UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549










FORM
20-F



|[  ] | REGISTRATION
    STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | --------------------------------------------------------------------------------------------------



Or



|[X] | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------



For
the fiscal year ended December 31, 2015



Or



|[  ] | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | --------------------------------------------------------------------------------------------



Or



|[  ] | SHELL
    COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | -----------------------------------------------------------------------------------------------



Commission
File No. 000-13248










SCIVAC
THERAPEUTICS INC.

(Exact
name of Registrant as specified in its charter)



N/A

(Translation
of Registrant’s name into English)



British
Columbia, Canada

(Jurisdiction
of incorporation or organization)



Gad
Feinstein Rd.

POB
580

Rehovot,
Israel 7610303

(Address
of principal executive offices)



James
J. Martin

4400
Biscayne Blvd.

Miami,
FL 33137

Telephone:
(305) 575-4207

Fax:
(781) 538-4327

(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



Securities
registered or to be registered pursuant to Section 12(b) of the Act:



|Title
                                         of each class |  | Name
                                         of each exchange on which registered
|------------------------------------------------------------ |  | ----------------------------------------------------------------------------------
|Common
    Shares, no par value                              |  | Toronto
    Stock Exchange                                                        



Indicate
the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period
covered by the annual report: 756,599,439 common shares, no par value.



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]
No [X]



If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes [  ] No [X]



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):





|Large
    accelerated filer [  ] | Accelerated filer [  ] | Non-accelerated filer [X]
|-------------------------------- | ---------------------- | -------------------------



Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|U.S.
    GAAP [  ] | International
    Financial Reporting Standardsas issued by the International Accounting Standards
    Board [X] | Other
    [  ]
|------------------ | ---------------------------------------------------------------------------------------------------------------- | --------------



If
“Other” has been checked in response to the previous question, indicate by check mark which financial statement item
the Registrant has elected to follow: Item 17 [  ] Item 18 [  ]



If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes [  ] No [X]



(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [  ]
No [  ]

















TABLE
OF CONTENTS



|PART
    I                                                                                | 8  
|----------------------------------------------------------------------------------------- | ---
|ITEM
    1. Identity of Directors, Senior Management and Advisers                         | 8  
|ITEM
    2. Offer Statistics and Expected Timetable                                       | 8  
|ITEM
    3. Key Information                                                               | 8  
|ITEM
    4. Information on the Company                                                    | 36 
|ITEM
    4A. Unresolved Staff Comments                                                    | 50 
|ITEM
    5. Operating and Financial Review and Prospects                                  | 50 
|ITEM
    6. Directors, Senior Management and Employees                                    | 61 
|ITEM
    7. Major Shareholders and Related Party Transactions                             | 72 
|ITEM
    8. Financial Information                                                         | 73 
|ITEM
    9. The Offer and Listing                                                         | 74 
|ITEM
    10. Additional Information                                                       | 76 
|ITEM
    11. Quantitative and Qualitative Disclosures About Market Risk                   | 85 
|ITEM
    12. Description of Securities Other Than Equity Securities                       | 86 
|                                                                                          |    
|PART
    II                                                                               | 87 
|ITEM
    13. Defaults, Dividend Arrearages and Delinquencies                              | 87 
|ITEM
    14. Material Modifications to the Rights of Security Holders and Use of Proceeds | 87 
|ITEM
    15. Controls and Procedures                                                      | 87 
|ITEM
    16. [RESERVED]                                                                   | 88 
|ITEM
    16A. Audit Committee Financial Expert                                            | 88 
|ITEM
    16B. Code of Ethics                                                              | 88 
|ITEM
    16C. Principal Accountant Fees and Services                                      | 88 
|ITEM
    16D. Exemptions from the Listing Standards for Audit Committees                  | 89 
|ITEM
    16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers      | 89 
|ITEM
    16F. Change in Registrant’s Certifying Accountant                                | 89 
|ITEM
    16G. Corporate Governance                                                        | 89 
|ITEM
    16H. Mine Safety Disclosure                                                      | 89 
|                                                                                          |    
|PART
    III                                                                              | 89 
|ITEM
    17. Financial Statements                                                         | 89 
|ITEM
    18. Financial Statements                                                         | 90 
|ITEM
    19. Exhibits                                                                     | 128



2






ABOUT
THIS ANNUAL REPORT



Unless
the context otherwise requires, all references to “we,” “us,” “our,” “SciVac”,
the “Company” and our “Company” in this Annual Report on Form 20-F, referred to as our annual report,
are to SciVac Therapeutics Inc. All references to “common shares” and “share capital” refer common shares
and share capital of SciVac. Our consolidated financial statements are prepared and presented in accordance with International
Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. Our historical results
do not necessarily indicate our expected results for any future periods. Any discrepancies in any table between totals and sums
of the amounts listed are due to rounding. Unless otherwise indicated, or the context otherwise requires, references in this annual
report to financial and operational data for a particular year refer to the fiscal year of our company ended December 31 of that
year.



The
functional currency of the Company and the presentation currency of the consolidated financial statements is the U.S. dollar.
Each of the Company’s subsidiaries determines its own respective functional currency, and this currency is used to separately
measure each entity’s financial position and operating results.



When
a subsidiary’s functional currency differs from the Company’s functional currency, that subsidiary represents a foreign
operation whose financial statements are translated into the Company’s functional currency so that they can be included
in the consolidated financial statements. In this annual report, “NIS” means New Israeli Shekel, “CAD”
and “CAD$” means Canadian dollars, and “$,” “US$” and “U.S. dollars” mean U.S.
dollars.



CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS



This
annual report contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things,
our product development efforts, business, financial condition, results of operations, strategies, plans and prospects. In addition,
from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking
statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,”
“plan,” “may,” “should,” “anticipate,” “could,” “might,”
“seek,” “target,” “will,” “project,” “forecast,” “continue”
or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly
to historical matters. These forward-looking statements may be included in, among other things, various filings made by us with
the Securities and Exchange Commission, or the SEC, press releases or oral statements made by or with the approval of one of our
authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results
as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements
are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results
expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially
from the activities and results anticipated in forward-looking statements, including, but not limited to, the factors summarized
below:



| | ● | None
    of SciVac’s products has received marketing approval in the United States and none has been cleared for clinical testing
    in the United States.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                            
| | ● | SciVac
    has generated limited revenue from commercial sales to date, and its future profitability is uncertain.                                         
| |   |                                                                                                                                                            
| | ● | International
    commercialization of SciVac’s product candidates faces significant obstacles.                                                            
| |   |                                                                                                                                                            
| | ● | SciVac
    needs to raise additional capital to operate its business.                                                                                      
| |   |                                                                                                                                                            
| | ● | SciVac
    has a history of losses and it may never achieve or sustain profitability.                                                                      
| |   |                                                                                                                                                            
| | ● | SciVac
    has a limited operating history upon which to base an investment decision.                                                                      





3






| | ● | If
    SciVac fails to obtain the capital necessary to fund its operations, it will be unable to continue or complete its product
    development and commercialization.                                                                                                                                                                                                                                                             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    has limited access to the capital markets, and, even if it can raise additional funding, if may be required to do so on terms
    that are dilutive to SciVac’s stockholders.                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    may not be able to enforce its intellectual property rights throughout the world. This risk is exacerbated for SciVac because
    it expects that one or more of its product candidates will be manufactured and used in a number of foreign countries.                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac’s
    patent position is highly uncertain and involves complex legal and factual questions.                                                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Sci-B-VacTM,
    SciVac’s lead product, is not currently protected by any pending patent application nor any unexpired patent. Accordingly,
    Sci-B-VacTM may be subject to competition from the sale of generic products that could adversely affect SciVac’s
    business and operations.                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Certain
    of SciVac’s patent rights are licensed to it by third parties. If SciVac fails to comply with the terms of these license
    agreements, its rights to those patents may be terminated, and it will be unable to conduct its business.                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac’s
    ability to protect and enforce its patents does not guarantee that it will secure the right to commercialize the patents.                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Changes
    in patent law could diminish the value of patents in general, thereby impairing SciVac’s ability to protect its products.                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Obtaining
    and maintaining SciVac’s patent protection depends on compliance with various procedural, documentary, fee payment and
    other requirements imposed by governmental patent agencies, and its patent protection could be reduced or eliminated for non-compliance
    with these requirements.                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    relies on confidentiality agreements to protect its trade secrets. If these agreements are breached by SciVac’s employees
    or other parties, its trade secrets may become known to its competitors.                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    may not be able to obtain or maintain orphan drug exclusivity for its product candidates.                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Under
    applicable U.S. and Israeli law, SciVac may not be able to enforce covenants not to compete and therefore may be unable to
    prevent its competitors from benefiting from the expertise of some of SciVac’s former employees. In addition, employees
    may be entitled to seek compensation for their inventions irrespective of their agreements with SciVac, which in turn could
    impact its future profitability.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    currently has international operations, which subject it to risks inherent with operations outside of the United States.                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac’s
    headquarters and other significant operations are located in Israel and, therefore, its results may be adversely affected
    by political, economic and military instability in Israel.                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac’s
    operations may be disrupted as a result of the obligation of Israeli citizens to perform military service.                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | Exchange
    rate fluctuations between the U.S. dollar, Canadian dollar and the New Israeli Shekel currencies may negatively affect SciVac’s
    earnings.                                                                                                                                                                                                                                                                           



4






| | ● | If
    SciVac or its current or future collaborators fail to obtain the necessary regulatory approvals, or if such approvals are
    limited, SciVac and its current or future collaborators will not be allowed to commercialize SciVac’s product or product
    candidates, and it will not generate product revenues.                                                                                                
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Clinical
    trials involve a lengthy and expensive process with an uncertain outcome and results of earlier studies and trials may not
    be predictive of future trial results.                                                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Conducting
    successful clinical studies may require the enrollment of large numbers of patients, and suitable patients may be difficult
    to identify and recruit.                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Development
    of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required, and SciVac may not adequately
    develop such protocols to support approval.                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Delays
    in clinical trials are common for many reasons and any such delays could result in increased costs to SciVac and jeopardize
    or delay its ability to obtain regulatory approval and commence product sales as currently contemplated.                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | SciVac
    may be required to suspend or discontinue clinical trials because of adverse side effects or other safety risks that could
    preclude approval of its biologic candidates.                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | SciVac
    relies on third parties to conduct its research and development, which we refer to as R&D, activities, including its clinical
    trials, and it may experience delays in obtaining or may be unsuccessful in obtaining regulatory approval for, or in commercializing,
    its biologic candidates if these third parties do not successfully carry out their contractual duties or meet expected deadlines.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Future
    legislation, regulations and policies adopted by the U.S. Food and Drug Administration, referred to as the FDA, or other regulatory
    authorities may increase the time and costs required for SciVac to conduct and complete clinical trials for its hormone therapy
    drug candidates.                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Developments
    by competitors may establish standards of care that affect SciVac’s ability to conduct its clinical trials as planned.                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | There
    can be no assurance that the data generated will be acceptable to the FDA.                                                                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | The
    future results of SciVac’s current or future clinical trials may not support its product candidate claims or may result
    in the discovery of unexpected adverse side effects.                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | There
    is no guarantee that the FDA will grant approval of a Biologics License Application, which we refer to as a BLA, for SciVac’s
    future product candidates, and failure to obtain necessary approvals for its future product candidates would adversely affect
    SciVac’s ability to grow its business.                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Even
    if SciVac believes that the data from its trials will support marketing approval in the United States or in Europe, it cannot
    predict whether the agencies will agree with its analysis and approve its applications.                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Conducting
    clinical trials of its product candidates or commercial sales of a product candidate may expose SciVac to expensive product
    liability claims and it may not be able to maintain product liability insurance on reasonable terms or at all.                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Even
    if SciVac obtains regulatory approval for one or more of its product candidates, it will still face extensive, ongoing regulatory
    requirements and review and its products may face future development and regulatory difficulties.                                                                                                                                                                        



5






| | ● | SciVac
    may not succeed at in-licensing product candidates or technologies to expand its product pipeline.                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    may need to focus its future efforts in new therapeutic areas in which it has little or no experience.                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | All
    of SciVac’s products for clinical trials are manufactured outside of the United States.                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    has limited manufacturing capabilities and may have to depend on other parties for its manufacturing operations. If these
    manufacturers fail to meet SciVac’s requirements and strict regulatory requirements, its product development and commercialization
    efforts may be materially harmed.                         
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | If
    the supplier of a biological active pharmaceutical ingredient, referred to as an API, or pharmaceutical excipient fails to
    provide sufficient quantities to SciVac, it may not be able to obtain an alternative supply on a timely or acceptable basis.                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | Modifications
    to SciVac’s products may require new BLA approvals.                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | Future
    products may never achieve market acceptance.                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | To
    be commercially successful, physicians must be persuaded that using SciVac’s products for the vaccination of the hepatitis
    B virus, which we refer to as HBV, or other planned indications are effective alternatives to existing vaccinations, therapies
    and treatments.                                                  
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    expects the healthcare industry to face increased limitations on reimbursement, rebates and other payments as a result of
    healthcare reform, which could adversely affect third-party coverage of its products and how much or under what circumstances
    healthcare providers will prescribe or administer its products.
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac’s
    revenue stream will depend upon third-party reimbursement.                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | Governments
    outside the United States tend to impose strict price controls, which may adversely affect SciVac’s revenues, if any.                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    may enter into an agreement with, and depend upon, one or more partners to assist it in commercializing its product candidates.                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    may have conflicts with its partners that could delay or prevent the development or commercialization of its product candidates.                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac
    has limited experience selling, marketing and distributing products.                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | If
    SciVac is unable to develop its own sales, marketing and distribution capabilities, or if it is not successful in contracting
    with third parties for these services on favorable terms, or at all, its product revenues could be disappointing.                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | Upon
    commercialization of its products, SciVac may be dependent on third parties to market, distribute and sell its products.                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                           
| | ● | SciVac’s
    products face, and its product candidates will face, significant competition in the markets for such products, and if they
    are unable to compete successfully, SciVac’s business will suffer.                                                                                                                            



6






| | ● | SciVac
    is faced with intense competition and rapid technological change, which may make it more difficult to achieve significant
    market penetration. If SciVac cannot compete successfully for market share against other drug companies, it may not achieve
    sufficient product revenues and its business will suffer.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | Adverse
    events involving SciVac’s product candidates may lead the FDA to delay or deny approval for its products or result in
    product recalls that could harm SciVac’s reputation, business and financial results.                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    may be exposed to liability claims associated with the use of hazardous materials and chemicals.                                                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac’s
    business depends upon securing and protecting critical intellectual property.                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    may not be able to obtain marketing exclusivity in the United States under the Biologics Price Competition and Innovation
    Act, referred to as the BPCI Act, or equivalent regulatory data exclusivity protection in other jurisdictions for its products.                                                          
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    may not be successful in hiring and retaining key employees.                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac’s
    employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | Business
    interruptions could limit SciVac’s ability to operate its business.                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    may expand its business through the acquisition of rights to new product candidates that could disrupt its business and harm
    its financial condition.                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | Managing
    growth as SciVac expands operations may strain its resources, and it may not successfully manage its growth.                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    is subject to federal and state laws and regulations relating to its business and its failure to comply with those laws could
    have a material adverse effect on its results of operations and financial conditions.                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    is considered a “foreign private issuer” under the Exchange Act, and SciVac’s disclosure and reporting requirements
    are different than those of a U.S. domestic reporting company.                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | The
    public market for SciVac common shares has been, and may continue to be, volatile. This may affect the ability of its investors
    to sell their shares as well as the price at which they sell their shares.                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                   
| | ● | SciVac
    has not paid dividends in the past and has no immediate plans to pay dividends.                                                                                                                                                                                                                                        



We
believe these forward-looking statements are reasonable; however, these statements are only current predictions and are subject
to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels
of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements.
We discuss many of these risks in this annual report in greater detail under the heading “Risk Factors” and elsewhere
in this annual report. Given these uncertainties, you should not rely upon forward-looking statements as predictions of future
events.



All
forward-looking statements attributable to us or persons acting on our behalf speak only as of the date hereof and are expressly
qualified in their entirety by the cautionary statements included in this annual report. We undertake no obligation to update
or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence
of unanticipated events, except as required by applicable law. In evaluating forward-looking statements, you should consider these
risks and uncertainties.



7






PART
I



ITEM
1. Identity of Directors, Senior Management and Advisers.



Not
applicable.



ITEM
2. Offer Statistics and Expected Timetable.



Not
applicable.



ITEM
3. Key Information.



A.
Selected Financial Data.



The
following tables summarize SciVac’s financial data as of and for the fiscal years ended December 31, 2015, 2014, 2013, 2012
and 2011. The statements of income data for the fiscal years ended December 31, 2015, 2014 and 2013 and the balance sheet data
as of December 31, 2015 and 2014 which were prepared in accordance with IFRS, as adopted by the IASB, have been derived from SciVac’s
audited consolidated financial statements and related notes, which are included elsewhere in this annual report. The consolidated
statement of income and the consolidated balance sheet data as of and for the fiscal years ended December 31, 2013 and 2012, which
were prepared in accordance with IFRS, and December 31, 2011, which were prepared in accordance with Israeli GAAP, have been derived
from SciVac’s audited consolidated financial statements and related notes, which are not included in this annual report.
Historical results are not indicative of the results that should be expected in the future. The following selected financial data
should be read in conjunction with the financial information, “Item 5. Operating and Financial Review and Prospects”
and other information provided elsewhere in this annual report and our consolidated financial statements and related notes. The
selected financial data in this section is not intended to replace the consolidated financial statements and is qualified in its
entirety thereby.



Balance
Sheet Data:

(Expressed
in U.S. dollars in thousands)



|                  |  | As of December 31, |       
|----------------- |  | ------------------ | ------
|                  |  | 2015               |       
|Total Assets      |  | $                  | 29,551
|Total Liabilities |  |                    | 4,559 
|Total Equity      |  |                    | 24,992
|Share Capital     |  |                    | 45,779



*
Represents amount lower than $1



8






Statement
of Income Data:

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



|                                                 |  | For the year ended December
    31, |            
|------------------------------------------------ |  | ----------------------------------- | -----------
|                                                 |  | 2015                                |            
|Revenues                                         |  | $                                   | 955        
|Cost of Revenues                                 |  |                                     | (3,755     
|Operating income (loss)                          |  |                                     | (8,836     
|Net income (loss)                                |  |                                     | (14,755    
|Basic and diluted net income (loss) per share(1) |  |                                     | (0.03      
|                                                 |  |                                     |            
|Weighted average number of shares outstanding(1) |  |                                     | 505,893,922



|(1) | On
    July 9, 2015 SciVac Ltd. completed a reverse takeover transaction with Levon Resources Ltd., referred to as Levon, pursuant
    to which Levon acquired 100% of the issued and outstanding securities of SciVac Ltd. (for additional information, see “Item
    4. Information on the Company—Recent Developments”). SciVac’s previous audited consolidated financial
    statements for the years ended December 31, 2014 and 2013 that are not included in this annual report were prepared prior
    to the transaction with Levon and do not retroactively restate the new equity structure. However, the selected consolidated
    statement of income data set forth above retroactively restates the new equity structure for the years ended December 31,
    2014, 2013, 2012 and 2011, using the share exchange ratio of 2,193.5 SciVac common shares for each share of SciVac Ltd. The
    table below contains a reconciliation of the selected consolidated statement of income data to SciVac’s audited consolidated
    financial statements included in this annual report.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                                                                     |  | 2014 |             |   | 2013 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | -
|Net loss from selected historical consolidated financial information above                                                                                           |  | $    | (5,672      | ) |      | $
|Weighted average number of shares outstanding from reconciliation below                                                                                              |  |      | 1,182       |   |      |  
|Basic and diluted net loss per share per historical audited financial statements included in
    this filing                                                         |  | $    | (4,800      | ) |      | $
|                                                                                                                                                                     |  |      |             |   |      |  
|Shares issued and outstanding per Note 16 of the historical audited financial statements included
    in this filing                                                 |  |      | 1,242       |   |      |  
|Weighting of shares due to ordinary shares issued during the year                                                                                                    |  |      | (60         | ) |      |  
|Weighted average number of shares outstanding                                                                                                                        |  |      | 1,182       |   |      |  
|June 30, 2015 share split: 100 for 1 ratio                                                                                                                           |  |      | 118,155     |   |      |  
|July 9, 2015 post-merger weighted average number of shares outstanding, which reflect the reverse
    merger share recapitalization exchange ratio of 2,193.5 for 1. |  |      | 259,172,993 |   |      |  
|Basic and diluted net loss per share per table above                                                                                                                 |  | $    | (0.02       | ) |      | $



B.
Capitalization and Indebtedness.



Not
applicable.



C.
Reasons for the Offer and Use of Proceeds.



Not
applicable.



9






D.
Risk Factors.



An
investment in SciVac’s securities involves a high degree of risk. SciVac operates in a dynamic and rapidly changing industry
that involves numerous risks and uncertainties. You should carefully consider the factors described below, together with all of
the other information contained in this annual report, including the audited consolidated financial statements and the related
notes, before deciding whether to invest in SciVac’s common shares. If any of the risks discussed below actually occur,
SciVac’s business, financial condition, operating results and cash flows could be materially adversely affected.



None
of SciVac’s products has received marketing approval in the United States and none has been cleared for clinical testing
in the United States.



Although
SciVac’s lead product candidate, Sci-B-VacTM, has been approved for use in 15 countries, Sci-B-VacTM has not been
approved by the FDA. Although SciVac has conducted clinical testing outside the United States, that testing has not been conducted
pursuant to an FDA-issued Investigational New Drug Application, which we refer to as an IND, and there is no assurance that the
FDA will permit SciVac to favorably rely on that data. Normally, the FDA requires candidates to complete three phases of clinical
trials ending with Phase III pivotal trials. A Phase III study program is designed to test the safety and efficacy of the product
candidate on a large number of patients. The timeline between a Phase I study and a Phase III study and subsequent filing of a
BLA can be several years. SciVac will need to commit substantial time and additional resources to conducting further nonclinical
studies and clinical trials before it can submit a BLA with respect to any of these or other product candidates. SciVac cannot
predict whether the FDA will permit it to conduct the necessary clinical testing nor can SciVac predict if or when it might submit
a BLA for regulatory approval of any of its current or future product candidates.



SciVac
has generated limited revenue from commercial sales to date, and its future profitability is uncertain.



SciVac
has a limited operating history, and its business is subject to all of the risks inherent in the establishment of a new business
enterprise. SciVac’s likelihood of success must be considered in light of the problems, expenses, difficulties, complications
and delays frequently encountered in connection with establishing a new biopharmaceutical company. Since SciVac began its business,
it has focused on R&D clinical trials of product candidates, and limited commercialization and distribution, and has incurred
significant losses since inception and generated only limited product revenues. If SciVac continues to incur operating losses
and fails to become a profitable company, it may be unable to continue its operations. SciVac expects to continue to operate at
a net loss for at least the next several years as it continues its R&D efforts, continues to conduct clinical trials and continues
to further develop its manufacturing, sales, marketing and distribution capabilities. There can be no assurance that the product
candidates under development by SciVac will be approved for sale in the United States or elsewhere. Furthermore, there can be
no assurance that if such product candidates are approved, they will be successfully commercialized, and the extent of SciVac’s
future losses and the timing of its potential profitability are highly uncertain.



International
commercialization of SciVac’s product candidates faces significant obstacles.



SciVac
currently markets and sells Sci-B-VacTM internationally through collaborative relationships with foreign partners and may
plan to do so with other product candidates in the future. SciVac has limited foreign regulatory, clinical and commercial resources.
Current and future partners are critical to its international success. SciVac may not be able to maintain current, or enter into
future, collaboration agreements with appropriate partners for important foreign markets on acceptable terms, if at all. Current
and future collaborations with foreign partners may not be effective or profitable. SciVac will need to obtain approvals from
the relevant regulatory, pricing and reimbursement authorities to market any of its proposed products internationally, and it
may be unable to obtain foreign regulatory approvals. Pursuing foreign regulatory approvals will be time-consuming and expensive.
The regulations vary among countries, and foreign regulatory authorities may require different or additional clinical trials than
those required to obtain FDA approval for SciVac’s product candidates. In addition, adverse clinical trial results, such
as death or injury due to side effects, could jeopardize regulatory approval, and if approval is granted, such results may also
lead to marketing restrictions or prohibitions.



10






SciVac
needs to raise additional capital to operate its business.



SciVac
is an early commercial-stage company focused on product development and commercialization and has generated only limited product
revenues to date. Until, and if, SciVac receives approval from the FDA and other regulatory authorities for its product and product
candidates, it cannot sell the drugs in those applicable jurisdictions and, based on SciVac’s forecasts, expects to generate
only limited product revenues. Therefore, for the foreseeable future, SciVac will have to fund all of its operations and capital
expenditures primarily from the net proceeds of future offerings and grants of securities. SciVac’s actual capital requirements
will depend on many factors. If it experiences unanticipated cash requirements, it may need to seek additional sources of financing,
which may not be available on favorable terms, if at all. If it does not succeed in raising additional funds on acceptable terms,
it may be unable to complete planned nonclinical studies and clinical trials or obtain approval of its product and/or product
candidates from the FDA and other regulatory authorities. In addition, SciVac could be forced to discontinue product development
and/or commercialization, reduce or forego sales and marketing efforts and attractive business opportunities or discontinue operations.



SciVac
has a history of losses and it may never achieve or sustain profitability.



SciVac
has incurred substantial losses since its inception, and it may not achieve profitability in the foreseeable future, if at all.
For the period from inception (April 18, 2005) to December 31, 2015, SciVac incurred an accumulated deficit of approximately $70,335,000.
Even if SciVac succeeds in developing and commercializing one or more of its products or product candidates, it expects to incur
substantial net losses and negative cash flows for the foreseeable future due in part to increasing R&D expenses, including
clinical trials, and increasing expenses from leasing additional facilities and hiring additional personnel. As a result, SciVac
will need to generate significant revenues in order to achieve and maintain profitability. SciVac may not be able to generate
these revenues or achieve profitability in the future. Even if it does achieve profitability, SciVac may not be able to sustain
or increase profitability.



SciVac
has a limited operating history upon which to base an investment decision.



Your
ability to evaluate SciVac’s prospects is limited due to its brief operating history and its unproven potential to generate
profits. You should evaluate the likelihood of financial and operational success in light of the risks, uncertainties, expenses
and difficulties associated with an early-stage biopharmaceutical business, many of which may be beyond SciVac’s control,
including:



| | ● | its
    potential inability to continue to undertake nonclinical studies, pharmaceutical development and clinical trials;
| | - | -------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                          
| | ● | its
    potential inability to obtain regulatory approvals; and                                                          
| |   |                                                                                                                          
| | ● | its
    potential inability to manufacture, sell and market its products.                                                



SciVac’s
operations have been limited to organizing and staffing, on a limited basis, the Company, acquiring, developing and securing its
proprietary technology, undertaking nonclinical studies and clinical trials of its principal product and product candidates, and,
on a limited basis, commercializing, manufacturing, distributing and selling Sci-B-VacTM in certain jurisdictions in which
it is approved for sale. These operations provide a limited basis for you to assess SciVac’s ability to commercialize its
product and product candidates and the advisability of investing in its securities.



11






If
SciVac fails to obtain the capital necessary to fund its operations, it will be unable to continue or complete its product development
and commercialization.



SciVac
will need to continue to seek capital from time to time to continue the development and commercialization of Sci-B-VacTM
beyond Phase II and Phase III clinical trials and to acquire and develop other product candidates. Sci-B-VacTM is not expected
to be commercialized in the United States until at least 2019; however, Sci-B-VacTM is currently approved for marketing in
15 other jurisdictions, including Israel, Hong Kong, Vietnam, Philippines, Burma and certain countries in Africa. The increase
in revenues that FDA approval could generate may not be sufficient to fund SciVac’s ongoing operations. SciVac believes
that it will need to raise substantial additional capital to fund its continuing operations and the development and commercialization
of its product and product candidates. SciVac’s business or operations may change in a manner that could consume available
funds more rapidly than anticipated and substantial additional funding may be required to maintain operations, fund expansion,
develop new or enhanced products, acquire complementary products, businesses or technologies or otherwise respond to competitive
pressures and opportunities, such as a change in the regulatory environment or a change in preferred vaccination modalities. In
addition, SciVac may need to accelerate the growth of its sales capabilities and distribution beyond what is currently envisioned
and this would require additional capital. However, SciVac may not be able to secure additional funding when it needs it or on
favorable terms, if at all. If SciVac cannot raise adequate funds to satisfy its capital requirements, it will have to delay,
scale-back or eliminate its R&D activities, clinical studies, commercialization efforts or future operations. It may also
be required to obtain funds through arrangements with collaborators, which arrangements may require SciVac to relinquish rights
to certain technologies, products or product candidates that it otherwise would not consider relinquishing, including rights to
future product candidates or certain major geographic markets. SciVac may further have to license its technology to others. This
could result in sharing revenues which it might otherwise retain for itself. Any of these actions may harm SciVac’s business,
financial condition and results of operations.



The
amount of capital SciVac may need depends on many factors, including the progress, timing and scope of its product development
and commercialization programs; the progress, timing and scope of its nonclinical studies and clinical trials; the time and cost
necessary to obtain regulatory approvals; the time and cost necessary to further develop manufacturing processes and arrange for
contract manufacturing; its ability to enter into and maintain collaborative, licensing and other commercial relationships; and
its partners’ commitment of time and resources to the development and commercialization of its products.



SciVac
has limited access to the capital markets, and, even if it can raise additional funds, it may be required to do so on terms that
are dilutive to SciVac’s shareholders.



SciVac
has limited access to the capital markets to raise capital. The capital markets have been unpredictable in the recent past for
other biopharmaceutical companies and unprofitable companies such as SciVac. In addition, it is generally difficult for early
commercial-stage companies to raise capital. The amount of capital that a company such as SciVac is able to raise often depends
on variables that are beyond its control. As a result, SciVac may not be able to secure financing on terms attractive to it, or
at all. If SciVac is able to consummate a financing arrangement, the amount raised may not be sufficient to meet its future needs.
If adequate funds are not available on acceptable terms, or at all, SciVac’s business, results of operations, financial
condition and its continued viability will be materially adversely affected.



SciVac
may not be able to enforce its intellectual property rights throughout the world. This risk is exacerbated for SciVac because
it expects that one or more of its product candidates will be manufactured and used in a number of foreign countries.



The
laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States.
Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign
jurisdictions. This risk is exacerbated for SciVac because it expects that one or more of its product candidates will be manufactured
and used in a number of foreign countries.



The
legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual
property protection, especially those relating to life sciences. This could make it difficult for SciVac to stop the infringement
of its intellectual property rights. For example, several foreign countries have compulsory licensing laws under which a patent
owner must grant licenses to third parties. In addition, some countries limit the enforceability of patents against third parties,
including government agencies or government contractors. In these countries, patents may provide limited or no benefit.



12






Most
jurisdictions in which SciVac has applied for, intends to apply for or has been issued patents have patent protection laws similar
to those of the United States, but some of them do not. For example, SciVac expects to do business in China, Indonesia and India
in the future and the countries in these regions may not provide the same or similar protection as that provided in the United
States. Additionally, due to uncertainty in patent protection law, SciVac has not filed applications in many countries where significant
markets exist, including, among others, China, Indonesia and India.



Proceedings
to enforce patent rights in foreign jurisdictions could result in substantial costs and divert SciVac’s efforts and attention
from other aspects of its business. Accordingly, efforts to protect its intellectual property rights in such countries may be
inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect
SciVac’s ability to obtain adequate protection for its technology and the enforcement of its intellectual property.



SciVac’s
patent position is highly uncertain and involves complex legal and factual questions.



SciVac’s
patent position is highly uncertain and involves complex legal and factual questions. Accordingly, it cannot predict the breadth
of claims that may be allowed or enforced in its patents or in third-party patents. For example, SciVac or its licensors might
not have been the first to make the inventions covered by its future patent applications and future issued patents; SciVac or
its licensors might not have been the first to file patent applications for these inventions; others may independently develop
similar or alternative technologies or duplicate any of SciVac’s technologies; it is possible that none of SciVac’s
future patent applications or the current or future pending patent applications of its licensors will result in issued patents;
SciVac’s issued patents and issued patents of its licensors may not provide a basis for commercially viable technologies,
or may not provide any competitive advantages, or may be challenged and invalidated by third parties; and, SciVac may not develop
additional proprietary technologies that are patentable.



As
a result, SciVac’s licensed patents may not be valid and it may not be able to obtain and enforce patents and maintain trade
secret protection for the full commercial extent of its technology. The extent to which SciVac is unable to do so could materially
harm its business.



Sci-B-VacTM,
SciVac’s lead product, is not currently protected by any pending patent application nor any unexpired patent. Accordingly,
Sci-B-VacTM may be subject to competition from the sale of generic products that could adversely affect SciVac’s business
and operations.



SciVac
or its licensors have applied for and will continue to apply for patents for certain products. Such applications may not result
in the issuance of any patents, and any patents now held or that may be issued may not provide SciVac with adequate protection
from competition. Furthermore, it is possible that patents issued or licensed to SciVac may be challenged successfully. In that
event, if SciVac has a preferred competitive position because of such patents, any preferred position held by it would be lost.
If it is unable to secure or to continue to maintain a preferred position, SciVac could become subject to competition from the
sale of generic products. Failure to receive, inability to protect, or expiration of SciVac’s patents would adversely affect
its business and operations.



Patents
issued or licensed to SciVac may be infringed by the products or processes of others. The cost of enforcing SciVac’s patent
rights against infringers, if such enforcement is required, could be significant, and SciVac may not have the financial resources
to fund such litigation. Further, such litigation can go on for years and the time demands could interfere with SciVac’s
normal operations. There has been substantial litigation and other proceedings regarding patent and other intellectual property
rights in the pharmaceutical industry. If SciVac became a party to patent litigation and other proceedings, the cost of any patent
litigation, even if resolved in SciVac’s favor, could be substantial.



13






Unpatented
trade secrets, improvements, confidential know-how and continuing technological innovation are important to SciVac’s scientific
and commercial success. Although SciVac attempts to and will continue to attempt to protect its proprietary information through
reliance on trade secret laws and the use of confidentiality agreements with its corporate partners, collaborators, employees
and consultants and other appropriate means, these measures may not effectively prevent disclosure of its proprietary information,
and, in any event, others may develop independently, or obtain access to, the same or similar information.



Certain
of SciVac’s patent rights are licensed to it by third parties. If SciVac fails to comply with the terms of these license
agreements, its rights to those patents may be terminated, and it will be unable to conduct its business.



If
SciVac is found to be infringing on patents or trade secrets owned by others, it may be forced to cease or alter its product development
efforts, obtain a license to continue the development or sale of its products and/or product candidates, and/or pay damages.



SciVac’s
manufacturing processes and potential products may violate proprietary rights of patents that have been or may be granted to competitors,
universities or others, or the trade secrets of those persons and entities. As the pharmaceutical industry expands and more patents
are issued, the risk increases that SciVac’s processes and potential products may give rise to claims that they infringe
the patents or trade secrets of others. These other persons could bring legal actions against SciVac claiming damages and seeking
to enjoin clinical testing, manufacturing and marketing of the affected product, product candidate or process. If any of these
actions are successful, in addition to any potential liability for damages, SciVac could be required to obtain a license in order
to continue to conduct clinical tests, manufacture or market the affected product or product candidate or use the affected process.
Required licenses may not be available on acceptable terms, if at all, and the results of litigation are uncertain. If SciVac
becomes involved in litigation or other proceedings, any such action could consume a substantial portion of its financial resources
and the efforts of its personnel.



SciVac’s
ability to protect and enforce its patents does not guarantee that it will secure the right to commercialize the patents.



A
patent is a limited monopoly right conferred upon an inventor, and his successors in title, in return for the making and disclosing
of a new and non-obvious invention. This monopoly is of limited duration but, while in force, allows the patent holder to prevent
others from making and/or using his invention. While a patent gives the holder this right to exclude others, it is not a license
to commercialize the invention, where other permissions may be required for permissible commercialization to occur. For example,
a drug cannot be marketed without the appropriate authorization from the FDA, regardless of the existence of a patent covering
the product. Further, the invention, even if patented itself, cannot be commercialized if it infringes the valid patent rights
of another party.



Changes
in patent law could diminish the value of patents in general, thereby impairing SciVac’s ability to protect its products.



As
is the case with other pharmaceutical companies, SciVac’s success is heavily dependent on intellectual property, particularly
patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity. Therefore,
obtaining and enforcing pharmaceutical patents is costly, time-consuming and inherently uncertain. In particular, the United States
has recently enacted, and is currently implementing, wide-ranging patent reform legislation. The United States Supreme Court has
ruled on several patent cases in recent years, and could do so again in the future, either narrowing the scope of patent protection
available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty
with regard to SciVac’s ability to obtain patents in the future, this combination of events has created uncertainty with
respect to the value of patents, once obtained. Depending on decisions by applicable courts and legislatures in the countries
in which SciVac may pursue patent protection, including those of the U.S. Congress, the federal courts and the U.S. Patent and
Trademark Office, which we refer to as the USPTO, the laws and regulations governing patents and the interpretations of such laws
could change in unpredictable ways that would weaken SciVac’s ability to obtain new patents or to enforce its existing patents
and patents that it may obtain in the future.



14






Obtaining
and maintaining SciVac’s patent protection depends on compliance with various procedural, documentary, fee payment and other
requirements imposed by governmental patent agencies, and its patent protection could be reduced or eliminated for non-compliance
with these requirements.



The
USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment
and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse
of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such
an event, competitors might be able to enter the market earlier than would otherwise have been the case.



SciVac
relies on confidentiality agreements to protect its trade secrets. If these agreements are breached by SciVac’s employees
or other parties, its trade secrets may become known to its competitors.



SciVac
relies on trade secrets that it seeks to protect through confidentiality agreements with its employees and other parties. If these
agreements are breached, competitors may obtain and use its trade secrets to gain a competitive advantage over SciVac. SciVac
may not have any remedies against its competitors and any remedies that may be available to SciVac may not be adequate to protect
its business or compensate it for the damaging disclosure. In addition, SciVac may have to expend resources to protect its interests
from possible infringement by others.



SciVac
may not be able to obtain or maintain orphan drug exclusivity for its product candidates.



The
FDA Office of Orphan Products has granted two orphan drug designations for S-Graft. These orphan designations cover the application
of deoxyribonuclease for the treatment of Graft-versus-host disease, referred to by the abbreviation GVHD, and the application
of deoxyribonuclease for the prevention of GVHD. GVHD is a potentially deadly complication that may occur following a stem cell
or bone marrow transplant. With GVHD, the newly-transplanted donor cells (i.e., the graft) treat the recipient’s body (i.e.
the host) as foreign, and the newly-transplanted cells attack the host. Among other things, GVHD may cause inflammation, skin
rash, nausea, vomiting, diarrhea and liver problems. If a product candidate that has orphan drug designation subsequently receives
FDA approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., for seven
years the FDA may not approve any other applications to market the same drug for the same indication, except in very limited circumstances.
SciVac may be unable to obtain orphan drug designations for any of its additional product candidates or orphan exclusivity for
any of its products, or its potential competitors may obtain orphan drug exclusivity for graft-versus-host disease products competitive
with SciVac’s product candidates before SciVac does, in which case SciVac may be excluded from that market for the exclusivity
period. Even if SciVac obtains orphan drug exclusivity for any of its products, it may not be able to maintain exclusivity if
a competitive product is shown to be clinically superior to SciVac’s product. Although obtaining FDA approval to market
a product with orphan exclusivity can be advantageous, there can be no assurance that it would provide SciVac with a significant
commercial advantage.



Under
applicable U.S. and Israeli law, SciVac may not be able to enforce covenants not to compete and therefore may be unable to prevent
its competitors from benefiting from the expertise of some of SciVac’s former employees. In addition, employees may be entitled
to seek compensation for their inventions irrespective of their agreements with SciVac, which in turn could impact its future
profitability.



SciVac
generally enters into non-competition agreements with its employees and certain key consultants. These agreements prohibit SciVac’s
employees and certain key consultants, if they cease working for SciVac, from competing directly with it or working for SciVac’s
competitors or clients for a limited period of time. SciVac may be unable to enforce these agreements under the laws of the jurisdictions
in which its employees or consultants work and it may be difficult for SciVac to restrict its competitors from benefitting from
the expertise its former employees or consultants developed while working for SciVac. For example, Israeli courts have required
employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the
former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts,
such as the secrecy of a company’s confidential commercial information or the protection of its intellectual property. If
SciVac cannot demonstrate that such interests will be harmed, it may be unable to prevent its competitors from benefiting from
the expertise of its former employees or consultants and its ability to remain competitive may be diminished.



15






In
addition, Chapter 8 to the Israeli Patents Law, 5727-1967, referred to as the Patents Law, deals with inventions made in the course
of an employee’s service and during his or her term of employment, whether or not the inventions are patentable, or service
inventions. Section 134 of the Patents Law provides that if there is no provision in an agreement with the employee regarding
compensation for such inventions, then the employee can file a claim for compensation with the Commission for Compensation and
Royalties, a statutory commission created under the Patents Law, having exclusive jurisdiction with respect to service inventions,
which we refer to as the Compensation Commission. However, if an agreement with the employee contains a provision that explicitly
states that the employee is not entitled to any consideration in excess of said employee’s salary and such provision specifically
references Section 134 of the Patents Law, then the employee is not entitled to any additional consideration. The Compensation
Commission has recently held that a blanket waiver by an employee signed at the end of his employment is also sufficient to block
a claim for compensation under Section 134 of the Patents Law for service inventions, even where the original employment agreement
did not contain the necessary provisions. The Compensation Commission further held that an explicit reference to the waived right
is not necessary in every circumstance in order for the employee’s waiver of such right to be valid. Such waiver can be
formalized in writing or orally or may be implied by the actions of the parties in accordance with the rules of interpretation
of Israeli contract law. This ruling of the Compensation Commission has been appealed to the Israeli Supreme Court sitting as
the High Court of Justice. The outcome cannot be predicted, and there is no assurance that the High Court of Justice will uphold
the ruling of the Compensation Commission.



SciVac
currently has international operations, which subject it to risks inherent with operations outside of the United States.



SciVac
currently has international operations, and it intends to seek to obtain additional market clearances in foreign markets that
it deems to generate significant opportunities. However, even with the cooperation of a commercialization partner, conducting
drug development in foreign countries involves inherent risks, including, but not limited to: difficulties in staffing, funding
and managing foreign operations; different and unexpected changes in regulatory requirements; export restrictions; tariffs and
other trade barriers; different reimbursement systems; economic weaknesses or political instability in particular foreign economies
and markets; compliance with tax, employment, immigration and labor laws for employees living or travelling abroad; supply chain
and raw materials management; difficulties in protecting, acquiring, enforcing and litigating intellectual property rights; fluctuations
in currency exchange rates; and potentially adverse tax consequences.



If
SciVac were to experience any of the difficulties listed above, or any other difficulties, its international development activities
and its overall financial condition may suffer and cause SciVac to reduce or discontinue its international development and registration
efforts.



SciVac’s
headquarters and other significant operations are located in Israel and, therefore, its results may be adversely affected by political,
economic and military instability in Israel.



SciVac’s
executive offices are located in Rehovot, Israel. Accordingly, political, economic and military conditions in Israel may directly
affect its business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between
Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel
and its trading partners could adversely affect SciVac’s business and results of operations.



Any
armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could
harm SciVac’s results of operations and could make it more difficult for SciVac to raise capital. Parties with whom SciVac
does business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing SciVac to make
alternative arrangements when necessary in order to meet its business partners face to face. In addition, the political and security
situation in Israel may result in parties with whom SciVac has agreements involving performance in Israel claiming that they are
not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.



16






Commercial
insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East.
Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by
terrorist attacks or acts of war, SciVac cannot assure that this government coverage will be maintained, or if maintained, will
be sufficient to compensate SciVac fully for damages incurred. Any losses or damages incurred by SciVac could have a material
adverse effect on its business. Any armed conflicts or political instability in the region would likely negatively affect business
conditions generally and could harm SciVac’s results of operations.



SciVac’s
operations may be disrupted as a result of the obligation of Israeli citizens to perform military service.



Many
Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty until they reach
the age of 40 (or older, for reservists who are officers or who have certain special training) and, in the event of a military
conflict, may be called to active duty. In response to increases in terrorist activity and recent armed conflicts, there have
been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups
in the future. SciVac’s operations could be disrupted by such call-ups, which may include the call-up of its employees or
the employees of its Israeli business partners. Such disruption could materially adversely affect SciVac’s business, financial
condition and results of operations.



Exchange
rate fluctuations between the U.S. dollar, Canadian dollar and the New Israeli Shekel currencies may negatively affect SciVac’s
earnings.



SciVac’s
functional currency is the U.S dollar. SciVac incurs expenses in New Israeli Shekel, which we refer to NIS, Canadian Dollar and
U.S. dollars. As a result, it is exposed to the risks that the U.S. dollar may devalue relative to the Canadian Dollar or NIS,
or, if the U.S. dollar appreciates relative to the Canadian Dollar or NIS, that the inflation rate in the United States may exceed
such rate of devaluation of the U.S. dollar, or that the timing of such devaluation may lag behind inflation in the United States.
The average exchange rate for the year ended December 31, 2015 was US $1.00 = NIS 4.052 and US$ 1.00 = Canadian Dollar 1.329.
SciVac cannot predict any future trends in the rate of inflation in the United States or the rate of devaluation, if any, of the
U.S. dollar against the Canadian Dollar or NIS. As of the date of this annual report, the inflation rate in the United States
did not exceed the rate of devaluation of the U.S. dollar for the calendar years 2013, 2014 or 2015.



If
SciVac or its current or future collaborators fail to obtain the necessary regulatory approvals, or if such approvals are limited,
SciVac and its current or future collaborators will not be allowed to commercialize SciVac’s product or product candidates,
and it will not generate product revenues.



Satisfaction
of all regulatory requirements for commercialization of a product candidate typically takes many years, is dependent upon the
type, complexity and novelty of the product candidate, and requires the expenditure of substantial resources for R&D. SciVac’s
research and clinical approaches may not lead to biologics that the FDA considers safe for humans and effective for the indicated
uses SciVac is studying. The FDA may require additional studies, in which case SciVac or its current or future collaborators would
have to expend additional time and resources and would likely delay the date of potentially receiving regulatory approval. The
approval process may also be delayed by changes in government regulation, future legislation or administrative action or changes
in FDA policy that occur prior to or during SciVac’s regulatory review. Delays in obtaining regulatory approvals would:



| | ● | delay
    commercialization of, and product revenues from, SciVac’s product candidates; and                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                         
| | ● | diminish
    the competitive advantages that SciVac may have otherwise enjoyed, which would have an adverse effect on its operating results
    and financial condition.



17






Even
if SciVac or its current or future collaborators comply with all FDA regulatory requirements, its product candidates may never
obtain regulatory approval. If SciVac or its collaborators fail to obtain regulatory approval for any of its product candidates,
it will have fewer commercial products, if any, and corresponding lower product revenues, if any. Even if SciVac’s product
candidates receive regulatory approval, such approval may involve limitations on the indications and conditions of use or marketing
claims for its products. Further, later discovery of previously unknown problems or adverse events could result in additional
regulatory restrictions, including withdrawal of products. The FDA may also require SciVac or its current or future collaborators
to commit to perform lengthy Phase IV post-approval clinical efficacy or safety studies. SciVac’s expending additional resources
on such trials would have an adverse effect on its operating results and financial condition.



In
jurisdictions outside the United States, SciVac or its collaborators must receive marketing authorizations from the appropriate
regulatory authorities before commercializing its drugs. Regulatory approval processes outside the United States generally include
all of the aforementioned requirements and risks associated with FDA approval. As of the date of this annual report, SciVac’s
lead product candidate, Sci-B-VacTM, has received regulatory approval in 15 jurisdictions outside the United States.



Clinical
trials involve a lengthy and expensive process with an uncertain outcome and results of earlier studies and trials may not be
predictive of future trial results.



In
order to obtain FDA approval for any of SciVac’s product candidates, SciVac or its collaborators must submit to the FDA
a BLA that demonstrates with substantive evidence that the product candidate is both safe and effective in humans for its intended
use. The data in a BLA application is normally drawn from non- clinical studies conducted by the sponsor on animals as well as
clinical studies on human subjects. In order to conduct such clinical studies in the United States, an applicant must submit to
the FDA an IND application which contains the results of both animal non-clinical and in vitro preclinical studies. There is no
guarantee that the FDA will permit an IND applicant to conduct clinical trials.



Moreover,
results from Phase I clinical trials may not support moving a product candidate to Phase II or Phase III clinical trials. Phase
III clinical trials may not demonstrate the safety or efficacy of SciVac’s product candidates. Success in preclinical studies
and early clinical trials does not ensure that later clinical trials will be successful. Results of later clinical trials may
not replicate the results of prior clinical trials and pre-clinical studies. Even if the results of Phase III clinical trials
are positive, and even if all endpoints are met, SciVac or its collaborators may have to commit substantial time and additional
resources to conducting further preclinical studies and clinical trials before obtaining FDA approval for any of its product candidates.
Even then, there is no guarantee that the FDA will approve any of SciVac’s BLA applications.



Clinical
trials are very expensive and difficult to design and implement, in part because they are subject to rigorous requirements. The
clinical trial process also consumes a significant amount of time. Furthermore, if participating patients in clinical trials suffer
drug-related adverse reactions during the course of such clinical trials, or if SciVac, its collaborators, an institutional review
board, which we refer to as an IRB, or the FDA believe that participating patients are being exposed to unacceptable health risks,
such clinical trials will have to be suspended or terminated. Failure can occur at any stage of the clinical trials, and SciVac
or its collaborators could encounter problems that cause abandonment or repetition of clinical trials.



SciVac’s
clinical trials and its future clinical trials for other product candidates for the prevention of GVHD are not biologically measurable.
The success in clinical trials and SciVac’s other product candidates designed to reduce risks of unintended use depends
on reaching statistically significant changes in patients’ symptoms based on clinician-rated scales. Due in part to a lack
of consensus on standardized processes for assessing clinical outcomes, these scores may or may not be reliable, useful or acceptable
to regulatory agencies.



18






SciVac
has a limited history of developing product candidates. SciVac does not know whether any of its planned clinical trials will result
in marketable drugs.



Conducting
successful clinical studies may require the enrollment of large numbers of patients, and suitable patients may be difficult to
identify and recruit.



Patient
enrollment in clinical trials and completion of patient participation and follow-up depends on many factors, including, by way
of example, the following: the size of the patient population; the percentage of patients that meets the inclusion criteria and
none of the exclusion criteria; the nature of the trial protocol; the attractiveness of, or the discomforts and risks associated
with, the treatments received by enrolled subjects; the availability of appropriate clinical trial investigators; support staff;
and proximity of patients to clinical sites and ability to comply with the eligibility and exclusion criteria for participation
in the clinical trial and patient compliance. For example, patients may be discouraged from enrolling in SciVac’s clinical
trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and
effectiveness of SciVac’s product candidates or if they determine that the treatments received under the trial protocols
are not attractive or involve unacceptable risks or discomforts. Patients may also not participate in SciVac’s clinical
trials if they choose to participate in contemporaneous clinical trials of competitive product candidates.



Development
of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required, and SciVac may not adequately
develop such protocols to support approval.



The
FDA may require SciVac to submit data on a greater number of patients than it originally anticipated or for a longer follow-up
period or change the data collection requirements or data analysis applicable to its clinical trials. The FDA may also require
additional data on certain categories of patients, should it emerge during the conduct of SciVac’s clinical trials that
certain categories of patients are likely to be affected in different manners than most of the patients. In addition to FDA requirements,
SciVac’s clinical trial requires the approval of an IRB at each site. SciVac may not be successful in developing the protocols
necessary to support approval.



Delays
in clinical trials are common for many reasons and any such delays could result in increased costs to SciVac and jeopardize or
delay its ability to obtain regulatory approval and commence product sales as currently contemplated.



SciVac
may experience delays in clinical trials for either of its two candidates, and the projected timetables for continued development
of the technologies and related product candidates by SciVac may otherwise be subject to delay or suspension. SciVac’s planned
clinical trials might not begin on time; may be interrupted, delayed, suspended, or terminated once commenced; might need to be
redesigned; might not enroll a sufficient number of patients; or might not be completed on schedule, if at all. Clinical trials
can be delayed for a variety of reasons, including the following:



| | ● | delays
    in obtaining regulatory approval to commence a trial;                                                                                                                                                                                                                                                         
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                          
| | ● | imposition
    of a clinical hold following an inspection of SciVac’s clinical trial operations or trial sites by the FDA or other
    regulatory authorities;                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                          
| | ● | delays
    occasioned by possible need to obtain approval from the Office of Biotechnology Activities within the National Institutes
    of Health before being permitted to administer SciVac’s candidate vaccine, which uses rDNA technology, to human subjects
    in a clinical trial, notwithstanding FDA clearance;
| |   |                                                                                                                                                                                                                                                                                                                          
| | ● | imposition
    of a clinical hold because of safety or efficacy concerns by the FDA, a data safety monitoring board or committee, which we
    refer to as a DSMB, a clinical trial site’s IRB, or SciVac, itself;                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                          
| | ● | delays
    in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites;                                                                                                                                                                                



19






| | ● | delays
    in obtaining required IRB approval at each site;                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                               
| | ● | delays
    in identifying, recruiting and training suitable clinical investigators;                                           
| |   |                                                                                                                               
| | ● | delays
    in recruiting suitable patients to participate in a trial;                                                         
| |   |                                                                                                                               
| | ● | delays
    in having patients complete participation in a trial or return for post- treatment follow-up;                      
| |   |                                                                                                                               
| | ● | clinical
    sites dropping out of a trial to the detriment of enrollment;                                                    
| |   |                                                                                                                               
| | ● | time
    required to add new sites;                                                                                           
| |   |                                                                                                                               
| | ● | delays
    in obtaining sufficient supplies of clinical trial materials, including suitable active pharmaceutical ingredients;
| |   |                                                                                                                               
| | ● | delays
    resulting from negative or equivocal findings of a DSMB for a trial; or                                            
| |   |                                                                                                                               
| | ● | adverse
    or inconclusive results from pre-clinical testing or clinical trials.                                             



Patient
enrollment, a significant factor in the timing of clinical trials, is affected by many factors, including the size and nature
of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of
the clinical trial, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages
of the biologic being studied in relation to other available therapies, including any new biologics that may be approved for the
indications SciVac is investigating. Any of these delays in completing SciVac’s clinical trials could increase its costs,
slow down its product development and approval process, and jeopardize its ability to commence product sales and generate revenue.



SciVac
may rely upon independent sites and investigators, such as universities and medical institutions and their faculty or staff, to
conduct its clinical trials. These sites and investigators are not SciVac employees and it cannot control the amount or timing
of resources that they devote to SciVac’s programs. If these investigators or collaborators fail to devote sufficient time
and resources to SciVac’s product development programs, or if their performance is substandard, the approval of SciVac’s
regulatory submissions and its introductions of new products will be delayed or prevented.



SciVac’s
potential collaborators may also have relationships with other commercial entities, some of which may compete with SciVac. If
outside collaborators assist SciVac’s competitors to its detriment, the approval of its regulatory submissions will be delayed
and the sales from its products, if any are commercialized, will be less than expected. Even if clinical trials are completed
as planned, their results may not support expectations or intended marketing claims. The clinical trials process may fail to demonstrate
that SciVac’s product candidates are safe and effective for indicated uses. Such failure would cause SciVac to abandon a
product candidate and could delay development of other product candidates.



Additional
delays to the completion of clinical studies may result from modifications being made to the protocol during the clinical trial,
if such modifications are warranted and/or required by the occurrences in the given trial.



Each
modification to a protocol for a clinical trial must be submitted to the FDA and the IRBs. This could result in the delay or suspension
of a clinical trial while the modification is evaluated. In addition, depending on the magnitude and nature of the changes made,
the FDA could take the position that the data generated by the clinical trial prior to the protocol modification cannot be pooled
with the data collected after the modification because the same protocol was not used throughout the trial. This might require
the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance
or approval of a product candidate.



20






SciVac
may be required to suspend or discontinue clinical trials because of adverse side effects or other safety risks that could preclude
approval of its biologic candidates.



SciVac’s
clinical trials may be suspended or terminated at any time for a number of reasons. A clinical trial may be suspended or terminated
by SciVac, its collaborators, the FDA, or other regulatory authorities because of a failure to conduct the clinical trial in accordance
with regulatory requirements or SciVac’s clinical protocols, presentation of unforeseen safety issues or adverse side effects,
failure to demonstrate a benefit from using the investigational biologic, changes in governmental regulations or administrative
actions, lack of adequate funding to continue the clinical trial, or negative or equivocal findings of the DSMB or the IRB for
a clinical trial. An IRB may also suspend or terminate SciVac’s clinical trials for failure to protect patient safety or
patient rights. SciVac may voluntarily suspend or terminate its clinical trials if at any time it believes that they present an
unacceptable risk to participants. In addition, regulatory agencies may order the temporary or permanent discontinuation of SciVac’s
clinical trials at any time if they believe the clinical trials are not being conducted in accordance with applicable regulatory
requirements or present an unacceptable safety risk to participants. If SciVac elects or is forced to suspend or terminate any
clinical trial of any proposed product that it develops, the commercial prospects of such proposed product will be harmed and
SciVac’s ability to generate product revenue from any of these proposed products will be delayed or eliminated. Any of these
occurrences may harm SciVac’s business, financial condition, results of operations and prospects significantly.



SciVac
relies on third parties to conduct its R&D activities, including its clinical trials, and it may experience delays in obtaining
or may be unsuccessful in obtaining regulatory approval for, or in commercializing, its biologic candidates if these third parties
do not successfully carry out their contractual duties or meet expected deadlines.



SciVac
does not have the resources to independently conduct R&D activities. Therefore, it has relied, and plans to continue to rely,
on various third-party CROs to conduct its R&D activities and to recruit patients and monitor and manage data for its on-going
clinical programs for its biologic candidates, as well as for the execution of its clinical studies. Although SciVac controls
only certain aspects of its CROs’ activities, it is responsible for ensuring that each of its studies is conducted in accordance
with the applicable protocol, legal, regulatory and scientific standards and its reliance on the CROs does not relieve SciVac
of its regulatory responsibilities. There is no assurance that the CROs will conduct the research properly or in a timely manner,
or that the results will be reproducible. SciVac and its CROs are required to comply with the FDA’s current Good Clinical
Practices, which we refer to as cGCPs, which are regulations and guidelines enforced by the FDA for all of SciVac’s products
in clinical development. The FDA enforces these cGCPs through periodic inspections of trial sponsors, principal investigators
and clinical trial sites. If SciVac or its CROs fail to comply with applicable cGCPs, the clinical data generated in the clinical
trials may be deemed unreliable or invalid and the FDA may require SciVac to perform additional clinical trials before approving
its proposed products. There is no assurance that, upon inspection, the FDA will determine that any of SciVac’s clinical
trials comply with cGCPs. In addition, to evaluate the safety and effectiveness of SciVac’s biologic candidates compared
to currently available treatments or a placebo, depending on the trial, to a statistically significant degree, SciVac’s
clinical trials will require an adequately large number of test subjects. Any clinical trial that a CRO conducts abroad on SciVac’s
behalf is subject to similar regulation plus the requirements of the country where the trial is being conducted. Accordingly,
if SciVac’s CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, SciVac may be
required to repeat clinical trials, which would delay the regulatory approval process.



In
addition, SciVac does not employ the personnel of its CROs, and, except for remedies available to it under the agreements with
such organizations, SciVac cannot control whether or not they will devote sufficient time and resources to its on-going clinical
and pre-clinical programs. SciVac’s CROs may also have relationships with other commercial entities, including one or more
of its competitors, for which they may also be conducting clinical studies or other biologic development activities, which could
impede their ability to devote appropriate time to SciVac’s clinical programs. If SciVac’s CROs do not successfully
carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or
accuracy of the clinical data they obtain is compromised because of the failure to adhere to SciVac’s clinical protocols
or regulatory requirements, or for other reasons, SciVac’s clinical trials may be extended, delayed, or terminated and it
may not be able to obtain regulatory approval for or successfully commercialize the biologic candidates that it seeks to develop.
As a result, its financial results and the commercial prospects for the biologic candidates that it seeks to develop would be
harmed, its costs could increase, and its ability to generate revenue could be delayed or ended.



21






SciVac
typically engages one or more CROs on a project-by-project basis for each study or trial. While SciVac has developed and plans
to maintain its relationships with CROs that it has previously engaged, it also expects to enter into agreements with other CROs
to obtain additional resources and expertise in an attempt to accelerate its progress with regard to on-going clinical programs
and, specifically, the compilation of clinical trial data for submission with a BLA for each of its biologic candidates. If any
of SciVac’s relationships with these third parties terminates, it may not be able to enter into arrangements with alternative
CROs or do so on commercially reasonable terms. Switching or entering into new relationships with CROs involves substantial cost
and requires extensive management time and focus. In addition, there is a natural transition period when a new CRO commences work.
As a result, delays occur, which can materially affect SciVac’s ability to meet its desired clinical development timelines
and can increase costs significantly. Although SciVac tries to carefully manage its relationships with its CROs, there can be
no assurance that SciVac will not encounter challenges or delays in the future or that these delays or challenges will not have
a material adverse impact on its business, financial condition, results of operations or prospects.



Future
legislation, regulations and policies adopted by the FDA or other regulatory authorities may increase the time and costs required
for SciVac to conduct and complete clinical trials for its hormone therapy drug candidates.



The
FDA has established regulations, guidelines and policies to govern the pharmaceutical development and approval process, as have
foreign regulatory authorities. Any change in regulatory requirements resulting from the adoption of new legislation, regulations
or policies may require SciVac to amend existing clinical trial protocols or add new clinical trials to comply with these changes.
Such amendments to existing protocols or clinical trial applications or the need for new ones, may significantly and adversely
affect the cost, timing and completion of the clinical trials for SciVac’s candidates.



In
addition, the FDA’s policies may change and additional government regulations may be issued that could prevent, limit or
delay regulatory approval of its product candidates, or impose more stringent product labeling and post-marketing testing and
other requirements.



Developments
by competitors may establish standards of care that affect SciVac’s ability to conduct its clinical trials as planned.



Changes
in standards related to clinical trial design could affect SciVac’s ability to design and conduct clinical trials as planned.
For example, regulatory authorities may not allow SciVac to compare one or more of its product candidates to a placebo in a particular
clinical indication where approved products are available. In that case, both the cost and the amount of time required to conduct
a clinical trial could increase.



There
can be no assurance that the data generated will be acceptable to the FDA.



There
can be no assurance that the data generated using SciVac’s original protocols or even modified protocols will be acceptable
to the FDA or that if future modifications during the trial are necessary, any such modifications will be acceptable to the FDA.
If the FDA believes that its prior approval is required for a particular modification, it can delay or halt a clinical trial while
it evaluates additional information regarding the change.



22






The
future results of SciVac’s current or future clinical trials may not support its product candidate claims or may result
in the discovery of unexpected adverse side effects.



Even
if SciVac’s clinical trials are completed as planned, it cannot be certain that the results will support its product candidate
claims or that the FDA or foreign authorities will agree with its conclusions regarding them. Success in pre-clinical studies
and early clinical trials does not ensure that later clinical trials will be successful, and SciVac cannot be sure that the later
trials will replicate the results of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate
that SciVac’s product candidates are safe and effective for the proposed indicated uses. If the FDA concludes that the clinical
trials for any of SciVac’s product candidates for which it might seek clearance have failed to demonstrate safety and effectiveness,
SciVac would not receive FDA approval to market that product in the United States for the indications sought. In addition, such
an outcome could cause SciVac to abandon the product candidate and might delay development of others. Any delay or termination
of SciVac’s clinical trials will delay the filing of any product submissions with the FDA and, ultimately, its ability to
commercialize its product candidates and generate revenues. It is also possible that patients enrolled in clinical trials will
experience adverse side effects that are not currently part of the product candidate’s profile. In addition, the clinical
trials performed until now involve a relatively small patient population. Because of the small sample size, their results may
not be indicative of future results.



There
is no guarantee that the FDA will grant BLA approval of SciVac’s future product candidates, and failure to obtain necessary
approvals for its future product candidates would adversely affect SciVac’s ability to grow its business.



The
FDA’s and other regulatory agencies’ decisions to approve SciVac product candidates will depend on SciVac’s
ability to demonstrate with substantial clinical evidence through well-controlled clinical trials that the product candidates
are effective, as measured statistically by comparing the overall protection and improvement in patients with a high risk of HBV
such as pre-dialysis and dialysis patients, and graft-versus-host patients, such as transplant patients, against the same metrics
in the respective control groups, who will be receiving currently available HBV preventative treatments or either GVHD preventative
treatments or placebos. However, there is a possibility that SciVac’s data may fail to show a statistically significant
difference from the control and treatment arms. Alternatively, there is a possibility that SciVac’s data may be statistically
significant, but that the actual clinical benefit of the product candidates may not be considered to be clinically significant,
clinically relevant or clinically meaningful.



Even
if SciVac believes that the data from its trials will support marketing approval in the United States or in Europe, it cannot
predict whether the agencies will agree with its analysis and approve its applications.



SciVac
is currently preparing to conduct several clinical trials in different phases for its product candidates and in the future expects
to submit BLAs to the FDA for approval of these products. The FDA may not approve these product candidates for the indications
that are necessary or desirable for successful commercialization. Indeed, the FDA may refuse SciVac’s requests for BLA market
approval of new product candidates, new intended uses or indications to future product candidates. Failure to receive approval
for SciVac’s new product candidates would have an adverse effect on its ability to expand its business.



Regulatory
authorities may revise previous guidance or decide to ignore previous guidance at any time during the course of SciVac’s
clinical activities or after the completion of its clinical trials. Even with successful clinical safety and efficacy data, including
such data from a clinical trial conducted pursuant to a Special Protocol Assessment, SciVac or its collaborators may be required
to conduct additional, expensive clinical trials to obtain regulatory approval.



Conducting
clinical trials of its product candidates or commercial sales of a product candidate may expose SciVac to expensive product liability
claims and it may not be able to maintain product liability insurance on reasonable terms or at all.



The
risk of product liability is inherent in the testing of pharmaceutical products. SciVac may be held liable if serious adverse
reactions from the use of its product candidates occurs. If SciVac cannot successfully defend against product liability claims,
it may incur substantial liabilities or be required to limit or terminate testing of one or more of its product candidates. SciVac’s
inability to obtain sufficient product liability insurance at an acceptable cost to protect against product liability claims could
prevent or inhibit the commercialization of its product candidates. SciVac currently maintains product liability insurance, and
it generally obtains clinical trial insurance once a clinical trial is initiated. However, the insurance coverage may not be sufficient
to reimburse SciVac for any expenses or losses it may suffer. If SciVac successfully commercializes one or more of its product
candidates, it may face product liability claims, regardless of FDA approval for commercial manufacturing and sale. Insurance
coverage is becoming increasingly expensive, and, in the future, SciVac, or any of its corporate collaborators, may not be able
to maintain insurance coverage at a reasonable cost or in sufficient amounts or at all to protect SciVac against losses due to
liability. Even if SciVac’s agreements with any current or future corporate collaborators entitle it to indemnification
against product liability losses, such indemnification may not be available or adequate should any claim arise.



23






Even
if SciVac obtains regulatory approval for one or more of its product candidates, it will still face extensive, ongoing regulatory
requirements and review and its products may face future development and regulatory difficulties.



Even
if SciVac obtains regulatory approval for one or more of its product candidates in the United States, the FDA may still impose
significant restrictions on a product’s indicated uses or marketing or to the conditions for approval, or impose ongoing
requirements for potentially costly post-approval studies, including Phase IV clinical trials or post-market surveillance. As
a condition to granting marketing approval of a product, the FDA may require a company to conduct additional clinical trials.
The results generated in these post-approval clinical trials could result in loss of marketing approval, changes in product labeling,
or new or increased concerns about side effects or efficacy of a product. For example, the labeling for SciVac’s product
candidates, if approved, may include restrictions on use or warnings. The Food and Drug Administration Amendments Act of 2007
gives the FDA enhanced post-market authority, including the explicit authority to require post-market studies and clinical trials,
labeling changes based on new safety information and compliance with FDA-approved Risk Evaluation and Mitigation Strategies, which
we refer to as REMS programs. If approved, SciVac’s biologics candidates will also be subject to ongoing FDA requirements
governing the manufacturing, labeling, packaging, storage, distribution, safety surveillance, advertising, promotion, record keeping
and reporting of safety and other post-market information. The FDA’s exercise of its authority could result in delays or
increased costs during product development, clinical trials and regulatory review, increased costs to comply with additional post-approval
regulatory requirements and potential restrictions on sales of approved products. Foreign regulatory agencies often have similar
authority and may impose comparable costs. Post-marketing studies, whether conducted by SciVac or by others and whether mandated
by regulatory agencies or voluntary, and other emerging data about marketed products, such as adverse event reports, may also
adversely affect sales of SciVac’s product candidates once approved, and potentially its other marketed products. Further,
the discovery of significant problems with a product similar to one of SciVac’s products that implicate (or are perceived
to implicate) an entire class of products could have an adverse effect on sales of its approved products. Accordingly, new data
about SciVac’s products could negatively affect demand because of real or perceived side effects or uncertainty regarding
efficacy and, in some cases, could result in product withdrawal or recall. Furthermore, new data and information, including information
about product misuse, may lead government agencies, professional societies and practice management groups or organizations involved
with various diseases to publish guidelines or recommendations related to the use of SciVac’s products or the use of related
therapies or place restrictions on sales. Such guidelines or recommendations may lead to lower sales of SciVac’s products.



The
holder of an approved BLA also is subject to obligations to monitor and report adverse events and instances of the failure of
a product to meet the specifications in the BLA. Application holders must submit new or supplemental applications and obtain FDA
approval for certain changes to the approved product, product labeling, or manufacturing process. Application holders must also
submit advertising and other promotional material to the FDA. Advertising and promotional materials must comply with FDA rules
in addition to other potentially applicable federal and state laws, including, by way of example, the Federal Trade Commission
Act. Any sales and promotional activities are also potentially subject to federal and state consumer protection and unfair competition
laws. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products.
In particular, a product may not be promoted for uses that are not approved by the FDA, or such other regulatory agencies as reflected
in the product’s approved labeling. In particular, any labeling approved by such regulatory agencies for SciVac’s
product candidates may also include restrictions on use. Such regulatory agencies may impose further requirements or restrictions
on the distribution or use of SciVac’s product candidates as part of a mandatory plan, such as limiting prescribing to certain
physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use
criteria and requiring treated patients to enroll in a registry. If SciVac receives marketing approval for one or more of its
product candidates, physicians may nevertheless prescribe such products to their patients in a manner that is inconsistent with
the approved label. If SciVac is found to have promoted such off-label uses, it may become subject to significant liability. In
particular, the U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion
and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into
consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.



24






The
distribution of product samples to physicians must comply with the requirements of the Prescription Drug Marketing Act. Sales,
marketing and scientific/educational grant programs must comply with the anti-fraud and abuse provisions of the Social Security
Act, the False Claims Act and similar state laws. Pricing and rebate programs must comply with the Medicaid rebate requirements
of the Omnibus Budget Reconciliation Act of 1990 and the Veterans Healthcare Act of 1992. If products are made available to authorized
users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.



In
addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the
FDA and other regulatory authorities for compliance with the FDA’s current good manufacturing practices, which we refer
to as cGMPs regulations. If SciVac or a regulatory agency discovers previously unknown problems with a product, such as adverse
events of unanticipated severity or frequency or problems with the facility where the product is manufactured, a regulatory agency
may impose restrictions on that product, the manufacturing facility, or SciVac, including requiring recall or withdrawal of the
product from the market or suspension of manufacturing, requiring new warnings or other labeling changes to limit use of the drug,
requiring that SciVac conduct additional clinical trials, imposing new monitoring requirements or requiring that SciVac establish
a REMS program.



If
SciVac or its third-party collaborators fail to comply with applicable regulatory requirements, a regulatory agency may take any
of the following actions:



| | ● | conduct
    an investigation into SciVac’s practices and any alleged violation of law;                                                                                                                                                 
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                        
| | ● | issue
    warning letters or untitled letters asserting that SciVac is in violation of the law;                                                                                                                                        
| |   |                                                                                                                                                                                                                                        
| | ● | seek
    an injunction or impose civil or criminal penalties or monetary fines;                                                                                                                                                        
| |   |                                                                                                                                                                                                                                        
| | ● | suspend
    or withdraw regulatory approval;                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                        
| | ● | require
    that SciVac suspend or terminate any ongoing clinical trials;                                                                                                                                                              
| |   |                                                                                                                                                                                                                                        
| | ● | refuse
    to approve pending applications or supplements to applications filed by SciVac;                                                                                                                                             
| |   |                                                                                                                                                                                                                                        
| | ● | suspend
    or impose restrictions on operations, including costly new manufacturing requirements;                                                                                                                                     
| |   |                                                                                                                                                                                                                                        
| | ● | seize
    or detain products, refuse to permit the import or export of products, or require SciVac to initiate a product recall; or                                                                                                    
| |   |                                                                                                                                                                                                                                        
| | ● | exclude
    SciVac from providing its products to those participating in government health care programs, such as Medicare and Medicaid,
    and refuse to allow SciVac to enter into supply contracts, including government contracts.



The
occurrence of any of the foregoing events or penalties may force SciVac to expend significant amounts of time and money and may
significantly inhibit its ability to bring to market or continue to market its products and generate revenue. Similar regulations
apply in foreign jurisdictions.



25






SciVac
may not succeed at in-licensing product candidates or technologies to expand its product pipeline.



SciVac
may not successfully in-license product candidates or technologies to expand its product pipeline. The number of such candidates
and technologies is limited. Competition among large pharmaceutical companies and biopharmaceutical companies for promising product
candidates and technologies is intense because such companies generally desire to expand their product pipelines through in-licensing.
If SciVac fails to carry out such in-licensing and expand its product pipeline, its potential future revenues may suffer.



SciVac
may need to focus its future efforts in new therapeutic areas in which it has little or no experience.



Although
SciVac’s primary strategic interest is in the area of infectious and immune diseases, a number of its product candidates
may have potential efficacy in other therapeutic areas such as metastatic cancers, certain inflammatory conditions, stroke and
certain cardiovascular diseases. If SciVac’s product candidate development efforts in its currently targeted indications
fail, or if the competitive landscape or investment climate for such indications becomes less attractive, SciVac may need to change
its strategic focus to include development of its product candidates or of newly acquired product candidates for therapeutic areas
other than HBV and GVHD. SciVac has very limited drug development experience in other therapeutic areas, and it may be unsuccessful
in changing SciVac’s focus to areas other than HBV and GVHD.



All
of SciVac’s products for clinical trials are manufactured outside of the United States.



The
facilities of any of SciVac’s future manufacturers must be approved by the FDA after SciVac submits its BLA and before approval.
SciVac is dependent on the continued adherence of third-party manufacturers to Good Manufacturing Practices, which we refer to
as GMP, and acceptable changes to their processes. If SciVac’s manufacturers cannot successfully produce material that conforms
to its specifications and the FDA’s strict regulatory requirements, SciVac will not be able to secure FDA approval for its
manufacturing facilities. If the FDA does not approve these facilities for commercial manufacture, it will need to find alternative
suppliers, which would result in significant delays in obtaining FDA approvals. These challenges may have a material adverse impact
on SciVac’s business, results of operations, financial condition and prospects.



SciVac
has limited manufacturing capabilities and may have to depend on other parties for its manufacturing operations. If these manufacturers
fail to meet SciVac’s requirements and strict regulatory requirements, its product development and commercialization efforts
may be materially harmed.



SciVac
has limited manufacturing capabilities and may have to depend on contract manufacturers. If any manufacturer is unable to produce
required quantities on a timely basis or at all, SciVac’s operations would be delayed and its business harmed. Any reliance
on contract manufacturers would expose SciVac to additional risks, including:



| | ● | failure
    of future manufacturers to comply with strictly-enforced regulatory requirements;                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                             
| | ● | failure
    to manufacture to SciVac’s specifications, or to deliver sufficient quantities in a timely manner;                                                                              
| |   |                                                                                                                                                                                             
| | ● | the
    possibility that SciVac may terminate a contract manufacturer and need to engage a replacement;                                                                                     
| |   |                                                                                                                                                                                             
| | ● | the
    possibility that SciVac’s future manufacturers may not be able to manufacture its product candidates and products without
    infringing the intellectual property rights of others;
| |   |                                                                                                                                                                                             
| | ● | the
    possibility that SciVac’s future manufacturers may not have adequate intellectual property rights to provide for exclusivity
    and prevent competition; and                       
| |   |                                                                                                                                                                                             
| | ● | insufficiency
    of intellectual property rights to any improvements in the manufacturing processes or new manufacturing processes for SciVac’s
    products.                              



26






Any
of these factors could result in significant delay or suspension of SciVac’s clinical trials, regulatory submissions, receipt
of required approvals or commercialization of its products and harm its business.



If
the supplier of a biological API or pharmaceutical excipient fails to provide sufficient quantities to SciVac, it may not be able
to obtain an alternative supply on a timely or acceptable basis.



SciVac
currently relies on a single source for its supply of vials and certain reagents required for the manufacture of Sci-B-VacTM.
Currently, SciVac does not have a written or oral agreement with this source of supply, as all orders are handled through individual
purchase orders or an order-by-order basis. Alternative sources from which SciVac can obtain its supply of most of these materials
exist. However, SciVac may not be able to find alternative suppliers in a timely manner that would provide supplies of these materials
at acceptable quantities and prices, if at all. Any interruption in the supply of these materials would disrupt SciVac’s
ability to manufacture Sci-B-VacTM and could have a material adverse effect on its business.



SciVac’s
pharmaceutical excipients and other API’s are multisource, although not all sources have an active Drug Master File, referred
to as DMF, with the FDA. A DMF is a submission to the FDA used to provide confidential detailed information about facilities,
processes, or articles used in the manufacturing, processing, packaging and storing of drugs to support a drug development and
approval. In addition, some of the countries for SciVac’s multisource APIs are not the same as its drug manufacturing locations.
Therefore, any disruption in supply from the preferred vendor could result in significant delays with SciVac’s pharmaceutical
development, clinical trials, BLA filing, BLA approval or commercial sale of the finished product due to contract delays, the
need to manufacture a new batch of API, out of specification API, the need for import and export permits, and the failure of the
newly sourced API to perform to the standards of the previously sourced API.



Modifications
to SciVac’s products may require new BLA approvals.



Once
a particular SciVac product receives FDA approval or clearance, expanded uses or uses in new indications of such product may require
additional human clinical trials and new regulatory approvals or clearances, including additional IND and BLA submissions and
premarket approvals before SciVac can begin clinical development, and/or prior to marketing and sales. If the FDA requires new
clearances or approvals for a particular use or indication, SciVac may be required to conduct additional clinical studies, which
would require additional expenditures and harm its operating results.



Conducting
clinical trials and obtaining clearances and approvals can be a time consuming process, and delays in obtaining required future
clearances or approvals could adversely affect SciVac’s ability to introduce new or enhanced products in a timely manner,
which in turn would harm its future growth.



Future
products may never achieve market acceptance.



Future
products that SciVac may develop may never gain market acceptance among physicians, patients or the medical community. The degree
of market acceptance of any of SciVac’s products will depend on a number of factors, including the actual and perceived
effectiveness and reliability of the products; the results of any long-term clinical trials relating to use of the products; the
availability, relative cost and perceived advantages and disadvantages of alternative technologies; the degree to which treatments
using the products are approved for reimbursement by public and private insurers; the strength of SciVac’s marketing and
distribution infrastructure; and the level of education and awareness among physicians and hospitals concerning SciVac’s
products. Failure of any of SciVac’s products to significantly penetrate current or new markets would negatively impact
its business, financial condition and results of operations.



27






To
be commercially successful, physicians must be persuaded that using SciVac’s products for the vaccination of HBV or other
planned indications are effective alternatives to existing vaccinations, therapies and treatments.



SciVac
believes that the medical community and other physicians will not widely adopt its products, if and when approved, unless they
determine, based on experience, clinical data, and published peer- reviewed journal articles, that the use of the products provides
an effective alternative to other means of vaccinating against HBV or other indications for which they are intended. Patient studies
or clinical experience may indicate that vaccination or treatment with SciVac’s products does not provide patients with
sufficient benefits in disease prevention, treatment or quality of life. SciVac believes that recommendations and support for
the use of its products from influential physicians will be essential for widespread market acceptance. Sci-B-VacTM is in
the commercial stage in certain jurisdictions other than the United States and it is premature to attempt to gain support from
physicians at this time. SciVac can provide no assurance that such support will ever be obtained. In the event that SciVac’s
product candidates are approved by the FDA, if such products do not receive such support from these physicians and from long-term
data, physicians may not use or continue to use, and hospitals may not purchase or continue to purchase, SciVac’s products.



SciVac
expects the healthcare industry to face increased limitations on reimbursement, rebates and other payments as a result of healthcare
reform, which could adversely affect third-party coverage of its products and how much or under what circumstances healthcare
providers will prescribe or administer its products.



In
both the United States and other countries, sales of SciVac’s products will depend in part upon the availability of reimbursement
from third-party payers, which include governmental authorities, managed care organizations and other private health insurers.
Third-party payers are increasingly challenging the price and examining the cost effectiveness of medical products and services.



Increasing
expenditures for healthcare have been the subject of considerable public attention in the United States. Both private and government
entities are seeking ways to reduce or contain healthcare costs. Numerous proposals that would effect changes in the U.S. healthcare
system have been introduced or proposed in Congress and in some state legislatures, including reducing reimbursement for prescription
products and reducing the levels at which consumers and healthcare providers are reimbursed for purchases of pharmaceutical products.



Although
SciVac cannot predict the full effect on its business of the implementation of existing legislation or the enactment of additional
legislation pursuant to healthcare and other legislative reform, SciVac believes that legislation or regulations that would reduce
reimbursement for, or restrict coverage of, its products could adversely affect how much or under what circumstances healthcare
providers will prescribe or administer the products. This could materially and adversely affect SciVac’s business by reducing
its ability to generate revenue, raise capital, obtain additional collaborators and market its products. In addition, SciVac believes
the increasing emphasis on managed care in the United States has and will continue to put pressure on the price and usage of pharmaceutical
products, which may adversely impact product sales.



SciVac’s
revenue stream will depend upon third-party reimbursement.



The
commercial success of SciVac’s products in both domestic and international markets will be substantially dependent on whether
third-party coverage and reimbursement is available for patients who use the products. However, the availability of insurance
coverage and reimbursement for newly approved drugs to vaccinate against HBV is uncertain, and therefore, third-party coverage
may be particularly difficult to obtain even if SciVac’s products are approved by the FDA as safe and effective. Government
authorities and third-party payers, such as private health insurers and health maintenance organizations, decide which medications
they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
Government authorities and these third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement
for particular medications. SciVac cannot be sure that reimbursement will be available for its product candidates and, if reimbursement
is available, the level of reimbursement.



28






Governments
outside the United States tend to impose strict price controls, which may adversely affect SciVac’s revenues, if any.



In
some countries, particularly the countries of the European Union, referred to as the EU, the pricing of prescription pharmaceuticals
is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable
time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, SciVac
may be required to conduct a clinical trial that compares the cost-effectiveness of SciVac’s product candidate to other
available therapies. If reimbursement of SciVac’s products is unavailable or limited in scope or amount, or if pricing is
set at unsatisfactory levels, its business could be harmed, possibly materially.



SciVac
may enter into an agreement with, and depend upon, one or more partners to assist it in commercializing its product candidates.



Because
of its limited financial and other resources, SciVac may actively seek and enter into a collaboration agreement with one or more
partners to assist in its product launch, assuming marketing approval. Any collaboration agreement SciVac enters into may contain
unfavorable terms, such as with respect to product candidates covered, control over decisions and responsibilities, termination
rights, payment and other significant terms. SciVac’s ability to receive any significant revenue from its product candidates
covered by the collaboration agreement will be dependent on the efforts of the collaboration partner and may result in lower levels
of income to SciVac than if it marketed its product candidates entirely on its own. The collaboration partner may not fulfill
its obligations or commercialize SciVac’s product candidates as quickly as it would like. SciVac could also become involved
in disputes with its partner, which could lead to delays in or termination of its commercialization programs and time-consuming
and expensive litigation or arbitration. If a collaboration partner terminates or breaches its agreement with SciVac, or otherwise
fails to complete its obligations in a timely manner, the chances of successfully developing or commercializing SciVac’s
product candidates would be materially and adversely affected.



Additionally,
depending upon the collaboration partner, other companies that might otherwise be interested in developing product candidates
with SciVac could be less inclined to do so because of its relationship with the collaboration partner. If SciVac’s ability
to work with present or future strategic partners or collaborators is adversely affected as a result of its collaboration agreement,
its business prospects may be limited and its financial condition may be adversely affected.



SciVac
may have conflicts with its partners that could delay or prevent the development or commercialization of its product candidates.



SciVac
may have conflicts with its partners, such as conflicts concerning the interpretation of nonclinical or clinical data, the achievement
of milestones, the interpretation of contractual obligations, payments for services, development obligations or the ownership
of intellectual property developed during the collaboration. If any conflicts arise with any of SciVac’s partners, such
partner may act in a manner that is adverse to SciVac’s best interests. Any such disagreement could result in one or more
of the following, each of which could delay or prevent the development or commercialization of SciVac’s product candidates,
and in turn prevent SciVac from generating revenues. Such disagreements could include, but are not limited to: unwillingness on
the part of a partner to pay SciVac milestone payments or royalties SciVac believes are due under a collaboration; uncertainty
regarding ownership of intellectual property rights arising from collaborative activities, which could prevent SciVac from entering
into additional collaborations; unwillingness by the partner to cooperate in the development or manufacture of the product candidate,
including providing SciVac with product candidate data or materials; unwillingness on the part of a partner to keep SciVac informed
regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those
activities; initiating litigation or alternative dispute resolution options by either party to resolve the dispute; or attempts
by either party to terminate the agreement.



29






SciVac
has limited experience selling, marketing and distributing products.



SciVac
currently has limited sales, marketing or distribution capabilities. In order to commercialize its products, if any are approved,
SciVac may need to develop its limited internal sales capabilities to target particular markets for its products, as well as make
arrangements with third parties to perform sales, marketing and/or distribution services with respect to other markets for its
products. SciVac may not be able to expand these capabilities sufficiently or hire additional marketing and sales personnel with
appropriate expertise to market and sell its products, if approved. In addition, even if SciVac is able to identify one or more
acceptable collaborators to perform these services with respect to other markets, it may not be able to enter into any collaborative
arrangements on favorable terms, or at all. If SciVac enters into any collaborative arrangements for the marketing or sale of
its products in other markets, its product revenues are likely to be lower than if SciVac, itself, marketed and sold the products.
In addition, any revenues SciVac receives would depend upon the efforts of its collaborators, which may not be adequate due to
lack of attention or resource commitments, management turnover, change of strategic focus, business combinations, and their inability
to comply with regulatory requirements or other factors outside of SciVac’s control. Depending upon the terms of the collaboration,
the remedies SciVac has against an under-performing collaborator may be limited and costly to enforce. If SciVac were to terminate
a relationship, it may be difficult or impossible to find a replacement collaborator on acceptable terms, if at all.



If
SciVac is unable to develop its own sales, marketing and distribution capabilities, or if it is not successful in contracting
with third parties for these services on favorable terms, or at all, its product revenues could be disappointing.



SciVac
currently have no sales, marketing or distribution capabilities in the United States. In order to commercialize its product candidates,
if any are approved by the FDA, SciVac will either have to develop such capabilities internally or collaborate with third parties
who can perform these services for it. If SciVac decides to commercialize any of its product candidates itself, it may not be
able to hire the necessary experienced personnel and build sales, marketing and distribution operations which are capable of successfully
launching new products and generating sufficient product revenues. In addition, establishing such operations will take time and
involve significant expense.



If
SciVac decides to enter into new co-promotion or other licensing arrangements with third parties, it may be unable to locate acceptable
collaborators because the number of potential collaborators is limited and because of competition from others for similar alliances
with potential collaborators. Even if SciVac is able to identify one or more acceptable new collaborators, it may not be able
to enter into any collaborative arrangements on favorable terms, or at all.



In
addition, any revenues SciVac receives would depend upon its collaborators’ efforts which may not be adequate due to lack
of attention or resource commitments, management turnover, change of strategic focus, business combinations or other factors outside
of SciVac’s control. Depending upon the terms of the collaboration, the remedies SciVac has against an under- performing
collaborator may be limited. If SciVac were to terminate the relationship, it may be difficult or impossible to find a replacement
collaborator on acceptable terms, or at all.



Upon
commercialization of its products, SciVac may be dependent on third parties to market, distribute and sell its products.



SciVac’s
ability to receive revenues may be dependent upon the sales and marketing efforts of any current and future co-marketing partners
and third- party distributors. At this time, SciVac has not entered into an agreement with any partner for commercialization of
any of its product candidates in the United States and only plans to do so after the successful completion of Phase III clinical
trials and prior to commercialization. If SciVac fails to reach an agreement with any such commercialization partner or upon reaching
such an agreement such partner fails to sell a large volume of SciVac’s products, it may have a negative impact on SciVac’s
business, financial condition and results of operations.



30






SciVac’s
products face, and its product candidates will face, significant competition in the markets for such products, and if they are
unable to compete successfully, SciVac’s business will suffer.



SciVac’s
products and product candidates face, and will continue to face, intense competition from large pharmaceutical companies, specialty
pharmaceutical and biotechnology companies as well as academic and research institutions. SciVac competes in an industry that
is characterized by: (i) rapid technological change; (ii) evolving industry standards; (iii) emerging competition; and (iv) new
product introductions. Competitors have existing products and technologies that will compete with SciVac’s product candidates
and technologies and may develop and commercialize additional products and technologies that will compete with SciVac’s
product candidates and technologies. Because several competing companies and institutions have greater financial resources than
SciVac, they may be able to: (i) provide broader services and product lines; (ii) make greater investments in R&D; and (iii)
carry on larger R&D initiatives. Competitors also have greater development capabilities than SciVac does and have substantially
greater experience in undertaking nonclinical and clinical testing of products, obtaining regulatory approvals and manufacturing
and marketing pharmaceutical products. They also have greater name recognition and better access to customers. SciVac’s
chief competitors in the field of HBV vaccines include companies such as MSD, Dynavax Technologies, Merck & Co., Sanofi Pasteur
and GlaxoSmithKline plc. The chief competitors in the field of GVHD include companies such as Mesoblast International SA, Samsung
Medical Center/Medipost Co. Ltd., Jazz Pharmaceuticals PLC, Kadmon Corporation, Alder Biopharmaceuticals Inc./Bristol-Myers Squibb,
Kamada Ltd., Baxter Healthcare Corporation, Adienne Pharma and Biotech, Novartis International AG, Rabin Medical Center, Xenikos
B.V., Seattle Genetics, Inc., Escape Therapeutics, Inc., Omni Bio Pharmaceutical, Inc., Hoffman-LaRoche and Biogen Idec, Inc.



SciVac
is faced with intense competition and rapid technological change, which may make it more difficult to achieve significant market
penetration. If SciVac cannot compete successfully for market share against other drug companies, it may not achieve sufficient
product revenues and its business will suffer.



The
market for SciVac’s product candidates is characterized by intense competition and rapid technological advances. If SciVac’s
product candidates receive FDA approval, they will compete with a number of existing and future drugs and therapies developed,
manufactured and marketed by others. If competitors’ existing products or new products are more effective than or considered
superior to SciVac’s future products, the commercial opportunity for its future products will be reduced or eliminated.
Existing or future competing products may provide greater therapeutic convenience or clinical or other benefits for a specific
indication than SciVac’s products, or may offer comparable performance at a lower cost. We face competition from fully integrated
pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions,
government agencies and other public and private research organizations. If SciVac is successful in penetrating the market for
HBV and/or GVHD with its product candidates, other companies may be attracted to the market. Many of SciVac’s competitors
have products or product candidates already approved or in development. In addition, many of these competitors, either alone or
together with their collaborative partners, are larger than SciVac is and have substantially greater financial, technical, research,
marketing, sales, distribution and other resources. Competitors may develop or market products that are more effective or commercially
attractive than any that SciVac is developing or marketing. Competitors may obtain regulatory approvals and introduce and commercialize
products before SciVac does. These developments could have a significant negative effect on SciVac’s financial condition.
Even if SciVac is able to compete successfully, it may not be able to do so in a profitable manner.



Adverse
events involving SciVac’s product candidates may lead the FDA to delay or deny approval for its products or result in product
recalls that could harm SciVac’s reputation, business and financial results.



Serious
injury or death resulting from a failure of one of SciVac’s product candidates during current or future clinical trials
could result in the FDA delaying the clinical trials or denying or delaying clearance or approval of a product candidate.



Even
though an adverse event may not be the result of the failure of SciVac’s product candidate, the FDA or an IRB could delay
or halt a clinical trial for an indefinite period of time while an adverse event is reviewed and likely would do so in the event
of multiple such events.



Any
delay or termination of SciVac’s current or future clinical trials as a result of the risks summarized above, including
delays in obtaining or maintaining required approvals from IRBs, delays in patient enrollment, the failure of patients to continue
to participate in a clinical trial and delays or termination of clinical trials as a result of protocol modifications or adverse
events during the trials may cause an increase in costs and delays in the filing of any product candidate submissions with the
FDA, delay the approval and commercialization of product candidates or result in the failure of the clinical trial, which could
adversely affect SciVac’s business, operating results and prospects. Lengthy delays in the completion of clinical trials
of product candidates would adversely affect SciVac’s business and prospects and could cause it to cease operations.



31






Once
a product receives FDA approval, the FDA has the authority to require the recall of commercialized products in the event of adverse
side effects, material deficiencies or defects in design or manufacture. The authority to require a recall must be based on an
FDA finding that there is a reasonable probability that the product would cause serious injury or death. Manufacturers may, under
their own initiative, recall a product if any material deficiency in a product is found. A government-mandated or voluntary recall
by SciVac or one of its distributors could occur as a result of adverse side effects, impurities or other product contamination,
manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of products would divert managerial
and financial resources and have an adverse effect on SciVac’s financial condition and results of operations.



SciVac
may be exposed to liability claims associated with the use of hazardous materials and chemicals.



SciVac’s
R&D activities involve the controlled use of hazardous materials and chemicals. Although SciVac believes that its safety procedures
for using, storing, handling and disposing of these materials comply with federal, state and local laws and regulations, it cannot
completely eliminate the risk of accidental injury or contamination from these materials. In the event of such an accident, SciVac
could be held liable for any resulting damages and any liability could materially adversely affect its business, financial condition
and results of operations. In addition, the federal, state and local laws and regulations governing the use, manufacture, storage,
handling and disposal of hazardous or radioactive materials and waste products may require SciVac to incur substantial compliance
costs that could materially adversely affect its business and financial condition.



SciVac’s
business depends upon securing and protecting critical intellectual property.



SciVac’s
commercial success will depend in part on obtaining and maintaining patent, trade secret, copyright and trademark protection of
its technologies in the United States and other jurisdictions, as well as successfully enforcing its intellectual property and
defending its intellectual property against third-party challenges. SciVac will only be able to protect its technologies from
unauthorized use by third parties to the extent that valid and enforceable intellectual property protection, such as patents or
trade secrets, cover them. In particular, SciVac places considerable emphasis on obtaining patent and trade secret protection
for significant new technologies, products and processes. Furthermore, the degree of future protection of SciVac’s proprietary
rights is uncertain because legal means afford only limited protection and may not adequately protect its rights or permit SciVac
to gain or keep its competitive advantage. Moreover, the degree of future protection of SciVac’s proprietary rights is uncertain
for product candidates that are currently in the early stages of development because it cannot predict which of these product
candidates will ultimately reach the commercial market or whether the commercial versions of these product candidates will incorporate
proprietary technologies.



SciVac
may not be able to obtain marketing exclusivity in the United States under the BPCI Act or equivalent regulatory data exclusivity
protection in other jurisdictions for its products.



The
BPCI Act, which is included in the Patient Protection and Affordable Care Act, creates an approval pathway for biosimilar and
interchangeable biological products and provides the manufacturer of innovator biologic to seek a twelve-year period of marketing
exclusivity. SciVac intends to seek the maximum period of market exclusivity for its candidate products, but there is no guarantee
that either or both will receive any marketing exclusivity under the BPCI Act. SciVac’s failure to obtain exclusivity for
any product that is ultimately approved by the FDA may have significant adverse financial consequences.



SciVac
may not be successful in hiring and retaining key employees.



SciVac’s
future success depends on its ability to identify, attract, hire or engage, retain and motivate well-qualified managerial, technical,
clinical and regulatory personnel. SciVac will need to hire additional qualified personnel with expertise in nonclinical pharmacology
and toxicology, pharmaceutical development, clinical research, regulatory affairs, manufacturing, sales and marketing. SciVac
competes for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions. Competition
for such individuals, particularly in the United States and in Israel, is intense, and SciVac may not be able to hire sufficient
personnel to support its efforts. There can be no assurance that these professionals will be available in the market, or that
SciVac will be able to retain existing professionals or to meet or to continue to meet their compensation requirements. Furthermore,
the cost base in relation to such compensation, which may include equity compensation, may increase significantly, which could
have a material adverse effect on SciVac. Failure to establish and maintain an effective management team and work force could
adversely affect SciVac’s ability to operate, grow and manage its business.



32






SciVac’s
employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.



SciVac
is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to:



| | ● | comply
    with FDA regulations or similar regulations of comparable foreign regulatory authorities;                                                                                         
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                              
| | ● | provide
    accurate information to the FDA or comparable foreign regulatory authorities;                                                                                                    
| |   |                                                                                                                                                                                              
| | ● | comply
    with manufacturing standards SciVac has established;                                                                                                                              
| |   |                                                                                                                                                                                              
| | ● | comply
    with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced
    by comparable foreign regulatory authorities;
| |   |                                                                                                                                                                                              
| | ● | report
    financial information or data accurately; or                                                                                                                                      
| |   |                                                                                                                                                                                              
| | ● | disclose
    unauthorized activities to SciVac.                                                                                                                                              



In
particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations
intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit
a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business
arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials,
which could result in regulatory sanctions and serious harm to SciVac’s reputation. SciVac has adopted a Code of Business
Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions SciVac takes
to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting
it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or
regulations. If any such actions are instituted against SciVac, and it is not successful in defending itself or asserting its
rights, those actions could have a significant impact on SciVac’s business and results of operations, including the imposition
of significant fines or other sanctions.



Business
interruptions could limit SciVac’s ability to operate its business.



SciVac’s
operations as well as those of its collaborators on which it depends are vulnerable to damage or interruption from computer viruses,
human error, natural disasters, electrical and telecommunication failures, international acts of terror and similar events. SciVac
has not established a formal disaster recovery plan and its back-up operations and its business interruption insurance may not
be adequate to compensate SciVac for losses it may suffer. A significant business interruption could result in losses or damages
incurred by SciVac and require it to cease or curtail its operations.



SciVac
may expand its business through the acquisition of rights to new product candidates that could disrupt its business and harm its
financial condition.



SciVac’s
business strategy includes expanding its products and capabilities, and it may seek acquisitions of product candidates or technologies
to do so. Acquisitions involve numerous risks, including substantial cash expenditures; potentially dilutive issuance of equity
securities; incurrence of debt and contingent liabilities, some of which may be difficult or impossible to identify at the time
of acquisition; difficulties in assimilating the acquired technologies or the operations of the acquired companies; diverting
management’s attention away from other business concerns; risks of entering markets in which SciVac has limited or no direct
experience; and the potential loss of its key employees or key employees of the acquired companies.



33






SciVac
cannot assure that any acquisition will result in short-term or long-term benefits to it. SciVac may incorrectly judge the value
or worth of an acquired product, company or business. In addition, its future success would depend in part on its ability to manage
the rapid growth associated with some of these acquisitions. SciVac cannot assure that it will be able to make the combination
of its business with that of acquired products, businesses or companies work or be successful. Furthermore, the development or
expansion of SciVac’s business or any acquired products, business or companies may require a substantial capital investment
by SciVac. SciVac may not have these necessary funds or they might not be available to SciVac on acceptable terms or at all. SciVac
may also seek to raise funds by selling capital stock or instruments convertible into or exercisable for capital stock, which
could dilute each stockholder’s ownership interest.



Managing
growth as SciVac expands operations may strain its resources, and it may not successfully manage its growth.



SciVac
expects to need to grow rapidly in order to support additional, larger, and potentially international, clinical trials of its
product candidates, which will place a significant strain on its financial, managerial and operational resources. SciVac’s
future success is heavily dependent upon growth and acceptance of its future products. In order to achieve and manage growth effectively,
SciVac must continue to improve and expand its operational, management and financial systems and capabilities, expand its facilities,
and augment its internal controls and infrastructure. Moreover, SciVac will need to increase staffing and train, motivate and
manage its employees. All of these activities will increase SciVac’s expenses and may require it to raise additional capital
sooner than expected. If SciVac fails to manage growth effectively or if it is unable to scale its business appropriately or otherwise
adapt to anticipated growth and new product introduction, its business, financial condition or results of operations could be
harmed.



SciVac
is subject to federal and state laws and regulations relating to its business and its failure to comply with those laws could
have a material adverse effect on its results of operations and financial conditions.



SciVac
is subject to additional health care regulation and enforcement by the federal government and the states in which it conducts
its business. The laws that may affect SciVac’s ability to operate include the following:



| | ● | the
    federal health care program Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully
    soliciting, receiving, offering, or paying remuneration, directly or indirectly, in exchange for or to induce either the referral
    of an individual for, or the purchase, order, or recommendation of, any good or service for which payment may be made under
    government health care programs such as the Medicare and Medicaid programs;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | the
    federal Ethics in Patient Referrals Act of 1989, commonly known as the Stark Law, which prohibits a physician from referring
    a patient for certain items or services covered by Medicare or Medicaid to an entity in which the physician or a family has
    a financial interest;                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | the
    federal False Claims Act and related laws that prohibit, among other things, individuals or entities from knowingly presenting,
    or causing to be presented, claims for payment from Medicare, Medicaid or other government health care programs that are false
    or fraudulent;                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | the
    so-called qui tam provisions of the federal and state false claims acts which permit whistleblowers to sue in the name the
    federal or state governments health care providers and others for alleged violations of those laws and which permit whistleblowers
    to obtain a reward for bringing the case. These qui tam cases have been on the rise in recent years;                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | federal
    criminal laws that prohibit executing a scheme to defraud any health care benefit program or making false statements relating
    to health care matters;                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ● | state
    law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or
    services reimbursed by any third-party payer, including commercial insurers;                                                                                                                                                                                                                                                                      



34






| | ● | the
    Affordable Care Act which imposes new reporting requirements on device and pharmaceutical manufacturers to make annual public
    disclosures of payments to health care providers and ownership of their stock by health care providers. Failure to submit
    required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (or up to an aggregate
    of $1 million per year for “knowing failures”), for all payments, transfers of value, or ownership or investment
    interests that are not reported; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | HIPAA,
    which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false
    statements relating to healthcare matters.                                                                                                                                                                                                                                                                                                                                                                              



Further,
the recently enacted Affordable Care Act, among other things, amends the intent requirement of the federal anti-kickback and criminal
health care fraud statutes. A person or entity can now be found guilty of fraud or false claims under the Affordable Care Act
without actual knowledge of the statute or specific intent to violate it. In addition, the Affordable Care Act provides that the
government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute
constitutes a false or fraudulent claim for purposes of the false claims statutes. Possible sanctions for violation of these anti-kickback
laws include monetary fines, civil and criminal penalties, exclusion from Medicare, Medicaid and other government programs and
forfeiture of amounts collected in violation of such prohibitions. Any violations of these laws, or any action against SciVac
for violation of these laws, even if it successfully defends against it, could result in a material adverse effect on SciVac’s
reputation, business, results of operations and financial condition.



In
addition, there has been a recent trend of increased federal and state regulation of payments made to physicians for marketing.
Some states, such as California, Massachusetts and Vermont, mandate implementation of corporate compliance programs, along with
the tracking and reporting of gifts, compensation, and other remuneration to physicians.



The
scope and enforcement of these laws is uncertain and subject to change in the current environment of health care reform, especially
in light of the lack of applicable precedent and regulations. SciVac cannot predict the impact on its business of any changes
in these laws. Federal or state regulatory authorities may challenge SciVac’s current or future activities under these laws.
Any such challenge could have a material adverse effect on SciVac’s reputation, business, results of operations, and financial
condition. Any state or federal regulatory review of SciVac, regardless of the outcome, would be costly and time-consuming.



SciVac
is considered a “foreign private issuer” under the Exchange Act, and SciVac’s disclosure and reporting requirements
are different than those of a U.S. domestic reporting company.



SciVac
is considered a “foreign private issuer” under the Exchange Act and the rules of the SEC promulgated thereunder. As
a result, SciVac is subject to the reporting requirements under the Exchange Act applicable to foreign private issuers, meaning
that, among other things, SciVac is required to file its annual report on Form 20-F with the SEC within four months of its fiscal
year end. In addition, SciVac must furnish to the SEC reports on Form 6-K regarding certain information required to be publicly
disclosed by SciVac in Canada or filed with, and made public by, the TSX or regarding information distributed or required to be
distributed by SciVac to its shareholders.



Additionally,
SciVac is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies
whose securities are registered under the Exchange Act. SciVac is not required to file financial statements prepared in accordance
with U.S. generally accepted accounting principles and is not required to comply with Regulation FD, which addresses certain restrictions
on the selective disclosure of material non-public information. Also, SciVac’s officers, directors and principal shareholders
are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the
rules under the Exchange Act with respect to their purchases and sales of the SciVac’s common shares. If SciVac loses its
status as a foreign private issuer, it will no longer be exempt from such rules and, among other things, will be required to file
periodic reports and financial statements as if it were a company incorporated in the United States.



35






The
public market for SciVac common shares has been, and may continue to be, volatile. This may affect the ability of its investors
to sell their shares as well as the price at which they sell their shares.



Due
to the volatility of the market for SciVac common shares, the market price for the shares may be volatile and significantly affected
by factors such as variations in quarterly and yearly operating results, general trends in the alternative vaccine industry, or
changes in state or federal regulations affecting SciVac and its industry. Furthermore, in recent years the stock market has experienced
extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies.
Such broad market fluctuations may adversely affect the market price of SciVac common stock.



SciVac
has not paid dividends in the past and has no immediate plans to pay dividends.



SciVac
plans to reinvest all of its earnings, to the extent it has earnings, in order to market its products and to cover operating costs
and to otherwise become and remain competitive. SciVac does not plan to pay any cash dividends with respect to its securities
in the foreseeable future. SciVac cannot assure you that it would, at any time, generate sufficient surplus cash that would be
available for distribution to the holders of SciVac common shares as a dividend. Therefore, holders of SciVac common shares should
not expect to receive cash dividends.



ITEM
4. Information on the Company.



Historical
Background and Corporate Structure



SciVac
was incorporated under the laws of British Columbia by Memorandum of Association on April 9, 1965 under the name “Alice
Arm Molybendum Co. Ltd.” On October 21, 1965, SciVac changed its name to “Alice Arm Mining Ltd.” and subsequently,
on July 13, 1975, changed its name to “New Congress Resources Ltd.” On January 12, 1983, SciVac changed its name to
“Levon Resources Ltd.” Upon completion of the Transaction (as described below in the section entitled “Recent
Developments”) on July 9, 2015, SciVac adopted the name “SciVac Therapeutics Inc.”



SciVac’s
registered office is located at 595 Burrard Street, Suite 2600, Vancouver, BC V7X 1L3. SciVac’s principal executive office
is located at Gad FeinStein Road, POB 580 Rehovot, Israel 7610303. The telephone number of SciVac’s principal office is
972-8-948-0625.



Intercorporate
Relationships



SciVac
Ltd., located in Rehovot, Israel, is a wholly owned subsidiary of SciVac that was incorporated on April 18, 2005 pursuant to the
Israeli Companies Law (1999), as amended. SciVac Ltd. currently manufactures and sells SciVac’s lead product, Sci-B-VacTM,
a third-generation Hepatitis B vaccine for adults, children and newborns.



SciVac
USA, LLC, located in Miami, Florida, is a wholly owned subsidiary of SciVac Ltd. and was formed on November 26, 2014.



Overview



SciVac
is a commercial-stage, private biopharmaceutical company focused on developing, producing and marketing recombinant healthcare
biotechnology derived products to prevent and treat infectious and immune diseases. We currently manufacture our lead product,
Sci-B-VacTM, a third generation HBV vaccine for adults, children and newborns, which is registered in twelve countries throughout
the world. Sci-B-VacTM, has not yet been approved by the FDA or the European Medicines Agency (the “EMA”). In
Israel, where more than 500,000 persons have already been vaccinated with our vaccine, Sci-B-VacTM, is considered the standard
of care. We have sold more than 1.5 million units in Israel. Certain clinical trials have shown the advantage of Sci-B-VacTM
over GlaxoSmithKline’s Engerix-B®, one of the primary existing HBV vaccines available for the hepatitis B virus, in
preventing hepatitis B infection. We are currently developing a clinical program to support the approval from the FDA and from
the EMA to market Sci-B-VacTM for sale for vaccination of pre-dialysis and HIV patients in the United States and the EU,
respectively. Our wholly-owned subsidiary in Rehovot, Israel currently manufactures and sells our lead product, Sci-B-VacTM,
a third-generation Hepatitis B vaccine for adults, children and newborns.



36






We
have in-licensed an early-stage enzyme-based product, recombinant human deoxyribonuclease I (“rhDNase I”), as a novel
biological intended for the prevention and treatment of GVHD. GVHD is a potentially deadly complication that may occur following
a stem cell or bone marrow transplant. With GVHD, the newly-transplanted donor cells (i.e., the graft) treat the recipient’s
body (i.e. the host) as foreign, and the newly-transplanted cells attack the host. Among other things, GVHD may cause inflammation,
skin rash, nausea, vomiting, diarrhea and liver problems. In its acute form (“aGVHD”) it is a deadly condition, impacting
stem cell, bone marrow and other transplant recipients for which no approved preventative or therapeutic drug is currently available.
Because rhDNase I has received FDA orphan drug designations for both the prevention and treatment of GVHD, it offers a development
path with potentially reduced cost structures and opportunities for market exclusivity. There are currently no FDA- or EMA-approved
drugs labeled for prevention or treatment of GVHD. We have also in-licensed rights to develop rhDNase I for additional indications,
including, but not limited to, autoimmune diseases, cardiovascular diseases and certain cancers. In accordance with the terms
of the Merger Agreement (as defined below under “Recent Developments”), we intend to sublicense all rights to rhDNase
I, as obtained through our license agreement with CLS Therapeutics Limited (“CLS”), to OPKO Health Inc. or one of
its affiliates in exchange for a royalty based on net sales.



We
have also created our own R&D center in order to develop bacterial (E. Coli) and mammalian cell (Chinese Hamster Ovary (“CHO”))
manufacturing technology, and we offer contract development and current good manufacturing practices (“cGMP”) manufacturing
services for Phase I/II clinical studies and additional R&D services for other life science and biotechnology companies.



We
may also seek to in-license late-stage drugs that we believe complement our product portfolio, including small molecule therapeutics
for niche indications in oncology.



Recent
Developments



On
July 9, 2015, SciVac, formerly Levon Resources Ltd. (“Levon”), completed a plan of arrangement (the “Transaction”)
pursuant to which SciVac Ltd. completed a reverse takeover of Levon. In connection with the Transaction, Levon acquired 100% of
the issued and outstanding securities of SciVac Ltd. and assumed certain related party loans in exchange for 517,514,016 common
shares of Levon, resulting in the former SciVac Ltd. securityholders holding 68.4% of the issued and outstanding common shares
and the shareholders of Levon immediately prior to the effective time of the Transaction controlling the remaining 31.6%. On completion
of the Transaction, Levon changed its name from Levon Resources Ltd. to SciVac Therapeutics Inc. Other than approximately CAD
$27 million in cash retained by SciVac, all other assets and liabilities of Levon were transferred or assumed by 1027949 BC Ltd.,
Levon’s wholly owned subsidiary (“BC Ltd.”). Additionally, upon consummation of the Transaction, each Levon
shareholder received 0.5 common shares of BC Ltd., resulting in the Levon shareholders holding 100% of the issued and outstanding
shares of BC Ltd; therefore, SciVac no longer owns any equity interest in BC Ltd.



On
July 14, 2015, SciVac Therapeutics Inc. common shares commenced trading on the Toronto Stock Exchange (the “TSX”)
under the ticker symbol “VAC” and its shares began to be quoted on the OTCQX under the symbol “SVACF”.



On
October 26, 2015, SciVac entered into an Agreement and Plan of Merger, as amended by the First Amendment to Agreement and Plan
of Merger, dated as of December 17, 2015, referred to collectively as the Merger Agreement, with Seniccav Acquisition Corporation,
a Delaware corporation, referred to as Sub, and VBI Vaccines, Inc., referred to as VBI. Pursuant to the terms of the Merger Agreement,
Sub will merge with and into VBI, with VBI surviving the merger as a wholly owned subsidiary of SciVac. We refer to the foregoing
transaction as the Merger. SciVac anticipates consummating the Merger during the second quarter of 2016.



37






Product
Development



Sci-B-VacTM
for Prevention of Hepatitis B: Sci-B-VacTM is a “third generation” vaccine, distinguished from previous generations
in that Sci-B-VacTM (i) is produced in mammalian cells (CHO cells) and (ii) contains more of the proteins, or surface antigens,
naturally occurring on the outer surface of the hepatitis B virus.



In
contrast to previous vaccines, which contain only one surface antigen, the “S” antigen, Sci-B-VacTM contains
the “S” antigen plus the “preS1” and “preS2” surface antigens. The composition of Sci-B-VacTM
therefore provides more opportunities for the immune system to respond with antibodies, or neutralizing antibodies, which can
recognize one of these components of the hepatitis B particle.



Because
the Sci-B-VacTM active component displays proteins substantially similar to those found on the outer surface of the naturally
occurring hepatitis B virus, we believe that Sci-B-VacTM could be more potent and immunogenic (capable of conferring immunity)
than other existing yeast-derived HBV vaccines, such as GlaxoSmithKline’s Engerix-B®.



Several
clinical studies conducted by SciVac have demonstrated that Sci-B-VacTM possesses the following benefits relating to the
prevention of the hepatitis B virus:



| | ● | Sci-B-VacTM
    has been demonstrated to be highly immunogenic in adults, children and newborn infants;                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | In
    several trials, the protection obtained by vaccination, or seroprotection, was faster, and anti-hepatitis B virus antibody
    concentration was higher in a larger percentage of vaccinated individuals, in each case when compared to current yeast-derived
    vaccines. In addition, seroprotection (the attainment of immunologically protective levels of anti-hepatitis B virus antibodies)
    was induced with only 25-50% of the recommended dose for currently U.S.- licensed HBV vaccines; and
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Sci-B-VacTM
    generated an adequate immune memory for long-term protection against hepatitis B.                                                                                                                                                                                                                                                                                                                                                                                                                 



Additionally,
preliminary results, such as from investigator-initiated academic studies, suggest that:



| | ● | Sci-B-VacTM
    generated superior to Engerix-B® immune response in overweight individuals;                                                                                                                       
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                  
| | ● | Sci-B-VacTM
    induced a protective immunity in end-stage renal disease (“ESRD”) patients who did not respond to previous vaccination
    with currently available vaccines and who were undergoing dialysis; and
| |   |                                                                                                                                                                                                                  
| | ● | Sci-B-VacTM
    could have particular clinical benefits in special subsets, such as immunosuppressed patients and special at-risk groups of
    non-responders.                                                   



Sci-B-VacTM
is generally well-tolerated by patients. During the clinical development and trials of Sci-B-VacTM, approximately 1% of the
patients experienced local reactions at the injection site (as commonly observed with the use of most vaccines). The injection
site reactions included soreness, pain, tenderness, pruritus, which is itchiness, erythema, which is redness, ecchymosis, which
is discoloration of the skin resulting from bleeding underneath the skin, swelling, warmth and nodule formation. These reactions
were generally mild and were resolved within two days after vaccination. Additionally fatigue, weakness, headache, fever, malaise,
nausea, diarrhea, pharyngitis, which is inflammation of the pharynx, and upper respiratory infection were observed.



Based
on the clinical data collected to date, we intend to bypass the Phase II trial in the United States and Europe with the consent
of the FDA and EMA, respectively, and commence three pivotal Phase III clinical trials for prevention of the hepatitis B virus
in pre-dialysis and HIV patients. We are in the process of finalizing the protocols for these Phase III clinical trials. In addition,
we are contemplating expanding the target populations to include diabetic patients, as well as healthy adults. We had limited
discussions with the FDA regarding Sci-B-Vac between May 2012 and September 2015; however, we requested that the FDA close its
master file on Sci-B-VacTM so that we could improve the presentation and clarity of our data. Although we have not yet filed
an IND with the FDA, we plan to meet with the FDA during 2016 to discuss our U.S. clinical development plan and to have a similar
consultation with the EMA as soon as reasonably practicable thereafter.



38






rhDNase
I for the Prevention and Treatment of GVHD:GVHD is a serious complication that occurs in patients receiving stem cell transplantation,
which is the donation of healthy stem cells from a donor, or a graft, to a recipient (the host). GVHD can also occur in organ
transplants and, rarely, in blood transfusions. By using preclinical mouse models of GVHD, we have indications that recombinant
human deoxyribonuclease I enzyme (rhDNase I), could be effective in the prevention and treatment of GVHD in humans if used shortly
prior to or together with the transplant.



In
August 2014, the FDA granted two orphan drug designations for rhDNase I in two indications applicable to GVHD: the prevention
of GVHD; and the treatment of GVHD. The FDA’s grant of these designations under the Orphan Drug Act, referred to as the
ODA, qualifies rhDNase I for certain benefits, including financial incentives, particular market exclusivities, protocol assistance
and waiver of filing fees. Orphan drug designation does not assure approval nor is it evidence that our clinical trials will provide
sufficiently positive data to assure the safety and effectiveness to support approval of the product for any use. The ODA provides
orphan status to drugs and biologics, which are defined as those intended for the safe and effective treatment, diagnosis or prevention
of rare diseases or disorders that affect fewer than 200,000 people in the United States. To promote the development of treatments
for orphan diseases such as GVHD, the FDA and other regulatory agencies provide regulatory and marketing incentives to companies
that develop orphan drugs. If rhDNase I receives marketing approval under a BLA, management anticipates that rhDNase I might become
one of the first biologics approved for the prevention and/or treatment of GVHD, because there are currently no FDA-approved drugs
or biologics for the prevention and/or treatment of GVHD. In 2010, the U.S. and European market for the treatment of GVHD was
approximately US$260 million, and it is expected to grow to US$407 million by 2018, according to GlobalData.



Market
Opportunities



Hepatitis
B



Hepatitis
B is an infectious illness of the liver caused by the hepatitis B virus. The hepatitis B virus is the major cause of liver disease
worldwide. The World Health Organization estimates that two billion people (one-third of the world’s population) have been
infected by the hepatitis B virus. Of these, approximately 400 million people have chronic infections that put them at high risk
of ultimately developing cirrhosis and cancer of the liver and the death of liver tissue. There is no cure for chronic hepatitis
B infection, and disease prevention through effective vaccines is critical to reducing the spread of the disease.



The
virus is transmitted by exposure to infected blood or body fluids, such as semen and vaginal fluids. Perinatal infection is a
major route of infection in areas of the world where the disease is common. Other risk factors for developing hepatitis B infection
include working in a healthcare setting, blood transfusions, dialysis, sharing razors or toothbrushes with an infected person,
travel in countries where the virus is common and living in an institution. Tattooing and acupuncture led to a significant number
of cases in the 1980s and still continue to be two of the causes of hepatitis B infection today due to the risk of using non-sterile
needles. The hepatitis B virus is 50 to 100 times more infectious than HIV.



Specific
treatments for viral hepatitis infection exist, but none of the available drugs can clear the infection. Instead, they can stop
the virus from replicating, which minimizes liver damage. However, prevention of the disease by vaccination is the only effective
medical measure for controlling the spread of the disease and decreasing illness and death due to hepatitis. Vaccines for the
prevention of the hepatitis B virus have been routinely recommended for infants since 1991 in the United States. Most vaccines
are given in three doses over a course of months. Seroprotection against the hepatitis B virus requires an anti-HBs antibody concentration
of at least 10 mIU/ml in the recipient’s serum.



39






Currently
Available HBV Vaccines



The
currently available HBV vaccines for prevention of the hepatitis B virus include: Engerix-B® and Fendrix®, manufactured
by GlaxoSmithKline; Recombivax HB, manufactured by Merck; Elovac B, manufactured by Human Biologicals Institute, a division of
Indian Immunologicals Limited; Gene Vac-B, manufactured by Serum Institute of India; and Shanvac-B, manufactured by Shantha Biotechnics
Pvt Ltd, under Sanofi Pasteur. To date, only Engerix-B® and Recombivax HB are approved by the FDA for immunization and distribution
in the United States; however, the remaining companies above and other companies may seek approval from the FDA or other organizations,
including the World Health Organization, for their respective vaccine products.



Limitations
of Current Treatments



| | ● | Limited
    effectiveness creating seroprotection in the dialysis population.Historically, HBV vaccine programs using second-generation
    vaccines led to effective seroprotection in only 67-86% of hemodialysis patients. An investigator-initiated study suggests
    that Sci-B-VacTM is well-tolerated and highly immunogenic in the population of ESRD patients who have not responded to
    a second generation yeast- derived vaccine. We are focused on finding treatment options for this specific population to be
    vaccinated at pre-dialysis stage, as recommended by the Centers for Disease Control and Prevention (the “CDC”).                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | Reduced
    efficacy of current vaccines for individuals with suppressed immune systems.In patients at high-risk for hepatitis B,
    such as those who suffer from diabetes, cancer, HIV, celiac disease and dialysis patients, 20-80% of such patients do not
    respond to the vaccines currently available in the market. Unlike other diseases which disappeared after mass vaccination,
    such as smallpox, hepatitis B persists as a major global health problem. Therefore, we believe that these challenges present
    a need for an innovative solution. Our research shows that non-responders or low-responders to the conventional HBV vaccine
    respond better to our third generation HBV vaccine, Sci-B-VacTM.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | Limited
    effectiveness in immunization of adults with increased body weight.The preliminary results collected by Bio-Technology
    General (Israel) Ltd., an Israeli subsidiary of Savient Pharmaceuticals, Inc. (“Savient”), which is the original
    company that licensed the Sci-B-VacTM technology to us, from two clinical studies suggest that Sci-B-VacTM generated
    superior immune response in overweight individuals as compared to Engerix-B®.                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | Limited
    effectiveness in newborn infants of hepatitis B-positive mothers.An investigator-initiated study suggested that
    Sci-B-VacTM could be more effective than Engerix-B® in reducing hepatitis B virus transmission and potentially triggering
    early hepatitis B virus clearance.                                                                                                                                                                                                                                                                                                                                                                                                                                    



Expected
Sci-B-VacTM Advantage



Due
to the limitations of currently marketed HBV vaccines, we believe an untapped market opportunity exists for adult populations
at higher risk of hepatitis B infection, such as immune-compromised persons and non-responders to currently marketed vaccines.
Because their immune systems are weakened or not functioning at all, immune-compromised people are more susceptible to infectious
diseases, including the hepatitis B virus. Additionally, even if immune-compromised people receive one or more of the currently
available vaccines, the patient’s immune response may be inadequate, and, as a result, the vaccination may have to be repeated.
For example, in the United States, the CDC recommends HBV vaccinations for all susceptible chronic hemodialysis patients, which
is a population of over one million in the United States alone, yet 14-33% of hemodialysis patients do not respond to the HBV
vaccines currently available in the market, according to the CDC. Hemodialysis patients have a reduced response to vaccinations
because of the general suppression of the immune system associated with uremia, a complication of chronic kidney disease, referred
to as CKD, and acute kidney failure. In an investigator-initiated clinical trial of ESRD patients who had not responded to four
double-dose injections of Engerix-B® (4x40 mcg), 86% (n=29) responded positively to three lower-dose injections of Sci-B-VacTM
(3x10 mcg). It should be noted that Sci-B-Vac achieves these seroprotection rates without the use of next-generation adjuvants,
which are substances that enhance the body’s immune response to an antigen, whose safety and efficacy profiles remain an
open issue due to limited clinical history. Sci-B-Vac is adjuvanted only with alum, a commercially accepted adjuvant with robust
safety data. We expect the further U.S. clinical studies to support efficacy of Sci-B-VacTM in the pre-dialysis, HIV and
diabetic subpopulations.



40






Our
Solutions



SCI-B-VACTM



Based
on various SciVac-sponsored clinical findings, as well as published reports by independent investigators, we have preliminary
indications of the following properties of Sci-B-VacTM:



| | ● | Rapid
    onset of immunity, as measured by levels of antibodies to the hepatitis B virus(anti-hepatitis B surface antigen (“HBsAg”)).
    The results of certain clinical trials conducted outside of the United States and not under an IND may suggest that two doses
    of Sci-B-VacTM instead of the conventional three may be sufficient to induce adequate seroprotection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Possible
    Activity of Sci-B-VacTM against emerging hepatitis B virus mutants.Second generation (i.e., single antigen) HBV
    vaccines, in combination with nucleoside analog-based therapy (antiviral drug therapy) of chronic hepatitis B, apply selective
    pressures on the hepatitis B virus in infected individuals, which leads to the generation and accumulation of mutations in
    the S antigen. The hepatitis B virus that contains these mutations is usually resistant to neutralization by antibodies raised
    by conventional second-generation HBV vaccines, which raise antibodies against the only S antigen. These mutations create
    public health concerns, as they can be responsible for reactivation of hepatitis B and what is referred to as occult hepatitis
    B infection. The prevalence of escape mutants, which means that hepatitis B infection may occur and/or may be transmitted
    to others, is growing; recent reports show up to 7% of the general population and up to 20% of liver transplant patients and
    HIV-infected individuals have hepatitis B virus escape mutants. We believe that Sci-B-VacTM may have the potential to
    maintain immune control in patients infected with hepatitis B virus escape mutants.



Our
Strategy



SciVac’s
currently derives revenues from sales of the Sci-B-VacTM vaccine product in Israel, as well as from R&D and manufacturing
services rendered in Israel to customers in the biotechnology and pharmaceutical sectors located in Europe, the United States
and Israel.



We
intend to leverage our considerable industry knowledge, scientific experience and development expertise to identify, develop and
commercialize product candidates with strong market potential that can fulfill unmet medical needs in the prevention and treatment
of infectious and immune diseases. Currently, we are focused on the development and commercialization of novel and improved therapies
for the treatment of hepatitis B using our proprietary recombinant protein expertise. However, we may also seek and enter into
strategic partnerships in order to leverage such potential partners’ financial strength, as well as regulatory, marketing
and other relevant expertise and assets to complete development, obtain regulatory approvals, manufacture and market our products
in various geographic regions.



To
achieve our current objectives, we intend to execute on the following:



| | ● | Commercialize
    Sci-B-VacTM in target populations in major pharmaceutical markets.We seek to obtain FDA and EMA approval and commence
    marketing Sci-B-VacTM as a preventative HBV vaccine in pre- dialysis and HIV patients in the United States and the EU,
    as applicable. If Sci-B-VacTM is approved for these indications, then we expect to extend the label for other adult niche
    populations at risk, such as diabetics patients. Additionally, we intended to seek approval for the use of Sci-B-VacTM
    in healthy subjects. For each new indication, we will likely be required to conduct clinical trials to demonstrate the efficacy
    of the vaccine in that population and obtain approval from the applicable regulatory agencies. We believe that Sci-B-VacTM
    will deliver significant improvements over existing HBV vaccines in the prevention of hepatitis B infection.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41






| | ● | Develop
    and commercialize rhDNase I in potentially major pharmaceutical markets.Through a planned sub-license arrangement with
    OPKO Health Inc., or one of its affiliates, rhDNase I may be developed for a number of indications inside of autoimmune diseases,
    cardiovascular disease and other potential disease areas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | We
    anticipate the ability to take advantage of regulatory incentives that may be available with respect to our product candidate.The Public Health Service Act (the “PHS Act”) authorizes the FDA to grant 12 years of market exclusivity to
    the holder of an approved FDA BLA. The pediatric provisions of the FDA Safety and Innovation Act authorize the FDA to grant
    six months of exclusivity, and the ODA provides seven years of exclusivity. Other possible, but not assured, benefits provided
    under these statutory provisions include research grants, tax credits, priority review, protocol assistance and waver of filing
    fees. The FDA has granted rhDNase I Orphan Drug Status for both the prevention and treatment of GVHD.                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Execute
    partnering and commercialization plans to build value.Our overall objective is to become a fully-integrated biopharmaceutical
    company, capable of drug development from discovery through manufacture, commercialization and marketing. In certain situations,
    however, we intend to seek and execute licensing and/or co-development agreements with companies capable of supporting the
    final stages of development of our products and their subsequent commercialization in U.S. and international markets. SciVac
    intends to maintain product marketing rights in the United States and out-license those rights to its partners for the rest
    of the world. We may further in-license late-stage drugs that we believe complement our product portfolio. Alternatively,
    we may also consider sales of specific product assets.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Target
    select categories of specialty physicians and, if any of our product candidates are approved, enter into agreements to distribute
    and market our products.If Sci-B-VacTM is approved in the United States or the EU, we intend to target, internally
    or through partnerships, select categories of specialty physicians (such as nephrologists and oncologists) and enter into
    agreements to distribute and market these products for appropriate treatments in various countries in North and South America,
    Europe and Asia.                                                                                                                                                                                                                                                                                                               



Intellectual
Property and Market Exclusivity



We
believe that market exclusivity derived from a combination of our intellectual property and orphan drug designations will present
barriers to competitors’ entry and are a key to our success.



Our
goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other proprietary
technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the
United States and in other countries. Our policy is to actively seek the broadest intellectual property protection possible for
our products, proprietary information and proprietary technology through a combination of contractual arrangements and patents,
both in the United States and elsewhere in the world. In addition, we intend to actively pursue product life cycle management
initiatives to extend our market exclusivity.



In
addition to any granted patents, our products will be eligible for market exclusivity to run concurrently with the term of the
patent for up to twelve years under the PHS Act provided the FDA determines that the biological is a “first licensure”
and an additional six months thereafter under the FDA’s pediatric exclusivity guideline. In the EU, our products will be
eligible for up to ten years of exclusivity, which includes eight years of data exclusivity and two years of market exclusivity
from the date of the BLA or market authorization approval.



Upon
marketing approval by the FDA and a determination that it is a first licensure, Sci-B-VacTM would be granted up to a 12-year
exclusivity period under 351(k) of the PHS Act.



rhDNase
I, as a product candidate for the treatment of GVHD, has nine patents claiming application of deoxyribonuclease enzyme for treatment
of GVHD issued and filed, which are held by CLS and exclusively licensed to us under the CLS License Agreement. Upon consummation
of the Merger, we would license our rights to rhDNase I to Opko Health, Inc., or one of its affiliates, in exchange for a royalty
based on net sales.



42






Partnerships
and Licensing



Ferring
License Agreement



In
June 2004, SciGen Ltd., a public company organized under the laws of Singapore (“SciGen Singapore”), and Savient entered
into a License Agreement (as subsequently amended, the “Ferring License Agreement”) with respect to the marketing,
promotion, distribution and sale of certain forms of HBsAg for sale as an HBV vaccine (the “Product”). Savient assigned
its rights and obligations under the Ferring License Agreement to Ferring International Center S.A. (“Ferring”), and,
in 2012, SciGen Singapore assigned its rights and obligations under the Ferring License Agreement to SciVac. The Ferring License
Agreement applies to SciVac’s sales of Sci-B-Vac.



Pursuant
to the Ferring License Agreement, SciVac has been granted the following: (i) an exclusive worldwide license to use, deal in, test,
promote, market, distribute and sell the Product; (ii) the right to sublicense such exclusive license; and (iii) the right to
use certain technology, patent rights and other confidential information disclosed by Savient or its subsidiary Bio-Technology
General (Israel) Ltd. (a) solely for the purpose of manufacturing the Product at one facility in each of Israel, India and the
People’s Republic of China, or such other country, provided that the requisite approval from the Israeli Office of the Chief
Scientist (the “OCS”) is obtained, (b) to use, sell, offer to sell and import the Product manufactured by SciVac in
accordance with the Ferring License Agreement and (c) sublicense any rights granted to SciVac under the Ferring License Agreement.



Pursuant
to the Ferring License Agreement, SciVac has agreed to pay Ferring a royalty equal to 7% of the net sales of the Product during
the term of the Ferring License Agreement and 30% of all non-royalty consideration received by SciVac from sub-licensees, if any,
subject, in the case of non-royalty consideration, to certain exceptions in a limited number of countries. Additionally, in connection
with the assignment of the Ferring License Agreement to the Company, the Company assumed the obligation of a prior assignee of
the Ferring License Agreement to pay SciGen Singapore five percent of net sales of the Product. Unless earlier terminated in accordance
with its terms, the Ferring License Agreement remains in force on a country-by-country basis until the date that is ten years
following the commencement of the date that SciVac receives regulatory approval in the applicable country. The Ferring License
Agreement contains customary termination provisions, generally permitting a party to terminate the agreement upon the other party’s
insolvency or uncured material breach.



CLS
License Agreement for rhDNase I



On
April 20, 2015, we entered into the CLS License Agreement with CLS, pursuant to which, CLS has granted to us an exclusive, worldwide,
perpetual and fully paid-up license (including the right to sublicense) to the Licensed Technology.



We
may terminate the CLS License Agreement at any time by providing CLS 30 days’ notice. The CLS License Agreement is not otherwise
terminable by either party, other than in the case of an uncured material breach by the other party, the granting of a winding-up
order in respect of the other party or upon certain events of bankruptcy or insolvency. The CLS License Agreement additionally
includes certain customary confidentiality and indemnification provisions. In connection with the proposed Merger, we plan to
sublicense all of our rights under the CLS License Agreement to Opko Health, Inc., or one of its affiliates, in exchange for a
royalty based on net sales.



Competitive
Overview



Competitive
landscape for Sci-B-VacTM



In
Canada and the United States, there are currently only two commercially available second generation vaccines that solely and specifically
target the hepatitis B virus: Engerix-B® from GlaxoSmithKline plc; and Recombivax HB® from Merck Sharpe and Dohme, a subsidiary
of Merck & Co., Inc. Each of these HBV vaccines contains only one of the three surface antigens of the hepatitis B virus,
whereas Sci-B-VacTM includes all three surface antigens.



43






Fendrix®,
another GlaxoSmithKline product, was approved for sale in Europe by the European Commission in 2005 for the active immunization
against the hepatitis B virus in patients with renal insufficiency, including pre- hemodialysis and hemodialysis patients. Fendrix®
contains only one of the three surface antigens of the hepatitis B virus and includes two different adjuvants.



HEPLISAVTM,
by Dynavax Technologies Corporation, is an investigational Phase III HBV vaccine formulated from yeast-derived recombinant small
surface protein (S) mixed with artificial immunostimulatory DNA sequence (1018 ISS). HEPLISAVTM is designed to improve seroprotection
rates in immunocompromised populations. Phase III trials demonstrated that HEPLISAVTM produces higher rates of seroprotection
in healthy adults and hyporesponders with fewer immunizations. However, in 2012, the FDA rejected the HEPLISAVTM BLA because
of safety concerns related to autoimmune reactions, including thyroid disorders. Currently, Dynavax is conducting a Phase III
study (HBV-23) to bring greater clarity regarding the safety profile of HEPLISAVTM.



Customer
Concentration



For
the year ended December 31, 2015, we derived 30%, 20%, 15%, 13% and 10% of our revenue from our top five customers, CCCR, Clalit
Health Services, referred to as Clalit, Opko Biologics, AS Kevelt and SAREL - Logistics Solutions & Products for Advanced
Medicine Ltd., referred to as SAREL, respectively. We currently provide R&D services to CCCR, Opko Biologics and AS Kevelt
under service contracts, and we provide Sci-B-VacTM to each of SAREL and Clalit, each of which is part of the Israeli
health system. The Chairman of the board of AS Kevelt is Dmitry Genkin, one of our directors. Please see “Management’s
Discussion and Analysis of SciVac’s Financial Condition and Results of Operations – Related Party Transactions.”



Government
Regulation



General



Our
research, development and clinical programs, as well as our manufacturing and marketing operations, are subject to extensive regulation
in the United States and other countries. Most notably, the formulation, manufacturing, processing, labeling, packaging, advertising
and distribution of our products either are or will be subject to regulation by several federal agencies in the United States,
including the FDA, the Centers for Medicare & Medicaid Services, the Offices of Inspector General, and Office of Civil Rights,
all within the Department of Health and Human Services, the Federal Trade Commission, the U.S. Department of Agriculture, the
Department of Defense, the Department of Veterans Affairs and the Environmental Protection Agency.



U.S.
Food and Drug Administration Regulation



Of
particular importance is the FDA, which administers requirements covering the testing, approval, safety, effectiveness, manufacturing,
labeling, and marketing of prescription pharmaceuticals. In many cases, the FDA requirements and practices have increased the
time and resources necessary to develop and test new products and bring them to market in the United States. Most notably, all
of our products and product candidates that are intended for sale in the United States will be subject to the PHS Act and the
Federal Food, Drug and Cosmetic Act, both as implemented and enforced by the FDA. In the United States our product candidates
would require FDA pre-marketing approval of a BLA, pursuant to 21 C.F.R. pt. 601. Foreign countries may require similar or more
onerous approvals to manufacture or market our products.



Failure
by us or by our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or other
regulatory authorities, which may result in sanctions including, but not limited to: untitled letters, warning letters, fines,
injunctions, consent decrees and civil penalties; customer notifications or repair, replacement, refunds, recall, detention or
seizure of our products; operating restrictions or partial suspension or total shutdown of production; refusing or delaying our
requests for BLA premarket approval of new products or modified products; withdrawing BLA approvals that have already been granted;
refusal to grant export approval for our products; or criminal prosecution.



44






FDA
Product Approval



Vaccines
and other biologicals follow the same general regulatory pathway as for drugs. A sponsor that wishes to begin clinical trials
with a vaccine or other biologic must submit an IND application to the FDA. The IND describes the vaccine or biologic, its method
of manufacture and quality control tests for release. Also included is information about the vaccine’s safety and ability
to elicit a protective immune response (immunogenicity) in animal testing, and in humans where such data is available, as well
as the proposed clinical protocol for studies in humans.



Pre-marketing
(pre-licensure) vaccine clinical trials are typically done in three phases, as is the case for any drug or biologic. Initial human
studies, referred to as Phase I, are safety and immunogenicity studies performed in a small number of closely monitored subjects.
Phase II studies are dose-ranging studies and may enroll hundreds of subjects. Finally, Phase III trials typically enroll thousands
of individuals and provide the critical documentation of effectiveness and important additional safety data required for licensing.
At any stage of the clinical or animal studies, if data raise significant concerns about either safety or effectiveness, the FDA
may request additional information or studies, or may halt ongoing clinical studies.



If
successful, the completion of all three phases of clinical development can be followed by the submission of a BLA. To be considered,
the license application must provide the multidisciplinary FDA reviewing team (medical officers, microbiologists, chemists, biostatisticians,
etc.) with the efficacy and safety information necessary to make a risk/benefit assessment and to recommend or oppose the approval
of a vaccine. Also during this stage, the proposed manufacturing facility undergoes a pre-approval inspection during which production
of the vaccine as it is in progress is examined in detail.



Following
the FDA’s review of a license application for a new biologic or new indication for an existing biologic, the sponsor and
the FDA may present their findings to the FDA’s Vaccines and Related Biological Products Advisory Committee. This non-FDA
expert committee (scientists, physicians, biostatisticians and a consumer representative) provides advice to the Agency regarding
the safety and efficacy of the vaccine for the proposed indication. Vaccine approval also requires the provision of adequate product
labeling to allow health care providers to understand the vaccine’s proper use, including its potential benefits and risks,
to communicate with patients and parents and to safely deliver the vaccine to the public.



The
FDA continues to oversee the production of vaccines after the vaccine and the manufacturing processes are approved, in order to
ensure continuing safety. After licensure, monitoring of the product and of production activities, including periodic facility
inspections, must continue as long as the manufacturer holds a license for the product. If requested by the FDA, manufacturers
are required to submit to the FDA the results of their own tests for potency, safety, and purity for each vaccine lot. They may
also be required to submit samples of each vaccine lot to the FDA for testing. However, if the sponsor describes an alternative
procedure which provides continued assurance of safety, purity and potency, the Center for Biologics Evaluation and Research may
determine that routine submission of lot release protocols (showing results of applicable tests) and samples is not necessary.



Until
a vaccine is given to the general population, all potential adverse events cannot be anticipated. Thus, many vaccines undergo
Phase IV studies, which are formal studies on a vaccine once it is on the market. Also, the government relies on the Vaccine Adverse
Event Reporting System to identify problems after marketing begins.



45






While
we have obtained regulatory approval to sell Sci-B-VacTM in fifteen countries and intend to continue to market the vaccine
internationally, we are currently seeking approval for the US clinical trials necessary to provide data in support of a BLA, which
can be a time-consuming and lengthy process. Before new pharmaceutical products may be sold in the United States, preclinical
studies and clinical trials of the products must be conducted and the results submitted to the FDA for approval. With limited
exceptions, the FDA requires companies to register both pre-approval and post-approval clinical trials and disclose clinical trial
results in public databases. Failure to register a trial or disclose study results within the required time periods could result
in penalties, including civil monetary penalties. Clinical trial programs must establish efficacy, determine an appropriate dose
and dosing regimen, and define the conditions for safe use. This is a high-risk process that requires stepwise clinical studies
in which the candidate product must successfully meet predetermined endpoints. For biologics, the results of the preclinical and
clinical testing of a product are then submitted to the FDA in the form of a BLA. In response to a BLA, the FDA may grant marketing
approval, request additional information or deny the application if it determines the application does not provide an adequate
basis for approval. The activities undertaken before a new pharmaceutical product may be marketed in the United States generally
include, but are not limited to:



| | ● | preclinical
    studies;                                                                                                                                                                                                                                                                                                                                                                
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | submission
    to the FDA of an IND, which must become effective before human clinical trials may commence;                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | adequate
    and well-controlled human clinical trials to establish the safety and efficacy of the product;                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | submission
    to the FDA of a BLA;                                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | acceptance
    for filing of the BLA by the FDA;                                                                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | satisfactory
    completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which both the active ingredients
    and finished drug product are produced as well as acceptance of the clinical trial sites to assess compliance with, among
    other things, patient informed consent requirements, the clinical trial protocols, cGCPs and cGMPs; and
| |   |                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | FDA
    review and approval of the BLA prior to any commercial sale and distribution of the product in the United States.                                                                                                                                                                                                                                                               



The
testing and approval processes require substantial time, effort and financial resources, and each may take several years to complete.
The FDA may not grant approval on a timely basis, or at all. Even if we believe a clinical trial has demonstrated safety and efficacy
of one of our product candidates for the treatment of a disease, the results may not be satisfactory to the FDA. Preclinical and
clinical data may be interpreted by the FDA in different ways, which could delay, limit or prevent regulatory approval. We may
encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals which could delay or preclude
us from marketing our product candidates. The FDA may limit the indications for use or place other conditions on any approvals
that could restrict the commercial application of the products. After approval, certain changes to the approved biologic, such
as adding new indications, manufacturing changes or additional labeling claims, are subject to further FDA review and approval.
Depending on the nature of the change proposed, a BLA supplement must be filed and approved before the change may be implemented.
For many proposed post-approval changes to a BLA, the FDA has up to 180 days to review the application. As with new BLAs, the
review process is often significantly extended by the FDA requests for additional information or clarification.



46






Biologics
Price Competition and Innovation Act



Under
the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”), products approved as a biological product
under a BLA in the United States may qualify for a 12-year period of non-patent exclusivity. In the future, if and when our product
candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions under
the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as “Hatch-Waxman,” on issued
patents covering those products, depending upon the length of the clinical trials for each drug and other factors, including those
involved in the filing of a BLA. Although most of Hatch-Waxman’s provisions apply only to drugs, the patent term extension
provisions (see 35 U.S.C. § 156) apply to biologics as well. We believe that any of our products approved as a biological
product under a BLA should qualify for a 12-year period of non-patent exclusivity currently permitted by the BPCIA. Specifically,
the BPCIA established an abbreviated pathway for the approval of biosimilar biologics, including the possible designation of a
biosimilar as “interchangeable,” based on their similarity to existing brand products. Under the BPCIA, an application
for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved under a
BLA. There is a risk that, as proposed by President Obama, the U.S. Congress could amend the BPCIA to significantly shorten this
exclusivity period or that the FDA will not consider our product candidates to be reference products for competing products, potentially
creating the opportunity for competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will
be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological
products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. The BPCIA
is complex and is only beginning to be interpreted and implemented by the FDA. As a result, its ultimate impact, implementation
and meaning are subject to uncertainty. While it is uncertain when any such processes may be fully adopted by the FDA, any such
processes that operate to limit the scope or length of exclusivity afforded by the BPCIA could have a material adverse effect
on the future commercial prospects for our biological products. In addition, foreign regulatory authorities may also provide for
exclusivity periods for approved biological products. For example, biological products in Europe may be eligible for a 10-year
period of exclusivity.



Orphan
Drug Designation



Under
the ODA, the FDA may grant orphan drug designation to products intended to treat a “rare disease or condition,” which
generally is a disease or condition that affects fewer than 200,000 individuals in the United States. We have received orphan
drug designation for rhDNase I, our biologics candidate indicated for treatment of aGVHD. Orphan drug designation must be requested
before submitting a BLA or supplemental BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic
agent and its potential orphan use are publicly disclosed by the FDA. Orphan drug designation does not convey any advantage in,
or shorten the duration of, the regulatory review and approval process. If a product which has an orphan drug designation subsequently
receives the first FDA approval for that product for the indication for which it has such designation, the product is entitled
to an orphan exclusivity period, in which the FDA may not approve any other applications to market the same product for the same
indication for seven years, except in limited circumstances, such as where the sponsor of a different version of the product is
able to demonstrate that its product is clinically superior to the approved orphan product. This exclusivity does not prevent
a competitor from obtaining approval to market a different product that treats the same disease or condition or the same product
to treat a different disease or condition. Among the other benefits of orphan drug designation are tax credits for clinical research
and testing as well as a waiver of the BLA application fee. The FDA can revoke a product’s orphan drug exclusivity under
certain circumstances, including when the holder of the approved orphan drug application is unable to assure the availability
of sufficient quantities of the product to meet patient needs. In addition, the FDA will typically coordinate with the sponsor
on research study design for an orphan product and may exercise its discretion to grant marketing approval on the basis of more
limited product safety and efficacy data than would ordinarily be required. Legislation similar to the ODA has been enacted in
other countries to encourage the research, development and marketing of medicines to treat, prevent or diagnose rare diseases.
In the EU, medicinal products intended for diagnosis, prevention or treatment of life-threatening or very serious diseases affecting
less than five in 10,000 people receive ten-year market exclusivity, protocol assistance, and access to the centralized procedure
for marketing authorization.



Product
Approval Outside the United States



We
currently market, and are pursuing further marketing authorizations for, our products in numerous jurisdictions outside of the
United States, including, notably, Israel. In order to market any product outside of the United States, we must comply with numerous
and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical
trials and commercial sales and distribution of our products. Approval procedures vary among countries and can involve additional
product testing and additional administrative review periods. The time required to obtain approval in other countries might differ
from and be longer than that required to obtain FDA approval. Regulatory approval in one country does not ensure regulatory approval
in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process
in others. In some regions, it is possible to receive an “accelerated” review whereby the national regulatory authority
will commit to truncated review timelines for products that meet specific medical needs. If we fail to comply with applicable
foreign regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls,
seizure of products, operating restrictions and criminal prosecution.



47






Marketing
Plans in the United States



We
intend to launch Sci-B-VacTM to prevent the hepatitis B virus in the adult pre-dialysis and HIV markets, with eventual entry
into the diabetic and healthy populations. From a commercialization perspective, we intend to hire a sales force to market Sci-B-VacTM
after the first BLA is filed. We expect that this sales force would target nephrologists and HIV specialists, which are well defined
in North America, and we believe that they are best accessed through a direct sales force.



Focus
Patient Population and Key Figures in the United States



| | ● | More
    than 400,000 people in the United States are expected to be treated for ESRD in 2015;                          
| | - | ------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                         
| | ● | Between
    1980 and 2009, the U.S. prevalence rate for ESRD increased nearly 600%, from 290 to 1,738 cases per million;
| |   |                                                                                                                         
| | ● | At
    the end of 2009, nearly 400,000 ESRD patients were being treated with some form of dialysis; and                 
| |   |                                                                                                                         
| | ● | In
    2010, Medicare made a total of approximately US$33 billion ESRD-related expenditures.                            



The
CDC recommends hepatitis B vaccination of all susceptible chronic hemodialysis patients. Hepatitis B vaccination is recommended
for pre-end-stage renal disease patients before they become dialysis dependent and for peritoneal and home dialysis patients because
they might require in-center hemodialysis.



Sci-B-VacTM
Positioning in CKD Sector in the United States



Physician
Awareness:The target physician audience is aware of the need for a vaccine to improve protection against hepatitis B
infection among CKD patients. 14-33% of hemodialysis patients do not respond to existing vaccines.



Efficacy:Clinical trials conducted outside of the United States and not under the jurisdiction of the FDA or EMA suggest that Sci-B-VacTM
may be more effective when compared to Engerix-B® in certain populations studied. Sci- B-VacTM appears to work faster,
appears to achieve higher levels of vaccination and appears to provide longer lasting protection.



Safety:Sci-B-VacTM has been well tolerated. Few, if any, serious adverse events were reported in any of the clinical trials
to date.



Convenience:
Based on the data collected to date, fewer injections would be required to achieve seroprotection, as compared to vaccination
with Engerix-B® (three doses of Sci-B-VacTM on a zero, one and six month schedule for chronic dialysis patients compared
to four doses of Engerix-B® at zero, one, two and six months, respectively). In addition, based on the results of certain
clinical trials performed to date, we could project that most of the patients would be seroprotected after the second immunization.



Physician
Targets for the CKD Market



Nephrologists
are trained in the diagnosis and treatment of CKD and are normally responsible for patient care. This care includes delivering
an HBV vaccine to patients on dialysis and pre-end-stage renal disease patients before they become dialysis dependent. These therapies
are delivered by physician recommendation or prescriptions from the physician and may be administered in a dialysis clinic. As
of 2014, there were approximately 9,000 nephrologists in the United States. We expect that nephrologists will be a key factor
in the success of Sci-B-VacTM and will be the main physician specialty group targeted by the SciVac sales force.



48






Dialysis
Centers Segmentation



SciVac
has segmented dialysis centers based on a weighted index (based 75% on dialysis patients and 25% on dialysis stations) in order
to incorporate a center’s current work (represented by number of patients) as well as its potential work (represented by
number of stations).



Planned
Field Force Structure



We
plan to create a sales force designed to reach both nephrologists’ offices and dialysis centers. In most cases, doctors
are expected to be the sole decision-makers for Sci-B-VacTM. For dialysis centers, however, some of which belong to chain
organizations, national and regional headquarters influence which type of vaccine is stocked at a given center. Further, the managers
of each dialysis center are key decision makers in granting access to sales representatives and deciding which products to stock
and use. Dieticians and doctors ultimately determine which products to administer to patients. We expect that our sales force
will have three teams designed to support the selling and maintenance needs of doctors and key decision makers at dialysis centers:



| | ● | A
    team of account managers dedicated to dialysis center headquarters;                        
| | - | -------------------------------------------------------------------------------------------------
| |   |                                                                                                  
| | ● | A
    team of field sales representatives dedicated to doctors’ offices and dialysis centers; and
| |   |                                                                                                  
| | ● | A
    team of medical science liaisons dedicated to ongoing education at dialysis centers.       



Commercial
Partner Arrangements – Non-U.S.



We
have entered into or are pursuing arrangements with certain commercial partners for the distribution of our products in the EU,
Latin America, Africa, India and Asia. Under our existing agreements, we receive payments from our distributors based on prices
set forth in their respective agreements with us.



Manufacturing



We
operate a proprietary, state-of-the-art mammalian cell-derived vaccine manufacturing facility in Rehovot, Israel, which we use
to manufacture Sci-B-VacTM. The facility was built in December 2006 and is GMP certified by the Israeli Ministry of Health
(“MoH”). It has also received MoH authorization to release vaccine batches to export markets. In 2013, the EU entered
into an agreement with Israel regarding conformity assessment and acceptance of industrial products. This agreement recognizes
Israel’s industrial standards as being equivalent to EU standards. It covers products for human and veterinary use (medicinal
products, active pharmaceutical ingredients and excipients) and procedures related to GMP. The agreement means that Israel and
the EU recognize each other’s GMP inspection conclusions, manufacturing and import authorizations and certification of conformity
of batches without the need for re-testing at import and official-control-authority batch release; however, our facility will
have to pass FDA inspection prior to marketing of Sci-B-VacTM in the United States.



Current
production capabilities satisfy our current manufacturing requirements for domestic and export markets. However, in the event
we receive FDA and/or EMA approval for Sci-B-VacTM, our production requirements may increase beyond our current production
capabilities, and we may enter into agreements with various third parties for the manufacture of Sci-B-VacTM.



Properties



The
Company does not own any real property. The Company leases its principal executive offices, which are located at 13 Gad Feinstein
Road, Rehovot, 76100 Israel. This lease is for an aggregate of 2,711 gross square meters of office space, will expire on January
31, 2017. The Company pays approximately US$83,110 per month, inclusive of VAT.



49






Legal
Proceedings



SciVac
is from time to time involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business.
SciVac does not believe any such legal proceedings or claims will have, individually or in the aggregate, a material adverse effect
on SciVac’s business, liquidity, results of operations, or financial position. Litigation, however, is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm SciVac’s business.



As
publicly announced by the Company on July 30, 2015, following discussions with the Israeli Ministry of Health, referred to as
the IMOH, the Company recalled from the market all Sci-B-VacTM sold by the Company since January 1, 2012, which primarily
affected the Israeli and Hong Kong markets. The Company carried out the recall solely as a precautionary measure, as, following
inspection by SciVac, it was determined that certain unshipped packages of the Sci-B-VacTM hepatitis B vaccine contained
a small number of damaged vials. SciVac then reported its findings to the IMOH. There have been no reports of harm to any patients,
nor have there been any reports with respect to Sci-B-Vac’sTM efficacy or safety. The Company ultimately determined
that an issue in the labeling process caused the damage. In September, 2015, the Company received approval from the IMOH to resume
all standard manufacturing, including labeling and release of Sci-B-VacTM to the market, following corrective actions to
the automated labeling process and an inspection of the Company’s facilities. Because the recall was not based on the safety
or efficacy of Sci-B-VacTM, the Company continued all other aspects of manufacturing without interruption during the brief
time period following the recall.



On
August 2, 2015, the Company was served in Israel with a Motion to Approve a Class Action, referred to as the Motion. The Motion
and underlying claim was filed in response to the recall discussed above, alleging that through purported actions or omissions,
SciVac violated patients’ autonomy, misled patients and violated provisions of the Israeli Law of Patients’ Rights.
The claimant seeks only monetary damages in the amount of NIS 150,000. The Company has provided notice of the Motion to its insurance
broker and they have retained counsel on behalf of the Company. A pre-trial hearing that had been scheduled for March 10, 2016
has been rescheduled for June 28, 2016 in order to provide the parties an opportunity to settle the matter. The Company believes
that the Motion and the underlying claim are without merit and intends to vigorously defend against it; however, there can be
no assurance that the Company will be successful in its defense.



ITEM
4A. Unresolved Staff Comments.



Not
applicable.



ITEM
5. Operating and Financial Review and Prospects.



MANAGEMENT’S
DISCUSSION AND ANALYSIS OF

SCIVAC’s
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The
following discussion of SciVac’s results of operations should be read together with SciVac’s audited consolidated
financial statements and the related notes, which appear elsewhere in this annual report. SciVac’s consolidated financial
statements have been prepared in accordance with IFRS, as issued by the IASB. The following discussion contains forward-looking
statements that reflect SciVac’s current plans, estimates and beliefs and involve risks and uncertainties. See “Cautionary
Statement Regarding Forward-Looking Statements.” SciVac’s actual results may differ materially from those discussed
in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and
elsewhere in this annual report, including in the section entitled “Risk Factors”.



50






SciVac
intends the discussion of SciVac’s financial condition and results of operations that follows to provide information that
will assist in understanding SciVac’s consolidated financial statements, the changes in certain key items in those consolidated
financial statements from period-to-period and the primary factors that accounted for those changes, as well as how certain accounting
principles, policies and estimates affect SciVac’s consolidated financial statements. This discussion should be read in
conjunction with SciVac’s audited consolidated financial statements and the related notes that appear elsewhere in this
annual report.



Overview



SciVac
is a commercial-stage, private biopharmaceutical company focused on developing, producing and marketing recombinant healthcare
biotechnology derived products to prevent and treat infectious and immune diseases. We currently manufacture our lead product,
Sci-B-VacTM, a third generation HBV vaccine for adults, children and newborns, which is registered in twelve countries throughout
the world. Sci-B-VacTM, has not yet been approved by the FDA or the EMA. In Israel, where more than 500,000 persons have
already been vaccinated with our vaccine, Sci-B-VacTM, is considered the standard of care. We have sold more than 1.5 million
units in Israel. Certain clinical trials have shown the advantage of Sci-B-VacTM over GlaxoSmithKline’s Engerix-B®,
one of the primary existing HBV vaccines available for the hepatitis B virus, in preventing hepatitis B infection. We are currently
developing a clinical program to support the approval from the FDA and from the EMA to market Sci-B-VacTM for sale for vaccination
of pre-dialysis and HIV patients in the United States and the EU, respectively. Our wholly owned subsidiary in Rehovot Israel,
currently manufactures and sells our lead product, Sci-B-VacTM, a third-generation Hepatitis B vaccine for adults, children
and newborns.



We
have in-licensed rhDNase I as a novel biological intended for the prevention and treatment of GVHD, which in its acute form is
a deadly condition, impacting stem cell, bone marrow and other transplant recipients for which no approved preventative or therapeutic
drug is currently available. Because rhDNase I has received FDA orphan drug designations for both the prevention and treatment
of GVHD, it offers a development path with potentially reduced cost structures and opportunities for market exclusivity. There
are currently no FDA- or EMA-approved drugs labeled for prevention or treatment of GVHD. We have also in-licensed rights to develop
rhDNase I for additional indications, including, but not limited to, autoimmune diseases, cardiovascular diseases and certain
cancers. In accordance with the Merger Agreement, we intend to sublicense all rights to rhDNase I, as obtained through its license
agreement with CLS Therapeutics Limited to OPKO Health Inc. or one of its affiliates in exchange for a royalty based on net sales.



We
have also created our own R&D center in order to develop bacterial (E. Coli) and mammalian cell (CHO) manufacturing technology,
and we offer contract development and cGMP manufacturing services for Phase I/II clinical studies and additional R&D services
for other life science and biotechnology companies.



We
may also seek to in-license late-stage drugs that we believe complement our product portfolio, including small molecule therapeutics
for niche indications in oncology.



Business
Activities



At
present, the Company’s operations are focused on:



| | ● | Manufacturing
    and sale of Sci-B-VacTM in territories where it is currently registered.                     
| | - | --------------------------------------------------------------------------------------------------------------
| |   |                                                                                                               
| | ● | Preparing
    for clinical trials to support various marketing authorizations in the United States and Europe.
| |   |                                                                                                               
| | ● | Providing
    contracted services, primarily to customers in the pharmaceutical and biotechnology sectors.    



51






Regulatory
and Quality Control:



In
November 2015, we initiated a Phase IV trial entitled: “an open label, single arm, single center clinical study in healthy
subjects to qualify an in-house reference standard batch of SCI-B-VACTM”. The primary goal of the study is to validate
the new in-house reference standard vaccine for routine quality control purposes, in compliance with the European Pharmacopeia
and the Israeli Ministry of Health. We anticipate the trial will be completed by the second quarter of 2017, and an interim analysis
is planned during the third quarter of 2016.



R&D
Services:



The
Company provides services for the biotechnology industry in Israel. These services include relevant activities for development
and manufacturing of therapeutic proteins according to international standards and cGMP quality level suitable for toxicological
studies in animals and clinical studies (Phase I & II) in humans. Service activities include analytics/bio analytics methods
for development and process development of therapeutic proteins starting with a lead candidate clone through the upstream, purification,
formulation and filling processes and manufacturing for Phase I & II clinical trials.



These
R&D services are primarily marketed to Israeli research community in academia and biotechnology companies in the life sciences
in Israel lacking the infrastructure or experience in the development and production of therapeutic proteins in the standards
and quality required for clinical trials for human use.



In
2014 and 2015 the Company provided services to more than 10 biotechnology companies including analytical development, upstream
development process, protein purification and formulation and filling for Phase I clinical studies. During 2015, the Company completed
several deliverables including fill/finish process for Phase I clinical study, small scale process development and a one-year
stability study



Results
of Operations



Year
Ended December 31, 2015 Compared to the Year Ended December 31, 2014



Revenues



For
the year ended December 31,



|                        |  | 2015 $ |          |   | 2014$ |  |           | $ Change in 2015 |  |  | % change in 2015 |  
|----------------------- |  | ------ | -------- | - | ----- |  | --------- | ---------------- |  |  | ---------------- | -
|Gross Products Revenues |  |        | 625,000  |   |       |  | 1,176,000 |                  |  |  | (551,000         | )
|Credit – Recall related |  |        | (323,000 | ) |       |  | -         |                  |  |  | (323,000         | )
|Services Revenues       |  |        | 653,000  |   |       |  | 1,692,000 |                  |  |  | (1,039,000       | )
|Total Revenues          |  |        | 955,000  |   |       |  | 2,868,000 |                  |  |  | (1,913,000       | )



Net
products revenue for the year ended December 31, 2015 was $302,000 as compared to $1,176,000 for the year ended December 31, 2014.
The net products revenue decrease of $874,000, or 74%, was primarily the result a recall of certain batches of the Company’s
Sci-B-VacTMproduct, which was implemented in July 2015 as a precaution and in conjunction with the Israeli Ministry
of Health. The recall resulted in the issuance of credit notes of $323,000 in the fourth quarter of 2015, and a temporary pause
in production during the recall assessment, which ended in September 2015.



Services
revenue is primarily milestone based and can vary from period to period. Services revenue for the year ended December 31, 2015
was $653,000, as compared to $1,692,000 for the year ended December 31, 2014. The services revenue decrease of $1,039,000, or
61%, was primarily a result of the completion of a large milestone on a services project during the year ended December 31, 2014.



52






Total
revenue for the year ended December 31, 2015 was $955,000, as compared to $2,868,000 for the year ended December 31, 2014. The
total revenue decrease of $1,913,000 or 67% was primarily a result of the reasons described above.



Revenue
by Geographic Region



|                   |  | 2015 $ |         |  | 2014
    $ |  |           | $ Change in 2015 |  |  | % change in 2015 |  
|------------------ |  | ------ | ------- |  | ---------- |  | --------- | ---------------- |  |  | ---------------- | -
|Revenue in Israel  |  |        | 534,000 |  |            |  | 1,418,000 |                  |  |  | (884,000         | )
|Revenue in Estonia |  |        | 413,000 |  |            |  | 1,445,000 |                  |  |  | (1,032,000       | )
|Revenue in Asia    |  |        | 8,000   |  |            |  | 5,000     |                  |  |  | 3,000            |  
|Total Revenue      |  |        | 955,000 |  |            |  | 2,868,000 |                  |  |  | (1,913,000       | )



Revenue
in Israel for the year ended December 31, 2015 was $534,000, as compared to $1,418,000 for the year ended December 31, 2014. The
revenue in Israel decreased by $884,000, or 62%, primarily from a decrease in product revenue resulting from the recall described
above.



Revenue
in Estonia for the year ended December 31, 2015 was $413,000, as compared to $1,445,000 for the year ended December 31, 2014.
The revenue in Estonia decreased by $1,032,000, or 71%, primarily from the completion of large milestone on a services project
during the year ended December 31, 2014.



Cost
of revenues



For
the year ended December 31,



|                 |  | 2015 $ |           |  | 2014
    $ |  |           | $ Change in 2015 |  |  | % change in 2015 | 
|---------------- |  | ------ | --------- |  | ---------- |  | --------- | ---------------- |  |  | ---------------- | 
|Cost of revenues |  |        | 3,755,000 |  |            |  | 3,699,000 |                  |  |  | 56,000           | 



Cost
of revenues, or COGS, for year ended December 31, 2015 was $3.755 million as compared to $3.699 million for the year ended December
31, 2014. The COGS increase of $56,000, or 2%, was primarily a result of an inventory write-off of $0.1 million due to the product
recall, which resulted in disposal of certain vials.



General,
Administrative and Selling Expense



For
the year ended December 31,



|                                                                                             |  | 2015 $ |           |  | 2014
    $ |  |           | $ Change in 2015 |  |  | % change in 2015 | 
|-------------------------------------------------------------------------------------------- |  | ------ | --------- |  | ---------- |  | --------- | ---------------- |  |  | ---------------- | 
|General, administrative and selling expense, excluding amortization of intangible
    assets |  |        | 4,707,000 |  |            |  | 2,664,000 |                  |  |  | 2,050,000        | 
|Amortization of intangible assets                                                            |  |        | 711,000   |  |            |  | 64,000    |                  |  |  | 640,000          | 
|Total General, administrative and selling expense                                            |  |        | 5,418,000 |  |            |  | 2,728,000 |                  |  |  | 2,690,000        | 



General,
Administrative and Selling, or GA&S, expense for year ended December 31, 2015 was $5.4 million, as compared to $2.7 million
for the year ended December 31, 2014. The GA&S expense increase of $2.7 million, or 99%, was primarily a result of an increase
in legal expenses of $1.2 million and consultant expense related to strategic merger activities, as well as an increase in intangible
asset amortization of $640,000 from the CLS License acquired in July 2015.



53






Research
and Development Expense



For
the year ended December 31,



|                         |  | 2015 $ |         |  | 2014
    $ |  |         | $ Change in 2015 |  |  | % change in 2015 |  
|------------------------ |  | ------ | ------- |  | ---------- |  | ------- | ---------------- |  |  | ---------------- | -
|Research and development |  |        | 618,000 |  |            |  | 634,000 |                  |  |  | (16,000          | )



Research
and Development, or R&D, expense for the year ended December 31, 2015 was $618,000, as compared to $634,000 for the year ended
December 31, 2014. The R&D expense decrease of $16,000, or 3%, was primarily the result of closely managing our in-house R&D
activities and lowering our dependence on third party contractors.



Financial
Expenses



|                                      |  | 2015 $ |           |  | 2014
    $ |  |           | $ Change in 2015 |  |  | % change in 2015 |  
|------------------------------------- |  | ------ | --------- |  | ---------- |  | --------- | ---------------- |  |  | ---------------- | -
|Interest and other financial expenses |  |        | 1,105,000 |  |            |  | 991,000   |                  |  |  | 114,000          |  
|Foreign exchange (gain) loss          |  |        | 1,463,000 |  |            |  | 1,607,000 |                  |  |  | (144,000         | )
|Total financial expenses              |  |        | 2,568,000 |  |            |  | 2,598,000 |                  |  |  | (30,000          | )



For
the year ended December 31,



Total
financial expenses for the years ended December 31, 2015 and 2014 was approximately $2.6 million. The financial expenses decrease
of $30,000, or 1%, for the year ended December 31, 2015 was primarily the result of increase in interest expenses of $114,000
from the increase of deemed interest of the intercompany loans that were held in SciVac LTD prior to the reverse takeover transaction
with Levon (referred to as the Levon Transaction), which was offset by the foreign exchange loss of $144,000, which decreased
by 9%, as compared to the 2014 period, as the result of the weakening of the CAD$ as compared to the U.S. dollar, offset by a
decrease of the foreign exchange effect from NIS to USD.



Listing
Expenses



The
excess of the fair value of the consideration received by the shareholders of Levon prior to the Levon Transaction over the fair
value of the identifiable net assets of Levon on the closing date of the Levon Transaction was calculated as follows:



|Consideration – common shares                        |  | $ | 22,282,000 | 
|---------------------------------------------------- |  | - | ---------- | 
|                                                     |  |   |            | 
|Identifiable net assets of Levon acquired by Scivac: |  |   |            | 
|Cash                                                 |  |   | 21,087,000 | 
|Reverse takeover listing expenses                    |  | $ | 1,195,000  | 
|                                                     |  |   |            | 
|Additional listing expenses                          |  | $ | 158,000    | 
|                                                     |  |   |            | 
|Total listing expenses                               |  | $ | 1,353,000  | 



54






The
consideration and allocation to the identifiable net assets of Levon at the date of the Levon Transaction initially represented
management’s best estimates and assumptions after taking into account all available information. During the quarter ended
December 31, 2015, certain costs incurred amounted to $485,000 were deemed to represent costs of the Levon Transaction and not
costs incurred for the issuance of common share consideration, and accordingly, were reallocated to net loss.



Share
based Payment



On
July 8, 2015, the Company issued 22,698,310 common shares of Levon to various advisors for services provided to the Company’s
shareholders in connection with the Levon Transaction. The fair value of the expense was recognized as $2,127,000.



Loss
per Share



The
losses for the years ended December 31, 2015, and 2014 were approximately US$14,755,000 and US$5,672,000 or US$0.03 and US$0.02
per share, respectively. The weighted average ordinary shares outstanding – basic for the years ended December 31, 2015,
and 2014 – were 505,893,922, and 259,172,993, respectively.



Year
Ended December 31, 2014 compared to the Year Ended December 31, 2013



Revenues



Revenue
for the year ended December 31, 2014 was approximately US$2,868,000 compared to US$1,661,000 for the year ended December 31, 2013,
a difference of US$1,207,000 from the comparable period in 2013. This increase was primarily related to recognition of revenues
from related parties’ contracts, and product sales increase due to higher penetration to the Israeli market.



Research
and Development Expense



Research
and development expense for the year ended December 31, 2014 was approximately US$634,000 compared to US$613,000 for the year
ended December 31, 2013, a difference of US$21,000 from the comparable period in 2013. This increase was primarily related to
increase of R&D services.



General
and Administrative Expense



General
and administrative expense for the year ended December 31, 2014 was approximately US$2,728,000 compared to US$2,852,000 for the
year ended December 31, 2013, a difference of US$124,000 from the comparable period in 2013. This decrease was primarily related
to a reduction in consultant expenses.



Other
Comprehensive Loss



Other
comprehensive income for the year ended December 31, 2014 was approximately US$1,021,000 compared to a loss of US$1,822,000 for
the year ended December 31, 2013, a difference of US$2,843,000 from the comparable period in 2013. This increase was primarily
related to changes in foreign currency translation adjustments.



55






Interest
Expense



Interest
expense for the year ended December 31, 2014 and 2013 primarily consisted of related-party loans interest and deemed interest.
Interest expense for the year ended December 31, 2014 was approximately US$941,000 compared to US$3,554,000 for the year ended
December 31, 2013, a difference of US$2,613,000 from the comparable period in 2013. This decrease was primarily related to a deemed
interest decrease as a result of the capital note conversation to equity in 2014.



Loss
per Share



The
losses for the years ended December 31, 2014 and 2013 were approximately US$5,672,000 and US$8,861,000 or US$0.02 and US$0.04
per share, respectively. The weighted average ordinary shares outstanding – basic for the years ended December 31, 2014
and 2013 – were 259,172,993 and 243,916,902, respectively.



Significant
Accounting Judgments and Estimates



The
preparation of consolidated financial statements requires management to make judgments, estimates, and assumptions that affect
the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. In particular,
significant judgments made by management in the application of IFRS during the preparation of the consolidated financial statements
and estimates with a risk of material adjustment are:



Income
taxes



In
assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable
income, applicable tax opportunities, expected timing of reversals of existing temporary differences and likelihood that tax positions
taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional
weight to positive and negative evidence that can be objectively verified.



Deprecation
for property and equipment



Depreciation
expense is allocated based on assumed asset lives. Should the asset life or depreciation rates differ from the initial estimate,
an adjustment would be made in the consolidated statements of operations and comprehensive loss.



Contingencies



By
their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. The assessment
of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.



Intangible
assets – useful lives



Following
initial recognition, the Company carries the value of intangible assets at cost less accumulated amortization and any accumulated
impairment losses. Amortization is recorded on the straight-line basis based upon management’s estimate of the useful life
and residual value. The estimates are reviewed at least annually and are updated if expectations change as a result of the technical
obsolescence or legal and other limits to use. A change in the useful life or residual value will impact the reported carrying
value of the intangible assets resulting in a change in related amortization expense.



56






Intangible
assets – impairment



The
application of the Company’s accounting policy for intangible asset expenditures requires judgment in determining whether
it is likely that the future economic benefits will flow to the Company, which are based on assumptions about future events or
circumstances. Estimates and assumptions may change if new information becomes available. If, after expenditures are capitalized,
information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized is written off
to profit or loss in the period the new information becomes available.



The
determination of the Company and its subsidiary’s functional currency



The
functional currency of the Company and its subsidiary is the currency of the primary economic environment and the Company reconsiders
the functional currency if there is a change in events and conditions, which determined the primary economic environment.



Fair
value hierarchy



Where
the fair value of financial assets and financial liabilities recorded in the statements of financial position cannot be derived
from active markets, their fair value is determined using valuation techniques including discounted cash flow models. The inputs
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required
in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect the reported fair value of financial instruments.



While
management believes that these judgments and estimates are reasonable, actual results could differ from those estimates and could
impact future results of comprehensive income and cash flows. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and further periods if the review affects both current and future periods. There
were no significant changes in estimates during the year ended December 31, 2015.



Financial
Instruments



Fair
value



Financial
instrument disclosures establish a fair value hierarchy that requires the Company to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The Company primarily applies the market approach for recurring
fair value measurements. This section describes three input levels that may be used to measure fair value:



Level
1 - unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability
is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide information
on an ongoing basis. The Company does not have any financial instruments in this category.



Level
2 - quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable
or can be corroborated by observable market data for substantially the full term of the assets or liabilities.



Level
3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities.



Financial
instruments whose carrying value approximates fair value



Cash
and cash equivalents and trade accounts receivable are financial instruments whose fair value approximates their carrying value
due to their short-term maturity.



57






The
fair value of accounts payable may be less than its carrying value due to liquidity risk.



Liquidity
and Capital Resources



|                    |  | December 31, 2015 
    $ |            |  | December 31, 2014 
    $ |  |            | $ Change in 2015 |  |  | % change in 2015 |  
|------------------- |  | ------------------------ | ---------- |  | ------------------------ |  | ---------- | ---------------- |  |  | ---------------- | -
|Current Assets      |  |                          | 14,522,000 |  |                          |  | 3,026,000  |                  |  |  | 11,496,000       |  
|                    |  |                          |            |  |                          |  |            |                  |  |  |                  |  
|Current Liabilities |  |                          | 2,929,000  |  |                          |  | 3,079,000  |                  |  |  | (150,000         | )
|                    |  |                          |            |  |                          |  |            |                  |  |  |                  |  
|Working Capital     |  |                          | 11,593,000 |  |                          |  | (53,000    | )                |  |  | 11,646,000       |  
|                    |  |                          |            |  |                          |  |            |                  |  |  |                  |  
|Accumulated Deficit |  |                          | 70,335,000 |  |                          |  | 55,580,000 |                  |  |  | 14,755,000       |  



As
at December 31, 2015, we had cash and cash equivalents and short-term investments of $12,476,000, as compared to $393,000 as at
December 31, 2014. As at December 31, 2015, the Company had working capital of $11,593,000, as compared to a negative working
capital of $53,000 at December 31, 2014. Working capital is calculated by subtracting current liabilities from current assets.



We
anticipate that our existing funds will be sufficient to maintain current operations beyond the next twelve months.



Our
actual future capital requirements will depend on many factors, including product sales outside of Israel, the progress and results
of our clinical trials, the duration and cost of discovery and preclinical development, and laboratory testing and clinical trials
for our products, the timing and outcome of regulatory review of our products, the costs involved in preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims and other intellectual property rights, the number and development requirements
of other product candidates that we pursue and the costs of commercialization activities, including product marketing, sales and
distribution.



We
may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration
and licensing arrangements. We currently do not have any commitments for future external funding. We may need to raise additional
funds more quickly if one or more of our assumptions prove to be incorrect or if we choose to expand our product development efforts
more rapidly than we presently anticipate. We may also decide to raise additional funds even before we need them if the conditions
for raising capital are favorable. The sale of additional equity or debt securities will likely result in dilution to our shareholders.
The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict
our operations. Additional equity or debt financing, grants or corporate collaboration and licensing arrangements may not be available
on acceptable terms, if at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate
our R&D programs, reduce our planned commercialization efforts or obtain funds through arrangements with collaborators or
others that may require us to relinquish rights to certain product candidates that we might otherwise seek to develop or commercialize
independently.



The
following table sets forth selected cash flow information for the periods indicated below:



|                                                     |  | For the years ended December
    31, |           
|---------------------------------------------------- |  | ------------------------------------ | ----------
|                                                     |  | 2015                                 |           
|Cash provided by (used in) operating activities      |  | $                                    | (9,047,000
|Cash provided by (used in) investing activities      |  |                                      | (526,000  
|Cash provided by (used in) financing activities      |  |                                      | 21,637,000
|Net increase (decrease) in cash and cash equivalents |  |                                      | 12,064,000



58






Net
cash used in operating activities was approximately $9,047,000 for the year ended December 31, 2015, as compared to approximately
$5,211,000 used in operations for the same period in 2014. The net loss for the year ended December 31, 2015 was approximately
$14,755,000, as compared to approximately $5,672,000 for the year ending December 31, 2014. The net loss increased by $9,083,000
for the year ended December 31, 2015, as compared to the same comparable prior year period.



Net
cash used in investing activities was approximately $526,000 for the year ended December 31, 2015, as compared to approximately
$959,000 used in investing activities for the same period in 2014. Net cash used for the years ended December 31, 2015 and 2014
was primarily for the purchase of property and equipment.



Net
cash provided by financing activities was approximately $21,637,000 for the year ended December 31, 2015, as compared to $6,544,000
for the same period in 2014. For the year ended December 31, 2015 we received net proceeds of approximately $21,087,000 from cash
acquired on the acquisition of Levon and for the year ended December 31, 2014 we received approximately $6,578,000 from the issuance
of related-party loans.



Non-cash
expenses for the years ended December 31, 2015 and December 31, 2014 primarily consisted of the following non-cash transactions:



| | i)   | Capital
    contribution in respect of related party loans (net of income taxes) in the amount of $393,000 and $1,078,000 for the years
    ended December 31, 2015 and 2014, respectively.                
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                            
| | ii)  | The
    Company purchased an Intangible Asset (CLS Licence) in exchange for an issuance of shares in the amount of $13,814,000 (Note
    14i).                                                             
| |      |                                                                                                                                                                                                            
| | iii) | Assignment
    of notes issued by SciVac to the Company in an amount of $10,611,000. These notes were derecognized from the consolidated
    financial statements (Note 12c).                              
| |      |                                                                                                                                                                                                            
| | iv)  | Capital
    notes in the amount of $23,972,000 were converted into contributed surplus during the year ended December 31, 2014.                                                                            
| |      |                                                                                                                                                                                                            
| | v)   | As
    part of a settlement agreement with FDS and Scigen Singapore, the Company recognized a receivable in the amount of $280,000
    as a contribution to equity during the year ended December 31, 2014.



Off-Balance
Sheet Arrangements



We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to investors.



Related
Party Transactions



|              |  | December 31, 2015 |   |  | December 31, 2014 | 
|------------- |  | ----------------- | - |  | ----------------- | 
|Loans         |  |                   | - |  |                   | 
|              |  |                   |   |  |                   | 
|Capital Notes |  |                   | - |  |                   | 



The
loans and capital notes in the above table were made by certain security holders of the Company. The loans and capital notes were
exchanged for common shares of the Company as part of the Levon Transaction.



59






In
April 2013, SciVac entered into a Development and Manufacturing Agreement with Kevelt AS (“Kevelt”), a company incorporated
under the laws of Estonia and a wholly owned subsidiary of Open Joint Stock Company Pharmsynthez (“Pharmsynthez”),
pursuant to which SciVac agreed to develop the manufacturing process for the production of clinical and commercial quantities
of certain materials in drug substance form.



On
December 10, 2015, the Company entered into a settlement agreement and three separate termination agreements with Pharmsynthez,
to put into order the outstanding agreements and understandings between the parties. Further to this settlement agreement, the
following agreements remain in force (in addition to the termination agreements):



| | ● | On
    December, 29, 2014, SciVac entered into an exclusive distribution agreement with Pharmsynthez, pursuant to which SciVac appointed
    Pharmsynthez as the exclusive distributor of Sci-B-VacTM in the Russian Federation for a term of five years. The term
    of the agreement will automatically continue at the expiration of the initial term, unless either party provides written notice
    to the other party at least 90 days prior to the termination of the initial term. The agreement provides that Pharmsynthez
    must purchase certain minimum quantities of Sci-B-VacTM per each quarter during the term of the agreement, and failure
    to do so will entitle SciVac to either terminate Pharmsynthez’s exclusivity rights or terminate the agreement. Further
    to the abovementioned settlement agreement, the aggregate amount of $468,000 already remitted to SciVac by Pharmsynthez is
    to be credited against future orders of products by Pharmsynthez in accordance with the terms and conditions of the distribution
    agreements. The deposit has been classified as long-term deferred revenue in 2015 and 2014. During the years ended December
    31, 2015 and 2014, no revenue was recognized as contract research and development revenue on completion of the milestones.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | SciVac
    entered into a material transfer agreement with Pharmsynthez and Ferring, dated as of April 30, 2014, pursuant to which SciVac
    and Pharmsynthez agreed to provide rhDNase I material to Ferring for research purposes. The agreement has a one-year term
    but the parties are permitted to terminate the agreement at any time by providing 30 days prior written notice to the other
    parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



The
chairman of the board of both Kevelt and Pharmsynthez is also a director of the Company. As of December 31, 2015, the Company
had deferred revenue related to the above contracts for Kevelt and Pharmsynthez as reflected in the following table:



|                  |  | Total Deferred Revenue |           |  | Short Term |  |           | Long Term | 
|----------------- |  | ---------------------- | --------- |  | ---------- |  | --------- | --------- | 
|Pharmsynthez      |  |                        | 468,750   |  |            |  |           |           | 
|Kevelt            |  |                        | 2,492,670 |  |            |  | 1,583,345 |           | 
|Non-related party |  |                        | 200,000   |  |            |  |           |           | 



SciVac
entered into a services agreement with OPKO Biologics Ltd. (“OPKO Bio”), a subsidiary of OPKO, dated as of March 15,
2015, pursuant to which SciVac agreed to provide certain aseptic process filling services to OPKO Bio for a term of three years.
Payment terms under this agreement are determined in accordance with invoices sent by SciVac to OPKO Bio for services rendered.
OPKO Bio may terminate this agreement at any time by providing 60 days prior written notice to SciVac.



Our
significant contractual obligations as of December 31, 2015:



|                                    |  | Payments due by Period in
    thousands |      
|----------------------------------- |  | --------------------------------------- | -----
|                                    |  | Total                                   |      
|                                    |  |                                         |      
|Capital (Finance) Lease Obligations |  | $                                       | 1,969



60






OUTSTANDING
SECURITIES OF SCIVAC



As
of December 31, 2015, SciVac had an aggregate of 756,599,439 common shares issued and outstanding.



ITEM
6. Directors, Senior Management and Employees.



A.
Directors and Senior Management.



SciVac
is managed by a board of directors, referred to as the Board, which is currently comprised of seven members, and executive officers.
Each of SciVac’s executive officers is appointed by the Board. The table below sets forth SciVac’s directors and executive
officers as of December 31, 2015. The business address for each of SciVac’s directors and executive officers is c/o SciVac
Therapeutics Inc., Gad Feinstein Rd. Rehovot, 7610303, Israel.



|Name                                                            |  | Age |  | Position                                                                     
|--------------------------------------------------------------- |  | --- |  | -----------------------------------------------------------------------------
|Dr.
                                         Curtis A. Lockshin |  | 55  |  | Chief
                                         Executive Officer and Director
|James
                                         J. Martin, CPA   |  | 49  |  | Chief
                                         Financial Officer             
|Steven
                                         D. Rubin        |  | 55  |  | Chairman
                                         of the Board               
|Dr.
                                         Dmitry Genkin      |  | 48  |  | Director                                                                     
|Kate
                                         Inman             |  | 43  |  | Director                                                                     
|Adam
                                         Logal             |  | 37  |  | Director                                                                     
|David
                                         Rector           |  | 69  |  | Director                                                                     
|Craig
                                         Edelstein        |  | 46  |  | Director                                                                     



Our
Executive Officers and Directors



Curtis
A. Lockshin, Ph.D. Dr. Lockshin has been a director and SciVac’s Chief Executive Officer since July 9, 2015. He has
also served as Chief Executive Officer of SciVac Ltd. since September 2014 and as a director since August 2014. Since March 2014,
Dr. Lockshin has served as the Vice President of Research and Operations of Xenetic Biosciences, Inc., a biopharmaceutical company
focused on developing biologic drugs and novel oncology therapeutics. Since May 2013, Dr. Lockshin has served as the President
and Chief Executive Officer of Guardum Pharmaceuticals, LLC, a private pharmaceutical company. From October 2011 to February 2013,
Dr. Lockshin served as Vice President of Corporate R&D Initiatives for OPKO Health, Inc. (NYSE: OPK) (“OPKO”),
a multi-national biopharmaceutical and diagnostics company, developing a range of solutions to diagnose, treat and prevent various
conditions, including point-of-care tests, laboratory developed tests, and proprietary pharmaceuticals and vaccines, following
which he assumed the position of consultant to OPKO until December 2013. Since April 2013, Dr. Lockshin has served on the board
of directors of RXi Pharmaceuticals Corp. (NASDAQ: RXII), a biotechnology company focused on discovering and developing innovative
therapeutics. From March 2011 until December 2013, Dr. Lockshin served as a member of the board of directors for ChromaDex, Inc.,
a natural products company engaged in the dietary supplement, food and beverage, cosmetic and pharmaceutical industries. From
October 2009 to September 2012, Dr. Lockshin served as a member of the board of directors for Sorrento Therapeutics, Inc., a development-stage
biopharmaceutical company. Since April 2004, Dr. Lockshin has also served as a member of the board of directors of the Ruth K.
Broad Biomedical Research Foundation. The foundation is a Duke University Support Corporation that supports basic research related
to Alzheimer’s disease and neurodegeneration via intramural, extramural and international grants. Since 2003, Dr. Lockshin
has worked as an independent consultant, focusing on small private companies in the healthcare, biotechnology and security sectors.
From August 2002 to March 2003, Dr. Lockshin held the position of Director of Discovery Biology at Beyond Genomics, Inc. (now
BG Medicine, Inc.), a company engaged in the discovery of disease-associated biomarkers and identification of therapeutic targets.
Dr. Lockshin held various positions from June 1998 to July 2002 at Sepracor, Inc. (now Sunovion Pharmaceuticals Inc.), a pharmaceutical
company that develops therapeutic products for the central nervous system and respiratory disorders. Dr. Lockshin holds a S.B.
degree in Life Sciences and a Ph.D. in Biological Chemistry from the Massachusetts Institute of Technology.



61






James
J. Martin, C.P.A. Mr. Martin has served as SciVac’s Chief Financial Officer since July 9, 2015. He is also the Chief
Financial Officer of SciVac Ltd. since August 2014. Mr. Martin previously served as Chief Financial Officer of SafeStitch Medical,
Inc., a medical device company, from January 2011 until October 2013, which was shortly after SafeStitch’s acquisition by
TransEnterix, Inc. Since January 2011, Mr. Martin has also served as the Chief Financial Officer of Non-Invasive Monitoring Systems,
Inc. (OTCBB:NIMU), a company engaged in the development, manufacture and marketing of non- invasive, whole body periodic acceleration
therapeutic platforms. From January 2011 through December 2011, Mr. Martin served as Vice President of Finance of Aero Pharmaceuticals,
Inc., referred to as Aero, a privately- held pharmaceutical distributor. From July 2010 until January 2011, Mr. Martin served
as the Controller of SafeStitch, NIMS and Aero. From 2008-2010, Mr. Martin served as the Controller of AAR Aircraft Services,
Inc., an aerospace and defense company, and from 2005-2008, Mr. Martin served as the Controller of Avborne Heavy Maintenance,
Inc., an aviation maintenance repair and overhaul company. In addition to his career in finance and accounting, Mr. Martin served
five years in the United States Navy as an Operations Specialist.



Steven
D. Rubin. Mr. Rubin has served as a director of SciVac since July 9, 2015. He has also served as a director of SciVac Ltd.
since October 2012. Mr. Rubin has served as Executive Vice President – Administration of OPKO since May 2007 and as a director
of OPKO since February 2007. Mr. Rubin served as the Senior Vice President, General Counsel and Secretary of IVAX Corporation
from August 2001 until September 2006. Mr. Rubin currently serves on the board of directors of Tiger Media, Inc. (NYSE MKT:IDI),
a multi-platform media company, Kidville, Inc. (OTCBB:KVIL), which operates large, upscale facilities, catering to newborns through
five-year-old children and their families and offers a wide range of developmental classes for newborns to five-year-olds, Non-Invasive
Monitoring Systems, Inc. (OTCBB:NIMU), a medical device company, Tiger X Medical, Inc. (OTCBB:CDOM), previously an early-stage
orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and spinal
surgical devices, Cocrystal Pharma, Inc. (OTCBB: COCP), formerly Biozone Pharmaceuticals, Inc., a publicly traded biotechnology
company developing new treatments for viral diseases, Sevion Therapeutics, Inc. (OTCBB:SVON), a clinical stage company which discovers
and develops next-generation biologics for the treatment of cancer and immunological diseases, Castle Brands, Inc. (NYSE MKT:ROX),
a developer and marketer of premium brand spirits, and Neovasc, Inc. (TSX:NVC), a company developing and marketing medical specialty
vascular devices. Mr. Rubin previously served as a director of Dreams, Inc. (NYSE MKT: DRJ), a vertically integrated sports licensing
and products company, Safestitch Medical, Inc. prior to its merger with TransEnterix, Inc., and PROLOR Biotech, Inc., prior to
its acquisition by OPKO in August 2013.



Dr.
Dmitry Genkin. Dr. Genkin has served as a director of SciVac since July 9, 2015. He has also served as a director of SciVac
Ltd. since August 27, 2014. Since May 2005, Dr. Genkin has served as the Executive Chairman of Pharmsynthez OAO, a biopharmaceutical
company focused on developing and manufacturing of biologic drugs and novel antiviral and oncology therapeutics (MICEX: LIFE).
From 2002 to October 2013, Dr. Genkin served as a member of the board of directors for of Xenetic Biosciences, Inc., a biopharmaceutical
company focused on developing second generation biologic drugs and vaccines (OTCBB: XBIO).



62






Kate
Inman. Ms. Inman has served as a director of SciVac since July 9, 2015. She has also served as a director of SciVac Ltd. since
October 2012. Ms. Inman currently serves as General Counsel and Secretary for OPKO. Previously, Ms. Inman served as OPKO’s
Deputy General Counsel from 2007 through November 2014 when she was appointed General Counsel. From 2001 to 2007, Ms. Inman practiced
in the areas of Corporate, Mergers & Acquisitions and Securities at the law firm Holland & Knight LLP. Previously, she
worked as a federal law clerk for the Honorable Edward B. Davis, Chief Judge of the U.S. District Court for the Southern District
of Florida, and the Honorable Peter T. Fay, U.S. Court of Appeals for the Eleventh Circuit.



Adam
Logal. Mr. Logal has served as a director of SciVac since July 9, 2015. He has also served as OPKO’s Sr. Vice President
and Chief Financial Officer since April 2014 and as OPKO’s Vice President of Finance, Chief Accounting Officer and Treasurer
since March 2007. From 2002 to 2007, Mr. Logal served in senior management of Nabi Biopharmaceuticals, a publicly traded, biopharmaceutical
company engaged in the development and commercialization of proprietary products. Mr. Logal held various positions of increasing
responsibility at Nabi Biopharmaceuticals, last serving as Senior Director of Accounting and Reporting.



David
Rector. Mr. Rector has served as a director of SciVac since July 9, 2015. Currently, he serves as a director and member of
the compensation and audit committee of the Dallas Gold and Silver Exchange Companies Inc. Mr. Rector has been a director of Sevion
Therapeutics Inc. since February 2002, and the interim Chief Executive Officer of Sevion since January 5, 2015. Prior to becoming
the interim Chief Executive Officer of Sevion, as an independent director, Mr. Rector served on the audit committee and was the
chair of the compensation committee. From January 2014 to January 2015, Mr. Rector was the Chief Operating Officer and a director
of MV Portfolios, Inc. Since 1985, Mr. Rector has been the Principal of The David Stephen Group, which provides enterprise consulting
services to emerging and developing companies in a variety of industries. Mr. Rector has previously served as an executive officer
and a member of the board of directors of numerous other public and private companies. Mr. Rector received a Bachelor of Science
degree in Business/Finance from Murray State University in 1969.



Craig
Edelstein.Mr. Edelstein has served as a director of SciVac since July 9, 2015. He is an active venture investor and
turnaround executive for Frost Group, LLC where he has worked since September 2008, utilizing his skills in finance, technology
evaluation and business strategy. His current work for Frost Group, LLC and his parallel activity as an angel investor have resulted
in a growing portfolio of investments and exits spanning internet/cybersecurity, cleantech, biosciences, and advanced materials.
Mr. Edelstein also has broad operational experience in various industries including software/hardware companies, public affairs/marketing
activities, and hospitality management. In addition to his activities at Frost Group, LLC, Mr. Edelstein has been involved in
his own family’s commercial real estate business, helping to execute a large multiparty land assembly deal and sale. He
sits on the board of directors of Uriel Solar, Infinium Metals, and represents Frost Group, LLC on the board of directors of Morgan
Solar. Mr. Edelstein received his MBA from the Massachusetts Institute of Technology and was a Sloan Fellow, and received his
MPA from The Harvard Kennedy School of Government. He also has a BA from the University of Pennsylvania.



63






B.
Compensation.



The
table below reflects the compensation paid to SciVac’s directors and officers during or with respect to the year ended December
31, 2015.



|Name and Principal Position                                      |  | Salary($) |            |  | Bonus($) |  |   | Option Awards($) |  |  | All Other Compensation($) |  |  | Total($) |  
|---------------------------------------------------------------- |  | --------- | ---------- |  | -------- |  | - | ---------------- |  |  | ------------------------- |  |  | -------- | -
|Dr. Curtis
    A. Lockshin, Chief Executive Officer and Director |  |           | 107,499.96 |  |          |  | — |                  |  |  | —                         |  |  |          | —
|James J. Martin, CPA,
    Chief Financial Officer                |  |           | 94,999.98  |  |          |  | — |                  |  |  | —                         |  |  |          | —
|Steven D. Rubin, Chairman
    of the Board                       |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —
|Dr. Dmitry Genkin,
    Director                                  |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —
|Kate Inman, Director                                             |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —
|Adam Logal, Director                                             |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —
|David Rector, Director                                           |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —
|Craig Edelstein, Director                                        |  |           | —          |  |          |  | — |                  |  |  | —                         |  |  |          | —



C.
Board Practices.



General



In
compliance with the requirements of the Business Corporations Act (British Columbia), under which the Company was incorporated,
the directors are elected by the shareholders to manage, or supervise the management of, the business and affairs of the Company.
In exercising their powers and discharging their responsibilities, they are required to act honestly and in good faith with a
view to the best interests of the Company and to exercise the care, diligence and skill that a reasonably prudent person would
exercise in comparable circumstances.



In
accordance with the recommended guidelines established by Canada’s National Policy 58-201-Corporate Governance Guidelines(“NP 58-201”), the Board has adopted the corporate governance policies described below.



For
the purposes of this section “6.C.–Board Practices”, named executive officers of the Company means the following
individuals (the “NEOs”):



| | a) | The
    Company’s chief executive officer, or an individual who acted in a similar capacity, for any part of the most recently
    completed financial year (“CEO”);                                                                                                                                                                                                                                                                                                                                     
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | The
    Company’s chief financial officer, or an individual who acted in a similar capacity, for any part of the most recently
    completed financial year (“CFO”);                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | c) | each
    of the three most highly compensated executive officers of the Company, including any of its subsidiaries, or the three most
    highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed
    financial year whose total compensation was, individually, more than $150,000, as determined in accordance with subsection
    1.3(6) of Form 51-102F6 Statement of Executive Compensation, for that financial year; and
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | d) | each
    individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of
    the Company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year.                                                                                                                                                                                                                                                           



64






Board
of Directors



The
Board is composed of seven directors, namely, Dr. Curtis A. Lockshin, Dr. Dmitry Genkin, Steven D. Rubin, Kate Inman, Adam Logal,
David Rector and Craig Edelstein. Each of Steven D. Rubin, Kate Inman, Adam Logal, Dr. Dmitry Genkin, David Rector and Craig Edelstein
is an independent director within the meaning of National Instrument (“NI”) 52-110. Directors are considered to be
“independent” if they have no direct or indirect material relationship with the Company. A “material relationship”
is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s
independent judgment. Dr. Curtis A. Lockshin is not considered independent as he is the Chief Executive Officer of the Company.



Board
Mandate



The
Board of Directors Mandate, referred to as the Board Mandate, is to supervise the management of the Company and the Company’s
business and affairs and in doing so to act honestly and in good faith with a view to the best interests of the Company. The Board
is responsible for: (i) approving long-term strategic plans and annual business and capital plans recommended by management, as
well as policies and processes generated by management relating to the authorization of major investments and significant allocations
of capital; (ii) reviewing management’s implementation of the Company’s strategic, business and capital plans; (iii)
reviewing the risks identified by management related to the Company’s business, and management’s systems to manage
such risks; (iv) reviewing reports and recommendations of the Company’s Compensation Committee related to compensation and
other matters relating to human resource management; (v) reviewing reports and recommendations from the Corporate Governance and
Nominating Committee related to the Company’s approach to corporate governance; and (vi) reviewing the Company’s overall
disclosure policy and the Company’s compliance therewith.



The
frequency of meetings of the Board and the nature of agenda items may change from year to year depending upon the activities of
the Company. However, the Board expects to meet at least quarterly and at each meeting there will be a review of the business
of the Company.



The
independent directors are not expected to hold regularly scheduled meetings at which non-independent directors and members of
management are not in attendance. All but one member of the Board are considered to be independent. Where deemed necessary by
the independent directors, the independent directors will hold in-camera sessions exclusive of the non-independent director and
members of management, which process will facilitate open and candid discussion amongst the independent directors.



Position
Descriptions



The
Company has three committees: the Audit Committee; the Compensation Committee; and the Corporate Governance and Nominating Committee.
The chair of each committee is required to ensure that the committee meets when required and performs its duties and to report
to the Board on the activities of the committee. The Board has not yet developed written position descriptions for the chair of
each Board committee.



The
Board has not developed a written position description for the Chairman of the Board. The responsibilities of the Chairman include
the efficient operation of the Board, ensuring that the Board is alert to its obligations to the Company, providing leadership
to the Board and chairing meetings of the Board.



The
Board has not developed a written position description for the CEO; however, the CEO is expected to provide leadership and vision
for the Company, oversee the executive management of the Company, develop long term and short term strategic plans, financial
and operating plans, report to the Board and shareholders and manage relationships with stakeholders.



65






Orientation
and Continuing Education



The
Company provides new directors with copies of relevant financial, technical and other information regarding its R&D programs.
Board members will also be encouraged to communicate with management and the auditor and to keep themselves current with industry
trends and developments. Board members will have full access to the Company’s records. In addition, the Chairman of the
Board will review with each new member (i) certain information and materials regarding the Company, including the role of the
Board and its committees and (ii) the legal obligations of a director of the Company. The Corporate Governance and Nominating
Committee of the Company will be responsible for developing any training programs for directors, if considered necessary.



Ethical
Business Conduct



The
Board has adopted a written Code of Business Conduct and Ethics, referred to as the Ethics Code, for directors, officers and employees.
The Ethics Code is available on the Company’s website at http://ir.scivactherapeutics.com/governance-docs. Information contained
on, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference
herein. If we make any amendment to the Ethics Code or grant any waivers, including any implicit waiver, from a provision of the
Ethics Code, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations
of the SEC.



Pursuant
to the Ethics Code, directors, officers or employees who have concerns or questions about violations of laws, rules, regulations
or the Ethics Code are required to report them to their manager or another person designated in the Ethics Code. The Board, acting
through the Corporate Governance and Nominating Committee and Audit Committee, is ultimately responsible for the Ethics Code and
for monitoring compliance with the Ethics Code.



Nomination
of Directors



The
Corporate Governance and Nominating Committee of the Board consists of Adam Logal, Kate Inman and David Rector, all of whom are
independent directors.



The
Board has approved a written mandate for the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating
Committee considers the competencies and skills that the Board as a whole should possess, the competencies and skills of existing
Board members and the competencies and skills of proposed Board members. The Corporate Governance and Nominating Committee members
will utilize their extensive knowledge of the industry and personal contacts to identify potential nominees that possess the desired
skills and competencies.



Assessments



The
Board and each individual director will be periodically assessed by the Corporate Governance and Nominating Committee regarding
its, his or her effectiveness and contribution. The assessment will consider and take into account:



| | ● | in
    the case of the Board, its mandate; and                                                                                                                                
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                               
| | ● | in
    the case of an individual director, the competencies and skills each individual director is expected to possess in the context
    of the current make-up of the Board.



Term
Limits and Diversity



In
the fall of 2014, the Canadian Securities Administrators (the “CSA”) introduced “comply or explain” policies
requiring companies to either adopt or explain why they have not adopted (a) policies with respect to term limits for directors
and (b) policies and targets designed to increase participation by women in board matters and in executive positions. Given the
re-constitution of the Board following the completion of the Transaction, the Corporate Governance and Nominating Committee has
begun considering the substance of appropriate policies, but has not yet adopted formal policies or targets on either term limits
or diversity.



66






The
Board and the Corporate Governance and Nominating Committee recognize the valuable contributions made to board deliberations and
management by people of different gender, experience and background. Selection is made as per the criteria described above and
elsewhere in this annual report (such as based on merit, skills, qualifications, needs of the Company at the time, etc.). However,
the Board is mindful of the benefit of diversity in the Company’s leadership positions and the need to maximize the effectiveness
of the Board and management in their decision making abilities. Accordingly, in searches for new directors or officers, the Board
considers the level of female representation and diversity within its leadership ranks and this is just one of several factors
used in its search process. The Company currently has one female member on its Board of seven (14.3%).



In
considering the recently adopted CSA guidelines, the Corporate Governance and Nominating Committee has determined to monitor developments
in this area while reviewing the Company’s own practices in order to adopt a policy that is meaningful for the Company.



Audit
Committee



The
Audit Committee’s duties and responsibilities are specified by law and in the Audit Committee Mandate. The Audit Committee,
among other things: oversees the Company’s financial statements and financial disclosures; oversees of the work of the auditors
of the Company, including the auditors’ work in preparing or issuing an audit report and performing other audit, review
or attest services or any other related work; and reviews the Company’s system of internal controls. Any non-audit services
provided to the Company by the Company’s auditors are pre-approved by the Audit Committee. The Audit Committee also oversees
any complaints and concerns regarding accounting, internal controls or auditing matters and the resolution of issues identified
by the Company’s external auditors. The Audit Committee recommends to the Board the firm of independent auditors to be nominated
for appointment by the Company’s shareholders and the compensation of the auditors. The Audit Committee meets as many times
per year as is necessary to carry out its responsibilities.



Composition
of the Audit Committee



Below
are the details of each Audit Committee member, including such person’s name, whether such person is independent and financially
literate (as such terms are defined under NI 52-110 - Audit Committees (“NI 52-110”)) and such person’s
education and experience as it relates to the performance of an audit committee member’s duties.



|Member
    Name       |  | Independent(1) |  | FinanciallyLiterate(2) |  | Education
    & Experience relevant to performance ofaudit committee duties
|--------------------- |  | -------------- |  | ---------------------- |  | ---------------------------------------------------------------------------
|Dr.
    Dmitry Genkin |  | Y              |  | Yes                    |  | Please
    see biography above.                                            
|                      |  |                |  |                        |  |                                                                            
|Steven
    D. Rubin   |  | Y              |  | Yes                    |  | Please
    see biography above.                                            
|                      |  |                |  |                        |  |                                                                            
|Adam
    Logal        |  | Y              |  | Yes                    |  | Please
    see biography above.                                            



Notes:



(1)	To
be considered independent, a member of the committee must not have any direct or indirect “material relationship”
with the Company. A material relationship is a relationship which could, in the view of the Company Board, reasonably interfere
with the exercise of a member’s independent judgment. The Company evaluates the independence of directors, including for
Audit Committee purposes, in accordance with the rules of NASDAQ, notwithstanding that the Company’s common shares are not
listed for trading on the NASDAQ or any other national securities exchange.



(2)	To
be considered financially literate, a member of the committee must have the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and
complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.



67






Audit
Committee Oversight



At
no time since the commencement of the Company’s most recently completed financial year, has a recommendation of the Audit
Committee to nominate or compensate an external auditor not been adopted by the Board.



De-Minimis
Non-Audit Services



At
no time since the commencement of the Company’s most recently completed financial year has the Company relied on the exemptions
contained in section 2.4 of NI 52-110 (De MinimisNon-Audit Services),or an exemption from NI 52-110, in whole
or in part, granted under Part 8 (Exemptions)of NI 52-110.



Pre-Approval
Policies and Procedures



The
Audit Committee has not adopted, and does not expect to adopt, specific policies and procedures for the engagement of non-audit
services; however, as provided for in NI 52-110 and the Audit Committee Mandate, the Audit Committee will be required to pre-approve
all non-audit services to be provided to the Company or its subsidiaries, unless otherwise permitted by NI 52-110.



Overview
of Current Compensation Philosophy



The
Company’s current compensation philosophy is to structure remuneration packages that are sufficiently attractive to recruit,
retain and motivate the kind of executives who will be instrumental in helping the Company achieve its short and long-term objectives,
to provide executives with compensation that is in accordance with existing market standards generally, to align the interests
of executive officers with those of the Company’s shareholders and to link individual executive compensation to the performance
of both the Company and the individual executive.



Given
the recent completion of the Transaction, the Compensation Committee is reviewing the policies outlined below to ensure that the
Company’s compensation structure appropriately takes into account the completion of the Transaction, and the individual
contributions to the Company’s performance made by its NEOs.



Compensation
Committee



The
Company does not have a formal compensation program; however, the compensation committee administers the Company’s compensation
mechanisms. The Compensation Committee, on behalf of the Board, monitors compensation for the executive officers of the Company.
The Compensation Committee has three members, all of whom are independent: Steven Rubin; Adam Logal; and Kate Inman. Steven Rubin
is the Chair of the Compensation Committee. All members of the Compensation Committee are experienced in the oversight of executive
and operational management teams as a result of their experience with various private and public sector businesses.



The
Compensation Committee maintains a mandate and meets as frequently as necessary in order to fulfill its responsibilities and,
in any event, at least annually. The following is a summary description of the mandate and responsibilities of the Compensation
Committee as it relates to NEO compensation:



| | ● | to
    review and approve corporate goals and objectives relevant to NEO compensation, including the evaluation and performance of
    the NEO in light of those corporate goals and objectives, and to make recommendations to the Board with respect to NEO compensation
    levels (including the award of any cash bonuses or share ownership opportunities);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



68






| | ● | to
    consider the implementation of short and long-term incentive plans, including equity-based plans, proposed by management,
    to make recommendations to the Board with respect to these plans and to review such plans after their implementation; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                               
| | ● | to
    review any other benefit plans proposed by management and to make recommendations to the Board with respect to their implementation.                                                                                                                   



All
of the members of the Compensation Committee have direct experience which is relevant to their responsibilities in executive compensation
as each has been, and is currently, involved with compensation matters at other companies, both public and private. For a description
of such experience, please see the director biographies above.



Performance
Factors



Although
no formal performance goals or benchmarks are in place for the NEOs, there are general factors that are considered when the members
of the Compensation Committee are considering NEO compensation. These factors include, but are not limited to:



| | ● | the
    Company’s cash position;                                                                              
| | - | --------------------------------------------------------------------------------------------------------------
| |   |                                                                                                               
| | ● | the
    NEO’s individual contribution to the Company;                                                         
| |   |                                                                                                               
| | ● | the
    long-term interests of the Company and its shareholders;                                              
| |   |                                                                                                               
| | ● | the
    Board’s assessment of each NEO’s individual performance;                                              
| |   |                                                                                                               
| | ● | the
    Company’s share price, earnings per share and market capitalization; and                              
| |   |                                                                                                               
| | ● | the
    NEO’s responsibilities, length of service and levels of compensation provided by industry competitors.



The
Compensation Committee does not have a pre-determined, performance-based compensation plan. Rather, it is expected that the Compensation
Committee will review the performance of the NEOs on at least a yearly basis. The Company’s compensation structure is designed
to reward performance and to be competitive with the compensation arrangements of other life sciences companies of similar size
and scope of operations. With each compensation award (i.e., salaries, cash bonuses or stock option grants), the Compensation
Committee will consider the industry as a whole and each member is expected to provide his or her input as to whether the compensation
grant is fair to the NEO, the Company and its shareholders. Ultimately however, performance-based rewards will be underpinned
by the Company’s financial circumstances.



Recruiting
and Retention



The
Company offers compensation packages that are sufficient to attract and retain the right level of skill, expertise and talent
in an increasingly competitive global market.



The
structure of each remuneration package is well-balanced across the short, medium and longer term elements, so that it is both
attractive to the individual and cost effective for the Company. This balance is achieved by providing base salary at a reasonable
median level as an anchor to make the Company a realistic prospect for talented candidates. In addition, the short term incentives
(including discretionary bonuses) will provide recruits with the opportunity to achieve superior total annual reward through their
own delivery of excellence at individual and business levels. Finally, longer term reward elements (including stock option grants),
which are described in greater detail below, will provide the opportunity to build ownership and growth in the medium and longer
term future in line with the opportunities for success afforded to the Company’s shareholders.



69






Role
of Management in Determining Compensation



The
accountability for decisions on executive remuneration is within the mandate of the Compensation Committee, but management also
has a key role in helping support the Compensation Committee in fulfilling its obligations. For example, the CEO and other senior
executives make recommendations to the Compensation Committee regarding executive officer base salary adjustments, stock-based
grants and discretionary bonuses. The Compensation Committee reviews the basis for these recommendations and is able to exercise
its discretion to modify any of the recommendations prior to making its recommendations to the Board. The CEO does not make a
recommendation to the Compensation Committee with respect to his own remuneration package.



Elements
of Executive Compensation



Executive
compensation is composed of three elements:



| | ● | base
    salaries, which are set at levels which are competitive with the base salaries paid by companies of a comparable size and
    operations within the life sciences industry, thereby enabling the Company to compete for and retain executives critical to
    the Company’s long-term success;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                        
| | ● | discretionary
    cash bonuses, which are considered from time to time, based on individual and corporate performance criteria; and                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                        
| | ● | share
    ownership opportunities through the SciVac Therapeutics Inc. Stock Option Plan (the “Stock Option Plan”), which
    provides additional incentive and aligns the interests of executive officers with the longer term interests of shareholders.                                             



Base
Salary



The
Company strives to pay its executives in the mid-range for salaries of comparable positions and in comparable companies, although
the Company does not formally benchmark its salaries against those of other companies. In making its annual recommendations, the
Compensation Committee considers the distinct contributions of each executive, the financial performance and ability to pay of
the Company and the experience and seniority of each executive.



Short
Term Incentive Compensation - Discretionary Cash Bonuses



The
Company may award discretionary cash bonuses to executive officers and employees of the Company from time to time. The Compensation
Committee will provide recommendations on discretionary cash bonuses from time to time. In arriving at a decision to award and
in determining the amount of discretionary cash bonuses, the Compensation Committee will consider the performance factors described
above under the heading “Performance Factors”, as well as performance measures, including financial results,
budgetary constraints, projects and other initiatives. The payment of bonuses is subject to the final approval of the Board and
the Board has the discretion to amend or reject proposed bonuses in its sole discretion.



Option-Based
Awards



Individual
stock options may be granted by the Board on the recommendation of, in the case of employees, senior management, and, in the case
of executive officers, including the CEO, by the Compensation Committee. Options may be awarded by the Board upon the commencement
of an individual’s employment with the Company, based on the level of such person’s responsibility. Additional option
grants may be made periodically to ensure that the number of stock options granted to any particular individual will be commensurate
with the individual’s level of ongoing responsibility within the Company. In considering additional grants, a number of
factors will be considered, including the role the individual plays in the Company, the number of stock options an individual
has been granted, the exercise price, value and the term of those options.



70






Risks
Associated with the Company’s Compensation Policies and Practices



Neither
the Board nor the Compensation Committee has yet proceeded to a formal evaluation of the implications of the risks associated
with the Company’s compensation policies and practices. As of the date hereof, the Board has no reason to believe that the
Company’s compensation program will result in unnecessary or inappropriate risk-taking, including risks that are likely
to have a material adverse effect on the Company.



Director
and Officer Hedging Prohibition



The
Company’s insider trading policy contains provisions prohibiting, among others, NEOs and directors from purchasing financial
instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange
funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly
or indirectly, by any NEO or director.



Termination
and Change of Control Benefits



The
Company does not have any contracts, agreements, plans or arrangements that provide for payments to a NEO at, following, or in
connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control
of the Company or a change in a NEO’s responsibilities.



D.
Employees.



As
of December 31, 2015, we had 51 employees. These employees primarily consisted of manufacturing, research and development, general
and administrative, regulatory and quality assurance positions.



E.
Share Ownership.



The
following security ownership information is set forth, as of March 22, 2016 with respect to (i) each shareholder known by SciVac
to be a beneficial owner of more than 5% of SciVac common shares, (ii) each of the current directors of SciVac, (iii) each of
the named executive officers of SciVac and (iv) all current directors and executive officers as a group (8 persons). Beneficial
ownership percentages set forth in the table below are based on 756,599,439 SciVac common shares outstanding on March 22, 2016.
Other than as set forth below, SciVac is not aware of any other shareholder who may be deemed to be a beneficial owner of more
than 5% of SciVac common shares. Unless otherwise indicated, the address of each beneficial owner is c/o SciVac Therapeutics Inc.,
Gad Feinstein Rd. POB 580 Rehovot, 7610303, Israel.



|Names and Address of Beneficial Owner                            |  | Number of Shares
    Beneficially Owned |             |     | % of Shares
    Owned | 
|---------------------------------------------------------------- |  | --------------------------------------- | ----------- | --- | --------------------- | 
|Directors and Officers:                                          |  |                                         |             |     |                       | 
|Dr. Curtis
    A. Lockshin, Chief Executive Officer and Director |  |                                         | 379,056     |     |                       | 
|James J. Martin, Chief
    Financial Officer                     |  |                                         | 199,803     |     |                       | 
|Steven D. Rubin, Chairman
    of the Board                       |  |                                         | -           |     |                       | 
|Dr. Dmitry Genkin,
    Director                                  |  |                                         | 182,467,783 | (1) |                       | 
|Kate Inman, Director                                             |  |                                         | -           |     |                       | 
|Adam Logal, Director                                             |  |                                         | -           |     |                       | 
|David Rector, Director                                           |  |                                         | -           |     |                       | 
|Craig Edelstein, Director                                        |  |                                         | -           |     |                       | 
|All Directors and Officers as a Group (8 persons)                |  |                                         | 183,046,642 |     |                       | 
|                                                                 |  |                                         |             |     |                       | 
|5% Owners                                                        |  |                                         |             |     |                       | 
|CLS Therapeutics Limited                                         |  |                                         | 147,403,443 |     |                       | 
|OPKO Health, Inc.                                                |  |                                         | 185,129,319 |     |                       | 
|Barry Honig                                                      |  |                                         | 74,349,080  | (2) |                       | 
|Michael Brauser                                                  |  |                                         | 61,183,738  | (3) |                       | 



71






| | *   | Less
    than one percent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (1) | Includes
    147,403,443 shares held by CLS Therapeutics Limited, of which Mr. Genkin is a 50% shareholder, over which Mr. Genkin exercises
    shared voting and dispositive power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (2) | Includes
                                         (i) 6,157,009 common shares held by GRQ Consultants, Inc. (“GRQ”), (ii) 11,394,234
                                         common shares held by GRQ Consultants, Inc. 401K (the “401K”), (iii) 20,017,000
                                         common shares held by GRQ Consultants, Inc. Roth 401K FBO Barry Honig (the “Roth
                                         401K”) and (iv) 700,600 common shares held by Barry and Renee Honig Charitable
                                         Foundation, Inc. (the “Foundation”). Mr. Honig is the President of GRQ and
                                         trustee of the 401K, Roth 401K and Foundation and in such capacities holds voting and
                                         dispositive power over the securities held by such entities. The information contained
                                         in this footnote 2 derives from Mr. Honig’s Amendment No. 1 to Schedule 13G, filed
                                         with the SEC on February 2, 2016. The address for Mr. Honig is 555 S. Federal Hwy., Suite
                                         450, Boca Raton, FL 33432.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (3) | Includes
    7,101,244 shares held by Grander Holdings, Inc. of which Mr. Brauser is the President (“Grander Inc.”); 18,945,919
    shares held by Grander Holdings, Inc. 401K of which Mr. Brauser is the trustee (“Grander 401K”); 3,234,274 shares
    held by Birchtree Capital, LLC of which Mr. Brauser is the manager (“Birchtree”); 17,219,003 shares held by Greenstone
    Capital, LLC of which Mr. Brauser is the manager (“Greenstone”); 10,000,000 shares held by Michael & Betsy
    Brauser TBE (“MBTBE”) and 1,500,000 shares held by the Betsy and Michael Brauser Charitable Family Foundation
    of which Mr. Brauser is the director (the “Foundation”). The information contained in this footnote 3 derives
    from Mr. Brauser’s Schedule 13G, filed with the SEC on February 23, 2016. The address for Mr. Brauser is 4400 Biscayne
    Blvd., Suite 450, Boca Raton, FL 33432.                                                                                                                                                                                                                                                                                                                           



ITEM
7. Major Shareholders and Related Party Transactions.



A.
Major Shareholders.



Except
as set forth in “Item 6. Directors, Senior Management and Employees—E. Share Ownership”, to the best of SciVac’s
knowledge, no other person beneficially owns 5.0% or more of SciVac’s common shares outstanding as of March 22, 2016. None
of SciVac’s shareholders has different voting rights from other shareholders. Other than as described herein, to the best
of SciVac’s knowledge, SciVac is not owned or controlled, directly or indirectly, by another corporation, by any foreign
government or by any natural person or legal persons, severally or jointly, and SciVac is not aware of any arrangement that may,
at a subsequent date, result in a change of control of SciVac.



B.
Related Party Transactions.



In
April 2013, SciVac entered into a Development and Manufacturing Agreement with Kevelt AS (“Kevelt”), a company incorporated
under the laws of Estonia and a wholly owned subsidiary of Open Joint Stock Company Pharmsynthez (“Pharmsynthez”),
pursuant to which SciVac agreed to develop the manufacturing process for the production of clinical and commercial quantities
of certain materials in drug substance form.



72






The
Company entered into two agreements with Pharmsynthez:



| | ● | On
    December, 29, 2014, SciVac entered into an exclusive distribution agreement with Pharmsynthez, pursuant to which SciVac appointed
    Pharmsynthez as the exclusive distributor of Sci-B-VacTM in the Russian Federation for a term of five years. The term
    of the agreement will automatically be renewed for an undefined period upon the expiration of the initial term, unless either
    party provides written notice to the other party at least 90 days prior to the termination of the initial term. The agreement
    provides that Pharmsynthez must purchase certain minimum quantities of Sci-B-VacTM per each quarter during the term of
    the agreement, and failure to do so will entitle SciVac to either terminate Pharmsynthez’s exclusivity rights or terminate
    the agreement. SciVac may also terminate the agreement upon 30 days prior written notice if Pharmsynthez distributes Sci-B-VacTM
    outside of the Russian Federation. Pharmsynthez is subject to non-compete and non-assignment obligations during the term of
    the agreement.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ● | SciVac
    entered into a material transfer agreement with Pharmsynthez and Ferring, dated as of April 30, 2014, pursuant to which SciVac
    and Pharmsynthez agreed to provide rhDNase material to Ferring for research purposes. The agreement has a one-year term but
    the parties are permitted to terminate the agreement at any time by providing 30 days prior written notice to the other parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



The
chairman of the board of both Kevelt and Pharmsynthez, Dmitry Genkin, is also a director of the Company. As of December 31, 2015,
the Company had deferred revenue related to the above contracts for Kevelt and Pharmsynthez as reflected in the following table:



|                  |  | Total Deferred
    Revenue |           |  | Short Term |  |           | Long Term | 
|----------------- |  | -------------------------- | --------- |  | ---------- |  | --------- | --------- | 
|Pharmsynthez      |  |                            | 468,750   |  |            |  |           |           | 
|Kevelt            |  |                            | 2,492,670 |  |            |  | 1,583,345 |           | 
|Non-related party |  |                            | 200,000   |  |            |  |           |           | 



C.
Interests of Experts and Counsel.



Not
applicable.



ITEM
8. Financial Information.



A.
Financial Statements and Other Financial Information.



See
“Item 18. Financial Statements” for a list of all financial statements filed as part of this Annual Report on Form
20-F.



Legal
Proceedings



SciVac
is from time to time involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business.
SciVac does not believe any such legal proceedings or claims will have, individually or in the aggregate, a material adverse effect
on SciVac’s business, liquidity, results of operations, or financial position. Litigation, however, is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm SciVac’s business.



As
publicly announced by the Company on July 30, 2015, following discussions with the Israeli Ministry of Health, referred to as
the IMOH, the Company recalled from the market all Sci-B-VacTM sold by the Company since January 1, 2012, which primarily
affected the Israeli and Hong Kong markets. The Company carried out the recall solely as a precautionary measure, as, following
inspection by SciVac, it was determined that certain unshipped packages of the Sci-B-VacTM hepatitis B vaccine contained
a small number of damaged vials. SciVac then reported its findings to the IMOH. There have been no reports of harm to any patients,
nor have there been any reports with respect to Sci-B-Vac’sTM efficacy or safety. The Company ultimately determined
that an issue in the labeling process caused the damage. In September, 2015, the Company received approval from the IMOH to resume
all standard manufacturing, including labeling and release of Sci-B-VacTM to the market, following corrective actions to
the automated labeling process and an inspection of the Company’s facilities. Because the recall was not based on the safety
or efficacy of Sci-B-VacTM, the Company continued all other aspects of manufacturing without interruption during the brief
time period following the recall.



73






On
August 2, 2015, the Company was served in Israel with a Motion to Approve a Class Action, referred to as the Motion. The Motion
and underlying claim was filed in response to the recall discussed above, alleging that through purported actions or omissions,
SciVac violated patients’ autonomy, misled patients and violated provisions of the Israeli Law of Patients’ Rights.
The claimant seeks only monetary damages in the amount of NIS 150,000. The Company has provided notice of the Motion to its insurance
broker and they have retained counsel on behalf of the Company. A pre-trial hearing that had been scheduled for March 10, 2016
has been rescheduled for June 28, 2016 in order to provide the parties an opportunity to settle the matter. The Company believes
that the Motion and the underlying claim are without merit and intends to vigorously defend against it; however, there can be
no assurance that the Company will be successful in its defense.



Dividend
Policy



SciVac
has never declared or paid cash dividends to our shareholders and it does not anticipate paying cash dividends in the foreseeable
future.



B.
Significant Changes.



No
significant changes with respect to our consolidated financial statements have occurred since December 31, 2015.



ITEM
9. The Offer and Listing.



9.A.4
Offer and Listing Details



SciVac’s
common shares are traded in Canada on the TSX under the symbol “VAC” and in the United States on the OTCQX under the
symbol “SVACF.” The bid quotations reported by the OTCQX reflect inter-dealer prices, without retail mark-up, mark-down
or commission, and may not represent actual transactions.



For
the periods indicated, the following tables set forth the high and low market prices of SciVac’s common shares, as reported
by the TSX and the OTCQX. The prices shown for SciVac common shares, as reported by the TSX, are shown in Canadian dollars and
the per share prices as reported by the OTCQX are shown in U.S. dollars.



74






|Period:         |  | SciVac/TSX (1) 
    (Canadian Dollars) |      |  | SciVac/OTCQX
    (U.S. Dollars) | 
|--------------- |  | -------------------------------------- | ---- |  | ------------------------------- | 
|Annual          |  | High                                   |      |  | Low                             | 
|2015            |  |                                        | 0.34 |  |                                 | 
|2014            |  |                                        | 0.49 |  |                                 | 
|2013            |  |                                        | 0.54 |  |                                 | 
|                |  |                                        |      |  |                                 | 
|Last Six Months |  |                                        |      |  |                                 | 
|February        |  |                                        | 0.17 |  |                                 | 
|January         |  |                                        | 0.19 |  |                                 | 
|December        |  |                                        | 0.19 |  |                                 | 
|November        |  |                                        | 0.21 |  |                                 | 
|October         |  |                                        | 0.25 |  |                                 | 
|September       |  |                                        | 0.30 |  |                                 | 
|                |  |                                        |      |  |                                 | 
|2015            |  |                                        |      |  |                                 | 
|First Quarter   |  |                                        | 0.51 |  |                                 | 
|Second Quarter  |  |                                        | 0.61 |  |                                 | 
|Third Quarter   |  |                                        | 0.63 |  |                                 | 
|Fourth Quarter  |  |                                        | 0.25 |  |                                 | 
|                |  |                                        |      |  |                                 | 
|2014            |  |                                        |      |  |                                 | 
|First Quarter   |  |                                        | 0.41 |  |                                 | 
|Second Quarter  |  |                                        | 0.30 |  |                                 | 
|Third Quarter   |  |                                        | 0.49 |  |                                 | 
|Fourth Quarter  |  |                                        | 0.34 |  |                                 | 



| | (1) | The
    SciVac common shares began trading on the TSX on July 14, 2015 upon completion of a reverse takeover transaction of Levon
    Resources Ltd. All trading data prior to this time corresponds to Levon Resources Ltd.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9.B.
Plan of distribution



Not
applicable.



9.C.
Market for Common Shares



SciVac’s
common shares are traded on the TSX under the symbol “VAC” and on the OTCQX under the symbol “SVACF.”



9.D.
Selling shareholders



Not
applicable.



9.E.
Dilution



Not
applicable.



9.F.
Expenses of the issue



Not
applicable.



75






ITEM
10. Additional Information.



A.
Share Capital.



Not
applicable.



B.
Memorandum and Articles of Association.



For
a summary of material provisions of SciVac’s articles of incorporation and the Business Corporations Act of British Columbia,
refer to “Comparison of Rights of SciVac Shareholders and VBI Stockholders” beginning on page 207 of SciVac’s
Registration Statement on Amendment No. 5 to Form F-4, filed with the SEC on March 25, 2016 and incorporated herein by reference.



C.
Material Contracts



For
a description of SciVac’s material agreements relating to strategic collaborations and licensing arrangements and other
material agreements, refer to “Item 4. Information on the Company – Partnerships and Licensing.” The descriptions
provided do not purport to be complete and are qualified in their entirety by the complete agreements.



D.
Exchange Controls.



There
is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would
affect the remittance of dividends, interest or other payments by SciVac to non-resident holders of SciVac’s common shares,
other than withholding tax requirements.



E.
Taxation.



The
following general discussion sets forth the material U.S. federal income tax consequences of the ownership and disposition of
SciVac common shares to U.S. holders (as defined below). This discussion is based on the Internal Revenue Code, referred to as
the Code, applicable Treasury regulations, judicial authority, administrative rulings, and the Canada-U.S. Tax Treaty, all as
of the date of this annual report, and all of which are subject to change, possibly with retroactive effect. No ruling has been
sought from the Internal Revenue Service, referred to as the IRS, with respect to any of the U.S. federal income tax consequences
described below, and there can be no assurance that the IRS or a court will not take a contrary position.



This
discussion is for general information purposes only and does not purport to be a complete analysis or listing of all potential
U.S. federal income tax considerations that may apply to a U.S. holder as a result of the ownership and disposition of SciVac
common shares. This discussion does not take into account the individual facts and circumstances of any particular U.S. holder
that may affect the U.S. federal income tax consequences to the U.S. holder, including specific tax consequences to a U.S. holder
under an applicable tax treaty, and is not intended to be, and should not be construed as, legal or tax advice with respect to
any U.S. holder. In addition, this discussion does not address any U.S. state or local or any non-U.S. tax considerations, any
U.S. federal estate, gift, generation skipping or alternative minimum tax considerations, or any U.S. federal tax consequences
other than U.S. federal income tax consequences of ownership and disposition of SciVac common shares.



This
discussion assumes that the U.S. holders hold their SciVac common shares as capital assets within the meaning of Section 1221
of the Code (generally, property held for investment). This discussion does not address the consequences to U.S. holders subject
to special tax rules, such as:



| | ● | banks,
    financial institutions, underwriters, or insurance companies;
| | - | ------------------------------------------------------------------------
| |   |                                                                         
| | ● | real
    estate investment trusts and regulated investment companies;   



76






| | ● | tax-exempt
    organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts;                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                
| | ● | former
    citizens or residents of the United States;                                                                                                         
| |   |                                                                                                                                                                
| | ● | entities
    or arrangements that are treated as partnerships for U.S. federal income tax purposes and investors in such partnerships;                         
| |   |                                                                                                                                                                
| | ● | dealers
    or traders in securities, commodities, or currencies;                                                                                              
| |   |                                                                                                                                                                
| | ● | grantor
    trusts;                                                                                                                                            
| |   |                                                                                                                                                                
| | ● | S
    corporations;                                                                                                                                            
| |   |                                                                                                                                                                
| | ● | U.S.
    holders subject to the alternative minimum tax;                                                                                                       
| |   |                                                                                                                                                                
| | ● | U.S.
    holders whose “functional currency” is not the U.S. dollar;                                                                                           
| |   |                                                                                                                                                                
| | ● | U.S.
    holders who received SciVac common shares through the exercise of options or otherwise as compensation or through a tax-qualified
    retirement plan;
| |   |                                                                                                                                                                
| | ● | U.S.
    holders who own (directly, indirectly, or through attribution) 5% or more by vote or value of the outstanding SciVac common
    shares; or            
| |   |                                                                                                                                                                
| | ● | U.S.
    holders holding SciVac common shares as part of a straddle, synthetic security, hedge, conversion transaction, or other integrated
    investment.    



U.S.
holders that are subject to special provisions under the Code, including U.S. holders described immediately above, should consult
their tax advisors regarding the tax consequences of the ownership and disposition of SciVac common shares.



As
used in this discussion, a “U.S. holder” means a beneficial owner of SciVac common shares who is for U.S. federal
income tax purposes:



| | ● | A
    citizen or resident of the United States;                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                     
| | ● | A
    corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any
    state or political subdivision thereof;                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                     
| | ● | A
    trust that (A) is subject to the primary jurisdiction of a court within the United States and the control of one or more U.S.
    persons with respect to all of its substantial decisions, or (B) has a valid election in effect under applicable Treasury
    regulations to be treated as a U.S. person; or
| |   |                                                                                                                                                                                                                                                                                                                     
| | ● | An
    estate that is subject to U.S. federal income tax on its income, regardless of source.                                                                                                                                                                                                                       



If
a partnership, including for this purpose any entity or arrangement that is treated as a partnership for U.S. federal income tax
purposes, holds SciVac common shares, the tax treatment of a partner in such partnership will generally depend upon the status
of the partner and the activities of the partnership. A holder that is a partnership and the partners in such partnership should
consult their tax advisors about the U.S. federal income tax consequences of the ownership and disposition of SciVac common shares.



The
following discussion is subject to the rules described below under the heading “Passive Foreign Investment Company Rules.”



77






Taxation
of Dividends



A
U.S. holder that receives a distribution, including a constructive distribution, with respect to SciVac common shares will be
required to include the amount of the distribution in gross income as a dividend (without reduction for any foreign income tax
withheld from the distribution) to the extent of the current or accumulated “earnings and profits” of SciVac, as computed
for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated “earnings and
profits” of SciVac, the distribution will be treated first as a tax-free return of capital to the extent of a U.S. holder’s
tax basis in the SciVac common shares, and thereafter as a gain from the sale or exchange of the SciVac common shares (see “Sale
or Other Taxable Disposition of SciVac Common Shares,” below). However, SciVac may not maintain the calculations of its
earnings and profits in accordance with U.S. federal income tax principles, and each U.S. holder may have to assume that any distribution
by SciVac with respect to its common stock will constitute dividend income. Dividends received on SciVac common shares by corporate
U.S. holders generally will not be eligible for the “dividends received deduction.”



Subject
to certain significant conditions and limitations, any Canadian taxes paid on or withheld from distributions from SciVac and not
refundable to a U.S. holder may be credited against the U.S. holder’s U.S. federal income tax liability or, alternatively,
may be deducted from the U.S. holder’s taxable income. The election to deduct, rather than credit, foreign taxes, is made
on a year-by-year basis and applies to all foreign taxes paid by a U.S. holder or withheld from a U.S. holder that year. Dividends
paid on the SciVac common shares generally will constitute income from sources outside the United States and be categorized as
“passive category income” or, in the case of some U.S. holders, as “general category income” for U.S.
foreign tax credit purpose. If the dividends are taxed as qualified dividend income (as discussed below), the amount of the dividend
taken into account for purposes of calculating the foreign tax credit limitation will be subject to certain limitations.



It
is possible that SciVac is, or at some future time will be, at least 50% owned by U.S. persons. Dividends paid by a foreign corporation
that is at least 50% owned by U.S. persons may be treated as U.S. source income (rather than foreign source passive income) for
foreign tax credit purposes to the extent the foreign corporation has more than an insignificant amount of U.S. source income.
The effect of this rule may be to treat a portion of any dividends paid by SciVac as U.S. source income, which may limit a U.S.
holder’s ability to claim a foreign tax credit with respect to foreign taxes payable or deemed payable in respect of the
dividends. The Code permits a U.S. holder entitled to benefits under the Canada-U.S. Income Tax Treaty to elect to treat any SciVac
dividends as foreign source income for foreign tax credit purposes if the dividend income is separated from other income items
for purposes of calculating the U.S. holder’s foreign tax credit with respect to Canadian taxes withheld, if any, on the
distribution of such dividend income. The rules relating to the determination of the foreign tax credit are complex, and U.S.
holders should consult their advisors regarding the availability of a foreign tax credit in their particular circumstances.



With
respect to certain non-corporate U.S. holders, including individual U.S. holders, dividends will be taxed at the lower capital
gains rates (currently, up to 20%) applicable to “qualified dividend income,” provided that (i) the SciVac common
shares are readily tradable on an established securities market in the United States (or certain other requirements are met),
(ii) SciVac is neither a passive foreign investment company nor treated as such with respect to a U.S. Holder (as discussed below
under “—Passive Foreign Investment Company Rules”) for its taxable year in which the dividend is paid and the
preceding taxable year, and (iii) certain holding period requirements are met. Under IRS authority, stock is considered for the
purpose of clause (i) above to be readily tradable on an established securities market in the United States if the stock is listed
on NASDAQ, as the SciVac common shares are expected to be. There can be no assurance that the SciVac common shares will be considered
readily tradable on an established securities market in the future. You should consult your tax advisors regarding the availability
of the lower capital gains rate applicable to qualified dividend income for any dividends SciVac pays with respect to the SciVac
common shares.



Dividends
may be paid in foreign currency. Generally, a U.S. holder should not recognize any foreign currency gain or loss if the foreign
currency is converted into U.S. dollars on the date the payment is received. However, any gain or loss resulting from currency
exchange fluctuations during the period from the date the U.S. holder includes the dividend payment in income to the date such
U.S. holder actually converts the payment into U.S. dollars will be treated as ordinary income or loss. That currency exchange
or loss (if any) generally will be income or loss from U.S. sources for foreign tax credit purposes.



78






The
additional 3.8% Medicare surtax (described below) may apply to dividends received by certain U.S. holders who meet certain modified
adjusted gross income thresholds.



The
dividend rules are complex, and U.S. holders should consult their own tax advisor regarding the application of such rules.



Sale
or Other Taxable Disposition of SciVac Common Shares



A
U.S. holder will recognize gain or loss on the sale or other taxable disposition of SciVac common shares in an amount equal to
the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) the U.S. holder’s
tax basis (determined under U.S. federal income tax rules) in the SciVac common shares sold or otherwise disposed of. Any such
gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if, at the time of the sale
or other disposition, the SciVac common shares has been held for more than one year. The source of any such gain or loss is generally
determined by reference to the residence of the holder, such that it generally will be treated as U.S. source income for foreign
tax credit limitation purposes in the case of a sale, exchange, or other taxable disposition by a U.S. holder.



Preferential
tax rates (currently, with a maximum rate of 20%) apply to long-term capital gains of a U.S. holder that is an individual, estate,
or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. holder that is a corporation. Deductions
for capital losses are subject to significant limitations under the Code.



The
additional 3.8% Medicare surtax (described below) may apply to gains recognized upon the sale, exchange, or other taxable disposition
of SciVac common shares by certain U.S. holders who meet certain modified adjusted gross income thresholds.



U.S.
holders should consult their own tax advisors regarding the U.S. federal income tax consequences of receiving currency other than
U.S. dollars upon the disposition of their SciVac common shares.



Passive
Foreign Investment Company Rules



PFIC
Status of SciVac



If
SciVac were to constitute a “passive foreign investment company” within the meaning of Section 1297 of the Code, referred
to as a PFIC, as defined below, for any year during a U.S. holder’s holding period, then potentially adverse rules may affect
the U.S. federal income tax consequences to a U.S. holder from the ownership and disposition of SciVac common shares.



SciVac
generally will be a PFIC if, for any tax year, (a) 75% or more of the gross income of SciVac is passive income, which we refer
to as the income test, or (b) 50% or more of the value of SciVac’s assets either produce passive income or are held for
the production of passive income, based on the quarterly average of the fair market value of those assets, which we refer to as
the asset test. “Passive income” generally includes, for example, dividends, interest, certain rents and royalties,
certain gains from the sale of stock and securities, and certain gains from commodities transactions.



For
purposes of the PFIC income test and asset test described above, if SciVac owns, directly or indirectly, 25% or more of the total
value of the outstanding shares of another corporation, SciVac will be treated as if it (a) held a proportionate share of the
assets of the other corporation and (b) received directly a proportionate share of the income of the other corporation. In addition,
for purposes of the PFIC income test and asset test described above, and assuming certain other requirements are met, “passive
income” does not include certain interest, dividends, rents, or royalties that are received or accrued by SciVac from certain
“related persons,” to the extent those items are properly allocable to the income of the related person that is not
passive income.



79






Based
on current business plans and financial expectations, including those resulting from the consummation of the Merger, it is expected
that SciVac will not be a PFIC immediately after the closing date of the Merger. However, since PFIC status is made on an annual
basis, determination about SciVac’s status as a PFIC will depend upon financial information that is not presently known.
The determination of whether any corporation is, or will be, a PFIC for a tax year depends, in part, on the application of complex
and fact-sensitive U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation
will be a PFIC for any tax year depends on the assets and income of the corporation over the course of each such tax year and,
as a result, cannot be predicted with certainty as of the date of this summary. Accordingly, there can be no assurance that that
SciVac will not be a PFIC for 2016 or any subsequent year. Each U.S. holder should consult its own tax advisors regarding the
PFIC status of SciVac and any subsidiary of SciVac.



In
any year in which SciVac is classified as a PFIC, a U.S. holder will be required to file an annual report with the IRS containing
the information required by Treasury regulations and/or other IRS guidance. In addition to penalties, a failure to satisfy these
reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. holders should
consult their own tax advisors regarding the requirements of filing these information returns under these rules, including the
requirement to file an IRS Form 8621.



Under
applicable attribution rules, if SciVac is a PFIC, U.S. holders will generally be deemed to own their proportionate share of SciVac’s
direct or indirect equity interest in any company that is also a PFIC, which we refer to as a Subsidiary PFIC, and will generally
be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described
below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by SciVac
or another Subsidiary PFIC, both as if the U.S. holders directly held the shares of the Subsidiary PFIC. In addition, U.S. holders
may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition
of SciVac common shares. Accordingly, U.S. holders should be aware that they could be subject to tax under the PFIC rules even
if no distributions are received and no redemptions or other dispositions of SciVac common shares are made.



Default
PFIC Rules under Section 1291 of the Code



If
SciVac is a PFIC for any tax year during which a U.S. holder owns SciVac common shares, the U.S. federal income tax consequences
to the U.S. holder of the ownership and disposition of SciVac common shares will depend on whether and when the U.S. holder makes
an election to treat SciVac and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF”
under Section 1295 of the Code, which we refer to as a QEF Election, or makes a mark-to-market election under Section 1296 of
the Code, which we refer to as a Mark-to-Market Election. A U.S. holder that does not make either a QEF Election or a Mark-to-Market
Election will be referred to in this summary as a Non-Electing U.S. Holder.



A
Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain
recognized on the sale or other taxable disposition of SciVac common shares and (b) any “excess distribution” received
on the SciVac common shares. A distribution generally will be classified as an “excess distribution” to the extent
that the distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions
received during the three preceding tax years (or during a U.S. holder’s holding period for the SciVac common shares, if
shorter).



Under
Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of SciVac common shares (including an indirect
disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on SciVac common shares or
with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding
period for the respective SciVac common shares. The amount of any such gain or excess distribution allocated to the tax year of
disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as
ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to
U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would
be imposed on the tax liability for each such year, calculated as if the tax liability had been due in each such year.



80






If
SciVac is a PFIC for any tax year during which a Non-Electing U.S. Holder holds SciVac common shares, SciVac will continue to
be treated as a PFIC with respect to the Non-Electing U.S. Holder, regardless of whether SciVac ceases to be a PFIC in one or
more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which
will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if the SciVac common shares were
sold on the last day of the last tax year for which SciVac was a PFIC.



If
a Non-Electing U.S. Holder who is an individual dies while owning SciVac common shares, the Non-Electing U.S. Holder’s successor
would be ineligible to receive a step-up in tax basis of such shares.



QEF
Election



A
U.S. holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its SciVac common
shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its SciVac
common shares. A U.S. holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on the
U.S. holder’s pro rata share of (a) the net capital gain of SciVac, which will be taxed as long-term capital gain to the
U.S. holder, and (b) the ordinary earnings of SciVac, which will be taxed as ordinary income to the U.S. holder. Generally, “net
capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary
earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. holder that makes a
QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which SciVac is a PFIC, regardless
of whether such amounts are actually distributed to the U.S. holder by SciVac. However, for any tax year in which SciVac is a
PFIC and has no net income or gain, U.S. holders that have made a QEF Election would not have any income inclusions as a result
of the QEF Election. If a U.S. holder that made a QEF Election has an income inclusion, the U.S. holder may, subject to certain
limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge.



A
U.S. holder that makes a timely and effective QEF Election with respect to SciVac generally (a) may receive a tax-free distribution
from SciVac to the extent that the distribution represents “earnings and profits” of SciVac that were previously included
in income by the U.S. holder because of the QEF Election and (b) will adjust the U.S. holder’s tax basis in the SciVac common
shares to reflect the amount included in income or allowed as a tax-free distribution because of the QEF Election. In addition,
a U.S. holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition
of SciVac common shares.



The
procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether
the QEF Election is timely. A QEF Election will be treated as “timely” if the QEF Election is made for the first year
in the U.S. holder’s holding period for the SciVac common shares in which SciVac was a PFIC. A U.S. holder may make a timely
QEF Election by filing the appropriate QEF Election documents with a timely filed U.S. federal income tax return for such year.
If a U.S. holder does not make a timely and effective QEF Election for the first year in the U.S. holder’s holding period
for the SciVac common shares, the U.S. holder may still be able to make a timely and effective QEF Election in a subsequent year
if the U.S. holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed
under the rules of Section 1291 of the Code discussed above) as if such SciVac common shares were sold for their fair market value
on the day the QEF Election is effective. If a U.S. holder owns PFIC stock indirectly through another PFIC, separate QEF Elections
must be made for the PFIC in which the U.S. holder is a direct shareholder and the Subsidiary PFIC in order for the QEF rules
to apply to both PFICs.



A
QEF Election will apply to the tax year for which the QEF Election is timely made and to all subsequent tax years, unless the
QEF Election is invalidated or terminated or the IRS consents to revocation of the QEF Election. If a U.S. holder makes a QEF
Election and, in a subsequent tax year, SciVac ceases to be a PFIC, the QEF Election will remain in effect (although it will not
be applicable) during those tax years in which SciVac is not a PFIC. Accordingly, if SciVac becomes a PFIC in another subsequent
tax year, the QEF Election will be effective and the U.S. holder will be subject to the QEF rules described above during any subsequent
tax year in which SciVac qualifies as a PFIC.



81






SciVac
will use commercially reasonable efforts to make available to U.S. holders, upon their written request: (a) information as to
its status as a PFIC and the PFIC status of any subsidiary in which SciVac owns more than 50% of such subsidiary’s total
aggregate voting power, and (b) for each year in which SciVac is a PFIC, the information and documentation that a U.S. holder
making a QEF Election with respect to SciVac and any more than 50% owned subsidiary which constitutes a PFIC is reasonably required
to obtain for U.S. federal income tax purposes. SciVac may elect to provide such information on its website. Because SciVac may
hold 50% or less of the aggregate voting power of one or more Subsidiary PFICs at any time, U.S. holders should be aware that
there can be no assurance that SciVac will satisfy record keeping requirements that apply to a QEF, or that SciVac will supply
U.S. holders with information that the U.S. holders are required to report under the QEF rules, in the event that a subsidiary
of SciVac is a PFIC and a U.S. holder wishes to make a QEF Election with respect to any such Subsidiary PFIC. With respect to
Subsidiary PFICs for which SciVac does not obtain the required information, U.S. holders will continue to be subject to the rules
discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.



U.S.
holders should consult their own tax advisors regarding the availability of, and procedure for making, a QEF Election with respect
to SciVac and any Subsidiary PFIC.



A
U.S. holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely
filed U.S. federal income tax return. However, if SciVac does not provide the required information with regard to SciVac or any
of its Subsidiary PFICs, U.S. holders will not be able to make a QEF Election for the entity and will continue to be subject to
the rules discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.



Mark-to-Market
Election



A
U.S. holder may make a Mark-to-Market Election only if the SciVac common shares are marketable stock. The SciVac common shares
generally will be “marketable stock” if the SciVac common shares are regularly traded on (a) a national securities
exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to
section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by
a governmental authority of the country in which the market is located, provided that (i) the foreign exchange has trading volume,
listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which
the foreign exchange is located, together with the rules of the foreign exchange, ensure that such requirements are actually enforced
and (ii) the rules of the foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such
a qualified exchange or other market, the stock generally will be “regularly traded” for any calendar year during
which the stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. SciVac common
shares are expected to constitute “marketable stock” as long as they remain listed on the NASDAQ Capital Market and
are regularly traded.



A
U.S. holder that makes a Mark-to-Market Election with respect to its SciVac common shares generally will not be subject to the
rules of Section 1291 of the Code discussed above with respect to such SciVac common shares. However, if a U.S. holder does not
make a Mark-to-Market Election beginning in the first tax year of the U.S. holder’s holding period for the SciVac common
shares for which SciVac is a PFIC or the U.S. holder has not made a timely QEF Election, the rules of Section 1291 of the Code
discussed above will apply to certain dispositions of, and distributions on, the SciVac common shares.



A
U.S. holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which SciVac is a PFIC,
an amount equal to the excess, if any, of (a) the fair market value of the SciVac common shares, as of the close of such tax year
over (b) the U.S. holder’s adjusted tax basis in the SciVac common shares. A U.S. holder that makes a Mark-to-Market Election
will be allowed a deduction in an amount equal to the excess, if any, of (a) the U.S. holder’s adjusted tax basis in the
SciVac common shares, over (b) the fair market value of the SciVac common shares (but only to the extent of the net amount of
previously included income as a result of the Mark-to-Market Election for prior tax years).



82






A
U.S. holder that makes a Mark-to-Market Election generally also will adjust the U.S. holder’s tax basis in the SciVac common
shares to reflect the amount included in gross income or allowed as a deduction because of the Mark-to-Market Election. In addition,
upon a sale or other taxable disposition of SciVac common shares, a U.S. holder that makes a Mark-to-Market Election will recognize
ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such
Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election
for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the
Code and Treasury regulations.



A
U.S. holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income
tax return. A Mark-to-Market Election applies to the tax year in which the Mark-to-Market Election is made and to each subsequent
tax year, unless the SciVac common shares cease to be “marketable stock” or the IRS consents to revocation of the
election. Each U.S. holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market
Election.



Although
a U.S. holder may be eligible to make a Mark-to-Market Election with respect to the SciVac common shares, no such election may
be made with respect to the stock of any Subsidiary PFIC that a U.S. holder is treated as owning, because that stock is not marketable.
Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the
Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC.



Other
PFIC Rules



Under
Section 1291(f) of the Code, the IRS has issued proposed Treasury regulations that, subject to certain exceptions, would cause
a U.S. holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of SciVac common
shares that would otherwise not be subject to U.S. federal income tax (e.g., gifts and exchanges pursuant to corporate reorganizations).
However, the specific U.S. federal income tax consequences to a U.S. holder may vary based on the manner in which SciVac common
shares are transferred.



Certain
additional adverse rules may apply with respect to a U.S. holder if SciVac is a PFIC, regardless of whether the U.S. holder makes
a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. holder that uses SciVac common shares as security for
a loan will, except as may be provided in Treasury regulations, be treated as having made a taxable disposition of the SciVac
common shares.



Special
rules also apply to the amount of foreign tax credit that a U.S. holder may claim on a distribution from a PFIC. The rules relating
to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. holder should consult
with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC. In addition,
special rules apply with respect to PFICs under the 3.8% Medicare surtax.



The
PFIC rules are complex, and U.S. holders should consult their own tax advisors regarding the PFIC rules and how the PFIC rules
may affect the U.S. federal income tax consequences of the ownership and disposition of SciVac common shares.



Medicare
Surtax



Individuals,
estates. and certain trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net
investment income” including, among other things, dividends and net gain from disposition of property (other than property
held in certain trades or businesses). U.S. holders should consult with their own tax advisors regarding the effect, if any, of
this tax on their ownership and disposition of SciVac common shares.



83






Information
Reporting and Backup Withholding Tax



In
general, information reporting requirements will apply to dividends received by U.S. holders of SciVac common shares and the proceeds
received on the disposition of SciVac common shares effected within the United States (and, in certain cases, outside the United
States), in each case, other than U.S. holders that are exempt recipients (such as corporations). Backup withholding (currently
at a rate of 28%) may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number (generally
on an IRS Form W-9 provided to the paying agent or the U.S. holder’s broker) or is otherwise subject to backup withholding.
Backup withholding is not an additional U.S. federal tax. Any amounts withheld under the backup withholding tax rules generally
will be allowed as a refund or credit against a U.S. holder’s U.S. federal income tax liability, if any, provided the U.S.
holder furnishes required information to the IRS in a timely manner.



Under
U.S. federal income tax law, certain categories of U.S. holders must file information returns with respect to their investment
in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed
on individuals who are U.S. holders that hold certain specified foreign financial assets in excess of certain thresholds. The
definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions,
but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person, and any interest
in a foreign entity. U.S. holders may be subject to these reporting requirements unless their shares are held in an account at
certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. holders
should consult with their own tax advisors regarding the requirements of filing information returns, including, without limitation,
the requirement to file an IRS Form 8938.



F.
Dividends and Paying Agents.



Not
applicable.



G.
Statements by Experts.



Not
applicable.



H.
Documents on Display.



You
may read and copy this Annual Report on Form 20-F, including the related exhibits and schedules, and any document we file with
the SEC at the Public Reference Room of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information
on the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet
website that contains reports and other information about issuers that file electronically with the SEC. The address of the site
is www.sec.gov. The reports and other information filed by SciVac with the SEC are also available at SciVac’s website at
http://www.scivactherapeutics.com. SciVac also files reports, statements and other information with the applicable Canadian securities
regulatory authorities. SciVac’s filings are electronically available to the public from the Canadian System for Electronic
Document Analysis and Retrieval, or SEDAR, the Canadian equivalent of the SEC’s EDGAR system, at www.sedar.com. The web
addresses of the SEC, SEDAR and SciVac have been included as inactive textual references only. Information on those web sites
is not part of this annual report.



I.
Subsidiary Information.



Not
applicable.



84






ITEM
11. Quantitative and Qualitative Disclosures About Market Risk.



Quantitative
and Qualitative Disclosures about Market Risk



Market
risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect
the Company’s income or valuation of its financial instruments. The Company is exposed to financial risk related to fluctuation
of foreign exchange rates. Foreign currency risk is limited to the portion of the Company’s business transactions denominated
in currencies other than the NIS in Israel or CAD in Canada, primarily US$ denominated expenses for research and development and
certain consultants. The Company believes that the results of operations, financial position and cash flows would be affected
by a sudden change in foreign exchange rates, but would not impair or enhance its ability to pay its US$.



Foreign
exchange risk



Foreign
exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates.



Foreign
currency sensitivity analysis



The
following table (in thousands) details the Company’s sensitivity to a 5% increase and decrease in the USD against the relevant
foreign currencies at December 31, 2015. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items at December 31, 2015 and adjusts their translation for a 5% change in foreign currency rates. A positive number below indicates
an increase in profit or equity where the relevant foreign currency strengthens 5% against the USD. For a 5% weakening of the
relevant foreign currency against the USD, there would be a comparable impact on the profit or equity, and the balances below
would be negative.



|          |  |  | 5% Increase |      |   | 5% Decrease | 
|--------- |  |  | ----------- | ---- | - | ----------- | 
|Asset     |  |  |             | 848  |   |             | 
|          |  |  |             |      |   |             | 
|Liability |  |  |             | (165 | ) |             | 
|          |  |  |             |      |   |             | 
|Balance   |  |  |             | 683  |   |             | 



Interest
rate risk



The
Company is subject to interest rate risk on its cash and cash equivalents and believes that the results of operations, financial
position and cash flows would not be significantly affected by a sudden change in market interest rates. The only financial instruments
that expose the Company to interest rate risk are its cash and cash equivalents.



As
of December 31, 2015 , cash held in savings accounts was $11.9 million. The interest rates range from 0.0% to 0.5%.



Liquidity
risk



Liquidity
risk is the risk that the Company will encounter difficulty in raising funds to meet cash flow requirements associated with financial
instruments. The Company continues to manage its liquidity risk by monitoring its cash flows and investments regularly, comparing
actual results with budgets and future cash requirements.



85






Credit
risk



The
Company limits its exposure to credit risk, with respect to cash and cash equivalents, by placing them with high quality credit
financial institutions. The Company’s cash equivalents consist primarily of operating funds and deposits with commercial
banks.



ITEM
12. Description of Securities Other Than Equity Securities.



A.
Debt Securities.



Not
applicable.



B.
Warrants and Rights.



Not
applicable.



C.
Other Securities.



Not
applicable.



D.
American Depositary Shares.



Not
applicable.



86






PART
II



ITEM
13. Defaults, Dividend Arrearages and Delinquencies.



None.



ITEM
14. Material Modifications to the Rights of Security Holders and Use of Proceeds.



|A. | Not
    applicable.
|-- | -------------------
|   |                    
|B. | Not
    applicable.
|   |                    
|C. | Not
    applicable.
|   |                    
|D. | Not
    applicable.



E.
Use of Proceeds.



Not
applicable.



ITEM
15. Controls and Procedures.



Disclosure
Controls and Procedures



Scivac
has performed an evaluation of the effectiveness of its disclosure controls and procedures that are designed to ensure that information
required to be disclosed by SciVac in reports that it files or submits under the Exchange Act is recorded, processed, summarized
and reported timely within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act, is accumulated and communicated to the issuer’s management, including its
principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. SciVac’s disclosure controls and procedures are designed to provide reasonable
assurance of achieving the desired control objectives. Based on SciVac’s evaluation, its management, including the Chief
Executive Officer and Chief Financial Officer, have concluded that SciVac’s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15(d) - 15(e) of the Exchange Act) as of the end of the period covered by this annual report are effective
at such reasonable assurance level.



Management’s
Annual Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public Accounting Firm



This
annual report does not include a report of management’s assessment regarding internal control over financial reporting or
an attestation report of SciVac’s registered public accounting firm due to a transition period established by rules of the
SEC for newly public companies.



Changes
in Internal Control over Financial Reporting



There
were no changes in SciVac’s internal control over financial reporting that occurred during the year ended December 31, 2015
that have materially affected, or are reasonably likely to materially affect, SciVac’s internal control over financial reporting.



87






ITEM
16. [RESERVED]



ITEM
16A. Audit Committee Financial Expert.



SciVac’s
Board affirmatively determined that Dmitry Genkin, Steven D. Rubin and Adam Logal are audit committee financial experts (as defined
by the SEC rules) and are independent and financially literate (as such terms are defined under NI 52-110. For information relating
to qualifications and experience of the audit committee financial experts, see “Item 6. Directors, Senior Management and
Employees—A. Directors and Senior Management.”



ITEM
16B. Code of Ethics.



See
“Item 6.C Board Practices—Ethical Business Conduct.”



ITEM
16C. Principal Accountant Fees and Services.



The
consolidated financial statements of SciVac as of December 31, 2015 and for the year ended December 31, 2015 have been audited
by Smythe LLP, chartered professional accountants, as set forth in their report thereon and included therein.



The
consolidated financial statements of SciVac as of December 31, 2014 and for each of the two years in the period ended December
31, 2014 have been audited by Kost Forer Gabbay & Kasierer, a Member of Ernst & Young Global, as set forth in their report
thereon and included therein. Such consolidated financial statements are contained in this annual report in reliance upon such
report given on the authority of such firms as experts in accounting and auditing.



The
following table presents the aggregate fees for professional services rendered by such accountants to SciVac during their respective
term as our principal accountants in 2014 and 2015.



|                       |  | 2015               |      |  | 2014               |  
|---------------------- |  | ------------------ | ---- |  | ------------------ | -
|                       |  | (US$ in thousands) |      |  | (US$ in thousands) |  
|Audit Fees (1)         |  | $                  | 64   |  |                    | $
|Audit-Related Fees (2) |  |                    | 22   |  |                    |  
|Tax Fees (3)           |  |                    | 4.5  |  |                    |  
|All Other Fees (4)     |  |                    |      |  |                    |  
|Total                  |  | $                  | 90.5 |  |                    | $



(1)
Audit fees consists of services rendered by the principal account for the audit of SciVac’s annual financial statements
or services that are normally provided in connection with statutory and regulatory filings or engagements.



(2)
Audit-related fees would be assurance and related services by the principal accountant that are reasonably related to the performance
of the audit or review of SciVac’s financial statements and are not reported under item (1).



(3)
Tax fees relate to tax compliance, planning and advice.



(4)
All other fees would be fees billed for products and services provided by the principal accountant, other than the services reported
in items (1) through (3).



Audit
Committee Pre-Approval Policies and Procedures



The
Audit Committee approved 100% of the fees paid to the principal accountant for audit-related, tax and other fees in the fiscal
year 2015. The Audit Committee pre-approves all non-audit services to be performed by the auditor in accordance with the Audit
Committee Charter. There were no hours expended on the principal accountant’s engagement to audit the Company’s financial
statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s
full-time, permanent employees.



88






ITEM
16D. Exemptions from the Listing Standards for Audit Committees.



Not
applicable.



ITEM
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.



Not
applicable.



ITEM
16F. Change in Registrant’s Certifying Accountant.



Not
applicable.



ITEM
16G. Corporate Governance.



Not
applicable.



ITEM
16H. Mine Safety Disclosure.



Not
applicable.



PART
III



ITEM
17. Financial Statements.



We
have responded to Item 18 in lieu of responding to this item.





89






ITEM
18. Financial Statements.









SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)



Consolidated
Financial Statements



For
the years ended December 31, 2015, 2014 and 2013



(Expressed
in U.S. dollars)



INDEX



|                                                                   | Page         
|------------------------------------------------------------------ | -------------
|                                                                   |              
|Report
    of Independent Registered Public Accounting Firm – 2015 | 91 – 92      
|                                                                   |              
|Report
    of Independent Registered Public Accounting Firm – 2014 | 93 – 94      
|                                                                   |              
|Consolidated
    Statements of Financial Position                  | 95
    – 96  
|                                                                   |              
|Consolidated
    Statements of Loss and Comprehensive Loss         | 97           
|                                                                   |              
|Consolidated
    Statements of Changes in Shareholders’ Equity     | 98           
|                                                                   |              
|Consolidated
    Statements of Cash Flows                          | 99           
|                                                                   |              
|Notes
    to Consolidated Financial Statements                     | 100
    – 127



-
- - - - - - - - -



90










REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO
THE SHAREHOLDERS OF SCIVAC THERAPEUTICS INC.

(formerly
Levon Resources Ltd.)



We
have audited the accompanying consolidated financial statements of SciVac Therapeutics Inc., which comprise the consolidated statement
of financial position as at December 31, 2015 and the consolidated statements of loss and comprehensive loss, changes in shareholders’
equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.



Management’s
Responsibility for the Consolidated Financial Statements



Management
is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International
Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.



Auditors’
Responsibility



Our
responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit
in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement.



An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements.



We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.



Opinion



In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of SciVac
Therapeutics Inc. as at December 31, 2015, and its financial performance and its cash flows for the year then ended, in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board.



Emphasis
of Matter



We
have also audited the adjustments to the consolidated financial statements for the years ended December 31, 2014 and 2013, and
as at January 1, 2013, to apply the reverse takeover transaction accounting as discussed in Notes 2 and 4 to the consolidated
financial statements. Our procedures included auditing the restatement of SciVac Ltd.’s equity structure to reflect the
number of shares issued in the reverse takeover transaction. In our opinion, such adjustments are appropriate and have been properly
applied. However, we were not engaged to audit, review or apply any procedures to the financial statements of SciVac Ltd. for
the years ended December 31, 2014 and 2013, or as at January 1, 2013, other than with respect to the adjustments noted, and accordingly,
we do not express an opinion or any other form of assurance on the consolidated financial statements of SciVac Ltd., taken as
a whole, for the years ended December 31, 2014 and 2013, or as at January 1, 2013.







91










Other
Matter



The
consolidated financial statements of SciVac Ltd. as at December 31, 2014 and for the years ended December 31, 2014 and 2013 were
audited by another auditor who expressed an unmodified opinion on those consolidated statements on May 4, 2015.



|/s/
    Smythe LLP                     | 
|-------------------------------------- | 
|                                       | 
|Chartered
    Professional Accountants | 
|                                       | 
|Vancouver,
    Canada                  | 
|March
    22, 2016                     | 







92










Independent
Auditors’ Report of Registered Public Accounting Firm



To
the Shareholders of SciVac Ltd.



Report
on the Consolidated Financial Statements



We
have audited, before the effects of the adjustments to apply the reverse merger accounting discussed in Note 1 to the consolidated
financial statements, the accompanying consolidated statements of financial position of SciVac Ltd. (“the Company”)
as of December 31, 2014, and the related consolidated statements of profit or loss and other comprehensive income, changes in
equity and cash flows for each of the two years in the period ended December 31, 2014, and a summary of significant accounting
policies and other explanatory information.



Management’s
Responsibility for the Consolidated Financial Statements



Management
is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.



Auditors’
Responsibility



Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the standard of the Public Company Accounting Oversight
Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement. We were not engaged
to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.



An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements, evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.



We
believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit
opinion.



Opinion



In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of SciVac
Ltd. as of December 31, 2014, and its financial performance and cash flows for each of the two years in the period ended December
31, 2014, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.



93






Emphasis
of Matter



We
were not engaged to audit, review, or apply any procedures to the adjustments to apply the reverse merger accounting discussed
in Note 1 to the consolidated financial statements and, accordingly, we do not express an opinion or any other form of assurance
about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.



The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 1 to the consolidated financial statements for period ended December 31, 2014, the Company’s recurring
losses from operations and stockholders’ deficiency raise substantial doubt about its ability to continue as a going concern.
Management’s plans concerning these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated
financial statements do not include any adjustments that might result from the outcome of this uncertainty.



|                     | /s/
    Kost Forer Gabbay & Kasierer
|-------------------- | ------------------------------------
|Tel-Aviv,
    Israel | KOST
    FORER GABBAY & KASIERER    
|May
    4, 2015      | A
    Member of Ernst & Young Global



94






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Consolidated
Statements of Financial Position

(Expressed
in U.S. dollars in thousands)



|                          |  |       |  | As of
    December 31 |       
|------------------------- |  | ----- |  | --------------------- | ------
|                          |  | Notes |  | 2015                  |       
|                          |  |       |  |                       |       
|CURRENT ASSET             |  |       |  |                       |       
|                          |  |       |  |                       |       
|Cash and cash equivalents |  | 21    |  | $                     | 12,476
|Trade accounts receivable |  |       |  |                       | 93    
|Inventory                 |  | 6     |  |                       | 1,316 
|Other current assets      |  | 7     |  |                       | 637   
|                          |  |       |  |                       |       
|Total current assets      |  |       |  |                       | 14,522
|                          |  |       |  |                       |       
|NON-CURRENT ASSETS        |  |       |  |                       |       
|                          |  |       |  |                       |       
|Long-term deposits        |  |       |  |                       | 96    
|Property and equipment    |  | 9     |  |                       | 1,750 
|Intangible assets         |  | 10    |  |                       | 13,183
|                          |  |       |  |                       |       
|Total non-current assets  |  |       |  |                       | 15,029
|                          |  |       |  |                       |       
|TOTAL ASSETS              |  |       |  | $                     | 29,551



The
accompanying notes are an integral part of these consolidated financial statements.



These
consolidated financial statements were approved on behalf of the Board by:



|/s/
    Curtis Lockshin           |  | /s/
    Adam
    Logal  
|--------------------------------- |  | ------------------------
|Dr.
    Curtis Lockshin, Director |  | Adam
    Logal, Director



95






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Consolidated
Statements of Financial Position

(Expressed
in U.S. dollars in thousands)



|                                           |  |       |  | As of
    December 31 |        
|------------------------------------------ |  | ----- |  | --------------------- | -------
|                                           |  | Notes |  | 2015                  |        
|                                           |  |       |  |                       |        
|LIABILITIES AND EQUITY                     |  |       |  |                       |        
|                                           |  |       |  |                       |        
|CURRENT LIABILITIES                        |  |       |  |                       |        
|                                           |  |       |  |                       |        
|Trade accounts payable                     |  |       |  | $                     | 408    
|Deferred revenues                          |  | 12    |  |                       | 1,583  
|Other current liabilities                  |  | 8     |  |                       | 938    
|                                           |  |       |  |                       |        
|Total current liabilities                  |  |       |  |                       | 2,929  
|                                           |  |       |  |                       |        
|NON-CURRENT LIABILITIES                    |  |       |  |                       |        
|                                           |  |       |  |                       |        
|Liabilities for severance pay, net         |  | 13    |  |                       | 52     
|Debt due to related parties                |  | 12    |  |                       | -      
|Deferred revenues                          |  | 12    |  |                       | 1,578  
|                                           |  |       |  |                       |        
|Total non-current liabilities              |  |       |  |                       | 1,630  
|                                           |  |       |  |                       |        
|TOTAL LIABILITIES                          |  |       |  |                       | 4,559  
|                                           |  |       |  |                       |        
|SHARHOLDERS’ EQUITY                        |  |       |  |                       |        
|                                           |  |       |  |                       |        
|Share capital                              |  | 14    |  |                       | 45,779 
|Contributed surplus                        |  |       |  |                       | 50,563 
|Other comprehensive income                 |  | 15    |  |                       | (1,015 
|Accumulated deficit                        |  |       |  |                       | (70,335
|                                           |  |       |  |                       |        
|Total equity                               |  |       |  |                       | 24,992 
|                                           |  |       |  |                       |        
|TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |  |       |  | $                     | 29,551 



The
accompanying notes are an integral part of these consolidated financial statements.



96






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Consolidated
Statements of Loss and Comprehensive Loss

(Expressed
in U.S. dollars in thousands, except share and per share information)



|                                                                                                                                                                                                     |  |       |  | Years
    ended December 31 |            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  | --------------------------- | -----------
|                                                                                                                                                                                                     |  | Notes |  | 2015                        |            
|                                                                                                                                                                                                     |  |       |  |                             |            
|Revenues                                                                                                                                                                                             |  |       |  |                             |            
|Sales of products                                                                                                                                                                                    |  |       |  | $                           | 302        
|Contract research and development                                                                                                                                                                    |  |       |  |                             | 653        
|                                                                                                                                                                                                     |  |       |  |                             | 955        
|Cost of revenues                                                                                                                                                                                     |  | 6,16  |  |                             | 3,755      
|Gross loss                                                                                                                                                                                           |  |       |  |                             | (2,800     
|                                                                                                                                                                                                     |  |       |  |                             |            
|General, administrative and selling                                                                                                                                                                  |  | 17    |  |                             | 5,418      
|Research and development                                                                                                                                                                             |  |       |  |                             | 618        
|Operating loss                                                                                                                                                                                       |  |       |  |                             | (8,836     
|                                                                                                                                                                                                     |  |       |  |                             |            
|Listing expense                                                                                                                                                                                      |  | 4     |  |                             | (1,353     
|Share-based payments                                                                                                                                                                                 |  | 12    |  |                             | (2,127     
|                                                                                                                                                                                                     |  |       |  |                             |            
|Financial income                                                                                                                                                                                     |  | 18    |  |                             | 44         
|Financial expenses                                                                                                                                                                                   |  | 18    |  |                             | (2,612     
|Financial expenses, net                                                                                                                                                                              |  | 18    |  |                             | (2,568     
|                                                                                                                                                                                                     |  |       |  |                             |            
|Loss before tax                                                                                                                                                                                      |  |       |  |                             | (14,884    
|                                                                                                                                                                                                     |  |       |  |                             |            
|Income tax benefit                                                                                                                                                                                   |  | 19    |  |                             | 129        
|Net loss for the year                                                                                                                                                                                |  |       |  |                             | (14,755    
|                                                                                                                                                                                                     |  |       |  |                             |            
|OTHER COMPREHENSIVE INCOME (LOSS)                                                                                                                                                                    |  |       |  |                             |            
|                                                                                                                                                                                                     |  |       |  |                             |            
|Items that will not be reclassified subsequently to profit or loss:                                                                                                                                  |  |       |  |                             |            
|Remeasurement of defined benefit obligation                                                                                                                                                          |  | 13    |  |                             | (19        
|                                                                                                                                                                                                     |  |       |  |                             |            
|Items that will
    be reclassified subsequently to profit or loss under specific conditions:                                                                                                        |  |       |  |                             |            
|Exchange
                                         differences resulting from translating the consolidated financial statements to the presentation
                                         currency |  |       |  |                             | (48        
|                                                                                                                                                                                                     |  |       |  |                             |            
|Total other comprehensive income (loss)                                                                                                                                                              |  |       |  |                             | (67        
|                                                                                                                                                                                                     |  |       |  |                             |            
|TOTAL COMPREHENSIVE LOSS FOR THE YEAR                                                                                                                                                                |  |       |  | $                           | (14,822    
|                                                                                                                                                                                                     |  |       |  |                             |            
|Basic and diluted net loss per share                                                                                                                                                                 |  |       |  | $                           | (0.03      
|                                                                                                                                                                                                     |  |       |  |                             |            
|Weighted average number of shares outstanding                                                                                                                                                        |  |       |  |                             | 505,893,922



The
accompanying notes are an integral part of these consolidated financial statements.



97






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Consolidated
Statements of Changes in Shareholders’ Equity

(Expressed
in U.S. dollars in thousands, except share information)





|                                                                                        |  | Number
    of Common  Shares |             |  | Share
    Capital |  |        | Contributed
    Surplus |  |  | OCI Reserves |  |  | Accumulated
    Deficit |        |   | Total
    Shareholders’ Equity | 
|--------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- |  | ----------------- |  | ------ | ----------------------- |  |  | ------------ |  |  | ----------------------- | ------ | - | ------------------------------ | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|BALANCE AS OF JANUARY 1, 2013                                                           |  |                              | 243,916,902 |  |                   |  | *)     |                         |  |  | 20,559       |  |  |                         | (147   | ) |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|Capital contribution in respect of related party loans, net of taxes (Note 19)          |  |                              | -           |  |                   |  | -      |                         |  |  | 697          |  |  |                         | -      |   |                                | 
|Loss for the year                                                                       |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Other comprehensive loss for the year                                                   |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | (1,822 | ) |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|BALANCE AS OF DECEMBER 31, 2013                                                         |  |                              | 243,916,902 |  |                   |  | *)     |                         |  |  | 21,256       |  |  |                         | (1,969 | ) |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|Issuance of shares (Notes 12b)                                                          |  |                              | 28,515,465  |  |                   |  | 529    |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Deemed capital contribution (Note 19)                                                   |  |                              | -           |  |                   |  | -      |                         |  |  | 280          |  |  |                         | -      |   |                                | 
|Conversion of capital notes to equity (Note 12b)                                        |  |                              | -           |  |                   |  | -      |                         |  |  | 23,972       |  |  |                         | -      |   |                                | 
|Capital contribution in respect of related party loans, net of taxes (Notes 12a and 19) |  |                              | -           |  |                   |  | -      |                         |  |  | 1,078        |  |  |                         | -      |   |                                | 
|Loss for the year                                                                       |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Other comprehensive income for the year                                                 |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | 1,021  |   |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|BALANCE AS OF DECEMBER 31, 2014                                                         |  |                              | 272,432,367 |  |                   |  | 529    |                         |  |  | 46,586       |  |  |                         | (948   | ) |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|Issuance of shares for intangible assets (Note 14i)                                     |  |                              | 147,403,020 |  |                   |  | 13,814 |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Share-based payments to advisors (Note 14ii)                                            |  |                              | 22,698,310  |  |                   |  | 2,127  |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Loans assigned by related party (Note 12c)                                              |  |                              | 74,980,319  |  |                   |  | 7,027  |                         |  |  | 3,584        |  |  |                         | -      |   |                                | 
|Issuance of shares
    on reverse takeover (Notes 4and 14ii)                            |  |                              | 239,085,423 |  |                   |  | 22,282 |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Capital contribution in respect of related party loans, net of taxes (Notes 12a and 19) |  |                              | -           |  |                   |  | -      |                         |  |  | 393          |  |  |                         | -      |   |                                | 
|Loss for the year                                                                       |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | -      |   |                                | 
|Other comprehensive income for the year                                                 |  |                              | -           |  |                   |  | -      |                         |  |  | -            |  |  |                         | (67    | ) |                                | 
|                                                                                        |  |                              |             |  |                   |  |        |                         |  |  |              |  |  |                         |        |   |                                | 
|BALANCE AS OF DECEMBER 31, 2015                                                         |  |                              | 756,599,439 |  |                   |  | 45,779 |                         |  |  | 50,563       |  |  |                         | (1,015 | ) |                                | 



*)
represents amount lower than $1



The
accompanying notes are an integral part of these consolidated financial statements.



98








SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Consolidated
Statements of Cash Flows

(Expressed
in U.S. dollars in thousands)





|                                                              |  | Years
    ended December 31 |        
|------------------------------------------------------------- |  | --------------------------- | -------
|                                                              |  | 2015                        |        
|                                                              |  |                             |        
|CASH FLOWS FROM OPERATING ACTIVITIES                          |  |                             |        
|                                                              |  |                             |        
|Net loss for the year                                         |  | $                           | (14,755
|                                                              |  |                             |        
|Income and expenses items not involving cash flows            |  |                             |        
|Depreciation and amortization (Notes 9, 10, 16 and 17)        |  |                             | 1,140  
|Deemed interest on related party loans                        |  |                             | 830    
|Share-based payments                                          |  |                             | 2,127  
|Listing expense (Note 4)                                      |  |                             | 1,195  
|Expenses for accrued severance pay                            |  |                             | 22     
|                                                              |  |                             | 5,314  
|                                                              |  |                             |        
|Change in non-cash working capital, net (Note 23)             |  |                             | 394    
|                                                              |  |                             |        
|Net cash used in operating activities                         |  |                             | (9,047 
|                                                              |  |                             |        
|CASH FLOWS FROM INVESTING ACTIVITIES                          |  |                             |        
|                                                              |  |                             |        
|Purchase of property, equipment                               |  |                             | (549   
|Purchase of intangible assets from related party              |  |                             | -      
|Increase (decrease) in short-term deposits                    |  |                             | 23     
|Investment grant (Note 20f)                                   |  |                             | -      
|                                                              |  |                             |        
|Net cash used in investing activities                         |  |                             | (526   
|                                                              |  |                             |        
|CASH FLOWS FROM FINANCING ACTIVITIES                          |  |                             |        
|                                                              |  |                             |        
|Line of credit                                                |  |                             | -      
|Cash acquired on acquisition of Levon Resources Ltd. (Note 4) |  |                             | 21,087 
|Loan received from related parties                            |  |                             | 2,025  
|Loans repaid to related parties (Note 12c)                    |  |                             | (1,475 
|Transaction with related parties (Note 12e)                   |  |                             | -      
|                                                              |  |                             |        
|Net cash provided by financing activities                     |  |                             | 21,637 
|                                                              |  |                             |        
|Increase (decrease) in cash and cash equivalents              |  |                             | 12,064 
|                                                              |  |                             |        
|Cash and cash equivalents at the beginning of the year        |  |                             | 393    
|                                                              |  |                             |        
|Change in cash accounts held in foreign currency              |  |                             | 19     
|                                                              |  |                             |        
|Cash and cash equivalents at the end of the year              |  | $                           | 12,476 



The
accompanying notes are an integral part of these consolidated financial statements.



99






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



|1. | NATURE
    AND CONTINUANCE OF OPERATIONS
|-- | ----------------------------------------



SciVac
Therapeutics Inc. (formerly Levon Resources Ltd.) (the “Company”) was incorporated under the laws of British Columbia
on April 9, 1965. Immediately before the Arrangement Agreement discussed below, the Company was in the business of the exploration
for and development of exploration and evaluation properties in Mexico. SciVac Ltd. (“SciVac”), a wholly owned subsidiary
of the Company is in the business of developing, producing and marketing biological products for human healthcare. The Company’s
flagship product, Sci-B-VacTM, is a recombinant third generation hepatitis B vaccine. The Company also has in-licensed an
early-stage enzyme-based product designated S-Graft. The Company’s registered office is located at Suite 2600 – 595
Burrard Street, Vancouver, BC V7X 1L3. The Company’s principal office is located at Gad FeinStein Road, POB 580 Rehovot,
Israel 7610303.



On
July 9, 2015, an Arrangement Agreement was completed whereby Levon Resources Ltd. (“Levon”) acquired 100% of the issued
and outstanding securities of SciVac and assumed certain related party loans in exchange for 517,514,016 common shares of Levon
(the “Transaction”). SciVac became a wholly owned subsidiary of Levon.



At
the closing of the Transaction on July 9, 2015 (the “Effective Time”), all holders of common shares of Levon immediately
prior to the Effective Time of the Transaction received, one New Levon common share and one-half of one common share of 1027949
BC Ltd. (“Spinco”) in exchange for each common share of Levon held by them. Other than approximately CAD $27 million
in cash retained by the Company, all other assets and liabilities of Levon were transferred or assumed by Spinco.



Pursuant
to the closing of the Transaction, the shareholders of SciVac prior to the Transaction obtained 68.4% of the post consolidation
common shares of Levon, and consequently, control of Levon. Accordingly, Levon has accounted for the transaction by analogy as
a reverse takeover and these consolidated financial statements represent the continuation of SciVac, the legal subsidiary. Levon
changed its name to SciVac Therapeutics Inc. As a result of the Transaction, the Company operates the business of SciVac (Note
4).



On
October 26, 2015, the Company announced that it has entered into an agreement and plan of merger (the “VBI Agreement”)
to acquire VBI Vaccines Inc. (“VBI”). VBI has proprietary vaccine development platforms, a pipeline of preventative
and therapeutic vaccine candidates and strong vaccine development expertise.



The
boards of directors of both companies have approved the VBI Agreement. The shareholders of the Company approved the VBI Agreement
on January 29, 2016 at a special meeting of the shareholders. The transactions are subject to customary closing conditions, including
the regulatory approvals and approval of the shareholders of VBI (see Note 5).



The
Company has a limited operating history and faces a number of risks, among them: uncertainties regarding demand and market acceptance
of the Company’s products, reliance on major customers (see Note 11). The Company anticipates that it will continue to incur
significant operating costs and losses in connection with the development of its products.



The
Company has an accumulated deficit of $70,335 and $55,580 as of December 31, 2015 and 2014, respectively, and negative cash flows
from operating activities of $9,047, $5,211 and $4,747 for the years ended December 31, 2015, 2014 and 2013, respectively. Management
believes that the Company will have sufficient resources to carry out its principal activities for the foreseeable future, but
will require ongoing funding from equity or debt financing thereafter.



|2. | BASIS
    OF PRESENTATION
|-- | -------------------------



Statement
of compliance



These
consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”),
as issued by the International Accounting Standards Board (“IASB”).



100






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Basis
of presentation



These
consolidated financial statements have been prepared under the historical cost basis, except for certain financial assets and
liabilities that are measured at fair value. These consolidated financial statements represent a continuation of SciVac, the legal
subsidiary (Note 4), except with respect to the equity structure, and include the accounts of the Company and its wholly owned
subsidiaries (Note 2) from the date of acquisition of SciVac.



All
figures as to the numbers of common shares, as well as loss per share in these consolidated financial statements, have been retroactively
restated to reflect the legal capital of Levon at an exchange ratio of 1 SciVac ordinary share to 2,193.50 common shares of Levon.



Consolidated
financial statements



As
a result of the reverse takeover described in Note 4, these consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, SciVac Ltd, incorporated in Israel and SciVac USA LLC, organized in the United States. Subsidiaries
of the Company are consolidated from the date control commences to the date control ceases. All intercompany transactions and
balances have been eliminated.



Functional
currency, presentation currency and foreign currency



The
functional currency of the Company and the presentation currency of the consolidated financial statements is the U.S. dollar.
Each of the Company’s subsidiaries determines its own respective functional currency, and this currency is used to separately
measure each entity’s financial position and operating results.



When
a subsidiary’s functional currency differs from the Company’s functional currency that subsidiary represents a foreign
operation whose financial statements are translated into the Company’s functional currency so that they can be included
in the consolidated financial statements. Assets and liabilities of foreign operations with a different functional currency from
that of the Company are translated at the closing rate at the end of each reporting period. Profit or loss items are translated
at average exchange rates for all the relevant periods. All resulting translation differences are recognized as a component of
other comprehensive income (loss).



Approval
of the consolidated financial statements



These
consolidated financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors
on March 22, 2016.



Critical
accounting judgements and key sources of estimation uncertainty



The
preparation of the consolidated financial statements requires management to make judgments, estimates, and assumptions that affect
the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. In particular,
significant judgments made by management in the application of IFRS during the preparation of the consolidated financial statements
and estimates with a risk of material adjustment are:



Income
taxes



In
assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable
income, applicable tax opportunities, expected timing of reversals of existing temporary differences and likelihood that tax positions
taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional
weight to positive and negative evidence that can be objectively verified.



Deprecation
for property and equipment



Depreciation
expense is allocated based on assumed asset lives. Should the asset life or depreciation rates differ from the initial estimate,
an adjustment would be made in the consolidated statements of loss and comprehensive loss.



101






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Contingencies



By
their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. The assessment
of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.



Intangible
assets – useful lives



Following
initial recognition, the Company carries the value of intangible assets at cost less accumulated amortization and any accumulated
impairment losses. Amortization is recorded on the straight-line basis based upon management’s estimate of the useful life
and residual value. The estimates are reviewed at least annually and are updated if expectations change as a result of, but not
limited to, the following: the expected usage of the asset by the Company, typical product life cycles for similar assets, changes
in market demand for the asset’s associated products, technical or technological obsolescence, expected actions by competitors
or potential competitors, the Company’s ability and intention to maintain the asset in good standing, the period of control
of the asset or changes thereto, and any relevant expiry dates for the asset. A change in the useful life or residual value will
impact the reported carrying value of the intangible assets resulting in a change in related amortization expense.



Intangible
assets – impairment



The
application of the Company’s accounting policy for intangible asset expenditures requires judgment in determining whether
it is likely that the future economic benefits will flow to the Company, which are based on assumptions about future events or
circumstances. Estimates and assumptions may change if new information becomes available. If, after expenditures are capitalized,
information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized is written off
to profit or loss in the period the new information becomes available.



The
determination of the Company and its subsidiaries’ functional currency



The
functional currency of the Company and its subsidiaries is the currency of the primary economic environment and the Company reconsiders
the functional currency if there is a change in events and conditions, which determined the primary economic environment.



Going
concern assumption



The
assessment of whether the going concern assumption is appropriate requires management to take into account all available information
about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The Company is
aware that material uncertainties related to events or conditions may cast significant doubt upon the Company’s ability
to continue as a going concern.



While
management believes that these judgments and estimates are reasonable, actual results could differ from those estimates and could
impact future results from operations and cash flows. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and further periods if the revision affects both current and future periods.



|3. | SIGNIFICANT
    ACCOUNTING POLICIES
|-- | -----------------------------------



| | a) | Cash
    and cash equivalents
| | -- | -----------------------------



Cash
and cash equivalents consist of cash and demand deposits in banks, and other short-term, highly liquid investments that are readily
convertible into cash with original maturities, when purchased, of less than three months.



102






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



| | b) | Inventory
| | -- | ---------



Inventory
components include all raw materials, work-in-progress and finished goods. Cost is determined on a first-in, first-out basis.



Inventory
is valued at the lower of cost or net realizable value. The cost of inventories comprises costs of purchase and costs incurred
in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the
ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. On an annual basis,
the Company evaluates the condition and age of inventories and makes provisions for slow moving inventories accordingly.



| | c) | Allowance
    for doubtful accounts
| | -- | -----------------------------------



The
Company provides a specific allowance for doubtful debts, which in management’s opinion adequately reflect the estimated
losses resulting from account receivables for which the collection is not reasonably probable. Doubtful debts, which according
to Company’s management assessment are unlikely to be collected, are written-off from the Company’s books, based on
a management resolution. Management’s determination of the adequacy of the provision is based, inter alia, on an evaluation
of the risk by considering the available information on the financial position of the debtors, the volume of their business, the
age of the receivables balance, an evaluation of the security received from them and past experience. Allowance for doubtful accounts
as of December 31, 2015 and 2014 was nominal.



| | d) | Property
    and equipment
| | -- | --------------------------



Property
and equipment are recorded at cost less accumulated depreciation and impairment.



The
assets are depreciated by the straight-line method, over the estimated useful lives of the related assets as follows.



|                                   |  | Number
    of years
|---------------------------------- |  | -------------------
|Furniture
    and office equipment |  | 7-10               
|Machinery
    and equipment        |  | 3-10               
|Computers                          |  | 3-5                
|Leasehold
    improvements         |  | 6-10               



| | e) | Impairment
    of non-current assets
| | -- | ------------------------------------



At
the end of each reporting period, the Company reviews the carrying amounts of its non-current assets to determine whether there
is any indication that the carrying amount is not recoverable. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). When an individual asset does not generate independent
cash flows, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Assets are grouped
together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets. When a reasonable and consistent basis of allocation can be identified, corporate
assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.



Recoverable
amount is the higher of fair value less costs of disposal and value in use. Fair value less costs to sell is determined as the
price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.



103






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



If
the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit
or loss.



When
an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in profit or loss.



| | f) | Intangible
    assets
| | -- | ---------------------



Licenses
and intellectual property:



The
Company’s intangible assets include license agreements with finite lives. Licenses obtained are recorded at cost less accumulated
amortization and any impairment losses.



Research
and development:



Expenditure
on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized
in profit or loss as incurred. Development activities involve a plan or design for the production of new or substantially improved
products and processes. Development expenditures are capitalized only if development costs can be measured reliably, the product
or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has
sufficient resources to complete development and to use or sell the asset. The expenditure capitalized includes the cost of materials,
direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and borrowing costs
on qualifying assets.



Other
development expenditures are recognized in profit or loss as incurred.



Capitalized
development expenditures are measured at cost less accumulated amortization and accumulated impairment losses. For the years presented,
the Company has not capitalized any development expenditure.



Amortization:



Amortization
is calculated over the cost of the asset less its residual value. The Company amortizes intangible assets with finite lives on
a straight-line basis over their estimated useful lives as follows:



|Licenses                  | 10
    years
|------------------------- | ------------
|Intellectual
    property | 7
    years 



| | g) | Revenue
    recognition
| | -- | -----------------------



Revenue
is recognized when all the following conditions are satisfied:



| | ● | The
    Company has transferred to the buyer the significant risks and rewards of ownership of the goods;                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                 
| | ● | The
    Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
    over the goods sold;
| |   |                                                                                                                                                                 
| | ● | The
    amount of revenue can be measured reliably;                                                                                                             
| |   |                                                                                                                                                                 
| | ● | It
    is probable that the economic benefits associated with the transaction will flow to the Company; and                                                     
| |   |                                                                                                                                                                 
| | ● | The
    costs incurred or to be incurred in respect of the transaction can be measured reliably.                                                                



104






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



The
Company recognizes revenue from product sales when goods are shipped and title and risk of loss are transferred to its customers
and the Company no longer retains continuing managerial involvement.



Milestone
payments related to arrangements to provide research and development services for which the Company has continuing performance
obligations are recognized as revenue upon achievement of the milestone only if all of the following conditions are met: the milestone
payments are non-refundable; there was substantive uncertainty at the date of entering into the arrangement that the milestone
would be achieved; the milestone is commensurate with either the Company’s performance to achieve the milestone or the enhancement
of the value of the delivered item by the Company; the milestone relates solely to past performance; and the amount of the milestone
is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone.



| | h) | Government
    grants
| | -- | ---------------------



Government
grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them
and that the grants will be received.



Government
grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the
related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that
the Company should purchase, construct or otherwise acquire non-current assets are recognized as a deduction from the related
asset in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis
over the useful lives of the related assets.



| | i) | Employee
    benefits
| | -- | ---------------------



Short-term
employee benefits



Short-term
employee benefits are benefits that are expected to be settled wholly before twelve months after the end of the annual reporting
period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave,
recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect
of a cash bonus or a profit-sharing plan is recognized when the Company has a legal or constructive obligation to make such payment
as a result of past service rendered by an employee and a reliable estimate of the amount can be made.



| | j) | Retirement
    benefit costs
| | -- | ----------------------------



Payments
to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them
to the contributions.



For
the defined benefit retirement plan, the cost of providing benefits is determined using the projected unit credit method, with
an actuarial valuation being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains
and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest),
is reflected immediately in the consolidated statement of financial position with a charge or credit recognized in other comprehensive
income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected in a capital reserve
and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or
asset. Defined benefit costs are categorised as follows:



105






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



| | ● | service
    cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                   
| | ● | net
    interest expense or income; and                                                                                           
| |   |                                                                                                                                   
| | ● | remeasurement.                                                                                                                    



The
Company presents the first two components of defined benefit costs in profit or loss. Curtailment gains and losses are accounted
for as past service costs.



The
retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or
surplus in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value
of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plan.



| | k) | Income
    taxes
| | -- | ----------------



Income
tax expense represents the sum of the tax currently payable and deferred tax.



The
tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as
reported in the consolidated statements of loss and comprehensive loss because of items of income or expense that are taxable
or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated using
tax rates that have been enacted or substantively enacted by the end of the reporting period.



Deferred
tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized
for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to
the extent that it is probable that taxable profits will be available against which those deductible temporary differences can
be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition
(other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit. Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the
liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date.



The
carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.



The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the
Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.



| | l) | Financial
    instruments
| | -- | -------------------------



Financial
assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.



Financial
assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss (“FVTPL”)) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets
or financial liabilities at FVTPL are recognized immediately in profit or loss.



106






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Financial
assets



Loans
and receivables



Loans
and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Loans and receivables (including trade and other receivables) are measured at amortized cost using the effective interest method,
less any impairment.



Interest
income is recognized by applying the effective interest rate, except for short-term receivables, when the effect of discounting
is immaterial.



Impairment
of financial assets



Financial
assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets
are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.



The
carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception
of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is
considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written
off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit
or loss.



Financial
liabilities and equity instruments



Classification
as debt or equity



Debt
and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and equity instrument.



Equity
instruments



An
equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.



Financial
liabilities



Financial
liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.



Other
financial liabilities



Other
financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost using the
effective interest method.



The
effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including
all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying
amount on initial recognition.



Fair
value hierarchy



Financial
instrument disclosures establish a fair value hierarchy that requires the Company to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The Company primarily applies the market approach for recurring
fair value measurements. This section describes three input levels that may be used to measure fair value:



107






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Level
1 - unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability
is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide information
on an ongoing basis. The Company does not have any financial instruments in this category.



Level
2 - quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable
or can be corroborated by observable market data for substantially the full term of the assets or liabilities.



Level
3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities.



| | m) | Earnings
    (loss) per share
| | -- | -----------------------------



Basic
profit (loss) per share is computed by dividing net profit (loss) by the weighted average number of shares outstanding during
the period. Diluted profit (loss) per share is computed by dividing net profit (loss) by the weighted average number of shares
outstanding and the impact of all dilutive potential shares. There is no dilutive effect on the earnings per share for all periods
presented.



| | n) | Operating
    lease
| | -- | -------------------



Operating
lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis
is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising
under operating leases are recognized as an expense in the period in which they are incurred.



| | o) | Share-based
    payment arrangements
| | -- | ------------------------------------



Equity-settled
share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received,
except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the Company obtains the goods or the counterparty renders the services.



| | p) | Contingencies
| | -- | -------------



From
time to time, the Company may be involved in certain claims and litigation arising out of the ordinary course and conduct of business.
Management assesses such claims and, if considered likely to result in a loss and when the amount of the loss is quantifiable,
provisions for loss are made based on management’s assessment of the most likely outcome. The Company does not provide for
claims for which the outcome is not determinable or claims where the amount of the loss cannot be reasonably estimated. Any settlements
or awards under such claims are provided for when reasonably determinable.



| | q) | New
    accounting standards issued but not yet effective
| | -- | ---------------------------------------------------------



A
number of new standards and amendments to standards and interpretations are not yet effective for the year ended December 31,
2015, and have not been applied in preparing these consolidated financial statements.



IFRS
9Financial Instruments (2014)



In
July 2014, the IASB issued the final and complete version of IFRS 9 Financial Instruments, which replaces International
Accounting Standard (“IAS”) 39 Financial Instruments: Recognition and Measurement. IFRS 9 mainly focuses on
the classification and measurement of financial assets and financial liabilities and it applies to all assets and liabilities
in the scope of IAS 39.



108






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



IFRS
9 is to be applied for annual periods beginning on January 1, 2018. Early adoption is permitted.



The
Company has yet to determine if the implementation of IFRS 9 will result in a significant impact on its consolidated financial
statements.



IFRS
15 Revenue from Contracts with Customers



In
May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which establishes a single comprehensive model
for entities to use in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue
recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when
it becomes effective.



The
core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Specifically, the Standard introduces a 5-step approach to revenue recognition:



| | ● | Step
    1: Identify the contract(s) with a customer                                     
| | - | -----------------------------------------------------------------------------------------
| |   |                                                                                          
| | ● | Step
    2: Identify the performance obligations in the contract                         
| |   |                                                                                          
| | ● | Step
    3: Determine the transaction price                                              
| |   |                                                                                          
| | ● | Step
    4: Allocate the transaction price to the performance obligations in the contract
| |   |                                                                                          
| | ● | Step
    5: Recognize revenue when (or as) the entity satisfies a performance obligation.



Under
IFRS 15, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e., when ‘control’ of
the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance
has been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.



Retrospective
application of this standard is effective for annual periods beginning on January 1, 2018, with earlier application permitted.
The Company has yet to determine if the implementation of IFRS 15 will result in a significant impact on its consolidated financial
statements.



IFRS
16Leases



In
January 2016, the IASB issued IFRS 16 Leases, which replaces the existing leasing standard IAS 17 Leases and requires
the recognition of most leases on the balance sheet. IFRS 16 effectively removes the classification of leases as either finance
or operating leases and treats all leases as finance leases for lessees with exemptions for short-term leases where the term is
twelve months or less and for leases of low value items. The accounting treatment for lessors remains the same, which requires
classification of a lease as either a finance or operating lease. IFRS 16 is effective for annual periods beginning of January
1, 2019, with earlier application permitted. Company has yet to determine if the implementation of IFRS 16 will result in a significant
impact on its consolidated financial statements.



Amendments
to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortization



The
amendments to IAS 16 Property, Plant and Equipment prohibit entities from using a revenue-based depreciation method for
items of property, plant and equipment. The amendments to IAS 38 Intangible Assets introduce a rebuttable presumption that
revenue is not an appropriate basis for amortization of an intangible asset. This presumption can only be rebutted in the following
two limited circumstances:



| | a) | When
    the intangible asset is expressed as a measure of revenue; or                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                     
| | b) | When
    it can be demonstrated that revenue and consumption of the economic benefits of the intangible asset are highly correlated.



109






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



The
amendments apply prospectively for annual periods beginning on or after January 1, 2016. Currently, the Company uses the straight-line
method for depreciation and amortization for its property, plant and equipment, and intangible assets, respectively. The Company
believe that the straight-line method is the most appropriate method to reflect the consumption of economic benefits inherent
in the respective assets and accordingly, the Company does not anticipate that the application of these amendments to IAS 16 and
IAS 38 will have a material impact on the consolidated financial statements.



|4. | REVERSE
    TAKEOVER TRANSACTION
|-- | --------------------------------



On
July 9, 2015, Levon acquired 100% of the 201,747 issued and outstanding ordinary shares of SciVac and related party loans in exchange
for 517,514,016 common shares issued by Levon.



The
resulting post-reverse acquisition issued and outstanding common shares amounted to 756,599,439:



(i)
Levon shareholders held 239,085,423 common shares; and



(ii)
SciVac shareholders held 517,514,016 common shares.



As
a result of this share issuance, the shareholders of SciVac prior to the Transaction obtained 68.4% of the post-consolidation
common shares of Levon, and consequently, control of Levon. In accordance with IFRS 3 Business Combinations, SciVac was
deemed to be the accounting acquirer, and Levon the accounting acquiree. However, at the time of the Transaction, Levon’s
assets consisted primarily of cash, and it did not have any processes capable of generating outputs; therefore, Levon did not
meet the definition of a business.



Accordingly,
as Levon did not qualify as a business in accordance with IFRS 3, the Transaction did not constitute a business combination; however,
by analogy it has been accounted for as a reverse takeover. Therefore, SciVac the legal subsidiary, has been treated as the accounting
parent company, and Levon, the legal parent, has been treated as the accounting subsidiary in these consolidated financial statements.
As SciVac was deemed to be the acquirer for accounting purposes, its assets, liabilities, and operations since incorporation are
included in these consolidated financial statements at their historical carrying values. Levon’s results of operations have
been included from July 9, 2015, the date of the completion of the Transaction.



These
consolidated financial statements have been prepared on the basis that the Transaction constituted the issuance of shares by SciVac
as consideration for Levon’s net assets in accordance with IFRS 2 Share-based Payment, followed by a recapitalization
of SciVac. As a result, the Transaction was accounted for by SciVac as the issuance of its shares at fair value for the net assets
of Levon and a listing expense, which reflects the difference between the fair value of the SciVac common shares deemed to have
been issued to Levon’s shareholders and Levon’s net assets acquired. In accordance with IFRS 2, the excess of the
fair value of the deemed shares issued over the net assets acquired is recognized in the consolidated statements of loss and comprehensive
loss as a listing expense. The fair value of the 201,747 issued and outstanding ordinary shares of SciVac prior to the Transaction
was estimated to be $48,500 based on an independent fair value assessment.



For
the purposes of accounting for the reverse takeover, the percentage of ownership of the pre-Transaction shareholders of Levon
in the combined entity upon the completion of the Transaction was determined to be 31.6% (which represents 239,085,423 common
shares out of total 756,599,439 common shares of Levon outstanding upon closing of the Transaction).



All
figures as to the numbers of common shares, as well as loss per share in these consolidated financial statements, have been retroactively
restated to reflect the legal capital of Levon at an exchange ratio of 1 SciVac ordinary share to 2,193.50 common shares of Levon.
The number of SciVac ordinary shares at December 31, 2014, has been restated from 1,242 to 272,432,367 following a share split
of SciVac’s shares on a 100 new ordinary shares for 1 old ordinary share at the exchange ratio of 2,193.50 to 1.



110






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



As
a result, the fair value of the consideration received by pre-Transaction shareholders of Levon amounts to $22,282, net of share
issuance costs.



The
excess of the fair value of the consideration received by the pre-Transaction shareholders of Levon over the fair value of the
identifiable net assets of Levon on the closing date of the Transaction was calculated as follows:



|Consideration – common shares                        |  | $ | 22,282 | 
|---------------------------------------------------- |  | - | ------ | 
|                                                     |  |   |        | 
|Identifiable net assets of Levon acquired by Scivac: |  |   |        | 
|Cash                                                 |  |   | 21,087 | 
|Reverse takeover listing expenses                    |  | $ | 1,195  | 
|                                                     |  |   |        | 
|Additional listing expenses                          |  | $ | 158    | 
|                                                     |  |   |        | 
|Total listing expenses                               |  | $ | 1,353  | 



The
consideration and allocation to the identifiable net assets of Levon at the date of Transaction initially represented management’s
best estimates and assumptions after taking into account all available information. During the quarter ended December 31, 2015,
certain costs incurred amounted to $485 were deemed to represent costs of the Transaction and not costs incurred for the issuance
of common share consideration, and accordingly, were reallocated to net loss.



|5. | SUBSEQUENT
    MERGER AGREEMENT
|-- | -------------------------------



Subsequent
to December 31, 2015, and pursuant to the VBI Agreement, a newly-formed wholly owned subsidiary of the Company will merge with
VBI (the “Merger”), with VBI surviving the Merger as a wholly owned subsidiary of the Company, and the Company will
change its name to VBI Vaccines Inc. At the closing of the Merger, each share of VBI common stock will be converted into the right
to receive 20.808356 common shares of the Company (the “Exchange Ratio”). In aggregate, VBI stockholders will receive
approximately 541,573,712 common shares of the Company, representing approximately 42% of the issued and outstanding shares and
voting power of the combined company after giving effect to the Merger. Holders of options and warrants to purchase VBI common
stock will receive options and warrants to purchase common shares of the Company in exchange for their VBI options and warrants,
as adjusted based on the Exchange Ratio but otherwise on the same terms and conditions as in the original VBI options and warrants.
In total, upon consummation of the Merger, holders of VBI’s securities will receive shares, options and warrants of the
Company representing approximately 46% of the fully diluted outstanding shares of the Company. The percentage ownerships described
above are before giving effect to any concurrent financing transaction and issuance of equity incentive awards under a new equity
incentive plan to be adopted at the closing of the Merger.



The
boards of directors of both companies have approved the VBI Agreement. The shareholders of the Company approved the VBI Agreement
on January 29, 1016 at a special meeting of the shareholders. The Merger is subject to customary closing conditions, including
the regulatory approvals and approval of the shareholders of VBI. For a detailed estimated financial effect, refer to the Company’s
Management Information Circular dated December 23, 2015.



|6. | INVENTORY
|-- | ---------



|                |  | 2015 |       |  | 2014 |  
|--------------- |  | ---- | ----- |  | ---- | -
|                |  |      |       |  |      |  
|Raw materials   |  | $    | 965   |  |      | $
|Work-in-process |  |      | 347   |  |      |  
|Finished goods  |  |      | 4     |  |      |  
|                |  | $    | 1,316 |  |      | $



111






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Included
in cost of revenues is $1,546, $1,422 and $1,107 for the years ended December 31, 2015, 2014, and 2013, respectively, of direct
material costs recognized as expense.



During
the year ended December 31, 2015, as a precaution and in conjunction with collaboration with the Israeli Ministry of Health, the
Company recalled certain batches of its Sci-B-VacTMproduct. Included in cost of revenues is $113 relating to the write-down
of the inventory.



|7. | OTHER
    CURRENT ASSETS
|-- | ------------------------



|                                    |  | 2015 |     |  | 2014 |  
|----------------------------------- |  | ---- | --- |  | ---- | -
|                                    |  |      |     |  |      |  
|Prepaid expenses                    |  | $    | 290 |  |      | $
|Short-term deposits                 |  |      | 104 |  |      |  
|Government authorities              |  |      | 102 |  |      |  
|Other current assets                |  |      | 76  |  |      |  
|Tax settlement receivable (Note 19) |  |      | 65  |  |      |  
|                                    |  | $    | 637 |  |      | $



|8. | OTHER
    CURRENT LIABILITIES
|-- | -----------------------------



|                                 |  | 2015 |     |  | 2014 |  
|-------------------------------- |  | ---- | --- |  | ---- | -
|                                 |  |      |     |  |      |  
|Accrued expenses                 |  | $    | 541 |  |      | $
|Employees and payroll accruals   |  |      | 397 |  |      |  
|Government authorities (Note 20) |  |      | -   |  |      |  
|                                 |  | $    | 938 |  |      | $



112






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



|9. | PROPERTY
    AND EQUIPMENT
|-- | --------------------------



|                                          |  | Furniture and office equipment |    |   | Machinery and equipment |  |       | Computer equipment |  |  | Leasehold improvements |   |  | Total |      
|----------------------------------------- |  | ------------------------------ | -- | - | ----------------------- |  | ----- | ------------------ |  |  | ---------------------- | - |  | ----- | -----
|                                          |  |                                | $  |   |                         |  | $     |                    |  |  | $                      |   |  |       | $    
|2015                                      |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Cost:                                     |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Balance as of January 1, 2015             |  |                                | 41 |   |                         |  | 752   |                    |  |  | 70                     |   |  |       | 1,751
|Additions                                 |  |                                | 8  |   |                         |  | 360   |                    |  |  | 87                     |   |  |       | 94   
|Disposals                                 |  |                                | (4 | ) |                         |  | (13   | )                  |  |  | (41                    | ) |  |       | -    
|Balance as of December 31, 2015           |  |                                | 45 |   |                         |  | 1,099 |                    |  |  | 116                    |   |  |       | 1,845
|                                          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Accumulated depreciation:                 |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Balance as of January 1, 2015             |  |                                | (7 | ) |                         |  | (148  | )                  |  |  | (29                    | ) |  |       | (585 
|Depreciation current year                 |  |                                | (4 | ) |                         |  | (121  | )                  |  |  | (34                    | ) |  |       | (270 
|Disposals                                 |  |                                | 4  |   |                         |  | 13    |                    |  |  | 41                     |   |  |       | -    
|Balance as of December 31, 2015           |  |                                | (7 | ) |                         |  | (256  | )                  |  |  | (22                    | ) |  |       | (855 
|                                          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Net balance as of December 31, 2015       |  |                                | 38 |   |                         |  | 843   |                    |  |  | 94                     |   |  |       | 990  
|Currency translation adjustments          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Net balance after translation adjustments |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|                                          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|2014                                      |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Cost:                                     |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Balance as of January 1, 2014             |  |                                | 33 |   |                         |  | 229   |                    |  |  | 39                     |   |  |       | 1,395
|Additions                                 |  |                                | 8  |   |                         |  | 523   |                    |  |  | 31                     |   |  |       | 356  
|Balance as of December 31, 2014           |  |                                | 41 |   |                         |  | 752   |                    |  |  | 70                     |   |  |       | 1,751
|                                          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Accumulated depreciation:                 |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Balance as of January 1, 2014             |  |                                | (4 | ) |                         |  | (87   | )                  |  |  | (12                    | ) |  |       | (337 
|Depreciation current year                 |  |                                | (3 | ) |                         |  | (61   | )                  |  |  | (18                    | ) |  |       | (248 
|Balance as of December 31, 2014           |  |                                | (7 | ) |                         |  | (148  | )                  |  |  | (30                    | ) |  |       | (585 
|                                          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Net balance as of December 31, 2014       |  |                                | 34 |   |                         |  | 604   |                    |  |  | 40                     |   |  |       | 1,166
|Currency translation adjustments          |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      
|Net balance after translation adjustments |  |                                |    |   |                         |  |       |                    |  |  |                        |   |  |       |      



Depreciation
expense for the years ended December 31, 2015, 2014 and 2013 amounted to $278, $216 and $226, respectively, and is included in
cost of revenues



113






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



|10. | INTANGIBLE
    ASSETS
|--- | ---------------------



|                                          |  | License- CLS (Note 14) |        |   | License-Ferring (Note 20) |  |      | Intellectual property |  |  | Total |  
|----------------------------------------- |  | ---------------------- | ------ | - | ------------------------- |  | ---- | --------------------- |  |  | ----- | -
|                                          |  | $                      |        |   | $                         |  |      | $                     |  |  | $     |  
|2015                                      |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Cost:                                     |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Balance as of January 1, 2015             |  |                        | -      |   |                           |  | 578  |                       |  |  | 91    |  
|Additions                                 |  |                        | 13,814 |   |                           |  | -    |                       |  |  | -     |  
|Balance as of December 31, 2015           |  |                        | 13,814 |   |                           |  | 578  |                       |  |  | 91    |  
|                                          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Accumulated amortization:                 |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Balance as of January 1, 2015             |  |                        | -      |   |                           |  | (128 | )                     |  |  | (76   | )
|Amortization current year                 |  |                        | (647   | ) |                           |  | (58  | )                     |  |  | (6    | )
|Balance as of December 31, 2015           |  |                        | (647   | ) |                           |  | (186 | )                     |  |  | (82   | )
|                                          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Net balance as of December 31, 2015       |  |                        | 13,167 |   |                           |  | 392  |                       |  |  | 9     |  
|Currency translation adjustments          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Net balance after translation adjustments |  |                        |        |   |                           |  |      |                       |  |  |       |  
|                                          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|2014                                      |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Cost:                                     |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Balance as of January 1, 2014             |  |                        | -      |   |                           |  | 578  |                       |  |  | 91    |  
|Additions                                 |  |                        | -      |   |                           |  | -    |                       |  |  | -     |  
|Balance as of December 31, 2014           |  |                        | -      |   |                           |  | 578  |                       |  |  | 91    |  
|                                          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Accumulated amortization:                 |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Balance as of January 1, 2014             |  |                        | -      |   |                           |  | (70  | )                     |  |  | (70   | )
|Amortization current year                 |  |                        | -      |   |                           |  | (58  | )                     |  |  | (6    | )
|Balance as of December 31, 2014           |  |                        | -      |   |                           |  | (128 | )                     |  |  | (76   | )
|                                          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Net balance as of December 31, 2014       |  |                        | -      |   |                           |  | 450  |                       |  |  | 15    |  
|Currency translation adjustments          |  |                        |        |   |                           |  |      |                       |  |  |       |  
|Net balance after translation adjustments |  |                        |        |   |                           |  |      |                       |  |  |       |  



|11. | SEGMENTED
    INFORMATION
|--- | -------------------------



Management
evaluates the Company at the corporate level and operating results are reported to the Chief Executive Officer (“CEO”)
on an aggregate basis rather than by type of activity. Management believes this basis of reporting is the most informative representation
of how the business of the Company is organized and managed.



Revenues
by geographic areas



|        |  |  | 2015 |     |  | 2014 |   |       | 2013 | 
|------- |  |  | ---- | --- |  | ---- | - | ----- | ---- | 
|Israel  |  |  | $    | 534 |  |      | $ | 1,418 |      | 
|Estonia |  |  |      | 413 |  |      |   | 1,445 |      | 
|Other   |  |  |      | 8   |  |      |   | 5     |      | 
|        |  |  | $    | 955 |  |      | $ | 2,868 |      | 



All
of the Company’s long-lived assets are located in Israel.



114






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Major
customers



Revenue
from major customers, each of whom amounts to 10% or more, of total revenues:



|                           |  | 2015 |    |   | 2014 |  |    | 2013 | 
|-------------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|Customer 1 (related party) |  |      | 30 | % |      |  | -  |      | 
|Customer 2                 |  |      | 20 | % |      |  | 11 | %    | 
|Customer 3 (related party) |  |      | 15 | % |      |  | -  |      | 
|Customer 4 (related party) |  |      | 13 | % |      |  | 50 | %    | 
|Customer 5                 |  |      | 10 | % |      |  | 29 | %    | 



|12. | RELATED
    PARTY TRANSACTIONS
|--- | ------------------------------



Balances
with related parties



|                            |  | 2015 |       |  | 2014 |  
|--------------------------- |  | ---- | ----- |  | ---- | -
|                            |  |      |       |  |      |  
|Loans                       |  | $    | -     |  |      | $
|Capital notes               |  |      | -     |  |      |  
|Short-term deferred revenue |  |      | 1,583 |  |      |  
|Long-term deferred revenue  |  |      | 1,578 |  |      |  
|                            |  | $    | 3,161 |  |      | $



Related
party details



| | a) | Loans
| | -- | -----



|                                                                                            |  | Total |        
|------------------------------------------------------------------------------------------- |  | ----- | -------
|Carrying amount, December 31, 2013                                                          |  | $     | 4,035  
|Proceeds from loans payable                                                                 |  |       | 5,578  
|Fair value calculation                                                                      |  |       | (1,437 
|Foreign exchange                                                                            |  |       | 191    
|Interest expense                                                                            |  |       | 898    
|Carrying amount, December 31, 2014                                                          |  |       | 9,265  
|Proceeds from loans payable                                                                 |  |       | 2,025  
|Fair value calculation                                                                      |  |       | (524   
|Foreign exchange                                                                            |  |       | (349   
|Interest expense                                                                            |  |       | 1,128  
|Repayment                                                                                   |  |       | (1,488 
|Conversion of loans payable as a result of the completion of the Transaction
    (Note 12c) |  |       | (10,057
|Carrying amount, December 31, 2015                                                          |  | $     | -      



During
the years ended December 31, 2015 and 2014, the Company received loans from its shareholders and their affiliates in the amount
of approximately $2,025 and $5,578, respectively. Loans either bear no interest or bear interest at rates of 3%, 4.5% or 10% per
annum. The loans are repayable within one year from date of receipt but are automatically extended for an additional year unless
otherwise agreed between the parties. The Company calculated the fair value of these loans in the amount of $1,501 and $4,141,
respectively, using an effective interest rate of approximately 15%. The differences between the principal amount of the loan
and their fair value in the amount of $524 and $1,437, respectively, to be expensed over the term of the loan, were recorded as
an increase in equity, net of income taxes.



115






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



| | b) | Capital
    notes
| | -- | -----------------



|                                                                                            |  | Total |        
|------------------------------------------------------------------------------------------- |  | ----- | -------
|Carrying amount, December 31, 2013                                                          |  | $     | 23,972 
|Conversion of capital notes to contributed surplus                                          |  |       | (23,972
|Proceeds from capital notes                                                                 |  |       | 1,000  
|Portion recorded to share capital                                                           |  |       | (529   
|Interest expense                                                                            |  |       | 43     
|Carrying amount, December 31, 2014                                                          |  |       | 514    
|Interest expense                                                                            |  |       | 40     
|Conversion of capital notes as a result of the completion of the Transaction
    (Note 12c) |  |       | (554   
|Carrying amount, December 31, 2015                                                          |  | $     | -      



On
January 1, 2014 capital notes held by FDS Pharma LLP (“FDS”) and OPKO Health Inc. (“OPKO”), both shareholders
of the Company, in the total amount of $2,414 and NIS 119,958 thousands (carrying amount of $23,972) were converted into contributed
surplus.



On
June 19, 2014, SciVacenteredinto a Share Purchase and Loan Agreement with HS Contrarian Investments, LLC (“Contrarian”) and Greenstone Capital,
LLC (“Greenstone”), pursuant to which each of Contrarian and Greenstone purchased 28,515,465 common shares of SciVac
and received a capital note in the amount of $500 each bearing no interest. Of the consideration received, $471 was allocated
to capital notes using an effective rate of approximately 15%. The balance of $529 was credited to share capital. These capital
notes were assigned to the Company as part of the Transaction in exchange for common shares of the Company.



The
outstanding capital notes were assigned to Levon (Note 4).



| | c) | On
    July 9, 2015, the Transaction as contemplated under the Arrangement Agreement was consummated. As part of this transaction,
    except for the following loans remitted by OPKO all related party loans and capital notes plus the accrued interest thereon
    were assigned from SciVac to Levon. The fair value of the loans assigned to Levon in the amount of $10,611 was accounted as
    being eliminated through the issuance of 74,980,319 common shares with a fair value of $7,027. The remaining difference of
    $3,584 was accounted as a credit to contributed surplus. The following loans were not assigned: $400, $450, $425 and $200
    remitted on March 24, 2015, April 30, 2015, May 21, 2015 and June 29, 2015, respectively. These loans were repaid in September
    2015. The fair value of repaid loans was $1,127. The loss from the early repayment of $361 was recorded as an expense.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | d) | Deferred
    revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



On
April 26, 2013, SciVac entered into a Development and Manufacturing Agreement with Xenetic Biosciences plc, a public company organized
under the laws of England with common key management, Kevelt AS (“Kevelt”), a company incorporated under the laws
of Estonia and a wholly owned subsidiary of OAO Pharmsynthez (“Pharmsynthez”), a shareholder of SciVac, pursuant to
which SciVac agreed to develop the manufacturing process for the production of clinical andcommercial
quantities of certain materials in drug substance form for an aggregate amount of $4,279. The
original term of the Agreement was for a period of one year commencing April 26, 2013, but pursuant to the terms of the agreement,
the term automatically renews thereafter for successive additional one-year periods, unless the parties fail to agree on the terms
applicable to any renewal term and either party provides at least 30 days prior written notice of non-renewal to the other. The
parties are currently negotiating an amendment to the project plan, which includes, inter alia, adjusting milestone delivery
dates. As at December 31, 2015 and 2014, $909 and $1,704, respectively, wererecorded as
short-term deferred revenue and $1,583 and $909, respectively, were recorded as long- term deferred revenue. During the years
ended December 31, 2015 and 2014, $128 and $1,404, respectively, were recognized as contract research and development revenue
on completion of the milestones.



116






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



On
December 10, 2015, the Company entered into a Settlement Agreement and three separate Termination Agreements (which formed appendices
thereto) with Pharmsynthez, to put into order the outstanding agreements and understandings between the parties. Further to this
Settlement Agreement, the following agreements remain in force (in addition to the Termination Agreements):



| | i.  | On
    December, 29, 2014, SciVac entered into an exclusive distribution agreement with Pharmsynthez, pursuant to which SciVac appointed
    Pharmsynthez as the exclusive distributor of Sci-B-VacTM in the Russian Federation for a term of five years. The term
    of the agreement will automatically continue at the expiration of the initial term, unless either party provides written notice
    to the other party at least 90 days prior to the termination of the initial term. The agreement provides that Pharmsynthez
    must purchase certain minimum quantities of Sci-B-VacTM per each quarter during the term of the agreement, and failure
    to do so will entitle SciVac to either terminate Pharmsynthez’s exclusivity rights or terminate the agreement. Further
    to the abovementioned Settlement Agreement, the aggregate amount of $468 already remitted to SciVac by Pharmsynthez is to
    be credited against future orders of products by Pharmsynthez in accordance with the terms and conditions of the Distribution
    Agreements. The deposit has been classified as long-term deferred revenue in 2015 and 2014. During the years ended December
    31, 2015 and 2014, no revenue was recognized as contract research and development revenue on completion of the milestones.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ii. | SciVac
    entered into a material transfer agreement with OJSC Pharmsynthez and Ferring International Center S.A. (“Ferring”),
    dated as of April 30, 2014, pursuant to which SciVac and Pharmsynthez agreed to provide rhDNase I material to Ferring for
    research purposes. The agreement has a one-year term but the parties are permitted to terminate the agreement at any time
    by providing 30 days prior written notice to the other parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



| | e) | Pursuant
    to an agreement in June 2012 between the Company, FDS, OPKO, SciGen Singapore and related entities the Company recognized
    $922 net financing.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                               
| | f) | Revenues                                                                                                                                                      



SciVac
entered into a services agreement with OPKO Biologics Ltd. (“OPKO Bio”), a subsidiary of OPKO, dated as of March 15,
2015, pursuant to whichSciVacagreed to provide certain aseptic process filling services to OPKO Bio for a term of three years. Payment terms under this agreement
are determined in accordance with invoices sent by SciVac to OPKO Bio for services rendered. OPKO Bio may terminate this agreement
at any time by providing 60 days prior written notice to SciVac.



| | g) | Key
    management compensation
| | -- | -------------------------------



Key
management includes directors, the CEO and the Chief Financial Officer (“CFO”), who have the authority and responsibility
for the planning, directing and controlling the activities of the Company. The compensation paid to these key management personnel
for the years ended December 31, 2015, 2014 and 2013 are outlined below:



|                                     |  | 2015 |     |  | 2014 |   |     | 2013 | 
|------------------------------------ |  | ---- | --- |  | ---- | - | --- | ---- | 
|CEO                                  |  | $    | 178 |  |      | $ | 28  |      | 
|CFO                                  |  |      | 133 |  |      |   | 28  |      | 
|Chief Operations Officer, former CEO |  |      | -   |  |      |   | 131 |      | 
|Former CFO                           |  |      | -   |  |      |   | 66  |      | 
|                                     |  | $    | 311 |  |      | $ | 253 |      | 





117






As
Payments to key management are included in the following expenses for the years ended December 31, 2015, 2014 and 2013, respectively:



| | ● | General,
    administrative and selling - $203, $203 and $291.
| | - | --------------------------------------------------------------
| |   |                                                               
| | ● | Share-based
    payments - $54, $nil and $nil.                



The
Company did not pay any termination benefits to its key management. As at December 31, 2015, 2014 and 2013, trade accounts payable
included $nil, $15 and $nil, respectively, related to CEO and CFO compensation.



|13. | EMPLOYEE
    BENEFITS
|--- | ---------------------



Defined
contribution plan



The
Company operates a defined contribution retirement benefit plan for all qualifying employees in accordance with Israeli law. The
assets of the plan are held separately from those of the Company in funds under the control of trustees.



The
total expense recognized in profit or loss of $95, $88 and $111 for the years ended December 31, 2015, 2014 and 2013, respectively,
represents contributions payable to these plans by the Company at rates specified in the rules of the plan.



Defined
benefit plan



Israel’s
labor laws and the Law “severance pay, 1963” (“the law”), require the Company to pay severance pay to
employees during dismissal, disability and retirement. Legal retirement age now stands at 64 for women and 67 for men. Thus, under
the plan, an employee who was employed by the Company for at least one year (and in the circumstances defined by the law) and
was fired by the Company after the said period is entitled to severance pay. The rate of compensation listed in the law is the
employee’s final salary for each year of employment.



Under
the program, the Company is obligated for depositing amounts at the rate fixed by law (since January 1, 2008), to ensure the accrual
of such a severance pay due to the employee as above. As was defined in extension order (consolidated version) for pension obligation
under the Collective Agreements Act 1957, in the reporting period the Company’s provisions for compensation rate is 8.33%,
which will be deposited in a pension fund/insurance severance fund.



The
plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary
risk. No other post-retirement benefits are provided to these employees.



The
most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at
December 31, 2015 by an external actuary. The present value of the defined benefit obligation, and the related current service
cost, were measured using the projected unit credit method.



The
amount included in the consolidated statements of financial position arising from the Company’s obligation in respect of
its defined benefit plan is as follows:



|                                                      |  | December 31, |     
|----------------------------------------------------- |  | ------------ | ----
|                                                      |  | 2015         |     
|Present value of funded defined benefit obligation    |  | $            | 384 
|Fair value of plan assets                             |  |              | (332
|Funded status                                         |  |              | 52  
|                                                      |  |              |     
|Net liability arising from defined benefit obligation |  | $            | 52  



118






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



|14. | SHARE
    CAPITAL
|--- | -----------------



Authorized



Unlimited
number of common shares without par value.



Issued



All
figures as to the numbers of common shares have been retroactively restated to reflect the legal capital of Levon at the exchange
ratio of 1 SciVac ordinary share to 2,193.50 common shares of Levon.



| | i.  | On
    April 20, 2015, SciVac entered into a license agreement (the “CLS License Agreement”) with CLS Therapeutics Limited,
    a Guernsey company (“CLS”), pursuant to which CLS has granted to SciVac, effective as of the completion of the
    Arrangement on July 9, 2015, (Note 4) an exclusive, worldwide, perpetual and fully paid-up license (including the right to
    sublicense) to all of CLS’ patents, know-how and related improvements with respect to the Deoxyribonuclease enzyme (“DNASE”),
    including the exclusive right to research, develop, manufacture, have manufactured, use, sell, offer for sale, import, export,
    market and distribute products with respect to DNASE for all indications (collectively, the “Licensed Technology”).
    Pursuant to the CLS License Agreement, SciVac agreed to issue to CLS 147,403,020 common shares of Levon. The fair value of
    the intangible asset was recognized as $13,814.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ii. | On
    July 8, 2015, the Company issued 22,698,310 common shares of Levon to various advisors for services provided to the Company’s
    shareholders in connection with the Arrangement Agreement. The fair value of the expense was recognized as $2,127.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



|15. | OTHER
    COMPREHENSIVE INCOME
|--- | ------------------------------



|                                                                                                         |  | Translation Reserves |        |   | Defined Benefit Reserves |   |     | Total OCI Reserves | 
|-------------------------------------------------------------------------------------------------------- |  | -------------------- | ------ | - | ------------------------ | - | --- | ------------------ | 
|Balance as of January 1, 2013                                                                            |  | $                    | (155   | ) |                          | $ | 8   |                    | 
|Remeasurement of defined benefit obligation                                                              |  |                      | -      |   |                          |   | 3   |                    | 
|Exchange differences from translating the consolidated financial statements
    to presentation currency |  |                      | (1,825 | ) |                          |   | -   |                    | 
|Balance as of December 31, 2013                                                                          |  |                      | (1,980 | ) |                          |   | 11  |                    | 
|Remeasurement of defined benefit obligation                                                              |  |                      | -      |   |                          |   | 4   |                    | 
|Exchange differences from translating the consolidated financial statements
    to presentation currency |  |                      | 1,017  |   |                          |   | -   |                    | 
|Balance as of December 31, 2014                                                                          |  |                      | (963   | ) |                          |   | 15  |                    | 
|Remeasurement of defined benefit obligation                                                              |  |                      | -      |   |                          |   | (19 | )                  | 
|Exchange differences from translating the consolidated financial statements
    to presentation currency |  |                      | (48    | ) |                          |   | -   |                    | 
|Balance as of December 31, 2015                                                                          |  | $                    | (1,011 | ) |                          | $ | (4  | )                  | 



119






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



|16. | COST
    OF REVENUES
|--- | --------------------



|                              |  | 2015 |       |  | 2014 |   |       | 2013 | 
|----------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- | 
|Salaries and related benefits |  | $    | 1,010 |  |      | $ | 1,144 |      | 
|Raw materials                 |  |      | 1,434 |  |      |   | 1,423 |      | 
|Inventory write-off - recall  |  |      | 113   |  |      |   | -     |      | 
|Depreciation and amortization |  |      | 278   |  |      |   | 216   |      | 
|Electricity and maintenance   |  |      | 314   |  |      |   | 323   |      | 
|Other                         |  |      | 606   |  |      |   | 593   |      | 
|Total                         |  | $    | 3,755 |  |      | $ | 3,699 |      | 



|17. | GENERAL,
    ADMINSTRIVE AND SELLING
|--- | ------------------------------------



|                              |  | 2015 |       |  | 2014 |   |       | 2013 | 
|----------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- | 
|Legal                         |  | $    | 1,662 |  |      | $ | 456   |      | 
|Salaries and related benefits |  |      | 1,382 |  |      |   | 923   |      | 
|Depreciation and amortization |  |      | 862   |  |      |   | 181   |      | 
|Consultancy                   |  |      | 620   |  |      |   | 409   |      | 
|Investor relationship         |  |      | 138   |  |      |   | -     |      | 
|Electricity                   |  |      | 132   |  |      |   | 190   |      | 
|Insurance                     |  |      | 99    |  |      |   | 81    |      | 
|Rental                        |  |      | 83    |  |      |   | 103   |      | 
|Regulation and registration   |  |      | 79    |  |      |   | 99    |      | 
|Other                         |  |      | 361   |  |      |   | 286   |      | 
|Total                         |  | $    | 5,418 |  |      | $ | 2,728 |      | 



|18. | FINANCIAL
    EXPENSES (INCOME), NET
|--- | ------------------------------------



|                                      |  | 2015 |       |   | 2014 |   |       | 2013 | 
|------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- | 
|Financial expenses:                   |  |      |       |   |      |   |       |      | 
|Deemed interest on related party loan |  | $    | 830   |   |      | $ | 552   |      | 
|Interest on related party loan        |  |      | 298   |   |      |   | 389   |      | 
|Other financial expenses              |  |      | 21    |   |      |   | 50    |      | 
|Foreign exchange differences          |  |      | 1,463 |   |      |   | 1,607 |      | 
|                                      |  |      | 2,612 |   |      |   | 2,598 |      | 
|Financial income:                     |  |      |       |   |      |   |       |      | 
|Interest income                       |  |      | (44   | ) |      |   | -     |      | 
|Foreign exchange differences          |  |      | -     |   |      |   | -     |      | 
|                                      |  |      | (44   | ) |      |   | -     |      | 
|                                      |  |      |       |   |      |   |       |      | 
|Financial expenses, net               |  | $    | 2,568 |   |      | $ | 2,598 |      | 



120






|19. | INCOME
    TAXES
|--- | ----------------



A
reconciliation of income tax recovery computed at the Canadian statutory rate of 26% (2014 - 26%: 2013 - 25%) to income tax benefit
for the years ended December 31 is as follows:



|                                                                 |  | 2015 |        |   | 2014 |   |        | 2013 | 
|---------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- | 
|                                                                 |  |      |        |   |      |   |        |      | 
|Loss before income taxes                                         |  | $    | 14,884 |   |      | $ | 6,791  |      | 
|Statutory tax rate                                               |  |      | 26     | % |      |   | 26     | %    | 
|Tax benefit computed at the statutory tax rate                   |  | $    | 3,870  |   |      | $ | 1,766  |      | 
|                                                                 |  |      |        |   |      |   |        |      | 
|Change in timing differences                                     |  |      | (634   | ) |      |   | -      |      | 
|Effect of change in tax rates                                    |  |      | 24     |   |      |   | -      |      | 
|Reversal of a provision in respect of prior year’s tax positions |  |      | 2      |   |      |   | 760    |      | 
|Unused tax losses and tax offsets not recognized                 |  |      | (3,133 | ) |      |   | (1,407 | )    | 
|                                                                 |  |      |        |   |      |   |        |      | 
|Income tax benefit                                               |  | $    | 129    |   |      | $ | 1,119  |      | 



Taxes
recognized directly in equity:



|                                                         |  | As of December 31, |    
|-------------------------------------------------------- |  | ------------------ | ---
|                                                         |  | 2015               |    
|                                                         |  |                    |    
|Contributions from shareholders recognized in fair value |  | $                  | 131



Tax
benefit (expenses) recognized in profit or loss



|                                                                                            |  | As of December 31, |    
|------------------------------------------------------------------------------------------- |  | ------------------ | ---
|                                                                                            |  | 2015               |    
|                                                                                            |  |                    |    
|Tax losses carryforward                                                                     |  | $                  | 131
|Income (expense) from reversal of a provision in respect of prior years,
    tax positions. |  |                    | (2 
|Total                                                                                       |  | $                  | 129



The
income tax benefit recorded in profit and loss for the years 2015, 2014 and 2013 in the amounts of $131, $359, and $176, respectively,
arise from the recognition of deferred tax assets in respect of carryforward losses against deferred tax liabilities recorded
for temporary taxable differences, in respect of related party loans that were recorded directly in equity.



In
addition, in 2014 the Company recognized a tax benefit of $760 due to a reversal of a provision in respect of prior years, tax
positions (see above).



121






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



The
tax effected items that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities
at December 31, 2015 and 2014 are presented below:



|                                                                |  | 2015 |      |   | 2014 |  
|--------------------------------------------------------------- |  | ---- | ---- | - | ---- | -
|                                                                |  |      |      |   |      |  
|Deferred
    tax assets                                         |  |      |      |   |      |  
|Non-capital
    losses                                          |  | $    | 158  |   |      | $
|                                                                |  |      |      |   |      |  
|Deferred tax liabilities                                        |  |      |      |   |      |  
|Property
                                         and equipment |  |      | (158 | ) |      |  
|Contribution
    from shareholders recognized at fair value     |  |      | -    |   |      |  
|Net
    deferred income tax liabilities                         |  | $    | -    |   |      | $



At
December 31, 2015 and 2014, no deferred tax assets are recognized on the following temporary differences, as it is not probable
that sufficient future taxable profit will be available to realize such assets:



|                                              |  | 2015 |        |  | 2014 |  
|--------------------------------------------- |  | ---- | ------ |  | ---- | -
|Non-capital loss carry-forwards               |  | $    | 22,820 |  |      | $
|Share issuance costs                          |  |      | 19     |  |      |  
|Other                                         |  |      | 194    |  |      |  
|Unrecognized deductible temporary differences |  | $    | 23,033 |  |      | $



At
December 31,2015,
the Company had non-capital losses aggregating approximately $17,019. The non-capital losses are available to reduce taxable
income of future years expire as follows:



|                       |  |  | Canada |       |  | Israel |  |        | USA |  |  | Total | 
|---------------------- |  |  | ------ | ----- |  | ------ |  | ------ | --- |  |  | ----- | 
|                       |  |  |        |       |  |        |  |        |     |  |  |       | 
|2034                   |  |  |        | -     |  |        |  | -      |     |  |  | 59    | 
|2035                   |  |  |        | 1,376 |  |        |  | -      |     |  |  | 261   | 
|Indefinite             |  |  |        | -     |  |        |  | 21,124 |     |  |  | -     | 
|Non-capital
    losses |  |  |        | 1,376 |  |        |  | 21,124 |     |  |  | 320   | 



Further
details



On
July 30, 2013, the Israeli Knesset approved the third reading of “The Arrangements” Law (hereinafter: “the Tax
Law”).



The
principal point of the Taxation Chapter of the Tax Law in respect of the Company’s business is the increase of the corporate
tax rate, starting in 2014, to a rate of 26.5% (an increase of 1.5%).



At
the beginning of January, 2016, there was an amendment to the Tax Law , reducing the tax rate from 26.5% to 25%. The reduction
is effective as of January 1, 2016.



Tax
assessments



As
of December 31, 2014 the Company signed an Income Tax Assessments Agreement for 2008-2012, with the Israeli Tax Authorities (the
“Assessment Agreement”) regarding the assessments for 2008-2012. As a result of the assessment the Company recorded
liability of NIS 1,026 thousands ($264). The additional tax arising from this agreement shall be paid in 12 equal instalments
with interest (4%).



122






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



On
December 31, 2014, the Company entered into a settlement agreement with FDS and SciGen Singapore (the “Settlement Agreement”)
related to SciGen Singapore liability under the Share Purchase Agreement of November 10, 2011 by and between SciGen Singapore
and FDS. Under the terms of this settlement agreement, SciGen Singapore would cover the cost of the income tax assessed on the
Company under the Assessment Agreement in the principal amount of $255 plus linkage and interest as well as half the out of pocket
expenses incurred by the Company in connection with the tax assessment in the amount of $16. The receivable has been recorded
as a contribution to equity in the amount of $280. SciGen Singapore shall be entitled to deduct outstanding royalties owed to
it by the Company, which as of the date of the Settlement Agreement was $54 as well as any future royalties that the Company is
required to remit, until payment in full of the above-mentioned amounts.

The
Company has completed all the payments of Assessment Agreement during 2015.



Foreign
tax rates



Taxable
income of the Company’s wholly owned subsidiaries, SciVac Ltd. and SciVac USA, LLC were subject to tax at the estimated
rates of 26.5% and 35% in 2015, respectively.



|20. | COMMITMENTS
    AND CONTINGENT LIABILITIES
|--- | ------------------------------------------



| | a) | Under
    a rental agreement for the Company’s manufacturing site in Rehovot, Israel, the Company is committed to pay $121 per
    year as rental costs until January 2017. The annual cost was approximately $250 and the expense was allocated between cost
    of revenues, general and administrative services (“G&A”) and research and development. The rental cost is
    linked to the Israeli consumer price index (“CPI”) and was increased by 5% at January 2013. Per the terms of the
    rental agreements, the Company is obligated to obtain bank guarantees equal to six months’ payments. The G&A expense
    recorded for this lease was $83, $103 and $79 for the years ended December 31, 2015, 2014 and 2013, respectively.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | b) | Subsequently,
    on February 24, 2016 the Company renewed the rental agreement for Rehovot, Israel. The term is for five years beginning February
    1, 2017 and ending January 31, 2022. The renewed lease includes a five-year option to extend until January 31, 2027 with an
    increase of 10%. The amount of the lease is approximately $24 per month and linked to the CPI.                                                                                                                                                                                                                                                                                                                                                          



The
minimum annual lease commitments relating to this premise during the next five years are:



|2016 |  |  | $ | 222   | 
|---- |  |  | - | ----- | 
|2017 |  |  |   | 283   | 
|2018 |  |  |   | 288   | 
|2019 |  |  |   | 288   | 
|2020 |  |  |   | 288   | 
|     |  |  | $ | 1,369 | 



| | c) | The
    Company’s flagship product, Sci-B-VacTM, is a recombinant third generation hepatitis B vaccine whose sales and
    territories are governed by the Ferring License Agreement. Under the License Agreement (Note 12), the Company is committed
    to pay Ferring royalties equal to 7% of Net Sales (as defined therein). The expenses were recorded in cost of revenues in
    the amount of $21, $76 and $42 for the years ended December 31, 2015, 2014 and 2013, respectively. In addition, the Company
    is committed to pay 30% of any and all non-royalty consideration, in any form, received by Company from such Sub-Licensee
    (other than consideration based on Net Sales for which a royalty is due under the License Agreement), provided that the payment
    of 30% shall not apply to a grant of rights in or relating to: (i) the Territory as such term was defined prior to the Amendment
    dated January 24, 2005; or (ii) the Berna Territory (as defined in the License Agreement).
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



123








SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



The
Company is to pay Ferring the above-mentioned royalties on a country by country basis until the date which is ten (10) years after
the date of commencement of the first Royalty Year in respect of such country (“License Period”). Upon expiry of the
full term of the first License Period having commenced, the Company shall have the option to extend the License Agreement in respect
of all the countries that still make up the Territory (as defined in the License Agreement) (as from the respective date of expiry)
for an additional seven (7) years by payment to Ferring of a one-time lump sum payment of $100. Royalties will continue to be
payable for the duration of the extended License Periods. When the license has been in effect for, and elapsed after, a seventeen
(17) year License Period with respect to a country in the Territory, the Company shall thereafter have a royalty-free license
to market (as defined in the License Agreement) in such country and when all the License Periods have expired in each country
in the Territory, a royalty-free license to manufacture the product in India and the PRC.



| | d) | Under
    an Assignment and Assumption Agreement, the Company is required to pay of royalties to SciGen Singapore equal to 5% of Net
    Sales. The expenses were recorded in cost of sales in the amount of $15, $74 and $30 for the years ended December 31, 2015,
    2014 and 2013, respectively.                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | e) | On
    August 2, 2015, the Company was served with a Motion to Approve a Class Action (the “Motion”). The Motion and
    underlying claim was filed in response to a recall of certain batches of the Company’s Sci-B-VacTMproduct,
    which was implemented in July 2015 as a precaution and in conjunction with the Israeli Ministry of Health. The Company has
    provided notice of the Motion to its insurance broker and they have retained counsel on behalf of the Company. A pre-trial
    hearing, which was scheduled for March 10, 2016, has been postponed to June 28, 2016. At this time the outcome of the Motion
    cannot be determined and no liability has been recorded.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | f) | In
    2013, the Company received $394 grant from the Office of the Chief Scientist of Israel to purchase equipment for research
    and development.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|21. | FINANCIAL
                                         INSTRUMENTS
|--- | --------------------------------------------------------------



Financial
instruments comprise cash and cash equivalents, trade accounts receivable, trade accounts payable and debt. At initial recognition
management has classified financial assets and liabilities as follows. The Company has classified its cash and cash equivalents
as FVTPL; trade accounts receivable as loans and receivables; and trade accounts payable, liabilities for severance pay and debt
as other liabilities. The Company’s financial instruments are exposed to certain financial risks: credit risk, liquidity
risk and market risk.



| | a) | Fair
    value
| | -- | --------------



Cash
and cash equivalents, short-term investments and trade accounts receivables are financial instruments whose fair value approximates
their carrying value due to their short-term maturity.



The
fair value of accounts payable may be less than its carrying value due to liquidity risk.



124






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



| | b) | Credit
    risk
| | -- | ---------------



Credit
risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation. The Company’s cash and cash equivalents is exposed to credit risk. The Company manages credit risk in respect
of cash and cash equivalents, by maintaining the majority of cash and cash equivalents at high credit rated Canadian, U.S. and
Israeli financial institutions. The Company’s concentration of credit risk, and maximum exposure thereto, is as follows:





|                                                                |  | 2015 |        |  | 2014 |  
|--------------------------------------------------------------- |  | ---- | ------ |  | ---- | -
|                                                                |  |      |        |  |      |  
|Cash and cash equivalents held at major financial institutions: |  |      |        |  |      |  
|Canada                                                          |  | $    | 11,979 |  |      | $
|U.S.                                                            |  |      | 29     |  |      |  
|Israel                                                          |  |      | 468    |  |      |  
|                                                                |  |      |        |  |      |  
|Total (as presented in the Financial Position)                  |  | $    | 12,476 |  |      | $





| | c) | Liquidity
    risk
| | -- | ------------------



Liquidity
risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company
manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities.
The Company has sufficient current assets to meet short-term business requirements. At December 31, 2015 and 2014, the Company
had current liabilities of $2,929 and $3,079, respectively. Trade accounts payable are subject to normal trade terms.



| | d) | Interest
    rate risk
| | -- | ----------------------



The
Company is subject to interest rate risk on its cash and cash equivalents and believes that the results of operations, financial
position and cash flows would not be significantly affected by a sudden change in market interest rates. The only financial instruments
that expose the Company to interest rate risk are its cash and cash equivalents.



As
of December 31, 2015, cash held in savings accounts and term deposits was $12.5 million. The interest rates range from 0.0% to
0.5%.



| | e) | Market
    risk
| | -- | ---------------



Market
risk consists of interest rate risk, foreign currency risk and other price risk. The Company is exposed to interest rate risk
and foreign currency risk.



125






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



| | f) | Foreign
    currency risk management
| | -- | ------------------------------------



The
Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise.
The carrying amounts of the Company’s foreign currency denominated net monetary assets at the end of the reporting period
are as follows:



|                |  | Net monetary assets/liability |       
|--------------- |  | ----------------------------- | ------
|                |  | December 31, 2015             |       
|U.S. dollar     |  |                               | (2,779
|Canadian dollar |  |                               | 12,202



For
the year ended December 31, 2015, the Company’s sensitivity analysis suggests that a change in the absolute rate of exchange
in the Canadian dollar by 4% and the U.S. dollar by 20% will not have a material effect on the Company’s business, financial
condition and results of operations.



The
Company has not entered into any foreign currency contracts to mitigate this risk.



|22. | CAPITAL
    MANAGEMENT
|--- | ----------------------



The
Company’s objective in managing capital is to ensure a sufficient liquidity position to finance its research and development
activities, corporate, administration and marketing expenses, working capital and overall capital expenditures. The Company makes
every attempt to manage its liquidity to minimize shareholder dilution whenever possible.



The
Company defines capital as shareholders’ equity and debt. No quantitative targets or benchmarks are used in managing capital.
Since inception, the Company has primarily financed its liquidity through private placements and debt with related parties. The
Company has also met its liquidity needs through revenue from sales of products and contract research activity. To meet future
requirements, the Company intends to raise cash or improve liquidity through some or all of the following: public or private equity
or debt financings.



The
Company is not subject to any externally imposed capital requirements. There have been no changes to the Company’s objectives
and what it manages as capital during the year ended December 31, 2015.



|23. | CASH
    FLOW INFORMATION
|--- | -------------------------



|                                                 |  | 2015 |      |   | 2014 |   |        | 2013 | 
|------------------------------------------------ |  | ---- | ---- | - | ---- | - | ------ | ---- | 
|Change in non-cash working capital               |  |      |      |   |      |   |        |      | 
|                                                 |  |      |      |   |      |   |        |      | 
|Decrease in trade account receivable             |  | $    | 490  |   |      | $ | 24     |      | 
|Decrease (increase) in inventory                 |  |      | 512  |   |      |   | (299   | )    | 
|Decrease (increase) in other current assets      |  |      | (181 | ) |      |   | (81    | )    | 
|Decrease (increase) in other long-term assets    |  |      | -    |   |      |   | (6     | )    | 
|Increase (decrease) in related parties           |  |      | 219  |   |      |   | 1,193  |      | 
|Decrease in trade account payable                |  |      | (119 | ) |      |   | (650   | )    | 
|Increase (decrease) in other current liabilities |  |      | (170 | ) |      |   | 883    |      | 
|Decrease in deferred revenues                    |  |      | (357 | ) |      |   | (1,556 | )    | 
|                                                 |  |      |      |   |      |   |        |      | 
|Change in non-cash working capital, net          |  | $    | 394  |   |      | $ | (492   | )    | 



126






SciVac
Therapeutics Inc.

(formerly
Levon Resources Ltd.)

Notes
to Consolidated Financial Statements

For
the years ended December 31, 2015, 2014 and 2013

(Expressed
in U.S. dollars in thousands)



Non-cash
transactions



| | i)   | Capital
    contribution in respect of related party loans (net of income taxes) in the amount of $393 and $1,078 for the years ended
    December 31, 2015 and 2014, respectively.                    
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                        
| | ii)  | The
    Company purchased an Intangible Asset (CLS Licence) in exchange for an issuance of shares in the amount of $ 13,814 (Note
    14i).                                                            
| |      |                                                                                                                                                                                                        
| | iii) | Assignment
    of notes issued by SciVac to the Company in an amount of $10,611. These notes were derecognized from the consolidated financial
    statements (Note 12c).                              
| |      |                                                                                                                                                                                                        
| | iv)  | Capital
    notes in the amount of $23,972 were converted into contributed surplus during the year ended December 31, 2014.                                                                            
| |      |                                                                                                                                                                                                        
| | v)   | As
    part of a settlement agreement with FDS and Scigen Singapore, the Company recognized a receivable in the amount of $280 as
    a contribution to equity during the year ended December 31, 2014.



127






ITEM
19. Exhibits.



|Exhibit
        No. |  | Description                                                                                                                                                                                                                                                                                                                                           
|------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|1.1                 |  | Articles,
    filed as Exhibit 3.1 to SciVac’s registration statement on Form F-4, filed with the SEC on December 23, 2015 and incorporated
    herein by reference.                                                                                                                                                                                  
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|1.2                 |  | Notice
    of Articles, filed as Exhibit 3.2 to Amendment No. 1 to SciVac’s registration statement on Form F-4, filed with the
    SEC on February 5, 2016 and incorporated herein by reference.                                                                                                                                                      
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|1.3                 |  | Form
    of Notice of Alteration, filed as Exhibit 3.3 to Amendment No. 1 to SciVac’s registration statement on Form F-4, filed
    with the SEC on February 5, 2016 and incorporated herein by reference.                                                                                                                                            
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|3.1                 |  | Form
    of SciVac Voting and Support Agreement, filed as Exhibit 10.1 to SciVac’s registration statement on Form F-4, filed
    with the SEC on December 23, 2015 and incorporated herein by reference.                                                                                                                                              
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|3.2                 |  | Voting
    and Support Agreement, dated as of October 26, 2015, by and among SciVac Therapeutics Inc., Seniccav Acquisition Corporation
    and ARCH Venture Fund VI, L.P., filed as Exhibit 10.5 to Amendment No. 1 to SciVac’s registration statement on Form
    F-4, filed with the SEC on February 5, 2016 and incorporated herein by reference. 
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|3.3                 |  | Voting
    and Support Agreement, dated as of October 26, 2015, by and among SciVac Therapeutics Inc., Seniccav Acquisition Corporation
    and Clarus Lifesciences I, L.P., filed as Exhibit 10.6 to Amendment No. 1 to SciVac’s registration statement on Form
    F-4, filed with the SEC on February 5, 2016 and incorporated herein by reference.
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|4.1                 |  | Agreement
    and Plan of Merger, dated as of October 26, 2015 (attached as Annex A to SciVac’s registration statement on Form F-4,
    filed with the SEC on December 23, 2015 and incorporated herein by reference).                                                                                                                                
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|4.2                 |  | First
    Amendment to Agreement and Plan of Merger, dated as of December 17, 2015 (attached as Annex A to SciVac’s registration
    statement on Form F-4, filed with the SEC on December 23, 2015 and incorporated herein by reference).                                                                                                            
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|4.3                 |  | Arrangement
    Agreement, dated as of March 19, 2015, by and between SciVac Ltd., Levon Resources Ltd. and 1027949 BC Ltd., filed as Exhibit
    99.1 to SciVac’s Report on Form 6-K, filed with the SEC on June 9, 2015 and incorporated herein by reference.                                                                                       
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|4.4                 |  | License
    Agreement, dated June 2004, by and between Savient Pharmaceuticals, Inc. and SciGen, Ltd., as amended, filed as Exhibit 99.2
    to SciVac’s Report on Form 6-K, filed with the SEC on July 20, 2015 and incorporated herein by reference.                                                                                                
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|8                   |  | Subsidiary
    List of SciVac Therapeutics Inc., filed as Exhibit 21.1 to SciVac’s registration statement on Form F-4, filed with the
    SEC on December 23, 2015 and incorporated herein by reference.                                                                                                                                              
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|12.1                |  | Certification
    of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act
    of 1934, as amended.                                                                                                                                                                                
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|12.2                |  | Certification
    of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act
    of 1934, as amended.                                                                                                                                                                                
|                    |  |                                                                                                                                                                                                                                                                                                                                                       
|13                  |  | Certifications
    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                           



128






SIGNATURES



The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.



| | SCIVAC
    THERAPEUTICS INC.
| | ----------------------------
| |                             
| | By:                         
| |                             
| |                             



Date:
March 30, 2016



129