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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001178913-08-002498.txt : 20080924
<SEC-HEADER>0001178913-08-002498.hdr.sgml : 20080924
<ACCEPTANCE-DATETIME>20080924144639
ACCESSION NUMBER:		0001178913-08-002498
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20080924
DATE AS OF CHANGE:		20080924

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PLURISTEM THERAPEUTICS INC
		CENTRAL INDEX KEY:			0001158780
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				980351734
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-151761
		FILM NUMBER:		081086408

	BUSINESS ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905
		BUSINESS PHONE:		972-4-850-1080

	MAIL ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PLURISTEM LIFE SYSTEMS INC
		DATE OF NAME CHANGE:	20030701

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AI SOFTWARE INC
		DATE OF NAME CHANGE:	20010906
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>zk85848.htm
<TEXT>
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     <!-- Project:        F:\EDGAR Filing\Pluristem Therapeutics Inc\85848\a85848.eep      -->
     <!-- Control Number: 85848                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   424B5                                                            -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>424B5</TITLE>
</HEAD>
<BODY>

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<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE STYLE="margin-top: -5px">
<HR ALIGN=LEFT WIDTH=100% SIZE=1 NOSHADE STYLE="margin-top: -10px">








<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN="Right"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Filed Pursuant to Rule
424(b)(5) </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Registration
No.&nbsp;333-151761</B> </FONT> </P>
<BR>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROSPECTUS SUPPLEMENT NO. 2
<BR>(to prospectus dated July 1, 2008, as previously supplemented
<BR>by Prospectus Supplement No. 1 filed on August 6, 2008)
<BR>
<BR>900,000 shares of common stock.
<BR>Warrants to purchase 675,000 shares of common stock.
<BR>
<BR>Price per share: $1.15
<BR>Exercise price of warrants: $1.90 per share of common
<BR>stock.</FONT></TD>
<TD WIDTH="50%" ALIGN="Right"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><IMG SRC="pluristem.jpg"></FONT></TD>
</TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pluristem Therapeutics Inc. is
offering for sale 900,000 shares of its common stock and warrants to purchase up to
675,000 shares of common stock pursuant to this prospectus supplement and related
prospectus attached hereto. We use the term, this Prospectus, to mean this prospectus
supplement and the accompanying prospectus, including the information incorporated by
reference herein. This Prospectus also covers the shares of common stock issuable upon
exercise of the warrants. Warrants may be purchased only together with shares of common
stock but may be subsequently transferred separately. A warrant to purchase 0.75 share of
common stock will be issued together with each share purchased. The shares and the
warrants are sometimes referred to as units. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The last reported sale price on the
Nasdaq Capital Market of our common stock on September 23, 2008 was $0.89 per share, and
the closing bid price was $0.82 per share. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Common stock trading symbols: Nasdaq
Capital Market: PSTI. Frankfurt Stock Exchange: PJT. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>This investment involves a high
degree of risk.&nbsp; See &#147;Risk Factors&#148; beginning on page S-4, as well as the
section called &#147;Risk Factors&#148; beginning on page 13 of our Annual Report on Form
10-KSB for our 2007 fiscal year filed with the Securities and Exchange Commission and
incorporated by reference into the accompanying prospectus.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of
these securities, or determined if this prospectus supplement or the accompanying
prospectus is truthful or complete.&nbsp; Any representation to the contrary is a criminal
offense.</B> </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Per Share</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Per Warrant Exercise Price</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Total</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="56%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Public offering price for shares</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1.15</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>-</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1,035,000</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Finder fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>6.0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 1.50</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>    62,100</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Public offering price (exercise price) for warrant exercise shares</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>-</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1.90</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1,282,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Total proceeds, before expenses, to Pluristem Therapeutics Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;from both shares and warrant exercise shares</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 2,255,400</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Delivery of the units will be made on
or about September 24, 2008.&nbsp; </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">The
date of this prospectus supplement is September 24, 2008. </FONT> </P>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TABLE OF CONTENTS </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROSPECTUS SUPPLEMENT </FONT></P>






<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1><B>Page</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A101">ABOUT THIS PROSPECTUS SUPPLEMENT</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-3</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A102">THE OFFERING</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-3</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A103">RISK FACTORS</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A104">USE OF PROCEEDS</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-5</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A105">DILUTION</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-6</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A106">PLAN OF DISTRIBUTION</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-7</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A107">DESCRIPTION OF WARRANTS</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-7</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><A HREF="#A108">LEGAL MATTERS</A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>S-9</FONT></P>
</TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2>PROSPECTUS</FONT></P>


<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1><B>Page</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>ABOUT THIS PROSPECTUS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>2</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>OUR COMPANY</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>RISK FACTORS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>USE OF PROCEEDS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>THE SECURITIES WE MAY OFFER</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>DESCRIPTION OF COMMON STOCK</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>DESCRIPTION OF WARRANTS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>PLAN OF DISTRIBUTION</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>6</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>VALIDITY OF SECURITIES</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>EXPERTS</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>WHERE YOU CAN FIND MORE INFORMATION</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>INCORPORATION OF DOCUMENTS BY REFERENCE</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
</TABLE><BR>


<p align=center>
<font size=2>S - 2</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You should rely only on the
information contained in or incorporated by reference into this prospectus supplement and
the accompanying prospectus.&nbsp; We have not authorized anyone to provide you with
different information.&nbsp; If anyone provides you with different or inconsistent
information, you should not rely on it.&nbsp; We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.&nbsp; The
information in this prospectus supplement and the accompanying prospectus is accurate only
as of the date it is presented.&nbsp; Our business, financial condition, results of
operations and prospects may have changed since these dates. </FONT></P>

<a name=A101></a>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ABOUT THIS PROSPECTUS
SUPPLEMENT </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This prospectus supplement and the
accompanying prospectus dated July 1, 2008 (as supplemented and amended to date) are part
of a &#147;shelf&#148; registration statement on Form S-3 filed with the Securities and
Exchange Commission, and declared effective by the Securities and Exchange Commission on
July 1, 2008. By using a &#147;shelf&#148; registration statement, we may sell shares of
common stock and warrants to purchase shares of common stock as described in the accompanying
prospectus from time to time in one or more offerings up to a total of $15,000,000.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>These documents contain important
information you should consider when making your investment decision.&nbsp; The
accompanying prospectus provides you with a general description of the securities we may
offer.&nbsp; This prospectus supplement contains information about the securities offered
by this prospectus supplement.&nbsp; This prospectus supplement may add, update or change
information in the accompanying prospectus.&nbsp; You should rely only on the information
contained in this prospectus supplement, the accompanying prospectus or incorporated by
reference into this prospectus supplement and the accompanying prospectus.&nbsp; We have
not authorized anyone to provide you with any other information. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This prospectus supplement does not
constitute an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby in any jurisdiction where, or to any person to whom, it is unlawful to make such
offer or solicitation. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The information contained in this
prospectus supplement is accurate only as of the date of this prospectus supplement and
the accompanying prospectus, regardless of the time of delivery of this prospectus or of
any sale of securities. </FONT></P>

<a name=A102></a>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE OFFERING </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Common stock and warrants offered by us pursuant to</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>900,000 shares, plus warrants to purchase 675,000</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>this prospectus</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>shares. This prospectus also covers the shares of</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>common stock issuable upon exercise of the warrants</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>offered hereby.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Common stock outstanding as of September 1, 2008</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>8,369,870 shares</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Warrants outstanding as of September 1, 2008</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Warrants to purchase 3,330,854 shares at a weighted</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>average purchase price of 5.21</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Common stock to be outstanding after this offering</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>9,269,870 shares, or 9,944,870 shares if the warrants</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>(pro forma as of September 1, 2008 excluding</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>sold in this offering are fully exercised (1)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>outstanding warrants to purchase 3,330,854 shares</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>with a weighted average exercise price of 5.21)</FONT></TD></TR>
</TABLE>
<BR>


<p align=center>
<font size=2>S - 3</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR><TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Common stock to be outstanding after this offering</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>12,600,724 shares, or 13,275,724 shares if the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>(pro forma as of September 1, 2008 including</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>warrants sold in this offering are fully exercised (1)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>outstanding warrants to purchase 3,330,854  shares</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>with a weighted average exercise price of 5.21)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Terms of warrants offered by us pursuant to this</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Five year term , $1.90 per share exercise price</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>prospectus</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Use of proceeds</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>We intend to use the net proceeds from the offering of</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>units to complete our IND package to be submitted to</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>the FDA and other research and development expenses</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>and for general working capital and administrative</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>expenses. See "Use of Proceeds" on page S-5.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Nasdaq Capital Market common stock symbol</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>PSTI</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Risk factors</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>This investment involves a high degree of risk. See</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>"Risk Factors" on page S-4 of this prospectus</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>supplement and in our last Annual Report on Form 10-K</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>filed with the SEC.</FONT></TD></TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)
          The number of shares of common stock to be outstanding after this offering
          excludes options outstanding on September 1, 2008, to purchase a total of
          2,007,773 shares at a weighted-average exercise price of $5.06 per share. </FONT></P>

<a name=A103></a>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RISK FACTORS </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
in our common stock and/or warrants involves a high degree of risk. Before making an
investment decision, you should carefully consider the risks and uncertainties described
below, together with all of the other information appearing in the accompanying
prospectus or incorporated by reference therein, in light of your particular investment
objectives and financial circumstances before you invest in our securities. In
particular, we urge you to read the material under &#147;Risk Factors&#148; beginning on
page 13 of our Annual Report on Form 10-KSB for our 2007 fiscal year, as filed with the
Securities and Exchange Commission. If any of these risks actually occurs, our business,
financial condition, results of operations and future growth prospects would be
materially adversely affected. The trading price of our securities could decline due to
any of these risks, and you may lose all or part of your investment. This prospectus, any
prospectus supplement and the information incorporated by reference into this prospectus
and any prospectus supplement also contain forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including the risks so
mentioned. Please note the following additional risk factor.  </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conflict
with Prior Financing Agreement</U> </FONT> </P>


<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our subscription agreement for our May 2007 equity financing (the &#147;Prior Financing
Agreement&#148;), there is a provision that requires us for a period of four years
(subject to acceleration under certain circumstances) not to sell any of our common stock
for less than $.0125 per share. The Prior Financing Agreement provides that any sale
below that number must be preceded by a consent from each purchaser in the placement.
Since that date, we have affected a one-for-200 reverse stock split.  </FONT></P>

<p align=center>
<font size=2>S - 4</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have decided to proceed with this offering notwithstanding this provision for the
following reasons:  </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT SIZE="2" FACE="Wingdings 2">&#151;</FONT> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
agreement does not contain any provisions for the adjustment of the specified minimum
price in the event of stock splits and the like. If such agreement were to have contained
such a provision, the floor price would be $2.50, which is more than the offering price
of this offering. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT SIZE="2" FACE="Wingdings 2">&#151;</FONT> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
majority of purchasers in the private placement have sold the stock purchased in the
placement, and thus the number of purchasers whose consent is purportedly required has
been substantially reduced. The number of shares outstanding as to which this provision
currently applies according the information supplied by our transfer agent is
approximately 1.9 million shares. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT SIZE="2" FACE="Wingdings 2">&#151;</FONT> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An
agreement that prevents our Board of Directors from issuing shares that are necessary to
finance our business may be unenforceable. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT SIZE="2" FACE="Wingdings 2">&#151;</FONT> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Even
if the agreement were considered enforceable and the share price number were to be
adjusted for our reverse stock split, we believe that there would be no damage from this
offering to the holders of our shares whose consent is purportedly required. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that a court were to hold that the issuance of shares below $2.50 per share
would violate the Prior Financing Agreement, it is unclear what remedy the court might
impose. If the court were to impose a remedy that would be the equivalent of an
anti-dilution provision (which is not contained in the Prior Financing Agreement), any
issuance of shares would be dilutive to our shareholders, including those who purchase
shares in the current offering.  </FONT></P>

<a name=A104></a>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>USE OF PROCEEDS </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The proceeds we will receive from the
offering of units will be $1,035,000, before deducting the finder&#146;s fee and estimated
offering expenses payable by us and excluding any proceeds from the potential exercise of
warrants offered hereby. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We intend to use the net proceeds
from the offering of units to fund the completion of our IND package to be submitted to
the FDA, to fund the initiation of clinical trials of our products, as well as for
related pre-clinical research and other research and development expenses and for general
working capital and administrative expenses. The amounts and timing of the expenditures
may vary significantly depending on numerous factors, such as the progress of our clinical
trials and other research and development efforts, technological advances and the
competitive environment for our products. Although we have no specific agreements,
commitments or understandings with respect to any acquisition, we evaluate acquisition
opportunities and engage in related discussions with other companies from time to
time.&nbsp; Pending the use of the net proceeds, we intend to invest the net proceeds in
short-term, interest-bearing, investment-grade securities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our management will have broad
discretion in the application of the net proceeds and investors will be relying upon the
judgment of our management regarding the application of these proceeds.&nbsp; We reserve
the right to change the use of these proceeds. Depending upon the timing of receipt of any
warrant exercise shares proceeds, we would use such proceeds for such corporate purposes
as our management and Board of Directors may approve at the time. Such purposes may be
different from today&#146;s purposes. </FONT></P>

<p align=center>
<font size=2>S - 5</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<a name=A105></a>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DILUTION </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If you purchase our common stock in
this offering (either as a component of units or upon warrant exercise), your interest
will be diluted to the extent of the difference between the public offering price per
share and the net tangible book value per share of our common stock after this
offering.&nbsp; We calculate net tangible book value per share by dividing the net
tangible book value, tangible assets less total liabilities, by the number of outstanding
shares of our common stock. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our net tangible book value at March
31, 2008, was $4.1 million, or $0.60 per share, based on 6,750,698 shares of our common
stock outstanding as of that date(1).&nbsp; After giving effect to the sale of 900,000
shares of common stock by us at a public offering price of $1.15&nbsp;per share, less the
finder fees, our net tangible book value as of March 31, 2008 would have been
approximately $5.1 million, or $0.66 per share.&nbsp; This represents an immediate
increase in the net tangible book value of approximately $0.06 per share to existing
stockholders and an immediate dilution of $0.49&nbsp;per share to investors in this
offering. The following table illustrates this per share dilution: </FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="70%" ALIGN="Center">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="86%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Public offering price per share</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1.15</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Net tangible book value per share as of March 31, 2008</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 0.60</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT" colspan=4><FONT FACE="Times New Roman" SIZE=2>Increase in net tangible book value per share</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>after this offering</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 0.06</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Net tangible book value per share after this</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>offering</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 0.66</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Dilution per share to new investors</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 0.49</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#808080 SIZE=1></TD><TD></TD></TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The foregoing per share dilution does
not give effect to the potential exercise of the warrants offered hereby. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assuming the sale of all units
offered hereby and also the exercise of all warrants within such units, the per share
dilution would be as follows: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our net tangible book value at March
31, 2008, was $4.1 million or $0.60 per share, based on 6,750,698 shares of our common
stock outstanding as of that date(1).  After giving effect to the sale of
&nbsp;1,575,000&nbsp;shares of common stock (inclusive of 675,000 warrant exercise shares)
by us at a blended public offering price of $1.43 per share, less the finder fees, our net
tangible book value as of March 31, 2008, would have been approximately $6.4 million, or
$0.76 per share.&nbsp; This represents an immediate increase in the net tangible book
value of approximately $0.16 per share to existing stockholders and an immediate dilution
of $0.67&nbsp;per share to investors in this offering. The following table illustrates
this per share dilution: </FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="70%" ALIGN="Center">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="86%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Public offering price per share</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 1.43</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Net tangible book value per share as of March 31, 2008</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 0.60</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT" colspan=4><FONT FACE="Times New Roman" SIZE=2>Increase in net tangible book value per share</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>after this offering</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 0.16</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Net tangible book value per share after this</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>offering</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 0.76</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Dilution per share to new investors</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 0.67</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#808080 SIZE=1></TD><TD></TD></TR>
</TABLE>
<BR>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)
          On August 5, 2008, we entered into securities purchase agreements with two
          investors pursuant to which the investors agreed to purchase 1,391,304 shares of
          our common stock and warrants to purchase 695,652 shares of common stock. The
          price per share of the common stock is $1.15, and the exercise price of the
          warrants is $1.90. The impact of this financing was not taken into
          consideration in the dilution information provided above. </FONT></P>




<p align=center>
<font size=2>S - 6</font></p>
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<page>

<a name=A106></a>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PLAN OF DISTRIBUTION </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have not entered into any
placement agency agreement in connection with this offering. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">We have entered into a securities
purchase agreement directly with purchaser in connection with this offering. We currently
anticipate that the closing of the sale of the units offered hereby will take place on or
before September 24, 2008. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon closing, we will deliver to each
purchaser delivering funds the number of shares purchased by such purchaser through the
facilities of The Depository Trust Company and will deliver a physical warrant certificate
to each Purchaser within three business days. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have agreed to pay the finder an
aggregate fee equal to 6.0% of the gross proceeds from the sale of units in this offering.
We are not obligated to pay the finder any additional fee when and if the warrants are
exercised. In addition, we agreed to grant compensation warrants to the finder to purchase
a number of our common stock shares equal to 6.0% of the actual purchase price of
$1,035,000 divided by $1.50. The compensation warrants will be substantially on the same
terms as the warrants offered hereby, except that the compensation warrants will have an
exercise price equal to $1.50 per share and will expire five years from the date of this
Prospectus Supplement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The transfer agent for our common
stock is American Stock Transfer &amp; Trust Company, Brooklyn, New York. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our common stock is traded on the Nasdaq
Capital Market and the Frankfurt Stock Exchange under the symbols &#147;PSTI&#148; and
&#147;PJT&#148;, respectively. </FONT></P>

<a name=A107></a>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DESCRIPTION OF WARRANTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
warrants to be issued in this offering represent the right to purchase up to 675,000
shares of common stock at an initial exercise price of $1.90 per share. Each warrant may
be exercised at any time and from time to time on or after September 24, 2008 and
through and including September 23, 2013. </FONT> </P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exercise </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
of the warrants may exercise their warrants to purchase shares of our common stock on or
before the expiration date by delivering (i)&nbsp;an exercise notice, appropriately
completed and duly signed, and (ii)&nbsp;if such holder is not utilizing the cashless
exercise provisions, payment of the exercise price for the number of shares with respect
to which the warrant is being exercised. Warrants may be exercised in whole or in part,
but only for full shares of common stock, and any portion of a warrant not exercised
prior to the expiration date shall be and become void and of no value.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the warrant holders are entitled to a &#147;cashless exercise&#148; option if,
at any time of exercise, there is no effective registration statement registering, or no
current prospectus available for, the issuance or resale of the shares of common stock
underlying the warrants. This option entitles the warrant holder to elect to receive
fewer shares of common stock without paying the cash exercise price. The number of shares
to be issued would be determined by a formula based on the total number of shares with
respect to which the warrant is being exercised, the volume weighted average of the
prices per share of our common stock on the trading date immediately prior to the date of
exercise and the applicable exercise price of the warrants.  </FONT></P>

<p align=center>
<font size=2>S - 7</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shares of common stock issuable on exercise of the warrants will be, when issued in
accordance with the warrants, duly and validly authorized, issued and fully paid and
non-assessable. We will authorize and reserve at least that number of shares of common
stock equal to the number of shares of common stock issuable upon exercise of all
outstanding warrants.  </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Delivery of Certificates </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the holder&#146;s exercise of a warrant, we will promptly, but in no event later than
three trading days after the exercise date, issue and deliver, or cause to be issued and
delivered, a certificate for the shares of common stock issuable upon exercise of the
warrant. In addition, we will, if the holder provides the necessary information to us,
issue and deliver the shares electronically through The Depository Trust&nbsp;Corporation
through its Deposit Withdrawal Agent Commission System or another established clearing
corporation performing similar functions.  </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain Adjustments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
exercise price and the number of shares of common stock purchasable upon the exercise of
the warrants are subject to adjustment upon the occurrence of the following events:  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stock
Dividends and Splits</U> </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
at any time while the warrant is outstanding, we (i) pay a stock dividend or otherwise
make a distribution on any class of capital stock that is payable in shares of common
stock, (ii) subdivide outstanding shares of common stock into a larger number of shares,
or (iii) combine outstanding shares of common stock into a smaller number of shares, then
in each such case the exercise price shall be multiplied by a fraction of which the
numerator shall be the number of shares of common stock outstanding immediately before
such event and of which the denominator shall be the number of shares of common stock
outstanding immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate exercise price
of the warrant shall remain unchanged.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Pro
Rata Distributions</U> </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
at any time while the warrant is outstanding, we distribute to all holders of our common
stock for no consideration (i) evidences of our indebtedness (ii) any security (other
than a distribution of common stock covered by the preceding paragraph), (iii) rights or
warrants to subscribe for or purchase any security, or (iv) any other asset besides cash,
then either upon any exercise of this Warrant that occurs after the record date fixed for
determination of stockholders entitled to receive such distribution or, at the option of
the Company, concurrently with such distribution, the Holder shall be entitled to
receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if
applicable), the Distributed Property that such Holder would have been entitled to
receive in respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fundamental
Transaction</U> </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
at any time while the warrant is outstanding, we (i) effect any merger with another
person, in which our shareholders immediately prior to the transaction own immediately
after the transaction less than a majority of the outstanding stock of the successor
entity, or its parent if applicable, (ii) effect any sale of all or substantially all of
our assets in one or a series of related transactions, (iii) complete any tender offer or
exchange offer, which was approved or authorized by our Board of Directors, pursuant to
which holders of at least a majority of our outstanding common stock tender or exchange
their shares for other securities, cash or property, or (iv) effect any reclassification
of the common stock or any compulsory share exchange pursuant to which the common stock
is effectively converted into or exchanged for other securities, cash or property, each,
a Fundamental Transaction. In the event of a Fundamental Transaction pursuant to which
the securities, cash or property issuable with respect to the outstanding common stock
consist solely of cash and/or securities traded on a national securities exchange or an
established over-the-counter market (the &#147;Alternate Consideration&#148;), the
warrant shall expire immediately prior to the closing of the Fundamental Transaction. We
shall not effect any such Fundamental Transaction unless prior to or simultaneously with
the consummation thereof, any successor, surviving entity or the corporation purchasing
or otherwise acquiring such assets or other appropriate corporation or entity shall
assume the obligation to deliver to the holders, such Alternate Consideration as, in
accordance with the foregoing provisions, the holders shall be entitled to receive upon
proper exercise of the warrant prior to such closing. In the event of a Fundamental
Transaction in which the consideration does not entirely consist of the Alternate
Consideration, we (or the successor entity) shall purchase the warrant from the holders
by paying to the holders, within ten business days after the closing of such Fundamental
Transaction cash in an amount equal to the Black Scholes Value (as reasonably determined
by our Board of Directors or our financial advisor in the Fundamental Transaction) of the
remaining unexercised portion of the warrant on the date of such Fundamental Transaction
determined as of the day immediately following the public announcement of the applicable
Fundamental Transaction.  </FONT></P>

<p align=center>
<font size=2>S - 8</font></p>
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<page>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notice of Corporate
Action </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will provide at least 10 trading days prior notice to holders of the warrants to provide
such holders with a practical opportunity to exercise their warrants and hold common
stock in order to participate in or vote on the following corporate events if we (i)
declare a dividend or any other distribution of cash, securities or other property on the
common stock, (ii) authorize, approve, enter into any agreement, contemplating or
soliciting shareholders&#146; approval for any Fundamental Transaction, or (iii)
authorize the voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company.  </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Limitations on Exercise </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of warrant shares that may be acquired by the holder upon any exercise of the
warrant shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of common stock then beneficially owned
by such holder and its affiliates and any other persons whose beneficial ownership of
common stock would be aggregated with the holder&#146;s for purposes of Section&nbsp;13(d)
of the Exchange Act, does not exceed 4.999% of the total number of issued and outstanding
shares of common stock (including for such purpose the shares of common stock issuable
upon such exercise), or Beneficial Ownership Limitation. The holder may waive this
provision upon a 61 day written notice to the Company.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary in the warrant, the number of warrant shares that may be acquired
by the holder upon any exercise of the warrant shall be limited to the extent necessary to
insure that, following such exercise (or other issuance), the total number of shares of
common stock then beneficially owned by such holder and its affiliates and any other
persons whose beneficial ownership of common stock would be aggregated with the
holder&#146;s for purposes of Section&nbsp;13(d) of the Exchange Act, does not exceed
9.999% of the total number of issued and outstanding shares of common stock (including for
such purpose the shares of common stock issuable upon such exercise), or Beneficial
Ownership Limitation. This restriction may not be waived. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additional Provisions </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
above summary of certain terms and provisions of the warrants is qualified in its
entirety by reference to the detailed provisions of the warrants, the form of which will
be filed as an exhibit to a current report on Form&nbsp;8-K that will be incorporated
herein by reference. We are not required to issue fractional shares upon the exercise of
the warrants. No holders of the warrants will possess any rights as a stockholder under
those warrants until the holder exercises those warrants. The warrants may be transferred
independent of the common stock they were issued with, on a form of assignment, subject
to all applicable laws.  </FONT></P>


<a name=A108></a>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LEGAL MATTERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The validity of the securities
offered by this prospectus supplement has been passed upon for us by Zysman, Aharoni,
Gayer &amp; Co./Sullivan &amp; Worcester LLP, Boston, Massachusetts. </FONT></P>







<p align=center>
<font size=2>S - 9</font></p>
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<page>









<P ALIGN=CENTER><FONT  SIZE=2><IMG SRC="img102.jpg" ALT="[PLURISTEM THERAPEUTICS INC. LOGO]"></FONT></P>

<P ALIGN=CENTER><FONT  SIZE=2>$15,000,000</FONT></P>

<P ALIGN=CENTER><FONT SIZE="3">PLURISTEM THERAPEUTICS INC. </FONT></P>

<P ALIGN=CENTER><FONT  SIZE=2>Common Stock <BR>
Warrants</FONT></P>

<P><FONT SIZE=2>We may from
time to time sell common stock and warrants to purchase common stock in one or
more offerings for an aggregate initial offering price of $15,000,000. We refer
to the common stock and the warrants to purchase common stock collectively as
the securities. This prospectus describes the general manner in which our
securities may be offered using this prospectus. We will specify in an
accompanying prospectus supplement the terms of the securities to be offered
and sold. We may sell these securities to or through underwriters or dealers,
directly to purchasers or through agents. We will set forth the names of any
underwriters, dealers or agents in an accompanying prospectus supplement. </FONT></P>

<P><FONT SIZE=2>Our common
stock is traded on the NASDAQ Capital Market under the symbol &#147;PSTI&#148; </FONT></P>

<P><FONT SIZE=2>Investing in
our securities involves risks. See &#147;Risk Factors&#148; on page&nbsp;3 of this
prospectus. </FONT></P>

<P><FONT SIZE=2>Neither the
Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>This
prospectus is dated July 1, 2008. </FONT></P>

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<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>


<P ALIGN=CENTER><FONT  SIZE=2>TABLE OF CONTENTS</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
  <TD WIDTH="94%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="6%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B101">ABOUT THIS PROSPECTUS</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>2 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B102">OUR COMPANY</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>3 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B103">RISK FACTORS</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>3 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B104">SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>4 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B105">USE OF PROCEEDS</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>4 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B106">THE SECURITIES WE MAY OFFER</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>4 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B107">DESCRIPTION OF COMMON STOCK</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>4 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B108">DESCRIPTION OF WARRANTS</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>4 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B109">PLAN OF DISTRIBUTION</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>6 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B110">VALIDITY OF SECURITIES</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>8 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B111">EXPERTS</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>8 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B112">WHERE YOU CAN FIND MORE INFORMATION</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>8 </FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=2><A HREF="#B113">INCORPORATION OF DOCUMENTS BY REFERENCE</A></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=RIGHT><FONT SIZE=2>8 </FONT></P>
  </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>You should
rely only on the information contained in this prospectus and the documents
incorporated by reference in this prospectus or to which we have referred you.
We have not authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. This prospectus does not constitute an offer to sell, or a
solicitation of an offer to purchase, the securities offered by this prospectus
in any jurisdiction to or from any person to whom or from whom it is unlawful
to make such offer or solicitation of an offer in such jurisdiction. You should
not assume that the information contained in this prospectus or any document
incorporated by reference is accurate as of any date other than the date on the
front cover of the applicable document. Neither the delivery of this prospectus
nor any distribution of securities pursuant to this prospectus shall, under any
circumstances, create any implication that there has been no change in the
information set forth or incorporated by reference into this prospectus or in
our affairs since the date of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that
date. </FONT></P>

<P ALIGN=CENTER><FONT  SIZE=2><A NAME="B101"></A>ABOUT THIS PROSPECTUS</FONT></P>

<P><FONT SIZE=2>This prospectus is part of a
registration statement that we filed with the Securities and Exchange
Commission using a &#147;shelf&#148; registration process. Under this shelf registration
process, we may, from time to time, sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $15,000,000. This prospectus describes the securities we may offer
and the general manner in which our securities may be offered by this
prospectus. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. We may also add, update or change in the prospectus supplement any of
the information contained in this prospectus. To the extent there is a conflict
between the information contained in this prospectus and the prospectus supplement,
you should rely on the information in the prospectus supplement, provided that
if any statement in one of these documents is inconsistent with a statement in
another document having a later date&nbsp;&#150; for example, a document
incorporated by reference in this prospectus or any prospectus
supplement&nbsp;&#150; the statement in the document having the later date modifies
or supersedes the earlier statement. </FONT></P>

<P ALIGN=CENTER><FONT  SIZE=2>2</FONT></P>

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<PAGE>





<P ALIGN=CENTER><A NAME=B102></A><FONT SIZE=2>OUR
COMPANY</FONT></P>

<P><FONT SIZE=2>We are engaged in the business of the development of
mesenchymal and stem cell production technology and the commercialization of
cell therapy products. </FONT></P>

<P><FONT SIZE=2>From May 2003 until March 2006, our business was
focused on the development of stem cell production technology. Originally, our
plan was to develop that technology to the point where we could license it to
medical scientists and practitioners for their use in producing cell therapy
products for sale in the marketplace. On March 6, 2006, we announced that our
company was taking a new direction. Instead of looking to license our stem cell
production technology, we decided to focus on developing the technology with
the goal of producing cell therapy products ourselves for sale in the
marketplace. On July 5, 2006 and October 16, 2006, we announced that our
subsidiary, Pluristem Ltd., achieved a breakthrough in our preclinical study of
bone marrow transplantation: The preclinical study showed that by adding PLX-I
(PLacenta eXpanded cells) to Umbilical cord blood (UCB) stem cells during bone
marrow transplantation (BMT), hematopoietic stem cell engraftment in mice
showed up to a 500% increase in engraftment after irradiation and chemotherapy.
On January 8, 2008, we announced that we achieved favorable results in
demonstrating a revascularization effect after using our propriety PLX-PAD
cells for the treatment of limb ischemia associated with peripheral artery
disease (PAD). On April 7, 2008, we announced that the results from Fraunhofer
Institute&#146;s additional pre-clinical study utilizing our proprietary PLacental
eXpanded (PLX) cells in treating ischemic stroke showed statistical
significance utilizing functional as well as anatomical endpoints. </FONT></P>

<P><FONT SIZE=2>On November 23, 2007, we changed our name to Pluristem
Therapeutics Inc. On November 26, 2007, we effected a one for two hundred
reverse stock split. Accordingly, all references to number of shares, common
stock and per share data have been adjusted to reflect the stock split on a
retroactive basis. </FONT></P>

<P><FONT SIZE=2>On December 10, 2007, our shares of common stock began
trading on the NASDAQ Capital Market under the symbol &#147;PSTI.&#148; The shares were
previously traded on the OTC Bulletin Board under the trading symbol &#147;PLRS.OB&#148;.
On May 7, 2007, our shares also began trading on Europe&#146;s Frankfurt Stock
Exchange, under the symbol &#147;PJT.&#148; </FONT></P>

<P><FONT SIZE=2>Effective on June 4, 2008, our authorized number of
shares of our common stock was increased from 7,000,000 shares to 30,000,000
shares. </FONT></P>

<P><FONT SIZE=2>Our executive offices are located at MATAM Advanced
Technology Park, Building No. 20, Haifa, Israel, our telephone number is 011
972 74 710 7171 and our website address is <U>www.pluristem.com</U>. The
information on our website is not incorporated by reference in this prospectus
and should not be considered to be part of this prospectus. Our website address
is included in this prospectus as an inactive technical reference only. Our
name and logo and the names of our products are our trademarks or registered
trademarks. Unless the context otherwise requires, references in this
prospectus to &#147;Pluristem,&#148; &#147;we,&#148; &#147;us,&#148; and &#147;our&#148; refer to Pluristem
Therapeutics Inc. and it subsidiaries as required by the context. </FONT></P>

<P ALIGN=CENTER><A NAME=B103></A><FONT SIZE=2>RISK
FACTORS</FONT></P>

<P><FONT SIZE=2>An investment in our securities involves significant
risks. You should carefully consider the risk factors contained in any
prospectus supplement and in our filings with the Securities and Exchange
Commission, as well as all of the information contained in this prospectus, any
prospectus supplement and the documents incorporated by reference in this
prospectus, before you decide to invest in our securities. The risks and
uncertainties we have described are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem
immaterial may also affect our operations. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>

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<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P ALIGN=CENTER><A NAME=B104></A><FONT SIZE=2>SPECIAL
NOTE&nbsp;REGARDING FORWARD-LOOKING INFORMATION</FONT></P>

<P><FONT SIZE=2>This prospectus, any prospectus supplement and the
documents we incorporate by reference in this prospectus contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and other Federal securities laws. All
statements, other than statements of historical fact, that we include in this
prospectus, any prospectus supplement and in the documents we incorporate by
reference in this prospectus, may be deemed forward-looking statements for
purposes of the Securities Act of 1933, or the Securities Act, and the
Securities Exchange Act of 1934, or the Exchange Act. We use the words
&#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148; &#147;may,&#148;
&#147;plan,&#148;
&#147;project,&#148; &#147;will,&#148; &#147;would&#148; and similar expressions to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. We cannot guarantee that we actually will achieve the plans,
intentions or expectations disclosed in our forward-looking statements and,
accordingly, you should not place undue reliance on our forward-looking
statements. There are a number of important factors that could cause actual
results or events to differ materially from the forward-looking statements that
we make, including the factors included in the documents we incorporate by
reference in this prospectus. You should read these factors and the other
cautionary statements made in the documents we incorporate by reference as
being applicable to all related forward-looking statements wherever they appear
in this prospectus, any prospectus supplement and any document incorporated by
reference. We caution you that, except as otherwise required by law, we do not
undertake any obligation to update forward-looking statements we make. </FONT></P>

<P ALIGN=CENTER><A NAME=B105></A><FONT SIZE=2>USE
OF PROCEEDS</FONT></P>

<P><FONT SIZE=2>Unless we otherwise indicate in the applicable
prospectus supplement, we currently intend to use the net proceeds from the
sale of the securities for research and product development activities, and for
working capital and other general corporate purposes. </FONT></P>

<P><FONT SIZE=2>We may set forth additional information on the use of
net proceeds from the sale of securities we offer under this prospectus in a
prospectus supplement relating to the specific offering. Pending the application
of the net proceeds, we intend to invest the net proceeds in investment-grade,
interest-bearing securities. </FONT></P>

<P ALIGN=CENTER><A NAME=B106></A><FONT SIZE=2>THE
SECURITIES WE MAY OFFER</FONT></P>

<P><FONT SIZE=2>The descriptions of the securities contained in this
prospectus, together with the applicable prospectus supplement, summarize the
material terms and provisions of the various types of securities that we may
offer. We will describe in the applicable prospectus supplement relating to any
securities the particular terms of the securities offered by that prospectus
supplement. If we so indicate in the applicable prospectus supplement, the
terms of the securities may differ from the terms we have summarized below. We
may also include in the prospectus supplement information, where applicable,
about material United States federal income tax consequences relating to the
securities, and the securities exchange or market, if any, on which the
securities will be listed. </FONT></P>

<P><FONT SIZE=2>We may sell from time to time, in one or more
offerings, one or more of the following securities: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>common stock; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>warrants to purchase common stock.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The total initial offering price of all securities
that we may issue in these offerings will not exceed $15,000,000. </FONT></P>

<P ALIGN=CENTER><A NAME=B107></A><FONT SIZE=2>DESCRIPTION
OF COMMON STOCK</FONT></P>

<P><FONT SIZE=2>For a description of the material terms and provisions
of our common stock and any other class of our securities which qualifies or
limits our common stock, please see the applicable prospectus supplement, as
well as the description of our capital stock in our Registration Statement on
Form&nbsp;8-A, as amended, which is incorporated by reference in this
prospectus. </FONT></P>

<P ALIGN=CENTER><A NAME=B108></A><FONT SIZE=2>DESCRIPTION
OF WARRANTS</FONT></P>

<P><FONT SIZE=2>The following description, together with the
additional information we may include in any applicable prospectus supplement,
summarizes the material terms and provisions of the warrants that we may offer
under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any
warrants that we may offer, we will describe the particular terms of any series
of warrants in more detail in the applicable prospectus supplement. If we so
indicate in a prospectus supplement, the terms of any warrants offered under
that prospectus supplement may differ from the terms we describe below.
Specific warrant agreements will contain additional important terms and
provisions and will be incorporated by reference as an exhibit to the
registration statement. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>

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<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P><FONT SIZE=2><U>General </U></FONT></P>

<P><FONT SIZE=2>We may issue warrants for the purchase of common stock
in one or more series. We may issue warrants independently or together with
common stock, and the warrants may be attached to or separate from the common
stock. </FONT></P>

<P><FONT SIZE=2>We will evidence each series of warrants by warrant
certificates that we will issue under a separate agreement or by warrant
agreements that we will enter into directly with the purchasers of the
warrants. If we evidence warrants by warrant certificates, we will enter into a
warrant agreement with a warrant agent. We will indicate the name and address
of the warrant agent, if any, in the applicable prospectus supplement relating
to a particular series of warrants. </FONT></P>

<P><FONT SIZE=2>We will describe in the applicable prospectus
supplement the terms of the series of warrants, including: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the offering price and aggregate number of warrants
  offered;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the currency for which the warrants may be purchased
  or exercised;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>if applicable, the terms of the common stock with
  which the warrants are issued and the number of warrants issued with such
  common stock;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>if applicable, the date on and after which the
  warrants and the related common stock will be separately transferable;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the number of shares of common stock purchasable
  upon the exercise of one warrant and the price at which these shares may be
  purchased upon such exercise;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the manner in which the warrants may be exercised,
  which may include by cashless exercise;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the effect of any merger, consolidation, sale or
  other disposition of our business on the warrant agreement and the warrants;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the terms of any rights to redeem or call the
  warrants;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any provisions for changes to or adjustments in the
  exercise price or number of shares of common stock issuable upon exercise of
  the warrants;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the dates on which the right to exercise the
  warrants will commence and expire;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the manner in which the warrant agreement and
  warrants may be modified;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the material United States federal income tax
  consequences of holding or exercising the warrants;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the terms of the common stock issuable upon exercise
  of the warrants; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any other specific terms, preferences, rights or
  limitations of or restrictions on the warrants.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Before exercising their warrants, holders of warrants
will not have any of the rights of holders of the common stock purchasable upon
such exercise, including the right to receive dividends, if any, or payments
upon our liquidation, dissolution or winding up or to exercise voting rights,
if any. </FONT></P>

<P><FONT SIZE=2><U>Exercise of Warrants </U></FONT></P>

<P><FONT SIZE=2>Each warrant will entitle the holder to purchase the
number of shares of common stock that we specify in the applicable prospectus
supplement at the exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable prospectus
supplement, holders of the warrants may exercise the warrants at any time up to
5:00&nbsp;P.M., Eastern U.S. time, on the expiration date that we set forth in
the applicable prospectus supplement. After the close of business on the
expiration date, unexercised warrants will become void. </FONT></P>

<P><FONT SIZE=2>Holders of the warrants may exercise the warrants by
delivering to the warrant agent or us the warrant certificate or warrant
agreement representing the warrants to be exercised together with specified
information, and by paying the required amount to the warrant agent or us in
immediately available funds, as provided in the applicable prospectus
supplement. We will set forth on the reverse side of the warrant certificate or
in the warrant agreement and in the applicable prospectus supplement the
information that the holder of the warrant will be required to deliver to the
warrant agent or us in connection with such exercise. Certain of the warrants
may entitle the holders thereof to &#147;cashless exercise&#148; under certain
circumstances. This option entitles the warrant holder to elect to receive
fewer shares of common stock without paying the cash exercise price. The number
of shares to be issued would be determined by a formula based on the total
number of shares to which the warrant holder is entitled, the market price of
the common stock on the date of exercise or the days prior to the exercise and
the applicable exercise price of the warrants. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>5</FONT></P>

<HR WIDTH="100%" size="1" noshade style="margin-top: -2px">
<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P><FONT SIZE=2>Upon receipt of the required payment, if need to, and
the warrant certificate or the warrant agreement, as applicable, properly
completed and duly executed at the corporate trust office of the warrant agent,
if any, at our offices or at any other office indicated in the applicable
prospectus supplement, we will issue and deliver the common stock purchasable
upon such exercise. If fewer than all of the warrants represented by the
warrant certificate or warrant agreement are exercised, then we will issue a
new warrant certificate or warrant agreement for the remaining amount of
warrants. </FONT></P>

<P><FONT SIZE=2><U>Enforceability of Rights
by Holders of Warrants </U></FONT></P>

<P><FONT SIZE=2>If we appoint a warrant agent, any warrant agent will
act solely as our agent under the applicable warrant agreement and will not
assume any obligation or relationship of agency or trust with any holder of any
warrant. A single bank or trust company may act as warrant agent for more than
one issue of warrants. A warrant agent will have no duty or responsibility in
case of any default by us under the applicable warrant agreement or warrant,
including any duty or responsibility to initiate any proceedings at law or
otherwise, or to make any demand upon us. Any holder of a warrant may, without
the consent of the related warrant agent or the holder of any other warrant,
enforce by appropriate legal action its right to exercise, and receive the
securities purchasable upon exercise of, its warrants. </FONT></P>

<P ALIGN=CENTER><A NAME=B109></A><FONT SIZE=2>PLAN
OF DISTRIBUTION</FONT></P>

<P><FONT SIZE=2>We may sell the securities being offered hereby in one
or more of the following ways from time to time:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>through agents to the public or to investors;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>to one or more underwriters for resale to the public
  or to investors;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>in &#147;at the market offerings,&#148; within the meaning of
  Rule 415(a)(4) of the Securities Act, to or through a market maker or into an
  existing trading market, on an exchange or otherwise; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>directly to investors in privately negotiated
  transactions; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>directly to a purchaser pursuant to what is known as
  an &#147;equity line of credit&#148; as described below; or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>through a combination of these methods of sale.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The securities that we distribute by any of these methods may be sold,
in one or more transactions, at:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a fixed price or prices, which may be changed;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>market prices prevailing at the time of sale;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>prices related to prevailing market prices; or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>negotiated prices.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The accompanying prospectus supplement will describe the terms of the
offering of our securities, including:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the name or names of any agents or underwriters;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any securities exchange or market on which the
  common stock may be listed;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the purchase price and commission, if any, to be
  paid in connection with the sale of the securities being offered and the
  proceeds we will receive from the sale; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any over-allotment options pursuant to which
  underwriters may purchase additional securities from us;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any underwriting discounts or agency fees and other
  items constituting underwriters&#146; or agents&#146; compensation;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any public offering price; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any discounts or concessions allowed or reallowed or
  paid to dealers.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>If underwriters are used in the sale, they will
acquire the securities for their own account and may resell the securities from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
the sale. The obligations of the underwriters to purchase the securities will
be subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Subject to certain conditions, the underwriters will be obligated to purchase
all the securities offered by the prospectus supplement. We may change from
time to time the public offering price and any discounts or concessions allowed
or reallowed or paid to dealers. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>6</FONT></P>

<HR WIDTH="100%" size="1" noshade style="margin-top: -2px">
<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P><FONT SIZE=2>We may also sell securities pursuant to an &#147;equity
line of credit&#148;. In such event, we will enter into a common stock purchase
agreement with the purchaser to be named therein, which will be described in a
Current Report on Form 8-K that we will file with the SEC. In that Form 8-K, we
will describe the total amount of money that we may require the purchaser to
invest under the purchase agreement and the other terms of purchase, and any
rights that the purchaser is granted to purchase securities from us. In
addition to our issuance of shares of common stock to the equity line purchaser
pursuant to the purchase agreement, this prospectus (and the applicable prospectus
supplement or post-effective amendment) also covers the resale of those shares
from time to time by the equity line purchaser to the public. The equity line
purchaser will be considered an &#147;underwriter&#148; within the meaning of Section
2(a)(11) of the Securities Act. Its resales may be effected through a number of
methods, including without limitation, ordinary brokerage transactions and
transactions in which the broker solicits purchasers and block trades in which
the broker or dealer so engaged will attempt to sell the shares as agent, but
may position and resell a portion of the block as principal to facilitate the
transaction. The equity line purchaser will be bound by various
anti-manipulation rules of the SEC and may not, for example, engage in any stabilization
activity in connection with its resales of our securities and may not bid for
or purchase any of our securities or attempt to induce any person to purchase
any of our securities other than as permitted under the Exchange Act. </FONT></P>

<P><FONT SIZE=2>We may sell our securities directly or through agents
we designate from time to time. We will name any agent involved in the offering
and sale of our common stock, and we will describe any commissions we will pay
the agent in the prospectus supplement. Unless the prospectus supplement states
otherwise, our agent will act on a best-efforts basis for the period of its
appointment. </FONT></P>

<P><FONT SIZE=2>We may provide underwriters and agents with
indemnification against civil liabilities related to this offering, including
liabilities under the Securities Act, or contribution with respect to payments
that the underwriters or agents may make with respect to these liabilities.
Underwriters and agents may engage in transactions with, or perform services
for, us in the ordinary course of business. We will describe such relationships
in the prospectus supplement naming the underwriter or agent and the nature of
any such relationship. </FONT></P>

<P><FONT SIZE=2>Rules of the Securities and Exchange Commission may
limit the ability of any underwriters to bid for or purchase securities before
the distribution of the shares of common stock is completed. However,
underwriters may engage in the following activities in accordance with the
rules: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Stabilizing transactions</I>
  &#150;&nbsp;Underwriters may make bids or purchases for the purpose of pegging,
  fixing or maintaining the price of the shares, so long as stabilizing bids do
  not exceed a specified maximum. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Over-allotments and syndicate
  covering transactions</I> &#150;&nbsp;Underwriters may sell more
  shares of our common stock than the number of shares that they have committed
  to purchase in any underwritten offering. This over-allotment creates a short
  position for the underwriters. This short position may involve either
  &#147;covered&#148; short sales or &#147;naked&#148; short sales. Covered short sales are short sales
  made in an amount not greater than the underwriters&#146; over-allotment option to
  purchase additional shares in any underwritten offering. The underwriters may
  close out any covered short position either by exercising their
  over-allotment option or by purchasing shares in the open market. To
  determine how they will close the covered short position, the underwriters
  will consider, among other things, the price of shares available for purchase
  in the open market, as compared to the price at which they may purchase
  shares through the over-allotment option. Naked short sales are short sales
  in excess of the over-allotment option. The underwriters must close out any
  naked position by purchasing shares in the open market. A naked short
  position is more likely to be created if the underwriters are concerned that,
  in the open market after pricing, there may be downward pressure on the price
  of the shares that could adversely affect investors who purchase shares in
  the offering.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Penalty bids</I>
  &#150;&nbsp;If underwriters purchase shares in the open market in a stabilizing
  transaction or syndicate covering transaction, they may reclaim a selling
  concession from other underwriters and selling group members who sold those
  shares as part of the offering. </FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Similar to other purchase transactions, an
underwriter&#146;s purchases to cover the syndicate short sales or to stabilize the
market price of our common stock may have the effect of raising or maintaining
the market price of our common stock or preventing or mitigating a decline in
the market price of our common stock. As a result, the price of the shares of
our common stock may be higher than the price that might otherwise exist in the
open market. The imposition of a penalty bid might also have an effect on the
price of shares if it discourages resales of the shares. </FONT></P>

<P><FONT SIZE=2>If commenced, the underwriters may discontinue any of
these activities at any time. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>7</FONT></P>

<HR WIDTH="100%" size="1" noshade style="margin-top: -2px">
<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P><FONT SIZE=2>Our common stock is traded on the NASDAQ Capital
Market. One or more underwriters may make a market in our common stock, but the
underwriters will not be obligated to do so and may discontinue market making
at any time without notice. We cannot give any assurance as to liquidity of the
trading market for our common stock. </FONT></P>

<P><FONT SIZE=2>Any underwriters who are qualified market makers on
the NASDAQ Capital Market may engage in passive market making transactions in
the common stock in accordance with Rule&nbsp;103 of Regulation&nbsp;M, during
the business day prior to the pricing of the offering, before the commencement
of offers or sales of the common stock. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive
market makers. In general, a passive market maker must display its bid at a
price not in excess of the highest independent bid for such security; if all
independent bids are lowered below the passive market maker&#146;s bid, however, the
passive market maker&#146;s bid must then be lowered when certain purchase limits
are exceeded. </FONT></P>

<P><FONT SIZE=2>In compliance with guidelines of the Financial
Industry Regulatory Authority, or FINRA, the maximum commission or discount to
be received by any FINRA member or independent broker dealer may not exceed 8%
of the aggregate amount of the securities offered pursuant to this prospectus
and any applicable prospectus supplement. </FONT></P>

<P ALIGN=CENTER><A NAME=B110></A><FONT SIZE=2>VALIDITY
OF SECURITIES</FONT></P>

<P><FONT SIZE=2>The validity of the securities offered hereby will be
passed upon for us by Zysman, Aharoni, Gayer &amp; Co. /Sullivan &amp;
Worcester, LLP, Boston, Massachusetts. </FONT></P>

<P ALIGN=CENTER><A NAME=B111></A><FONT SIZE=2>EXPERTS</FONT></P>

<P><FONT SIZE=2>The financial statements of Pluristem Therapeutics
Inc. appearing in its Annual Report (Form&nbsp;10-KSB) for the year ended June
30, 2007 have been audited by Kost Forer Gabbay &amp; Kasierer A member of
Ernst &amp; Young Global, independent registered public accounting firm, as set
forth in their report thereon, included therein, and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing. </FONT></P>

<P ALIGN=CENTER><A NAME=B112></A><FONT SIZE=2>WHERE
YOU CAN FIND MORE INFORMATION</FONT></P>

<P><FONT SIZE=2>We file reports, proxy statements and other documents
with the Securities and Exchange Commission. You may read and copy any document
we file with the SEC at the SEC&#146;s Public Reference Room at
100&nbsp;F&nbsp;Street, N.E., Room&nbsp;1580, Washington,&nbsp;D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. </FONT></P>

<P><FONT SIZE=2>The SEC also maintains a website, the address of which
is www.sec.gov. That site also contains our annual, quarterly and current
reports, proxy statements, information statements and other information. </FONT></P>

<P><FONT SIZE=2>We have filed this prospectus with the SEC as part of
a registration statement on Form&nbsp;S-3 under the Securities Act. This
prospectus does not contain all of the information set forth in the
registration statement because some parts of the registration statement are
omitted in accordance with the rules and regulations of the SEC. You can obtain
a copy of the registration statement from the SEC at the address listed above
or from the SEC&#146;s website. </FONT></P>

<P><FONT SIZE=2>We also maintain a website at www.pluristem.com,
through which you can access our SEC filings. The information set forth on our
website is not part of this prospectus.</FONT></P>

<P ALIGN=CENTER><A NAME=B113></A><FONT SIZE=2>INCORPORATION
OF DOCUMENTS BY REFERENCE</FONT></P>

<P><FONT SIZE=2>We are &#147;incorporating by reference&#148; certain documents
we file with the SEC, which means that we can disclose important information to
you by referring you to those documents. The information in the documents
incorporated by reference is considered to be part of this prospectus.
Statements contained in documents that we file with the SEC and that are
incorporated by reference in this prospectus will automatically update and
supersede information contained in this prospectus, including information in
previously filed documents or reports that have been incorporated by reference
in this prospectus, to the extent the new information differs from or is
inconsistent with the old information. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>

<HR WIDTH="100%" size="1" noshade style="margin-top: -2px">
<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">
<PAGE>

<P><FONT SIZE=2>We have filed or may file the following documents with
the SEC. These documents are incorporated herein by reference as of their
respective dates of filing: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Annual Report on Form&nbsp;10-KSB for the year
  ended June 30, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Quarterly Report on Form&nbsp;10-QSB for the
  quarter ended March 31, 2008; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Quarterly Report on Form&nbsp;10-QSB for the
  quarter ended December&nbsp;31, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Quarterly Report on Form&nbsp;10-QSB for the
  quarter ended September&nbsp;30, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on April 10, 2008; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on December 7, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on November 26, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on November 9, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on November 6, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on October 12, 2007; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Our Current Report on Form&nbsp;8-K, as filed with
  the SEC on September 5, 2007;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The description of our common stock contained in our
  Registration Statement on Form&nbsp;8-A filed with the SEC, as
  amended;&nbsp;and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>All documents filed by us pursuant to
  Section&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act (1)&nbsp;after the
  date of the filing of this registration statement and prior to its
  effectiveness and (2)&nbsp;until all of the common stock to which this
  prospectus relates has been sold or the offering is otherwise terminated,
  except in each case for information contained in any such filing where we
  indicate that such information is being furnished and is not to be considered
  &#147;filed&#148; under the Exchange Act, will be deemed to be incorporated by
  reference in this prospectus and the accompanying prospectus supplement and
  to be a part hereof from the date of filing of such documents. </FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>We will provide a copy of the documents we incorporate by reference, at
no cost, to any person who receives this prospectus. To request a copy of any
or all of these documents, you should write or telephone us at MATAM Advanced
Technology Park, Building No. 20, Haifa, 31905, Israel, Attention: Yaky Yanay,
(+972) 74 710 7171. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>9</FONT></P>

<HR WIDTH="100%" size="1" noshade style="margin-top: -2px">
<HR WIDTH="100%" size="4" noshade style="margin-top: -10px">


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