenses and other current assets and other long-term assets | (510) | (49) | ||
| Decrease in trade payables | (393) | (254) | ||
| Decrease in other accounts payable and accrued expenses | (1,128) | (3,598) | ||
| Decrease in operating lease right-of-use asset and liability | (2) | (419) | ||
| Increase in interest receivable on deposits | (786) | (247) | ||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 278 | 1,072 | ||
| Long term interest payable and exchange rate differences relate to EIB loan | 1,668 | (944) | ||
| Accrued severance pay, net | (33) | (42) | ||
| Net cash used for operating activities | (19,960) | (28,074) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Purchase of property and equipment | (165) | (81) | ||
| Proceeds from withdrawal of (investment in) short-term deposits | 5,539 | (4,233) | ||
| Proceeds from withdrawal of long-term deposits | 19,052 | |||
| Net cash provided by investing activities | 5,374 | 14,738 | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
| Issuance of common shares and warrants, net of issuance costs | 8,034 | |||
| Proceeds related to investment in subsidiary by non-controlling interest | 7,500 | |||
| Net cash provided by financing activities | 8,034 | 7,500 | ||
| EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (278) | (1,072) | ||
| Decrease in cash, cash equivalents and restricted cash | (6,830) | (6,908) | ||
| Cash, cash equivalents and restricted cash at the beginning of the period | 11,413 | 31,838 | ||
| Cash, cash equivalents and restricted cash at the end of the period | 4,583 | 24,930 | 4,583 | 24,930 |
| Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: | ||||
| Cash and cash equivalents | 3,677 | 23,791 | 3,677 | 23,791 |
| Restricted cash | 273 | 470 | 273 | 470 |
| Long-term restricted bank deposits | 633 | 669 | 633 | 669 |
| Total cash, cash equivalents, restricted cash and restricted bank deposits | 4,583 | 24,930 | 4,583 | 24,930 |
| (a) Supplemental disclosure of non-cash activities: | ||||
| Purchase of property and equipment on credit | $ 87 | $ 12 | $ 87 | $ 12 |
General |
9 Months Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||
| General [Abstract] | ||||||||||||||||||||
| GENERAL | NOTE 1: - GENERAL
The Company has incurred an accumulated deficit of approximately $393,125 and incurred recurring operating losses and negative cash flows from operating activities since inception. As of March 31, 2023, the Company’s total shareholders’ equity amounted to $19,064. During the nine-month period ended March 31, 2023, the Company incurred losses of $22,281 and its negative cash flow from operating activities was $ 19,960.
As of March 31, 2023, the Company’s cash position (cash and cash equivalents, short-term bank deposits, restricted cash and restricted bank deposits) totaled $45,074. The Company plans to continue to finance its operations from its current resources, by entering into licensing or other commercial and collaboration agreements, from grants 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 consolidated financial statements. The Company also implemented a cost reduction and efficiency plan to align with the change in its business strategy. There is no assurance, however, that the Company will be able to obtain an adequate level of financial resources that are required for the long-term development and commercialization of its products.
The first warrant (the “First Warrant”) issued to Tnuva permits Tnuva to purchase up to 125,000 ordinary shares of Ever After at an exercise price of $40.00 per share, and has a term commencing on the Closing Date and ending at the earlier of (i) six months from the Closing Date, (ii) immediately prior to and subject to the consummation of an initial public offering or acquisition of Ever After or (iii) the consummation of a financing round with a non-affiliated investor. In addition, on the six month anniversary of the Closing Date, and provided that the First Warrant has not expired, Ever After agreed to issue a second warrant (the “Second Warrant”) to Tnuva which will permit Tnuva to purchase up to a number of ordinary shares of Ever After, or the then most senior securities issued by Ever After, in consideration for such amount equal to 200% of the remaining balance of the aggregate purchase price of the First Warrant, provided that Tnuva exercises at least 62,500 ordinary shares at a price per share of $40.00, or $2,500 in the aggregate, of the First Warrant. The Second Warrant’s exercise price per share equals $76.00. The Second Warrant has a term commencing on the six month anniversary of the Closing Date and ending at the earlier of (i) six months from its issuance, (ii) immediately prior to and subject to the consummation of an initial public offering or acquisition of Ever After or (iii) the consummation of a financing round with a non-affiliated investor.
The Company determined the fair value of the ordinary shares and the warrants utilizing a Monte Carlo simulation model (Level 3 classification), which incorporates various assumptions including expected stock price volatility, risk-free interest rate, and the expected date of a qualifying event. The Company estimated the volatility of the ordinary shares of Ever After based on data from similar companies operating in the food tech field.
The consideration allocated to the shares issued was divided between the non-controlling interests (“NCI”) and the Company’s shareholders as this transaction is a transaction with the NCI.
The consideration allocated to the warrants was recognized against the NCI.
On August 23, 2022, (“Amendment Date”), Ever After and Tnuva executed an amendment to the warrant agreement (“Amendment”), extending the exercise period of the First Warrant from six months to nine months from the Closing Date. All other terms remained unchanged.
Following the Amendment, the Company recalculated the fair value of the warrants utilizing the same Monte Carlo simulation model (Level 3 classification) before and after the Amendment Date, which incorporates various assumptions including expected stock price volatility, risk-free interest rate, and the expected date of a qualifying event.
The main assumptions used in the Monte Carlo simulation model are as follows:
The Company estimated the volatility of the ordinary shares of Ever After based on data from similar companies operating in the food tech field. The additional fair value determined was $385.
On November 22, 2022, the warrants in Ever After expired unexercised and $1,014 were classified from NCI to additional paid-in capital. |
Significant Accounting Policies |
9 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||
| General [Abstract] | ||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair statement have been included (consisting only of normal recurring adjustments). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022. The year-end balance sheet data was derived from the audited consolidated financial statements as of June 30, 2022, but not all disclosures required by U.S. GAAP are included.
Operating results for the nine-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023.
The significant accounting policies followed in the preparation of these interim unaudited condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.
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.
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank deposits and other current assets, trade payable and other accounts payable, approximate their fair value because of their generally short-term maturities.
The Company measures its derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
The Company measures its liability pursuant to the Finance Agreement with the EIB based on the aggregate outstanding amount of the combined principal and accrued interest. The Company does not reflect its liability for future royalty payments pursuant to the Finance Agreement with the EIB since the royalty payments are to be paid as a percentage of the Company’s future consolidated revenues, pro-rated to the amount disbursed, beginning in the fiscal year 2024 and continuing up to and including its fiscal year 2030, which cannot be measured at this time.
ASU 2021-04-Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).
In May 2021, the FASB issued ASU 2021-04 that provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company has adopted ASU 2021-04, which has had an impact on the modification of the warrants to the non-controlling interest in Ever After (see also note 1c).
ASU No. 2021-10-“Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”):
In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021.
The adoption of this standard does not have a material impact on the Company’s consolidated financial statements.
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”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. The guidance also requires increased disclosures. The amendments contained in ASU 2016-13 were originally effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company. In November 2019, the FASB issued ASU No. 2019-10, which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the U.S. Securities and Exchange Commission rules (“SRC”)) to fiscal years beginning after December 15, 2022, including interim periods.
Early adoption is permitted. The Company meets the definition of an SRC and is adopting the deferral period for ASU 2016-13. 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 is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements but does not expect that the adoption of this standard will have a material impact on its consolidated financial statements. |
Commitments and Contingencies |
9 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||
| Commitments and Contingencies [Abstract] | |||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 3: - COMMITMENTS AND CONTINGENCIES
As of March 31, 2023, the Company’s contingent liability in respect to royalties to the IIA amounted to $27,574, not including LIBOR interest as described above.
|
Loan from the EIB |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Loan from the EIB [Abstract] | |
| LOAN FROM THE EIB | NOTE 4: - LOAN FROM THE EIB
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 (the “Loan”) in the amount of up to €50 million, subject to certain milestones being reached by December 31 2022, payable in three tranches, with the first tranche consisting of €20 million, second of €18 million and third of €12 million for a period of 36 months from the signing of the Finance Contract.
The tranches will be treated independently, each with its own interest rate and maturity period. The annual interest rate is 4% (consisting of a 0% fixed interest rate and a 4% deferred interest rate payable upon maturity,) for the first tranche, 4% (consisting of a 1% fixed interest rate and a 3% deferred interest rate payable upon maturity) for the second tranche and 3% (consisting of a 1% fixed interest rate and a 2% deferred interest rate payable upon maturity) for the third tranche.
In addition to any interest payable on the Loan, the EIB is entitled to receive royalties from future revenues for a period of seven years starting at the beginning of fiscal year 2024 and continuing up to and including its fiscal year 2030 in an amount equal to between 0.2% to 2.3% of the Company’s consolidated revenues, pro-rated to the amount disbursed from the Loan.
During June 2021, Pluri received the first tranche in an amount of €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 principal of the Loan. As of March 31, 2023, the linked principal balance in the amount of $21,755 and the interest accrued in the amount of $1,591 are presented among long-term liabilities. Since the project period ended on December 31, 2022, the Company does not expect to receive additional funds pursuant to the Finance Contract.
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 other banks and financing entities for other loans. |
Shareholders' Equity |
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| Stockholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | NOTE 5: - SHAREHOLDERS’ EQUITY
Pursuant to a shelf registration statement on Form S-3 declared effective by the SEC on July 23, 2020, in July 2020 the Company entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies LLC (“Jefferies”), which provided that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company could elect, from time to time, to offer and sell common shares having an aggregate offering price of up to $75,000 through Jefferies acting as sales agent. During the year ended June 30, 2021, the Company sold 1,045,097 common shares under the ATM Agreement at an average price of $8.50 per share for aggregate net proceeds of approximately $8,506, net of issuance expenses of $380.
On September 21, 2022, as a result of General Instruction I.B.6 of Form S-3, and in accordance with the terms of the ATM Agreement, the Company reduced the amount available to be sold under the ATM Agreement to a maximum aggregate offering price of up to $11,800 of its common shares from time to time through Jefferies.
During the nine-month period ended March 31, 2023, the Company did not sell any common shares under the ATM Agreement.
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 8,155,900 common shares and warrants, or the Warrants, to purchase up to 8,155,900 common shares. On December 13, 2022, the Company executed securities purchase agreements to sell, at a purchase price of $1.03 per share, up to 5,579,883 common shares and Warrants to purchase up to 5,579,833 common shares, with an exercise price of $1.03 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 $1.05 per share, up to 2,068,517 common shares and Warrants to purchase up to 2,068,517 common shares, with an exercise price of $1.05 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 $1.06 per share, up to 237,500 common shares and Warrants to purchase up to 237,500 common shares, with an exercise price of $1.06 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 $1.09 per share, up to 135,000 common shares and Warrants to purchase up to 135,000 common shares, with an exercise price of $1.09 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 $1.12 per share, up to 135,000 common shares and Warrants to purchase up to 135,000 common shares, with an exercise price of $1.12 per share and a term of three years. The Warrants sold in the December 2022 Private Placement will be exercisable upon the later of six months from their issuance date or the date which the Company increased its authorized share capital (see Note 6b). As March 31, 2023, the Company issued 8,155,900 common shares and warrants that relates to the December 2022 Private Placement and received $8 million net of $435 that were recorded as issuance expenses.
A summary of the options to non-employee consultants under the Company’s equity incentive plans is as follows:
Compensation expenses recorded in General and administration expenses related to options granted to consultants for the nine months ended March 31, 2023 and 2022 were $5 and $29, respectively. Compensation expenses (income) recorded in General and administration expenses related to options granted to consultants for the three ended March 31, 2023 and 2022 were $1 income and $9 expenses, respectively.
A summary of the options to employees under the Company’s equity incentive plans is as follows:
On December 14, 2022, Yaky Yanay, the Company’s 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 the Company’s existing equity compensation plans. In that regard, the Company granted Mr. Yanay (i) 334,821 RSUs, vesting ratably each month (see item c. below), and (ii) options to purchase 334,821 common shares, vesting ratably each month, with a term of 3 years, at an exercise price of $1.12 per share. In addition, the Board of Directors also agreed to grant Mr. Yanay options to purchase 1,500,000 common shares, with a term of 3 years, with the following terms: (i) options to purchase 500,000 common shares at an exercise price of $1.56 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 500,000 common shares at an exercise price of $2.08 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase 500,000 common shares at an exercise price of $2.60 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 (see Note 6b).
Compensation expenses recorded in general and administration expenses related to options granted to the Chief Executive Officer for the nine and three months ended March 31, 2023 were $310. There were no compensation expenses recorded in general and administration expenses related to options granted to employees for the nine and three months ended March 31, 2022.
The following table summarizes the activity related to RSUs granted to employees and directors under the Company’s equity incentive plans for the nine-month periods ended March 31, 2023 and 2022:
Compensation expenses related to RSUs granted to employees and directors were recorded as follows:
Unamortized compensation expenses related to RSUs granted to employees and directors is approximately $1,937 to be recognized by the end of June 2026.
The following table summarizes the activity related to unvested RSUs granted to consultants under the Company’s equity incentive plans for the nine-month periods ended March 31, 2023 and 2022:
Compensation expenses related to RSUs granted to consultants were recorded as follows:
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Subsequent Event |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||
| Subsequent Events [Abstract] | |||||||
| SUBSEQUENT EVENT | NOTE 6: - SUBSEQUENT EVENT
Under Nasdaq Listing Rule 5810(c)(3)(A), if during the 180 calendar day period following the date of the Notice the closing bid price of the common shares is at or above $1.00 for a minimum of 10 consecutive business days, the Company will regain compliance with the MBPR and the Company’s common shares will continue to be eligible for listing on Nasdaq, absent noncompliance with any other requirement for continued listing. The compliance period (“Compliance Period”) to comply with the MBPR will expire on October 16, 2023.
If the Company does not regain compliance with the MBPR by the end of the Compliance Period, then under Nasdaq Listing Rule 5810(c)(3)(A)(i), the Company may transfer to The Nasdaq Capital Market, provided that the Company meets the applicable market value of publicly held shares requirement for continued listing as well as all other standards for initial listing of the common shares on the Nasdaq Capital Market (other than the MBPR), and notifies Nasdaq of the Company’s intention to cure the deficiency. Following a transfer to The Nasdaq Capital Market, the Company may be afforded an additional 180-days to regain compliance with the MBPR.
The Company intends to monitor the closing bid price of its common shares and may, if appropriate, consider implementing available options to regain compliance with the MBPR under the Nasdaq Listing Rules, including initiating a reverse stock split.
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Accounting Policies, by Policy (Policies) |
9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||
| General [Abstract] | ||||||||||
| Unaudited Interim Financial Information |
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair statement have been included (consisting only of normal recurring adjustments). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022. The year-end balance sheet data was derived from the audited consolidated financial statements as of June 30, 2022, but not all disclosures required by U.S. GAAP are included.
Operating results for the nine-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023.
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| Significant Accounting Policies |
The significant accounting policies followed in the preparation of these interim unaudited condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements.
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| 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.
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| Fair value of financial instruments |
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, short-term bank deposits and other current assets, trade payable and other accounts payable, approximate their fair value because of their generally short-term maturities.
The Company measures its derivative instruments at fair value under Accounting Standards Codification (“ASC”), “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
The Company measures its liability pursuant to the Finance Agreement with the EIB based on the aggregate outstanding amount of the combined principal and accrued interest. The Company does not reflect its liability for future royalty payments pursuant to the Finance Agreement with the EIB since the royalty payments are to be paid as a percentage of the Company’s future consolidated revenues, pro-rated to the amount disbursed, beginning in the fiscal year 2024 and continuing up to and including its fiscal year 2030, which cannot be measured at this time.
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| New Accounting Pronouncements |
ASU 2021-04-Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).
In May 2021, the FASB issued ASU 2021-04 that provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company has adopted ASU 2021-04, which has had an impact on the modification of the warrants to the non-controlling interest in Ever After (see also note 1c).
ASU No. 2021-10-“Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”):
In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021.
The adoption of this standard does not have a material impact on the Company’s consolidated financial statements.
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”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. The guidance also requires increased disclosures. The amendments contained in ASU 2016-13 were originally effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company. In November 2019, the FASB issued ASU No. 2019-10, which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the U.S. Securities and Exchange Commission rules (“SRC”)) to fiscal years beginning after December 15, 2022, including interim periods.
Early adoption is permitted. The Company meets the definition of an SRC and is adopting the deferral period for ASU 2016-13. 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 is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements but does not expect that the adoption of this standard will have a material impact on its consolidated financial statements. |
General (Tables) |
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Mar. 31, 2023 | |||||||||||
| General [Abstract] | |||||||||||
| Schedule of main assumptions used in the monte carlo simulation model |
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Shareholders' Equity (Tables) |
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| Shareholders' Equity (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of expenses related to RSUs granted |
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| Non-employee Consultants [Member] | Stock Option [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity (Tables) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of options to non-employee consultants |
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| RSUs [Member] | Employees and Directors [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of activity related to RSUs granted |
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General (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Jan. 05, 2022 |
Nov. 22, 2022 |
Feb. 24, 2022 |
Mar. 31, 2023 |
Dec. 27, 2022 |
Dec. 19, 2022 |
Dec. 15, 2022 |
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| General (Details) [Line Items] | |||||||
| Ordinary shares (in Shares) | 187,500 | ||||||
| Additional investment | $ 7,500 | ||||||
| Exercise price per share (in Dollars per share) | $ 1.12 | $ 1.09 | $ 1.06 | ||||
| Compensation expense recognized during the period | $ 385 | ||||||
| First Warrant [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Number of ordinary shares to be issued (in Shares) | 125,000 | ||||||
| Remaining balance of the aggregate purchase price of the first warrant | 200.00% | ||||||
| Number of shares (in Shares) | 62,500 | ||||||
| Exercise price per share (in Dollars per share) | $ 40 | ||||||
| Aggregate price | $ 2,500 | ||||||
| Second Warrants [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Exercise price per share (in Dollars per share) | $ 76 | ||||||
| Warrant [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Unexercised value | $ 1,014 | ||||||
| Plurinuva [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Investment in ever after subsidiary | $ 7,500 | ||||||
| Exercise price per share (in Dollars per share) | $ 40 | ||||||
| Tnuva Received Warrants [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Ordinary shares percentage | 15.79% | ||||||
| Bio-technology Company [Member] | |||||||
| General (Details) [Line Items] | |||||||
| Accumulated deficit | $ 393,125 | ||||||
| Shareholders’ equity | 19,064 | ||||||
| Incurred losses | 22,281 | ||||||
| Negative cash flow operating activities | 19,960 | ||||||
| Cash and cash equivalents, short-term bank deposits and marketable securities | $ 45,074 | ||||||
General (Details) - Schedule of main assumptions used in the monte carlo simulation model |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Schedule of Main Assumptions Used in the Monte Carlo Simulation Model [Abstract] | |
| Risk-free interest rate | 3.25% |
| Expected stock price volatility | 70.00% |
Commitments and Contingencies (Details) $ in Thousands |
9 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Commitments and Contingencies (Textual) | |
| Cash and deposits | $ 907 |
| Percentage of qualified expenditures eligible for grant | 50.00% |
| Royalty rate | 3.00% |
| Royalty payable based on grants received | 100.00% |
| Contingent liability in respect to royalties | $ 27,574 |
| Ichilov Hospital [Member] | |
| Commitments and Contingencies (Textual) | |
| Royalty payable based on grants received | 1.00% |
| Aggregate royalty amount | $ 250 |
| Shalav [Member] | |
| Commitments and Contingencies (Textual) | |
| Royalty rate | 3.00% |
| Aggregate royalty amount | $ 52 |
| Marketing grant of approximately | 52 |
| Revenues in the U.S. market | 250 |
| Grants received | $ 57 |
Loan from the EIB (Details) $ in Thousands, € in Millions |
1 Months Ended | 9 Months Ended | |
|---|---|---|---|
|
Jun. 30, 2021
EUR (€)
|
Apr. 30, 2020
EUR (€)
|
Mar. 31, 2023
USD ($)
|
|
| Loan from the EIB (Details) [Line Items] | |||
| Subsidiary Loan (in Euro) | € 50 | ||
| Contract period | 36 months | ||
| Contractual interest rate for funds borrowed | 4.00% | ||
| Fixed interest rate | 0.00% | ||
| Deferred interest rate | 4.00% | ||
| First tranche price (in Euro) | € 20 | ||
| Annual interest percentage | 4.00% | ||
| Principal balance (in Dollars) | $ | $ 21,755 | ||
| Accrued interest (in Dollars) | $ | $ 1,591 | ||
| Minimum [Member] | |||
| Loan from the EIB (Details) [Line Items] | |||
| Company’s consolidated revenues percentage | 0.20% | ||
| Maximum [Member] | |||
| Loan from the EIB (Details) [Line Items] | |||
| Company’s consolidated revenues percentage | 2.30% | ||
| First Tranche Consisting [Member] | |||
| Loan from the EIB (Details) [Line Items] | |||
| Loans payable (in Euro) | € 20 | ||
| Contractual interest rate for funds borrowed | 4.00% | ||
| Fixed interest rate | 1.00% | ||
| Deferred interest rate | 3.00% | ||
| Second Tranche Consisting [Member] | |||
| Loan from the EIB (Details) [Line Items] | |||
| Loans payable (in Euro) | 18 | ||
| Contractual interest rate for funds borrowed | 3.00% | ||
| Fixed interest rate | 1.00% | ||
| Deferred interest rate | 2.00% | ||
| Third Tranche Consisting [Member] | |||
| Loan from the EIB (Details) [Line Items] | |||
| Loans payable (in Euro) | € 12 | ||
Shareholders' Equity (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 27, 2022 |
Dec. 15, 2022 |
Dec. 14, 2022 |
Dec. 14, 2022 |
Dec. 13, 2022 |
Jun. 30, 2021 |
Dec. 27, 2022 |
Dec. 19, 2022 |
Sep. 21, 2022 |
Jul. 23, 2020 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Shareholders' Equity (Details) [Line Items] | ||||||||||||||
| Offering price (in Dollars) | $ 11,800 | |||||||||||||
| Aggregate common shares | 8,155,900 | |||||||||||||
| Warrants to purchase of common stock | 8,155,900 | 5,579,883 | 135,000 | 135,000 | ||||||||||
| Purchase price per share (in Dollars per share) | $ 1.03 | |||||||||||||
| Purchase of common shares | 5,579,833 | 135,000 | 135,000 | |||||||||||
| Exercise price per share (in Dollars per share) | $ 1.12 | $ 1.03 | $ 1.12 | $ 1.09 | ||||||||||
| Price per share (in Dollars per share) | $ 1.12 | $ 1.06 | $ 1.12 | $ 1.09 | ||||||||||
| Common shares and warrants sold | 8,155,900 | 8,155,900 | ||||||||||||
| Aggregate gross proceeds (in Dollars) | $ 8,000,000 | |||||||||||||
| Issuance expenses (in Dollars) | 435 | |||||||||||||
| General and administration expenses (in Dollars) | $ 9,000 | $ 5,000 | $ 29,000 | |||||||||||
| General and administration income (in Dollars) | $ 1,000 | |||||||||||||
| Annual cash CEO's salary (in Dollars) | $ 375,000,000 | $ 375,000,000 | ||||||||||||
| RSUs shares | 334,821 | |||||||||||||
| Expire period | 3 years | |||||||||||||
| General and administration expenses (in Dollars) | 310 | $ 310 | ||||||||||||
| Unamortized compensation expense (in Dollars) | $ 1,937,000 | $ 1,937,000 | ||||||||||||
| Securities Purchase Agreement [Member] | ||||||||||||||
| Shareholders' Equity (Details) [Line Items] | ||||||||||||||
| Warrants to purchase of common stock | 237,500 | 2,068,517 | ||||||||||||
| Purchase of common shares | 237,500 | 2,068,517 | ||||||||||||
| Exercise price per share (in Dollars per share) | $ 1.06 | $ 1.05 | $ 1.05 | |||||||||||
| Price per share (in Dollars per share) | $ 1.05 | $ 1.05 | ||||||||||||
| Restricted Stock Units 1 (RSUs) [Member] | ||||||||||||||
| Shareholders' Equity (Details) [Line Items] | ||||||||||||||
| CEO's grant agreements, description | below), and (ii) options to purchase 334,821 common shares, vesting ratably each month, with a term of 3 years, at an exercise price of $1.12 per share. | |||||||||||||
| Restricted Stock Units 2 (RSUs) [Member] | ||||||||||||||
| Shareholders' Equity (Details) [Line Items] | ||||||||||||||
| CEO's grant agreements, description | In addition, the Board of Directors also agreed to grant Mr. Yanay options to purchase 1,500,000 common shares, with a term of 3 years, with the following terms: (i) options to purchase 500,000 common shares at an exercise price of $1.56 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, (ii) options to purchase 500,000 common shares at an exercise price of $2.08 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023, and (iii) options to purchase 500,000 common shares at an exercise price of $2.60 per share, 50% vesting on June 30, 2023 and 50% vesting on December 31, 2023. | |||||||||||||
| Open Market Sales Agreement - Jefferies, LLC [Member] | ||||||||||||||
| Shareholders' Equity (Details) [Line Items] | ||||||||||||||
| Aggregate offering price (in Dollars) | $ 75,000,000 | |||||||||||||
| Number of shares sold | 1,045,097 | |||||||||||||
| Average price, per share (in Dollars per share) | $ 8.5 | |||||||||||||
| Aggregate net proceeds (in Dollars) | $ 8,506,000 | |||||||||||||
| Issuance expenses (in Dollars) | $ 380,000 | |||||||||||||
Shareholders' Equity (Details) - Schedule of options to non-employee consultants $ / shares in Units, $ in Thousands |
9 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
$ / shares
shares
| |
| Employee [Member] | |
| Shareholders' Equity (Details) - Schedule of options to non-employee consultants [Line Items] | |
| Number, Options outstanding at the beginning of the period | 91,045 |
| Weighted Average Exercise Price, Options outstanding at the beginning of the period (in Dollars per share) | $ / shares | $ 1.32 |
| Weighted Average Remaining Contractual Terms (in years), Options outstanding at the beginning of the period | 7 years 18 days |
| Aggregate Intrinsic Value Price, Options outstanding at the beginning of the period (in Dollars) | $ | $ 44 |
| Number Options forfeited | (26,250) |
| Weighted Average Exercise Price Options forfeited (in Dollars per share) | $ / shares | $ 2.29 |
| Options outstanding at the end of the period | 64,795 |
| Weighted Average Exercise Price, Options outstanding at the end of the period (in Dollars per share) | $ / shares | $ 0.93 |
| Weighted Average Remaining Contractual Terms (in years), Options outstanding at the end of the period | 6 years 5 months 26 days |
| Aggregate Intrinsic Value Price, Options outstanding at the end of the period (in Dollars) | $ | $ 37 |
| Number, Options exercisable at the end of the period | 57,295 |
| Weighted Average Exercise Price, Options exercisable at the end of the period (in Dollars per share) | $ / shares | $ 0.79 |
| Weighted Average Remaining Contractual Terms (in years), Options exercisable at the end of the period | 6 years 2 months 15 days |
| Aggregate Intrinsic Value Price, Options exercisable at the end of the period (in Dollars) | $ | $ 37 |
| Number, Options unvested | 7,500 |
| Weighted Average Exercise Price, Options unvested (in Dollars per share) | $ / shares | $ 2 |
| Number, Options expected to vest | 64,795 |
| Weighted Average Exercise Price, Options expected to vest (in Dollars per share) | $ / shares | $ 0.93 |
| Weighted Average Remaining Contractual Terms (in years), Options expected to vest | 6 years 5 months 26 days |
| Aggregate Intrinsic Value Price, Options expected to vest (in Dollars) | $ | $ 37 |
| Non-Employee [Member] | |
| Shareholders' Equity (Details) - Schedule of options to non-employee consultants [Line Items] | |
| Number, Options outstanding at the beginning of the period | |
| Weighted Average Exercise Price, Options outstanding at the beginning of the period (in Dollars per share) | $ / shares | |
| Weighted Average Remaining Contractual Terms (in years), Options outstanding at the beginning of the period | |
| Aggregate Intrinsic Value Price, Options outstanding at the beginning of the period (in Dollars) | $ | |
| Number Options granted | 1,834,821 |
| Options outstanding at the end of the period | 1,834,821 |
| Weighted Average Exercise Price, Options outstanding at the end of the period (in Dollars per share) | $ / shares | $ 1.94 |
| Weighted Average Remaining Contractual Terms (in years), Options outstanding at the end of the period | 3 years 5 months 26 days |
| Aggregate Intrinsic Value Price, Options outstanding at the end of the period (in Dollars) | $ | |
| Number, Options exercisable at the end of the period | 83,703 |
| Weighted Average Exercise Price, Options exercisable at the end of the period (in Dollars per share) | $ / shares | $ 1.12 |
| Weighted Average Remaining Contractual Terms (in years), Options exercisable at the end of the period | 3 years 3 months 14 days |
| Aggregate Intrinsic Value Price, Options exercisable at the end of the period (in Dollars) | $ | |
| Number, Options unvested | 1,751,118 |
| Weighted Average Exercise Price, Options unvested (in Dollars per share) | $ / shares | $ 1.94 |
| Weighted Average Remaining Contractual Terms (in years), Options unvested | 3 years 5 months 26 days |
| Aggregate Intrinsic Value Price, Options unvested (in Dollars) | $ | |
| Number, Options expected to vest | 1,834,821 |
| Weighted Average Exercise Price, Options expected to vest (in Dollars per share) | $ / shares | $ 1.94 |
| Weighted Average Remaining Contractual Terms (in years), Options expected to vest | 3 years 5 months 26 days |
| Aggregate Intrinsic Value Price, Options expected to vest (in Dollars) | $ |
Shareholders' Equity (Details) - Schedule of activity related to RSUs granted - shares |
9 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Number | ||
| Unvested at the beginning of the period | 1,935,014 | 2,404,415 |
| Granted | 334,821 | 75,000 |
| Forfeited | (51,389) | (41,028) |
| Vested | (387,583) | (350,239) |
| Unvested at the end of the period | 1,830,866 | 2,088,148 |
| Expected to vest after the end of the period | 1,811,309 | 2,052,240 |
| Restricted Stock Units (RSUs) [Member] | ||
| Number | ||
| Unvested at the beginning of the period | 41,250 | 76,249 |
| Vested | (21,250) | (34,375) |
| Unvested at the end of the period | 20,000 | 41,874 |
Shareholders' Equity (Details) - Schedule of expenses related to RSUs granted - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | $ 56 | $ 56 | $ 149 | $ 195 |
| Employees and Directors [Member] | ||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | 504 | 2,646 | 1,760 | 7,558 |
| Research and development expenses [Member] | ||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | 1 | 1 | 1 | 46 |
| Research and development expenses [Member] | Employees and Directors [Member] | ||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | (82) | 108 | 35 | 526 |
| General and administrative expenses [Member] | ||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | 55 | 55 | 148 | 149 |
| General and administrative expenses [Member] | Employees and Directors [Member] | ||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
| Compensation expenses | $ 586 | $ 2,538 | $ 1,725 | $ 7,032 |
Subsequent Event (Details) - $ / shares |
9 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2023 |
May 01, 2023 |
Apr. 19, 2023 |
Jun. 30, 2022 |
|
| Subsequent Event (Details) [Line Items] | ||||
| Per share value | $ 1 | |||
| Expire date | Oct. 16, 2023 | |||
| Common stock , share authorized | 60,000,000 | 60,000,000 | ||
| Subsequent Event [Member] | ||||
| Subsequent Event (Details) [Line Items] | ||||
| Per share value | $ 1 | |||
| Subsequent Event [Member] | Maximum [Member] | ||||
| Subsequent Event (Details) [Line Items] | ||||
| Common stock , share authorized | 300,000,000 | |||
| Subsequent Event [Member] | Minimum [Member] | ||||
| Subsequent Event (Details) [Line Items] | ||||
| Common stock , share authorized | 60,000,000 |
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