Exhibit
99.1


Report
of Management on Internal Control Over Financial Reporting





Financial
Statements





XTL
Biopharmaceuticals Ltd. (the “Company”) is responsible for the preparation,
integrity and fair presentation of its published consolidated financial
statements as of December 31, 2008, and for the year then ended. The
consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United
States.





Internal Control Over Financial
Reporting





The
management of the Company is responsible for establishing and maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting.





The
Company’s internal control over financial reporting is a process designed by, or
under the supervision of, the Company’s Audit Committee, principal executive and
principal financial officers, and effected by the Company’s board of directors,
management, and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company’s assets that could have a
material effect on the consolidated financial statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect material misstatements on a timely basis. Therefore even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.  Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.





Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008, based on the criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring
Organizations – COSO – of the Treadway Commission. Based on that assessment,
management has concluded that as of December 31, 2008 the Company’s internal
control over financial reporting is effective.





The
Company's independent auditors, Kesselman & Kesselman, a member of
PricewaterhouseCoopers International Limited, have audited the consolidated
financial statements prepared by the Company and independently assessed the
effectiveness of the Company’s internal control over financial
reporting.





/s/
      Ron Bentsur
                
                /s/
      Bill KesslerRon
      Bentsur
                
                Bill
      KesslerCo-Chief
      Executive Officer
                
                Director
      of FinanceApril
      6, 2009
                
                April
      6, 2009