Pluri Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures We conducted an evaluation under the supervision of our CEO and CFO (our principal executive officer and principal financial officer, respectively), regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2021. Based on the aforementioned evaluation, management has concluded that our disclosure controls and procedures were effective as of June 30, 2021. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting on June 30, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework in Internal Control—Integrated Framework . Based on that assessment under those criteria, management has determined that, as of June 30, 2021, our internal control over financial reporting was effective. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of Fiscal Year 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 41 PART III Item 10. Directors, Executive Officers and Corporate Governance. Our directors and executive officers, their ages, positions currently held, and duration of such, are as follows: Name Position Held With Company Age Date First Elected or Appointed Zami Aberman Executive Chairman 67 June 23, 2019 Yaky Yanay President Director Chief Executive Officer 50 February 4, 2014 February 5, 2015 June 23, 2019 Chen Franco-Yehuda Chief Financial Officer, Treasurer and Secretary 38 March 14, 2019 Doron Birger Director 70 July 15,2021 Mark Germain Director 70 May 17, 2007 Moria Kwiat Director 41 May 15, 2012 Rami Levi Director 59 June 1, 2021 Varda Shalev Director 62 July 15,2021 Maital Shemesh-Rasmussen Director 51 June 1, 2021 Doron Shorrer Director 68 October 2, 2003 Business Experience The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person’s principal occupation during the period, and the name and principal business of the organization by which they were employed. Zami Aberman Mr. Aberman joined the Company in September 2005 and has served as our Executive Chairman since June 2019, as our Co-Chief Executive Officer from March 2017 until June 2019, as our CEO from November 2005 until March 2017, and as President of the Company from September 2005 until February 2014. He changed the Company’s strategy towards cellular therapeutics. Mr. Aberman’s vision to use the maternal section of the Placenta (Decidua) as a source for cell therapy, combined with the Company’s 3D culturing technology, led to the development of our products. Since November 2005, Mr. Aberman has served as a director of the Company, and since April 2006, as Chairman of the Board. He has 25 years of experience in marketing and management in the high technology industry. Mr. Aberman has held the CEO and Chairman positions of various companies located in Israel, the United States, Europe, Japan and Korea. 42 Mr. Aberman has operated within high-tech global companies in the fields of automatic optical inspection, network security, video over IP, software, chip design and robotics. He serves as the chairman of Rose Hitech Ltd., a private investment company. He previously served as the chairman of VLScom Ltd., a private company specializing in video compression for HDTV and video over IP and as a director of Ori Software Ltd., a company involved in data management. Prior to holding those positions, Mr. Aberman served as the President and CEO of Elbit Vision System Ltd. (EVSNF.OB), a company engaged in automatic optical inspection. Before joining the Company, Mr. Aberman served as President and CEO of Netect Ltd., a company specializing in the field of internet security software and was the co-founder, President and CEO of Associative Computing Ltd., which developed an associative parallel processor for real-time video processing. He also served as Chairman of Display Inspection Systems Inc., specializing in laser based inspection machines and as President and CEO of Robomatix Technologies Ltd. In 1992, Mr. Aberman was awarded the Rothschild Prize for excellence in his field from the President of the State of Israel. Mr. Aberman holds a B.Sc. in Mechanical Engineering from Ben Gurion University, Israel. We believe that Mr. Aberman’s qualifications to sit on our Board include his unique multidisciplinary innovative approach, years of experience in the financial markets in Israel and globally, as well as his experience in serving as the CEO of publicly traded entities. Yaky Yanay Mr. Yanay became a director of the Company in February 2015. He has served as our President from February 2014 and as our CEO from June 2019, previously serving as Co-CEO from March 2017. Mr. Yanay has served in variety of executive positions in Pluristem since 2006 including as our CFO from November 2006 until February 2014 and from February 2015 until March 2017. He also served as our Chief Operating Officer from February 2014 until March 2017. From November 2006 to February 2014, he served as our Secretary and served as our Executive Vice President from March 2013 until February 2014. From 2015 to 2018, Mr. Yanay served as the Co-Chairman of Israel Advanced Technology Industries (IATI), the largest umbrella organization representing Israel’s high tech and life science industries and since August 2012 has continually served as a Director of IATI, representing Israel’s life sciences industry. Prior to joining the Company, Mr. Yanay founded and served as Chairman of “The Israeli Life Science Forum” and also served as the CFO of Elbit Vision Systems Ltd., a public company. In addition, from July 2010 to April 2018, he served on the Board of Directors of Elbit Vision Systems Ltd. Prior to these positions, Mr. Yanay served as manager of audit groups of the technology sector at Ernst & Young Israel. Mr. Yanay holds a bachelor’s degree with honors in business administration and accounting from the College of Management Academic Studies of Rishon LeZion, Israel, and is a Certified Public Accountant in Israel. We believe that Mr. Yanay’s qualifications to sit on our Board include his years of experience in the medical technology industry, his vast skill and expertise in accounting and economics, as well as his knowledge and familiarity with corporate finance. Chen Franco-Yehuda Ms. Franco-Yehuda was appointed as our Chief Financial Officer, or CFO, effective as of March 17, 2019. Prior to being appointed as our CFO, Ms. Franco-Yehuda served as the Company’s Head of Accounting and Financial Reporting since July 2016 and, prior to that, the Company’s Controller since May 2013. Before joining the Company, from October 2008 to April 2013, Ms. Franco-Yehuda served as a manager of audit groups relating to public and private companies in various industries at PricewaterhouseCoopers (PwC) and also as a lecturer of accounting classes at the Open University of Israel from 2009 to 2014. Ms. Franco-Yehuda holds a bachelor’s degree in economics and accounting from Haifa University, Israel, and is a certified public accountant in Israel. 43 Doron Birger Mr. Birger became a director of the Company in July 2021. Mr. Doron Birger has been serving as the chairman of the board of directors of Sight Diagnostic Ltd. since June 2014, Nurami Medical Ltd. since April 2016, Ultrasight Medical Imaging Ltd. from June 2019, Intelicanna Ltd. (TASE: INTL) from April 2021 and Matricelf Ltd. (TASE:MTLF ) from December 2020, and as a director of IceCure Medical Ltd. (TASE: ICCM) since August 2012, Vibrant Ltd. since December 2014, Hera Med Ltd. (ASX: HMD) since November 2019, Citrine Global (OTC: CTGL) since March 2020, Kadimastem Ltd. (TASE: KDST) since December 2020 and Netiv Ha’or, a subsidiary of the Israel Electric Corporation Ltd., since March 2020 and as chairman and director in a variety of non-profit organizations. Prior to that, Mr. Birger has served as member of the board of directors of MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL) from March 2015 to May 2018, Mekorot National Water Company Ltd. from November 2015 to November 2018, and chairman of the board of directors of Insulin Medical Ltd. (TASE: INSL) from March 2016 to August 2017, IOPtima Ltd. from June 2012 to June 2019, MST Medical Surgical Technologies Ltd. from August 2009 to June 2019, Highcon Ltd. from November 2014 to January 2018, Magisto Ltd. from September 2009 to July 2019, Real Imaging Ltd. from November 2018 to April 2019 and Medigus Ltd. (Nasdaq and TASE: MDGS) from May 2015 to September 2018. Mr. Birger holds a BA and MA in economics from the Hebrew University, Israel. We believe that Mr. Birger’s qualifications to sit on our Board include his extensive experience in the high-tech sector and life-science industry, his experience serving as a director of public companies, his vast skill and expertise in accounting and economics as well as his knowledge and familiarity with corporate finance. Mark Germain Mr. Germain became a director of the Company in May 2007. Between May 2007 and February 2009, Mr. Germain served as Co-Chairman of our Board. Mr. Germain has been a merchant banker serving primarily the biotech and life sciences industries for over five years. He has been involved as a founder, director, chairman of the board of, and/or investor in, over twenty companies in the biotech field and assisted many of them in arranging corporate partnerships, acquiring technology, entering into mergers and acquisitions, and executing financings and going public transactions. He graduated from New York University School of Law in 1975, Order of the Coif, and was a partner in a New York law firm practicing corporate and securities law before leaving in 1986. Since then, and until he entered the biotech field in 1991, he served in senior executive capacities, including as president of a public company that was sold in 1991. In addition to being a director of the Company, Mr. Germain is a Managing Director at The ÆNTIB Group, a boutique merchant bank. From June 2018 through September 30, 2019, Mr. Germain also served as Vice Chairman of the board of BiondVax Pharmaceuticals Ltd., a company based in Israel engaging in a Phase III clinical trials for a universal flu vaccine, and, effective September 30, 2019 has served as the chairman of the board of BiondVax Pharmaceuticals Ltd. Mr. Germain also serves or served as a director of the following companies that were reporting companies in the past: ChromaDex Inc., Stem Cell Innovations, Inc., Omnimmune Corp. and Collexis Holdings, Inc. He is also a co-founder and director of a number of private companies in and outside the biotech field. We believe that Mr. Germain’s qualifications to sit on our Board include his years of experience in the biotech industry, his experience serving as a director of public companies, as well as his knowledge and familiarity with corporate finance. Moria Kwiat Dr. Kwiat became a director of the Company in May 2012. Dr. Kwiat is Scientific and Clinical Researcher at AquaPass Medical, a medical device company that develops a treatment for heart failure. Between 2018 to 2021, she served as an analyst at aMoon, a leading Israeli life sciences venture fund. Between 2016 to 2017, she was a consultant and analyst at Frost & Sullivan, producing equity research for public companies in the healthcare domain. Dr. Kwiat has a broad academic background and scientific experience in inter-disciplinary fields, with specific expertise at the interface between biology and materials field. She is the co-author of multiple scientific papers. Dr. Kwiat holds a Ph.D. in Chemistry specializing in nanotechnology and material sciences, M.Sc. and B.Sc. in Biotechnology, from Tel Aviv University, Israel. We believe that Dr. Kwiat’s qualifications to sit on our Board include her knowledge and experience as a scientist and a researcher in the fields of biotechnology and nanotechnology. 44 Rami Levi Mr. Levi became a director of the Company in June 2021. Mr. Levi is the Founder and President of Catalyst Group International, LLC where, since 2009, he has provided consulting services relating to strategic planning to notable clients in the private and public sectors. From 2004 to 2006, he served as Senior Deputy General and Head of Marketing Administration at Israel’s Ministry of Tourism. He holds an MA with Honors in Political Science from The Hebrew University of Jerusalem, Israel. We believe that Mr. Levi’s qualifications to sit on our Board include his experience in strategic planning, business development and activities in the government sector. Varda Shalev Prof. Shalev became a director of the Company in July 2021. Prof. Shalev, MD has been serving as a professor at the department of epidemiology at the medical school of Tel Aviv University, Israel since 2019. She has also been serving as a member of the board of directors of BATM Advanced Communications Ltd. since November 2018. She is the Chief Medical Officer of Alike Ltd. since May 2020. Prof. Shalev established the Department of Medical Informatics at Maccabi Health Care and was responsible for planning and developing its computerized medical systems. She has pioneered the development of multiple disease registries to support chronic disease management. She has also served as the director of primary care division at Maccabi Health Care from October 2013 to June 2015 and as the Chief Executive Officer of the research and innovation center (KSM Institute and Maccabitech the epidemiological and clinical research arm of Israel’s Maccabi Healthcare Services) at Maccabi Health Care from July 2015 to May 2020. Prof. Shalev holds an MD from Ben Gurion University, Israel, and an MPH in Public Health Administration from Clark University, Massachusetts and her Doctoral Fellowship in Medical Informatics from Johns Hopkins University. We believe that Prof. Shalev’s qualifications to sit on our Board include her experience working in clinical environments and research settings at the intersection of health and technology. Maital Shemesh-Rasmussen Ms. Shemesh-Rasmussen became a director of the Company in June 2021. Ms. Shemesh-Rasmussen has served as the Chief Commercial Officer of Octave Bioscience, Inc. since February 2021. Prior to this role, Ms. Shemesh-Rasmussen served as the Global Head of Marketing at Roche Diagnostics Information Solutions between 2018 and 2020. Between 2016 and 2018, she worked at Fitango Health, Inc. where she focused on marketing and business development. Between 2013 and 2016, she led Product Marketing at the Oracle Health Sciences Global Business Unit, as well as Marketing and Business Development in the Oracle Digital Health Innovation Unit. Prior to these positions, Ms. Shemesh-Rasmussen served as Vice President at JPMorgan Chase Bank from 2002 until 2007. Ms. Shemesh-Rasmussen holds a BA in Behavioral Sciences from Ben Gurion University, Israel. We believe that Ms. Shemesh-Rasmussen’s qualifications to sit on our Board include her experience in marketing for pharmaceutical companies, science, business development and investment banking. Doron Shorrer Mr. Shorrer became a director of the Company in October 2003. Mr. Shorrer was one of the Company’s founders and served as its first Chairman until 2006. Since 1998, Mr. Shorrer has served as the Chairman and CEO of Shorrer International Ltd., an investment and financial consulting company. Mr. Shorrer also serves as a director at each of Sigma Mutual Funds Ltd., Food Save Ltd. and G.D.M. Investments Ltd. 45 Mr. Shorrer has served as a director of Provident Fund for employees of the Israel Electric Company Ltd. and between 1999 and 2004 he was Chairman of the board of directors of Phoenix Insurance Company, one of the largest insurance companies in Israel, and of Mivtachim Pension Funds Group, the largest pension fund in Israel. Prior to serving in these positions, Mr. Shorrer held senior positions that included Arbitrator at the Claims Resolution Tribunal for Dormant Accounts in Switzerland; Economic and Financial Advisor, Commissioner of Insurance and Capital Markets for the State of Israel; Member of the board of directors of “Nechasim” of the State of Israel; Member Committee for the Examination of Structural Changes in the Capital Market (The Brodet Committee); General Director of the Ministry of Transport; founder and managing partner of an accounting firm with offices in Jerusalem, Tel-Aviv and Haifa; Member of the Lecture Staff of the Hebrew University Business Administration School; Chairman of Amal School Chain; Chairman of a Public Committee for Telecommunications; and Economic Consultant to the Ministry of Energy. In addition, Mr. Shorrer served as a director of Hebrew University employees and Massad Bank from the International Bank group from 2009 to 2018. Among his many areas of expertise, Mr. Shorrer formulates, implements and administers business planning in the private and institutional sector, in addition to consulting on economic, accounting and taxation issues to a diverse audience ranging from private concerns to government ministries. Mr. Shorrer holds a BA in Economics and Accounting and an M.B.A. in Business Administration (specialization in finance and banking) from the Hebrew University of Jerusalem, Israel, and is a Certified Public Accountant in Israel. We believe that Mr. Shorrer’s qualifications to sit on our Board include his years of experience in the high-tech industry, his vast skill and expertise in accounting and economics, as well as his knowledge and familiarity with corporate finance. There are no family relationships between any of the directors or officers named above. Audit Committee and Audit Committee Financial Expert Until May 31, 2021, the members of our Audit Committee were Doron Shorrer, Isaac Braun and Moria Kwiat. Mr. Braun was not re-nominated as a director for the 2021 annual meeting of shareholders, held on June 1, 2021, or the 2021 Annual Meeting, and his membership on the Board and Audit Committee terminated on June 1, 2021. Effective June 3, 2021, the Board appointed Ms. Shemesh -Rasmussen to serve on the Audit Committee. Mr. Shorrer is the Chairman of the Audit Committee, and our Board has determined that all members of the Audit Committee are “independent” as defined by the rules of the SEC and the Nasdaq rules and regulations. The Board also determined that Mr. Shorrer is an Audit Committee financial expert. The Audit Committee operates under a written charter that is posted on our website at www.pluristem.com. The information on our website is not incorporated by reference into this Annual Report. The primary responsibilities of our Audit Committee include: ● Appointing, compensating and retaining our registered independent public accounting firm; ● Overseeing the work performed by any outside accounting firm; ● Assisting the Board in fulfilling its responsibilities by reviewing: (i) the financial report provided by us to the SEC, our shareholders or to the general public, and (ii) our internal financial and accounting controls; and ● Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations. 46 Our Audit Committee held seven meetings from during Fiscal Year 2021. Compensation Committee Until May 31, 2021, the members of our Compensation Committee were Doron Shorrer and Isaac Braun. Mr. Braun was not re-nominated as a director for the 2021 Annual Meeting, and his membership on the Board and Compensation Committee terminated that day. Effective June 3, 2021, the Board appointed Ms. Kwiat to serve on the Compensation Committee. The Board has determined that all of the members of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Compensation Committee operates under a written charter that is posted on our website at www.pluristem.com. The information on our website is not incorporated by reference into this Annual Report. The primary responsibilities of our Compensation Committee include: ● Reviewing and recommending to our Board of the annual base compensation, the annual incentive bonus, equity compensation, employment agreements and any other benefits of our executive officers; ● Administering our equity based plans and making recommendations to our Board with respect to our incentive–compensation plans and equity–based plans; and ● Annually reviewing and making recommendations to our Board with respect to the compensation policy for such other officers as directed by our Board. Our Compensation Committee held eight meetings during Fiscal Year 2021. During Fiscal Year 2021 the Compensation Committee engaged Deloitte Israel to review the Company’s existing compensation structure for its executive officers and non-executive directors. Such review included a benchmark analysis that evaluated the compensation that we pay our CEO, CFO, Executive Chairman and non-executive directors in comparison to our peer group. On September 10, 2020, our Board, upon recommendation from our Compensation Committee, approved new compensation arrangements for our CEO, CFO and Executive Chairman as well as an updated compensation policy for our non-executive directors. Nominating Committee The members of our Nominating Committee are Mark Germain and Doron Shorrer. Mr. Germain is the Chairman of the Nominating Committee. The Board has determined that all of the members of the Nominating Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Nominating Committee operates under a written charter that is posted on our website, www.pluristem.com. The information on our website is not incorporated by reference into this Annual Report. The primary responsibilities of our Nominating Committee include: ● Overseeing the composition and size of the Board, developing qualification criteria for Board members and actively seeking, interviewing and screening individuals qualified to become Board members for recommendation to the Board; ● Recommending the composition of the Board for each annual meeting of shareholders; and ● Reviewing periodically with the Chairman of the Board and the Chief Executive Officer the succession plans relating to positions held by directors, and making recommendations to the Board with respect to the selection and development of individuals to occupy those positions. 47 Director Nominations The Nominating Committee is responsible for developing and approving criteria, with Board approval, for candidates for Board membership. The Nominating Committee is responsible for overseeing the composition and size of the Board, developing qualification criteria for Board members and actively seeking, interviewing and screening individuals qualified to become Board members for recommendation to the Board and for recommending the composition of the Board for each of the Company’s annual meetings. The Board as a whole is responsible for nominating individuals for election to the Board by the shareholders and for filling vacancies on the Board that may occur between annual meetings of the shareholders. Nominees for director will be selected on the basis of their integrity, business acumen, knowledge of our business and industry, age, experience, diligence, conflicts of interest and the ability to act in the interests of all shareholders. No particular criteria will be a prerequisite or will be assigned a specific weight, nor does the Company have a diversity policy. The Company believes that the backgrounds and qualifications of its directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. We have never received communications from shareholders recommending individuals to any of our independent directors. Therefore, we do not yet have a policy with regard to the consideration of any director candidates recommended by shareholders. In Fiscal Year 2021, we did not pay a fee to any third party to identify or evaluate, or assist in identifying or evaluating, potential nominees for our Board. We have not received any recommendations from shareholders for Board nominees. All of the nominees for election at the 2021 Meeting were current members of our Board, at that time. Code of Ethics Our Board has adopted a Code of Business Conduct and Ethics that applies to, among other persons, members of our Board, our officers including our CEO (being our principal executive officer) and our CFO (being our principal financial and accounting officer) and our employees. Our Code of Business Conduct and Ethics is posted on our Internet website at www.pluristem.com. The information on our website is not incorporated by reference into this Annual Report. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct by posting such information on the website address specified above. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common shares, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. We have reviewed all forms provided to us or filed with the SEC. Based on that review and on written information given to us by our executive officers and directors, we believe that all Section 16(a) filings during the past fiscal year were filed on a timely basis and that all directors, executive officers and 10% beneficial owners have fully complied with such requirements during the past fiscal year, other than three reports on Form 4, filed on July 7, 2020, May 27, 2021 and June 1, 2021, which were filed late by Clover Wolf Capital – Limited Partnership, resulting in 4 transactions, 3 transactions and 6 transactions, respectively, not being reported on a timely basis. 48 Item 11. Executive Compensation. Compensation Discussion and Analysis The Compensation Committee of our Board is comprised solely of independent directors as defined by Nasdaq and non-employee directors as defined by Rule 16b-3 under the Exchange Act. The Compensation Committee has the authority and responsibility to review and make recommendations to the Board regarding the compensation of our CEO, Executive Chairman and CFO, and any other executive officers we may hire from time to time. Our named executive officers for Fiscal Year 2021 are those three individuals listed in the “Summary Compensation Table” below. Other information concerning the structure, roles and responsibilities of our Compensation Committee is set forth in in Item 10 – “Directors, Executive Officers and Corporate Governance — Compensation Committee” above. At our 2021 annual meeting of shareholders, we provided our shareholders with the opportunity to cast an advisory vote on our then named executive officers’ compensation. Over 88% of the votes cast on this “2021 say-on-pay vote” were voted in favor of the proposal. We have considered the 2021 say-on-pay vote and we believe that the support from our shareholders for the 2021 say-on-pay vote proposal indicates that our shareholders are supportive of our approach to executive compensation. At our 2019 annual meeting of shareholders, our shareholders voted in favor of the proposal to hold say-on-pay votes every two years. We will continue to consider the outcome of our say-on-pay votes when making compensation decisions regarding our named executive officers. A discussion of the policies and decisions that shape our executive compensation program, including the specific objectives and elements, is set forth below. Executive Compensation Objectives and Philosophy The objective of our executive compensation program is to attract, retain and motivate talented executives who are critical for our continued growth and success and to align the interests of these executives with those of our shareholders. To this end, our compensation programs for executive officers are designed to achieve the following objectives: ● attract, hire, and retain talented and experienced executives; ● motivate, reward and retain executives whose knowledge, skills and performance are critical to our success; ● ensure fairness among the executive management team by recognizing the contributions each executive makes to our success and the tenure of each team member as a factor in achieving such success; ● focus executive behavior on achievement of our corporate objectives and strategy; ● build a mechanism of “pay for performance”; and ● align the interests of management and shareholders by providing management with longer-term incentives through equity ownership. 49 The Compensation Committee reviews the allocation of compensation components regularly to ensure alignment with strategic and operating goals, competitive market practices and legislative changes. The Compensation Committee does not apply a specific formula to determine the allocation between cash and non-cash forms of compensation. Certain compensation components, such as base salaries, benefits and perquisites, are intended primarily to attract, hire, and retain well-qualified executives. Other compensation elements, such as long-term incentive opportunities, are designed to motivate and reward performance. Long-term incentives are intended to reward our long-term performance and executing our business strategy, and to strongly align named executive officers’ interests with those of shareholders. As such, from time to time, the Compensation Committee, and/or the Board, may engage external consultants to provide the Company with data that the Compensation Committee and/or Board may deem to be appropriate in determining the compensation of our executive officers, and the compensation, if any, paid to the members of the Board. With respect to equity compensation, the Compensation Committee makes awards to executives under our equity compensation plans as approved by the Board. Executive compensation is paid or granted based on such matters as the Compensation Committee deems appropriate, including our financial and operating performance, the alignment of the interests of the executive officers and our shareholders, the performance of our common shares and our ability to attract and retain qualified individuals. Elements of Executive Officer Compensation Our executive officer compensation program is comprised of: (i) base salary or monthly compensation; (ii) performance-based bonuses; (iii) long-term equity incentive compensation in the form of RSU awards; and (iv) benefits and perquisites. In establishing overall executive compensation levels and making specific compensation decisions for our executive officers in Fiscal Year 2021, the Compensation Committee considered a number of criteria, including the executive’s position, scope of responsibilities, prior base salary and annual incentive awards and expected contribution. In addition, the Compensation Committee conducted a compensation benchmark analysis for the executive officers. In that regard, our Compensation Committee decided to provide our Executive Chairman, Mr. Aberman, our CEO, Mr. Yanay, and our CFO, Ms. Franco-Yehuda with base salaries, RSU awards, acceleration of such awards under certain circumstances, and performance based bonuses in their respective employment and/or consulting agreement. Generally, our Compensation Committee reviews and, as appropriate, approves compensation arrangements for our named executive officers, from time to time but not less than once a year. The Compensation Committee also takes into consideration our CEO recommendations for the compensation of our CFO. Our CEO generally presents these recommendations at the time of our Compensation Committee’s review of executive compensation arrangements. On September 10, 2020, our Board, upon recommendation from our Compensation Committee, approved new compensation arrangements for our CEO, CFO and Executive Chairman as well as our non-executive directors. In that regard, the Compensation Committee engaged Deloitte Israel to review the Company’s compensation structure for its executive officers and non-executive directors. Such review included a benchmark analysis that evaluated the compensation that we pay our CEO, CFO, Executive Chairman and non-executive directors in comparison to our peer group. When evaluating the appropriateness of our compensation peer group, the Compensation Committee seeks to construct and approve a peer group of companies in similar industries of similar size, similar region or similar market cap to that of our Company. As a result, the Company has revised its compensation structure for its CEO, CFO, Executive Chairman and non-executive directors as further described herein, which impacted such compensation for the fiscal year ending June 30, 2021. 50 Base Salary The Compensation Committee performs a review of base salaries / monthly compensation for our named executive officers from time to time as appropriate. In determining salaries, the Compensation Committee members also take into consideration their understanding of the compensation practices of comparable companies (based on size and stage of development), independent third party market data such as compensation benchmark surveys to industry, including information relating to peer companies; individual experience and performance adjusted to reflect individual roles; and contribution to our clinical, regulatory, commercial, financial and operational performance. None of the factors above has a dominant weight in determining the compensation of our executive officers, and our Compensation Committee considers the factors as a whole when considering such compensation. In addition, our Compensation Committee may, from time to time, use comparative data regarding compensation paid by peer companies, for example, as it conducted during Fiscal Year 2021, in order to obtain a general understanding of current trends in compensation practices and ranges of amounts being awarded by other public companies, and not as part of an analysis or a formula. We may also change the base salary / monthly compensation of an executive officer at other times due to market conditions. We believe that a competitive base salary / monthly compensation is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. We also believe that attractive base salaries can motivate and reward executives for their overall performance. Base salaries and/or monthly compensation are established in part based on the individual experience, skills and expected contributions of our executives and our executives’ performance during the prior year. Compensation adjustments are made occasionally based on changes in an executive’s level of responsibility, Company progress or on changed local and specific executive employment market conditions. On September 10, 2020, at the recommendation of our Compensation Committee, following the benchmarking review conducted, our Board approved, effective as of January 1, 2021, on the one hand, an increase to the base monthly salary of our CEO and CFO such that the respective salaries will increase to 99,000 NIS and 65,000 NIS, and on the other hand, a decrease to the monthly consulting fee of our Executive Chairman to 142,250 NIS per month starting January 1, 2021 and effective through the earlier of December 31, 2021 or the filing of a BLA. Upon the expiration of the consulting agreement, we currently intend to enter into a new consulting agreement with Mr. Aberman or an entity which he controls. Performance Based Bonus Given the nature of our business, the determination of incentives for our executives is generally tied to success in promoting our Company’s development. We are continually seeking non-dilutive sources of funding. In addition, a key component of our strategy is to develop and manufacture cell therapy products for the treatment of multiple disorders through collaboration with other companies and entering into licensing agreements with such companies, such as our agreement with CHA. Therefore, to reward our executive officers, each of Mr. Yanay and Mr. Aberman will be entitled to a bonus equal to 1.5%, and Ms. Franco–Yehuda will be entitled to a bonus equal to 0.5%, of amounts received by us from non-dilutive funding received, among other things, from corporate partnering and strategic deals. Our Board approved a target bonus to our CEO, equal to up to seven times his monthly salary and to our CFO, of up to five and a half times her monthly salary, subject to milestones and performance targets that was set by our Compensation Committee. In addition, according to their employment agreements, Ms. Franco-Yehuda and Mr. Yanay are also entitled to a special bonus of up to three times of their monthly salary at the discretion of the Board. During Fiscal Year 2021, we have not paid bonuses in cash to our CEO and CFO, but accrued $126,000 and $64,000, respectively, for certain target bonuses as a result of the achievement of certain operational, commercial and financial goals that were defined by the Compensation Committee. Following the Board approval, we expect to pay such bonuses during October 2021. 51 Long-Term Equity Incentive Compensation Long-term incentive compensation allows the executive officers to share in any appreciation in the value of our common shares. The Compensation Committee believes that share participation aligns executive officers’ interests with those of our shareholders. The amounts of the awards are designed to reward past performance and create incentives to meet long-term objectives. Awards are made at a level expected to be competitive within the biotechnology industry. We do not have a formula relating to the level of awards that is competitive within the biotechnology industry. In determining the amount of each grant, the Compensation Committee also takes into account the number of shares held by the executive prior to the grant. For our executive management team, awards are made on a discretionary basis and not pursuant to specific criteria set out in advance. RSU awards provide our executive officers with the right to purchase shares of our common shares at a par value of $0.00001, subject to continued employment with our Company or the achievement of certain business or market milestones. In recent years, we granted our executive officers RSU awards. We chose to grant RSU awards and not options because RSU awards, once vested, always have an immediate financial value to the holder thereof, unlike options where the exercise price might be below the current market price of the shares and therefore not have any intrinsic value to the holder thereof. Our Executive Chairman, CEO and CFO are entitled to acceleration of the vesting of their awards in the following circumstances: (1) if we terminate their employment or consulting arrangement with us or any of our subsidiaries for a reason other than “Justifiable Cause” (as defined in their employment or consulting arrangement contract), they will be entitled to acceleration of 100% of any unvested award and (2) if they resign, they will be entitled to acceleration of up to 50% of any unvested award subject to the approval of the Board and (3) in the event of a change in control as defined in their consulting or employment agreement, as long as they continue to provide services to the Company or its subsidiaries, they will be entitled to an acceleration of 100% of any unvested RSUs. All grants are approved, upon receipt of recommendation by our Compensation Committee, by our Board. In September 2020, following a benchmark analysis conducted by our compensation committee, we decided to grant our CEO and Executive Chairman 1,000,000 RSUs each. Of this award, 500,000 RSUs that were granted to each of them were linked to achievement of a market condition – our reaching $550 million of market capitalization during the three year period from the date of the grant. We believe that such compensation aligns executive officers’ interests with those of our shareholders. For clarification purposes, the acceleration mechanism detailed above does not apply to the 500,000 RSUs granted to each of our CEO and Executive Chairman in September 2020, that were linked to the achievement of our market capitalization reaching of $550 million during the three year period from the date of the grant. Benefits and Perquisites Generally, benefits available to Mr. Yanay and Ms. Franco-Yehuda are available to all employees on similar terms and include welfare benefits, paid time-off, life and disability insurance and other customary or mandatory social benefits in Israel. We provide our named executive officers with a phone and a Company car, or reimbursement for car or phone expenses, which are customary benefits in Israel to managers and officers. While the agreement will be terminated on the earlier of December 31, 2021 or upon the filing of a BLA, we have agreed to pay Mr. Aberman an adjustment fee as provided above, but only during the period between January 1, 2021 and December 31, 2021, or in the event of a change of control equal to nine months of consulting fees; provided, however that such adjustment fees shall be paid in two installments as follows: (i) 38,250 NIS paid on January 1, 2021, and 1,307,250 NIS on December 31, 2021. In July 2021, the Board revised Mr. Aberman’s eligibility to adjustment fees to 1,515,600 NIS in total to include nine months of car and related expenses, 1,477,350 NIS of which will be paid on December 31, 2021. 52 Mr. Yanay is entitled to a severance payment that equals a month’s compensation for each twelve-month period of employment or otherwise providing services to the Company, and an additional adjustment fee that equals the monthly salary amount multiplied by 6, plus the number of years the employment agreement remains in force from September 12, 2018, but in any event no more than 9 years in the aggregate. In conjunction with the adjustments made to the base salaries during Fiscal Year 2021, the employment agreement of our CFO was amended to also provide for an adjustment fee that equals her monthly salary amount multiplied by three, plus the number of years the employment agreement remained in force from June 30, 2020, but in any event no more than six months of adjustment fees in the aggregate. Ms. Chen Franco-Yehuda is also entitled to severance pay upon termination of employment for any reason, including retirement, based on 8.333% of her monthly base salary, according to section 14 of the Severance Pay Law, 1963. We do not believe that the benefits and perquisites described above deviate materially from the customary practice for compensation of executive officers by other companies similar in size and stage of development. Report of the Compensation Committee The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis prepared under Item 402(b) of Regulation S-K with our management and, based on such review and discussions, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K and in our proxy statement relating to our next annual meeting of stockholders. Compensation Committee Members: Doron Shorrer Moria Kwiat Summary Compensation Table The following table shows the particulars of compensation owed to our named executive officers for the fiscal years ended June 30, 2021 and 2020. We do not currently have any other executive officers. Name and Principal Position Fiscal Year (1) Salary ($) (2) Non-Equity Plan Compensation ($) (3) Bonus ($) (4) Share-based Awards ($) (5) All Other Compensation ($) (6) Total ($) Zami Aberman 2021 556,475 (7) - - 8,741,402 508,074 9,805,951 Executive Chairman 2020 439,704 (7) - - - 61,540 501,244 Yaky Yanay 2021 459,016 (8) 126,000 - 8,741,402 27,588 9,354,006 CEO 2020 320,911 (8) - - - 29,466 350,377 Chen Franco-Yehuda 2021 251,642 64,000 1,020,000 14,653 1,350,295 CFO 2020 179,229 - 14,426 - 14,035 207,690 (1) The information is provided for each fiscal year, which begins on July 1 and ends on June 30. (2) Amounts paid for Salary which were originally denominated in NIS, were translated into U.S. dollars at the then current exchange rate for each payment. The salaries of Mr. Yanay and Ms. Franco-Yehuda are comprised of base salaries and additional payments and provisions such as welfare benefits, paid time-off, life and disability insurance and other customary or mandatory social benefits to employees in Israel. For Mr. Yanay and Mr. Aberman, their salaries also include additional amounts equal to one monthly salary of NIS 80,000, or approximately $25,000 and NIS 149,500, or approximately $44,000, respectfully. (3) For Mr. Yanay and Ms. Franco-Yehuda, we have accrued, but have not yet paid, bonuses during Fiscal Year 2021 of $126,000 and $64,000 respectively, for certain target bonuses as a result of the achievement of certain milestones that were defined by the Compensation Committee. We expect to pay such bonuses during October 2021. (4) In fiscal year 2020, we paid to Ms. Franco-Yehuda a onetime bonus of NIS 50,000, or approximately $14,000. 53 (5) The fair value recognized for the share-based awards was determined as of the grant date in accordance with Accounting Standard Codification, or ASC, Topic 718. The assumptions used in the calculations for these amounts are included in Note 9 to our audited consolidated financial statements for Fiscal Year 2021 included elsewhere in this Annual Report (see also “Grants of Plan-Based Awards” table presented below). (6) Mr. Aberman is entitled to adjustment fees of NIS 1,515,600, or approximately $443,000, out of which we paid NIS 38,250, or approximately $11,000, during Fiscal Year 2021, and we expect to pay the rest of the adjustment fees during January 2022. Additionally, this column includes costs in connection with car or car expenses reimbursement and mobile phone expenses for Mr. Aberman. We have also paid Mr. Yanay the tax associated with the company car benefit included in this column, which is grossed-up. For Mr. Yanay the gross-up is part of the amount in the “Salary” column. (7) Includes $6,201 and $18,486 paid in cash to Mr. Aberman as compensation for services as a director in fiscal year 2021 and 2020 respectively. Starting October 2020, Mr. Aberman was not entitled to compensation for services as a director. (8) Includes $6,194 and $18,400 paid in cash to Mr. Yanay as compensation for services as a director in Fiscal Year 2021 and 2020, respectively. Starting October 2020, Mr. Yanay was not entitled to compensation for services as a director. Employment and Consulting Agreements During Fiscal Year 2021, we had the following written agreements and other arrangements concerning compensation with our named executive officers: (a) Mr. Aberman is engaged with us as a consultant and currently receives a monthly consulting fee of NIS 142,500 (approximately $43,000 per month). On September 10, 2020, at the recommendation of our Compensation Committee, our Board approved, effective as of January 1, 2021 a decrease to the monthly consulting fee of our Executive Chairman from 149,500 to NIS 142,250 per month. In addition, Mr. Aberman was entitled once a year to receive an additional amount that equals the monthly consulting fee. All amounts that were paid, were paid plus value added tax. Mr. Aberman is also entitled to a performance-based bonus of 1.5% from amounts received by us from non-diluting funding and strategic deals during the term of his consulting agreement and nine months afterwards. Mr. Aberman is also entitled to car expenses reimbursement. (b) Starting January 1, 2021, Mr. Yanay’s monthly salary is NIS 99,000, approximately $30,000 per month. On September 10, 2020, at the recommendation of our Compensation Committee, our Board approved, effective as of January 1, 2021, an increase to the base salary of our CEO such that the salary will increase to NIS 99,000 from NIS 80,000. Mr. Yanay is provided with a cellular phone and a Company car pursuant to the terms of his agreement. Furthermore, Mr. Yanay is entitled to a performance based bonus of 1.5% from amounts received by us from non-diluting funding and strategic deals and a target bonus equal to up to seven times his monthly salary subject to milestones and performance targets that was set by our Compensation Committee. The Board may also grant Mr. Yanay a discretionary bonus of up to 3 months of his monthly salary. (c) Starting January 1, 2021 Ms. Franco-Yehuda’s monthly salary is NIS 65,000. On September 10, 2020, at the recommendation of our Compensation Committee, our Board approved, effective as of January 1, 2021, an increase to the base salary of our CFO such that the salary will increase to NIS 65,000 from NIS 42,000. Ms. Franco-Yehuda receives car and cellular phone expense reimbursements pursuant to the terms of her agreement. Furthermore, Ms. Franco-Yehuda is entitled to a performance based bonus of 0.5% from amounts received by us from non-diluting funding and strategic deals and a target bonus equal to up to five and a half times her monthly salary, subject to milestones and performance targets that was set by our Compensation Committee. The Board may also grant Ms. Franco-Yehuda a discretionary bonus of up to 3 months of her monthly salary. Potential Payments Upon Termination or Change-in-Control We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change-in-control) or a change of responsibilities following a change-in-control, except for the following: (i) in the event of termination of Mr. Aberman’s consulting agreement, he will be entitled to receive an adjustment fee that equals the monthly consulting fees and car expenses multiplied by nine. We paid NIS 38,250, or approximately $11,000, of the adjustment fee in January 2021 and we expect to pay an additional NIS 1,477,350, or approximately $432,000, in January 2022; (ii) in the event of termination of Mr. Yanay employment, he is entitled to a severance payment, under Israeli law, that equals a month’s compensation for each twelve-month period of employment or otherwise providing services to the Company, and an additional adjustment fee that equals the monthly base salary multiplied by six, plus the number of years the employment agreement is in force from September 12, 2018, but in any event no more than nine months in the aggregate; and (iii) in the event of termination of Ms. Franco-Yehuda’s employment, she is entitled to a severance payment, under Section 14 of the Israeli Severance Pay Law, and an adjustment fee that equals her monthly salary amount multiplied by three, plus the number of years the employment agreement remains in force from June 30, 2020, but in any event no more than six years in the aggregate. In addition, Mr. Aberman, Mr. Yanay and Ms. Franco-Yehuda are entitled to acceleration of the vesting of their share options and restricted share in the following circumstances: (1) if we terminate their employment for a reason other than cause (as may be defined in each respective agreement), they will be entitled to acceleration of 100% of any unvested awards and (2) if they resign, they will be entitled to acceleration of 50% of any unvested award, subject to the approval of the Board. In addition, Mr. Aberman, Mr. Yanay and Ms. Franco-Yehuda are also entitled to acceleration of 100% of any unvested award in case of our change in control as defined in their respective consulting and employment agreements. For clarification purposes, the acceleration mechanism detailed above does not apply to the 500,000 RSUs granted to each of our CEO and Executive Chairman in September 2020, that were linked to the achievement of our market capitalization reaching of $550 million during the three year period from the date of the grant. 54 The following table displays the value of what our CEO, Executive Chairman and CFO would have received from us had their employment been terminated, or a change in control of us happened on June 30, 2021. Officer Salary Accelerated Vesting of RSUs (1) Total Zami Aberman Terminated due to officer resignation $ 453,792 $ 841,500 (2) $ 1,295,292 Terminated due to discharge of officer $ 453,792 $ 1,683,000 (3) $ 2,136,792 Change in control - $ 1,683,000 (4) $ 1,683,000 Yaky Yanay Terminated due to officer resignation $ 565,689 (5) $ 841,500 (2) $ 1,407,189 Terminated due to discharge of officer $ 565,689 (5) $ 1,683,000 (3) $ 2,248,689 Change in control - $ 1,683,000 (4) $ 1,683,000 Chen Franco Yehuda Terminated due to officer resignation $ 79,755 $ 169,290 (2) $ 249,045 Terminated due to discharge of officer $ 79,755 $ 338,580 (3) $ 418,335 Change in control - $ 338,580 (4) $ 338,580 (1) Value shown represents the difference between the closing market price of our common shares on June 30, 2021 of $3.96 per share and the applicable exercise price of each grant. (2) Up to 50% of all unvested RSUs issued under the applicable equity incentive plans vest upon resignation under the terms of those plans, subject to the approval of the Board at its sole discretion. (3) All unvested RSUs issued under the applicable equity incentive plans vest upon an involuntary termination due to discharge, except for cause, excluding 500,000 RSUs that will vest upon achievement of increasing market capitalization of our common shares on the Nasdaq Global Market to $550 million within no more than 3 years from the date of grant. (4) All unvested RSUs issued under the applicable equity incentive plans vest upon a change in control under the terms of those plans excluding 500,000 RSUs that will vest upon achievement of increasing market capitalization of our common shares on the Nasdaq Global Market to $550 million within no more than 3 years from the date of grant. (5) As of June 30, 2021, the value of the severance fund net of Mr. Yanay is $220,000. For severance payments, we will need to pay the difference between Mr. Yanay’s eligibility to receive severance payment and the value of the fund, which as of June 30, 2021, amounted to $345,000. Pension, Retirement or Similar Benefit Plans We have no arrangements or plans, except for those we are obligated to maintain pursuant to the Israeli law, under which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options, RSUs or restricted shares at the discretion of our Board in the future. 55 Outstanding Equity Awards at the End of Fiscal Year 2021 The following table presents the outstanding equity awards held as of June 30, 2021 by our named executive officers, all of which have been issued pursuant to our 2019 Equity Compensation Plan, or the 2019 Plan, and 2016 Equity Compensation Plan, or the 2016 Plan: Name Number of shares that have not vested (#) Market value of shares that have not vested ($) Equity incentive plan awards: Number of shares that have not vested (#) Equity incentive plan awards: Market value of shares that have not vested ($) Zami Aberman - - 500,000 (1) 1,980,000 406,250 (2) 1,608,750 - - 18,750 (3) 74,250 - - Yaky Yanay - -- 500,000 (1) 1,980,000 406,250 (2) 1,608,750 - - 18,750 (3) 74,250 - - Chen Franco-Yehuda 750 (4) 2,970 - - 3,500 (5) 13,860 - - 81,250 (6) 321,750 - - (1) 500,000 RSUs vest in full upon milestone achievement of increasing our market capitalization on the Nasdaq Global Markets to $550 million within no more than three years from the date of grant. (2) 406,250 RSUs vest in 13 equal installments of 31,250 on September 10, 2021 and every three months thereafter. (3) 18,750 RSUs vest in six equal installments of 3,125 on September 19, 2021 and every three months thereafter. (4) 750 RSUs vest in six equal installments of 125 on September 19, 2021 and every three months thereafter. (5) 3,500 RSUs vest in seven equal installments of 500 on September 28, 2021 and every three months thereafter. (6) 81,250 RSUs vest in 13 equal installments of 6,250 on September 11, 2021 and every three months thereafter. 56 Long-Term Incentive Plans-Awards in Last Fiscal Year We have no long-term incentive plans, other than the 2016 Plan and the 2019 Plan, described in Item 12 below. Director Compensation The following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who is not an executive officer during Fiscal Year 2021: Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Total ($) Isaac Braun (2) 34,207 204,000 238,207 Mark Germain 110,175 (4) 204,000 314,175 Moria Kwiat 35,412 204,000 239,412 Rami Levi (3) 17,500 144,400 161,900 Maital Shemesh-Rasmussen (3) 17,750 144,400 162,150 Doron Shorrer 46,026 204,000 250,026 (1) The fair value recognized for the Stock Awards was determined as of the grant date in accordance with ASC 718. Assumptions used in the calculations for these amounts are included in Note 9 to our consolidated financial statements for Fiscal Year 2021 included elsewhere in this Annual Report. (2) Effective as of June 1, 2021, Mr. Braun ceased to serve on the Board. (3) Effective as of January 5, 2021, this director was appointed to serve on the Board. (4) Includes a bonus to Mr. Germain in the amount of $75,000 for his contribution in connection with the EIB Finance Agreement. On September 10, 2020, our Board, upon the recommendation of our Compensation Committee, approved the change of their compensation components to an annual fee of $35,000. In addition, members of our Board of Director committees are compensated as follows (i) the Chairman of our Audit Committee receives an additional annual fee of $10,000 and, in the event of an annual equity grant issued to directors, or an Annual Director Grant, an additional 10% of equity securities in addition to such grant, and each other member of the Audit Committee shall receive an additional annual fee of $3,000 and, in the event of an Annual Director Grant, an additional 3% of equity securities in addition to such grant; (ii) the Chairman of our Compensation Committee receives an additional annual fee of $4,000 and, in the event of an Annual Director Grant, an additional 4% of equity securities in addition to such grant, and each other member of the Compensation Committee receives an additional annual fee of $2,000 and, in the event of an Annual Director Grant, an additional 2% of equity securities in addition to such grant; and (iii) the Chairman of our Nominating Committee receives an additional annual fee of $4,000 and, in the event of an Annual Director Grant, an additional 4% of equity securities in addition to such grant, and each other member of the Nominating Committee receives an additional annual fee of $2,000 and, in the event of an Annual Director Grant, an additional 2% of equity securities in addition to such grant. In exceptional circumstances members of the Board may receive bonuses of up to $75,000 per year for extraordinary performance, as well as discretionary bonuses in special circumstances as the Board or the Compensation Committee may decide. During 2021, we paid Mr. Mark Germain $75,000 for his contribution in connection with the EIB Finance Agreement. 57 During Fiscal Year 2021, we paid a total of $187,081 excluding the bonus paid to Mr. Germain in cash to directors as compensation. As of June 30, 2021, we have outstanding grants to our non-executive directors aggregating 382,612 restricted shares and RSUs of which 260,156 were exercisable or vested, as the case may be, as follows: Name Total of Options, restricted shares and RSUs Granted Total of restricted shares and RSUs exercisable and vested Isaac Braun (1) 78,621 78,621 Mark Germain 100,645 60,998 Moria Kwiat 55,750 34,594 Rami Levi 20,000 0 Maital Rasmussen 20,000 0 Doron Shorrer 107,596 85,943 Total 382,612 260,156 (1) Mr. Braun was not re-nominated as a director nominee, and therefore, effective as of June 1, 2021, Mr. Braun ceased to serve on the Board. For all directors, the vesting of directors’ share options, RSUs and restricted share accelerates in the following circumstances: (1) if the director is not re-nominated to serve on the Board or the director is not re-elected by stockholders at a special or annual meeting, this will result in the acceleration of 100% of any unvested award, and (2) the voluntary resignation of a director will result in the acceleration of up to 50% of any unvested award subject to Board approval. In addition, a change in control will result in the acceleration of 100% of any unvested award of our directors. Mr. Braun was not re-nominated as a director nominee at the 2021 Annual Meeting and on June 1, 2021, all unvested awards held by Mr. Braun were accelerated, resulting in the vesting of 22,139 RSUs for Mr. Braun. Other than as described above, we have no present formal plan for compensating our directors for their service in their capacity as directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our Board as per policy approved by our Compensation Committee. The Board may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. Other than indicated above, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments during Fiscal Year 2021. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth certain information, to the best knowledge and belief of the Company, as of September 3, 2021 (unless provided herein otherwise), with respect to holdings of our common shares by (1) each person known by us to be the beneficial owner of more than 5% of the total number of our common shares outstanding as of such date; (2) each of our directors; (3) each of our named executive officers; and (4) all of our directors and our executive officers as a group. 58 Unless otherwise indicated, the address of each person listed below is c/o Pluristem Therapeutics Inc., MATAM Advanced Technology Park, Building No. 5, Haifa, Israel, 3508409. Name of Beneficial Owner Beneficial Number of Shares (1) Percentage of Shares Beneficially Owned Directors and Named Executive Officers Zami Aberman Executive Chairman of the Board of Directors 621,630 (2) 1.9 % Yaky Yanay CEO, President and Director 548,474 (2) 1.7 % Chen Franco-Yehuda 39,091 * CFO Doron Birger Director - * Doron Shorrer Director 91,506 (5) * Isaac Braun Director 88,621 (3) * Maital Rasmussen Director 3,750 * Mark Germain Director 63,681 * Moria Kwiat Director 42,543 (4) * Rami Levi Director 3,750 * Varda Shalev Director - * Directors and Executive Officers as a group (11 persons) 1,503,046 (6) 4.7 % 5% Shareholders Clover Wolf Capital – Limited Partnership 2,340,085 (7) 7 % * less than 1% 59 (1) Based on 32,004,785 common shares issued and outstanding as of September 3, 2021. Except as otherwise indicated, we believe that the beneficial owners of the common shares listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares subject to options, warrants or right to purchase or through the conversion of a security currently exercisable or convertible, or exercisable or convertible within 60 days, are reflected in the table above and are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. (2) Includes a warrant to acquire up to 7,143 shares. (3) Includes a warrant to acquire up to 5,000 shares. (4) Includes a warrant to acquire up to 2,857 shares. (5) Includes a warrant to acquire up to 1,429 shares. (6) Includes warrants to acquire up to 23,572 shares. (7) Based solely on information provided by the holder. Clover Wolf Ltd. is the General Partner of Clover Wolf Capital – Limited Partnership. Adi Wolf is the Managing Member and Chief Executive Officer of Clover Wolf Capital – Limited Partnership and also the Chief Executive Officer of Clover Wolf Ltd. All investment decisions are made by Adi Wolf, and thus the power to vote or direct the votes of these common share, as well as the power to dispose or direct the disposition of such common shares is held by Adi Wolf through Clover Wolf Capital – Limited Partnership and Clover Wolf Ltd. The address of Clover Wolf Capital – Limited Partnership is 24 Bodenhimer Street, Tel Aviv, Israel 6200838. Equity Compensation Plan Information At our annual meeting of our shareholders held on May 31, 2016, our shareholders approved the 2016 Plan. Under the 2016 Plan, options, restricted share and RSUs may be granted to our officers, directors, employees and consultants or the officers, directors, employees and consultants of our subsidiary. Under the 2016 Plan, the plan administrator is authorized to grant awards to acquire common shares, restricted shares and RSUs, in each calendar year, in a number not exceeding 2.75% of the number of our common shares issued and outstanding on a fully diluted basis on the immediately preceding December 31. In addition, at our annual meeting of our shareholders held on June 13, 2019, our shareholders approved the 2019 Plan. Under the 2019 Plan, options, restricted shares and RSUs may be granted to our officers, directors, employees and consultants or the officers, directors, employees and consultants of our subsidiary. Under the 2019 Plan, the plan administrator is authorized to grant options to acquire common shares, restricted shares and RSUs in a number not exceeding 16% of the number common shares issued and outstanding immediately prior to the grant of such awards on a fully diluted basis. 60 The following table summarizes certain information regarding our equity compensation plans as of June 30, 2021: Plan Category Number of securities to be issued upon exercise of outstanding options Weighted-average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans (2016 Plan and 2019 Plan) Equity compensation plan approved by security holders 39,835 $ 0.00001 4,677,366 Item 13. Certain Relationships and Related Transactions and Director Independence. Except for the arrangements described in Item 11, during fiscal years 2021 and 2020, we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest. The Board has determined that Doron Birger, Doron Shorrer, Maital Shemesh-Rasmussen, Mark Germain, Moria Kwiat, and Varda Shalev are “independent” directors, as defined by the rules of the SEC and the Nasdaq rules and regulations. Item 14. Principal Accounting Fees and Services The fees for services provided by our independent registered public accounting firm to the Company and paid in the last two fiscal years were as follows: Twelve months ended on June 30, 2021 Twelve months ended on June 30, 2020 Audit Fees $ 105,000 $ 110,041 Audit-Related Fees None None Tax Fees $ 28,507 $ 27,072 All Other Fees None None Total Fees $ 133,507 $ 137,113 Audit Fees . These fees were comprised of (i) professional services rendered in connection with the audit of our consolidated financial statements for our Annual Report on Form 10-K, (ii) the review of our quarterly consolidated financial statements for our quarterly reports on Form 10-Q, (iii) audit services provided in connection with other regulatory or statutory filings. 61 Tax Fees. These fees relate to our tax compliance and tax advisory projects. All Other Fees . These fees were comprised of fees related to assistance in preparation of IIA as well as other grant applications. SEC rules require that before the independent registered public accounting firm are engaged by us to render any auditing or permitted non-audit related service, the engagement be: 1. pre-approved by our Audit Committee; or 2. entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management. The Audit Committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by the Audit Committee before the services were rendered. On March 25, 2021, our Audit Committee dismissed Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as our independent registered public accounting firm, effective after their completion of the review of the Company’s consolidated financial statements for the three months ending March 31, 2021. In addition, on March 25, 2021, our Audit Committee appointed Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, or PWC, as our independent registered public accounting firm for the fiscal year ending June 30, 2021, whose appointment took place upon the dismissal of our former auditors. The Audit Committee has considered the nature and amount of fees billed by Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, and Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, and believes that the provision of services for activities unrelated to the audit was compatible with maintaining Kost Forer Gabbay & Kasierer’s independence and it is compatible with maintaining Kesselman & Kesselman’s, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, independence. As of June 30, 2021, we have accrued approximately $70,000 for the annual audit fees for the Fiscal Year ended June 30,2021, which we expect to pay PWC during fiscal year 2022. 62 PART IV Item 15. Exhibits. 3.1 Composite Copy of the Company’s Articles of Incorporation as amended on July 2, 2020 (incorporated by reference to Exhibit 4.1 of our registration statement on Form S-3 filed on July 16, 2020). 3.2 Composite Copy (marked) of the Company’s Articles of Incorporation as amended on July 2, 2020 (incorporated by reference to Exhibit 4.2 of our registration statement on Form S-3 filed on July 16, 2020). 3.3 Amended and Restated By-laws as amended on September 10, 2020 (incorporated by reference to Exhibit 3.3 of our annual report on Form 10-K filed on September 10, 2020). 4.1 Form of Common Share Purchase Warrant dated January 25, 2017 (incorporated by reference to Exhibit 4.1 of our current report on Form 8-K filed on January 20, 2017). 4.2 Form of Common Share Purchase Warrant dated April 2019 (incorporated by reference to Exhibit 4.1 of our current report on Form 8-K filed on April 5, 2019). 4.3 Description of Securities (incorporated by reference to Exhibit 4.3 of our annual report on Form 10-K filed on September 10, 2020). 10.1 Summary of Lease Agreement dated January 22, 2003, by and between Pluristem Ltd. and MTM – Scientific Industries Center Haifa Ltd., as supplemented on December 11, 2005, June 12, 2007 and July 19, 2011 (incorporated by reference to Exhibit 10.2 of our annual report on Form 10-K filed September 12, 2011). 10.2 Summary of Supplement to the Lease Agreement by and between Pluristem Ltd. and MTM – Scientific Industries Center Haifa Ltd dated July 31, 2012 (incorporated by reference to Exhibit 10.3 of our annual report on Form 10-K filed on September 11, 2013). 10.3 Summary of Supplement to the Lease Agreement by and between Pluristem Ltd. and MTM – Scientific Industries Center Haifa Ltd dated December 31, 2012 (incorporated by reference to Exhibit 10.4 of our annual report on Form 10-K filed on September 11, 2013). 10.4 Summary of Supplement to the Lease Agreement by and between Pluristem Ltd. and MTM – Scientific Industries Center Haifa Ltd dated February 3, 2015 (incorporated by reference to Exhibit 10.1 of our quarterly report on Form 10-Q filed on May 6, 2015). 10.5 Assignment Agreement dated May 15, 2007 between Pluristem Therapeutics Inc. and each of Technion Research and Development Foundation Ltd., Shai Meretzki, Dr. Shoshana Merchav (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on May 24, 2007). 10.6 Assignment Agreement dated May 15, 2007 between Pluristem Therapeutics Inc. and Yeda Research and Development Ltd. (incorporated by reference to Exhibit 10.2 of our current report on Form 8-K filed on May 24, 2007). 10.7 Exclusive License and Commercialization Agreement dated June 26, 2013, between Pluristem Ltd. and CHA (incorporated by reference to Exhibit 10.8 of our annual report on Form 10-K filed on September 11, 2013). 63 10.8+ Summary of Directors’ Ongoing Compensation (incorporated by reference to Exhibit 10.8 of our annual report on Form 10-K filed on September 10, 2020). 10.9+ Form of Indemnification Agreement between Pluristem Therapeutics Inc. and each of our directors and officers (incorporated by reference to Exhibit 10.1 of our quarterly report on Form 10-Q filed on February 8, 2021). 10.10+ 2016 Equity Compensation Plan (incorporated by reference to our Definitive Proxy Statement on Schedule 14A filed on April 4, 2016). 10.11+ Form of Share Option Agreement under the 2016 Equity Compensation Plan (incorporated by reference to Exhibit 10.17 of our annual report on Form 10-K filed on September 7, 2016). 10.12+ Form of Restricted Share Agreement under the 2016 Equity Compensation Plan (incorporated by reference to Exhibit 10.18 of our annual report on Form 10-K filed on September 7, 2016). 10.13+ Form of Restricted Share Agreement (Israeli directors and officers) under the 2016 Equity Compensation Plan (incorporated by reference to Exhibit 10.19 of our annual report on Form 10-K filed on September 7, 2016). 10.14+ 2019 Equity Compensation Plan (incorporated by reference to our Definitive Proxy Statement on Schedule 14A filed on April 25, 2019). 10.15+ Form of Share Option Agreement under the 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.19 of our annual report on Form 10-K filed on September 12, 2019). 10.16+ Form of Restricted Share Agreement under the 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.20 of our annual report on Form 10-K filed on September 12, 2019). 10.17+ Form of Restricted Share Agreement (Israeli directors and officers) under the 2019 Equity Compensation Plan (incorporated by reference to Exhibit 10.21 of our annual report on Form 10-K filed on September 12, 2019). 10.18*+ Form of Restricted Stock Unit Agreement (executive officers) under the 2019 Equity Compensation Plan. 10.19*+ Form of Restricted Stock Unit Agreement (directors) under the 2019 Equity Compensation Plan. 10.20*+ Form of Restricted Stock Unit Agreement (employees) under the 2019 Equity Compensation Plan. 10.21+ Amended and Restated Consulting Agreement between Pluristem Ltd. and Rose High Tech Ltd. dated September 10, 2020 (incorporated by reference to Exhibit 10.17 of our annual report on Form 10-K filed on September 10, 2020). 10.22+ Amended and Restated Employment Agreement between Pluristem Ltd. and Yaky Yanay dated September 10, 2020 (incorporated by reference to Exhibit 10.18 of our annual report on Form 10-K filed on September 10, 2020). 10.23+ Amended and Restated Employment Agreement between Pluristem Ltd. and Chen Franco-Yehuda dated September 10, 2020 (incorporated by reference to Exhibit 10.19 of our annual report on Form 10-K filed on September 10, 2020). 10.24^ Finance Contract between the European Investment Bank, as Lender, and Pluristem GmBH, as borrower, and Pluristem Therapeutics Inc. and Pluristem Ltd., as Original Guarantors, dated April 29, 2020 (incorporated by reference to Exhibit 10.21 of our annual report on Form 10-K filed on September 10, 2020). 64 10.25 Guarantee Agreement by and among the European Investment Bank, Pluristem Therapeutics, Inc. and Pluristem GmbH, dated September 30, 2020 (incorporated by reference to Exhibit 10.1 of our quarterly report on Form 10-Q filed on November 5, 2020). 10.26 Guarantee Agreement by and among the European Investment Bank, Pluristem Ltd. and Pluristem GmbH dated, September 30, 2020 (incorporated by reference to Exhibit 10.1 of our quarterly report on Form 10-Q filed on November 5, 2020). 10.27 Open Market Sales Agreement, dated July 16, 2020, between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.2 of our registration statement on Form S-3 filed on July 16, 2020). 10.28*+ Letter agreement by and between Pluristem Ltd. and Rose High Tech Ltd., dated September 13, 2021. 10.29*+ Letter agreement by and between Pluristem Ltd. and Yaky Yanay, dated September 13, 2021. 10.30*+ Letter agreement by and between Pluristem Ltd. and Chen Franco-Yehuda, dated September 13, 2021. 21.1 List of Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 of our annual report on Form 10-K filed on September 10, 2020). 23.1* Consent of Kost Forer Gabbay & Kasierer, A member of Ernst & Young Global. 23.2* Consent of Kesselman & Kesselman, Independent Registered Public Accounting Firm. 31.1* Certification pursuant to Rule 13a-14(a)/15d-14(a) of Yaky Yanay. 31.2* Certification pursuant to Rule 13a-14(a)/15d-14(a) of Chen Franco-Yehuda. 32.1** Certification pursuant to 18 U.S.C. Section 1350 of Yaky Yanay. 32.2** Certification pursuant to 18 U.S.C. Section 1350 of Chen Franco-Yehuda. 101* The following materials from our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements, tagged as blocks of text and in detail. * Filed herewith. ** Furnished herewith. + Management contract or compensation plan. ^ Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to Pluristem if publicly disclosed. Item 16. Form 10-K Summary. None. 65 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Pluristem Therapeutics Inc. By: /s/ Yaky Yanay Yaky Yanay, Chief Executive Officer Dated: September 13, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Yaky Yanay Yaky Yanay, Chief Executive Officer, President and Director (Principal Executive Officer) Dated: September 13, 2021 By: /s/ Chen Franco-Yehuda Chen Franco-Yehuda, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Dated: September 13, 2021 By: /s/ Zami Aberman Zami Aberman, Executive Chairman of the Board of Directors Dated: September 13, 2021 By: /s/ Doron Birger Doron Birger, Director Dated: September 13, 2021 By: /s/ Mark Germain Mark Germain, Director Dated: September 13, 2021 By: /s/ Moria Kwiat Moria Kwiat, Director Dated: September 13, 2021 By: /s/ Rami Levi Rami Levi, Director Dated: September 13, 2021 By: /s/ Prof. Varda Shalev Prof. Varda Shalev, Director Dated: September 13, 2021 By: /s/ Maital Shemesh-Rasmussen Maital Shemesh-Rasmussen, Director Dated: September 13, 2021 By: /s/ Doron Shorrer Doron Shorrer, Director Dated: September 13, 2021 66