Rosetta Genomics Ltd. (Form: 6-K, Received: 09/26/2016 16:33:58)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the Month of September 2016

Commission File Number 001-33042

Rosetta Genomics Ltd.
(Translation of registrant’s name into English)

10 Plaut Street, Science Park
Rehovot 76706, Israel
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Rosetta Genomics Ltd.

The unaudited condensed interim consolidated financial statements of Rosetta Genomics Ltd. (the “Company”) and its subsidiaries as of and for the six months ended June 30, 2016 are filed as Exhibit 99.1 to this Form 6-K and incorporated by reference herein. A copy of the press release issued by the Company on September 26, 2016 is filed as Exhibit 99.2 to this Form 6-K and incorporated by reference herein.

The information contained in this Report is hereby incorporated by reference into the Company’s Registration Statements on Form F-3, File Nos. 333-163063, 333-171203, 333-172655, 333-177670, 333-185338, 333-207697 and 333-210366.

Exhibits

Exhibit
Number	Description of Exhibit
99.1	Unaudited Condensed Interim Consolidated Financial Statements as of and for the six months ended June 30, 2016.
99.2	Press Release dated September 26, 2016.
101	The following materials from Exhibit 99.1 to this Report on Form 6-K formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Interim Consolidated Balance Sheets, (ii) the Condensed Interim Consolidated Statements of Loss, (iii) the Condensed Interim Consolidated Statements of Changes in Shareholders' Equity, (iv) the Condensed Interim Consolidated Statements of Cash Flows, and (v) Notes to Condensed Interim Consolidated Financial Statements.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ROSETTA GENOMICS LTD.

Date: September 26, 2016	By:	/s/ Ron Kalfus
		Ron Kalfus Chief Financial Officer

Exhibit 99.1

ROSETTA GENOMICS LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2016

UNAUDITED

INDEX

	Page

Condensed Interim Consolidated Balance Sheets	2 - 3

Condensed Interim Consolidated Statements of Comprehensive Loss	4

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	5

Condensed Interim Consolidated Statements of Cash Flows	6

Notes to Condensed Interim Consolidated Financial Statements	7 - 13

- - - - - - - - - - - - - - - - - - -

ROSETTA GENOMICS LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	June 30,		December 31,
	2016		2015
	Unaudited

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	8,055	$	12,447
Short-term bank deposits and restricted cash		600		1,098
Trade receivables		3,371		3,633
Other accounts receivable and prepaid expenses		767		2,192

Total current assets		12,793		19,370

LONG TERM ASSETS:
Property and equipment, net		2,918		2,975
Long-term bank deposits and other long-term receivables		84		78

Total long term assets		3,002		3,053

Total assets	$	15,795	$	22,423

The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements.

ROSETTA GENOMICS LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

	June 30,			December 31,
	2016			2015
	Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturity of long - term capital lease	$	55		$	-
Trade payables		982			1,070
Accrued expenses		409			517
Employees and accruals		1,608			1,216

Total current liabilities		3,054			2,803

LONG-TERM LIABILITIES:
Long term capital lease obligations		92			-

Total long-term liabilities		92			-

COMMITMENTS AND CONTINGENT LIABILITIES

SHAREHOLDERS EQUITY:
Share capital:
Ordinary Shares of NIS 0.6 par value: 60,000,000 shares authorized at June 30, 2016 and December 31, 2015; 20,868,826 (unaudited) and 20,518,794 shares issued at June 30, 2016 and December 31, 2015, respectively; 20,865,568 (unaudited) and 20,515,536 shares outstanding at June 30, 2016 and December 31, 2015, respectively		3,247			3,194
Additional paid-in capital		157,102			156,696
Accumulated deficit		(147,700	)		(140,270	)

Total shareholders' equity		12,649			19,620

Total liabilities and shareholders' equity	$	15,795		$	22,423

The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements.

ROSETTA GENOMICS LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except share and per share data)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016		2015
	Unaudited						Unaudited

Revenues	$	2,412		$	1,957		$	5,015	$	2,278
Cost of revenues		1,989			1,917			3,647		2,269

Gross profit		423			40			1,368		9

Operating expenses:

Research and development, net		618			613			1,459		1,361
Sales, marketing and business development		1,742			2,478			3,639		4,075
General and administrative		1,451			2,232			3,664		3,643
Gain from bargain purchase related to acquisition of CynoGen, Inc.		-			(2,352	)		-		(2,352	)

Total operating expenses		3,811			2,971			8,762		6,727

Operating loss		3,388			2,931			7,394		6,718
Financial expense (income), net		(1	)		(117	)		24		41
Income tax expenses		6			5			12		10

Net comprehensive loss	$	3,393		$	2,819		$	7,430	$	6,687

Basic and diluted net loss per ordinary share attributable to Rosetta Genomics' shareholders	$	0.16		$	0.20		$	0.36	$	0.49
Weighted average number of ordinary shares used to compute basic and diluted net loss per ordinary share		20,862,599			14,425,034			20,756,461		13,598,198

The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share and per share data)

	Number of Ordinary Shares		Share capital		Additional paid-in capital			Accumulated deficit			Total equity

Balance as of January 1, 2016		20,515,536	$	3,194	$	156,696		$	(140,270	)	$	19,620

Exercise of warrants		333,314		51		(51	)		-			-
Share-based compensation related to options and RSUs issued to employees and directors		16,719		2		457			-			459
Net loss		-		-		-			(7,430	)		(7,430	)

Balance as of June 30, 2016 (unaudited)		20,865,569	$	3,247	$	157,102		$	(147,700	)	$	12,649

	Number of Ordinary Shares		Share capital		Additional paid-in capital		Accumulated deficit			Total equity

Balance as of January 1, 2015		11,762,420	$	1,830	$	136,160	$	(122,925	)	$	15,065

Issuance of shares in February 2015, at 4.46 per share, net of $491 issuance expenses		2,204,764		344		8,995		-			9,339
Issuance of shares related to acquisition		500,000		75		1,485		-			1,560
Share-based compensation related to options and RSUs issued to employees and directors		32,500		5		539		-			544
Net loss		-		-		-		(6,687	)		(6,687	)

Balance as of June 30, 2015 (unaudited)		14,499,684	$	2,254	$	147,179	$	(129,612	)	$	19,821

The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Six months ended June 30,
	2016			2015
	Unaudited
Cash flows from operating activities:

Net loss	$	(7,430	)	$	(6,687	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		458			293
Decrease (increase) in trade receivables		262			(566	)
Decrease (increase) in other accounts receivable and prepaid expenses		1,425			(73	)
Stock-based compensation		459			544
Gain from bargain purchase related to acquisition of CynoGen, Inc.		-			(2,352	)
Change in fair value of warrants related to share purchase agreement		-			4
Increase (decrease) in trade payables		(88	)		9
Increase in other accounts payable and accruals		284			436

Net cash used in operating activities		(4,630	)		(8,392	)

Cash flows from investing activities:

Purchase of property and equipment		(254	)		(110	)
Investment in (proceeds from) bank deposits and restricted cash		492			(2,043	)
Acquisition of CynoGen, Inc. (a)		-			(2,000	)

Net cash provided by (used in) investing activities		238			(4,153	)

Cash flows from financing activities:

Issuance of shares, net		-			9,339

Net cash provided by financing activities		-			9,339

Decrease in cash and cash equivalents		(4,392	)		(3,206	)
Cash and cash equivalents at beginning of period		12,447			7,929

Cash and cash equivalents at end of period	$	8,055		$	4,723

Supplemental cash flow activities:

(a) Acquisition of CynoGen, Inc.

Fair value of assets acquired and liabilities assumed at the date of acquisition:
Working capital, net (excluding cash and cash equivalents)	$	-		$	2,673
Property and equipment		-			2,628
Gain from bargain purchase related to acquisition of CynoGen, Inc.		-			(2,352	)
Issuance of shares, net		-			(1,560	)
Commitment to issue shares		-			(389	)

	$	-		$	2,000

(b) Supplemental disclosure of non-cash activities :

Share issuance for acquisition of CynoGen, Inc.	$	-		$	1,560
Commitment to issue shares with respect to the Acquisition of CynoGen, Inc.	$	-		$	389
Purchase of property and equipment under capital lease	$	147		$	-

The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 1:

GENERAL

Organization and Business

Rosetta Genomics Ltd. (the "Company") commenced operations on March 9, 2000.

The Company's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta Genomics is working on the application of these technologies in the development of a full range of microRNA-based diagnostic tools. The Company's microRNA-based tests, RosettaGX Cancer Origin™, RosettaGX Reveal™, mi-LUNG™, and mi-KIDNEY™, are commercially available worldwide and all samples are processed in its Philadelphia-based CAP-accredited, Clinical Laboratories Improvement Amendments ("CLIA") certified lab. The Company’s broad menu of molecular and other assays for bladder, lung, prostate and breast cancer patients are offered through its facility in Lake Forest, California.

The Company has three wholly-owned subsidiaries in the United States: (1), Rosetta Genomics, Inc. (“Rosetta Inc.”), (2) Minuet Diagnostics, Inc. (“Minuet”), and (3) CynoGen, Inc. (“CynoGen” or “PersonalizeDx” and collectively with Rosetta Inc. and Minuet, the “U.S. Subsidiaries”). The principal business activities of the U.S. Subsidiaries are to commercialize the Company's products, perform tests in its CLIA-approved laboratories and expand the business of the Company in the United States.

Liquidity and Capital Resources

During the six-month period ended June 30, 2016 and the year ended December 31, 2015, the Company incurred operating losses amounting to $7,394 and $15,721, respectively. The Company will be required to obtain additional liquidity resources in the near term in order to support its activities.

The Company is addressing its liquidity issues by implementing initiatives to allow the coverage of budget deficit. The Company’s current operating plan includes various assumptions concerning the level and timing of cash receipts from sales and cash outlays for operating expenses and capital expenditures. The Company’s ability to successfully carry out its business plan, which includes a cost-reduction plan should it be unable to raise sufficient additional capital, is primarily dependent upon its ability to (1) obtain sufficient additional capital, (2) attract and retain knowledgeable employees, (3) increase its cash collections and (4) generate significant additional revenues. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its products.

According to management estimates, liquidity resources as of June 30, 2016 will be sufficient to maintain the Company's operations at least through April 2017.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The unaudited condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2015, are applied consistently in these financial statements. For further information, refer to the consolidated financial statements for the year ended December 31, 2015, set forth in the Company’s Annual Report on Form 20-F as filed with the U.S. Securities and Exchange Commission on March 23, 2016, except for the following:

Capital leases

The Company entered into a three-year capital lease agreement in which it purchased lab equipment for its operations. This lease includes a bargain purchase option at the end of the original lease term and has been classified as a capital lease. The capital lease lab equipment is included in property and equipment. The lab equipment is depreciated using the straight-line method over their estimated useful lives of five years.

The Company accounts for capital l eases under ASC 840, “Leases”, which establishes the criteria for capital lease classification. Accordingly, at least one of the four following criteria must be met for a lease to be classified as a capital lease: (1) a transfer of ownership of the property to the lessee by the end of the lease term; (2) a bargain purchase option; (3) a lease term that is greater than or equal to 75 percent of the economic life of the leased property; (4) present value of the future minimum lease payments equals or exceeds 90 percent of the fair market value of the leased property. If none of the aforementioned criteria are met, the lease will be treated as an operating lease . Under capital leases, a lessee recognizes a capital lease as an asset and an obligation.

At the commencement of the lease term, the leased asset is measured at the lower of the fair value of the leased asset or the present value of the minimum lease payments.

The Company amortizes the capital lease asset, on a straight-line basis, over the estimated useful life of the leased asset.

Recent Accounting Pronouncement

In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting", to simplify the accounting for share-based payment transactions, including the income tax consequences, an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance will be effective for the Company in the first quarter of 2017, and early adoption is permitted. The Company is still evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures.

NOTE 3:

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ended December 31, 2016.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 4:

FAIR VALUE MEASUREMENT

The Company applies ASC 820, "Fair Value Measurements and Disclosures". Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The hierarchy is broken down into three levels based on the inputs as follows:

Level 1 – Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 – Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3.

The following methods and assumptions were used by the Company and its subsidiaries in estimating their fair value disclosures for financial instruments:

The carrying amounts of cash and cash equivalents, short-term bank deposits, trade receivables, trade payables, and other accounts payable approximate their fair values due to the short-term maturities of such instruments.

NOTE 5:

COMMITMENTS AND CONTINGENT LIABILITIES

Restricted cash and restricted bank deposit:

As of June 30, 2016, restricted cash was primarily attributed to bank guarantees to the landlords of the Company’s and CynoGen’s premises for the fulfillment of their lease commitments in the amount of approximately $678. These restricted cash deposits are presented in short-term and long-term "Bank deposited and restricted cash".

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

The facilities of the Company and its U.S. subsidiaries are leased under various operating lease agreements, the latest of which ends in 2018. Aggregate annual minimum lease commitments under the non-cancelable operating lease agreements as of June 30, 2016, are as follows:

2016	$	352
2017		668
2018		555

Total	$	1,572

Lease expenses for the Company's facilities for the six months ended June 30, 2016 and 2015, were $375 and $301, respectively.

The Company leases its motor vehicles under cancelable operating lease agreements. The minimum payment under these operating leases, upon cancellation of these lease agreements was $6 as of June 30, 2016.

Lease expenses for motor vehicles for the six months ended June 30, 2016 and 2015, were $20 and $22, respectively.

The Company entered into a three-year capital lease agreement in which it purchased lab equipment for its operation.

The following table is a schedule, by years, of the future minimum lease payments required as of June 30, 2016:

2016	$	23
2017		55
2018		55
2019		14

Total lease payments	$	147

In May 2006, the Company signed a royalty-bearing, co-exclusive, worldwide license agreement with a third party. Under this agreement, the Company was granted the right to make, use and sell the third party's proprietary microRNAs for diagnostic purposes including a limited right to sublicense. In consideration for this license the Company paid an initiation fee and will pay a fixed annual license maintenance fee, royalties based on net sales and a percentage of the Company's revenues from any sublicense. The Company estimates that until 2029 the minimum aggregate license maintenance fees over the term of this agreement should be approximately $960, of which $540 will be paid after June 30, 2016.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

In June 2006, the Company signed a royalty-bearing, co-exclusive, worldwide license agreement with a third party. Under this agreement, the Company licensed from this third party the rights to its proprietary microRNAs for diagnostic purposes. In consideration for this license the Company paid an initiation fee and will pay a fixed annual license maintenance fee, royalties based on net sales and a percentage of the Company's revenue from any sublicense. The Company estimates that until 2022 the minimum aggregate license maintenance fees over the term of this agreement should be approximately $434, of which $217 will be paid after June 30, 2016.

In August 2006, the Company signed a royalty-bearing, exclusive, worldwide license agreement with a third party. Under this agreement, the Company has exclusively licensed from this third party the rights to its proprietary microRNAs for all fields and applications including a limited right to sublicense. In consideration for this license the Company paid an initiation fee and will pay minimum annual royalties, royalties based on net sales and a percentage of the Company's revenues from any sublicense. This agreement was amended and restated in August 2011 and is now on a non-exclusive basis. For the amendment, the Company paid an amendment fee. The Company estimates that until 2032 the aggregate minimum royalties over the term of this agreement should be approximately $320, of which $165 will be paid after June 30, 2016.

In December 2006, the Company signed a royalty-bearing, non-exclusive, worldwide license agreement with a third party. Under this agreement the Company licensed from the third party its proprietary microRNAs for research purposes. In consideration for this license the Company paid an initiation fee and will pay a fixed annual license maintenance fee, royalties based on net sales and a percentage of the Company's revenues from any sublicenses. The Company estimates that until 2022 the minimum aggregate license maintenance fees over the term of this agreement should be approximately $267, of which $109 will be paid after June 30, 2016.

In May 2007, the Company signed a royalty-bearing, co-exclusive, worldwide license agreement with a third party. Under this agreement, the Company has licensed from this third party the rights to its proprietary microRNAs for therapeutic purposes including a limited right to sublicense. In consideration for this license the Company paid an initiation fee and will pay a fixed annual license maintenance fee, payments based on milestones and royalties based on net sales and a percentage of the Company's revenues from any sublicense. The Company estimates that until 2029 the minimum aggregate maintenance fees over the term of this agreement should be approximately $690, of which $405 will be paid after June 30, 2016.

In January 2008, the Company signed a royalty-bearing, co-exclusive, worldwide license agreement with a third party. Under this agreement, the Company was granted the right to make, use and sell the third party's proprietary microRNAs for research purposes including a limited right to sublicense. In consideration for this license the Company paid an initiation fee and will pay a fixed annual license maintenance fee, royalties based on net sales and a percentage of the Company's revenues from any sublicense. The Company estimates that until 2029 the minimum aggregate license maintenance fees over the term of this agreement should be approximately $440, of which $270 will be paid after June 30, 2016.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

In July 2014, the Company signed a royalty-bearing joint research and license agreement with a third party. Under this agreement, the Company and the third party engage in joint research and the Company was granted a non-exclusive, royalty bearing, non-transferable and non-sublicensable license to use the joint information, inventions and patents for the development, manufacture, commercialization, distribution and sale of products, while the third party was also granted a non-exclusive, sublicensable and a worldwide license. In consideration for this agreement, the Company will pay a fixed annual license maintenance fees and royalties based on net sales. In the six month period ended June 30, 2016, the Company paid $5 under this agreement.

Rimonim Consortium:

In January 2011, the Company joined the Rimonim Consortium, which is supported by the Office of the Chief Scientist of Israel's Ministry of Economy, of the State of Israel (the "OCS"). The purpose of the consortium is to develop RNAi-based therapeutics. Under the terms applicable to members of the consortium, so long as the Company continues to meet the criteria for receiving these grants, which criteria include the payment by the Company of part of the expenses for the activities funded by the grants and the timely delivery to OCS of written reports regarding those activities, then the Company is not required to repay the grants. If the Company ceases to meet these and other criteria, then the grant amounts for the year in which the Company ceased to meet the criteria become immediately due and payable to OCS. As of June 30, 2016, the Company received total grants of $43 from the OCS for its development under the consortium.

m. Magneton Project:

In October 2013, the Company entered into a sponsored research agreement with Ramot at Tel Aviv University (“Ramot”), a Company organized under the laws of Israel and a wholly-owned subsidiary of Tel Aviv University, for the joint development of a nano-carrier system for miR mimetic technology to treat cancer. The parties will perform joint research in accordance with a plan approved, and jointly funded by the OCS and the Company, for an initial period of 12 months commencing on October 1, 2013 and an additional period of 12 months, subject to approval by OCS, which was approved in November 2014. During 2015 the Company received an additional extension from the OCS which extended the plan to December 31, 2015. Under the applicable terms, so long as the Company continues to meet the criteria for receiving OCS grants, which criteria includes the payment by the Company of part of the expenses for the activities funded by the grants and the timely delivery to OCS of written reports regarding those activities, then the Company is not required to repay the grants. If the Company ceases to meet these and other criteria, then the grant amounts for the year in which the Company ceased to meet the criteria become immediately due and payable to OCS. As of June 30, 2016, the Company received total grants of $76 from the OCS for its development under this project.

ROSETTA GENOMICS LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 6:

SHARE CAPITAL

Stock-based compensation

During the six-month period ended June 30, 2016, the Company's Board of Directors granted employees options to purchase 461,666 ordinary shares of the Company. The exercise prices for such options ranges from $0.83-$1.24 per share, with vesting to occur over 4 years.

The Company estimates the fair value of stock options granted during the six-month period ended June 30, 2016, under ASC 718 using the Black-Scholes option pricing model with the following weighted-average assumptions: expected volatility of 1.16%; risk free interest rates range between 1.46%-1.79%; dividend yield of 0%; time to maturity of 6.25 years; and options forfeiture rate of 10%.

During the six month periods ended June 30, 2016 and 2015, the Company recorded stock-based compensation in a total amount of $459 and $544, respectively.

During the six month period ended June 30, 2016, the Company's Board of Directors approved the granting of 15,000 Restricted Share Units ("RSUs") to certain employees. Each RSU vest into one ordinary share of the Company one year after the grant.

Warrants

In February 2016, 333,333 Series B Warrants were exercised. As of June 30, 2016, 1,976,157 warrants were outstanding.

NOTE 7:

FINANCIAL INCOME, NET

	Six months ended, June 30,
	2016		2015
	Unaudited
Financial income:
Interest income on short-term bank deposits	$	-	$	(23	)
Foreign currency adjustments gains, net		-		(59	)

Total financial income		-		(82	)

Financial expenses:
Foreign currency adjustments losses, net		8		-
Bank commissions		16		37
Change in fair value of warrants related to share purchase agreement		-		4

Total financial expenses		24		41

Total financial expense (income), net	$	24	$	(41	)

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News Release

Rosetta Genomics Reports 2016 Second Quarter Financial Results

RosettaGX Reveal for the Diagnosis of Indeterminate Thyroid FNA Expected to Drive Significant Revenue Growth over the Next Several Years

Conference call begins today at 4:30 p.m. Eastern time

PHILADELPHIA and REHOVOT, Israel (September 26, 2016) – Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and provider of microRNA-based and other molecular diagnostics, reports financial results for the three and six months ended June 30, 2016.

Recent developments include:

Gross billings for RosettaGX Reveal ^™ (“Reveal”), the Company’s first-of-its-kind microRNA classifier for indeterminate thyroid nodules, are tracking to be approximately $1.5 million for the first nine months of 2016;

Announced that Reveal is now available for use on ThinPrep ^® samples;

Published data confirming the analytical validity of Reveal to classify indeterminate thyroid nodules in the peer-reviewed journal Cancer Cytopathology ;

Entered into a services agreement with an unnamed global pharmaceutical company to provide Fluorescence in Situ Hybridization (FISH) testing services for a clinical study the pharmaceutical company is conducting in prostate cancer;

Launched OncoGxSelect ^™ , a next-generation sequencing (NGS)-based test that detects somatic mutations frequently found in cancers and provides actionable results to help guide decisions related to targeted cancer therapies; and

Received U.S. patent allowance for a microRNA-based ovarian cancer treatment.

Management Commentary

“Throughout the first half of 2016 we demonstrated our ability to increase revenues by expanding our molecular diagnostics test menu and advancing our commercial programs to enable precision medicine for patients and physicians,” said Kenneth A. Berlin, President and Chief Executive Officer of Rosetta Genomics. “We are particularly pleased about our progress with the commercial launch and clinical adoption of our Reveal test for the classification of indeterminate thyroid nodules.

“We made two key advances that significantly enhance our commercial efforts with Reveal. First, compelling analytical data was published in a peer-reviewed journal that supports the robustness of the Reveal assay under many different laboratory conditions. In addition, we presented data at the recent American Thyroid Society annual meeting confirming that Reveal produces the same high-level performance on ThinPrep prepared slides as it does on a direct smear from a thyroid Fine Needle Aspirate (“FNA”) biopsy. We believe offering the option of using Reveal with either ThinPrep or direct smears will expand our customer base and potentially increase our test volumes by more than 50% over the next several months.

“We are gaining traction with our strategy to use Reveal to access new accounts to promote our exceptional thyroid offering as well as our urologic cancer and solid tumor product lines. In the near term, this primary focus on Reveal may temporarily slow the growth of the solid tumor and urology business lines as our sales people will be mainly calling on pathologists and endocrinologists, rather than oncologists and urologists. Over the long term, we believe that by winning new accounts with our Reveal offering we will be able to expand use of our solid tumor and urologic oncology offerings by many of these new accounts, thus further accelerating revenue growth.

“The commercial launch of Reveal will continue to be a prime focus of our company. We believe Reveal’s excellent performance – combined with the assay’s ability to be used with either ThinPrep or FNA biopsy, as well as its unique ability to use the same smears from the original indeterminate diagnosis – gives Reveal a significant competitive advantage that we expect will allow us to gain meaningful market share in this $350 million market in the U.S. and recent trends in demand and gross billings for Reveal demonstrate this. For example, in the third quarter we expect approximately 300 Reveal orders with gross billings of approximately $900,000.

“With demand for Reveal reaching higher levels in the current quarter and with that demand expected to continue to increase substantially going forward, we are increasing capacity at our Philadelphia laboratory to process samples. In addition, the investments we made in enhancing billing and collections is bearing fruit as we continue to improve collections.. We are pleased with our progress to date, as evidenced by our cash collections during the first half of 2016.

“Throughout the balance of the year we will continue to build on recent progress to drive demand for Reveal and the rest of our products and improve billings, collections and reimbursement. We look forward to making advances that will enhance shareholder value,” concluded Mr. Berlin.

Second Quarter Financial Results

Revenues for the second quarter of 2016 increased 23% to $2.4 million compared with revenues of $2.0 million for the second quarter of 2015, and decreased 7% compared with revenues of $2.6 million for the first quarter of 2016. On a pro-forma basis (as if the PersonalizeDx acquisition occurred on January 1, 2015 instead of the actual acquisition date of April 13, 2015), revenues increased 13% compared with revenues of $2.1 million for the second quarter of 2015.

Revenues from urologic cancer testing services in the second quarter of 2016 increased 43% to $1.4 million, compared with $971,000 for the second quarter of 2015, and represented approximately 58% of clinical testing revenues for the second quarter of 2016. On a pro-forma basis, revenues increased 26% compared with $1.1 million for the second quarter of 2015.

Revenues from solid tumor testing services in the second quarter of 2016 of $855,000 decreased 13% compared with $986,000 in the second quarter of 2015, primarily due to a refocused sales force emphasis on the Reveal introduction. Solid tumor testing services, represented 35% of total clinical testing revenues during the second quarter of 2016. On a pro-forma basis, revenues decreased 17% compared with $1.0 million in the second quarter of 2015.

Reveal revenues during the second quarter of 2016 were $166,000 compared with $17,000 in the first quarter of 2016. There were no Reveal revenues in the second quarter of 2015 as the assay was not launched commercially until the first quarter of 2016. On a non-GAAP basis, gross billings for Reveal during the second quarter of 2016 were $511,000 compared with gross billings of Reveal of $111,000 in the first quarter of 2016. Gross billings are the aggregate amounts invoiced to customers.

Cost of revenues for the second quarter of 2016 increased to $2.0 million from $1.9 million for the second quarter of 2015.

Research and development expenses for the second quarter of 2016 increased to $618,000 from $613,000 for the second quarter of 2015.

Sales, marketing and business development expenses for the second quarter of 2016 decreased to $1.7 million from $2.5 million in the prior-year period primarily due to higher headcount in 2015 and transitional expenses associated with the consolidation of the PersonalizeDx business into Rosetta.

General and administrative expenses for the second quarter of 2016 decreased to $1.5 million compared with $2.2 million for the same period in 2015 primarily due to acquisition-related expenses in 2015.

The operating loss for the second quarter of 2016 was $3.4 million, which included $229,000 of non-cash stock-based compensation expense, compared with an operating loss of $2.9 million for the second quarter of 2015, which included $268,000 of non-cash stock-based compensation expense as well as a gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx.

The net loss for the second quarter of 2016 was $3.4 million, or $0.16 per ordinary share on 20.9 million weighted average shares outstanding, compared with a net loss for the second quarter of 2015 of $2.8 million, or $0.20 per ordinary share on 14.4 million weighted average shares outstanding.

On a non-GAAP basis, excluding $229,000 of non-cash stock-based compensation expense, the net loss for the second quarter of 2016 was $3.2 million, or $0.15 per ordinary share on 20.9 million weighted average shares outstanding. For the second quarter of 2015, excluding the $268,000 of non-cash stock-based compensation expense as well as the gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx, the non-GAAP net loss was $4.9 million, or $0.34 per ordinary share on 14.4 million weighted average shares outstanding.

Six Month Financial Results

Revenues for the first six months of 2016 increased 120% to $5.0 million compared with revenues of $2.3 million for the first six months of 2015. On a pro forma basis, revenues for the six months of 2016 increased 20% compared with pro forma revenues of $4.2M for the first six months of 2015.

Cost of revenues for the six-month period ended June 30, 2016 was $3.6 million compared with $2.3 million for the same period of 2015.

Total operating expenses for the first six months of 2016 of $8.8 million compared with $6.7 million in the first six months of 2015, which included a gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx.

The operating loss for the first half of 2016 was $7.4 million, which included $459,000 of non-cash stock-based compensation expense, compared with an operating loss of $6.7 million for the first half of 2015, which included $544,000 of non-cash stock-based compensation expense as well as a gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx.

The net loss for the first six months of 2016 was $7.4 million, or $0.36 per ordinary share on 20.8 million weighted average shares outstanding, compared with a net loss for the first six months of 2015 of $6.7 million, or $0.49 per ordinary share on 13.6 million weighted average shares outstanding.

On a non-GAAP basis, excluding $459,000 of non-cash stock-based compensation expense, the net loss for the first half of 2016 was $7.0 million, or $0.34 per ordinary share on 20.8 million weighted average shares outstanding. For the first half of 2015, excluding the $544,000 of non-cash stock-based compensation expense as well as the gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx, the non-GAAP net loss was $8.5 million, or $0.62 per ordinary share on 13.6 million weighted average shares outstanding.

Balance Sheet Highlights

As of June 30, 2016, Rosetta Genomics had cash, cash equivalents, restricted cash and short-term bank deposits of $8.7 million, compared with $13.6 million as of December 31, 2015. The Company used approximately $6.5 million in cash to fund operations during the first six months of 2016, and collected approximately $4.9 million in cash from its clinical testing services as well as $1.6 million from a licensing deal signed in December 2015. Based on the Company’s current operations and plans, which include a cost-reduction plan should it be unable to raise sufficient additional capital, if necessary, Rosetta Genomics expects its current cash position will fund operations into May 2017.

Conference Call

Rosetta Genomics management will host a conference call today beginning at 4:30 p.m. Eastern time to provide an update on the Company’s business and answer questions. Individuals interested in listening to the conference call may do so by dialing (866) 239-5859, or for international callers (702) 495-1913. The conference ID number is 82293939. The call is also being webcast, and can be accessed on the investor relations section of the Company’s website at www.rosettagx.com.

A telephone replay will be available through October 2, 2016 by dialing (855) 859-2056, or for international callers (404) 537-3406, and entering the conference ID number 82293939. The webcast will be available on the Company’s website for 30 days.

ThinPrep ^® is a registered trademark of Hologic, Inc.

Use of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures. A "non-GAAP financial measure" refers to a numerical measure of historical or future financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the financial statements. In this news release, Rosetta provides non-GAAP gross billings, non-GAAP pro forma revenues and non-GAAP net loss as additional information relating to its operating results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for revenues, net loss or net loss per share prepared in accordance with GAAP.

Pursuant to the requirements of Regulation G promulgated by the Securities and Exchange Commission, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call or webcast to the most directly comparable financial measure prepared in accordance with GAAP. This reconciliation is presented in the tables below under the heading "Reconciliation of GAAP to Non-GAAP Consolidated Statement of Operation." Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures.

Management uses these non-GAAP measures for internal reporting and forecasting purposes. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company's historical and prospective financial performance.

About Rosetta Genomics

Rosetta develops and commercializes a full range of microRNA-based and other molecular diagnostics. Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. Through the acquisition of PersonalizeDx, the Company now offers core FISH, IHC and PCR-based testing capabilities and partnerships in Pathology, Oncology and Urology that provide additional content and platforms that complement Rosetta’s microRNA and Next-Gen Sequencing offerings. RosettaGX Reveal™, a Thyroid microRNA Classifier for the diagnosis of indeterminate thyroid FNA smears, as well as the full RosettaGX™ portfolio of cancer testing services are commercially available through the Company’s Philadelphia, PA- and Lake Forest, CA-based CAP-accredited, CLIA-certified labs. For more information visit www.rosettagx.com.

Forward-Looking Statement Disclaimer

Various statements in this release concerning Rosetta’s future expectations, plans and prospects including, but not limited to statements about expanding the customer base, increasing test volumes by more than 50% over the next several months, increasing penetration of our solid tumor and urologic oncology offerings, accelerating revenue growth, gaining meaningful market share, increasing demand, improving billings, collections and reimbursement, enhancing shareholder value, that RosettaGX Reveal is expected to drive significant revenue growth over the next several years, that Rosetta expects that RosettaGX Reveal’s competitive advantage will allow it to gain meaningful market share in a $350 million market in the U.S., and that Rosetta expects its current cash position will fund operations at least through April 2017 constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those risks more fully discussed in the "Risk Factors" section of Rosetta’s most recently filed Annual Report on Form 20-F, as filed with the SEC. In addition, any forward-looking statements represent Rosetta’s views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. Rosetta does not assume any obligation to update any forward-looking statements unless required by law.

Rosetta Genomics Contact:	Investor Contact:
Ken Berlin, President & CEO	LHA
(267) 298-1159	Anne Marie Fields
investors@rosettagx.com	(212) 838-3777
	afields@lhai.com

-Tables to Follow-

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	June 30,		December 31,
	2016		2015
	Unaudited

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	8,055	$	12,447
Short-term bank deposits and restricted cash		600		1,098
Trade receivables		3,371		3,633
Other accounts receivable and prepaid expenses		767		2,192

Total current assets		12,793		19,370

LONG TERM ASSETS:
Property and equipment, net		2,918		2,975
Long-term bank deposits and other long-term receivables		84		78

Total long term assets		3,002		3,053

Total assets	$	15,795	$	22,423

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

	June 30,			December 31,
	2016			2015
	Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturity of long - term capital lease	$	55		$	-
Trade payables		982			1,070
Accrued expenses		409			517
Employees and accruals		1,608			1,216

Total current liabilities		3,054			2,803

LONG-TERM LIABILITIES:
Long term capital lease obligations		92			-

Total long-term liabilities		92			-

COMMITMENTS AND CONTINGENT LIABILITIES

SHAREHOLDERS EQUITY:
Share capital:
Ordinary Shares of NIS 0.6 par value: 60,000,000 shares authorized at June 30, 2016 and December 31, 2015; 20,868,826 (unaudited) and 20,518,794 shares issued at June 30, 2016 and December 31, 2015, respectively; 20,865,568 (unaudited) and 20,515,536 shares outstanding at June 30, 2016 and December 31, 2015, respectively		3,247			3,194
Additional paid-in capital		157,102			156,696
Accumulated deficit		(147,700	)		(140,270	)

Total shareholders' equity		12,649			19,620

Total liabilities and shareholders' equity	$	15,795		$	22,423

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except share and per share data)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016		2015
	Unaudited						Unaudited

Revenues	$	2,412		$	1,957		$	5,015	$	2,278
Cost of revenues		1,989			1,917			3,647		2,269

Gross profit		423			40			1,368		9

Operating expenses:

Research and development, net		618			613			1,459		1,361
Sales, marketing and business development		1,742			2,478			3,639		4,075
General and administrative		1,451			2,232			3,664		3,643
Gain from bargain purchase related to acquisition of CynoGen, Inc.		-			(2,352	)		-		(2,352	)

Total operating expenses		3,811			2,971			8,762		6,727

Operating loss		3,388			2,931			7,394		6,718
Financial expense (income), net		(1	)		(117	)		24		41
Income tax expenses		6			5			12		10

Net comprehensive loss	$	3,393		$	2,819		$	7,430	$	6,687

Basic and diluted net loss per ordinary share attributable to Rosetta Genomics' shareholders	$	0.16		$	0.20		$	0.36	$	0.49
Weighted average number of ordinary shares used to compute basic and diluted net loss per ordinary share		20,862,599			14,425,034			20,756,461		13,598,198

Non-GAAP RECONCILING TABLES

U.S. dollars in thousands (except share and per share data)

	Quarter ended
	June 30, 2015
USD in thousands	(Unaudited)
GAAP revenues	$	1,957
Additional revenues from PersonalizeDx for non-consolidated period of April 1, 2015 - April 12, 2015		169
Pro forma revenues	$	2,126

	Quarter ended
	June 30, 2015
USD in thousands	(Unaudited)
GAAP revenues for urologic cancer testing services	$	971
Additional revenues from PersonalizeDx for non-consolidated period of April 1, 2015 - April 12, 2015		131
Pro forma revenues for urologic cancer testing services	$	1,102

	Quarter ended
	June 30, 2015
USD in thousands	(Unaudited)
GAAP revenues for solid tumor testing services	$	986
Additional revenues from PersonalizeDx for non-consolidated period of April 1, 2015 - April 12, 2015		38
Pro forma revenues for solid tumor testing services	$	1,024

	Three months ended
USD in thousands	June 30, 2016		March 31, 2016
Revenues for Reveal	$	166	$	17
Unrecognized billings	$	345	$	94
Gross billings for Reveal	$	511	$	111

	Six months ended
	June 30, 2015
USD in thousands	(Unaudited)
GAAP revenues	$	2,278
Additional revenues from PersonalizeDx for the non-consolidated period of January 1, 2015 - April 12, 2015	$	1,903
Pro forma revenues	$	4,181

	Quarter ended
	June 30,
	2016		2015
USD in thousands	(Unaudited)		(Unaudited)
Net loss	$	3,393	$	2,819
Share-based compensation	$	229	$	268
Gain from bargain purchase related to acquisition of PersonalizeDx		-		(2,352	)
non-GAAP net loss	$	3,164	$	4,903

	Quarter ended
	June 30,
	2016		2015
Basic and diluted per share data	(Unaudited)		(Unaudited)
Net loss	$	0.16	$	0.20
Share-based compensation	$	0.01	$	0.02
Gain from bargain purchase related to acquisition of PersonalizeDx		-	$	(0.16	)
non-GAAP net loss	$	0.15	$	0.34
Weighted average number of Ordinary shares used to
compute basic and diluted net loss per Ordinary share		20,862,599		14,425,034

	Six months ended
	June 30,
	2016		2015
USD in thousands	(Unaudited)		(Unaudited)
Net loss	$	7,430	$	6,687
Share-based compensation	$	459	$	544
Gain from bargain purchase related to acquisition of PersonalizeDx		-	$	(2,352	)
non-GAAP net loss	$	6,971	$	8,495

	Six months ended
	June 30,
	2016		2015
Basic and diluted per share data	(Unaudited)		(Unaudited)
Net loss	$	0.36	$	0.49
Share-based compensation	$	0.02	$	0.04
Gain from bargain purchase related to acquisition of PersonalizeDx	$	-	$	(0.17	)
non-GAAP net loss	$	0.34	$	0.62

Weighted average number of Ordinary shares used to
compute basic and diluted net loss per Ordinary share		20,756,461		13,598,198

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