Riccardo Carta

Pluristem (OTCBB:PLRS) closes another 13 million dollar funding, now approaching 1 billion shares outstanding

by Riccardo Carta May 22, 2007
Pluristem (PLRS:OTCBB) today announced it has secured an additional 13 million in funding from private investors. As of March 31st 2007 their cash position was right under 5 million. This funding along with the funds they have recently received from the exercise of their warrants should take the company's cash position to almost 20 million.

Zami Aberman
- Pluristem's Commander in Chief

During the first quarter of 2007, Pluristems expenses increased over 500% and their net loss went up to a record $3.92 Million Dollars. At this rate of burning money we estimate that their current funding should last them about 15 months.

In our opinion this funding is a positive and lends further credibility to their technology platform, and business as a whole. The stock appears to be a cheap one at $0.12 but don't let the low price tag fool you. As of May 21, 2007 Pluristem had 840 million shares outstanding. Before today's announcement the market valuation of the company was nearly $100 million. We estimate they will be issuing at least 100 million new shares. This would bring the total outstanding shares closer to that 1 billion shares outstanding number.

What do all these shares mean? Well if pluristem were to go to $1 and stay there it would need to have a $1 billion valuation. To get a respectable wall street analyst to seriously look at a stock PLRS stock, the should be at least $5 in pluristem's case they would need a $5 billion valuation. The entire market they are currently targetting is not even that size. Therefore, something must give.

There may or may not be a nice positive reaction to this financing in the near term, but it changes things at the company. They no longer belong on the OTCBB as they now have the capital requirements for a better exchange, but for a better exchange they would also need a higher share price.

Pluristem 100 million dollar market cap looks about fairly valued here, it is even possible the stock can double or triple if they begin to show positive progress in their research. However, without an amazing technology breakthrough we don't expect the market value of this company will go much higher. We also expect a sharp reverse split over the next year, possibly as bad as 1-20.

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