Dutton Associates • 3721 Douglas Blvd., Suite 350 •Roseville, CA 95661 • Phone (916) 960-0623 Denise T. Resnik, MS DResnik@duttonassociates.com Pluristem Therapeutics, Inc. January 22, 2008 Note 1: All EPS figures have been adjusted for the November 26, 2007 1-for-200 reverse split; the per share figures in years prior to fiscal 2007 are based on substantially fewer shares than currently outstanding. Year EPS P/E Current Rating History $6.50 9,080 Industry: Recent Price: 52-Week Price Range: REVS PSR Fiscal Year Ending: June PSTI Healthcare, Biotechnology & Pharmaceutical $2.58-$28.00 Symbol (Nasdaq) 2006 2007 Balance Sheet Data (mil) 09/30/07 A A E N/A Ownership and Valuation (mil) Target Price (12 Months) Avg. Daily Vol. (3 mo.): $2.69 2008 2009 - - - x - - - x - - - x - - - x - - - x - - - x - - - x - - - x ($7.67) ($5.84) ($1.28) - - - $0.0 $0.0 $0.0 - - - 1/22/08 $2.69 - - - 12 Months $4.3 $4.9 $0.2 $5.5 Cash Equivalent: Working Capital: Long-Term Liabilities: Shareholders' Equity: Time Frame: Shares Outstanding: Inside Ownership: Institutional Ownership: Equity Market Value: 6.6 27% N/A $17.8 - - - Date Assigned: Price at Rating: Original Price Target: x - - - - - - x 2010 - - - N/A Updated Initial Report Rating: Speculative Buy Basis for Rating Pluristem Therapeutics’ innovative cell therapy technology has the potential to enable blood from the umbilical cord and the placenta (retrieved after the birth of a baby) to become a viable alternative to stem cells harvested from donor bone marrow, with its intrinsic problems. The Company’s first product in development, PLX-I, works by expanding, in three dimensions, mesenchymal stromal cells (MSCs) from the placenta and co-transplanting them with hematopoietic stem cells (HSCs) from umbilical cord blood to improve the engraftment process (by which newly-transplanted stromal cells produce normal adult cells). The Company believes that the resultant material will be more acceptable to the immune system of the recipient, since the cells are younger and less differentiated. The Company further believes that the successful use of umbilical cord blood will address the global shortage of matched tissue for bone marrow transplant (BMT) patients, thus reducing the amount of BMT donor/patient matching currently necessary. While validation of the Company’s technology is still in the pre-clinical stage, we believe that, if the technology proves to be successful, the impact on the patient population requiring BMT would be significant, especially as therapeutic uses for BMT continue to be discovered. We believe that the Company has two challenges to overcome before it can be successful. The first challenge will be to fully validate its hypothesis that the co-transplantation of mesenchymal stromal cells from the placenta and hematopoietic stem cells from the umbilical cord blood causes not only a statistical improvement in engraftment in the recipient, but also a clinical improvement. We believe the second challenge will be to fully validate its hypothesis that the three-dimensional expansion of placental-derived mesenchymal stromal cells in Pluristem’s PluriX™ 3D Bioreactor System offers clinical benefits above and beyond the benefits identified from co-transplantation alone. As the Company makes progress in its clinical program — specifically filing for Food and Drug Administration (FDA) permission to conduct Phase 1 trials and commencing those trials — we believe the shares will respond favorably. We therefore rate the shares of Pluristem Therapeutics as a Speculative Buy with a 12-month price target of $6.50.