# EDGAR Filing Document

**Accession Number:** 0002029039
**File Stem:** 0001641172-25-018388
**Filing Date:** 2025-7
**Character Count:** 1500754
**Document Hash:** 2babc68c6e3407a0656ad64f66465219
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-018388.hdr.sgml**: 20250709

**ACCESSION NUMBER**: 0001641172-25-018388

**CONFORMED SUBMISSION TYPE**: F-1

**PUBLIC DOCUMENT COUNT**: 58

**FILED AS OF DATE**: 20250709

**DATE AS OF CHANGE**: 20250709

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Nasus Pharma Ltd
- **CENTRAL INDEX KEY:** 0002029039
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 516022712
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** F-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288582
- **FILM NUMBER:** 251113550

**BUSINESS ADDRESS:**
- **STREET 1:** 29 HARAKEVET ST
- **CITY:** TEL AVIV - YAFO
- **STATE:** L3
- **ZIP:** 6618003
- **BUSINESS PHONE:** 972 54-255-3956

**MAIL ADDRESS:**
- **STREET 1:** 29 HARAKEVET ST
- **CITY:** TEL AVIV - YAFO
- **STATE:** L3
- **ZIP:** 6618003

**As filed with the Securities and Exchange Commission on July 9, 2025**

**Registration No. 333-**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**Form F-1**

**REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933**

**Nasus Pharma Ltd.**

*(Exact name of registrant as specified in its charter)*

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| | | |
|:---|:---|:---|
| **State of Israel** | **2834** | **Not Applicable** |
| *(State or other jurisdiction of*<br> *incorporation or organization)* | *(Primary Standard Industrial*<br> *Classification Code Number)* | *(I.R.S. Employer*<br> *Identification Number)* |

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| | |
|:---|:---|
| **Udi Gilboa**<br> **Executive Chairman**<br> **Yigal Alon 65**<br> **Tel Aviv, Israel 6744317**<br> **Tel: +972.3.573.6632** | **Puglisi & Associates**<br> **850 Library Ave., Suite 204**<br> **Newark, DE 19711**<br> **Tel: (302) 738-6680** |
| *(Address, including zip code, and telephone number,*<br> *including area code, of registrant's principal executive offices)* | *(Name, address, including zip code, and telephone*<br> *number, including area code, of agent for service)* |

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***Copies to:***

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| | | |
|:---|:---|:---|
| **Oded Har-Even, Esq.**<br> **Eric Victorson, Esq.**<br> **Sullivan & Worcester LLP**<br> **1251 Avenue of the Americas, 19th Floor**<br> **New York, NY 10020**<br> **Tel: +1.212.660.3000** | **Reut Alfiah, Adv.**<br> **Gal Cohen, Adv.**<br> **Sullivan & Worcester Tel-Aviv<br> (Har-Even & Co.)<br> 28 HaArba'a St. HaArba'a**<br> **Towers,<br> North Tower, 35th Floor<br> Tel-Aviv, Israel 6473925<br> Tel: +972.74.758.0480** | **Ross D. Carmel,** **Esq.**<br> **Sichenzia Ross**<br> **Ference Carmel** **LLP<br> 1185 Avenue of the Americas**<br> **New York, New York 10036<br> (212) 930-9700** |

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**Approximate date of commencement of proposed sale to the public:** As soon as practicable after the effective date hereof.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

†The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.**

**The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.**

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| | | |
|:---|:---|:---|
| **PRELIMINARY PROSPECTUS** | **SUBJECT TO COMPLETION** | **DATED JULY 9, 2025** |

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**1,000,000** **Ordinary Shares**

![](image_001.jpg)

**Nasus Pharma Ltd.**

This is a firm commitment initial public offering of 1,000,000 ordinary shares, no par value, or Ordinary Shares, of Nasus Pharma Ltd., an Israeli company. Prior to this offering, there has been no public market for our Ordinary Shares. We anticipate that the initial public offering price of our shares will be between $10.00 and $12.00.

We have applied to list our Ordinary Shares on the NYSE American LLC, or NYSE American, under the symbol "NSRX". This offering is contingent upon the Ordinary Shares being listed on the NYSE American, and no assurance can be given that our application will be approved or that a trading market will develop.

We are both an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and a "foreign private issuer" as defined under the U.S. federal securities laws and have elected to comply with certain reduced public company reporting requirements.

**Investing in our Ordinary Shares involves a high degree of risk. See "*Risk Factors*" beginning on page 8. Neither the U.S. Securities and Exchange Commission, or the SEC, nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

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| | | |
|:---|:---|:---|
|  | **Per Share** | **Total** |
| Initial public offering price | $| $|
| Underwriting discounts and commissions <sup>(1)</sup> | $| $|
| Proceeds to us (before expenses) | $| $|

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Underwriting discounts
 and commissions do not include a non-accountable expense allowance equal to 1.0% of the initial public offering price payable to
 the underwriters. We have agreed to issue to Laidlaw & Company (UK) Ltd and to Craft Capital Management LLC, the underwriters,
 upon the consummation of this offering, warrants in an aggregate amount equal to 3% of the Ordinary Shares sold in
 this offering, or the Underwriter's Warrants. We refer you to "*Underwriting*" beginning on page
 163 for additional information regarding underwriters' compensation.

We have granted a 45-day option to Laidlaw and Company (UK) Ltd, the representative of the underwriters, or the Representative, to purchase up to additional 150,000 Ordinary Shares solely to cover over-allotments, if any.

The underwriters expect to deliver the Ordinary Shares on or about , 2025.

---

| | |
|:---|:---|
| **Laidlaw & Company (UK) Ltd** | **CRAFT CAPITAL MANAGEMENT LLC** |

---

The date of this prospectus is , 2025

![](image_01.jpg)

**TABLE OF CONTENTS**

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| | |
|:---|:---|
|  | **Page** |
| [Prospectus Summary](#b_001) | 1 |
| [Risk Factors](#b_002) | 8 |
| [Cautionary Note Regarding Forward-Looking Statements](#b_003) | 59 |
| [Listing Details](#b_004) | 61 |
| [Use of Proceeds](#b_005) | 62 |
| [Dividend Policy](#b_006) | 63 |
| [Capitalization](#b_007) | 64 |
| [Dilution](#b_008) | 66 |
| [Management's Discussion and Analysis of Financial Condition and Results of Operations](#b_009) | 68 |
| [Business](#b_010) | 77 |
| [Management](#fw_007) | 124 |
| [Beneficial Ownership of Principal Shareholders and Management](#one_001) | 147 |
| [Related Party Transactions](#one_002) | 148 |
| [Description of Share Capital and Governing Documents](#one_003) | 150 |
| [Shares Eligible for Future Sale](#one_004) | 154 |
| [Taxation](#one_005) | 156 |
| [Underwriting](#one_006) | 163 |
| [Expenses](#one_007) | 172 |
| [Legal Matters](#one_008) | 173 |
| [Experts](#one_009) | 174 |
| [Enforceability of Civil Liabilities](#one_010) | 174 |
| [Where You Can Find Additional Information](#one_011) | 175 |
| [Index of Financial Statements](#one_012) | F-1 |

---

**You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not authorized anyone to provide you with information that is different. We are offering to sell the Ordinary Shares, and seeking offers to buy the Ordinary Shares, only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Ordinary Shares.**

For investors outside of the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

i

**ABOUT THIS PROSPECTUS**

In this prospectus, "we," "us," "our," the "Company" and "Nasus" refer to Nasus Pharma Ltd.

We are incorporated in the State of Israel, and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the SEC, we are currently eligible for treatment as a "foreign private issuer." As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

**TRADEMARKS**

All trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the® and™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies' trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

**MARKET, INDUSTRY AND OTHER DATA**

Unless otherwise indicated, this prospectus includes statistical, market and industry data and forecasts which we obtained from publicly available information and independent industry publications and reports that we believe to be reliable sources, concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size estimates, is based on information from independent industry analysts, third-party sources and management estimates. These publicly available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information. Although we believe that these sources are reliable, we have not independently verified the information contained in such publications. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us based on such data and our knowledge of such industry and market, which we believe to be reasonable. In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the heading "*Risk Factors*" and "*Cautionary Note Regarding Forward-Looking Statements.*"

**PRESENTATION OF FINANCIAL INFORMATION**

Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to "NIS" are to New Israeli Shekels, references to "Euro" or "€" mean the currency of the European Union and references to "dollars" or "$" mean U.S. dollars. Unless otherwise noted, all translations from NIS to U.S. dollars in this prospectus were made at a rate of NIS 3.6417 for $1.00, the exchange rate as of December 31, 2024, published by the Bank of Israel. All translations from Euro to U.S. dollars in this prospectus were made at a rate of €1.00 for $1.0351, the exchange rate as of December 31, 2024, published by the H.10 statistical release of the Federal Reserve Board. The aforementioned exchange rate is provided solely for your convenience and may differ from the actual rates used in the preparation of the consolidated financial statements included in this prospectus and other financial data appearing in this prospectus.

We report our financial statements in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.

ii

**PROSPECTUS SUMMARY**

*This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read the entire prospectus carefully, including the "Risk Factors" section and the financial statements and related notes appearing elsewhere in this prospectus.*

**Our Company**

We are a clinical-stage specialty pharmaceutical company focused primarily on the development of intranasal drugs to treat emergency medical conditions. Intranasal administration is especially suitable for medical emergencies when prompt drug administration is critical, since the nose is lined up with a very rich vascular bed enabling quick drug absorption. We are developing a unique powder-based intranasal technology, or PBI, with a specialized product portfolio to address acute medical conditions and public health threats. We believe that PBI may be superior over liquid-based solutions due to potentially significantly higher dispersion of powder throughout the nasal cavity, thus creating a larger absorption area and enabling more rapid and higher drug absorption. In addition, the uniform spherical powder particles of our proprietary formulation may enhance the consistency and reliability of the delivered dose. The initial clinical trials of our PBI products involving different molecules performed thus far have demonstrated quicker and higher drug absorption over similar solution-based nasal products. However, to date we have only tested our product candidates on a relatively small patient population and none of our products have been approved by the Food and Drug Administration, or the FDA. Prior to obtaining FDA approval of any of our product candidates, we will need to perform additional clinical testing of our product candidates to confirm any benefits and advantages our products may have over similar nasal products.

Our mission is to offer better protection to patients during acute, severe and life-threatening medical conditions by an effective, user-friendly and immediately active PBI specialized products. To help achieve this we are focused on developing NS002, an intranasal powder Epinephrine nasal spray for the treatment of type 1 severe allergies and anaphylaxis, or Intranasal Epinephrine, and we also have been developing NS001, an intranasal Naloxone powder nasal spray for the treatment of opioid overdose, or Intranasal Naloxone, however we currently paused our work on NS001 and plan to pursue partnering opportunities for further development of NS001. We will need to obtain regulatory approval for our products in order for us to grow our business. We currently have no FDA approved products. Our products have been tested on relatively small patient populations thus far.

Obtaining regulatory approvals and developing NS002 and NS001 will require the incurrence of significant costs and our success will depend, in part, on gaining market acceptance. In order to gain market acceptance in the United States, we will require specific approval from the FDA for our product candidates. We intend to seek approval of NS002 as an approved molecule and a new delivery route (with EpiPen autoinjector as the reference device) under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or FFDCA, which allows the applicant to rely in part on previous studies conducted by unrelated parties, such as another drug manufacturer, and existing sources including published literature, for marketing approval by the FDA in the United States, and will seek approval under the comparable hybrid application pathway in the European Union, or the EU. The FDA may not agree that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval. Such abbreviated approval pathways may not lead to a faster development or review process compared to traditional approval pathways and do not increase the likelihood that NS002 or NS001 will receive regulatory approval in the United States or the EU. See "*Business – Government Regulation*" and "*Risk Factors – Risks Related to Product Development, Regulatory Approval and Commercialization*" for additional information.

To date, we have conducted a twelve-patient pilot study of NS002, which included the testing of bioavailability of Epinephrine under "allergenic challenge" - the creation of severe acute allergic reaction in the nose by inserting ascending doses of allergens to the nose of the healthy volunteers with known allergic rhinitis included in the study. The results showed that Epinephrine intranasal delivery of our NS002 followed the established characteristics of our platform technology, namely, there were higher levels of the drug in the plasma in situations where immediate administration could be lifesaving. The Phase 2 portion of our NS002 study included twelve patients and the trial was not powered for statistical significance. In trials not powered for statistical significance, there is a high chance that observed effects may not be accurate due to small sample size. The Phase 2 study, which is meant to optimize the dose that will be used in the Phase 3 study for registration, is conducted in limited patient populations to identify possible adverse effects and safety risks, to preliminarily evaluate the dosage tolerance of the product for specific targeted diseases or conditions and to determine dosage tolerance, optimal dosage and dosing schedule. Our Phase 2 study is aimed at defining the final clinical dose to be used in our powder Epinephrine product candidate, compared to the bioavailability of Epinephrine following a various dosing of NS002 Microspheres Epinephrine powder. The pharmacokinetic, or PK, results of our Phase 2 study are in line with the known attributes of our nasal powder technology, namely: immediate absorption of Epinephrine and reaching higher peak plasma Epinephrine levels quicker compared to intramuscular, or IM, Epinephrine injections. We intend to perform two additional Phase 2 studies of NS002. The first will be aimed at determining whether, if necessary, during a real-life anaphylaxis a second dose of NS002 should be administered in the same nostril as the one used for the first administration of NS002 or whether it should be in the other nostril. The second Phase 2 study will test the "carry-over effect," or whether the first dose of Epinephrine changes the absorption of Epinephrine of a following dose. Each study is currently planned to include at least 12 healthy volunteers with allergic rhinitis. Prior to submission to the FDA for marketing approval, we also intend to perform a pivotal clinical, or Phase 3, study that will include a subsection of self-administration. We also intend to separately perform: (1) stability testing which involves testing the product candidate under various temperature and humidity points; (2) a reliability study, which is a subset of the stability study that tests the NS002's administration device in several potential conditions; (3) a usability study, which tests how user friendly the device is; (4) preclinical studies or short animal safety studies in two animal species; and (5) a pediatric study, the details of which will be agreed upon with the FDA as we progress with the program.

With respect to NS001 Intranasal Naloxone, we have performed a pilot study, which is a first in human study aimed at safety and bioequivalence, and pivotal clinical study, which is the Phase 3 registration study, in 14 and 42 healthy volunteers, respectively, with the objective of evaluating the comparative bioavailability of Naloxone between NS001 and certain competitor products. The pilot study results were submitted to the FDA in support of the progression to the pivotal study. While the pilot study was not powered for statistical significance, the results suggested our technology demonstrated a faster absorption rate in the immediate critical period after administration. This finding was further supported by the pivotal clinical, or Phase 3, which was powered for statistical significance and confirmed the enhanced absorption profile. The Phase 3 study included an expanded patient population to further evaluate dosage and clinical efficacy. Our pivotal clinical study consistently showed an advantage in the first 30 minutes after administration. As of the date of this prospectus, we currently intend to focus our development and regulatory approval efforts on our Intranasal Epinephrine and other preclinical programs and plan to pursue partnering opportunities for further development of NS001.

Our platform technology can also be incorporated into other products as it has been tested with several additional preclinical and invitro molecules based on our proprietary nasal powder formulation and technology. In addition to our two main products, Intranasal Epinephrine and Intranasal Naloxone, we are exploring other potential indications for which our PBI technology may be applicable, including: NS005, an intranasal midazolam powder nasal spray for the treatment of acute seizures, or Intranasal Midazolam; NS004, an intranasal atropine powder nasal spray for the treatment of organophosphate poisoning, or Intranasal Atropine; and NS003, an intranasal ondansetron powder nasal spray for the treatment of intractable vomiting, or Intranasal Ondansetron.

Competition in the pharmaceutical industry is intense. Some of our competitors hold significant market share, have long histories and strong reputations within the industry, greater brand recognition, and more financial and human resources than we do. They also have more experience and capabilities in researching and developing testing devices, obtaining and maintaining regulatory clearances and other requirements, manufacturing and marketing those products than we do. Their dominant market position and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales of NS002 or NS001.

To date, we have incurred significant operating losses, generated no revenues from existing products, and as of December 31, 2024, our accumulated deficit was $12.7 million. We expect that we will need to raise substantial additional funding in the future. See "*Risk Factors – Risks Related to Our Financial Position and Capital Requirements.*"

**Corporate Information**

We are an Israeli corporation and were incorporated in Israel in May 2019 under the name Nasus Pharma Ltd. Our principal executive offices are located at Yigal Alon 65, Tel Aviv, Israel 6744317. Our telephone number is +972.3.573.6632. Our website address is *www.nasus-pharma.com*. The information contained on, or that can be accessed through, our website is not part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC's website at *http://www.sec.gov*.

**Implications of Being an Emerging Growth Company**

We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the JOBS Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not "emerging growth companies" such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and not being required to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We could remain an "emerging growth company" until the end of the fifth year following this offering, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.

**Implications** **of being a Foreign Private Issuer**

We are subject to the information reporting requirements of the Exchange Act that are applicable to "foreign private issuers," and under those requirements we file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file our annual report with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. Our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the NYSE American Listing Rules for domestic U.S. issuers (see "*Risk Factors — Risks Related to this Offering and the Ownership of Our Securities*"). These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting company. We intend to take advantage of the exemptions available to us as a foreign private issuer during and after the period we qualify as an "emerging growth company," until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States.

**Summary Risk Factors**

Our business is subject to numerous risks, as more fully described in the section entitled "*Risk Factors*" immediately following this prospectus summary. You should read these risks before you invest in the Ordinary Shares. In particular, our risks include, but are not limited to, the following:

**Risks Related to Our Financial Position and Capital Requirements**

● We have not generated revenues from our continued activities, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability, which raise a substantial doubt about our ability to continue as a going concern and could prevent us from obtaining new financing on reasonable terms or at all.

● We are a clinical stage pharmaceutical company and we have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.

● Notwithstanding our legacy product and business activity, we have not generated revenue from any product candidate and may never be profitable, even if we receive regulatory approval to commercialize our products.

● We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. This raises substantial doubt about our ability to continue as a going concern.

● We have identified material weaknesses in our internal control over financial reporting. If our remediations are not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial conditions or results or operations, or prevent fraud, which may adversely affect investor confidence in our Company and as a result, the market price of our Ordinary Shares.

**Risks Related to Product Development, Regulatory Approval and Commercialization**

● We depend substantially on the success of our proprietary intranasal powder product candidates. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.

● All of our product candidates are in various stages of clinical development. Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes. If clinical trials of our product candidates are prolonged, delayed or not commercially viable, we or our collaborators may be unable to obtain required regulatory approvals, and therefore may be unable to commercialize our product candidates on a timely basis or at all, which will adversely affect our business.

● The denial of regulatory approval for NS002 could mean that we need to delay or even cease operations, and a delay in obtaining such approval would delay commercialization of our products and adversely impact our ability to generate revenue, business and results of operations.

● The results of pre-clinical studies, early-stage clinical trials, data obtained from real-world use, and published third-party studies may not be indicative of results in future clinical trials and we cannot assure you that any planned or future clinical trials will lead to results sufficient for the necessary regulatory approvals.

● We or others could discover that NS002, NS001, or any product candidate we may pursue in the future (including current pre-clinical programs) lacks sufficient efficacy, or that it causes undesirable side effects that were not previously identified, which could delay or prevent regulatory approval or commercialization.

● Our clinical trials or the clinical trials of any of our current or potential future partners may encounter delays, suspensions or other problems.

● Even if we obtain regulatory approval for a product candidate, our products will remain subject to ongoing regulatory oversight.

**Risks Related to Our Reliance on Third Parties**

● We are dependent on manufacturers for Naloxone and Epinephrine. Any delay, price increase or unavailability of our manufacturers could materially adversely affect our ability to conduct clinical trials and, if this were to occur after we obtained commercialization and marketing approval, could materially impact our operations.

● We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all.

● We rely on third parties to conduct our pre-clinical and clinical studies and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

● We have limited manufacturing experience and could experience production problems that result in delays in our development or commercialization programs or otherwise adversely affect our business. We currently have no manufacturing facilities and anticipate reliance on third-party manufacturers for our products.

**Risks Related to Our Intellectual Property**

● We own several issued patents but may require filing of additional patents in the future. There can be no assurance that all or some of our patent applications will result in issued patents. Consequently, our ability to protect our proprietary technology in the marketplace beyond the intellectual property already protected by our currently issued patents may be limited.

● Our proprietary position for our product candidates currently depends upon patents protecting the method of use, which may not prevent a competitor or other third party from using the same product candidate for another use.

● Even if our patents are issued, because the patent status of pharmaceutical products can be complex and uncertain, we cannot predict the scope and extent of patent protection for our product candidates.

● We may not be able to enforce our intellectual property rights throughout the world.

**Risks Related to Our Business and Industry**

● Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

● Our product candidates for which we intend to seek approval may face competition sooner than anticipated.

● We manage our business through a small number of employees and key consultants. We will need to significantly increase the size of our organization, and we may experience difficulties in managing growth.

**Risks Related to this Offering and the Ownership of Our Securities**

● The market price of our Ordinary Shares may be highly volatile, and you may not be able to resell your shares at or above the initial public offering price.

● Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.

● Raising additional capital would cause dilution to our existing shareholders and may adversely affect the rights of existing shareholders.

● Our principal shareholders and management own a significant percentage of our Ordinary Shares and will be able to exert significant influence over matters subject to shareholder approval.

● Management will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.

**Risks Related to Israeli Law and Our Operations in Israel**

● We conduct our operations in Israel. Conditions in Israel, including the multi-front war Israel is facing, may affect our operations.

● We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.

● The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.

**THE OFFERING**

---

| | |
|:---|:---|
| **Issuer** | Nasus Pharma Ltd. |
| **Ordinary Shares issued and outstanding prior to this offering**<sup>(1)</sup> | 7,362,906 Ordinary Shares |
| **Ordinary Shares offered by us** | 1,000,000 Ordinary Shares<sup>(2)</sup> |
| **Ordinary Shares to be outstanding after this offering**<sup>(1)</sup> | 8,687,800 Ordinary Shares or 8,837,800 Ordinary Shares if the underwriters exercise in full the over-allotment option to purchase additional Ordinary Shares. |
| **Over-allotment option** | We have granted the underwriters an option for a period of up to 45 days to purchase, at the public offering price less underwriting discounts and commissions, up to 150,000 additional Ordinary Shares, to cover over-allotments, if any. |
| **Underwriter's** **Warrants** | We will issue to Laidlaw & Company (UK) Ltd and to Craft Capital Management LLC, the Underwriters, or their permitted designees, Underwriter's Warrants, to purchase up to an aggregate amount of 30,000 Ordinary Shares (or up to 34,500 Ordinary Shares if the underwriters exercise their over-allotment option in full). The Underwriter's Warrants will have an exercise price equal to $13.75, or 125% of the per Ordinary Share assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, will be exercisable beginning on a date which is 180 days from the commencement of sales under the registration statement of which this prospectus forms a part and will expire four and a half years from such commencement of sales. |
| **Use of proceeds** | We expect to receive approximately $9.3 million in net proceeds from the sale of Ordinary Shares offered by us in this offering (approximately $10.8 million if the underwriters exercise their over-allotment option in full), based upon an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.<br>We intend to use the net proceeds from this offering for our research and development efforts as well as general and administrative corporate purposes, including working capital and capital expenditures. We currently expect that such use of the net proceeds from this offering would specifically support the development of our Intranasal Epinephrine program, including, manufacturing scale-up and additional Phase 2 studies.<br>The amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering. See "Use of Proceeds" for more information about the intended use of proceeds from this offering. |
| **Lock Up** | Our directors and executive officers have agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Ordinary Shares or securities convertible into Ordinary Shares for a period of six (6) months commencing on the date of this prospectus, and six (6) months commencing on the date of this prospectus in the case of any other holder of outstanding securities. See "*Underwriting*." |
| **Risk factors** | Investing in our securities involves a high degree of risk. You should read the "Risk Factors" section starting on page 8 of this prospectus for a discussion of factors to consider carefully before deciding to invest in the Ordinary Shares. |
| **Proposed NYSE American symbol** | We have applied to list the Ordinary Shares to be issued in this offering on the NYSE American under the symbol "NSRX". This offering is contingent upon the Ordinary Shares being listed on the NYSE American. There is no assurance that such listing will be approved. |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The actual number of Ordinary
 Shares that we will offer and that will be outstanding after this offering will be determined based on the actual public offering
 price.

(2) The number of the Ordinary
 Shares to be outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are
 sold, and is based on 7,362,906 ordinary shares, outstanding as of December 31, 2024. This number excludes:

● 346,537 Ordinary Shares issuable upon the exercise of options, or share options, granted subsequent to December 31, 2024, at a weighted average exercise price of $6.05 per ordinary share;

● 191,700 Ordinary Shares issuable upon the exercise of share options to directors, employees and consultants under our 2019 Incentive Option Plan, or the 2019 Plan, outstanding as of December 31, 2024, at a weighted average exercise price of $2.77, of which 180,201 were vested as of December 31, 2024; and

● 184,612 Ordinary Shares reserved for future grants under the 2019 Plan as of July 3, 2025.

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

● an assumed initial public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus;

● the automatic conversion of all outstanding existing classes of ordinary shares, including Class A, Class A-1, Class A-2, Class A-3, Class A-3A, Class A-3B ordinary shares into 2,592,497 Ordinary Shares, which will occur upon the effectiveness of the registration statement for this offering;

● 324,894 Ordinary Shares issuable upon the conversion of the Simple Agreements for Future Equity, or the SAFEs, entered into between March 2024 and March 2025, or, collectively, the 2024 SAFEs, in the aggregate amount of $2,322,992, which will automatically convert into Ordinary Shares upon the effectiveness of the registration statement for this offering, based on an assumed public offering price of $11.00, which is the midpoint of the price range set forth on the cover page of this prospectus, assuming this offering occurs within 18 months of the execution of such SAFEs, otherwise such SAFEs will be converted into our securities on the basis of a previous round of equity financing consummated by the Company;

● the adoption of our amended and restated articles of association upon the effectiveness of the registration statement for this offering (except that, where Ordinary Shares as of a date prior to the effectiveness of this registration statement are mentioned, the par value of our ordinary shares is NIS 0.01 per share), which will replace our amended and restated articles of association as currently in effect;

● no exercise of the underwriters' over-allotment option and the Underwriter's Warrants; and

● a 1-for-4.77008 forward share split, effected upon the effectiveness of this offering, and the customary adjustments to our outstanding options and warrants;

**SUMMARY FINANCIAL DATA**

The following table summarizes our financial data. We have derived the following statements of operations data for the years ended December 31, 2024 and 2023 from our consolidated audited financial statements which are included elsewhere in this prospectus. We have derived the following statements of operations data for the years ended December 31, 2024, and 2023 and balance sheet data as of December 31, 2024 from our audited consolidated financial statements, which are included elsewhere in this prospectus. Such financial statements have been prepared in accordance with U.S. GAAP. Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary financial data should be read in conjunction with "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and our financial statements and related notes, which are included elsewhere in this prospectus.

Our financial statements included in this prospectus were prepared in accordance with U.S. GAAP.

---

| | | |
|:---|:---|:---|
| | **Year Ended<br> December 31,** | **Year Ended<br> December 31,** |
| <br>***U.S. dollars in thousands, except share and per share data*** | **2024** | **2023** |
| **Consolidated statements of operations:** |  |  |
| Operating expenses: |  |  |
| Research and development<sup>(1)</sup> | $335 | $567 |
| General and administrative<sup>(2)</sup> | 743 | 580 |
| Total operating expenses | 1078 | 1147 |
| Operating loss from continuing operations | (1078) | (1147) |
| Interest expense<sup>(3)</sup> | (29) | (49) |
| Change in fair value of convertible securities | (443) | 219 |
| Other expenses, net | (2) | (28) |
| Loss from continuing operations | (1552) | (1005) |
| Net income (loss) from discontinued operations | 20 | (46) |
| Net loss | $(1532) | $(1051) |
| Per share data: |  |  |
| Loss per share attributable to shareholders: |  |  |
| Basic | $(0.22) | $(0.15) |
| Diluted | (0.22) | $(0.20) |
| Weighted average ordinary shares outstanding - basic | 7027725 | 6889708 |
| Weighted average ordinary shares outstanding - diluted | 7027725 | 7057820 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Research and development
 expenses includes $208 thousand and $228 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

(2) General and administrative
 expenses includes $307 thousand and $288 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

(3) Interest expenses includes
 $17 thousand and $27 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

---

| | | | |
|:---|:---|:---|:---|
| | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| <br>***U.S. dollars in thousands*** | **Actual** | ***Pro Forma* <sup>(1)</sup>** | ***Pro Forma* As Adjusted *<sup>(2)</sup>*** |
| **Consolidated Balance Sheet Data:** | | **Unaudited** | **Unaudited** |
| Cash and cash equivalents | $284 | 969 | 11089 |
| Total assets | 717 | 1402 | 11262 |
| Convertible securities | 1802 |  |  |
| Total current liabilities | 3929 | 2127 | 2127 |
| Accumulated deficit | (12664) | (12664) | (12664) |
| Total shareholders' deficit | (3212) | (725) | 9135 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The *pro forma* data
 gives effect to (i) the issuance of 324,894 Ordinary Shares to be issued upon the conversion of the 2024 SAFEs into Ordinary Shares
 upon the effectiveness of the registration statement for this offering; and (ii) our receipt of aggregate proceeds of $685,000 from
 the 2024 SAFEs we entered into with certain investors from January 2025 through March 2025, including $250,000 to be
 received prior to the effectiveness of the registration statement for this offering.

(2) The *pro forma* as
 adjusted data gives effect to the *pro forma* adjustments set forth above and the issuance of 1,000,000 Ordinary
 Shares in this offering, at an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price
 range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and estimated
 offering expenses, as if the sale of the Ordinary Shares had occurred on December 31, 2024.

**RISK FACTORS**

*An investment in our securities involves a high degree of risk. We operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including the financial statements and the related notes included elsewhere in this prospectus, before deciding whether to invest in our securities. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the trading price of our Ordinary Shares to decline, and you may lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus. See "Cautionary Note Regarding Forward-Looking Statements."*

 

**Risks Related to Our Financial Position and Capital Requirements**

***We have not generated revenues from our continued activities, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability, which raise a substantial doubt about our ability to continue as a going concern and could prevent us from obtaining new financing on reasonable terms or at all.***

To date, we have not generated revenues from our continued activities, we have incurred substantial operating losses, and funded our operations primarily through equity financing and the raise of outside capital. As of December 31, 2024, we incurred accumulated deficit of approximately $12.7 million. Management expects us to continue to generate substantial operating losses and to continue to fund our operations primarily through the utilization of our current financial resources, and through additional raises of capital.

Until we can generate significant revenues, we expect to satisfy our future cash needs through existing cash, debt or equity financing. We expect to require additional financing to fund our operations in the near future. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of any products or achieve or maintain profitability. Our expenses will also increase substantially if and as we proceed with development. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products and it risks our ability to continue operating as a going concern.

These events and conditions, along with other matters, indicated that a material uncertainty existed as of December 31, 2024, that raises substantial doubt on our ability to continue as a going concern. The report of our auditors for our financial statements for the period ended December 31, 2024 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements for the year ended December 31, 2024 do not reflect any adjustments that might result from the outcome of this uncertainty.

***We are a clinical stage pharmaceutical company and we have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.***

We are an emerging pharmaceutical company with a limited operating history. We have funded our operations to date primarily through proceeds from the private placement of securities, credit facilities, loans, convertible notes and revenues from our past legacy product and business operations and activities. We expect to continue to incur substantial losses over the next several years during our clinical development phase. To fully execute our business plan, which we estimate will cost between $18 and $22 million, we will need to complete Phase 2 and 3 clinical studies and certain development activities as well as manufacture the required clinical and commercial production batches in the pilot manufacturing plant. Further, our product candidates will require regulatory approval prior to commercialization, and we will need to establish sales, marketing and logistic infrastructures. These activities may span many years and require substantial expenditures to complete and may ultimately be unsuccessful. Any delays in completing these activities could adversely impact us. Management plans to seek additional equity financing through private and public offerings or strategic partnerships and, in the longer term, by generating revenues from product sales. We have incurred losses in each year since our inception. Our net loss for the years ended December 31, 2024 and 2023 were $1.5 million and $1.1 million, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $12.7 million. Substantially all of our operating losses resulted from costs incurred in connection with Epinephrine development, compensation and general and administrative costs.

Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through existing cash, debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products.

We expect our research and development expenses to increase in connection with our planned expanded clinical trials. In addition, if we obtain marketing approval for Intranasal Epinephrine, Intranasal Naloxone or any other current or future product candidate, we will likely incur significant sales, marketing and outsourced manufacturing expenses, as well as continued research and development expenses.

Furthermore, in addition to such operating expenses, we expect to incur additional costs associated with operating as a public company subject to the rules and regulations of the SEC, which we estimate will be at least $1 million dollars annually. As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future. Because of the numerous risks and uncertainties associated with developing a pharmaceutical candidate, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

We expect to continue to incur significant losses until we are able to commercialize our product candidates, which we may not be successful in achieving. We anticipate that our expenses will increase substantially if and as we:

● continue the research and development of our product candidates;

● expand the scope of our current clinical studies for our product candidates;

● seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies;

● establish a sales, marketing, and distribution infrastructure to commercialize our product candidates;

● seek to identify, assess, acquire, license, and/or develop other product candidates and subsequent generations of our current product candidates;

● seek to maintain, protect, and expand our intellectual property portfolio;

● seek to attract and retain skilled personnel; and

● create additional infrastructure to support our operations as a public company and our product candidate development and planned future commercialization efforts.

***Notwithstanding our legacy product and business activity, we have not generated revenue from any product candidate and may never be profitable, even if we receive regulatory approval to commercialize our products.***

Our ability to become profitable depends upon our ability to generate revenue. To date, we have not generated any revenue from our development stage product candidates, other than from our legacy product and past business activities. In order to generate significant revenue, we will need to obtain additional regulatory approvals in jurisdictions within which we already have certain regulatory approvals and also in jurisdictions in which we currently have no regulatory approvals to market our products. Even if our current products or any future products are approved for marketing and sale, we anticipate incurring significant incremental costs associated with commercializing such products, including:

● obtaining favorable results from and progress the pre-clinical and clinical development of our product candidates, including Intranasal Epinephrine, Intranasal Naloxone and other current or future product candidates;

● developing and obtaining regulatory approval for registration studies protocols for our product candidates, including Intranasal Epinephrine, Intranasal Naloxone and other current or future product candidates;

● subject to successful completion of registration and clinical trials of Intranasal Epinephrine, Intranasal Naloxone and other current or future product candidates, applying for and obtaining marketing approval;

● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products, and at acceptable costs, to support market demand for our product candidates, if marketing approval is received;

● identifying, assessing, acquiring and/or developing new product candidates;

● accurately identifying demand for our product candidates;

● continued consumer interest in treatments for products for intranasal drug delivery;

● obtaining market acceptance of our product candidates, if approved for marketing, as viable treatment options;

● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

● obtaining and maintaining CIV labeling (no FDA-imposed boxed warning, commonly referred to as a "Black Box" warning) of our lead product candidates, Intranasal Epinephrine, Intranasal Naloxone and other current or future product candidates;

● establishing and nurturing relationships with the leading physicians in the United States; and

● attracting, hiring and retaining qualified personnel.

***We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. This raises substantial doubt about our ability to continue as a going concern.***

We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. This raises substantial doubt about our ability to continue as a going concern. If we cannot continue as a going concern, our investors may lose their entire investment in our securities. Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through debt or equity financing. Even if we raise the proceeds from this offering, we do not believe that such proceeds will be sufficient to complete all research and development activities necessary to commercialize our product candidates. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products.

***We have identified material weaknesses in our internal control over financial reporting. If our remediations are not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial conditions or results or operations, or prevent fraud, which may adversely affect investor confidence in our Company and as a result, the market price of our Ordinary Shares.***

As a public company, we will be required to maintain internal control over financial reporting and will be required to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F. In addition, once we cease to be an EGC as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. According to the U.S. Public Company Accounting Oversight Board, a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. If we fail to remediate the material weaknesses, or are otherwise unable to maintain effective internal control over financial reporting, management could be required to expend significant resources and we could fail to meet our public reporting requirements on a timely basis, and be subject to fines, penalties (including any penalties associated with late filing of tax returns), investigations or judgements, all of which could negatively affect investor confidence and adversely impact our stock price.

As of December 31, 2023, we identified a material weakness with our internal control over financial reporting as we had not designed or maintained an effective control environment and associated control activities to meet our accounting and reporting requirements. Specifically, we did not have a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, we have not performed a documented risk assessment process to identify and analyze risks of misstatement due to error and/or fraud, have not documented our financial reporting processes, have not implemented, documented, or tested internal controls over financial reporting and, in certain cases, we did not have appropriate reviews over journal entries and third party reported information to allow for reliable and timely financial reporting. As of the date of this prospectus, we have not remediated this material weakness.

All of our existing material weaknesses may not have been identified, and we may in the future identify additional material weaknesses. Our management did not perform an evaluation of our internal control over financial reporting during any period in accordance with the provisions of Sarbanes-Oxley Act. Had we performed an evaluation of our internal control over financial reporting in accordance with the provisions of Sarbanes-Oxley Act, additional control deficiencies amounting to material weaknesses may have been identified.

We will take steps to develop a plan to remediate the material weakness identified above and to strengthen our internal control over financial reporting. This involves assessing risk factors, understanding process gaps, and pinpointing areas that needed improvement. We cannot assure investors that our future remediation plan will be sufficient to establish and maintain effective internal control over financial reporting.

 ****

***Even if this offering is successful, we expect that we will need to raise substantial additional funding before we can expect to complete the development of Intranasal Epinephrine or any other product candidate. This additional financing may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product candidate development efforts or other operations.***

As of December 31, 2024, our cash and cash equivalents were approximately $0.3 million, and we had a working capital deficit of $3.3 million and an accumulated deficit of $12.7 million. Based upon our currently expected level of operating expenditures, we expect that our existing cash and cash equivalents will be sufficient to fund operations through September 2025. Even if this offering is completed, we expect that we will require substantial additional capital to commercialize our product candidates. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors, including but not limited to:

● our clinical trial results;

● the cost, timing and outcomes of seeking marketing approval of Intranasal Epinephrine, Intranasal Naloxone and other current or future product candidates;

● the cost of filing and prosecuting patent applications and the cost of defending our patents;

● the cost of prosecuting patent infringement actions against third parties;

● development of other early-stage development product candidates;

● the costs associated with commercializing Intranasal Epinephrine or any other product candidate, if we receive marketing approval, including the cost and timing of establishing sales and marketing capabilities to market and sell such product candidates;

● subject to receipt of marketing approval, revenue received from sales of approved products, if any, in the future;

● any product liability or other lawsuits related to our products;

● the expenses needed to attract and retain skilled personnel; and

● the costs associated with being a public company.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Moreover, the terms of any financing may adversely affect the holdings or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the development or commercialization, if any, of any product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

***Certain agreements that we may enter into with lenders and future debt agreements may contain restrictions that may limit our flexibility in operating our business.***

We may enter into credit facilities with certain lenders which contain restrictions, such as prohibiting that we merge into another company or change our accounting standards, that could limit our flexibility in operating our business. Documents governing our future indebtedness, or in connection with additional capital raises, if any, may contain, numerous financial and operating covenants that limit the discretion of management with respect to certain business matters. Restrictive covenants included in the above-mentioned credit facility include restrictions on, among others, our ability to:

● create or permit to subsist any security interest over any of our assets;

● sell, transfer or otherwise dispose of any or our assets on recourse terms;

● pay dividends;

● buy back our own securities;

● incur or permit additional indebtedness;

● merge or conduct any other corporate reconstruction; and

● change the nature of our business.

Our ability to comply with these and other provisions of the existing debt agreements is dependent on our future performance, which will be subject to many factors, some of which are beyond our control. The breach of any negative covenants in our current or future agreements could result in an event of default, as may be defined in such agreements, thereby leading to a potential default interest rate or immediate repayment of any borrowed amounts. These restrictive covenants which may be in place from time to time and a lack of compliance by us could limit our flexibility in operating our business.

***Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.***

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, fluctuations in unemployment rates, fluctuations in inflation rates and uncertainty about economic stability. For example, the ongoing conflicts between Ukraine and Russia and in the Middle East have created volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs. Any significant increases in inflation and related increase in interest rates could have a material adverse effect on our business, results of operations, financial condition and our ability to raise funds.

**Risks Related to Product Development, Regulatory Approval and Commercialization**

***We depend substantially on the success of our proprietary intranasal powder product candidates. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.***

We have invested almost all of our efforts and financial resources in general and administrative costs and the research and development of our intranasal powder product candidates. Our portfolio comprises a number of programs: Intranasal Epinephrine (completed Phase 2), Intranasal Naloxone (completed pivotal study), as well as a number of preclinical proof of concept, or POC, programs. We currently intend to focus our development and regulatory approval efforts on our Intranasal Epinephrine and POC programs. The process to develop, obtain regulatory approval for and commercialize pharmaceutical product candidates is long, complex, costly and inherently uncertain of outcome. We are not permitted to market any of our product candidates in the United States, the EU, or any other jurisdiction until we receive the requisite regulatory approvals. We cannot give any assurance that our current clinical development plan will proceed as planned, or that our product candidates will receive regulatory approval, or that such regulatory approval, if received, will be within a timeframe that allows us to effectively compete with our competitors, or be successfully marketed and commercialized.

We currently have no product candidates approved for marketing and are investing the majority of our efforts and financial resources in the development of NS002 for the emergency treatment of allergic reactions and potential other indications. Successful continued development and ultimate regulatory approval of NS002 for our initial indication or potential additional indications is critical to the future success of our business. We will need to successfully complete our clinical development of NS002 for the emergency treatment of allergic reactions and potential other indications. The future regulatory and commercial success of our product candidates is subject to a number of risks, including the following:

● successful completion of nonclinical studies and clinical trials;

● successful patient enrollment in clinical trials;

● successful data from our nonclinical studies and clinical trials that support an acceptable risk-benefit profile of our product candidates in the intended populations and indications;

● satisfaction of applicable regulatory requirements, including to satisfy applicable rules governing combination products;

● potential unforeseen safety issues or adverse side effects;

● receipt and maintenance of marketing approvals from applicable regulatory authorities;

● remaining in compliance with post-marketing regulatory requirements;

● obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

● making arrangements or maintaining existing arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates;

● entry into collaborations to further the development of NS002, NS001 or any future product candidates;

● establishing sales, marketing and distribution capabilities and launching commercial sales of any approved products, whether alone or in collaboration with others;

● successfully launching commercial sales of our product candidates, if and when approved;

● acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors;

● obtaining and maintaining third-party coverage and adequate reimbursement;

● products, following approval, maintaining a continued acceptable safety profile;

● effectively competing with other therapies;

● ensuring that we promote and distribute our products consistent with all applicable healthcare laws; and

● enforcing and defending intellectual property rights and claims.

Many of these risks are beyond our control, including the risks related to clinical development, the regulatory submission and review process, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any current or future collaboration partner. If we are unable to develop, receive regulatory approval for, or successfully commercialize NS002 for the indications we are developing it for, or if we experience delays as a result of any of these risks or otherwise, our business will be materially harmed.

In addition, of the large number of products in development in the pharmaceutical industry, only a small percentage result in the submission of a New Drug Application, or NDA, to the FDA or a Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, and even fewer are approved for marketing and commercialization. Furthermore, even if we receive regulatory approval to market NS002 for any indication, any such approval may be subject to limitations on the indications or uses or the patient populations for which we may market the product. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development activities, we cannot assure you that we will successfully develop or commercialize NS002 for any indication. If we or any of our current or future licensing and collaboration partners are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize NS002 for its initial indication or potential additional indications, we may not be able to generate sufficient revenue to continue our business. In addition, our failure to satisfy other regulatory requirements could adversely affect our development efforts for NS002 in other indications.

***Our product candidates are in different stages of clinical development. Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes. If clinical trials of our product candidates are prolonged, delayed or not commercially viable, we or our collaborators may be unable to obtain required regulatory approvals, and therefore may be unable to commercialize our product candidates on a timely basis or at all, which will adversely affect our business.***

To obtain the requisite regulatory approvals to market and sell any of our product candidates, we or our collaborators for such candidates must demonstrate through extensive preclinical studies and clinical trials that our products are safe, pure and potent or effective in humans. Further, the process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we or our potential future collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. Additionally, clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process and our future clinical trial results may not be successful. In addition, we cannot make comparative claims regarding the use of our products against any alternative treatments without conducting head-to-head comparative clinical studies, which would be expensive and time-consuming.

We may not be able to commence or complete the clinical trials that would support our submission of an NDA to the FDA or an MAA to EMA. Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage of any of our clinical trials. Clinical trials can be delayed or prevented for a number of reasons, including:

● difficulties obtaining regulatory approval to commence a clinical trial or complying with conditions imposed by a regulatory authority regarding the scope or term of a clinical trial;

● delays in reaching or failing to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● insufficient or inadequate supply or quality of a product candidate or other materials necessary to conduct our clinical trials;

● if the FDA or EMA elect to enact policy changes, as a result of the COVID-19 pandemic or otherwise;

● difficulties obtaining institutional review board, or IRB, approval to conduct a clinical trial at a prospective site; and

● challenges recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including fears resulting from the COVID-19 pandemic or due to government actions enacted and as a result of such pandemic, size and nature of patient population, proximity of patients to clinical sites, eligibility criteria for the trial, nature of trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications.

Clinical trials may also be delayed or terminated as a result of ambiguous or negative interim results. In addition, a clinical trial may be suspended or terminated by us, the FDA, IRBs, at the sites where the IRBs are overseeing a trial, a data safety monitoring board overseeing the clinical trial at issue or by other regulatory authorities due to a number of factors, including:

● failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;

● inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities;

● unforeseen safety issues or lack of effectiveness; and

● lack of adequate funding to continue the clinical trial.

Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates or result in the development of our product candidates being stopped early.

***The denial of regulatory approval for NS002 or NS001 could mean that we need to delay or even cease operations, and a delay in obtaining such approval would delay commercialization of our products and adversely impact our ability to generate revenue, business and results of operations.***

If we are not successful in commercializing NS002 or NS001, or are significantly delayed in doing so, our business will be materially harmed, and we may need to curtail or cease operations. We currently have no pharmaceutical products approved for marketing, and we may never obtain regulatory approval to market and commercialize NS002 or NS001 for any indication. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of pharmaceutical products are subject to extensive regulation by the FDA, the EMA, and other regulatory agencies in the United States, EU and other countries, and such regulations differ from country to country. We are not permitted to market NS002 and NS001 until we receive approval or marketing authorization from the relevant regulatory authority. Of the large number of pharmaceutical products in development, only a small percentage successfully complete the FDA, the EMA or other regulatory approval processes and are commercialized.

Even if we eventually complete clinical testing and receive approval of an NDA, MAA or other foreign marketing authorization for NS002 or NS001, the FDA, the EMA or other applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, which may be required after approval. The FDA, the EMA or other applicable foreign regulatory agency may also approve NS002 and NS001 for a more limited indication and/or a narrower patient population than we originally request, and the FDA, the EMA or any other applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of NS002 or NS001. Any delay in obtaining, or inability to obtain, applicable regulatory approvals would delay or prevent commercialization of NS002 and NS001 and would materially adversely impact our business and prospects.

***The results of pre-clinical studies, early-stage clinical trials, data obtained from real-world use, and published third-party studies may not be indicative of results in future clinical trials and we cannot assure you that any planned or future clinical trials will lead to results sufficient for the necessary regulatory approvals.***

The results of pre-clinical studies may not be predictive of the results of clinical trials, and the results of any completed clinical trials, including studies derived from real-world use and studies in published literature, or clinical trials we commence may not be predictive of the results of later-stage clinical trials. Additionally, interim results during a clinical trial do not necessarily predict final results. Later clinical trial results may not replicate earlier clinical trials for a variety of reasons, including differences in trial design, different trial endpoints (or lack of trial endpoints in exploratory studies), subject population, number of subjects, subject selection criteria, trial duration, drug dosage and formulation and lack of statistical power in the earlier studies. The Phase 2 portion of our NS002 study included twelve patients and the trial was not powered for statistical significance. In trials not powered for statistical significance, there is a high chance that observed effects may not be accurate due to small sample size.

There can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our product candidates. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a negative impact on our business.

***We or others could discover that NS002, NS001, or any product candidate we may pursue in the future, lacks sufficient efficacy, or that it causes undesirable side effects that were not previously identified, which could delay or prevent regulatory approval or commercialization.***

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We do not currently have any FDA approved products and our product candidates have been tested in relatively small patient populations and for limited durations to date. Therefore, our product candidates require additional clinical testing and it is possible that our clinical trials have or will indicate an apparent positive effect that is greater than the actual positive effect, if any, or that additional and unforeseen side effects may be observed as its development progresses. The discovery that NS002, NS001 or any POC program lacks sufficient efficacy, or that it causes undesirable side effects (including side effects not previously identified in our completed clinical trials), could cause us or regulatory authorities to interrupt, delay or discontinue clinical trials and could result in the denial of regulatory approval by the FDA or other non-U.S. regulatory authorities for any or all targeted indications, including, but not limited to, a determination by the FDA that the 505(b)(2) regulatory pathway is not available for a product candidate. The most common events reported to date have been tachycardia, hypertension, headache, anxiety, apprehension, palpitations, diaphoresis, nausea, vomiting, weakness, and tremors.

The discovery that NS002, NS001, or any POC program or future product candidate, lacks sufficient efficacy or that it causes undesirable side effects that were not previously identified could prevent us from commercializing such product candidate and generating revenues from its sale. In addition, if we receive marketing approval for any of our current or future products and we or others later discover that it is less effective, or identify undesirable side effects caused by them:

● regulatory authorities may withdraw their approval of the product;

● we may be required to recall the product, change the way this product is administered, conduct additional clinical trials or change the labeling or distribution of the product;

● additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product;

● we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

● we could be sued and held liable for harm caused to patients;

● the product may be rendered less competitive and sales may decrease; or

● our reputation may suffer generally both among clinicians and patients.

Any one or a combination of these events could prevent us from achieving or maintaining market acceptance of the affected product or could substantially increase the costs and expenses of commercializing the product, which in turn could delay or prevent us from generating significant, or any, revenues from the sale of the product.

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***Our clinical trials or the clinical trials of any of our current or potential future partners may encounter delays, suspensions or other problems.***

We, or our partners, may encounter problems in clinical trials that may cause us or the FDA or foreign regulatory agencies to delay, suspend or terminate any such clinical trials at any phase. These problems could include the possibility that we may not be able to conduct clinical trials at our preferred sites, enroll a sufficient number of patients for our clinical trials at one or more sites or begin or successfully complete clinical trials in a timely fashion, if at all. Furthermore, we, our partners, the FDA or foreign regulatory agencies may suspend clinical trials at any time if we or they believe the subjects participating in the trials are being exposed to unacceptable health risks or if we or they find deficiencies in the clinical trial process or conduct of the investigation. If clinical trials of any of our products fail, we will not be able to market the product which is the subject of the failed clinical trials. The FDA and foreign regulatory agencies could also require additional clinical trials, which would result in increased costs and significant development delays. Our, or our partners', failure to adequately demonstrate the safety and effectiveness of a product under development could delay or prevent regulatory approval of the product and could have a material adverse effect on our business, prospects, financial condition and results of operations.

***Obtaining approval of an NDA or an MAA, even after clinical trials that are believed to be successful, is an uncertain process.***

We are not permitted to market our products in the United States or the EU until we receive regulatory approval of an NDA from the FDA, or MAA from the EMA, or in any foreign countries until we receive the requisite approval from regulatory authorities in such countries.

Even if we complete our planned clinical trials and believe the results to be successful, all of which are uncertain, obtaining regulatory approval is an extensive, lengthy, expensive and uncertain process, and the FDA and EMA, and other regulatory authorities may delay, limit or deny approval of our products for many reasons, including, but not limited to:

● we may not be able to demonstrate to their satisfaction that the product candidate is a safe or effective treatment for a given indication;

● the results of clinical trials may not meet the level of statistical significance or clinical significance required by the regulatory agencies;

● disagreements regarding the number, design, size, conduct or implementation of our clinical trials, or with our interpretation of data from pre-clinical studies or clinical trials;

● difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee, or such other similar committee, may recommend against approval of our application or may recommend that such regulators require, as a condition of approval, additional pre-clinical studies or clinical trials, limitations on approved labeling, or distribution and use restrictions;

● the requirement that we develop a Risk Evaluation and Mitigation Strategy, or REMS, as a condition of approval, which may or may not be feasible for us;

● the identification of deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies;

● changes in approval policies or the adoption of new regulations by such regulators; and

● we may be unable to be granted a pediatric investigation plan, or PIP, deferral which we intend to request from the EMA for delayed clinical trials and subsequent approval in children; this may delay our clinical trial program or approvals for adults, or we may have successful clinical trial results for adults but not children (if we were required to conduct pediatric studies prior to the receipt of an NDA or MMA for use of our product candidates in adults), or vice versa.

Generally, before we can submit an NDA to the FDA, we must conduct Phase 3 trials (PK and bioavailability studies) that will be substantially broader than our Phase 2 trials. An NDA must be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry, manufacturing and controls to demonstrate the safety and effectiveness of the applicable product candidate. The number and types of pre-clinical studies and clinical trials that will be required varies depending on the product candidate, the disease or condition that the product candidate is designed to target and the regulations applicable to any particular product candidate. Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed.

In this respect, we will also need to agree on a protocol with the FDA for the Phase 3 clinical trials before commencing those trials. Phase 3 clinical trials frequently produce unsatisfactory results even though prior clinical trials were successful. Therefore, the results of the additional trials that we conduct may or may not be successful. The FDA may suspend all clinical trials or require that we conduct additional clinical, nonclinical, manufacturing validation or drug product quality studies and submit those data before it will consider or reconsider the NDA. Depending on the extent of these or any other studies, approval of any applications that we submit may be delayed by several years, or may require us to expend more resources than we have available. It is also possible that additional studies, if performed and completed, may not be considered sufficient by the FDA to approve the NDA. If any of these outcomes occur, we would not receive approval at such time, if any, that we seek FDA approval. We may face similar risks with respect to obtaining regulatory approval from the EMA at such time, if any, that we seek EMA approval. The risks that we face in obtaining applicable approvals from the FDA and EMA Intranasal Epinephrine, Intranasal Naloxone or any other product candidate that we may seek to develop, may also exist with other regulatory authorities, such as those in Latin America or other regions.

Even if we obtain FDA, EMA or other regulatory approval for Intranasal Epinephrine or any other product candidate, the approval might contain significant limitations related to use restrictions, warnings, precautions or contraindications, or may be subject to significant post-marketing studies or risk mitigation requirements. If we are unable to successfully commercialize Intranasal Epinephrine or other current or future product candidates, we may be forced to cease operations.

***Preliminary data that we or others announce or publish from time to time with respect to our product candidates may change as more data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.***

From time to time, we, or our partners, may publish or seek to publish preliminary data from ongoing clinical trials, which are based on a preliminary analysis of then-available data. Positive preliminary data may not be predictive of such trial's subsequent or overall results. Preliminary data are subject to the risk that one or more of the results and related findings and conclusions may materially change following a more comprehensive review of the data or as more data become available. Therefore, positive preliminary results in any ongoing clinical trial may not be predictive of such results in the completed trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully evaluate all data. As a result, preliminary data that we report may differ from future results from the same clinical trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, preliminary data should be viewed with caution until the final data are available. Material adverse changes in the final data compared to preliminary data could significantly harm our business prospects.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, in scale, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

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***The results of clinical trials conducted at clinical sites outside the United States may not be accepted by the FDA and the results of clinical trials conducted at clinical sites in the United States may not be accepted by international regulatory authorities.***

We plan to conduct some of our clinical trials outside the United States. For example, we are planning to conduct some of our Intranasal Epinephrine clinical studies in Canada and Israel. We have also previously performed our pivotal study for Naloxone in Canada in an FDA approved facility. However, although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well-designed and conducted and performed by qualified investigators in accordance with ethical principles such as or IRB or ethics committee approval and informed consent. The study population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. Generally, the subject population for any clinical trials conducted outside of the United States must be representative of the U.S. population. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials were conducted consistent with all applicable U.S. laws and regulations. There can be no assurance the FDA or international regulatory authorities will accept data from trials conducted outside of the United States or inside the United States, as the case may be, as adequate support of a marketing application. If the FDA does not accept the data from sites in our globally conducted clinical trials, or if international regulatory authorities do not accept the data from our U.S. clinical trials, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt the development of one or more of our product candidates.

***Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential or result in significant negative consequences following regulatory approval, if obtained.***

During the conduct of clinical trials, patients may experience changes in their health, including illnesses, injuries, discomforts or a fatal outcome. It is possible that as we develop Intranasal Epinephrine, Intranasal Naloxone or other product candidates that we may seek to develop, in larger, longer and more extensive clinical trials as use of our product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier clinical trials, as well as conditions that did not occur or went undetected in previous clinical trials, will be reported by subjects. Many times, side effects are only detectable after investigational products are tested in larger scale, Phase 2 and 3 clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that Intranasal Epinephrine, Intranasal Naloxone or other product candidates that we seek or may seek to develop, have side effects or cause serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked or limited.

Additionally, if any of our product candidates receives marketing approval, the FDA or EMA could require us to adopt a REMS to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to health care practitioners, and restrictions on how or where the product can be distributed, dispensed or used. Furthermore, if we or others later identify undesirable side effects caused by Intranasal Epinephrine, Intranasal Naloxone or other current or future product candidates, several potentially significant negative consequences could result, including:

● regulatory authorities may suspend or withdraw approvals of such a product candidate;

● regulatory authorities may require additional warnings on the label;

● regulatory authorities may issue negative publicity regarding the affected product, including safety communications;

● we may be required to change the way the product is distributed, dispensed or administered, or conduct additional pre-clinical studies or clinical trials;

● we may need to voluntarily recall our products; and

● we could be sued and held liable for harm caused to patients.

Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could significantly harm our business, prospects, financial condition and results of operations.

***Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.***

As product candidates proceed through pre-clinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the materials manufactured using altered processes. Such changes may also require additional testing, FDA or EMA notification or FDA approval. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commence sales and generate revenue.

***We will need to obtain FDA approval of any proposed names for our product candidates that gain marketing approval, and any failure or delay associated with such naming approval may adversely impact our business.***

Any name we intend to use for our product candidates will require approval from the FDA regardless of whether we have secured a formal trademark registration from the U.S. Patent and Trademark Office, or the U.S. PTO. The FDA typically conducts a review of proposed product names, including an evaluation of whether proposed names may be confused with the names of other drug products. The FDA may object to any product name we submit if it believes the name inappropriately implies medical claims. If the FDA objects to any of our proposed product names, we may be required to adopt an alternative name for our product candidates, which could result in further evaluation of proposed names with the potential for additional delays and costs.

***Changes in regulatory requirements and guidance or unanticipated events during our clinical trials may occur, which may result in necessary changes to clinical trial protocols, which could result in increased costs to us, delay our development timeline or reduce the likelihood of successful completion of our clinical trials.***

Changes in regulatory requirements and guidance or unanticipated events during our clinical trials may occur, as a result of which we may need to amend clinical trial protocols. Amendments may require us to resubmit our clinical trial protocols to IRBs for review and approval, which may impact the cost, timing or successful completion of a clinical trial. If we experience delays in completion of, or if we terminate, any of our clinical trials, the commercial prospects for our products would be harmed and our ability to generate product revenue would be delayed, possibly materially.

***Our development and regulatory strategy for our product candidates depends in part on published scientific literature and the FDA's prior findings regarding the safety and efficacy of approved product candidates. If the FDA does not conclude that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for our product candidates under Section 505(b)(2) are not as we expect, the approval pathway would likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated and in either case may not be successful.***

The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments, added Section 505(b)(2) to the FFDCA, or Section 505(b)(2). Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. We intend to seek FDA approval through the Section 505(b)(2) regulatory pathway for Intranasal Epinephrine and may seek this regulatory pathway for other product candidates that we seek to develop, which we believe could expedite the development program for Intranasal Epinephrine and other current and future product candidates by potentially decreasing the amount of preclinical and clinical data that we would need to generate in order to obtain FDA approval. However, while we believe that Intranasal Epinephrine and Intranasal Naloxone are reformulation of already-approved drugs and, therefore, will be eligible for submission of an NDA under Section 505(b)(2), the FDA may disagree and determine that are not eligible for review under such regulatory pathway.

If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval, and complications and risks associated with FDA approval, would substantially increase. We may need to obtain additional funding, which could result in significant dilution to the ownership interests of our then existing shareholders to the extent we issue equity securities or convertible debt. We cannot assure you that we would be able to obtain such additional financing on terms acceptable to us, if at all. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive product candidates reaching the market faster than our product candidates, which could materially adversely impact our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization.

In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain competitors and others have objected to the FDA's interpretation of Section 505(b)(2). If the FDA's interpretation of Section 505(b)(2) is successfully challenged, the FDA may be required to change its 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our potential future NDAs for up to 30 months depending on the outcome of any litigation. It is also not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition.

Moreover, even if and NS002, NS001 or any POC program or future product candidates are approved under the Section 505(b)(2) pathway, as the case may be, the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.

***We may seek designations for our product candidates with the FDA and other comparable regulatory authorities that are intended to confer benefits such as a faster development process or an accelerated regulatory pathway, but there can be no assurance that we will successfully obtain such designations. In addition, even if one or more of our product candidates are granted such designations, we may not be able to realize the intended benefits of such designations.***

The FDA, and other comparable regulatory authorities, offer certain designations for product candidates that are intended to encourage the research and development of pharmaceutical products addressing conditions with significant unmet medical need. These designations may confer benefits such as additional interaction with regulatory authorities, a potentially accelerated regulatory pathway and priority review. There can be no assurance that we will successfully obtain any such designation for our products. In addition, while such designations could expedite the development or approval process, they generally do not change the standards for approval. Even if we obtain such designations for one or more of our product candidates, there can be no assurance that we will realize their intended benefits.

For example, we may seek a Breakthrough Therapy designation from the FDA for one or more of our product candidates. A Breakthrough Therapy designation is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or condition, if preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies that have Breakthrough Therapy designation, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies with Breakthrough Therapy designation from the FDA are also eligible for accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for Breakthrough Therapy designation, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy designation for a product candidate may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify for Breakthrough Therapy designation, the FDA may later decide that such product candidates no longer meet the conditions for qualification.

We may also seek Fast Track designation from the FDA for some of our product candidates. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply for Fast Track designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it. Even if we do receive Fast Track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track Designation does not provide assurance of ultimate FDA approval. The FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program.

***The results of preclinical studies and early-stage clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Initial success in our ongoing clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials.***

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Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Furthermore, there can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our product candidates. There is a high failure rate for drugs and biologics proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could harm our business and operating results.

***Interim, topline and preliminary data from our clinical trials that we announce or publish may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.***

From time to time, we may publish interim, topline or preliminary data from our clinical trials. Preliminary and interim data from our clinical trials may change as more patient data become available. Preliminary or interim data from our clinical trials are not necessarily predictive of final results. Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues, more patient data become available, and we issue our final clinical trial report. Interim, topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, preliminary and interim data should be viewed with caution until the final data are available. Adverse changes in the final data compared to the interim data could significantly harm our business prospects.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular preclinical study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate or our business. If the preliminary and interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

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***Even if we obtain regulatory approval for a product candidate, our products will remain subject to ongoing regulatory oversight.***

Even if we obtain any regulatory approval for our product candidates, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for our product candidates also may be subject to a REMS, limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product. The holder of an approved marketing application also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current good manufacturing practices, or cGMP, requirements and adherence to commitments made in the NDA or foreign marketing application. If we, or a regulatory authority, discover 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 or disagrees with the promotion, marketing or labeling of that product, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements, a regulatory authority may:

● issue an untitled letter or warning letter that we are in violation of the law;

● seek an injunction or impose administrative, civil or criminal penalties or monetary fines;

● suspend or withdraw regulatory approval;

● suspend any ongoing clinical trials;

● refuse to approve pending applications or supplements to applications;

● restrict the marketing or manufacturing of the product;

● seize or detain the products or require the withdrawal of the product from the market;

● refuse to permit the import or export of the products; or

● refuse to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and adversely affect our business, financial condition, results of operations and prospects.

***International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States, Israel or the EU.***

Other than our headquarters and other operations which are located in Israel, we currently have limited international operations, but our business strategy incorporates potentially significant international expansion, particularly in anticipation of approval of our product candidates. We may plan to maintain sales representatives and conduct physician and patient association outreach activities, as well as clinical trials, outside of the United States, Israel and Europe. If our products are approved for commercialization outside the United States, Israel, or the EU, we will likely enter into agreements with third parties to market the drugs in these additional global territories. We expect that we will be subject to additional risks related to entering into or maintaining international business relationships, including:

● different regulatory requirements for drug approvals in foreign countries;

● differing United States and foreign drug import and export rules, tariffs and other trade barriers;

● reduced protection for intellectual property rights in foreign countries;

● failure by us to obtain regulatory approvals for the use of our products in various countries;

● different reimbursement systems;

● economic weakness, including inflation, or political instability in particular foreign economies and markets;

● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;

● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations, which could result in increased operating expenses and reduced revenues;

● workforce uncertainty in countries where labor unrest is more common than in the United States;

● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, or FCPA, its books and records provisions or its anti-bribery provisions;

● potential liability resulting from development work conducted by these distributors; and

● business interruptions resulting from a local or worldwide pandemic, such as COVID-19, geopolitical actions, including war and terrorism, or natural disasters.

Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations.

***Even if any of our product candidates receives marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, pharmacists and others in the medical community necessary for commercial success.***

The commercial success of our products will depend upon the acceptance of each product by the medical community, including physicians, patients and third-party payors. The degree of market acceptance of any approved product will depend on a number of factors, including:

● the efficacy and safety of the product;

● the potential advantages of the product compared to available therapies;

● the convenience and ease of administration compared to alternative treatments;

● limitations or warnings, including use restrictions contained in the product's approved labeling;

● distribution and use restrictions imposed by the EMA, FDA or other regulatory authority or agreed to by us as part of a mandatory or voluntary risk management plan;

● pricing and cost effectiveness in relation to alternative treatments;

● if the product is included under physician treatment guidelines as a first-, second,- or third-line therapy;

● the strength of sales, marketing and distribution support;

● the availability of third-party coverage and adequate reimbursement and the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors;

● the strength of sales, marketing and distribution support;

● the willingness of patients to pay for drugs out of pocket in the absence of third-party coverage; and

● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies.

If our products are approved but do not achieve an adequate level of acceptance by physicians, third party payors and patients, we may not generate sufficient revenue from the product, and we may not become or remain profitable. In addition, our efforts to educate the medical community and third-party payors on the benefits of the product may require significant resources and may never be successful.

In addition, we may choose to collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we enter into arrangements with third parties to perform sales, marketing and distribution services for our products, the resulting revenues or the profitability from these revenues to us are likely to be lower than if we had sold, marketed and distributed our products ourselves. If we are unable to enter into such arrangements on acceptable terms or at all, we may not be able to successfully commercialize any of our product candidates that receive regulatory approval. Depending on the nature of the third-party relationship, we may have little control over such third parties, and any of these third parties may fail to devote the necessary resources and attention to sell, market and distribute our products effectively. If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future product revenue will suffer, and we may incur significant additional losses.

***We currently have no marketing and sales organization. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any product revenue.***

We have no experience selling and marketing our product candidates, and we currently have no marketing or sales organization. To successfully commercialize any product candidates that may result from our development programs, we will need to develop these capabilities, either on our own or with others. If our product candidates receive regulatory approval, we intend to establish a sales and marketing organization independently or by utilizing experienced third parties with technical expertise and supporting distribution capabilities to commercialize our product candidates in major markets, all of which will be expensive, difficult and time consuming. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact our ability to commercialize our product candidates.

Further, given our lack of prior experience in marketing and selling pharmaceutical products, our initial estimate of the size of the required sales force may be materially more or less than the size of the sales force actually required to effectively commercialize our product candidates. As such, we may be required to hire sales representatives and third-party distributors to adequately support the commercialization of our product candidates, or we may incur excess costs if we hire more sales representatives than necessary. With respect to certain geographical markets, we may enter into collaborations with other entities to utilize their local marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. We also may enter into collaborations with large pharmaceutical companies to develop and commercialize product candidates. If our future collaborators do not commit sufficient resources to develop and commercialize our future products, if any, and we are unable to develop the necessary marketing capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We may compete with companies that currently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

Our efforts to educate the medical community, including physicians, hospital pharmacists and third-party payors on the benefits of our product candidates may require significant resources and may never be successful. If any of our product candidates are approved but fail to achieve market acceptance among physicians, patients or third-party payors, we will not be able to generate significant revenues from such product, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

***Even if we are able to commercialize any product candidates, the products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, any of which could harm our business.***

Our ability to commercialize any product candidates successfully will depend, in part, on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and impact reimbursement levels.

Obtaining and maintaining adequate reimbursement for our products may be difficult. We cannot be certain if and when we will obtain an adequate level of reimbursement for our products by third party payors. Even if we do obtain adequate levels of reimbursement, third-party payors, such as government or private healthcare insurers, carefully review and increasingly question the coverage of, and challenge the prices charged for, drugs. Reimbursement rates from private health insurance companies vary depending on the company, the insurance plan and other factors. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs. We may also be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval, and the royalties resulting from the sales of those products may also be adversely impacted.

There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be reimbursed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription drug pricing remains subject to continuing governmental control, including possible price reductions, even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval. There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically necessary or cost-effective for a specific indication, or that coverage or an adequate level of reimbursement will be available.

***We face intense competition in an environment of rapid technological change and the possibility that our competitors may develop products and drug delivery systems that are similar, more advanced or more effective than ours. As a result, we may be unable to effectively compete in our industry, which may adversely affect our financial condition and our ability to successfully market or commercialize our product candidates.***

The pharmaceutical industry in which we operate is intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing therapies in the market and in development that may in the future compete with our product candidates, including other products that address opioid overdose or anaphylactic shock, as well as other drug delivery mechanisms. Other approaches may also emerge for the prevention or treatment of any of the indications on which we focus, and new technologies may emerge in localized drug delivery.

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies and specialty pharmaceutical companies. The major market players within the intranasal drug market and our primary competitors in the United States and abroad include ADAPT Pharma, Inc., Teva Pharmaceuticals Ltd., Pfizer Inc., Viatris Inc., and Kaléo, Inc., among others. Some of these companies hold significant market share. Their dominant market position and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales and capture market share. Many of our competitors have long histories and strong reputations within the industry. They have significantly greater brand recognition, financial and human resources than we do. They also have more experience and capabilities in researching and developing medical devices, obtaining and maintaining regulatory clearances, manufacturing and marketing those products and other resources, than we do. There is a significant risk that we may be unable to overcome the advantages held by our competition, and our inability to do so could lead to the failure of our business and the loss of your investment. In addition, we may be unable to develop additional products in the future or to keep pace with developments and innovations in the market and lose market share to our competitors.

Our competitors may succeed in developing, acquiring or licensing on products that are more effective or less costly than any product candidate that we may develop, or achieve earlier patent protection, regulatory approval, product commercialization and market penetration than we do. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors.

Further, competition in the pharmaceutical industry is intense, and can lead to, among other things, price reductions, longer selling cycles, lower product margins, loss of market share and additional working capital requirements. To succeed, we must, among other critical matters, gain consumer acceptance for our products, as compared to other solutions currently available in the market. For example, since the currently accepted treatment for opioid overdose and anaphylactic shock are Narcan (Naloxone HCI) and the EpiPen (Epinephrine Injection USP), respectively, we will need to invest resources in educating the medical community and consumers, and establish strategic collaborations before we will be able to gain market acceptance for our Intranasal Epinephrine and Intranasal Naloxone as a treatment in severe acute emergency situations. If our competitors offer significant discounts on certain products and solutions, we may need to lower our prices or offer other favorable terms in order to compete successfully. Moreover, any broad-based changes to our prices and pricing policies could make it difficult to generate revenues or cause our revenues to decline. Moreover, if our competitors develop and commercialize products and solutions that are more effective or desirable than products and solutions that we may develop, we may not convince our customers to use our products and solutions. Any such changes would likely reduce our commercial opportunity and revenues potential and could materially adversely impact our operating results. See "*Business Overview - Competition.*"

***The FDA and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses. The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that may lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.***

If any of our product candidates are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, if approved. In particular, while the FDA permits the dissemination of truthful and non-misleading information about an approved product, a manufacturer may not promote a product for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product's approved labeling. If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees, corporate integrity agreements or permanent injunctions under which specified promotional conduct must be changed or curtailed. If we cannot successfully manage the promotion of our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

Further, advertising and promotion of our products that obtain marketing approval in the United States may be heavily scrutinized by the FDA, the U.S. Department of Justice, or DOJ, U.S. Department of Health and Human Services, or HHS, state attorneys general, members of Congress, and the public. In addition, advertising and promotion of any product that obtains approval outside of the United States may be heavily scrutinized by comparable foreign regulatory authorities.

We expect that, if cleared or approved, our products, will be cleared by the requisite regulatory authorities for specific indications. We expect to train our marketing personnel and direct sales force to not promote our devices for uses outside of the FDA-approved indications for use, known as "off-label uses." We cannot, however, prevent a physician from using our devices off-label, when in the physician's independent professional medical judgment, he or she deems it appropriate. There may be increased risk of injury to patients if physicians attempt to use our devices off-label. Furthermore, the use of our devices for indications other than those approved by the FDA or approved by any foreign regulatory body may not effectively treat such conditions, which could harm our reputation in the marketplace among healthcare providers and patients.

If the FDA or any state or foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations. We may become subject to such actions and, if we are not successful in defending against such actions, those actions may have a material adverse effect on our business, financial condition and results of operations. Equivalent laws and potential consequences exist in foreign jurisdictions.

In addition, if our products are cleared or approved, healthcare providers may misuse our products or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If our products are misused or used with improper technique, we may become subject to costly litigation by our customers or their patients. As described above, product liability claims could divert management's attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.

***If product liability lawsuits are brought against us, we may incur substantial liabilities, even if we have appropriate insurance policies, and we may be required to limit commercialization of our product candidates. Product liability or similar claims that could be expensive, damage our reputation and harm our business.***

We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing and use of pharmaceutical products. Currently, we have no products that have been approved for marketing or commercialization; however, the use of our product candidates in clinical trials, and the sale of these product candidates, if approved, in the future, may expose us to liability claims. Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, health care providers, pharmaceutical companies, our collaborators or others using, administering or selling any of our future approved products. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities, even if we have product liability or such other applicable insurance policies in effect. We may not be able to maintain adequate levels of insurance for these liabilities at reasonable cost and/or reasonable terms. Excessive insurance costs or uninsured claims would add to our future operating expenses and adversely affect our financial condition. As a result of such lawsuits and their potential results, we may be required to limit commercialization of our product candidates. Regardless of the merits or eventual outcome, liability claims may result in:

● decreased demand for our product candidates;

● termination of clinical trial sites or entire trial programs;

● injury to our reputation and negative media attention;

● product recalls or increased warnings on product labels;

● withdrawal of clinical trial participants;

● costs of to defend the related litigation;

● diversion of management and our resources;

● substantial monetary awards to, or costly settlements with, clinical trial participants, patients or other claimants;

● higher insurance premiums;

● loss of initiation of investigations by regulators or other authorities; and

● the inability to successfully commercialize our product candidates, if approved.

Further, our business exposes us to an inherent risk of potential product liability or similar claims. The pharmaceutical industry has historically been litigious, and we face financial exposure to product liability or similar claims if the use of any of our products were to cause or contribute to injury or death. There is also the possibility that defects in the design or manufacture of any of our products might necessitate a product recall. Although we plan to maintain product liability insurance, the coverage limits of these policies may not be adequate to cover future claims. In the future, we may be unable to maintain product liability insurance on acceptable terms or at reasonable costs and such insurance may not provide us with adequate coverage against potential liabilities. A product liability claim, regardless of merit or ultimate outcome, or any product recall could result in substantial costs to us, damage to our reputation, customer dissatisfaction and frustration and a substantial diversion of management attention. A successful claim brought against us in excess of, or outside of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations.

***We may be subject to litigation for a variety of claims, including class actions, which could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business.***

We may be subject to litigation for a variety of claims, including class actions and contract claims, arising from our normal business activities. These may include claims, suits, and proceedings involving labor and employment, wage and hour, commercial, contractual and other matters. For example, on October 5, 2022, we received a termination notice from Aptar Group Inc., or Aptar, in connection with an alleged breach of our contractual obligations with Aptar under a master services agreement, or MSA, we entered into with Aptar on September 6, 2019. We timely responded to such notice, exchanged correspondence with Aptar through February 2023 and have been unable to resolve the claims and allegations made by each party. Since February 2023, we have continued to purchase products from Aptar under our MSA and related schedules of work and, as of July 3, 2025, we have not received any further notices, demands or claims from Aptar. Termination of the MSA with Aptar could result in significant delays to our commercialization efforts and adversely harm our business, operating results, and financial condition. See "*Business—Our Solution—Aptar UDS and collaboration*" for further information.

The outcome of any litigation, regardless of its merits, is inherently uncertain. Further, we are unable to predict whether unknown claims and lawsuits may be brought against us that could become material. Any claims and lawsuits, and the disposition of such claims and lawsuits, could be time-consuming and expensive to resolve, divert management attention and resources, and lead to attempts on the part of other parties to pursue similar claims. Any adverse determination related to litigation could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business. In addition, depending on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our operating results, cash flows and our ability to raise capital.

***Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. Our failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed abroad, and any approval we are granted for our product candidates in the United States would not assure approval of product candidates in foreign jurisdictions.***

In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drugs are subject to extensive regulation by the FDA in the United States and other regulatory authorities in other countries. These regulations differ from country to country. Even if we obtain and maintain regulatory approval of our product candidates in one jurisdiction, such approval does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.

Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional nonclinical studies or clinical trials as investigations conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. These regulatory procedures can result in substantial delays in such countries. In other countries, product approval depends on showing superiority to an approved alternative therapy. This can result in significant expense for conducting complex clinical trials.

If we, or any third parties with whom we work, fail to comply with regulatory requirements in United States or international markets or to obtain and maintain required approvals or if regulatory approvals in international markets are delayed, our target market may be reduced and our ability to realize the full market potential of our products will likely be harmed. The inability to meet continuously evolving regulatory standards for approval may result in our failing to obtain regulatory approval to market our current product candidates, which could significantly harm our business, results of operations and prospects.

***Our market is subject to intense competition, which may result in others commercializing products before or more successfully than us. If we are unable to compete effectively, our products may be rendered non-competitive or obsolete, which may adversely affect our operating results.***

The development and commercialization of new products is highly competitive. Our potential competitors include major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to our intranasal powder products or any future product candidate that we may seek to develop or commercialize. Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, have fewer or more tolerable side effects or are more convenient or less costly than our products or any future product candidate we may develop, which could render any product candidates obsolete and non-competitive. Our competitors also may obtain FDA or other marketing approval for their products before we are able to obtain approval for ours, which could result in competitors establishing a strong market position before we are able to enter the applicable market.

Many of our potential competitors, alone or with their strategic partners, have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining marketing approvals and commercializing approved products than we do. There is a trend toward consolidation in the pharmaceutical and biotechnology industry, and additional mergers and acquisitions in these industries may result in even more resources being concentrated among a smaller number of our competitors, which may adversely affect us.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These companies also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials.

In addition, if we enter the markets of our product candidates, with such entrance remaining subject to various additional regulatory approvals, too late in the cycle, we may not achieve commercial success, or we may have to reduce our price in order to effectively compete, which would impact our ability to generate revenue, obtain profitability and adversely affect our operating results.

***Legislative or regulatory healthcare reforms in the United States may make it more difficult and costly for us to obtain regulatory clearance or approval of our product candidates and to produce, market and distribute our products after clearance or approval is obtained.***

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory clearance or approval, manufacture and marketing of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our product candidates. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require:

● changes to manufacturing methods;

● change in protocol design;

● additional treatment arm (control);

● recall, replacement, or discontinuance of one or more of our products; and

● additional recordkeeping.

In addition, in the United States, there have been a number of legislative and regulatory proposals to change the health care system in ways that could affect our ability to sell our products profitably. The pharmaceutical industry in the United States, as an example, has been affected by the passage of the Patient Protection and Affordable Care Act 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the Affordable Care Act, which, among other things, imposed new fees on entities that manufacture or import certain branded prescription drugs and expanded pharmaceutical manufacturer obligations to provide discounts and rebates to certain government programs. There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the "individual mandate" was repealed by Congress. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025. The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and any potential future healthcare reform measures of the Trump administration will impact the Affordable Care Act and our business.

Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. These changes include, among others, aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect until 2032 unless additional Congressional action is taken. Congress is considering additional health reform measures.

Further, there has been particular and increasing legislative and enforcement interest in the United States with respect to drug pricing practices in recent years, particularly with respect to drugs that have been subject to relatively large price increases over relatively short time periods. There have been several recent U.S. Presidential executive orders, Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

For example, in July 2021, the Biden administration released an executive order, "Promoting Competition in the American Economy," with multiple provisions aimed at prescription drugs. In response to President Biden's executive order, on September 9, 2021, the Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions will take effect progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional drugs covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. Further in response to the Biden administration's October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Centers for Medicare & Medicare Services, or CMS, Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future.

Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida's Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

In the future, there will likely continue to be proposals relating to the reform of the U.S. healthcare system, some of which could further limit coverage and reimbursement of drug products, including our product candidates. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Our results of operations could be adversely affected by the Affordable Care Act and by other health care reforms that may be enacted or adopted in the future.

In addition, the delivery of healthcare in the EU, including the establishment and operation of health services, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay additional marketing approval of product candidates or any initial marketing approval for our current or any future product candidates, restrict or regulate post-approval activities and affect our ability to commercialize any products for which we obtain marketing approval.

We are currently unable to predict what additional legislation or regulation, if any, relating to the health care industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation would have on our business. The pendency or approval of such proposals or reforms could result in a decrease in the price of our Ordinary Shares or limit our ability to raise capital or to enter into collaboration agreements for the further development and potential commercialization of our products.

***Inadequate funding for the FDA and other government agencies and/or potentially shifting priorities under the new administration could hinder the FDA's and/or those other government agencies' ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.***

The ability of the FDA to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, among other factors. Average review times at the agency may fluctuate as a result. In addition, government funding of other government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also increase the time necessary for new drugs to be reviewed and/or approved by necessary government agencies or to otherwise respond to regulatory submissions, such as our future-planned NDA submission for NS002, which would adversely affect our business. For example, the Trump administration has discussed several changes to the reach and oversight of the FDA, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs. Additionally, over the last several years, the U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities. If funding for the FDA is reduced, FDA priorities change, or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, including our future-planned NDA submission for NS002, which could have a material adverse effect on our business.

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***Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.***

Even after we achieve regulatory approvals to market our products in certain countries, we are still subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, sale, promotion, import, export, and registration. In addition, if we receive additional regulatory approvals to market our products, we will likewise remain subject to ongoing regulation. Failure to comply with these regulations could result in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate further investigation.

The regulations to which we are subject are complex and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs, or lower than anticipated sales. Even after we have obtained the proper regulatory clearance to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state and foreign regulatory authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:

● untitled letters or warning letters;

● fines, injunctions, consent decrees and civil penalties;

● recalls, termination of distribution, administrative detention, or seizure of our products;

● customer notifications or repair, replacement or refunds;

● operating restrictions or partial suspension or total shutdown of production;

● delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products;

● withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products;

● FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and criminal prosecution.

Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition and results of operations.

In addition, the FDA or state or foreign authorities may change their clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay clearance or approval of our future products under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain new clearances or approvals, increase the costs of compliance or restrict our ability to maintain any approvals we are able to obtain.

***Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.***

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies' ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor, customer, consumer, employee or other stakeholders' evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, support for local communities, board of directors and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.

Customers, consumers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain of our products. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.

If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation, business or financial condition.

**Risks Related to Our Reliance on Third Parties**

***We are dependent on manufacturers for Epinephrine and other formulations. Any delay, price increase or unavailability of our manufacturers could materially adversely affect our ability to conduct clinical trials and, if this were to occur after we obtained commercialization and marketing approval, could materially impact our operations.***

The FDA requires identification of raw material suppliers in applications for approval of drug products. If Epinephrine and other formulations were unavailable from a specified manufacturer, FDA approval of a new manufacturer, assuming one is found, could delay the manufacture of the drug involved or delay any clinical trial we are then conducting or planning to conduct. Either such occurrence could have an adverse effect on our operations and reputation and could materially impact our operations.

Furthermore, there is a risk of a sole approved manufacturer significantly raising prices. If prices for raw materials were to be significantly increased, our profit margins and sales, if any, would be greatly reduced and, assuming our products were approved for commercialization or marketing, delay product launches, or delay clinical trials at earlier stages of development. Such price increase occurrences could be resolved by the successful FDA approval of an alternate supplier; however, such approval process can be lengthy and costly. There can be no guarantee that a resolution would be reached in the event of a significant price increase.

***We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all.***

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We source components of our technology from third parties and certain components are sole sourced, as is customary for development stage pharmaceutical companies. Obtaining substitute components may affect our timelines. For example, as a small pharmaceutical development company, Aptar, a leading global manufacturer of inhalers, is our sole supplier for supply of its intranasal Unit Dose Spray product, or UDS, to be the delivery system for our Intranasal Epinephrine powder and Intranasal Naloxone powder. Although alternatives for UDS are commercially available, including generic versions, if Aptar is unable to supply UDS to us in the quantities we require, or at all, or otherwise default on their supply obligations to us, we may not be able to obtain alternative supplies from other suppliers on acceptable terms in a timely manner. In addition, if we are required to change UDS manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. In the event that we are required to change UDS manufacturers, we will also need to verify, such as through a manufacturing comparability study, that any new manufacturer or manufacturing process will produce our product candidate according to the specifications. A change in manufacturer may also require the conduct of a small bridging study to show comparability, as is the case in every change in the manufacturing process. The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.

Further, any natural or other disasters, epidemic or pandemic, acts of war or terrorism, shipping embargoes, labor unrest or political instability or similar events at our third-party suppliers' facilities that cause a loss of manufacturing capacity or a reduction in the quality of the items manufactured would heighten the risks that we face. Changes to, failure to renew or termination of our existing agreements or our inability to enter into new agreements with other suppliers could result in the loss of access to important components of our tests and could impair, delay or suspend our commercialization efforts. Our failure to maintain a continued and cost-effective supply of high-quality components could materially and adversely harm our business, operating results, and financial condition.

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***We rely on third parties to conduct our pre-clinical and clinical studies and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.***

We have relied upon and plan to continue to rely upon third-party CROs to monitor and manage data for our ongoing pre-clinical and clinical programs. We rely on these parties for execution of our pre-clinical and clinical studies, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities. We and our CROs and other vendors are required to comply with current cGMP, Good Clinical Practices, or GCP, quality system requirements, or QSR, and Good Laboratory Practices, or GLP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area, and comparable foreign regulatory authorities for all of our product candidates in clinical development. Regulatory authorities enforce these regulations through periodic inspections of study sponsors, principal investigators, study sites and other contractors. If we or any of our CROs or vendors fail to comply with applicable regulations, the clinical data generated in our clinical studies may be deemed unreliable and the FDA, EMA or comparable foreign regulatory authorities may require us to perform additional clinical studies before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical studies comply with GCP regulations. In addition, our clinical studies must be conducted with product candidates which are produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical studies, which would delay the regulatory approval process.

***We have limited manufacturing experience and could experience production problems that result in delays in our development or commercialization programs or otherwise adversely affect our business. We currently have no manufacturing facilities and anticipate reliance on third-party manufacturers for our products.***

We have limited experience manufacturing NS002 and NS001. We are currently only able to produce clinical trial material up to and including Phase 2 studies of our products. We may be unable to produce commercial materials or meet demand for our product candidates if we are unable to receive or maintain commercial regulatory approvals for our facility. Any such failure could delay or prevent our development of our products and would have a material adverse effect on our business, financial condition and results of operations.

If either of our product candidates is approved, we may need to increase the scale or capacity of our manufacturing process. We currently do not have manufacturing facilities capable of producing our product candidates on a commercial scale and do not intend to develop facilities for the manufacture of products for commercial purposes in the foreseeable future. We will rely on third-party manufacturers to produce bulk drug products required for our Phase 3 clinical trials and commercial sales, if any. We plan to rely upon contract manufacturers and, potentially, collaboration partners to manufacture commercial quantities of our drug product candidates if and when approved for marketing by the applicable regulatory authorities. The use of new manufacturers may require obtaining new approvals. Our contract manufacturers will need to complete process validation for the drug substance manufacturing process. Process validation involves a series of activities taking place over the lifecycle of the product and process. If our contract manufacturers are not approved by the FDA, or other regulatory bodies, our commercial supply of drug substance will be significantly delayed and may result in significant additional costs. If the FDA does not consider the result of the process validation or required testing to be satisfactory, regulatory approval and/or commercial supply after launch may be delayed. The FDA and similar foreign regulatory bodies may also implement new requirements, or change their interpretation and enforcement of existing requirements, for manufacturers, packaging or testing of products at any time. If we, or our contract manufacturers are unable to comply with such process validation or other requirements, we may be subject to regulatory, civil actions or penalties which could harm our business.

Any future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business. In the event of a natural disaster, business failure, strike or other difficulty, such as difficulties involving production yields, quality control and quality assurance, we may be unable to replace a third-party manufacturer in a timely manner and the production of any product candidate or commercialized drug would be interrupted, resulting in delays and additional costs.

If we collaborate with contract manufacturers located outside of the United States, we may face difficulties in importing our drug substances into the United States as a result of, among other things, FDA import inspections, incomplete or inaccurate import documentation or defective packaging.

Further, we may not be successful in producing sufficient quantities of our products, due to several factors, including equipment malfunctions, facility contamination, technical process challenges, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of our suppliers. Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical- and commercial-grade materials that meet FDA, EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.

Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. There is no assurance we will not experience such failures at our own manufacturing facility or that of a third party in the future. Lot failures or product recalls could cause delays in product supply or clinical trials, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects.

We also may encounter problems hiring and retaining the experienced specialist scientific, quality assurance, quality control and manufacturing personnel needed to operate our manufacturing process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.

Any problems in our manufacturing process or facilities could make us a less attractive collaborator for potential partners, including pharmaceutical companies, which could limit our access to additional attractive development programs.

***We and our potential collaborators and contract manufacturers are subject to significant regulation with respect to manufacturing our product candidates. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and have limited capacity.***

Manufacturers and their facilities are required to comply with extensive regulatory requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs. These cGMP regulations cover all aspects of manufacturing relating to our product candidates. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational product candidates and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We, our potential collaborators or our contract manufacturers must supply all necessary documentation in support of an NDA or MAA on a timely basis and must adhere to GLP and cGMP QSR regulations enforced by the FDA and other regulatory authorities through their facilities inspection program. The facilities and quality systems of some or all of our potential and future collaborators and third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential product candidates. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential product candidates or the associated quality systems for compliance with the regulations applicable to the activities being conducted. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements. If these facilities do not pass a pre-approval plant inspection, regulatory approval of the product candidates may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever. Moreover, if our contract manufacturer's fail to achieve and maintain high manufacturing standards, in accordance with applicable regulatory requirements, or there are substantial manufacturing errors, this could result in patient injury or death, product shortages, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously harm our business.

***Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our current and potential future product candidates.***

We may seek collaboration arrangements with pharmaceutical or biotechnology companies for the development or commercialization of our current and potential future product candidates. We may enter into these arrangements on a selective basis depending on the merits of retaining commercialization rights for ourselves as compared to entering into selective collaboration arrangements with other pharmaceutical or biotechnology companies for each product candidate, both in the United States and internationally. We will face, to the extent that we decide to enter into collaboration agreements, significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time consuming to negotiate, document and implement. We may not be successful in our efforts to establish and implement collaborations or other alternative arrangements should we so choose to enter into such arrangements. The terms of any collaborations or other arrangements that we may establish may not be favorable to us.

Disagreements between parties to a collaboration arrangement regarding clinical development and commercialization matters can lead to delays in the development process or commercializing the applicable product candidate and, in some cases, termination of the collaboration arrangement. These disagreements can be difficult to resolve if neither of the parties has final decision-making authority.

Collaborations with pharmaceutical or biotechnology companies and other third parties often are terminated or allowed to expire by the other party. Any such termination or expiration could adversely affect us financially and could harm our business reputation.

***Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.***

Because we rely on third parties to develop and manufacture our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.

**Risks Related to Our Intellectual Property**

***We own several issued patents but may require filing of additional patents in the future. There can be no assurance that all or some of our patent applications will result in issued patents. Consequently, our ability to protect our proprietary technology in the marketplace beyond the intellectual property already protected by our currently issued patents may be limited.***

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We have filed patent applications in many countries worldwide. These applications cover a range of technological areas including:, compositions of matter, such as but not limited to pharmaceutical compositions and formulations, comprising multiple active pharmaceutical ingredients, or APIs, which may be known or novel, specific dosage forms such a dosage unit forms of the compositions of matter, methods of treatment of various medical/physiological conditions using the compositions of matter, including treatment regimens, and process/es of manufacturing the pharmaceutical compositions and formulations, and the dosage unit forms. While several patent applications have been granted, others are still pending. Unless and until our pending patent applications are granted and patents thereon are issued, their protective scope cannot be established. It is also not possible to predict whether or how many of our patent applications will mature into issued patents. Even if patents on pending applications are issued, they may be issued with a scope significantly narrower than that we currently seek.

***Our proprietary position for our product candidates currently depends upon patents protecting the method of use, which may not prevent a competitor or other third party from using the same product candidate for another use.***

The primary patent based intellectual property protection for our product candidates will be patents granted on the formulation and/or pharmaceutical composition, optionally in dosage unit form/s, and method/s of their use in treating specific medical/physiological conditions. We have patents and patent applications covering our products as a composition of matter, specifically formulations and pharmaceutical compositions comprising a desired API such as, but not limited to Epinephrine and Naloxone. We also have patents and patent applications directed to methods of preparing these compositions of matter, dosage unit forms of these compositions of matter and methods of treating medical conditions using them.

Composition of matter patent claims on the API, *per se* or comprised in pharmaceutical drug products are generally considered to be the favored intellectual property protection for pharmaceutical products, as such patents provide protection irrespective of any particular method of use, manufacture or formulation of the API used. Method of use patent claims protect the use of a product, which may be the API or a composition/formulation comprising the same, for a defined indication, by the specified method, which may be limited, for example, to route of administration/application and/or dosing regimen. These types of patent claims do not prevent a competitor or other third party from making and marketing an identical API or composition comprising the API, for treating an indication that is outside the scope of the method claims or from developing a different dosing regimen. Moreover, even if competitors or other third parties do not actively promote their product for our targeted indications or uses for which we may obtain patents, physicians may recommend that patients use these products off-label, or patients may do so themselves. Although off-label use may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

***Even if our patents are issued, because the patent status of pharmaceutical products can be complex and uncertain, we cannot predict the scope and extent of patent protection for our product candidates.***

Any patents that may be issued to us will not ensure the protection of our intellectual property for a number of reasons, including without limitation the following:

● any issued patents may not be broad or strong enough to prevent competition by other drug products including identical or similar drug products;

● if we are not issued patents or if issued patents expire, there would be no protection against competitors making generic equivalents;

● there may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim throughout the patent term;

● there may be other patents existing, now or in the future, in the patent landscape for PBI products, or any other product candidates that we seek to commercialize or develop, if any, that will affect our freedom to operate;

● if our patents are challenged, a court could determine that they are not valid or enforceable;

● a court could determine that a competitor's technology or product does not infringe our patents;

● a court could determine we infringe a competitor's patents;

● our patents could irretrievably lapse due to failure to pay fees or otherwise comply with regulations, or could be subject to compulsory licensing; and

● if we encounter delays in our development or clinical trials, the period of time during which we could market our products under patent protection would be reduced.

***Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental or other patent authorities, and our patent protection could be reduced or eliminated for noncompliance with these requirements.***

Periodic maintenance fees on any issued patent are due to be paid to the U.S. PTO and foreign patent authorities at several stages over the term of the patent. The U.S. PTO and various foreign governmental or other patent authorities require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to office actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In any such events, our competitors might be able to enter the market, which would have a material adverse effect on our business.

***We may not be able to enforce our intellectual property rights throughout the world.***

Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Israel can be less extensive than those in the United States and Israel. In addition, the laws of some foreign countries do not protect intellectual property to the same extent as laws in the United States and Israel. Consequently, we may not be able to seek to prevent third parties from practicing our inventions in all countries outside the United States and Israel, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors, for example, may use our technologies in jurisdictions where we have not obtained patents to develop their own products and further, may export otherwise infringing products to territories where we have patents, but enforcement is not as strong as that in the United States and Israel.

Many companies have encountered significant problems in protecting and defending intellectual property in foreign jurisdictions. The legal systems of certain countries, particularly China and certain other developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property, particularly those relating to medical devices and pharmaceutical and biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. To date, we have not sought to enforce any issued patents in any jurisdictions. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. The requirements for patentability may differ in certain countries, particularly developing countries. Certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

***If we are unable to maintain effective proprietary rights for our product candidates, we may not be able to compete effectively in our markets.***

In addition to the protection afforded by any patents currently owned and that may be granted, historically, we have relied on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes that are not easily known, knowable, understood, analyzed or easily ascertainable, and for which patent infringement is difficult to monitor and enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data, trade secrets and intellectual property by maintaining physical security of our premises and physical and electronic security of our information technology systems. Agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors.

We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Also, misappropriation or unauthorized and unavoidable disclosure of our trade secrets and intellectual property could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets and intellectual property are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret.

***Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.***

Our commercial success depends upon our ability to develop, manufacture, market and sell our platform technology without infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the medical device and pharmaceutical industries. While no such litigation has been brought against us to date and we have not been held by any court to have infringed a third party's intellectual property rights, we cannot guarantee that our technology or use of our technology does not infringe third-party patents. It is also possible that we have failed to identify relevant third-party patents or applications. For example, applications filed before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing, which is referred to as the priority date. Therefore, patent applications covering our technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our technology.

We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our technology, including inter parties review, interference, or derivation proceedings before the U.S. PTO and similar bodies in other countries. Third parties may assert infringement claims against us based on existing intellectual property rights and intellectual property rights that may be granted in the future.

If we are found to infringe a third party's intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Any inability to secure licenses or alternative technology could result in delays in the introduction of our products or lead to prohibition of the manufacture or sale of products by us. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology. In addition, we could be found liable for monetary damages, including treble damages and attorneys' fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our technology or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

***We may be subject to claims challenging the inventorship of our patents and other intellectual property.***

We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. In addition, we may receive less revenue from future products if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability.

***Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. In addition, employees may be entitled to seek compensation for their inventions irrespective of their agreements with us.***

We generally enter into non-competition agreements with our employees and certain key consultants. These agreements prohibit our employees and certain key consultants, if they cease working for us, from competing directly with us or working for our competitors or clients for a limited period of time. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us. 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 we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.

In addition, under Israeli law, if we wish to obtain ownership over inventions developed by our employees, which inventions were developed while performing their employment activities, but outside the performance of their contractual duties, we are required to compensate the employee for the rights to their respective inventions. There can be no guarantee that we will be able to obtain any such inventions and the failure to obtain such ownership rights over employee inventions could have a material adverse effect on our operations and ability to effectively compete.

**Risks Related to Our Business and Industry**

***Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.***

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Our future growth and success depend to a large extent on the continued services of members of our current management including, who each have valuable and extensive experience and knowledge of the pharmaceutical industry. In particular, Mr. Udi Gilboa, who is our co-founder and Executive Chairman of the board of directors, Mr. Dan Teleman, who serves as our Chief Executive Officer, Dr. Dalia Megiddo, who serves as our Chief Development Officer and Chief Medical Officer, Ms. Tair Lapidot, our Vice President of Research and Development and Clinical Development, and Ms. Galia Temtsin Kryaz, who serves as our Director of Product, have been instrumental in formulating our business strategies and spearheading the growth of our business and operations. We do not maintain "key person" insurance for any of our executives or employees. Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of our product pipeline toward scaling up for commercialization, manufacturing and sales and marketing personnel, will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

***Our product candidates for which we intend to seek approval may face competition sooner than anticipated.***

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The Biologics Price Competition and Innovation Act of 2009, or BPCIA, created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor's own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation and meaning are subject to uncertainty.

***We manage our business through a small number of part-time employees and key consultants. We will need to significantly increase the size of our organization, and we may experience difficulties in managing our planned growth.***

As of July 3, 2025, we had one full-time employee (Mr. Dan Teleman), one part-time employee (Ms. Tair Lapidot), three service providers (Dr. Dalia Megiddo, Mr. Udi Gilboa, and Mr. Oren Elmaliach) and one consultant (Ms. Galia Temtsin Kryaz). Our future growth and success depend to a large extent on the continued services of members of our current management including, in particular, Mr. Udi Gilboa, who is our co-founder and Executive Chairman of the board of directors, Mr. Dan Teleman, who serves as our Chief Executive Officer, Dr. Dalia Megiddo who serves as our Chief Development Officer and Chief Medical Officer, Ms. Tair Lapidot, our Vice President of Research and Development and Clinical Development, and Ms. Galia Temtsin Kryaz, who serves as our Director of Product. Any of our employees and consultants may leave our company at any time, subject to certain notice periods. The loss of the services of any of our executive officers or any key employees or consultants may adversely affect our ability to execute our business plan and harm our operating results. Our operational success will substantially depend on the continued employment of senior executives, technical staff and other key personnel, especially given the intense competition for qualified personnel. The loss of key personnel may have an adverse effect on our operations and financial performance.

Since we currently have a very limited number of employees, in order to commercialize our products, we will need to substantially increase our operations, including expanding our employee base of managerial, operational and financial personnel. Any future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees. To that end, we must be able to:

● manage our clinical trials and the regulatory process effectively;

● develop our administrative, accounting and management information systems and controls;

● hire and train additional qualified personnel; and

● integrate current and additional management, administrative, financial and sales and marketing personnel.

Expansion will place a significant strain on our financial, management and other resources, and will require us, among other things, to change, expand and improve our operating, managerial and financial systems and controls and improve coordination between our various corporate functions. Although we intend to hire a full-time Chief Financial Officer following the consummation of our initial public offering, we presently rely entirely on one full-time employee, one part-time employee, three service providers and one consultant.

Our inability to effectively manage our growth, including the failure of any new personnel we hire to achieve anticipated performance levels, would have a material adverse effect on our business, consolidated financial condition and results of operations.

***We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.***

If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations may be directly or indirectly through our customers, subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, or the FCA, and physician sunshine laws and regulations. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:

● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

● federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent;

● the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

● HIPAA, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

● the federal physician sunshine requirements under Affordable Care Act, requires manufacturers of drugs, devices and medical supplies to report annually to the HHS information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations;

● 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 payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; and

● European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers, and the European General Data Protection Regulation, or GDPR, which became effective in May 2018 and contains new provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures intended to bring non-EU companies under the regulation, including companies like us that conduct clinical trials in the EU; we anticipate that over time we may expand our business operations to include additional operations in the EU and with such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including the GDPR.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, disgorgement, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to similar actions, penalties and sanctions. Efforts to ensure that our business arrangements comply with applicable healthcare laws and regulations, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company's attention from the business.

***Current and future healthcare and other legislation and regulatory reform measures may have a material adverse effect on our business and results of operations.***

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare.

Our industry is highly regulated and changes in law may adversely impact our business, operations or financial results. The Affordable Care Act is a sweeping measure intended to, among other things, expand healthcare coverage within the United States, primarily through the imposition of health insurance mandates on employers and individuals and expansion of the Medicaid program. Several provisions of the law may affect us and increase certain of our costs. Among the provisions of the Affordable Care Act of importance to our potential product candidates, the Affordable Care Act established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; expands eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; created a new Medicare Part D coverage gap discount program; required certain Affordable Care Act marketplace and other private payor plans to include coverage for preventative services, including vaccinations recommended by the Advisory Committee on Immunization Practices without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

In addition, other legislative changes have been adopted since the Affordable Care Act was enacted. These changes include aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013. These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect until 2031.

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These laws and new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and, accordingly, our financial operations.

We anticipate that the Affordable Care Act, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and an additional downward pressure on the reimbursement our customers may receive for our products. Further, there have been, and there may continue to be, judicial and Congressional challenges to certain aspects of the Affordable Care Act. For example, the U.S. Tax Cuts and Jobs Act of 2017, or TCJA, includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate." On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the "individual mandate" was repealed by Congress. Further, prior to the U.S. Supreme Court ruling, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 26, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the Affordable Care Act. In addition, on August 16, 2022, President Biden signed the IRA into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025. The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost through a newly established manufacturer discount program. Additional legislative and regulatory changes to the Affordable Care Act, its implementing regulations and guidance and its policies, remain possible. However, it remains unclear how any new legislation or regulation might affect the prices we may obtain for any of our product candidates for which regulatory approval is obtained. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payers. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.

In addition, the delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize any products for which we obtain marketing approval.

We are currently unable to predict what additional legislation or regulation, if any, relating to the health care industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation would have on our business. The pendency or approval of such proposals or reforms could result in a decrease in the price of our securities or limit our ability to raise capital or to enter into collaboration agreements for the further development and potential commercialization of our products.

***We may be subject to securities litigation, which is expensive and could divert management attention.***

In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.

***Unsuccessful compliance with certain European privacy regulations could have an adverse effect on our business and reputation.***

The collection and use of personal health data in the EU is governed by the provisions of the Data Protection Directive, and as of May 2018, the GDPR. These directives impose several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, notification of data processing obligations to the competent national data protection authorities and the security and confidentiality of the personal data. The GDPR also extends the geographical scope of EU data protection law to non-EU entities under certain conditions, tightens existing EU data protection principles and creates new obligations for companies and new rights for individuals. Failure to comply with the requirements of the Data Protection Directive, the GDPR, and the related national data protection laws of the EU Member States may result in fines and other administrative penalties. The GDPR introduces new data protection requirements in the EU and substantial fines for breaches of the data protection rules. The GDPR regulations impose additional responsibility and liability in relation to personal data that we process, and we intend to put in place additional mechanisms ensuring compliance with these and/or new data protection rules. In addition, other jurisdictions, including Switzerland, are currently discussing or implementing regulations similar to GDPR. Changes to these European privacy regulations (and similar regulations in other jurisdictions) and unsuccessful compliance may be onerous and adversely affect our business, financial condition, prospects, results of operations and reputation.

***International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States or Israel.***

Other than our headquarters and other operations which are located in Israel, our business strategy incorporates significant international expansion, particularly in anticipated expansion of regulatory approvals of our products. Doing business internationally involves a number of risks, including but not limited to:

● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

● failure by us to obtain regulatory approvals for the use of our products and services in various countries;

● additional potentially relevant third-party patent rights;

● complexities and difficulties in obtaining protection and enforcing our intellectual property;

● difficulties in staffing and managing foreign operations;

● complexities associated with managing multiple regulatory, governmental and reimbursement regimes;

● limits in our ability to penetrate international markets;

● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;

● natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions;

● certain expenses including, among others, expenses for travel, translation and insurance; and

● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the FCPA, its books and records provisions or its anti-bribery provisions.

Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations.

***Our management team has limited experience managing a U.S. reporting company.***

Most members of our management team do not have experience or have limited experience managing a publicly traded company in the United States, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our transition to being a public company in the United States that is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, results of operations and prospects.

***Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.***

We depend on the efficient and uninterrupted operation of our computer and communications systems, and those of our consultants, contractors and vendors, which we use for, among other things, sensitive company data, including our intellectual property, financial data and other proprietary business information.

While certain of our operations have business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, our IT infrastructure and the IT infrastructure of our consultants, contractors and vendors are vulnerable to damage from cyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. We could experience failures in our information systems and computer servers, which could result in an interruption of our normal business operations and require substantial expenditure of financial and administrative resources to remedy. System failures, accidents or security breaches can cause interruptions in our operations and can result in a material disruption of our targeted phage therapies, product candidates and other business operations. The loss of data from completed or future studies or clinical trials could result in delays in our research, development or regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur regulatory investigations and redresses, penalties and liabilities and the development of our product candidates could be delayed or otherwise adversely affected.

Despite the implementation of security measures intended to secure our data against impermissible access and to preserve the integrity and confidentiality of our data, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our new products development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, including under data privacy laws such as the GDPR, damage to our reputation, and the further development of our new products could be delayed.

Even though we believe we carry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results. Moreover, any such event could delay the development of our product candidates.

Furthermore, it is possible that a cybersecurity attack might not be noticed for some period of time. The occurrence of a cybersecurity attack or incident could result in negative publicity resulting in reputational damage with our shareholders and other stakeholders and/or increased costs to prevent, respond to or mitigate cybersecurity events. In addition, the unauthorized dissemination of sensitive personal information or proprietary or confidential information could expose us or other third parties to regulatory fines or penalties, litigation and potential liability, or otherwise harm our business.

**Risks Related to this Offering and the Ownership of Our Securities**

***The market price of our Ordinary Shares may be highly volatile, and you may not be able to resell your shares at or above the initial public offering price.***

Prior to this offering, there has not been a public market for our Ordinary Shares. If an active trading market for our Ordinary Shares does not develop following this offering, you may not be able to sell your shares quickly or at the market price. The initial public offering price for the Ordinary Shares will be determined by negotiations between us and representative of the underwriters and may not be indicative of prices that will prevail in the trading market.

The trading price of each of our Ordinary Shares is likely to be volatile. The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of such securities:

● inability to obtain the approvals necessary to commence further clinical trials;

● unsatisfactory results of clinical trials;

● announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process;

● announcements of therapeutic innovations or new products by us or our competitors;

● adverse actions taken by regulatory authorities with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;

● changes or developments in laws or regulations applicable to the treatment of opioid overdose and anaphylactic shock, or any other indication that we may seek to develop;

● any adverse changes to our relationship with manufacturers or suppliers;

● any intellectual property infringement actions in which we may become involved;

● announcements concerning our competitors or the pharmaceutical industry in general;

● our commencement of, or involvement in, litigation;

● any major changes in our board of directors or management;

● our ability to recruit and retain qualified regulatory, research and development personnel;

● legislation in the United States relating to the sale or pricing of pharmaceuticals;

● the depth of the trading market in our Ordinary Shares;

● termination of the lock-up agreements or other restrictions limiting our ability or that of any of our existing shareholders to sell our common shares (or any other securities that we may issue, if any) after this offering;

● economic weakness, including inflation, or political instability in particular foreign economies and markets;

● business interruptions resulting from a local or worldwide pandemic, such as COVID-19, geopolitical actions, including war and terrorism, or natural disasters

● the granting or exercise of employee share options or other equity awards; and

● changes in investors' and securities analysts' perception of the business risks and conditions of our business.

In addition, the stock market in general, and the NYSE American in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of small companies. Broad market and industry factors may negatively affect the market price of our Ordinary Shares, regardless of our actual operating performance. Further, a systemic decline in the financial markets and related factors beyond our control may cause our share price to decline rapidly and unexpectedly.

***Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.***

Sales of a substantial number of our Ordinary Shares in the public market or the perception that these sales might occur, could depress the market price of our common shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common shares. While the Ordinary Shares sold to non-affiliates in this offering will be freely tradable, without restriction, in the public market, substantially all of the Ordinary Shares owned prior to this offering or purchased in this offering by our existing shareholders are expected to be subject to lock-up agreements with the underwriters of this offering that restrict the ability of these shareholders' to transfer our common shares held by them for at least six months from the date of this prospectus. These outstanding shares that are subject to lock-up agreements are expected to become eligible for unrestricted sale upon expiration of the lockup period, as described in the section of this prospectus entitled "*Shares Eligible for Future Sale*." In addition, shares issued or issuable upon exercise of share options vested as of the expiration of the lock-up period will be eligible for sale at that time. Sales of shares by these shareholders could have a material adverse effect on the trading price of our common shares.

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***Raising additional capital would cause dilution to our existing shareholders and may adversely affect the rights of existing shareholders.***

We may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the issuance of equity (such as this offering) or otherwise including through convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Future sales of our Ordinary Shares or of securities convertible into our Ordinary Shares, or the perception that such sales may occur, could cause immediate dilution and adversely affect the market price of our Ordinary Shares.

***Our principal shareholders and management own a significant percentage of our Ordinary Shares and will be able to exert significant influence over matters subject to shareholder approval.***

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Our executive officers, directors, five percent shareholders and their affiliates currently beneficially own approximately 75% of our Ordinary Shares as of July 3, 2025. Following the completion of this offering, it is expected that our executive officers, directors and principal shareholders will beneficially own 72% of our Ordinary Shares, assuming no exercise of the underwriters' over-allotment option to purchase additional Ordinary Shares. Therefore, these shareholders, and in particular, our largest shareholders, Ehud Gilboa and Dr. Dalia Megiddo, will have the ability to influence us through their ownership positions. These shareholders may be able to determine all matters requiring shareholder approval. For example, these shareholders, acting together, may be able to control elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our securities that you may believe are in your best interest as one of our shareholders. See "*Beneficial Ownership of Principal Shareholders and Management*" for additional information.

***Management will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.***

Our management will have broad discretion in the allocation of the net proceeds and could use them for purposes other than those contemplated at the time of this offering and as described in the section entitled "*Use of Proceeds*." Our management could spend the proceeds in ways that you do not agree with or that do not improve our results of operations or enhance the value of our securities.

***As a foreign private issuer, we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and NYSE American requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.***

Our status as a foreign private issuer exempts us from compliance with certain SEC laws and regulations and certain regulations of the NYSE American, including the proxy rules, the short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination of directors and executive compensation. In addition, we will not be required under the Exchange Act to file current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and we will generally be exempt from filing quarterly reports with the SEC. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor. See "*Management – Differences between the Companies Law and NYSE American Requirements*" for additional information.

***As a foreign private issuer, we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and NYSE American requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.***

Our status as a foreign private issuer exempts us from compliance with certain SEC laws and regulations and certain regulations of the NYSE American, including the proxy rules, the short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination of directors and executive compensation. In addition, we will not be required under the Exchange Act to file current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and we will generally be exempt from filing quarterly reports with the SEC. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor. See "*Management – Differences between the Companies Law and NYSE American Requirements*" for additional information.

***If we were to be characterized as a "passive foreign investment company" for U.S. tax purposes, U.S. holders of our securities could have adverse U.S. income tax consequences.***

In general, we will be treated as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is "passive income" or (2) on average at least 50% of our assets by value produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account. We do not expect to be a PFIC for 2024 and we do not expect to become a PFIC in the future, although there can be no assurance in this regard. If we are a PFIC in any taxable year during which a U.S. taxpayer holds the securities, such U.S. taxpayer would be subject to certain adverse U.S. federal income tax rules. In particular, if the U.S. taxpayer did not make an election to treat us as a qualified electing fund, or QEF, or make a "mark-to-market" election, then "excess distributions" to the U.S. taxpayer, and any gain realized on the sale or other disposition of the securities by the U.S. taxpayer: (1) would be allocated ratably over the U.S. taxpayer's holding period for the securities; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. In addition, if the U.S. Internal Revenue Service, or IRS, determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. taxpayer to make a timely QEF or mark-to-market election. U.S. taxpayers that have held the securities during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. taxpayer who made a timely QEF or mark-to-market election. A U.S. taxpayer can make a QEF election by completing the relevant portions of and filing IRS Form 8621 in accordance with the instructions thereto. We do not intend to furnish U.S. Holders annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we are a PFIC. U.S. taxpayers that hold the securities are strongly urged to consult their tax advisors about the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or mark-to-market election with respect to the securities in the event that we are a PFIC. See "*Taxation—U.S. Federal Income Tax Consequences—Passive Foreign Investment Companie*s" for additional information.

***We have not paid, and do not intend to pay, dividends on our Ordinary Shares and, therefore, unless our traded securities appreciate in value, our investors may not benefit from holding our Ordinary Shares.***

We have never declared or paid any dividends on our Ordinary Shares. We do not anticipate paying any dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and expand our business. Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant. The Israeli Companies Law, 5759-1999, or the Companies Law, imposes restrictions on our ability to declare and pay dividends. See "*Dividend Policy*."

***The JOBS Act allows us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our Company and adversely affect the market price of our common shares.***

For so long as we remain an "emerging growth company" as defined in the JOBS Act, we intend to take advantage of certain exemptions from various requirements that are applicable to public companies that are not "emerging growth companies" including:

● the provisions of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

● Section 107 of the JOBS Act, which provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This means that an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are electing to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date;

● any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor's report on the financial statements; and

● our ability to furnish two rather than three years of income statements and statements of cash flows in the registration statement on Form F-1 of which this prospectus is part.

We intend to take advantage of these exemptions until we are no longer an "emerging growth company." We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, as defined in the rule under the Exchange Act, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We cannot predict if investors will find our ordinary less attractive because we may rely on these exemptions. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for each such traded security, and the trading price of each may be more volatile and may decline.

***If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our shares, the trading prices of our shares and trading volume of our shares could decline.***

The trading market for our Ordinary Shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not have any control over these analysts and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our shares or provide more favorable relative recommendations about our competitors, the trading price of our shares would likely decline. If any analyst who may cover us were to cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the trading price of our shares and trading volume of our shares to decline.

**Risks Related to Israeli Law and Our Operations in Israel**

***Potential political, economic and military instability in Israel, where our headquarters, members of our management team, our production facilities, and employees are located, may adversely affect our results of operations.***

Our headquarters and principal offices and most of our operations are located in the State of Israel. In addition, all of our key employees and officers are residents of Israel. Accordingly, political, economic and military conditions in Israel may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and countries in the region or groups in neighboring countries. In addition, several countries, principally in the Middle East, restrict doing business with Israel, and additional countries may impose restrictions on doing business with Israel and Israeli companies whether as a result of hostilities in the region or otherwise. Any hostilities involving Israel, terrorist activities, political instability, violence in the region or the interruption or curtailment of trade or transport between Israel and its trading partners could adversely affect our operations and results of operations and the market price of our Ordinary Shares.

Our commercial insurance does not cover losses that may occur as a result of an event associated with war and terrorism. 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, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for any damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business, financial condition and results of operations. As of July 3, 2025, we have not incurred any direct losses or damages caused by terrorism or war.

On October 7, 2023, an attack was launched against Israel by the Hamas terrorist organization. In response, the Security Cabinet of the State of Israel declared war on Hamas and a military campaign ensued. On March 18, 2025, the ceasefire with Hamas that had been in place since January 2025 has ended and hostilities resumed. To date, the State of Israel continues to be at war with Hamas. On Israel's northern border, Israel has been engaged with Hezbollah in Lebanon, a terrorist organization that has been launching missile, rocket, and shooting attacks against Israeli military sites, troops, and Israeli towns. In response to these attacks, the Israeli army has carried out a number of targeted strikes on sites associated with Hezbollah in Lebanon. As of the end of November 2024, Israel entered into a ceasefire agreement with Hezbollah, but there are no assurances as to whether the agreement will hold or whether further hostilities with Hezbollah will resume. In addition, the Houthi movement in Yemen has launched direct attacks on Israel involving drones and missiles and has threatened to continue to attack Israel. In April 2024 and October 2024, Iran launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel. On June 13, 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military and nuclear infrastructure inside Iran aimed to disrupt Iran's capacity to coordinate or launch further hostilities against Israel, as well as disrupt its nuclear program. For 12 days, both sides launched attacks against one another, with Iran targeting civilian infrastructure. As a result of the escalation with Iran, Israel temporarily closed its airspace and ceased all port activity related to commercial shipments. On June 22, 2024, the U.S. military joined Israel to launch strikes directly targeting nuclear infrastructure in Iran. On June 24, 2025, Israel entered into a ceasefire agreement with Iran, but there are no guarantees as to whether the agreement will hold or whether future hostilities will resume. Iran is also widely believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, and the Houthi movement in Yemen and various rebel militia groups in Iraq. The continuation of the conflict with Hamas has led to heightened security concerns, potential disruptions to business operations, and economic instability. There remains significant uncertainty regarding the duration and escalation of the conflict, and further military actions, restrictions, or government-imposed measures could adversely affect our operations, supply chains, and financial condition.

Since the war with Hamas broke out on October 7, 2023, our operations have not been adversely affected. At this time, it is not possible to predict the intensity or duration of the war, nor can we predict how this war will ultimately affect Israel's economy in general, which may involve additional credit rating agencies downgrading Israel's credit rating score after Moody's downgraded Israel's credit rating from A2 to Baa1 and its outlook rating remains at "negative." We continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations.

Further, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older for certain reservists) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. In connection with the Israeli security cabinet's declaration of war against Hamas, hostilities with Hezbollah and Iran, and possible hostilities with other organizations, several hundred thousand Israeli military reservists were drafted to perform immediate military service. Although many such military reservists have been discharged, they may be called up again depending on how events unfold. As of July 3, 2025, none of our current employees in Israel have been called to active military duty. Moreover, we rely on service providers located in Israel and have entered into certain agreements with Israeli counterparties. Employees of such service providers or contractual counterparties may be called for service in the current or future wars or other armed conflicts Israel may be engaged in and such persons may be absent from their positions for a period of time. Military service call ups that result in absences of our personnel, service providers or contractual counterparties in Israel may disrupt our operations and absences for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations. As of July 3, 2025, we have not been affected by any absences of personnel of our service providers or counterparties located in Israel.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of operations. Our insurance policies do not cover losses that may occur as a result of events associated with war and terrorism.

Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

Several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies, whether as a result of hostilities in the region or otherwise. In addition, there have been increased efforts by certain countries, activists and organizations to cause companies, research institutions and consumers to boycott Israeli goods and cooperation with Israeli-related entities based on Israeli government policies. Such actions, particularly if they become more widespread, may adversely impact our ability to collaborate with other third parties.

Additionally, political conditions within Israel may affect our operations. Many citizens and groups have responded strongly against the Israeli government's pursuit of judicial reform. To date, these initiatives have been substantially put on hold. Actual or perceived instability in Israel or any negative changes in the political environment may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.

***We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.***

We incur expenses in NIS, U.S. dollars, and Euros, but our functional currency is the U.S. dollar. Accordingly, we face exposure to adverse movements in currency exchange rates. Accordingly, we face exposure to adverse movements in the currency exchange rate of the U.S. dollars against these foreign currencies, which may have a negative effect on our revenue and costs. If the U.S. dollar strengthens against any of these currencies, the translation of these foreign currency denominated transactions will result in decreased revenue in U.S. dollars. Changes in currency exchange rates may have a negative effect on our financial results. If the U.S. dollar weakens against the NIS and Euro, the translation of the NIS and Euro currency denominated transactions to U.S. dollar will result in increased operating expenses. Similarly, if the U.S. dollar strengthens against NIS and Euro denominated, the translation of these NIS and Euro denominated transactions to U.S. dollars will result in decreased expenses. As exchange rates vary, sales and other operating results, when translated, may differ materially from our or the capital market's expectations.

***The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.***

The Israeli government currently provides tax and capital investment incentives to Israeli companies, as well as grant and loan programs relating to research and development and marketing and export activities. In recent years, the Israeli government has reduced the benefits available under these programs and the Israeli governmental authorities may in the future further reduce or eliminate the benefits of these programs. While we have not previously received any such benefits or grants, we may take advantage of these benefits and programs in the future; however, there can be no assurance that such benefits and programs will be available to us. If we qualify for such benefits and programs and fail to meet the conditions thereof, the benefits could be canceled and we could be required to refund any benefits we might already have enjoyed and become subject to penalties. Additionally, if we qualify for such benefits and programs and they are subsequently terminated or reduced, it could have an adverse effect on our financial condition and results of operations.

***We may be required to pay monetary remuneration to our Israeli employees for their inventions, even if the rights to such inventions have been duly assigned to us.***

We enter into agreements with our Israeli employees pursuant to which such individuals agree that any inventions created in the scope of their employment are either owned exclusively by us or are assigned to us, depending on the jurisdiction, without the employee retaining any rights. A portion of our intellectual property has been developed by our Israeli employees during their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee during the course of his or her employment and within the scope of said employment are considered "service inventions." Service inventions belong to the employer by default, absent a specific agreement between the employee and employer otherwise. The Patent Law also provides that if there is no agreement regarding the remuneration for the service inventions, even if the ownership rights were assigned to the employer, the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration for these inventions. The Committee has not yet determined the method for calculating this Committee-enforced remuneration. While it has previously been held that an employee may waive his or her rights to remuneration in writing, orally or by conduct, litigation is pending in the Israeli labor court is questioning whether such waiver under an employment agreement is enforceable. Although our Israeli employees have agreed that we exclusively own any rights related to their inventions, we may face claims demanding remuneration in consideration for employees' service inventions. As a result, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.

***We may not be able to enforce covenants not-to-compete under current Israeli law that might result in added competition for our products.***

We have non-competition agreements with all of our employees, all of which are governed by Israeli law. These agreements prohibit our employees from competing with or working for our competitors, generally during their employment and for up to 12 months after termination of their employment. However, Israeli courts are reluctant to enforce non-compete undertakings of former employees and tend, if at all, to enforce those provisions for relatively brief periods of time in restricted geographical areas, and only when the employee has obtained unique value to the employer specific to that employer's business and not just regarding the professional development of the employee. If we are not able to enforce non-compete covenants, we may be faced with added competition.

***Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, us, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.***

Israeli corporate law regulates mergers, requires tender offers for acquisitions of securities above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approved the merger. In addition, a majority of each class of securities of the target company must approve a merger. Moreover, a tender offer for all of a company's issued and outstanding securities can only be completed if the acquirer receives positive responses from the holders of at least 95% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, following consummation of the tender offer, the acquirer would hold at least 98% of the Company's outstanding securities. Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the securities does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer's response date.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfilment of a number of conditions, including, in some cases, a holding period of two years from the date of the transaction during which sales and dispositions of securities of the participating companies are subject to certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the securities has occurred. These provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.

***It may be difficult to enforce a judgment of a U.S. court against us and our executive officers and directors and the Israeli experts named in this prospectus in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts.***

We were incorporated in Israel. Substantially all of our executive officers and directors reside outside of the United States, and all of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It also may be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action with respect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court (see "*Enforceability of Civil Liabilities*" for additional information on your ability to enforce a civil claim against us and our executive officers or directors named in this prospectus).

***Your rights and responsibilities as a shareholder will be governed in key respects by Israeli laws, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.***

The rights and responsibilities of the holders of our securities are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in U.S. companies. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders, and to refrain from abusing its power in such company, including, among other things, in voting at a general meeting of shareholders on matters such as amendments to a company's amended and restated articles of association, increases in a company's authorized share capital, mergers and acquisitions and related party transactions requiring shareholder approval, as well as a general duty to refrain from discriminating against other shareholders. In addition, a shareholder who is aware that it possesses the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our securities that are not typically imposed on shareholders of U.S. companies.

***Our articles of association to be effective upon the consummation of this offering may be deemed to have an anti-takeover effect.***

 ****

Certain provisions of our articles of association to be effective upon the effectiveness of the registration statement for this offering may make a change in control of us more difficult to affect. Our articles of association will provide for a staggered board of directors consisting of three classes of directors. Directors of each class are chosen for three-year terms upon the expiration of their current terms and each year one class of our directors will be elected by our shareholders. This classified board of directors provision could have the effect of making the replacement of incumbent directors more time consuming and difficult. At least two annual meetings of shareholders, instead of one, will generally be required to effect a change in a majority of our board of directors. Thus, the classified board of directors provision could increase the likelihood that incumbent directors will retain their positions. The staggered terms of directors may delay, defer or prevent an attempt to change control of us, even though a change in control might be considered by our shareholders to be in their best interest.

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Some of the statements made under "*Prospectus Summary*," "*Risk Factors*," "*Use of Proceeds*," "*Management's Discussion and Analysis of Financial Condition and Results of Operations*," "*Business*" and elsewhere in this prospectus constitute forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" "intends" or "continue," or the negative of these terms or other comparable terminology.

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

● the regulatory pathways that we may elect to utilize in seeking EMA, FDA and other regulatory approvals;

● obtaining EMA and FDA approval of, or other regulatory action in Europe or the United States and elsewhere with respect to Intranasal Epinephrine, Intranasal Naloxone or other product candidates that we may seek to develop;

● the commercial launch and future sales of Intranasal Epinephrine or any other future product candidates;

● our expectations regarding the timing of commencing further clinical trials, the process entailed in conducting each such trial, including dosages, and the order of such trials with each of our product candidates or whether such trials will be conducted at all;

● third-party payor reimbursement for Intranasal Epinephrine;

● our estimates regarding anticipated expenses, capital requirements, and our needs for additional financing;

● changes to the patient market size and market adoption of Intranasal Epinephrine by physicians and patients;

● the timing, cost, regulatory approvals or other aspects of the commercial launch of Intranasal Epinephrine;

● submission of an MAA and NDA with the EMA and FDA for Intranasal Epinephrine;

● completion and receiving favorable results of clinical trials for Intranasal Epinephrine and Intranasal Naloxone;

● our use of proceeds from this offering;

● our ability to raise capital through the issuance of additional securities;

● issuance of patents to us by the U.S. PTO and other governmental patent agencies and our ability to maintain, protect, and enhance our intellectual property;

● the development and commercialization, if any, of any other product candidates that we may seek to develop;

● the ability of our management team to lead the development of our product candidates;

● our expectations regarding licensing, acquisitions, and strategic operations;

● general market, political and economic conditions in the countries in which we operate, including those related to recent unrest and actual or potential armed conflict in Israel and other parts of the Middle East, such as the multi-front war Israel is facing;

● projected capital expenditures and liquidity;

● the impact of competition and new technologies;

● changes in our strategy; and

● litigation.

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 prospectus in greater detail under the heading "*Risk Factors*" and elsewhere in this prospectus. You should not rely upon forward-looking statements as predictions of future events.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus.

**LISTING**

We have applied to list the Ordinary Shares on the NYSE American under the symbol "NSRX". No public market currently exists for our Ordinary Shares included in this offering. This offering is contingent upon the Ordinary Shares being listed on the NYSE American; however, no assurance can be given that our application will be approved.

**USE OF PROCEEDS**

We expect to receive approximately $9.3 million in net proceeds from the sale of 1,000,000 Ordinary Shares offered by us in this offering (approximately $10.8 million if the underwriters exercise their over-allotment option in full), based upon an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus.

A $1.00 increase or decrease in the assumed public offering price of $11.00 per Ordinary Share would increase or decrease the proceeds from this offering by approximately $920,000, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 500,000 Ordinary Shares offered would increase or decrease our proceeds by approximately $5,060,000, assuming the assumed public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds from this offering for the following purposes:

● approximately $6 million to $7 million for the development of our Intranasal Epinephrine program, including, manufacturing scale-up and additional Phase 2 studies; and

● the remainder for general and administrative corporate purposes, including working capital, and capital expenditures.

The amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering.

Changing circumstances may cause us to consume capital significantly faster than we currently anticipate. The amounts and timing of our actual expenditures will depend upon numerous factors, including the progress of our global marketing and sales efforts, the development efforts, and the overall economic environment. Therefore, our management will retain broad discretion over the use of the proceeds from this offering. We may ultimately use the proceeds for different purposes than what we currently intend. Pending any ultimate use of any portion of the proceeds from this offering, if the anticipated proceeds will not be sufficient to fund all the proposed purposes, our management will determine the order of priority for using the proceeds, as well as the amount and sources of other funds needed.

Pending our use of the net proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities.

**DIVIDEND POLICY**

We have never declared or paid any cash dividends on our Ordinary Shares and do not anticipate paying any cash dividends in the foreseeable future. Payment of cash dividends, if any, in the future will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Under the Companies Law, repurchase of shares is considered a dividend distribution.

The Companies Law imposes further restrictions on our ability to declare and pay dividends. Under the Companies Law, we may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial statements, provided that the end of the period to which the financial statements relate is not more than six months prior to the date of distribution, generally referred to as the Earnings Criteria. In the event that we do not meet such earnings criteria, we may seek the approval of a court in order to distribute a dividend. The court may approve our request if it is convinced that there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due, generally referred to as the Solvency Criteria.

However, under the exemptions applicable as of March 12, 2024, generally referred to as the Exemptions Regulations, an Israeli company whose shares are listed outside of Israel, is permitted to perform distribution in a way of repurchasing its own shares, even if the Earnings Criteria is not met, without the need for court's approval. The exemption is subject to certain conditions, including, among others: (i) The distribution meets the Solvency Criteria; and (ii) no rejection was filed by any of the company's creditors to the court. If any creditor objects to the distribution, the company will be required to obtain the court's approval for the distribution.

Payment of dividends may be subject to Israeli withholding taxes (see "*Taxation—Israeli Tax Considerations and Government Programs*").

**CAPITALIZATION**

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2024:

● on an actual basis;

● on a *pro forma* basis to give effect to (i) the issuance of 324,894 Ordinary Shares to be issued upon the conversion of the 2024 SAFEs into Ordinary Shares upon the effectiveness of the registration statement for this offering; and (ii) our receipt of aggregate proceeds of $685,000 from the 2024 SAFEs we entered into with certain investors from January 2025 through March 2025, including $250,000 to be received prior to the effectiveness of the registration statement for this offering; and.

● on a *pro forma* as adjusted basis to give effect to the issuance of 1,000,000 Ordinary Shares in this offering, at an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses, as if the sale of the Ordinary Shares had occurred on December 31, 2024.

The *pro forma* as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

You should read this table in conjunction with the sections entitled "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and our financial statements and related notes included elsewhere in this prospectus.

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| | | | |
|:---|:---|:---|:---|
| | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| <br>***U.S. dollars in thousands*** | **Actual** | ***Pro Forma*** | ***Pro Forma*<br> As<br> Adjusted *<sup>(1)</sup>*** |
|  | | **Unaudited** | **Unaudited** |
| Cash and cash equivalents | 284 | 969 | 11089 |
| Convertible securities | 1802 |  |  |
| Shareholders' equity (deficit): |  |  |  |
| 13,265,593 Ordinary Shares authorized as of December 31, 2024; and 7,362,906 Ordinary Shares issued as of December 31, 2024; 7,687,800 Ordinary Shares on a *pro forma* basis and 8,687,800 Ordinary Shares on a *pro forma* as adjusted basis. | 20 | 21 | 24 |
| Additional Paid-In Capital | 9432 | 11918 | 21775 |
| Accumulated deficit | (12664) | (12664) | (12664) |
| Total shareholders' equity (deficit) | (3212) | (725) | 9135 |
| Total capitalization | (1410) | (725) | 9135 |

---

The number of Ordinary Shares purchased from us by existing shareholders is based on 7,362,906 Ordinary Shares issued and outstanding as of December 31, 2024, and excludes the following as of such date:

● 346,537 Ordinary Shares issuable upon the exercise of share options granted subsequent to December 31, 2024, at a weighted average exercise price of $6.05 per ordinary share;

● 191,700 Ordinary Shares issuable upon the exercise of share options to directors, employees and consultants under the 2019 Plan outstanding as of December 31, 2024, at a weighted average exercise price of $2.77, of which 184,612 were vested as of December 31, 2024 and 184,612 Ordinary Shares reserved for future grants under the 2019 Plan.

The adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of our initial public offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the *pro forma* as adjusted amount of each of cash, cash equivalents and shareholders' equity (deficiency) by $0.9 million, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 500,000 Ordinary Shares offered by us at the assumed initial public offering price would increase (decrease) each of cash, cash equivalents and shareholders' equity (deficiency) by $5.1 million.

**DILUTION**

If you invest in our Ordinary Shares, your interest will be diluted immediately to the extent of the difference between the public offering price per Ordinary Share you will pay in this offering and the *pro forma* net tangible book value per Ordinary Share after this offering.

As of December 31, 2024, we had a net tangible book value of $(3.2) million, corresponding to a net tangible book value of $(0.44) per Ordinary Share. Net tangible book value per share or per Ordinary Share represents the amount of our total tangible assets less our total liabilities, divided by 7,362,906, the total number of Ordinary Shares issued and outstanding on December 31, 2024.

Our *pro forma* net tangible book value as of December 31, 2024 was $(0.7) million, representing approximately $(0.09) per Ordinary Share. *Pro forma* net tangible book value per Ordinary Share represents the amount of our total tangible assets less our total liabilities, divided by 7,687,800, the total number of Ordinary Shares outstanding at December 31, 2024, after giving effect to (i) the issuance of 324,894 Ordinary Shares to be issued upon the conversion of the 2024 SAFEs into Ordinary Shares upon the effectiveness of the registration statement for this offering; and (ii) our receipt of aggregate proceeds of $685,000 from the 2024 SAFEs we entered into with certain investors from January 2025 through March 2025, including $250,000 to be received prior to the effectiveness of the registration statement for this offering.

After giving effect to the *pro forma* adjustments set forth above and the sale of the 1,000,000 Ordinary Shares offered by us in this offering, at an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, assuming no exercise of the underwriter's option to purchase additional Ordinary Shares and after deducting the estimated underwriting discounts and commissions and management fees and estimated offering expenses payable by us, our *pro forma* as adjusted net tangible book value estimated at December 31, 2024 would have been approximately $9.1 million, representing $1.05 per Ordinary Share based on 8,687,800 Ordinary Shares deemed outstanding after this offering assuming no exercise of the underwriters' over-allotment option. At the assumed public offering price for this offering of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, this represents an immediate increase in historical net tangible book value of $1.49 per Ordinary Share to existing shareholders and an immediate dilution in net tangible book value of $9.95 per Ordinary Share to purchasers of Ordinary Shares in this offering. Dilution for this purpose represents the difference between the price per Ordinary Share paid by these purchasers and *pro forma* net tangible book value per Ordinary Share immediately after the completion of this offering.

The following table illustrates this dilution on a per Ordinary Share basis to purchasers of Ordinary Shares in this offering:

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| | |
|:---|:---|
| Assumed public offering price per Ordinary Share | $11.00 |
| Historical net tangible book value per share as of December 31, 2024 | $(0.44) |
| Increase in *pro forma* net tangible book value per Ordinary Share attributable to new investors | $0.35 |
| *Pro Forma net tangible book value per Ordinary Share as of December 31, 2024* | $(0.09) |
| Increase in *pro forma* as adjusted net tangible book value per Ordinary Share attributable to new investors | $1.14 |
| *Pro forma as adjusted net tangible book value per Ordinary Share after this offering* | $1.05 |
| Dilution per Ordinary Share to new investors | $9.95 |
| Percentage of dilution in net tangible book value per Ordinary Share for new investors | 90% |

---

The dilution information set forth in the table above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

A $1.00 increase or decrease in the assumed initial public offering price of $11.00 per Ordinary Share would increase (decrease) our *pro forma* as adjusted net tangible book value per Ordinary Share after this offering by $0.11 and the dilution per Ordinary Share to new investors by $0.89, assuming the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 500,000 Ordinary Shares would increase or decrease our *pro forma* as adjusted net tangible book value per Ordinary Share after this offering by $0.49 and the dilution per Ordinary Share to new investors by $(0.49), assuming the assumed initial offering price of $11.00 per Ordinary Share, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The following table summarizes, on a *pro forma* as adjusted basis as of December 31, 2024, the differences between the number of Ordinary Shares acquired from us, the total amount paid and the average price per Ordinary Share paid by the existing holders of our Ordinary Shares and by investors in this offering and based upon an assumed public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Shares** | **Shares** | **Total Consideration** | **Total Consideration** | |
|  | **Number** | **Percent** | **Amount** | **Percent** | **Average<br> Price Per<br> Ordinary**<br>**Share** |
| Existing shareholders | 7687800 | 88% | $11277501 | 51% | $1.47 |
| New investors | 1000000 | 12% | $11000000 | 49% | $11.00 |
| Total | 8687800 | 100.0% | $22277501 | 100% | $2.56 |

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The number of Ordinary Shares purchased from us by existing shareholders is based on 7,362,906 Ordinary Shares issued and outstanding as of December 31, 2024, and excludes the following as of such date:

● 346,537 Ordinary Shares issuable upon the exercise of share options granted subsequent to December 31, 2024, at a weighted average exercise price of $6.05 per ordinary share;

● 191,700 Ordinary Shares issuable upon the exercise of share options to directors, employees and consultants under the 2019 Plan outstanding as of December 31, 2024, at a weighted average exercise price of $2.77, of which 180,201 were vested as of December 31, 2024; and

● 184,612 Ordinary Shares reserved for future grants under the 2019 Plan as of July 3, 2025.

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

● an initial public offering price of $11.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus;

● the automatic conversion of all outstanding Class A, Class A-1, Class A-2, Class A-3, Class A-3A, Class A-3B Ordinary Shares into 2,592,497 Ordinary Shares, which will occur upon the effectiveness of the registration statement for this offering;

● 324,894 Ordinary Shares issuable upon the conversion of 2024 SAFEs in the aggregate amount of $2,322,992, which will automatically convert into Ordinary Shares upon the effectiveness of the registration statement for this offering, based on an offering price of $11.00, which is the midpoint of the price range set forth on the cover page of this prospectus, assuming this offering occurs within 18 months of the execution of such SAFEs, otherwise such SAFEs will be converted into our securities on the basis of a previous round of equity financing consummated by the Company;

● the adoption of our amended and restated articles of association upon the effectiveness of the registration statement for this offering, which will replace our amended and restated articles of association as currently in effect;

● no exercise of the underwriters' over-allotment option and the Underwriter's Warrants; and

● a 1-for-4.77008 forward share split, effected upon the effectiveness of this offering, and the customary adjustments to our outstanding options and warrants;

If all of such issued and outstanding share options had been exercised as of December 31, 2024, the number of Ordinary Shares held by existing shareholders would increase to 7,901,143, or 89% of the total number of Ordinary Shares outstanding after this offering (in each case, not taking into account the conversion of SAFEs as described above), and the average price per Ordinary Share paid by the existing shareholders would be $1.34.

If the underwriters exercise their option to purchase additional Ordinary Shares in full in this offering, the number of Ordinary Shares held by new investors will increase to 1,150,000, or 14% of the total number of Ordinary Shares issued and outstanding after this offering and the percentage of Ordinary Shares held by existing shareholders will decrease to 86% of the total Ordinary Shares issued and outstanding (in each case, not taking into account the conversion of SAFEs as described above).

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion and other parts of the prospectus contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under "Risk Factors" and elsewhere in this prospectus.*

**Overview**

We are a clinical-stage specialty pharmaceutical company focused primarily on the development of intranasal drugs to treat emergency medical conditions. Intranasal administration is especially suitable for medical emergencies when prompt drug administration is critical, since the nose is lined up with a very rich vascular bed enabling quick drug absorption. We are developing a unique PBI technology with a specialized product portfolio to address acute medical conditions and public health threats. We believe that PBI may be superior over liquid-based solutions due to potentially significantly higher dispersion of powder throughout the nasal cavity, thus creating a larger absorption area and enabling more rapid and higher drug absorption. In addition, the uniform spherical powder particles of our proprietary formulation may enhance the consistency and reliability of the delivered dose. The initial clinical trials of our PBI products involving different molecules performed thus far have demonstrated quicker and higher drug absorption over similar solution-based nasal products. However, to date we have only tested our product candidates on a relatively small patient population and none of our products have been approved by the FDA. Prior to obtaining FDA approval of any of our product candidates, we will need to perform additional clinical testing of our product candidates to confirm any benefits and advantages our products may have over similar nasal products.

Our mission is to offer better protection to patients during acute, severe and life-threatening medical conditions by an effective, user-friendly and immediately active PBI specialized products. To help achieve this we are focused on developing NS002, an Intranasal Epinephrine, and we also have been developing NS001, an Intranasal Naloxone, however we currently paused our work on NS001 and plan to pursue partnering opportunities for further development of NS001. We will need to obtain regulatory approval for our products in order for us to grow our business. We currently have no FDA approved products. Our products have been tested on relatively small patient populations thus far.

Obtaining regulatory approvals and developing NS002 and NS001 will require the incurrence of significant costs and our success will depend, in part, on gaining market acceptance. In order to gain market acceptance in the United States, we will require specific approval from the FDA for our product candidates. We intend to seek approval of NS002 as an approved molecule and a new delivery route (with EpiPen autoinjector as the reference device) under Section 505(b)(2) of the FFDCA which allows the applicant to rely in part on previous studies conducted by unrelated parties, such as another drug manufacturer and, existing sources, including published literature, for marketing approval by the FDA in the United States, and will seek approval under the comparable hybrid application pathway in the EU. The FDA may not agree that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval. Such abbreviated approval pathways may not lead to a faster development or review process compared to traditional approval pathways and do not increase the likelihood that NS002 or NS001 will receive regulatory approval in the United States or the EU. See "*Business – Government Regulation*" and "*Risk Factors – Risks Related to Product Development, Regulatory Approval and Commercialization*" for additional information.

To date, we have conducted a twelve-patient pilot study of NS002, which included the testing of bioavailability of Epinephrine under "allergenic challenge" - the creation of severe acute allergic reaction in the nose by inserting ascending doses of allergens to the nose of the healthy volunteers with known allergic rhinitis included in the study. The results showed that Epinephrine intranasal delivery of our NS002 followed the established characteristics of our platform technology, namely, there were higher levels of the drug in the plasma in situations where immediate administration could be lifesaving. The Phase 2 portion of our NS002 study included twelve patients and the trial was not powered for statistical significance. In trials not powered for statistical significance, there is a high chance that observed effects may not be accurate due to small sample size. The Phase 2 study, which is meant to optimize the dose that will be used in the Phase 3 study for registration, is conducted in limited patient populations to identify possible adverse effects and safety risks, to preliminarily evaluate the dosage tolerance of the product for specific targeted diseases or conditions and to determine dosage tolerance, optimal dosage and dosing schedule. Our Phase 2 study is aimed at defining the final clinical dose to be used in our powder Epinephrine product candidate, compared the bioavailability of Epinephrine following a various dosing of NS002 Microspheres Epinephrine powder. The PK results of our Phase 2 study are in line with the known attributes of our nasal powder technology—namely: immediate absorption of Epinephrine and reaching higher peak plasma Epinephrine levels quicker compared to IM Epinephrine injections. We intend to perform two additional Phase 2 studies of NS002. The first will be aimed at determining whether, if necessary, during a real-life anaphylaxis a second dose of NS002 should be administered in the same nostril as the one used for the first administration of NS002 or whether it should be in the other nostril. The second Phase 2 study will test the "carry-over effect," or whether the first dose of Epinephrine changes the absorption of Epinephrine of a following dose. Each study is currently planned to include at least 12 healthy volunteers with allergic rhinitis. Prior to submission to the FDA for marketing approval, we also intend to perform a pivotal clinical, or Phase 3, study that will include a subsection of self-administration. We also intend to separately perform: (1) stability testing which involves testing the product candidate under various temperature and humidity points; (2) a reliability study, which is a subset of the stability study that tests the NS002's administration device in several potential conditions; (3) a usability study, which tests how user friendly the device is; (4) preclinical studies or short animal safety studies in two animal species; and (5) a pediatric study, the details of which will be agreed upon with the FDA as we progress with the program.

With respect to NS001 Intranasal Naloxone, we have performed a pilot study, which is a first in human study aimed at safety and bioequivalence, and pivotal clinical study, which is the Phase 3 registration study, in 14 and 42 healthy volunteers, respectively, with the objective of evaluating the comparative bioavailability of Naloxone between NS001 and certain competitor products. The pilot study results were submitted to the FDA in support of the progression to the pivotal study. The results of the pilot study showed our technology having a faster absorption rate in the immediate critical period after administration. The Phase 3 study included an expanded patient population to further evaluate dosage and clinical efficacy. Our pivotal clinical study consistently showed an advantage in the first 30 minutes after administration. We currently intend to focus our development and regulatory approval efforts on our Intranasal Epinephrine and other preclinical programs, and plan to pursue partnering opportunities for further development of NS001.

Our platform technology can also be incorporated into other products as it has been tested with several additional preclinical and invitro molecules based on our proprietary nasal powder formulation and technology. In addition to our two main products, Intranasal Epinephrine and Intranasal Naloxone, we are exploring other potential indications for which our PBI technology may be applicable, including Intranasal Midazolam, Intranasal Atropine and Intranasal Ondansetron.

Competition in the pharmaceutical industry is intense. Some of our competitors hold significant market share, have long histories and strong reputations within the industry, greater brand recognition, and more financial and human resources than we do. They also have more experience and capabilities in researching and developing testing devices, obtaining and maintaining regulatory clearances and other requirements, manufacturing and marketing those products than we do. Their dominant market position and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales of NS002 or NS001.

To date, we have incurred significant operating losses, generated no revenues from existing products, and as of December 31, 2024, our accumulated deficit was $12.7 million. We expect that we will need to raise substantial additional funding in the future. See "*Risk Factors–Risks Related to Our Financial Position and Capital Requirements.*"

**Components of Operating Results**

***Operating Expenses***

Our current operating expenses consist of two components – research and development expenses and general and administrative expenses.

*Research and Development Expenses.*

 

Research and development expenses consist primarily of costs incurred in connection with our research and development activities. This includes conducting clinical trials and preclinical studies, manufacturing development efforts and activities related to regulatory filings for product candidates, as well as overhead costs. Our research and development expenses primarily consist of:

● salaries and personnel-related costs, including benefits and share-based compensation expense, for our scientific personnel for executing clinical trials, preclinical studies, regulatory activities and for performing research and development activities;

● costs related to executing clinical trials and preclinical studies;

● costs of third-party clinical consultants and expenses related to conducting clinical and pre-clinical trials;

● costs related to acquiring, developing and manufacturing materials for such clinical trials and preclinical studies; and

● other related overhead costs.

Research and development expenses are expensed as incurred. We record accrued expenses for research and development activities conducted, on our behalf, by third-party service providers, which include the performance of clinical trials and the conduct of preclinical studies. We record these accrued expenses based upon research and development activities performed by such third-party service providers and reported to us, and we include these costs in accrued liabilities in the consolidated balance sheets and within research and development expense in the consolidated statements of operations.

From inception though December 31, 2024, we have incurred approximately $11.5 million in research and development expenses to advance the development of our product candidates, as well as other preclinical research and development programs. Substantially all of our research and development expenses for the years ended December 31, 2024 and 2023 were related to the development of NS001 and NS002.

We expect that our research and development expenses will materially increase as we enter into the Phase 2 and Phase 3 clinical development stage of our product candidates, start Chemical Control and Manufacturing activity, or CMC, and recruit additional research and development employees. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates.

*General and Administrative Expenses*

General and administrative expenses consist primarily of salaries and related expenses, professional service fees for accounting, legal and bookkeeping, facilities, travel expenses and other general and administrative expenses.

We expect our general and administrative expenses will increase in the future to support continued research and development activities. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs, as well as investor, public relations and compliance expenses, associated with operating as a public company. We expect increased expenses if any of our product candidates receives regulatory approval and we determine to build a commercial infrastructure to support commercial sales and marketing of our products.

**Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023**

***Results of Operations***

The following table presents our results of operations for the year ended December 31, 2024 and 2023.

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| <br>***U.S. dollars in thousands*** | **2024** | **2023** |
| **Consolidated statements of operations:** |  |  |
| Operating Expenses: |  |  |
| Research and development<sup>(1)</sup> | $335 | $567 |
| General and administrative<sup>(2)</sup> | 743 | 580 |
| Total operating expenses | 1078 | 1147 |
| Operating loss from continuing operations | (1078) | (1147) |
| Interest expense<sup>(3)</sup> | (29) | (49) |
| Change in fair value of convertible securities | (443) | 219 |
| Other expense, net | (2) | (28) |
| Loss from continuing operations | (1552) | (1005) |
| Net income (loss) from discontinued operations | 20 | (46) |
| Net loss | $(1532) | $(1051) |

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 ****

&nbsp;&nbsp;&nbsp;&nbsp;(1) Research and development
 expenses includes $208 thousand and $228 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

(2) General and administrative
 expenses includes $307 thousand and $288 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

(3) Interest expenses includes
 $17 thousand and $27 thousand in expenses to related parties in the years ended December 31, 2024 and 2023, respectively.

 ****

*Research and Development Expenses*

 ****

Our research and development expenses for the year ended December 31, 2024 amounted to $335 thousand representing a decrease of $232 thousand, or 41%, compared to $567 thousand for the year ended December 31, 2023. The decrease was primarily attributable to a reduction in clinical trial costs as we have not conducted clinical trials during 2024, while clinical trial costs incurred in 2023. For further information regarding our research and development activities, *see* "*Business – Research and Development*."

*General and Administrative Expenses*

Our general and administrative expenses totaled $743 thousand for the year ended December 31, 2024, representing an increase of $163 thousand, or 28%, compared to $580 thousand for the year ended December 31, 2023. The increase was primarily attributable to costs associated with this offering that do not meet the criteria for capitalization as deferred issuance costs.

*Operating Loss from Continuing Operations*

As a result of the foregoing, our operating loss totaled $1,078 thousand for the year ended December 31, 2024, representing a decrease of $69 thousand, or 6%, compared to $1,147 thousand for the year ended December 31, 2023.

*Change in Fair Value of Convertible Securities*

Change in fair value of convertible securities consists of changes in fair value as done from time to time. We recognized financial income of $443 thousand for the year ended December 31, 2024, representing an increase of $662 thousand, or 302%, compared to financial expense of $219 thousand for the year ended December 31, 2023. The increase was due to an increase in the fair value of the Company's SAFE instruments.

*Net Loss (Income) from Discontinued Operations*

Net income from discontinued operations totaled $20 thousand for the year ended December 31, 2024, representing an increase of $66 thousand, or 143%, compared to $46 thousand in net loss from discontinued operations for the year ended December 31, 2023. The decrease was primarily attributable to effect of changes in foreign currency in connection with current liabilities related to discontinued operations.

*Net Loss*

As a result of the foregoing, our net loss totaled $1,532 thousand for the year ended December 31, 2024, representing an increase of $481 thousand, or 31%, compared to $1,051 thousand for the year ended December 31, 2023.

**Liquidity and Capital Resources**

***Overview***

Since our inception through December 31, 2024, we have funded our operations principally with approximately $10.7 million (net of issuance expenses) through proceeds from equity financing and the issuance of convertible securities in the form of SAFEs. As of December 31, 2024, we had approximately $284 thousand in cash and cash equivalents.

The table below presents our cash flows for the periods indicated:

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| <br>***U.S. dollars in thousands*** | **2024** | **2023** |
| Net cash used in operating activities | (665) | (1029) |
| Cash used in investing activities |  |  |
| Net cash provided by financing activities | 770 | 1055 |
| Net increase decrease in cash and cash equivalents | 101 | 39 |

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*Net cash used in operating activities*

Net cash used in operating activities of $0.7 million during the year ended December 31, 2024 compared to $1.0 million during the year ended December 31, 2023. The decrease is mainly due to a change in other current assets as of December 31, 2024 and higher operational costs in 2023.

Net cash used in operating activities during the year ended December 31, 2024 was primarily attributable to our net loss from continuing operations of $1,552 thousand, adjusted for non-cash expenses of $891 thousand, which includes a $443 thousand loss from change in convertible securities, share-based compensation of $10 thousand, and a net decrease in working capital of $438 thousand.

Net cash used in operating activities during the year ended December 31, 2023 was primarily attributable to our net loss from continuing operations of $1,005 thousand, adjusted for non-cash expenses of $23 thousand, which includes a $219 thousand income from change in convertible securities, share-based compensation of $39 thousand, and a net decrease in working capital of $203 thousand.

*Cash used in investing activities*

We had no net cash used in investing activities during the year ended December 31, 2024 and 2023.

*Net cash provided by financing activities*

Net cash provided by financing activities was $0.8 million for the year ended December 31, 2024, as compared to $1.1 million for the year ended December 31, 2023. The decrease was mainly attributable to deferred issuance costs incurred during 2024.

Between February 2022 and April 2022, we entered into the 2022 SAFEs for aggregate proceeds of $966,000. Per the terms of the 2022 SAFEs, since an initial public offering, merger, acquisition, equity financing other liquidity event or dissolution event did not take place within 15 months from the execution of such the 2022 SAFEs, on August 28, 2024, the subscription amounts under such SAFEs were converted into Class A-3A Ordinary Shares. Upon the effectiveness of the registration statement for this offering, such Class A-3A Ordinary Shares will automatically convert into Ordinary Shares.

In July 2022, we received a loan, or the July 2022 Loan, from Dr. Ronnie Hershman, a director and shareholder, and Michael Gibber, a shareholder, pursuant to which we received a principal amount of $500,000, for a term of twelve (12) months, at an interest rate of 8% per annum. On August 28, 2024, we and each of Dr. Ronnie Hershman and Michael Gibber entered into an exchange letter, or the July 2022 Loan Exchange Letter, according to which our obligations in connection with the loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs, under which it is deemed that Dr. Hershman invested an amount of $284,154 and Michael Gibber invested an amount of $286,210.

In February 2023, we received a loan in an aggregate amount of $60,000 from Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa, or the February 2023 Loan, under substantially the same terms as the July 2022 Loan, for a term of twelve (12) months, at an interest rate of 8% per annum. A definitive agreement for the February 2023 Loan was not executed. In August 2024, we and each of Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa entered into an exchange letter, or the February 2023 Loan Exchange Letter, according to which our obligations in connection with the February 2023 Loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs, under which Dr. Ronnie Hershman was deemed to have invested an amount of $43,954, Dr. Dalia Megiddo was deemed to have invested an amount of $11,286, and Mr. Udi Gilboa was deemed to have invested an amount of $10,963 in said SAFEs. See "*Related Party Transactions—SAFEs*" for information regarding the terms of the 2024 SAFEs.

In March 2023 through April 2023, we entered into the 2023 SAFEs for aggregate proceeds of $995,000. Per the terms of the 2023 SAFEs, since an initial public offering, merger, acquisition, equity financing or other liquidity event or dissolution event did not take place within 15 months from the execution of the 2023 SAFEs, on August 28, 2024, the subscription amounts under such SAFEs were converted into Class A-3B Ordinary Shares. Upon the effectiveness of the registration statement for this offering, such Class A-3B Ordinary Shares will automatically convert into Ordinary Shares.

In March 2024 through March 2025, we entered into the 2024 SAFEs in the aggregate amount of $1,986,500, of which $300,000 were canceled and terminated in November 2024. In addition, pursuant to the terms of the July 2022 Loan Exchange Letter and the February 2023 Loan Exchange Letter, the July 2022 Loan and February 2023 Loan were converted into 2024 SAFEs in the amount of $570,364 and $66,203, respectively; however, no additional proceeds were received pursuant to said exchanges. Our co-founders and members of our board of directors participated in the 2024 SAFEs (see "*Related Party Transactions—SAFEs*"). Per the terms of the 2024 SAFEs, upon an initial public offering, merger, acquisition, qualified equity financing or other liquidity event, the subscription amounts under such SAFEs will be converted into our Ordinary Shares upon the effectiveness of the registration statement for this offering, at a conversion price reflecting a discount of 35%. However, if such events do not occur within 18 months of the execution of such SAFEs, such SAFEs will be converted into our securities of such class of shares having certain rights identical to the respective rights of the most senior class of shares on the basis of a previous round of equity financing consummated by the Company at a conversion price reflecting a discount of 35%, as prescribed in such SAFEs.

***Current Outlook***

As of December 31, 2024, our cash and cash equivalents were approximately $0.3 million, and we had a working capital deficit of $3.3 million and an accumulated deficit of $12.7 million. Based upon our currently expected level of operating expenditures, we expect that our existing cash and cash equivalents will be sufficient to fund operations through September 2025.

We have financed our operations to date primarily through proceeds from equity financing and the issuance of convertible securities in the form of SAFEs.

We expect to generate revenues from the sale of our products and other revenues in the future. However, we do not expect these revenues to support all of our operations in the near future. We expect our expenses to increase in connection with our activities, particularly as we continue the development of our products, and continue our commercialization efforts. Accordingly, we expect that we will require substantial additional funding in connection with the growth of our operations, continuing our research and development activity, and commercializing our products. Until we can generate recurring revenues and profit, we expect to satisfy our future cash needs through debt and equity financings. However, there is no assurance that we will be successful accomplishing these plans. If we are unable to obtain sufficient capital, we may need to reduce, delay, or adjust our operating expenses, including commercialization of our products or be unable to expand our operations, as desired. We expect to continue incurring losses and negative cash flows from operations until our products reach profitability. As a result of these expected losses and negative cash flows from operations, along with our current cash position, our management has concluded that a material uncertainty exists that raises substantial doubt about our ability to continue as a going concern. The proceeds from this offering may or may not alleviate the going concern. Even if we raise the proceeds from this offering, we do not believe that such proceeds will be sufficient to complete all research and development activities necessary to commercialize our product candidates. See also "*Risk Factors – Risks Related to Our Financial Position and Capital Requirements — We have not generated revenues from our continued activities, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability, which raise a substantial doubt about our ability to continue as a going concern and could prevent us from obtaining new financing on reasonable terms or at all."*

**Seasonality**

Seasonality does not materially affect our business or the results of our operations.

**Off-Balance Sheet Arrangements**

We have not engaged in any off-balance sheet arrangements.

**Quantitative and Qualitative Disclosure About Market Risk**

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our current investment policy is to invest available cash in bank deposits with banks that have a credit rating of at least A-. Accordingly, a substantial majority of our cash and cash equivalents is held in deposits that bear interest. Our market risk exposure is primarily a result of foreign currency exchange rates, which is discussed in detail in the following paragraph.

**Foreign Currency Exchange Risk**

We operate primarily in Israel, and part of our expenses are denominated in NIS. We are therefore exposed to market risk, which represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. We are subject to fluctuations in foreign currency rates in connection with these arrangements.

As of December 31, 2024, we have not entered into any hedging transactions, but we may do so in the future. Even if we do enter into such hedging transactions in the future, we cannot guarantee that such measures will effectively protect us from adverse effects due to the impact of fluctuations in currency exchange rates.

**Critical Accounting Policies and Estimates**

We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2024. We believe that the accounting policy below is critical in order to fully understand and evaluate our financial condition and results of operations.

We prepare our financial statements in accordance with U.S. GAAP. At the time of the preparation of the financial statements, our management is required to use estimates, evaluations and assumptions which affect the application of the accounting policy and the amounts reported for assets, obligations, income and expenses. Our management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgment and assumptions can affect reported amounts and disclosures made. Actual results could differ from those estimates. Any estimates and assumptions are continually reviewed. The changes to the accounting estimates are credited during the period in which the change to the estimate is made.

***Fair Value Measurements***

Critical accounting estimates include the valuation of our convertible securities, including SAFEs, which are measured at fair value on a recurring basis with changes in fair value reported in the consolidated statements of operations. We elected the fair value option in accordance with ASC 825, Financial Instruments. The SAFEs are measured at fair value each period by using the probability-weighted expected return model. In estimating the fair value of our SAFEs, we used the assistance of a third-party valuation specialist and considered factors we believed are material to the valuation process, including, but not limited to, the likelihood of a SAFE mandatory conversion, qualified equity finance or liquidity event or dissolution and fair value of Ordinary Shares, risk free rate, time to maturity and weighted average cost of capital.

***Share-based compensation***

We account for share-based compensation in accordance with ASC Topic 718, "Compensation-Stock Compensation." We calculate the fair value of share options on the date of grant using the Black-Scholes option-pricing model, and the expense is recognized over the requisite service period for awards expected to vest using the graded vesting method. This model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award, including the expected term, expected volatility, expected dividend yield, risk-free interest rate, and fair value of our share on the date of grant. The requisite service period for share options is generally four years.

As there is no public market for our Ordinary Shares, the fair value of our equity is being approved by our board of directors as of the date share-based awards were granted. In estimating the fair value of our Ordinary Shares, we used the assistance of a third-party valuation specialist and considered factors we believed are material to the valuation process, including, but not limited to, the price at which recent equity was issued by us to independent third parties or transacted between third parties, risks, prospects, and economic and market conditions, among other factors. We believe the combination of these factors provided an appropriate estimate of our expected fair value and reflects the best estimate of the fair value of our Ordinary Shares at each grant date.

The fair value of the Ordinary Shares underlying our option awards was determined by our board of directors, with input from management. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our Ordinary Shares as of each respective grant date. The valuations of our Ordinary Shares were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, *Valuation of Privately-Held-Company Equity Securities Issued as Compensation*, or the AICPA Practice Aid. The assumptions used in the valuation model are based on future expectations combined with management judgment. Our board of directors, with input from management, exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our Ordinary Shares as of the date of each option grant, including the following factors:

● independent valuations performed at periodic intervals by independent third-party valuation specialist;

● our current business projections;

● our stage of development;

● the prices, rights, preferences and privileges of our convertible classes of Ordinary Shares;

● current business conditions;

● the likelihood of a liquidity event for the Ordinary Shares underlying these share options, such as an initial public offering or sale of our company, given prevailing market conditions;

● any adjustments necessary due to the lack of marketability of our Ordinary Shares;

● the purchase of our Ordinary Shares by third party investors in arms-length transactions; and

● the market performance of comparable publicly traded companies.

***Impact of Inflation and Currency Fluctuations***

Our functional and reporting currency is the U.S. dollar. We incur some of our expenses in other currencies. As a result, we are exposed to the risk that the rate of inflation in countries in which we are active other than the United States will exceed the rate of devaluation of such countries' currencies in relation to the dollar or that the timing of any such devaluation will lag behind inflation in such countries. To date, we have not been materially affected by changes in the rate of inflation or the exchange rates of other countries' currencies compared to the dollar, and we cannot assure you that we will not be adversely affected in the future.

The annual rate of inflation in Israel was 3% in 2024 and 3% in 2023. The NIS weakened against the U.S. dollar by approximately 1% in 2024 and 3.07 % in 2023.

***JOBS Act Accounting Election***

We are an "emerging growth company." Under the JOBS Act, an emerging growth company can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will not be subject to the same new or revised accounting standards as public companies that are not emerging growth companies.

**BUSINESS**

**Company Overview**

We are a clinical-stage specialty pharmaceutical company focused primarily on the development of intranasal drugs to treat emergency medical conditions. Intranasal administration is especially suitable for medical emergencies when prompt drug administration is critical, since the nose is lined up with a very rich vascular bed enabling quick drug absorption. We are developing a unique PBI technology with a specialized product portfolio to address acute medical conditions and public health threats. We believe that PBI may be superior over liquid-based solutions due to potentially significantly higher dispersion of powder throughout the nasal cavity, thus creating a larger absorption area and enabling more rapid and higher drug absorption. In addition, the uniform spherical powder particles of our proprietary formulation may enhance the consistency and reliability of the delivered dose. The initial clinical trials of our PBI products involving different molecules performed thus far have demonstrated quicker and higher drug absorption over similar solution-based nasal products. However, to date we have only tested our product candidates on a relatively small patient population and none of our products have been approved by the FDA. Prior to obtaining FDA approval of any of our product candidates, we will need to perform additional clinical testing of our product candidates to confirm any benefits and advantages our products may have over similar nasal products.

Our mission is to offer better protection to patients during acute, severe and life-threatening medical conditions by an effective, user-friendly and immediately active PBI specialized products. To help achieve this we are focused on developing NS002, an Intranasal Epinephrine, and we also have been developing NS001, an Intranasal Naloxone, however we currently paused our work on NS001 and plan to pursue partnering opportunities for further development of NS001. We will need to obtain regulatory approval for our products in order for us to grow our business. We currently have no FDA approved products. Our products have been tested on relatively small patient populations thus far.

Obtaining regulatory approvals and developing NS002 and NS001 will require the incurrence of significant costs and our success will depend, in part, on gaining market acceptance. In order to gain market acceptance in the United States, we will require specific approval from the FDA for our product candidates. We intend to seek approval of NS002 as an approved molecule and a new delivery route (with EpiPen autoinjector as the reference device) under Section 505(b)(2) of the FFDCA which allows the applicant to rely in part on previous studies conducted by unrelated parties, such as another drug manufacturer, and existing sources including published literature, for marketing approval by the FDA in the United States, and will seek approval under the comparable hybrid application pathway in the EU. The FDA may not agree that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval. Such abbreviated approval pathways may not lead to a faster development or review process compared to traditional approval pathways and do not increase the likelihood that NS002 or NS001 will receive regulatory approval in the United States or the EU. See "*Business – Government Regulation*" and "*Risk Factors – Risks Related to Product Development, Regulatory Approval and Commercialization*" for additional information.

To date, we have conducted a twelve-patient pilot study of NS002, which included the testing of bioavailability of Epinephrine under "allergenic challenge" - the creation of severe acute allergic reaction in the nose by inserting ascending doses of allergens to the nose of the healthy volunteers with known allergic rhinitis included in the study. The results showed that Epinephrine intranasal delivery of our NS002 followed the established characteristics of our platform technology, namely, there were higher levels of the drug in the plasma in situations where immediate administration could be lifesaving. The Phase 2 portion of our NS002 study included twelve patients and the trial was not powered for statistical significance. In trials not powered for statistical significance, there is a high chance that observed effects may not be accurate due to small sample size. The Phase 2 study, which is meant to optimize the dose that will be used in the Phase 3 study for registration, is conducted in limited patient populations to identify possible adverse effects and safety risks, to preliminarily evaluate the dosage tolerance of the product for specific targeted diseases or conditions and to determine dosage tolerance, optimal dosage and dosing schedule. Our Phase 2 study is aimed at defining the final clinical dose to be used in our powder Epinephrine product candidate, compared the bioavailability of Epinephrine following a various dosing of NS002 Microspheres Epinephrine powder. The PK results of our Phase 2 study are in line with the known attributes of our nasal powder technology—namely: immediate absorption of Epinephrine and reaching higher peak plasma Epinephrine levels quicker compared to IM Epinephrine injections. We intend to perform two additional Phase 2 studies of NS002. The first will be aimed at determining whether, if necessary, during a real-life anaphylaxis a second dose of NS002 should be administered in the same nostril as the one used for the first administration of NS002 or whether it should be in the other nostril. The second Phase 2 study will test the "carry-over effect," or whether the first dose of Epinephrine changes the absorption of Epinephrine of a following dose. Each study is currently planned to include at least 12 healthy volunteers with allergic rhinitis. Prior to submission to the FDA for marketing approval, we also intend to perform a pivotal clinical, or Phase 3, study that will include a subsection of self-administration. We also intend to separately perform: (1) stability testing which involves testing the product candidate under various temperature and humidity points; (2) a reliability study, which is a subset of the stability study that tests the NS002's administration device in several potential conditions; (3) a usability study, which tests how user friendly the device is; (4) preclinical studies or short animal safety studies in two animal species; and (5) a pediatric study, the details of which will be agreed upon with the FDA as we progress with the program.

With respect to NS001 Intranasal Naloxone, we have performed a pilot study, which is a first in human study aimed at safety and bioequivalence, and pivotal clinical study, which is the Phase 3 registration study, in 14 and 42 healthy volunteers, respectively, with the objective of evaluating the comparative bioavailability of Naloxone between NS001 and certain competitor products. The pilot study results were submitted to the FDA in support of the progression to the pivotal study. The results of the pilot study showed our technology having a faster absorption rate in the immediate critical period after administration. The Phase 3 study included an expanded patient population to further evaluate dosage and clinical efficacy. Our pivotal clinical study consistently showed an advantage in the first 30 minutes after administration. We currently intend to focus our development and regulatory approval efforts on our Intranasal Epinephrine and other preclinical programs, and plan to pursue partnering opportunities for further development of NS001.

Our platform technology can also be incorporated into other products as it has been tested with several additional preclinical and invitro molecules based on our proprietary nasal powder formulation and technology. In addition to our two main products, Intranasal Epinephrine and Intranasal Naloxone, we are exploring other potential indications for which our PBI technology may be applicable, including Intranasal Midazolam, Intranasal Atropine and Intranasal Ondansetron.

Competition in the pharmaceutical industry is intense. Some of our competitors hold significant market share, have long histories and strong reputations within the industry, greater brand recognition, and more financial and human resources than we do. They also have more experience and capabilities in researching and developing testing devices, obtaining and maintaining regulatory clearances and other requirements, manufacturing and marketing those products than we do. Their dominant market position and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales of NS002 or NS001.

To date, we have incurred significant operating losses, generated no revenues from existing products, and as of December 31, 2024, our accumulated deficit was $12.7 Million. We expect that we will need to raise substantial additional funding in the future. See "*Risk Factors–Risks Related to Our Financial Position and Capital Requirements.*"

**The Intranasal Drug Delivery Product Market**

***Overview***

Intranasal administration is a non-invasive route for drug delivery, which was widely used for the local treatment of rhinitis or nasal polyposis. Since drugs can be quickly absorbed into the systemic circulation through the nasal mucosa, this route can also be used in a range of acute or chronic conditions requiring considerable or rapid systemic exposure. Indeed, such drug administration offers advantages such as ease of administration, rapid onset of action, and avoidance of first-pass metabolism (in the liver).

The nasal mucosa is highly vascularized and enables quick and efficient drug delivery to the systemic circulation. The olfactory tissues also provide a direct conduit to the central nervous system, bypass first-pass metabolism, and lead to an onset of action similar to intravenous, or IV, drug administration. The intranasal route of administration has also been shown to decrease delays in drug administration, especially in the pre-hospital and community setting of emergency medical situations, which can have a profound impact in a variety of scenarios, such as anaphylactic shock, opioid overdose, seizures, acutely agitated or combative patients, and trauma management. Intranasal administration of Midazolam (Nazylam UCB pharma) Lorazepam, Flumazenil, Ketamine, (Spravato, Jennssen) Fentanyl, (Lazanda, Archimedes Pharma) Glucagon (Baqsimi, Eli Lili) or Sumatriptan (Sumatryptan nasal spray, Snadoz, Immitrex, SGK) has been shown to be an effective alternative to the same molecules given as IM or IV administration (the names referred to here in this paragraph are the generic molecule and in parenthesis are the name of the commercial product).

Intranasal drug delivery is especially suitable for potential medical emergency situations such as, anaphylaxis opioid overdose, seizures and the like, most of which occur either at home or in the streets. While injectable drugs are available in the hands of professional health personnel, immediate administration of the necessary drugs is essential for preservation of life. The availability of user-friendly, non-invasive intranasal drug can significantly enhance the prospects of patients' survival.

According to a Research and Markets report entitled "Intranasal Drug Delivery - Global Market Trajectory & Analytics," the intranasal drug delivery market in the United States was estimated at $21.9 billion in 2021, currently accounting for a 42.05% share in the global market. China, the world's second largest economy, is forecast to reach an estimated market size of $5.7 billion by the year 2026, trailing a compound annual growth rate, or CAGR, of 8.4% from 2021-2026. Other noteworthy geographic markets include Japan and Canada, each forecast to grow at 4.8% and 5% respectively over the same period. Within Europe, Germany is forecast to grow at approximately 5.9% CAGR while the rest of the European market will reach $6.1 billion by the close of the analysis period. The following graphic depicts the forecasted growth of the global market for intranasal drug delivery.

![](image_002.jpg)

According to a market monitoring report published in July 2023 entitled "Nasal Drug Delivery Market: Global Industry Analysis and Forecast (2023-2029)," the total market, as depicted below, was estimated at $59 billion in 2022 and is expected to grow at CAGR of 6.9% reaching $93.7 billion in 2029. The following graphic demonstrates the high estimated CAGR and that the major part of the market is in the US and Europe:

![](image_003.jpg)

*Anaphylaxis and Severe Allergy Type 1*

Anaphylaxis is a severe, potentially life-threatening allergic reaction that exists on a spectrum and is influenced by both intrinsic (i.e., genetic predisposition) and extrinsic factors (i.e., allergenic source and route of exposure). It can occur within seconds or minutes of exposure to an allergen, such as drugs peanuts or bee stings. Anaphylaxis causes the immune system to release a flood of cellular mediators that can cause shock, with sudden blood pressure drops and airways narrowing, blocking breathing. Signs and symptoms include a rapid, weak pulse; a skin rash, nausea, vomiting, respiratory distress and death. "Time to reach 100pg/ml" means the time for reaching the start of the clinical effect. The following graphic demonstrates the different stages of an allergic reaction:

![](image_004.jpg)

(1) JF
 Philips et al. Allergy Asthma Proc (2011)

(2) JT
 Fleming et al. J Allergy Clin Immunol Pract (2014)

(3) E.
 Andrew et al. Prehospital Emergency Care (2018)

(4) Emergency
 treatment of anaphylactic reactions: guidelines for healthcare providers. Resuscitation Council (UK)

(5) Yu RJ et al. J Allergy Clin Immunol Pract. (2021)

The World Allergy Organization anaphylaxis guidance in 2020 shows a global anaphylaxis incidence of 50-112 episodes per 100,000 persons per year; recurrence of reactions occurs in 26.5–54.0% of anaphylaxis patients. According to an article titled Fatal Anaphylaxis: Mortality Rate and Risk Factors, by Turner at al., dated 2017, or the Cantor Fitzgerald Research, anaphylaxis can be even fatal in 1% of cases. According to the Cantor Fitzgerald research and Raymond James research from 2024, there are approximately 40 million patients with type 1 allergies in the United States alone, of which approximately 20 million patients who experience severe type 1 allergic reactions that may lead to anaphylaxis. Further, according to such researches, among such patients with type 1 allergies in the United States, only approximately 7 million have been prescribed with Epinephrine.

Epinephrine, also called adrenaline, is the first-line therapy for anaphylaxis. It is an endogenous ligand of adrenergic receptors that is produced in the adrenal glands. According to a summary review entitled "Update on the usage and safety of Epinephrine auto-injectors, 2017" by Posner published in the Drug Health and Patient Safety Journal in 2017, administration of exogenous Epinephrine can counteract some of the most severe symptoms of anaphylaxis through adrenergic (alpha and beta) receptor, signaling decreased vasoconstriction and peripheral vascular resistance, decreased upper airway mucosal edema, increased bronchodilation, and decreased mediator release from mast cells and basophils. Epinephrine has been in use for more than 100 years, and it can be administered via different routes. A review entitled "Adrenaline in the Acute Treatment of Anaphylaxis," published in the Deutsches Ärzteblatt Int. 2018 stated that in accordance with FDA approval of autoinjectors (for example EpiPen) and the many studies supporting this therapeutic mode the method of choice in the initial phase of anaphylaxis, especially for self-medication, is intramuscular injection. The first Epinephrine auto-injector, EpiPen and EpiPen Jr., was approved by FDA in 1987. Several generic versions of EpiPen have been in the market as well. Additional recent Epinephrine auto-injectors are now also FDA approved (AUVI-Q, Adrenaclick), and the prescribed dosage is 0.3 mg per delivery for adults and 0.15 mg per delivery for children.

In the last several decades, there has been a dramatic increase in anaphylactic episodes, especially among children with peanut allergies. Anaphylaxis requires an immediate injection of Epinephrine and an evacuation to an emergency room. Allergic people are required to carry with them two Epinephrine autoinjectors at all times and make sure that injections are never more than a few feet away. According to a study published in the World Allergy Organization Journal, the annual cost of Anaphylaxis in direct cost in the United States is over $600 million and indirect annual costs are estimated at $1.2 billion.

*The unmet need for Anaphylaxis*

 

In many cases, adrenaline injections are not used readily or adequately, which contributes to fatality and severe morbidity cases, creating a need for a convenient and rapid delivery of Epinephrine in patients with anaphylaxis. Lack of availability of autoinjectors due to high prices, low availability and lack of education regarding treatment options of anaphylaxis are among the leading causes. Other issues preventing prompt use of adrenaline injections concern patients and caregivers, hesitance and "needle fear" since injection is perceived as "aggressive," especially in young children.

Epinephrine in solution form is widely known for its stability issues shortening its effective expiration date and necessitating frequent and expensive change of the Epinephrine injection. In addition, careful observation of the required storage condition is required in order to preserve the effective dose within the autoinjectors. Further, the size and weight of a typical two autoinjector package is quite large and cumbersome, requiring a special carrying bag. According to the Cantor Fitzgerald Research and Raymond James Research published in 2024, out of approximately 7 million patients prescribed with Epinephrine in 2023, approximately 50% do not carry Epinephrine.

Additionally, the price for a package containing two autoinjectors are high: the price for EpiPen ranges between $650 to $700 and the price for generics are about half: $347-$481, according to a 2024 study by Leigh Ann Anderson published in April 2024 on drugs.com. This extremely high price and the need to acquire a new set every 12-18 months is a major obstacle in the treatment of the ever-expanding life-threatening condition of anaphylaxis. According to a Cantor Fitzgerald Research and Raymond James Research published in 2024, out of approximately 7 million patients prescribed with Epinephrine, approximately 50% do not refill regularly.

*Rise in prevalence*

 

The lifetime prevalence of anaphylaxis is about 2% in the U.S. and up to 3% in Europe. Anaphylaxis accounts for up to 0.26% of overall hospital admissions. A comprehensive study by Turner entitled "Global Trends in Anaphylaxis Epidemiology and Clinical Implications," published recently in the Journal of Allergy and Immunology practice (April 2020) reports that in recent decades, there have been multiple reports from around the globe describing a dramatic increase in cases of Anaphylaxis, especially related to food allergy (mainly nuts) and among younger children. The following graphics depict the rate of hospital admissions for anaphylaxis in various countries from 1995-2015, including two United States data sources for each figure.

![](image_005.jpg)

*Figure 1: Hospital admissions for anaphylaxis from all allergens*

(1) Mullins R.J.,
 Wainstein B.K., Barnes E.H., Liew W.K., Campbell D.E. Increases in anaphylaxis fatalities in Australia from 1997 to 2013. Clin Exp
 Allergy. 2016;46:1099–1110. - PubMed.

(2) Jeppesen A.N., Christiansen
 C.F., Froslev T., Sorensen H.T. Hospitalization rates and prognosis of patients with anaphylactic shock in Denmark from 1995 through
 2012. J Allergy Clin Immunol. 2016;137:1143–1147. – PubMed.

(3) Tejedor-Alonso M.A., Moro-Moro
 M., Mosquera Gonzalez M., Rodriguez-Alvarez M., Perez Fernandez E., Latasa Zamalloa P. Increased incidence of admissions for anaphylaxis
 in Spain 1998-2011. Allergy. 2015;70:880–883. – PubMed.

(4) Yao T.C., Wu A.C., Huang
 Y.W., Wang J.Y., Tsai H.J. Increasing trends of anaphylaxis-related events: an analysis of anaphylaxis using nationwide data in Taiwan,
 2001-2013. World Allergy Organ J. 2018;11:23. - PMC – PubMed.

(5) Turner P.J., Gowland M.H.,
 Sharma V., Ierodiakonou D., Harper N., Garcez T. Increase in anaphylaxis-related hospitalizations but no increase in fatalities:
 an analysis of United Kingdom national anaphylaxis data, 1992-2012. J Allergy Clin Immunol. 2015;135:956–963.e1. doi:
 10.1016/j.jaci.2014.10.021. [DOI] [PMC free article] [PubMed] [Google Scholar].

(6) Motosue M.S., Bellolio
 M.F., Van Houten H.K., Shah N.D., Campbell R.L. Increasing emergency department visits for anaphylaxis, 2005-2014. J Allergy Clin
 Immunol Pract. 2017;5:171–175.e3. – PubMed.

(7) Motosue M.S., Bellolio
 M.F., Van Houten H.K., Shah N.D., Li J.T., Campbell R.L. Outcomes of emergency department anaphylaxis visits from 2005 to 2014. J
 Allergy Clin Immunol Pract. 2018;6:1002–1009.e2. – PubMed.

Source: Turner PJ, Campbell DE, Motosue MS, Campbell RL. Global Trends in Anaphylaxis Epidemiology and Clinical Implications. J Allergy Clin Immunol Pract. 2020 Apr;8(4):1169-1176. doi: 10.1016/j.jaip.2019.11.027. Epub 2019 Nov 28. PMID: 31786255; PMCID: PMC7152797.

![](image_006.jpg)

*Figure 2: Prevalence of hospitalization for food allergy*

 

(1) Mullins R.J.,
 Wainstein B.K., Barnes E.H., Liew W.K., Campbell D.E. Increases in anaphylaxis fatalities in Australia from 1997 to 2013. Clin Exp
 Allergy. 2016;46:1099–1110. doi: 10.1111/cea.12748. [DOI] [PubMed] [Google Scholar].

(2) Kivisto J.E., Protudjer
 J.L., Karjalainen J., Wickman M., Bergstrom A., Mattila V.M. Hospitalizations due to allergic reactions in Finnish and Swedish children
 during 1999-2011. Allergy. 2016;71:677–683. – PubMed.

(3) Wang Y., Koplin J.J., Ho
 M.H.K., Wong W.H.S., Allen K.J. Increasing hospital presentations for anaphylaxis in the pediatric population in Hong Kong. J Allergy
 Clin Immunol Pract. 2018;6:1050–1052.e2. – PubMed.

(4) Nocerino R., Leone L.,
 Cosenza L., Berni Canani R. Increasing rate of hospitalizations for food-induced anaphylaxis in Italian children: an analysis of
 the Italian Ministry of Health database. J Allergy Clin Immunol. 2015;135:833–895.e3. – PubMed.

(5) Turner P.J., Gowland M.H.,
 Sharma V., Ierodiakonou D., Harper N., Garcez T. Increase in anaphylaxis-related hospitalizations but no increase in fatalities:
 an analysis of United Kingdom national anaphylaxis data, 1992-2012. J Allergy Clin Immunol. 2015;135:956–963.e1. doi:
 10.1016/j.jaci.2014.10.021. [DOI] [PMC free article] [PubMed] [Google Scholar].

(6) Ma L., Danoff T.M., Borish
 L. Case fatality and population mortality associated with anaphylaxis in the United States. J Allergy Clin Immunol. 2014;133:1075–1083.
 - PMC – PubMed.

(7) Motosue M.S., Bellolio
 M.F., Van Houten H.K., Shah N.D., Campbell R.L. National trends in emergency department visits and hospitalizations for food-induced
 anaphylaxis in US children. Pediatr Allergy Immunol. 2018;29:538–544. – PubMed.

 

Source: Turner PJ, Campbell DE, Motosue MS, Campbell RL. Global Trends in Anaphylaxis Epidemiology and Clinical Implications. J Allergy Clin Immunol Pract. 2020 Apr;8(4):1169-1176. doi: 10.1016/j.jaip.2019.11.027. Epub 2019 Nov 28. PMID: 31786255; PMCID: PMC7152797.

*Current treatment limitations*

 

*Needle fear:* Perception of the current injections as invasive and risky leads to a delay in prompt administration. Parents have reservations about administering Epinephrine to their children due to concerns over injury, incorrect use, and poor outcomes. A more user-friendly treatment is required. Despite the potentially life-saving benefits of using Epinephrine auto-injectors, Epinephrine is not used to treat the majority of anaphylactic reactions. A major obstacle to prompt the Epinephrine administration in the community setting is the availability of an auto-injector, partially caused by price issues and misleading information regarding side effects and risks of injections. Analysis of fatal and near fatal anaphylaxis both in children, teenagers and adults consistently showed that delay or hesitancy in timely administering IM injection was the root cause in all cases. In the case of teenagers, a UK-based study showed that the current injection dose of 0.3 was inadequate and larger doses were required to create effective plasma levels. The NHS has encouraged Epinephrine manufacturer to produce larger dosage auto-injectors (0.5 mg instead of the 0.3) with little success. It is widely agreed by professional organizations that failure to administer the adequate dose or doses of Epinephrine immediately and up to 30 minutes following an event is the single most important risk factor associated with fatal or near fatal incidences of anaphylaxis.

*Needle size:* A review by Dreborg published in Allergy Asthma Clin Immunol in 2016 entitled "Do Epinephrine auto-injectors have an unsuitable needle length in children and adolescents at risk for anaphylaxis from food allergy?" points out that one of the major limitations in the use of autoinjectors is needle size. The current indication for autoinjectors calls for injecting in the lateral side of the thigh muscle. Absorption of drugs from muscle is significantly quicker than its absorption from the fat tissue. Since the amount of fat covering the thigh differs widely between men and women, and differs in relation to the body mass of the user, it cannot be expected that a single size needle will ensure the injected Epinephrine will indeed reach the muscle in all people, yet all autoinjectors have one single needle size (one of adults and one for children- irrespective of age). In a recent formal publication of the Royal College of Physicians of Ireland in June 2022, the College stated that while the required length of a needle to reach the thigh muscles is between 25 mm up to 38-40mm for those weighing more than 100 kg, *none of the currently approved autoinjectors carries an adequate length needle.* As a result, the opinion of the Royal College of Physicians of Ireland was that the Epinephrine injected into the fat tissue below the skin creates a delay of 10-15 minutes in Epinephrine absorption.

In general, absorption of Epinephrine from the muscle is not immediate and may not always promptly create therapeutic levels of Epinephrine in the blood. Most studies averaged a period of approximately 15 minutes for "time to 100pg/ml" – the time for reaching the start of the clinical effect. This major limitation is reviewed and discussed by Sclar in "Bioequivalence evaluation of Epinephrine autoinjectors with attention to rapid delivery" – published in Ther Clin Risk Management journal in 2013. This major limitation further shortens the therapeutic window for intervention.

*Stability and price*: The auto-injectors consisting of Epinephrine in an aqueous solution suffer from severe issues of instability and loss of the active ingredient of the Epinephrine due to creation of enantiomers. Despite the addition of many stabilizers and lowering the acidity of the Epinephrine solution, multiple independent studies have shown that the stability of Epinephrine as a solution is highly volatile and unpredictable. After the use-by date, and oftentimes even before the expiration date, the solution gradually loses effectiveness, even though it stays clear and colorless.

Epinephrine was found to lose about 30% of its active compound after 12 weeks of a heat cool cycle. The molecule is highly sensitive to light and should not be exposed to light. It can also be easily oxidized and therefore all Epinephrine solutions contain low acidity and bisulfites. Due to the known stability issues of Epinephrine in solution autoinjectors, injectors need to be replaced every 12-18 months. The cost of EpiPen 2 injectors package (the leading brand and largest market share) can reach up to $650-700, and the cost of generic autoinjectors is about 50-60% of that amount. Despite many government investigations and political pressure, the cost did not change significantly even after the introduction of generics into the market and still poses an economic burden. The volatility of Epinephrine thus necessitates frequent restocking, and given the high prices of new Epinephrine package, further contributes to the lower availability of proper treatment options.

***Opioid overdose***

Opioid overdose can occur in both drug abusers and patients treated with prescribed medications for pain. Opioid intoxication is manifested by reduced consciousness and respiratory depression, which may deteriorate to cardiac arrest and death.

According to the U.S. Center for Disease Control, or CDC, press release dated November 17, 2021, misuse and abuse of opioids has evolved into a worldwide epidemic, particularly in the U.S. where it is declared a national public health emergency. According to a CDC Morbidity and Mortality Weekly report from 2021 entitled "Trends and Geographic Patterns in Drug and Synthetic Opioid Overdose Death," overdose deaths involving synthetic opioids were nearly 12 times higher in 2019 than in 2013. More than 36,000 people died from overdoses involving synthetic opioids in 2019.

Nearly 108,000 Americans died of drug overdoses in 2022, according to final federal figures released on March 2024. Over the last two decades, the number of U.S. overdose deaths has risen almost every year and continued to break annual records, making it the worst overdose epidemic in U.S. history.

The following graphic depicts age-adjusted rate of drug overdose deaths by gender in the United States from 2002–2022:

![](image_007.jpg)

Source: Spencer, M.R, M.P.H., Garnett, M.F, M.P.H. and Miniño, A.M., M.P.H. Drug Overdose Deaths in the United States, 2002–2022. - CDC.

Additionally, the U.S. Substance Abuse and Mental Health Service Administration, has reported that the immediate treatment for opioid overdose is rapid administration of Naloxone. Naloxone is a medication approved by the FDA, designed to rapidly reverse opioid overdose. It is an opioid antagonist, or in other words, it binds to opioid receptors and can reverse and block the effects of other opioids, such as heroin, morphine, and oxycodone.

According to a CDC publication from April 2021 entitled "State-Level Economic Costs of Opioid Use Disorder and Fatal Opioid Overdose — United States, 2017" Naloxone is currently available in injections (auto injectors or solution for injection), intranasal or IV solutions. In 2017, the FDA approved the first liquid based intranasal Naloxone (Narcan 4 mg, by Adapt Pharma) and has since approved generic versions, and an 8 mg Naloxone nasal solution (Kloxxado, Hikkma). The U.S. economic cost of opioid use disorder ($471 billion) and fatal opioid overdose ($550 billion) during 2017 totaled $1.021 billion.

*The Unmet Need for Opioid Overdose Treatment*

The unparalleled increase in the use of synthetic opioids such as Fentanyl, Isotonitazene, or ISO, and other extremely dangerous New Synthetic Opioids, or NSOs, have changed the scope of immediate treatment of opioid overdose. While Narcan (solution based intranasal Naloxone) was approved in 2017 in a 4 mg dosage, the FDA approved label for Narcan indicated that if respiratory depression is not improved within 2-3 minutes, then there is a need for an additional dose, followed by a third one until emergency health professionals have reached the victim. According to reports by the FDA Advisory Committee on the Most Appropriate Dose or Doses of Naloxone to Reverse the Effects of Life-threatening Opioid Overdose in the Community Settings (2016) a third of opioid overdose victims required two doses of Narcan and about 16% required a third dose.

Two conclusions can be reached from the changing landscape of opioid overdose in recent years:

● the amount of Naloxone needed to overcome the new highly potent synthetic opioids is higher according to a review article entitled "Naloxone dosage for opioid reversal: current evidence and clinical implications," published by Dr. Lyn and colleagues from the University of Denver in "Therapeutic Advances in Drug Safety" Journal in 2018; and

● the first few minutes are the critical period for effective intervention since, in these first few minutes, the maintenance of high plasma levels of Naloxone is imperative, attested by the need for repeat dosages in the prehospital and community setting.

*Current treatment limitation:*

 

While intranasal Naloxone administration is most suitable for out of hospital opioid overdose and offers non-invasive, easy to use, immediately available first aid, the currently approved liquid based products such as Narcan and Kloxxado (Naloxone HCI Nasal Spray) do not create sufficient plasma levels of Naloxone, especially in the first few minutes (10-15 -30) where maintaining adequate levels of Naloxone in the plasma is vital for restoration of respiration and life as reflected in the high percentage of victims, requiring a second and third dose. Notably, Narcan and Kloxxado are distributed in a 2-inhaler package.

**Our Solution**

We are currently developing a number of intranasal powder products aimed at assisting patients in severe acute emergency situations such as anaphylactic shock, opioid overdose and other medical emergencies. Intranasal administration is most suitable for those situations in which rapid drug delivery is required and offers multiple advantages such as rapid drug delivery, ease of use and non-invasiveness. Our portfolio comprises a number of programs: NS002 Intranasal Epinephrine (completed Phase 2); NS001 Intranasal Naloxone (completed pivotal study) and a number of preclinical POC programs, such as NS005 Intranasal Midazolam (acute seizures); NS004 Intranasal Atropine (organophosphate poisoning); NS003 Intranasal Ondansetron (intractable vomiting) and others.

Our technology aims to provide an inexpensive, non-invasive, needle-free, and user-friendly solution to the limitations described above through the administration of a *powder-based* nasal spray to treat anaphylaxis, opioid overdose and other emergency situations.

We believe that our cost structure enables us to compete in the market and maintain extremely high margins. Our powder Epinephrine nasal spray is stable and devoid of the stability issues of liquid-based Epinephrine products in the market. Due to the inherent advantage of drug delivery through the highly vascularized nasal tissue, our results show a dramatic advantage in bringing clinical levels of Epinephrine into the plasma much higher and quicker compared to IM injections especially in the first critical 30 minutes.

Moreover, in our limited clinical studies with small patient sample sizes, our product candidates have been shown to maintain, and even increase, the absorption rate as compared to the currently known results of our potential competitors developing liquid based Epinephrine nasal sprays, even with the presence of nasal congestion common in anaphylaxis.

***Nasus's Well Differentiated and Diversified Technology Platform – Intranasal Powder***

 ****

Most intranasal emergency drugs approved by the FDA in recent years are liquid based. Powder nasal spray products are extremely rare since the proper technology for the creation of nasal powder is not obvious or simple and requires deep understanding and proprietary knowledge. Nasus' proprietary powder composition for intranasal delivery, Nasax, is comprised of uniform spherical APIs and carriers approved for inhalations. The active compound's particles' shape, size, and morphology, in combination with a carrier and a device provide rapid and precise delivery of the drug to the blood stream and brain. Our patented technology (manufacturing device and process) creates a unique combination of two homogenous particle populations:

● Small, unified API particles ensure stable and repeatable absorption of the drug

● Large lactose particles serve as disaggregants and carriers for the powder into the nose.

The following graphic depicts the size distribution of the powder particles showing two distinct populations: the active ingredient and the carrier molecule. The ability to control the size of the API particles is critical for effective absorption.

 

![](image_008.jpg)

 

*Figure 3a: Nasus powder technology: Particle size*

 

The following graphic depicts the shape of powder particles as seen under scanning electron microscopy showing a mixture of two distinct populations: the active ingredient and the carrier molecule.

 

![](image_009.jpg)

 

*Figure 3b: Nasus powder technology: Particle shape*

It has been long established that powder spray into the nose covers a significantly larger surface area of the nasal cavity compared to liquid nasal spray. The liquid particles are heavier and tend to accumulate at the lower area of the nasal cavity (an area that is covered by an epithelium that is less absorbent compared to the respiratory epithelium at the upper parts of the nasal cavity). According to a review by Djupesland from 2013 in Drug Delivery and Translational Research entitled "Nasal drug delivery devices: characteristics and performance in a clinical perspective—a review," due to the significantly larger absorbent area after powder nasal administration, drug absorption is more rapid and larger compared to liquid nasal spray. This phenomenon was also found in our clinical studies when compared head-to-head with similar liquid nasal products. The following graphic depicts the drug liquid nasal spray distribution versus powder drug distribution in the nasal cavity:

![](image_010.jpg)

*Figure 4a: Powder nasal spray achieves significantly larger absorption area compared to liquid spray.*

The following table depicts the comparative distribution of powder and liquid solution nasal sprays in a laboratory model called Nasal Cast. This table was published by Aptar to demonstrate the difference between generic powder formulation (Lactose) and generic liquid formulation (Lactose), using Aptar's UDS. The Nasal Cast in-vitro model includes representation of most of the potentially impacted areas of interest within the nasal cavity. This includes the nose, nasal valve, floor of nasal cavity, turbinates, ethmoids, rhinopharynx and lung fractions. This enables an understanding of the distribution of nasal drugs in the different compartments of the nose, that differ in their absorption efficacy and potential brain penetrance. The data shown in this graphic uses Aptar's UDS product which is also used by us as the delivery system for our intranasal powders. However, it does not specifically reflect the distribution of our powder formulation. Nonetheless, the Nasal Cast model is an acceptable modeling method to determine the optimal device and formulation delivery approach for specific products, as well as the inherent difference between powder and liquid nasal formulations. Although the model is not specific to our powder formulation, it highlights key differences between powder-based and solution-based nasal spray, using the same formulations, in terms of their distribution within the nasal cavity. In this specific table, it is shown that 50% of the liquid based nasal spray can be found at the tip of the nasal cavity, an area that has less absorbent capacity, while the areas in which the absorption is efficient such as the middle zone and the olfactory zone receive only about 36% of the solution. In comparison, almost 70% of nasal powder spray land on the high-absorbent areas of the middle and olfactory zone. Thus, while the model does not represent our specific powder formulation, we believe it provides useful comparative data that may support the understanding of nasal drug distribution, and may be relevant to evaluating the potential of superior performance of powder-based nasal sprays over solution-based nasal sprays more generally.

***<u>In vitro</u>* <u>deposition from a nasal spray and a nasal powder in a nasal cast, n=6. (\* p< 0.05)</u>**

![](image_024.jpg)

 

*Figure 4b: Powder nasal spray achieves significantly larger absorption area compared to liquid spray.*

Source: Williams et al, In Vitro and In Vivo Assessment of Regional Nasal Deposition using Scintigraphy from a Nasal Spray and a Nasal Powder, Respiratory Drug Delivery (2021), n=6 (\* p<0.05).

![](image_012.jpg)

*Figure 5: Powder morphology -commercial and Nasus Pharma.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Source for left side of
 Figure 5: Gieszinger P, Csóka I, Pallagi E, Katona G, Jójárt-Laczkovich O, Szabó-Révész
 P, Ambrus R. Preliminary study of nanonized lamotrigine containing products for nasal powder formulation. Drug Des Devel Ther. 2017
 Aug 23;11:2453-2466. doi: 10.2147/DDDT.S138559. PMID: 28860716; PMCID: PMC5574602.

 

*Tech Transfer, Scalability and Nasal Inhaler*

 

We have previously been successful in completing our scalability and technology transfer to a European GMP FDA approved manufacturing facility and succeeded in manufacturing three commercial batches as was required for NDA submission and filling the nasal inhaler device with powder. We recently initiated the tech transfer to the European GMP FDA approved manufacturing facility for commercial size production of NS002 and expect to utilize our prior experience for a successful completion of our scalability and technology transfer, including the manufacturing of commercial batches for NDA submission and filling of NS002.

*Aptar UDS and collaboration*

 

We have a collaboration agreement with Aptar, a leading global manufacturer of inhalers. On September 6, 2019, we entered into the MSA with Aptar for services, including the performance of certain work, studies and analytical services in connection with our drug device product development program. The MSA provides that the work and services to be performed are to be enumerated in schedules of work signed by the parties for fees set forth in such schedules. Pursuant to the MSA, Aptar is required to use reasonable commercial efforts to meet agreed upon timelines for providing the services to us. The MSA remains in effect for the later of a period of three years and the completion of the services or other obligations set forth in executed schedules, unless earlier terminated in accordance with the terms and conditions set forth therein. The rights and obligations of the parties under the MSA are ongoing and the MSA is in effect as of the date of this prospectus. In addition, there are rights and obligations under the existing schedules that remain in effect for seven years following the future launch of our products.

Concurrently with signing of the MSA, on September 6, 2019, we entered into a schedule of work related to Naloxone with Aptar, or the Naloxone SOW, which provides that, for a fee of $1,350 thousand, comprising of $200 thousand in development stage, $350 thousand upon submission of an NDA with the FDA (or equivalent) and $800 thousand at market launch, Aptar will provide support to us for the use and submission of its intranasal UDS to be the delivery system for our Intranasal Naloxone powder. Any additional services requested by us, not included in the Naloxone SOW, will be negotiated by us and Aptar in good faith on a fee for services basis. The Naloxone SOW also provides for tier-based royalty payments upon commercialization of Intranasal Naloxone using Aptar's UDS for a period of up to seven years following the first commercial sale which are as follows: 1% for up to $30 million; 1.2% for $30 million to $60 million; 1.4% for $60 million to $100 million; and 1.6% for over $100 million. The Naloxone SOW has a termination fee of $450 thousand to be paid to Aptar if our Intranasal Naloxone program is terminated for whatever reason, other than Aptar's breach of the agreement, or if we do not make applicable filings to regulatory authorities within three years of the effective date of the agreement (which may be extended upon mutual agreement for a period of six months). Through December 2020, we made a filing for a pre-investigational new drug, or pre-IND, with the FDA, and an additional filling related to Type C meetings to review questions related to drug development. In addition, we made an equivalent IND filing with Health Canada before conducting a registration study in Canada. As of the date of this prospectus, we have paid $200 thousand to Aptar in connection with the Naloxone SOW.

On April 20, 2020, we entered into a schedule of work related to Epinephrine, or the Epinephrine SOW, with Aptar governed under the same terms and conditions set forth in the Naloxone SOW, the purpose of which was to extend Aptar's services to Intranasal Epinephrine. For a fee of $675 thousand, comprising of $150 thousand in the development stage, $225 thousand upon a submission of an NDA with the FDA (or equivalent) and $300 thousand at market launch. Aptar will provide support to us for the use and submission of its intranasal UDS product to be the delivery system for our Intranasal Epinephrine powder. Any additional services requested by us, not included in the Naloxone SOW, will be negotiated by us and Aptar in good faith on a fee for services basis. The Epinephrine SOW provides for certain tiered-based royalty payments upon commercialization of Intranasal Epinephrine using Aptar's UDS for a period of up to seven years following the first commercial sale. The Epinephrine SOW has a termination fee of $450 thousand to be paid to Aptar if our Intranasal Epinephrine program is terminated for whatever reason, other than Aptar's breach of the agreement, we do not make applicable filings to regulatory authorities within three years of the effective date of the agreement (which may be extended upon mutual agreement for a period of six months). We made a pre-IND filing with the FDA, as well as equivalent filings with Health Canada and the Israeli Health Ministry before performing our Phase 2 and Phase 3 studies of Intranasal Epinephrine. As of the date of this prospectus, we have paid $150 thousand to Aptar in connection with the Epinephrine SOW.

On August 16, 2021, we entered into a change order with respect to the Naloxone SOW, for the provision of additional services and deliverables by Aptar related to Intranasal Naloxone, including but not limited to, the authoring of a reliability protocol (excludes execution of the protocol), drafting of a fault tree analysis, data analysis post-execution of the reliability protocol, and authoring of the reliability report, for a fee of €100 thousand ($103), of which €40 ($41) thousand was paid to Aptar prior to January 1, 2022, and the remaining amounts will be paid upon NDA submission and FDA approval of Intranasal Naloxone, if any.

For the services received under the agreement by April 2022, there is an amount of $529 thousand outstanding to be paid to Aptar, which has not been paid to date.

On October 5, 2022, we received a written notice from Aptar, or the Notice, based on our alleged breach of our contractual obligations under the MSA concerning failure to cooperate with and outstanding payments in connection with services rendered by Aptar's subdivision, NextBreath, in an aggregate amount of $1 million (which also includes termination fees of $450,000 in connection with the Naloxone SOW), which set forth a period to cure the alleged breach within 15 days. We responded to the Notice on October 13, 2022 and on October 19, 2022, contesting Aptar's allegations set forth in the Notice and rejecting any grounds for termination by Aptar. Since our response letters were sent in October 2022, we and Aptar discussed and exchanged further correspondence regarding the Notice through February 2023 and were unable to resolve the claims and allegations made by each party. Since February 2023, we have continued to purchase UDS products from Aptar and, as of July 3, 2025, we have not received any further notices, demands or claims from Aptar concerning the Notice.

We believe that we have operated and continue to operate in accordance with our contractual obligations under the MSA, Naloxone SOW and Epinephrine SOW, or the Aptar Agreements. We further believe that Aptar and we are still operating based on the terms of the Aptar Agreements.

The MSA calls for certain services to be performed to support our future NDA submission. Aptar has collaborated and supported the development of our drug device program with appropriate information to support the device information part of the future submission to the FDA, as is customary in our industry. Aptar's UDS is a single-use, ready-to-use one-step nasal delivery device that can deliver a powder formulation in an emergency situation quickly and easily. During such an event, the patient or caregiver presses a small plunger on the bottom of the device to release the drug in a single powder puff into the nose, where the drug can be quickly absorbed via the nasal mucosa. Aptar's nasal UDS is an alternative to injectable kits that may require assembly, including multistep, time-consuming steps. The UDS powder system we use, depicted below, was recently approved by the FDA in conjunction with Eli Lilly and Company's emergency use glucagon for hypoglycaemia (Baqsimi).

![](image_013.jpg)

*Figure 6: Aptar's powder unidose system*

**Our Products**

***Intranasal Epinephrine (NS002)***

NS002 Intranasal Epinephrine, our primary product, is aimed at assisting in severe allergic reaction emergency situations. Clinical data from Phase 1 and 2 clinical studies has shown that our product offered faster and quicker Epinephrine absorption compared to EpiPen by needle-free treatment. We are developing NS002 to offer:

● a simple, long shelf-life, product removing the need for frequent refills;

● a portable, compact, and easily stowed solution – making it easier for patients to carry Epinephrine wherever they go; and

● a needle-free solution easily administered by trained professionals and patients alike.

*Development status*

 

Our powder based intranasal Epinephrine is being developed for acute intervention in cases of severe allergy and anaphylactic shock. We are developing NS002 as a Section 505(b)(2) program. Our reference device is the EpiPen Autoinjector 0.3 mg (EpiPen, Mylan Specialty L.P., USA). Our pilot study was prepared by a proprietary spray drying and blending process using the final nasal inhaler that will be used in our commercial product. We have developed stable clinical trial material and performed a POC/pilot study for NS002 followed by a dose finding/safety Phase 2 study. We have completed a 2-year stability study for our clinical trial material proving complete stability of our powder that remained 100% pure without the characteristic enantiomeric conversion that usually develops in liquid-based Epinephrine formulation.

*Our pilot study (NP002)*

 

We conducted a pilot study of NS002 which we called NP002. Developing a successful intranasal product for anaphylaxis requires testing under conditions of nasal congestions to reflect the status of the nasal mucosa during an anaphylaxis. To that end, our NP002 pilot study included the testing of bioavailability of Epinephrine under "allergenic challenge"- the creation of severe acute allergic reaction in the nose by inserting ascending doses of allergens to the nose of the healthy volunteers with known allergic rhinitis included in the study.

NP002 was an open-label, single-dose, two-period, three-treatment and fixed-sequence clinical study that compared Epinephrine bioavailability in 12 adults (9 male and 3 female) with seasonal allergic rhinitis. All participants received all treatments. NS002 (1.6 mg and 3.2 mg Epinephrine) was administered intranasally to adults with and without a nasal allergenic challenge and compared to IM Epinephrine (0.3 mg) injection (EpiPen, Mylan Specialty L.P., USA). Epinephrine PKs were evaluated based on 21 plasma samples from each subject on each dosing day. Clinical and safety assessments were done at screening, on dosing days and at the end of the study visit. The study was performed between September 2020 and February 2021 at Hadassah Medical Center, Jerusalem, with Prof. Joseph Caraco, Director of the Hadassah Center for Clinical Research, Jerusalem as the principal investigator and Prof. Yuval Tal, Director of the Clinical Immunology and Allergy Unit, Hadassah Medical Center, Jerusalem as the allergy expert. The study was approved by the hospital's ethics committee, in accordance with GCP (NCT04696822 on clinicaltrials.gov.).

The following graphic provides an overview of our NP002 pilot study:

![](formdrsa_026.jpg)

The results showed that Epinephrine intranasal delivery of our NS002 followed the established characteristics of our platform technology, namely, there were significantly higher levels of the drug in the plasma in situation where immediate administration could be lifesaving. Specifically, time to plasma concertation of 100pg/ml is considered crucial since it is accepted that at this plasma level a clinical effect is starting. Our 3.2 mg dosage under allergenic challenge was three times shorter compared to IM EpiPen.

NS002 (3.2 mg) Epinephrine administered following an allergen challenge had the shortest median time to, the highest concentration of drug in the blood, or Cmax, and the shortest median time to reach the clinical plasma threshold of 100 pg/mL. Both results reached statistical significance compared to all other administrations. Mean Epinephrine total amount of drug absorbed 0-8 hours following administration of NS002 3.2 mg with and without an allergen challenge were similar but not significantly to higher than mean Epinephrine total amount of drug absorbed 0-8 hours for EpiPen in all other administrations. Analysis showed that NS002 was well tolerated at both concentrations and most treatment-emergent adverse events, or AEs, were mild and resolved spontaneously. Intranasal absorption of Epinephrine was faster compared to that with EpiPen, offering a clinical advantage in the short therapeutic window for the treatment of anaphylaxis while total Epinephrine exposure was comparable. The below graphic depicts the PK results of our pilot study, which was aimed to test the safety of NS002 and evaluate the PK versus the reference product:

![](image_014.jpg)

*Figure 7: NS002 PK results vs EpiPen, first 30 minutes*

![](formdrsa_027.jpg)

None of the studies of NS002 were powered for statistical significance. In trials not powered for statistical significance, there is a high chance that observed effects may not be real due to small sample size. We have published the detailed results of our pilot study in a prestigious scientific journal, the Journal of Allergy and Clinical Immunology, in June 2023.

One of the common impurities that develop in Epinephrine products is the formation of enantiomers. Normally, molecules are found in nature as mirror images of both versions, those being a plus (+) and a minus (-) version. In the case of Epinephrine, only the minus (-) enantiomer is active and the development of a plus enantiomer (+) reflects loss of activity of the product. The FDA requires that no more than 1.5% of the Epinephrine molecules will be in the inactive form (+). We have tested EpiPen injectors (both for adults and for children) for the presence of enantiomers before their expiration date. We found high levels of the plus enantiomer in both products. Further, in the Junior EpiPen, levels were out of specifications, meaning a loss of activity beyond FDA limits, despite the injectors being within their labeled shelf life. These results were compared to our Epinephrine powder device, where 100% of the Epinephrine remained in the active (-) form, with no detectable levels of the inactive enantiomers. The following graphic depicts our PBI products in terms of long-term stability:

![](formdrsa_028.jpg)

*Figure 8: Enantiomeric Stability Nasus vs. EpiPen and EpiPen Junior*

No less important are the pharmacodynamic results which point to the potential biological activity of the absorbed Epinephrine compared to the injected reference product.

The two main pharmacodynamics, or PD, and safety parameters reflect the biological effect of Epinephrine: systolic blood pressure and heart rate. These two hemodynamic parameters are the mainstay of the Epinephrine activity in the body and potentially safety indicators. As can be seen there is no significant difference in the effect of Epinephrine on blood pressure and heart rate and more importantly (as will be discussed in the competitor analysis) the PD characteristics of our Intranasal Epinephrine follow the same trend of the IM reference EpiPen. The following graphics depicts the changes in heart rate and blood pressure following administration of either intranasal doses (3.6 mg and 4 mg) compared in IM injection (EpiPen). As can be seen the pharmacodynamic changes follow closely the pattern of EpiPen and all changes from base line still remain within normal limits.

![](formdrsa_0029.jpg)

*Figure 9: PD parameters systolic BP and HR from Pilot Study* 

*Our Phase 2 dose-finding/safety study - NP006*

The Phase 2 portion of our NS002 study, or NP006, aimed at defining the final clinical dose to be used in our powder Epinephrine product. The NP006 study compared the bioavailability of Epinephrine following a single nasal dose of NS002 Microspheres Epinephrine powder either 3.6 mg, or 4 mg with EpiPen 0.3 mg IM injection in healthy adult volunteers.

NP006 was an open-label, single-dose, three-treatment, randomized, three-sequence, comparative bioavailability study. Twelve healthy volunteers were randomized to receive intranasal 3.6 mg, 4.0 mg and Epinephrine IM 0.3 mg at weekly intervals. Epinephrine PKs were evaluated based on 13 plasma samples of the first two hours after administration from each subject on each dosing day. Clinical and safety assessments were done at screening, on dosing days and at the end of the study visit. The study was performed at Hadassah Medical Center, Jerusalem, and approved by the hospital ethics committee, in accordance with GCP.

The following graphic provides an overview of the Phase 2 portion of our NS002 study:

![](formdrsa_030.jpg)

The PK results of our Phase 2 study are in line with the known attributes of our nasal powder technology—namely: immediate absorption of Epinephrine and reaching higher peak plasma Epinephrine levels quicker compared to IM Epinephrine injections. No less significant are the pharmacodynamic results that are fully comparable to those of our reference product—IM Epinephrine —reflecting the actual effect of Epinephrine in the body.

It is well established that the therapeutic window in anaphylactic shock is very short and ranges between a few minutes up to 25 minutes. The immediate creation of clinically significant levels of Epinephrine in the plasma could well mean saving lives. In this context the results of our Phase 2 study, these results potentially indicate the advantages of our nasal powder Epinephrine over IM injection as well as other competing technologies below. Further clinical testing will need to be performed to confirm these results.

In that context it is worth noting the following: the levels of Epinephrine in the plasma after 3.6 mg and 4 mg in the first 4, 10, 20 and 30 minutes was consistently higher compared to those after IM Epinephrine administration. Although the Phase 2 study was not powered for statistical significance, the result of the study indicated a very strong and robust effect of NS002 compared to EpiPen, resulting in reaching statistical significance after four minutes. However, in trials not powered for statistical significance, there is a high chance that observed effects may not be real due to small sample size. The following graphic depicts the area under the curve, or AUC, of Epinephrine concentration in the plasma in the first 30 minutes after administration showing higher amounts of Epinephrine in the plasma after intranasal administration of either 3.6 mg and 4 mg Epinephrine compared to IM injection.

The graph below depicts the Epinephrine plasma concentration over the first 30 minutes.

![](image_016.jpg)

*Figure 10: AUC after dosing Phase 2 study*

Additional significant results observed in the NP006 study were:

● The time to reach a clinical threshold level in the plasma (T100pg) was about a third compared to IM injections (3.6 minutes compared to 9 minutes or 0.15h compared to 0.067h)

● 91% of patients receiving NS002 4mg achieved the clinical threshold level in the plasma of 100 pg/ml compared to 55% of patients receiving EpiPen. The time until maximum amounts of Epinephrine were absorbed (T max) was shorter after nasal administration (10 minutes or 0.17h compared to 14.6 minutes or 0.245 h)

● The total amount of Epinephrine absorbed was higher compared to IM administration (477pg/ml vs 360pg/ml)

![](formdrsa_031.jpg)

Figure 11: Comparison of plasma levels: 4 mg intranasal, 3.6 mg intranasal and EpiPen 0.3 mg IM

The following graphic depicts that in additional PK parameters, NS002 was better compared to IM injection: the time to maximum concentration of Epinephrine in the blood, or T max, and the time to the clinical threshold (T100pg) was shorter and the Cmax (maximum concentration) was higher.

![](formdrsa_032.jpg)

*Figure 12: PK results Phase 2 study*

In our Phase 2 Study, we further evaluated the biological effect of Epinephrine on systolic blood pressure, heart rate, and respiration rate. The following graphic depicts the changes in heart rate, blood pressure, and respiration rate following administration of either intranasal doses (3.6 mg and 4 mg) compared in IM injection (EpiPen). As can be seen, the pharmacodynamic changes follow closely the pattern of EpiPen and all changes from base line still remain within normal limits.

![](formdrsa_034.jpg)

Figure 13: PD parameters systolic BP, diastolic BP, HR, and RR from Phase 2 Study

 

In our studies of NS002, the primary objective was to evaluate the comparative bioavailability of NS002 against the reference product, EpiPen, and the secondary objective was to evaluate the safety and tolerability of NS002. None of the studies of NS002 were powered for statistical significance, but a statistically significant difference was found nonetheless. The result of the study indicated a very strong and robust effect of NS002 compared to EpiPen, resulting in reaching statistical significance. However, in trials not powered for statistical significance, there is a high chance that observed effects may not be real due to small sample size. Specifically, the NP002 study showed comparable or superior PK profile especially during the first 30 minutes in a simulation of the real-life nasal congestion that occurs in severe allergic reactions, while the NP006 study indicated that 4mg of NS002 is absorbed faster and achieves the clinical threshold faster than the reference product. There were no significant adverse events and NS002 was tolerated at both concentrations tested whether it was with or without an allergen test. No unexpected safety signals were observed in the NP002 studies we performed.

*Our Stability Study*

The Epinephrine powder for our stability study of NS002 was manufactured at the Formulex Pharma Innovation facility in Nes Ziona, Israel, and filled into disposable UDSs. The drug-device product FMXIN002 (NS002) was analyzed to control the powder particle size, drug content, shot weight, purity, uniformity, microbial cleanliness and stability, based on the International Council for Harmonisation Guidance for Industry Q1A (R2) Stability Testing of New Drug Substances and Products dated November 2003. Each FMXIN002 was packed in a sealed protective pouch and contained 3.6 mg or 4.0 mg Epinephrine. The clinical batch was successfully produced in compliance with cGMP. The stability of FMXIN002 was evaluated at various storage conditions for 5 years at 20±5°C conditions without humidity control, 2 years at 20±5°C at 40% relative humidity, or RH and 6 months at accelerated conditions 40°C at 75% RH. ICH.

FMXIN002 was found highly stable at all tested conditions: 5 years at 20±5°C conditions (stored without humidity control), 2 years at 20±5°C at 40% RH, and 6 months at accelerated conditions (40°C at 75% relative humidity).

We have published the detailed results of our Phase 2 and stability studies in the Journal of Allergy and Clinical Immunology in June 2025.

**Intranasal Naloxone (NS001)**

We believe that our Naloxone has the answer to the issues of slower and lower absorption of Naloxone in currently approved products during medical emergencies that necessitate immediate drug administration. It is able to create significantly higher plasma levels of Naloxone in the blood starting from first minutes and up to one hour against the 4 mg Narcan.

As explained above, our powder technology enjoys an inherent advantage over liquid nasal products based on larger absorption area achieved by powder and a rapid and repeatable absorption based on the uniform spherical powder particles of our proprietary formulation.

We currently intend to focus our development and regulatory approval efforts on our Intranasal Epinephrine and other preclinical programs, and plan to pursue partnering opportunities for further development of NS001.

***Development status of NS001 – Powder Naloxone program.***

We have paused our development of NS001. We currently plan to pursue partnering opportunities for further development of NS001. Future development under partnership, if any, would include (1) a stability study with reliability study, (2) a usability study and (3) a short two-week preclinical safety study in rats to study the effects of the products in histology of the product.

NS001 was being developed under a Section 505(b)(2) application under the FFDCA as an approved molecule and a similar delivery route. The reference device is Narcan. The following are the steps that need to be completed in order to submit an NDA dossier for marketing approval.

● Successful scale up of manufacturing and manufacturing of three commercial batches;

● Filling up the devices; and

● Starting a stability study.

A pilot study and a pivotal clinical study of NS001, NP001 and NPNAL004, were performed in 14 and 42 healthy volunteers, respectively, according to a similar protocol. The primary objective in both studies was to evaluate the comparative bioavailability of naloxone between NS001 (FMXIN001) Naloxone Microspheres Powder 4 mg for Nasal Application (Nasus Pharma, Israel) and Narcan® (naloxone HCl) nasal spray 4 mg (Adapt Pharma, Inc., USA) after a single dose in healthy subjects under fasting conditions. The secondary objective was to evaluate the safety and tolerability of the study treatments (NCT04713709). The pilot study results were submitted to the FDA in support of the progression to the pivotal study. The results of the pilot study showed our technology having a significantly faster absorption rate in the immediate critical period after administration and that it was well tolerated:

● The partial AUC0-4 minutes was approximately 7-fold higher;

● The partial AUC0-10 minutes was approximately 4-fold higher;

● The partial AUC10-30 minutes was approximately 1.6-fold higher;

● The total systemic exposure was approximately 1.26-fold higher;

● The peak systemic exposure was approximately 1.6-fold higher; and

● The median Tmax occurred approximately 5 minutes earlier.

The following graphic depicts the levels of Naloxone in the blood after administration of either our NS001 Intranasal Naloxone or Narcan. Our NS001 creates higher levels of Naloxone in the blood as well as creates higher levels in the first few minutes – the important therapeutic window.

*Figure 14: NSOO1 (FMXIN001) pilot study PK profile compared to Narcan*

The pivotal study comprised of 42 healthy volunteers and consistently showed the same characteristics: significant advantage in the first 30 minutes after administration. We have successfully completed a majority of the development plan, including Phase 3, and will need to establish a full stability study before submitting to FDA. If our management so decides, based on market conditions, demand for the product candidate and our ability to obtain appropriate financing, we believe we will be able to complete the program within the next 24 months. The following graphic depicts the results of the pivotal study of NS001 versus Narcan.

*Table 1: Results of pivotal study NS001 (FMXIN001) vs Narcan*

![](formdrsa_021.jpg)

![](formdrsa_022.jpg)

*Figure 15: NS001 Pivotal study results*

![](formdrsa_023.jpg)

*Figure 16: NS001 vs Narcan Pivotal study- significant higher absorption*

Both NS001 and Narcan were well tolerated by the volunteers in the study. The incidence of mild side effects that resolved spontaneously before the study ended (within a few hours) was similar between the study treatments. The most common side effect was nasal congestion. No serious side effects were found, and all volunteers completed the study.

In our studies of NS001, NP001 and NPNAL004, the primary objective was to evaluate the comparative bioavailability of NS001 against the reference product, Narcan, and the secondary objective was to evaluate the safety and tolerability of NS001. Only the NPNAL004 study of NS001 was powered for statistical significance, but a statistically significant difference was found in both studies. Specifically, 14 subjects were enrolled into this study (NP001). The sample size chosen for this study was not based on any formal calculation or published literature but was considered to be adequate for this explorative PK bioequivalence study. The study was not expected to demonstrate statistical power, or the means to learn the statistical significance, but to provide preliminary assessment of the PK and safety profiles for Naloxone. Nonetheless, the result of the study indicated a very strong and robust effect of NS001 compared to Narcan, resulting in reaching statistical significance. Overall, the results were specifically significant in that 4mg of NS001 displayed greater peak and total systemic exposure, with earlier onset of action when compared to the reference product after a single dose in healthy subjects with allergic rhinitis. In NPNAL004, the results were statistically significant in the working assumption that the NS001 drug delivery system is either comparable or superior to the reference product while maintaining the effectiveness of the treatment. However, in trials not powered for statistical significance, there is a high chance that observed effects may not be accurate due to small sample size. There were no significant adverse events in these studies.

We believe that our powder intranasal technology showed consistent advantage, including quicker and higher absorption, over the current market leader in intranasal Naloxone. This advantage is highly meaningful clinically since it creates higher plasma levels of the antidote in the most critical first few minutes of overdose rescue. We have published our results in a highly respected journal in an article titled "A Novel Faster-Acting, Dry Powered-Based, Naloxone, Intranasal Formulation for Opioid Overdose," published in Pharmacy Res in 2022, providing a scientific overview of our NS001 product. NS001 was named as having a high (4.2) impact factor.

**Our Strengths**

We are developing a unique intranasal powder technology that has been tested in multiple clinical studies as well as in preclinical work in multiple molecules. This technology enables quick and efficient absorption of the drug through the nasal cavity, making it especially suitable for the treatment of medical emergencies. Using a nasal inhaler for immediate rescue of a patient is simple and does not require waiting for medical professionals to reach the patient. Our PBI technology has been scaled up for commercial uses and passed successfully both the tech transfer and the commercial scaleup.

Our leadership and executives are highly experienced biotech executives that have accumulated precious experience with regards to our technology as well as relevant industry experience. Further, we maintain a strong IP position with multiple patents already approved and many others in different stages of examination worldwide. We have developed a strong strategy covering further development and product commercialization.

**Our Commercialization Strategy**

Our strategic objective is to develop and commercialize our PBI products.

We intend to further advance our breakthrough technologies and commercialization efforts. To achieve these objectives, we plan to:

● *Seek partnerships to accelerate and maximize the potential for our advanced programs.* As we continue to generate data, we will seek partnering opportunities with pharmaceutical companies that have established development and sales and marketing capabilities to potentially enhance and accelerate the development and commercialization of our products.

● *Seek partnerships to potentially commercialize our products.* We plan to pursue partnering opportunities for NS001. We plan to focus our development efforts on our other programs, NS002 and additional pipeline programs for different indications.

● *Explore regulatory approval of our products outside the United States*. We are working on getting scientific advice from several European countries to advance our products approval in the EU.

● Use our platform technology and accumulated knowledge and experience to further develop additional pipeline programs for different indications than anaphylaxis and opioid overdose.

**Competition**

***Competitors and Market for NS001***

Since Emergent BioSolutions Inc.'s acquisition of Narcan in 2017, its sales of Narcan consistently beat the market expectation as well as the company's own estimation. The intranasal Naloxone Narcan sales since first launched showed a CAGR above 23%:

*Table 2: Narcan sales 2018 – 2021 (U.S. dollars in millions)*

---

| | |
|:---|:---|
| **Year** | **Sales** |
| 2018 | 41 |
| 2019 | 280 |
| 2020 | 373 |
| 2021 | 434 |
| 2022 | 374 |
| 2023 | 488 |
| 2024 | Reached 119 in first quarter |

---

At the end of 2021, several new players entered the market. Teva and Sandoz Inc. recently won an intellectual property legal battle against Emergent, the sole manufacturer of Narcan in the last 4 years. Given this, they are allowed to distribute authorized generics of Narcan at a price around $40-80 compared to the $130-140 market price for Narcan.

Notably, however, according to a market study by Vantage Market Research in 2022 entitled "Naloxone Spray Market," intranasal Naloxone is gradually replacing the $2 billion injectable Naloxone market, and therefore, the whole market is estimated to reach $785 million in 2025 at a CAGR of 22.3%.

In April 2024, the FDA approved Summit Biosciences Inc.'s Rozeopy, which is a 10 mg nasal solution for emergency treatment of known or suspected opioid overdose, as manifested by respiratory and/or central nervous system depression in adult and pediatric patients. Another recent entrant to the market is Hikma Pharmaceuticals, with its product, Kloxxado. This product recently received emergency use authorization from the FDA for an 8 mg liquid nasal spray, compared to 4 mg of Narcan. Our NS001 creates high plasma levels in the first minutes after administration, the critical therapeutic window in our clinical studies performed thus far, which have had small patient sample sizes.

***Competitors and Market for NS002***

Currently, there are no approved PBI Epinephrine products in the market. Based on an article titled Anaphylaxis – StatPearls published in the National Library of Medicine, the estimated prevalence of anaphylaxis among the global population is approximately between 1% and 3%. According to market research by Fortune Business Insights, the global Epinephrine market size was valued at $2.3 billion in 2024 and is projected to grow to $4.4 billion by 2032. Most of the growth is attributed to growth of the autoinjector sections and anaphylaxis. Based on the Cantor Fitzgerald Research and Raymond James Research, in 2024, the revenues in the global Epinephrine market increased by more than 12.7% year-over-year in 2023 at a CAGR of 6.5% from 2010 to 2023, mainly as a result of sales growth of Epinephrine. There are a number of companies working on alternative administration routes and formulas of Epinephrine.

Epinephrine IM injections are currently considered the standard of care for severe allergic reaction and anaphylactic shock. We believe our PBI technology is superior to the reference product used in our studies, EpiPen, because it had a higher nasal absorption rate in head-to-head studies (albeit in small patient populations) due to the physical properties of powder particles versus solution particles. Absorption area of powder in the nose is larger and, therefore, the initial absorption rate is quicker and higher. At this time there are a number of programs in development aiming to find an alternative to injections. Two programs are developing intranasal liquid-based Epinephrine —ARS Pharmaceuticals, Inc. (whose product, Neffy, was recently approved by the FDA) and Bryn Pharma. There is another program that is developing PBI Epinephrine (Orexo). Another program that is competing in this field is Aquestive Therapeutics Inc., which is developing a sublingual film of Epinephrine.

*PK Data of Competing Products* 

 

These PK parameters provide insight into the absorption characteristics of each product. We believe it is important to interpret the results of clinical studies in the context of the Intranasal Epinephrine market. Although there has not been a head-to-head study comparing the four product candidates, the four studies presented below were conducted to explore the PK of Epinephrine to support FDA approval of the product candidates and included similar study designs, patient populations, study endpoints and follow-up periods in compliances with FDA standard requirement for 505(b)(2) approval.

<u>ARS</u>

According to the FDA Briefing Document NDA/BLA# 214697 prepared for the Drug Advisory Committee meeting in May 2023, which preceded Neffy's approval, ARS's intranasal Epinephrine product demonstrated a Cmax of 341 pg/ml, with a median time to reach Cmax (Tmax) of 30 minutes. The early exposure profile showed an AUC of 712 h/pg/ml over the first 10 minutes, increasing to 4,901 h/pg/ml over 30 minutes. The median and mean times to reach a plasma concentration of 100 pg/ml (T100 pg/ml) were 10 and 21 minutes, respectively. At 5 minutes, 15% of subjects had reached this concentration, increasing to 60% at 10 minutes and 83% at 30 minutes.

<u>Bryn Pharma</u>

Based on a study published by David A. Dworaczyk et al in the Journal of Allergy and Clinical Immunology (JACI) in December 2023 entitled "A 13.2 mg Intranasal Epinephrine Spray Demonstrates Comparable Pharmacokinetics, Pharmacodynamics, and Safety to 0.3 mg Epinephrine Autoinjector," Bryn Pharma's intranasal Epinephrine product achieved a Cmax of 429 pg/ml, with a Tmax of 20 minutes. The AUC over the first 10 minutes was 1,130 h/pg/ml, and over 30 minutes, it reached 6,789 h/pg/ml. While the median and mean T100 pg/ml values were not reported, the percentage of subjects reaching a plasma concentration of 100 pg/ml was 17% at 5 minutes and 60% at 10 minutes.

<u>Orexo</u>

According to publicly available patent filings (U.S. Patent No. 11,957,647 and related patents), Orexo's intranasal Epinephrine formulation exhibited a Cmax of 377 pg/ml, with a Tmax of 25 minutes. The early exposure profile showed an AUC of 912 h/pg/ml over the first 10 minutes and 5,796 h/pg/ml over the first 30 minutes. The mean time to reach a plasma concentration of 100 pg/ml was reported as 5 minutes.

<u>Aquestive</u>

 ****

As reported in a Cantor research report from December 2024, Aquestive's intranasal Epinephrine product demonstrated a Cmax of 497 pg/ml, with a Tmax of 15 minutes. The early exposure AUC was 1,074 h/pg/ml over the first 10 minutes and 6,900 h/pg/ml over the first 30 minutes. The mean time to reach a plasma concentration of 100 pg/ml was 10 minutes. At 10 minutes, 82% of subjects had reached this concentration, increasing to 91% at 15 minutes.

**Legacy Product**

Our legacy product, Taffix, an innovative personal powder nasal spray which is used to block viruses within the nasal cavity, has been discontinued in order for us to focus on our current products and activities. We started the wind-down of operations with respect to Taffix in December 2021, and ceased all operations by end of 2022.

**Intellectual Property**

We seek patent protection as well as other effective intellectual property rights for our products and technologies in the United States and internationally. Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business.

Our intranasal powder-based Naloxone technology is covered by a granted U.S. patent, US 11,202,757 B2, with a priority date of December 1, 2020.

Our current intellectual property portfolio consists of two patent families. Patents of the first family relate to dry powder formulations for intranasal delivery, and cover our basic powder formulation for intranasal administration of APIs. In this family we have four granted patents in the U.S. (one of which is specifically covering Naloxone), one granted patent in India, one granted patent in Japan and one granted patent in Israel. We have pending applications under examination in Europe by the European Patent Office, or EPO, Australia, Canada and China.

The second family of patents relates to dry powder formulations for intranasal delivery of Epinephrine. In this family we have one granted patent in the U.S., and pending applications in the U.S., Argentina, Taiwan, Australia, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, New Zealand and South Korea.

The tables below provide certain information regarding our intellectual property portfolio, all of which we owned as of July 3, 2025.

*Dry powder compositions for intranasal delivery*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Country** | **Filed** | **Patent No./**<br> Publication No. | **Grant Date/**<br> Pub. Date | **Status** | **Expiration Date<sup>(2)</sup>** |
| USA | 8/20/2017 |  |  | Term Ended |  |
| PCT<sup>(1)</sup> | 8/19/2018 | WO<br> 2019/038756 A1 |  | National Phase entered | 8/19/2038 |
| Australia | 8/19/2018 |  |  | Grant Fee Paid | 8/19/2038 |
| Canada | 8/19/2018 |  |  | Office Action due: 10/22/2024 | 8/19/2038 |
| China | 8/19/2018 | CN 110996912 A | 4/10/2020 | Examination in progress | 8/19/2038 |
| EPO | 8/19/2018 | 3668490 | 6/24/2020 | Examination requested | 8/19/2038 |
| India | 8/19/2018 | 416927 | 1/05/2023 | Proof of Use due: 9/30/ 2024 | 8/19/2038 |
| Israel | 8/19/2018 | 272220 | 4/02/2024 | Granted | 8/19/2038 |
| Japan | 8/19/2018 | 7334145 | 8/18/2023 | Granted | 8/19/2038 |
| USA | 8/19/2018 | 11331270 | 5/17/2022 | Granted | 8/19/2038 |
| USA | 11/19/2020 | 11844859 | 12/19/2023 | Granted Specific to opioid receptor antagonists (Naloxone etc.) | 8/19/2038 |
| USA | 8/19/2018 | 11202757 | 12/21/2021 | Granted | 8/19/2038 |
| USA | 8/19/2018 | 11116723 | 9/14/2021 | Granted | 8/19/2038 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Patent
 Cooperation Treaty, or PCT.

(2) Expiration
 dates for pending patents or PCT applications are estimated.

*Treatment with powdered intranasal Epinephrine*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Country** | **Filed** | **Patent No./** Publication No. | Grant Date/ Publication Date | Status | **Expiration Date<sup>(1)</sup>** |
| USA | 3/16/2020 |  |  | Term Ended |  |
| USA | 12/28/2020 | 11400045 | 8/02/2022 | Granted | 12/28/2040 |
| Argentina | 3/16/2021 | AR121593 A1 | 6/22/2022 | Examination requested | 12/28/2040 |
| PCT | 3/16/2021 | WO 2021/186437 | 9/23/2021 | National Phase entered | 12/28/2040 |
| Australia | 3/16/2021 |  |  | Request for Exam: 11/16/2026 | 12/28/2040 |
| Brazil | 3/16/2021 |  |  | Examination requested | 12/28/2040 |
| Canada | 3/16/2021 |  |  | Request for Exam: Mar 16, 2025 | 12/28/2040 |
| China | 3/16/2021 | CN 115279340 A | 11/01/2022 | Examination in progress | 12/28/2040 |
| EPO | 3/16/2021 | 4121005 | 1/25/2023 | Examination in progress | 12/28/2040 |
| India | 3/16/2021 |  |  | Examination requested | 12/28/2040 |
| Israel | 3/16/2021 |  |  | Awaiting Examination | 12/28/2040 |
| Japan | 3/16/2021 |  |  | Examination requested | 12/28/2040 |
| Mexico | 3/16/2021 | MX/a/2022/011 464 | 12/13/2022 | National Phase entered | 12/28/2040 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Expiration
 dates for pending patents or PCT applications are estimated.

*Sustained-release intranasal pharmaceutical composition*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Country** | **Filed** | **Patent No./**<br> Publication No. | **Grant Date/**<br> **Pub. Date** | **Status** | **Expiration Date** |
| US Provisional | 4/15/2024 |  |  | Examination in progress | 04/15/2045 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Expiration
 dates for pending patents or PCT applications are estimated.

We also rely on trade secrets, know-how, and continuing innovation to develop and maintain our competitive position. We cannot be certain that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents granted to us in the future will be commercially useful in protecting our technology.

Our success depends, in part, on an intellectual property portfolio that supports future revenue streams and erects barriers to our competitors. We are maintaining and building our patent portfolio through filing new patent applications, prosecuting existing applications, and licensing and acquiring new patents and patent applications.

Despite these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated. Intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive one (see "*Risk Factors—Risks Related to our Intellectual Property*").

**License Agreements**

See "*Related Party Transactions—Formulex License Agreement*" for information regarding our license agreement.

**Production and Manufacturing**

Based on prior work already completed for our Naloxone product, we identified and were successful in building a manufacturing process through FDA and EMA approved vendors in Europe and the U.S. We have succeeded in scaling up the manufacturing process for commercial quantities as well as collaborating with a filling and packaging FDA approved vendor for adaptation of a specific filling line to our specific needs. We expect to utilize our prior experience in successfully building a manufacturing process for our other product candidates.

**Research and Development**

As described herein, we are developing NS002 Intranasal Epinephrine to treat anaphylactic shock and severe allergic reaction. NS002 is being developed under a Section 505(b)(2) application under the FFDCA Act as an approved molecule and a new delivery route. The reference device is EpiPen autoinjector. The following are the steps, based on discussions with the FDA, that need to be completed in order to submit our NDA dossier for marketing approval, all of which is subject to consummation of this offering and us obtaining sufficient funding:

● Scaling up of powder production to commercial size batches. We initiated the tech transfer to a third-party manufacturer for commercial size production in the first quarter of 2025 and expect its completion in the third quarter of 2025.

● Pre-clinical studies, or short two-week animal safety studies in two animal species. These studies will entail giving several doses of Intranasal Epinephrine to the animals and later estimating via histology if there is potential damage to the relevant tissues such as the nose, pharynx or lungs.

● The effect of two concurrent doses and the effect of prior dose on the absorption of the next dose, or the Carry-Over Effect study (Phase 2). We intend to perform two additional Phase 2 studies of NS002. The first will be aimed at determining whether, if necessary, during a real-life anaphylaxis a second dose of NS002 should be administered in the same nostril as the one used for the first administration or whether it should be in the other nostril as it is important to learn which method of administration is more effective and safer for use in case a second dose is deemed necessary. The second Phase 2 study will test the "carry-over effect," or whether the first dose of Epinephrine changes the absorption of Epinephrine of a following dose. In other words, this study will test how efficiently the absorption was after a first dose was already administered. The primary objective will be to make sure that Intranasal Epinephrine did not lower the absorption of a second dose. These studies have been agreed upon with the FDA as required studies for submission. We intend to initiate the additional Phase 2 studies of NS002 in the fourth quarter of 2025.

● IND submission is planned for the third quarter of 2026 following the successful completion of the additional Phase 2 studies.

● Completion of our Phase 3 study, or pivotal clinical study, prior to submission to the FDA for marketing approval, subject to the successful completion of the additional Phase 2 studies. The study will be conducted in healthy volunteers where NS002 or EpiPen will be administered by health care professionals. The study will also include a subsection of self-administration by the subjects to collect information on self-use. This requirement of the study for submission has also been agreed upon with the FDA as a required study for submission. We intend to initiate the study by the third quarter of 2026.

● Pediatric study, the details of which will be agreed upon with the FDA as we progress with the program. We intend to initiate the study by the fourth quarter of 2026.

● Stability testing that will test the product under various temperature and humidity points.

● Reliability testing, which is a subset of the stability study that tests the products administration device in several potential conditions.

● Usability study, which tests how user friendly the device is.

Based on prior work already completed for our Intranasal Naloxone product, we identified and were successful in building a manufacturing process through FDA and EMA approved vendors in Europe and the U.S. We have succeeded in scaling up the manufacturing process for commercial quantities as well as collaborating with a filling and packaging FDA approved vendor for adaptation of a specific filling line to our specific needs. We intend to submit our NDA dossier for marketing approval of NS002 by the second quarter of 2027.

We have paused our development of NS001 Intranasal Naloxone to treat opioid overdose. We currently plan to pursue partnering opportunities for further development of NS001. Future development under partnership, if any, would include (1) a stability study with reliability study, (2) a usability study and (3) a short two-week preclinical safety study in rats to study the effects of the products in histology of the product. NS001 was being developed under a Section 505(b)(2) application under the FFDCA, which allows the applicant to rely in part on previous studies conducted by unrelated parties, such as another drug manufacturer and virtually any source including published literature, for marketing approval by the FDA in the United States, as an approved molecule and a similar delivery route. The reference device is Narcan. The following are the steps that need to be completed in order to submit an NDA dossier for marketing approval:

● Successful scale up of manufacturing and manufacturing of three commercial batches;

● Pre-clinical study, or short two-week animal safety studies in one animal species (we have already completed one such study in a second animal species). This study will entail giving several doses of Intranasal Naloxone to the animals and later estimating via histology if there is a potential damage to the relevant tissues such as the nose, pharynx or lungs;

● Filling up the devices; and

● Starting a stability study.

To perform the above steps, three batches of NS001 will need to be manufactured in quantities that are equivalent to the quantities that will be needed for commercial use in the future (i.e. commercial batches) and fill the nasal inhalers with the powder. NS001 will then need to be tested at various temperature (room temperature or accelerated conditions) and humidity points (40% and 75%) to determine whether they continue to function in terms of the characteristics of the powder emitted and quality and activity of the molecules. The room temperature program is a two-year program, during which devices are tested every three months in the first year and later twice a year until the 24<sup>th</sup> month. The accelerated program is for six months only.

Future development under a partnership would require completion of the following studies after we receive FDA input on our suggested protocols:

● Reliability study, which is a subset of the stability study that tests the products administration device in several potential conditions;

● Usability study, which tests how use-friendly the device is; and

● A short preclinical study in rats that will involve a one-time administration of NS001 to animals and follow up at different time points up to two weeks to study the histology.

We do not currently intend to submit an NDA for NS001 to the FDA for marketing approval. If we submit an NDA for NS001 in the future under a partnership or otherwise, our submission may not lead to a faster development or review process compared to traditional approval pathways and does not increase the likelihood that NS001 will receive regulatory approval in the United States or the European Union. For further information, see "*Risk Factors—Our product candidates are in different stages of clinical development. Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes. If clinical trials of our product candidates are prolonged, delayed or not commercially viable, we or our collaborators may be unable to obtain required regulatory approvals, and therefore may be unable to commercialize our product candidates on a timely basis or at all, which will adversely affect our business*" and "*Risk Factors—Our development and regulatory strategy for our product candidates depends in part on published scientific literature and the FDA's prior findings regarding the safety and efficacy of approved product candidates. If the FDA does not conclude that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for our product candidates under Section 505(b)(2) are not as we expect, the approval pathway would likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated and in either case may not be successful*."

In January 2022, we entered into a non-recurring research and development arrangement with a governmental body. As part of the arrangement, we performed certain research and development activities in connection with NS001. We no longer provide services under this arrangement and do not have any future obligations or other contractual commitment to repay the amounts received or otherwise under this arrangement in the future, and intellectual property and know-how, if any, resulted from the performance of such research and development activities will remain with the Company. Additionally, we do not provide research and development services as part of our central operations. For further information, see "*Management's Discussion and Analysis of Financial Condition and Results of Operations—Research and Development Expenses*."

In addition to our two main products, Intranasal Epinephrine and Intranasal Naloxone, we are exploring other potential indications for which our PBI technology may be applicable, including:

● NS005: An Intranasal Midazolam powder nasal spray for the treatment of acute seizures;

● NS004: An Intranasal Atropine; and

● NS003: An Intranasal Ondansetron powder nasal spray for the treatment of intractable vomiting.

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We have conducted feasibility studies to evaluate the potential of developing nasal powder formulations for ondansetron, atropine, and midazolam. These studies included small-scale manufacturing, analytical method development, and, in the case of atropine, preclinical PK evaluations in animals. The results of these studies are summarized below.

***NS003: Intranasal Ondansetron***

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A lab-scale proof-of-concept study demonstrated the feasibility of producing ondansetron hydrochloride as a nasal powder formulation. Small-scale manufacturing yielded a white, flowable powder with no aggregation issues, and an appropriate analytical method was developed to characterize the formulation. The total yield was 77.8%, with an assay result of 352 mg/g of ondansetron hydrochloride. Based on these findings, the maximum dose of the active ingredient that can be incorporated into the device as a solo API is 20 mg.

***NS004: Intranasal Atropine***

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A lab-scale proof-of-concept study was conducted to evaluate the feasibility of developing a nasal powder formulation of atropine. Small-scale manufacturing produced a white, flowable powder without aggregation, and laser particle size distribution analysis confirmed two distinct populations: API with a mean particle size of 12 microns and lactose with a mean particle size of 100 microns. The total yield was above 80%, and an analytical method was developed.

To further assess the feasibility of intranasal atropine administration, an animal study was conducted in male Sprague Dawley (SD) rats. The study compared the PK profile of atropine following intranasal administration at doses of 3 mg and 9 mg (human-equivalent doses) to that of an IM dose equivalent to 1 mg of atropine in humans. The bioanalytical method used in the study was developed. The results demonstrated that intranasal administration of atropine is feasible and can serve as an alternative to IM injection. Furthermore, dose adjustments of the intranasal formulation can be performed to achieve the required blood concentration levels. Based on prior experience with similar drug formulations, it is estimated that a 20 mg dose of nasal atropine using our powder technology would be bioequivalent to a 2 mg IM injection. The formulation was observed to be well tolerated in the animal study, with no safety concerns observed.

***NS005: Intranasal Midazolam***

A specialized formulation is being developed for midazolam to enhance its water solubility while maintaining a pH suitable for nasal delivery. The formulation produced was a white, flowable powder with two distinct particle populations, as confirmed by laser diffraction analysis: API with a mean particle size of 10 microns and lactose with a mean particle size of 100 microns. An appropriate analytical method was developed, and the formulation demonstrated a yield of 62% with an assay result of 193 mg/g. Based on this feasibility study, the maximum dose of midazolam hydrochloride that can be incorporated into the device as a solo API is 10 mg.

These feasibility studies support the potential for developing intranasal powder formulations of Intranasal Ondansetron, Intranasal Atropine, and Intranasal Midazolam. Further development, including clinical evaluations, will be necessary to assess their safety and efficacy in humans.

**Government Regulation**

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the clinical development, manufacturing and marketing of pharmaceutical products. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, packaging, recordkeeping, tracking, approval, import, export, distribution, advertising and promotion of our products.

***U.S. Government Regulation of Drug Products***

In the United States, the FDA regulates drugs under the FFDCA and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA's refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before drug product candidates may be marketed in the United States generally involves the following:

● nonclinical laboratory and animal tests that must be conducted in accordance with GLPs;

● submission of an IND, which must become effective before clinical trials may begin;

● ethical approval of the clinical research by an independent institutional review board, or IRB, for each clinical site or centrally before each trial may be initiated;

● adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed product candidate for its intended use, performed in accordance with good clinical practices, or GCPs;

● submission to the FDA of an NDA and payment of user fees;

● satisfactory completion of an FDA advisory committee review, if applicable;

● satisfactory pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with cGMP and GCPs;

● manufacturing of the drug product in accordance with good manufacturing practices;

● satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

● FDA approval of an NDA to permit commercial marketing for particular indications for use; and

● compliance with any post-approval requirements, including the potential requirement to implement a REMS and the potential requirement to conduct post-approval studies.

The testing and approval process requires substantial time, effort and financial resources. Preclinical studies include laboratory evaluation of drug substance chemistry, pharmacology, toxicity and drug product formulation, as well as animal studies to assess potential safety and efficacy. Prior to commencing the first clinical trial in the U.S. with a product candidate, we must submit the results of the preclinical tests and preclinical literature, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical studies may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the conduct of the clinical trial or information in the IND, which may result in a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Submission of an IND does not result in FDA authorization to commence a clinical trial.

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements. A separate submission of the clinical protocol to the existing IND must be made for each successive clinical trial conducted during product development, as well as amendments to previously submitted clinical trials. Further, an independent IRB for each study site proposing to conduct the clinical trial must review and approve the plan for any clinical trial, its informed consent form and other communications to study subjects before the clinical trial commences at that site. The IRB must continue to oversee the clinical trial while it is being conducted, including any changes to the study plans.

Regulatory authorities, an IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk, the clinical trial is not being conducted in accordance with the FDA's or the IRB's requirements, if the drug has been associated with unexpected serious harm to subjects, or based on evolving business objectives or competitive climate. Some studies also include a data safety monitoring board, which receives special access to unblinded data during the clinical trial and may advise the study sponsor to halt the clinical trial if it determines that there is an unacceptable safety risk to subjects or other grounds, such as no demonstration of efficacy.

In general, for purposes of NDA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

● Phase 1—Studies are initially conducted to test the product candidate for safety, dosage tolerance, structure-activity relationships, mechanism of action, absorption, metabolism, distribution and excretion in healthy volunteers or subjects with the target disease or condition. If possible, Phase 1 clinical trials may also be used to gain an initial indication of product effectiveness.

● Phase 2—Controlled studies are conducted with groups of subjects with a specified disease or condition to provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule and expanded evidence of safety. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expansive Phase 3 clinical trials.

● Phase 3—These clinical trials are undertaken in larger subject populations to provide statistically significant evidence of clinical efficacy and to further test for safety in an expanded subject population at multiple clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. These clinical trials may be done globally to support global registrations so long as the global sites are also representative of the U.S. population and the conduct of the study at global sites comports with FDA regulations and guidance, such as compliance with GCPs.

The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so-called Phase 4 studies may be made a condition to be satisfied after approval. The results of Phase 4 studies can confirm the effectiveness of a product candidate and can provide important safety information.

Clinical trials must be conducted under the supervision of qualified investigators in accordance with GCP requirements, which includes the requirements that all research subjects provide their informed consent in writing for their participation in any clinical trial, and the review and approval of the study by an IRB. Investigators must also provide information to the clinical trial sponsors to allow the sponsors to make specified financial disclosures to the FDA. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the trial procedures, the parameters to be used in monitoring safety and the efficacy criteria to be evaluated and a statistical analysis plan. Information about some clinical trials, including a description of the trial and trial results, must be submitted within specific timeframes to the National Institutes of Health for public dissemination on their ClinicalTrials.gov website.

The manufacture of investigational drugs for the conduct of human clinical trials is subject to cGMP requirements. Investigational drugs and APIs imported into the United States are also subject to regulation by the FDA relating to their labeling and distribution. Further, the export of investigational drug products outside of the United States is subject to regulatory requirements of the receiving country as well as U.S. export requirements under the FFDCA. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and the IRB and more frequently if serious adverse effects occur.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product candidate as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

***Orange Book Listing***

In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA patents whose claims cover the applicant's product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book.

Any applicant who files a 505(b)(2) NDA referencing a drug listed in the Orange Book must certify to the FDA (1) that no patent information on the drug product that is the subject of the application has been submitted to the FDA; (2) that such patent has expired; (3) the date on which such patent expires; or (4) that such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. This last certification is known as a Paragraph IV certification. Generally, the 505(b)(2) NDA cannot be approved until all listed patents have expired, except where the 505(b)(2) NDA applicant challenges a listed patent through a Paragraph IV certification.

If the applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the holder of the NDA for the reference listed drug and the patent owner once the application has been accepted for filing by the FDA. The applicant may also elect to submit a "section viii" statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification prevents the FDA from approving the application until the earlier of 30 months from the date of the lawsuit, expiration of the patent, settlement of the lawsuit, a decision in the infringement case that is favorable to the applicant or such shorter or longer period as may be ordered by a court. This prohibition is generally referred to as the 30-month stay. In instances where a 505(b)(2) NDA applicant files a Paragraph IV certification, the NDA holder or patent owner regularly take action to trigger the 30-month stay, recognizing that the related patent litigation may take many months or years to resolve. Thus, approval of a 505(b)(2) NDA could be delayed for a significant period of time depending on the patent certification the applicant makes and the reference drug sponsor's decision to initiate patent litigation. To our knowledge, we will not need to challenge intellectual property rights via a Paragraph IV certification in connection with our 505(b)(2) NDA filing.

***Exclusivity***

The FDA provides periods of non-patent regulatory exclusivity, which provides the holder of an approved NDA limited protection from new competition in the marketplace for the innovation represented by its approved drug for a period of three or five years following the FDA's approval of the NDA. Five years of exclusivity are available to new chemical entities, or NCEs. An NCE is a drug that contains no active moiety that has been approved by the FDA in any other NDA. An active moiety is the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, including a salt with hydrogen or coordination bonds, or other noncovalent, or not involving the sharing of electron pairs between atoms, derivatives, such as a complex (*i.e.*, formed by the chemical interaction of two compounds), chelate (*i.e.*, a chemical compound), or clathrate (*i.e.*, a polymer framework that traps molecules), of the molecule, responsible for the therapeutic activity of the drug substance. During the exclusivity period, the FDA may not accept for review or approve an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) NDA submitted by another company that contains the previously approved active moiety. An ANDA or 505(b)(2) application, however, may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed.

If a product is not eligible for the NCE exclusivity, it may be eligible for three years of exclusivity. Three-year exclusivity is available to the holder of an NDA, including a 505(b)(2) NDA, if one or more new clinical trials, other than bioavailability or bioequivalence trials, was essential to the approval of the application and was conducted or sponsored by the applicant. This three-year exclusivity period protects against FDA approval of ANDAs and 505(b)(2) NDAs for the particular condition of the new drug's approval or the change to a marketed product, such as a new formulation for a previously approved drug. Five-year and three-year exclusivity will not delay the submission or approval of a 505(b)(1) NDA; however, an applicant submitting a 505(b)(1) NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and efficacy.

In addition, under the Generating Antibiotic Incentives Now Act, or GAIN Act, which was enacted as part of the Food and Drug Administration Safety and Innovation Act, or FDASIA, which was signed into law in July 2012, the FDA may designate a product as a Qualified Infectious Disease Product, or QIDP. In order to receive this designation, a drug must qualify as an antibiotic or antifungal drug for human use intended to treat serious or life-threatening infections, including those caused by either (1) an antibiotic or antifungal resistant pathogen, including novel or emerging infectious pathogens, or (2) a so-called "qualifying pathogen" found on a list of potentially dangerous, drug-resistant organisms to established and maintained by the FDA. A sponsor must request such designation before submitting a marketing application. Upon approving a marketing application for a QIDP-designated product, the FDA will extend by an additional five years any non-patent marketing exclusivity period awarded, such as a three-year exclusivity period awarded for new clinical investigations of previously approved products. This extension is in addition to any pediatric exclusivity extension awarded, and the extension will be awarded only to a drug first approved on or after the date of enactment of the GAIN Act. The GAIN Act prohibits the grant of an exclusivity extension where the application is a supplement to an application for which an extension is in effect or has expired, is a subsequent application for a specified change to an approved product, or is an application for a product that does not meet the definition of QIDP based on the uses for which it is ultimately approved.

***Hatch Waxman Amendments and the 505(b)(2) Regulatory Approval Process***

Section 505 of the FFDCA describes three types of marketing applications that may be submitted to the FDA to request marketing authorization for a new drug. A Section 505(b)(1) NDA is an application that contains full reports of investigations of safety and efficacy. A Section 505(b)(2) NDA is an application that contains full reports of investigations of safety and efficacy, but where at least some of the information required for approval comes from investigations that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted. This regulatory pathway enables the applicant to rely, in part, on the FDA's prior findings of safety and efficacy for an existing product, or published literature, in support of its application. Specifically, the applicant may rely upon the FDA's prior findings of safety and efficacy for an approved product that acts as the reference listed drug for purposes of a 505(b)(2) NDA. The FDA may also require 505(b)(2) applicants to perform additional studies or measurements to support any changes from the reference listed drug. The FDA may then approve the new product candidate for all or some of the labeled indications for which the referenced product has been approved, as well as for any new indication sought by the 505(b)(2) applicant. Lastly, the FDA permits marketing applications through Section 505(j), which establishes an abbreviated approval process for a generic version of approved drug products through the submission of an ANDA.

An ANDA provides for marketing of a generic drug product that has the same active ingredients, dosage form, strength, route of administration, labeling, performance characteristics and intended use, among other things, to a previously approved product. ANDAs are termed "abbreviated" because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and efficacy. Instead, generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing. The generic version must deliver the same amount of active ingredients into a subject's bloodstream in the same amount of time as the innovator drug and can often be substituted by pharmacists under prescriptions written for the reference listed drug.

***Special FDA Expedited Review and Approval Programs***

The FDA has various programs, including Fast Track Designation, breakthrough therapy designation, accelerated approval, and priority review, which are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

Under the fast-track program, the sponsor of a new drug candidate may request that FDA designate the drug candidate for a specific indication as a fast-track drug concurrent with, or after, the filing of the IND for the drug candidate. To be eligible for a Fast Track Designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need, or that the drug qualifies as a QIDP under the GAIN Act. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors. Fast Track Designation provides additional opportunities for interaction with the FDA's review team and may allow for rolling review of NDA components before the completed application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA. However, the FDA's time period goal for reviewing an application does not begin until the last section of the NDA is submitted. The FDA may decide to rescind the Fast Track Designation if it determines that the qualifying criteria no longer apply.

In addition, a sponsor can request breakthrough therapy designation for a drug if it is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs designated as breakthrough therapies are eligible for intensive guidance from the FDA on an efficient drug development program, organizational commitment to the development and review of the product including involvement of senior managers, and, like fast-track products, are also eligible for rolling review of the NDA. Both fast track and breakthrough therapy products are also eligible for accelerated approval and/or priority review, if relevant criteria are met.

Under the FDA's accelerated approval regulations, the FDA may approve a drug for a serious or life threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. A drug candidate approved on this basis is subject to rigorous post marketing compliance requirements, including the completion of Phase 4 or post approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post approval studies, or confirm a clinical benefit during post marketing studies, will allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated approval regulations are subject to prior review by the FDA.

Once an NDA is submitted for a product intended to treat a serious condition, the FDA may assign a priority review designation if FDA determines that the product, if approved, would provide a significant improvement in safety or effectiveness. A priority review means that the goal for the FDA to review an application is six months, rather than the standard review of ten months under current The Prescription Drug User Fee Act, or PDUFA, guidelines. Under the current PDUFA agreement, for new molecular entities, these six and ten-months review periods are measured from the 60-day filing date rather than the receipt date for NDAs for non-new molecular entities, which typically adds approximately two months to the timeline for review from the date of submission. Most products that are eligible for fast track breakthrough therapy designation are also likely to be considered appropriate to receive a priority review.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. In addition, the manufacturer of an investigational drug for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on responding to requests for expanded access. Furthermore, fast track designation, breakthrough therapy designation, accelerated approval and priority review do not change the standards for approval and may not ultimately expedite the development or approval process.

***NDA Submission and Review by the FDA***

Assuming successful completion of the required clinical and preclinical testing, among other items, the results of product development, including chemistry, manufacture and controls, nonclinical studies and clinical trials are submitted to the FDA, along with proposed labeling, as part of an NDA. The submission of an NDA requires payment of a substantial user fee to the FDA. These user fees must be filed at the time of the first submission of the application, even if the application is being submitted on a rolling basis. Fee waivers or reductions are available in some circumstances. One basis for a waiver of the application user fee is if the applicant employs fewer than 500 employees, including employees of affiliates, the applicant does not have an approved marketing application for a product that has been introduced or delivered for introduction into interstate commerce, and the applicant, including its affiliates, is submitting its first marketing application.

In addition, under the Pediatric Research Equity Act, an NDA or supplement to an NDA for a new active ingredient, indication, dosage form, dosage regimen or route of administration must contain data that are adequate to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults or full or partial waivers from the pediatric data requirements.

The FDA must refer applications for drugs that contain active ingredients, including any ester or salt of the active ingredients, that have not previously been approved by the FDA to an advisory committee or provide in an action letter a summary of the reasons for not referring it to an advisory committee. The FDA may also refer drugs which present difficult questions of safety, purity or potency to an advisory committee. An advisory committee is typically a panel that includes clinicians and other experts who review, evaluate and make a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA reviews applications to determine, among other things, whether a product is safe and effective for its intended use and whether the manufacturing controls are adequate to assure and preserve the product's identity, strength, quality and purity. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontracts, are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCPs.

Once the FDA receives an application, it has 60 days to review the NDA to determine if it is substantially complete to permit a substantive review, before it accepts the application for filing. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA. The FDA's NDA review times may differ based on whether the application is a standard review or priority review application. The FDA may give a priority review designation to drugs that are intended to treat serious conditions and provide significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has set the review goal of 10 months from the 60-day filing date to complete its initial review of a standard NDA for a new molecular entity, or NME, and make a decision on the application. For non-NME standard applications, the FDA has set the review goal of 10 months from the date that the FDA receives the application to complete its initial review and to make a decision on the application. For priority review applications, the FDA has set the review goal of reviewing NME NDAs within six months of the 60-day filing date and non-NME applications within six months of the date that the FDA receives the application. Such deadlines are referred to as the PDUFA date. The PDUFA date is only a goal and the FDA does not always meet its PDUFA dates. The PDUFA date may be extended by the FDA in certain circumstances. These include circumstances such as a 'major amendment,' for example, where data submitted to a final study report is updated or data inadvertently omitted is supplied.

Once the FDA's review of the application is complete, the FDA will issue either a Complete Response Letter, or CRL, or approval letter. A CRL indicates that the review cycle of the application is complete and the application is not ready for approval. A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing, or other information or analyses in order for the FDA to reconsider the application. Upon completion of the deficient information, the updated NDA is resubmitted. The FDA has the goal of reviewing 90% of application resubmissions in either two or six months of the date that the FDA receives the application, depending on the FDA classification of resubmission. Even with the submission of additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA's satisfaction, the FDA may issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

The FDA may delay or refuse approval of an NDA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product, or impose other conditions, including distribution restrictions or other risk management mechanisms. For example, the FDA may require a REMS as a condition of approval or following approval to mitigate any identified or suspected serious risks and ensure safe use of the drug. The FDA may prevent or limit further marketing of a product, or impose additional post-marketing requirements, based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements, FDA notification and FDA review and approval. Further, should new safety information arise, additional testing, product labeling or FDA notification may be required.

If regulatory approval of a product is granted, such approval may entail limitations on the indicated uses for which such product may be marketed or may include contraindications, warnings or precautions in the product labeling, which has resulted in a Black Box warning. A Black Box warning is the strictest warning put in the labeling of prescription drugs or drug products by the FDA when there is reasonable evidence of an association of a serious hazard with the drug. The FDA also may not approve the inclusion of labeling claims necessary for successful marketing. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, the FDA may require Phase 4 post-marketing studies to monitor the effect of approved products, and may limit further marketing of the product based on the results of these post-marketing studies.

***Post-approval Requirements***

Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including manufacturing, periodic reporting, product sampling and distribution, advertising, promotion, drug shortage reporting, compliance with any post-approval requirements imposed as a conditional of approval such as Phase 4 clinical trials, REMS and surveillance, recordkeeping and reporting requirements, including adverse experiences.

After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any approved products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data. Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and to list their drug products, and are subject to periodic announced and unannounced inspections by the FDA and these state agencies for compliance with cGMPs and other requirements, which impose procedural and documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval, or FDA notification, before being implemented. FDA regulations also require investigation and correction of any deviations from cGMPs and specifications, and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in withdrawal of marketing approval, mandatory revisions to the approved labeling to add new safety information or other limitations, imposition of post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS program, among other consequences.

The FDA closely regulates the marketing and promotion of drugs. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA. Physicians, in their independent professional medical judgement, may prescribe legally available products for uses that are not described in the product's labeling and that differ from those tested by us and approved by the FDA. We, however, are prohibited from marketing or promoting drugs for uses outside of the approved labeling.

In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. The Drug Supply Chain Security Act also imposes obligations on manufacturers of pharmaceutical products related to product tracking and tracing.

Failure to comply with any of the FDA's requirements could result in significant adverse enforcement actions. These include a variety of administrative or judicial sanctions, such as refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment, injunctions, fines, consent decrees, corporate integrity agreements, refusals of government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement or civil or criminal penalties, including fines and imprisonment. It is also possible that failure to comply with the FDA's requirements relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state healthcare fraud and abuse and other laws, as well as state consumer protection laws. Any of these sanctions could result in adverse publicity, among other adverse consequences.

***Other Healthcare Regulations***

Our business activities, including but not limited to, research, sales, promotion, distribution, medical education and other activities are subject to regulation by numerous regulatory and law enforcement authorities in the United States in addition to the FDA, including the DOJ, the HHS and its various divisions, including CMS and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense and state and local governments. Our business activities must comply with numerous healthcare laws and regulations, including those described below.

The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for, or purchasing, leasing, ordering, or arranging for the purchase, lease or order of, any good, facility, item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other hand. The term remuneration has been interpreted broadly to include anything of value. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Additionally, the Affordable Care Act, amended the intent requirement of the federal Anti-Kickback Statute, and other healthcare criminal fraud statutes, so that a person or entity no longer needs to have actual knowledge of the federal Anti-Kickback Statute, or the specific intent to violate it, to have violated the statute. The Affordable Care Act also provided that a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower to assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for purposes of the federal civil FCA.

The federal civil and criminal false claims laws, including the FCA, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or approval by, the U.S. federal government, including the Medicare and Medicaid programs, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim or to avoid, decrease or conceal an obligation to pay money to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes "any request or demand" for money or property presented to the U.S. government. In addition, manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to "cause" the submission of false or fraudulent claims. The FCA also permits a private individual acting as a "whistleblower" to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery. FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties. Government enforcement agencies and private whistleblowers have investigated pharmaceutical companies for or asserted liability under the FCA for a variety of alleged promotional and marketing activities, such as providing free products to customers with the expectation that the customers would bill federal programs for the products; providing consulting fees and other benefits to physicians to induce them to prescribe products; engaging in promotion for "off-label" uses; and submitting inflated best price information to the Medicaid Rebate Program.

As a condition of receiving Medicaid coverage for prescription drugs, the Medicaid Drug Rebate Program requires manufacturers to calculate and report to CMS their Average Manufacturer Price, or AMP, which is used to determine rebate payments shared between the states and the federal government and, for some multiple source drugs, Medicaid payment rates for the drug, and for drugs paid under Medicare Part B, to also calculate and report their average sales price, which is used to determine the Medicare Part B payment rate for the drug. In January 2016, CMS issued a final rule regarding the Medicaid Drug Rebate Program, or MDRP, effective April 1, 2016, that, among other things, revised the manner in which the AMP is calculated by manufacturers participating in the program and implemented certain amendments to the Medicaid rebate statute created under the Affordable Care Act. In addition, the MDRP requires pharmaceutical manufacturers to enter into and have in effect a National Drug Rebate Agreement, or NDRA, with the Secretary of HHS as a condition for states to receive federal matching funds for the manufacturer's outpatient drugs furnished to Medicaid patients. On March 23, 2018, CMS finalized updates to the NDRA, or the Updated NDRA, to incorporate a number legislative and regulatory changes, including changes to align with certain provisions of the Affordable Care Act.

Drugs that are approved under a biologics license application, or BLA, or an NDA, including a 505(b)(2) NDA, are subject to an additional requirement to calculate and report the manufacturer's best price for the drug and inflation penalties which can substantially increase rebate payments. For BLA and NDA drugs, the Veterans Health Care Act requires manufacturers to calculate and report to the Department of Veterans Affairs a different price called the Non-Federal AMP, offer the drugs for sale on the Federal Supply Schedule, and charge the government no more than a statutory price referred to as the Federal Ceiling Price, which includes an inflation penalty. A separate law requires manufacturers to pay rebates on these drugs when paid by the Department of Defense under its TRICARE Retail Pharmacy Program. Knowingly submitting false pricing information to the government creates potential federal FCA liability.

HIPAA created additional federal criminal statutes that prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the third-party payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick, scheme or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Additionally, the Affordable Care Act amended the intent requirement of some of these criminal statutes under HIPAA so that a person or entity no longer needs to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.

Additionally, the federal Open Payments program pursuant to the Physician Payments Sunshine Act, created under Section 6002 of the Affordable Care Act and its implementing regulations, requires some manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with specified exceptions) to report annually information related to specified payments or other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually specified ownership and investment interests held by physicians and their immediate family members. Failure to submit timely, accurately and completely the required information for all payments, transfers of value and ownership or investment interests may result in civil monetary penalties.

In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, impose requirements relating to the privacy, security and transmission of individually identifiable health information held by covered entities, their business associates and covered subcontractors. Among other things, HITECH makes HIPAA's security standards directly applicable to business associates, defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions.

Many states have also adopted laws similar to each of the above federal laws, which may be broader in scope and apply to items or services reimbursed by any third-party payor, including commercial insurers. We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and/or state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations were found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from government funded healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could substantially disrupt our operations. If the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

***Coverage and Reimbursement***

Our ability to commercialize any products successfully will also depend in part on the extent to which coverage and adequate reimbursement for the procedures utilizing our product candidates, performed by health care providers, once approved, will be available from government health administration authorities, private health insurers and other organizations. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, determine which procedures, and the products utilized in such procedures, they will cover and establish reimbursement levels. Assuming coverage is obtained for procedures utilizing a given product, by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who undergo procedures for the treatment of their conditions, and their treating physicians, generally rely on third-party payors to reimburse all or part of the costs associated with the procedures which utilize our products. When used in connection with surgical and certain other procedures, our product candidates may not be reimbursed separately but their cost may instead be bundled as part of the payment received by the provider for the procedure only. Treating physicians are unlikely to use and order our products unless coverage is provided and the reimbursement is adequate to cover all or a significant portion of the cost of the procedures which utilize our products. A decision by a third-party payor not to cover or adequately reimburse for our product candidates or procedures using our product candidates, could reduce physician utilization of our products once approved. Therefore, coverage and adequate reimbursement for procedures which utilize new products is critical to the acceptance of such new products. Coverage decisions may depend upon clinical and economic standards that disfavor new products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

Government authorities and other third-party payors are developing increasingly sophisticated methods of cost containment, such as including price controls, restrictions on coverage and reimbursement and requirements for substitution of less expensive products and procedures. Government and other third-party payors are increasingly challenging the prices charged for health care products and procedures, examining the cost effectiveness of procedures, and the products used in such procedures, in addition to their safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement. Further, no uniform policy requirement for coverage and reimbursement exists among third-party payors in the United States, which causes significant uncertainty related to the insurance coverage and reimbursement of newly approved products, and the procedures which may utilize such newly approved products. Therefore, coverage and reimbursement can differ significantly from payor to payor and health care provider to health care provider.

We cannot be sure that coverage and reimbursement will be available for any product that we commercialize, or the procedures which utilize such product, and, if reimbursement is available, what the level of reimbursement will be. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize any product candidate for which we obtain marketing approval.

***Healthcare Reform Measures***

The United States and some non-U.S. jurisdictions are considering or have enacted a number of legislative and regulatory proposals designed to change the healthcare system. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

For example, the pharmaceutical industry in the United States has been affected by the passage of Affordable Care Act, which, among other things: imposed new fees on entities that manufacture or import certain branded prescription drugs; expanded pharmaceutical manufacturer obligations to provide discounts and rebates to certain government programs; implemented a licensure framework for follow-on biologic products; expanded health care fraud and abuse laws; revised the methodology by which rebates owed by manufacturers to the state and federal government under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including products that are inhaled, infused, instilled, implanted or injected; imposed an additional rebate similar to an inflation penalty on new formulations of drugs; extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; expanded the 340B program which caps the price at which manufacturers can sell covered outpatient pharmaceuticals to specified hospitals, clinics and community health centers; and provided incentives to programs that increase the federal government's comparative effectiveness research.

There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the "individual mandate" was repealed by Congress. Further, on August 16, 2022, President Biden signed the IRA into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025. The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and any potential future healthcare reform measures of the Trump administration will impact the Affordable Care Act and our business.

Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2.0% per fiscal year, which went into effect in April 2013, and due to subsequent legislative amendments, including the Bipartisan Budget Act of 2015, will remain in effect until 2032, unless additional U.S. Congressional action is taken. In addition, in January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several categories of healthcare providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Additionally, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, ended the use of the statutory formula for clinician payment and established a quality payment incentive program, also referred to as the Quality Payment Program. This program provides clinicians with two ways to participate, including through the Advanced Alternative Payment Models, or APMs, and the Merit-based Incentive Payment System, or MIPS. Under both APMs and MIPS, performance data collected each performance year will affect Medicare payments in later years, including potentially reducing payments. At this time, the full impact to overall physician reimbursement as a result of the introduction of the Quality Payment Program remains unclear. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Congress is considering additional health reform measures.

In addition, there has been particular and increasing legislative and enforcement interest in the United States with respect to drug pricing practices in recent years, particularly with respect to drugs that have been subject to relatively large price increases over relatively short time periods. Specifically, there have been several recent U.S. Presidential executive orders, Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of prescription drugs under Medicare and reform government program reimbursement methodologies for pharmaceutical products. For example, in July 2021, the Biden administration released an executive order, "Promoting Competition in the American Economy," with multiple provisions aimed at prescription drugs. In response to President Biden's executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional drugs covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. Further in response to the Biden administration's October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. In addition, individual states in the United States have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida's Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs. In the future, there will likely continue to be proposals relating to the reform of the U.S. healthcare system, some of which could further limit coverage and reimbursement of products.

***The Foreign Corrupt Practices Act***

The Foreign Corrupt Practices Act, or FCPA, prohibits any U.S. individual or business from paying, offering or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the companies to maintain books and records that accurately and fairly reflect all transactions of the companies, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.

**Non-U.S. Government Regulation**

To the extent that any of our product candidates, once approved, are sold in a country outside of the United States, we will be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

In order to market our future products in the European Economic Area, or the EEA (which is comprised of the 27 Member States of the EU plus Norway, Iceland and Liechtenstein) and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA. There are two types of marketing authorizations:

● the Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use of the EMA, and which is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU; and

● National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member State through the Mutual Recognition Procedure. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.

Under the above described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

***Data and Marketing Exclusivity***

In the EEA, new products authorized for marketing, or reference products, qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU. The 10-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

***Pediatric Investigation Plan***

In the EEA, marketing authorization applications for new medicinal products not authorized have to include the results of studies conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA's Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the marketing authorization is obtained in all Member States of the EU and study results are included in the product information, even when negative, the product is eligible for six months' supplementary protection certificate extension.

**Environmental, Health and Safety Matters**

We are subject to extensive environmental, health and safety laws and regulations in a number of jurisdictions, primarily Israel, governing, among other things: the use, storage, registration, handling, emission and disposal of chemicals, waste materials and sewage; chemicals, air, water and ground contamination; air emissions and the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals, waste materials and sewage. Our operations use chemicals and produce waste materials and sewage and require permits from various governmental authorities including, local municipal authorities, the Ministry of Environmental Protection and the Ministry of Health. The Ministry of Environmental Protection and the Ministry of Health, local authorities and the municipal water and sewage company conduct periodic inspections in order to review and ensure our compliance with the various regulations. These laws, regulations and permits could potentially require the expenditure by us of significant amounts for compliance or remediation. If we fail to comply with such laws, regulations or permits, we may be subject to fines and other civil, administrative or criminal sanctions, including the revocation of permits and licenses necessary to continue our business activities. In addition, we may be required to pay damages or civil judgments in respect of third-party claims, including those relating to personal injury (including exposure to hazardous substances we use, store, handle, transport, manufacture or dispose of), property damage or contribution claims. Some environmental, health and safety laws allow for strict, joint and several liability for remediation costs, regardless of comparative fault. We may be identified as a responsible party under such laws. Such developments could have a material adverse effect on our business, financial condition and results of operations. In addition, laws and regulations relating to environmental, health and safety matters are often subject to change. In the event of any changes or new laws or regulations, we could be subject to new compliance measures or to penalties for activities that were previously permitted.

**Organizational Structure**

We do not currently have any subsidiaries. Until February 2023, we had a United Kingdom incorporated subsidiary, Nasus Pharma UK Ltd., which was never active.

**Property and Facilities**

Our offices are located in Israel. We currently lease one facility located at Yigal Alon 65, Tel Aviv, Israel from TopNotch Ltd. for a monthly fee of NIS 12,000 ($3,295).

We consider that our current office space is sufficient to meet our anticipated needs for the foreseeable future and is suitable for the conduct of our business.

**Employees**

As of July 3, 2025, we have five members of senior management (including our Chief Executive Officer), of which one is a full-time employee, one is a part-time employee, and three are service providers. As of July 3, 2025, we also have one consultant. In 2023, we reduced our workforce by two employees due to discontinued operations and a slowdown of our NS001 program. We had no changes in workforce in 2024.

None of our employees are represented by labor unions or covered by collective bargaining agreements. However, in Israel, we are subject to certain Israeli labor laws, regulations and national labor court precedent rulings, as well as certain provisions of collective bargaining agreements applicable to us by virtue of extension orders issued in accordance with relevant labor laws by the Israeli and Industry of Economy and which apply such agreement provisions to our employees even though they are not part of a union that has signed a collective bargaining agreement.

All of our employment and consulting agreements include employees' and consultants' undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is limited by Israeli law.

**Legal Proceedings**

From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

**MANAGEMENT**

**Directors and Senior Management**

The following table sets forth information regarding our executive officers and directors as of July 3, 2025:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Dan Teleman | 53 | Chief Executive Officer |
| Udi Gilboa <sup>(2)</sup> | 58 | Co-Founder and Executive Chairman of the Board of Directors |
| Dr. Dalia Megiddo<sup>(2)</sup> | 73 | Co-Founder, Director, Chief Development Officer and Chief Medical Officer |
| Tair Lapidot, Pd.D.<sup>(3)</sup> | 55 | Vice President of Research and Development and Clinical Development |
| Galia Temtsin Kryaz, Ph.D.<sup>(1)</sup> | 58 | Director of CMC and Product Development |
| Oren Elmaliach<sup>(2)</sup> | 41 | Director of Finance |
| Dr. Ronnie Hershman<sup>(7)</sup> | 66 | Director |
| David Silberman<sup>(4)(5)(6)(7)</sup> | 41 | Director Nominee |
| Dr. Sharon Shacham<sup>(4)(5)(6)(7)</sup> | 54 | Director Nominee |
| Isaac Israel<sup>(4)(5)(6)(7)</sup> | 46 | Director Nominee |

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(1) Consultant

(2) Service
 Provider

(3) Part-Time
 Employee

(4) Member
 of the compensation committee

(5) Member
 of the audit committee and financial statement examination committee

(6) Independent
 Director (as defined under Israeli law)

(7) Independent
 Director (as defined under NYSE American LLC Company Guide Manual Section 803(A)(2), or NYSE American Section 803(A)(2))

**Dan Teleman, Chief Executive Officer**

*Mr. Dan Teleman* has served as our Chief Executive Officer since January 2025. Prior to this appointment Mr. Teleman served as Pharma Two B Ltd.'s Chief Executive Officer from May 2023 to January 2025, and as its President from October 2022 to May 2023. Mr. Teleman brings over 20 years of experience in the biotechnology industry. From May 2022 to May 2023, Mr. Teleman was an Executive Partner at Israel Biotech Fund, a life science venture capital firm. From January 2023 to November 2023, Mr. Teleman also served as a board member of 4C Biomed, an early stage immune-oncology company developing a novel antibody. From July 2021 to May 2023, Mr. Teleman served as the chairman of Tamarix Pharma Ltd, an early-stage ophthalmology company developing novel anti apoptotic molecules. From January 2010 to May 2022, Mr. Teleman was the chief executive officer of Atox Bio Ltd., where he led the company through an NDA submission for Reltecimod, the first immunomodulator developed for NSTI. Previously, Mr. Teleman was the co-founder and chief executive officer of PainReform Ltd. (NASDAQ: PRFX), head of business development for Pharmos Corporation and held marketing and sales roles at Amgen (NASDAQ: AMGN). Mr. Teleman holds an MBA from the Fuqua School of Business at Duke University and an MSc in Biochemical engineering from Ben-Gurion University in Israel.

**Udi Gilboa, Co-Founder and Executive Chairman**

*Mr. Udi Gilboa* has served as our Co-Founder and Executive Chairman since 2019. Since January 2012, Mr. Gilboa has been serving as a director, Senior Vice President of Operations and the Chief Financial Officer of Bioblast Pharma Ltd. (NASDAQ: ORPN). Mr. Gilboa is the founder and managing partner of TopNotch Capital Ltd., a prominent Israeli life sciences investment bank. He is also the founder of a number of medical device and pharmaceutical companies. Mr. Gilboa is Chairman of the Board of Samson NeuroSciences Ltd. Mr. Gilboa has served as a director of InsuLine Medical Ltd. (TASE: INSL) until 2014 and served, until 2010 as a director and chairman of the board of directors of Topspin Medical Ltd. Mr. Gilboa holds a Bachelor's degree and M.B.A. from Tel Aviv University. We believe Mr. Gilboa's skills and experiences in the pharmaceutical and medical device industry as a founder, board member and in management positions, specifically in publicly traded companies, make him a beneficial addition to our board of directors.

**Dr. Dalia Megiddo, Co-Founder, Director, Chief Development Officer and Chief Medical Officer**

*Dr. Dalia Megiddo* is one of our Co-Founders and served as our director since May 2019. She has also served as our Chief Development Officer and Chief Medical Officer since June 2019. Dr. Megiddo also served as our Chief Executive Officer from March 2020 to January 2025. She has founded and served as management or a director for multiple biopharma and medtech companies, including Chiasma Inc. (NASDAQ: CHMA) from 2002 to 2008 as co-founder and director; Medingo Ltd. (sold to Roche Holding AG) from 2005 to 2007 as co-founder and director; Alcobra Pharmaceuticals Ltd. (NASDAQ: ADHD) from 2008 to 2013 as co-founder and director; and Bioblast Pharma Ltd. (NASDAQ: ORPN) from February 2012 through its public offering in February 2015 as CEO and director from February 2012 to March 2019. Dr. Megiddo managed two venture capital funds: 7 Health Ventures from 2006 through 2010 and *InnoMed Ventures*, since 2000. Dr Megiddo has been involved in the Life Science Venture Capital Industry since 1999 and is well recognized as one of the leaders in the healthcare investment and entrepreneurial community both in Israel and internationally. She is a frequent speaker at local and international meetings and served as a board member at Given Imaging Ltd. (NASDAQ: GIVN), Elron Ventures Ltd. (NASDAQ: ELRN), Alcobra, and Bioblast. Dr. Megiddo is member of the scientific-investment advisory boards to several academic institutes in Israel including the Technion and Tel Aviv University. Dr. Megiddo holds an MBA from Kellogg-Recanati School of Business, and teaches at various entrepreneurial programs in Israeli universities. She completed her medical studies at the Hebrew University's Hadassah Medical School and a specialty program in Family Medicine. After spending a few years as a faculty member in the Family Medicine department at the Hebrew University in Jerusalem, Dr. Megiddo founded and sold two successful businesses in the medical field: *The Journal Club* - Israel's leading provider of Continuing Medical Education for physicians, and *Academia Medica* – a medical multimedia developer and worldwide distributor for Continuing Medical Education programs for physicians. We believe Dr. Megiddo's skills and experiences as an investor, board member, Chief Development Officer and Chief Medical Officer, as well as her professional experience as a practicing physician with drug development capabilities make her a beneficial addition to our board of directors.

**Tair Lapidot, Pd.D., Vice President of Research and Development and Clinical Development**

*Dr. Tair Lapidot* has served as our Vice President of R&D and Clinical Development since 2019. Since 2002 Dr. Lapidot has been managing scientific projects and product development activities in the Israel Life-Science industry, from early preclinical research, clinical trials, and regulatory approval. Dr. Lapidot served as Chief Scientific Officer of Algatech Ltd. (sold to Solabia) from 2016 to 2019. She served as Director of Product Development & RA at Epitomee Medical (TLV: EPIT) 2010- 2016. She managed analytical and research activities in Chiasma Inc. (NASDAQ: CHMA), BioLineRx Ltd. (NASDAQ: BLRX; TASE: BLRX), and Compugen Ltd. (NASDAQ: CGEN; TASE: CGEN). Dr. Lapidot received her Ph.D. in Biochemistry from the Hebrew University of Jerusalem and had graduated Cum Laude Food Technology, B.Sc. Agri, also from the Hebrew University.

**Galia Temtsin Kryaz, Ph.D., Director of CMC and Product Development**

*Dr. Galia Temtsin Kryaz, Ph.D.* has served as our Director of CMC and Product Development since 2019. Dr. Kryaz serves as CEO of Formulex Pharma Innovations Ltd., or Formulex, where she has worked for the past 15 years. Dr. Kryaz received her Ph.D. in chemistry with specialization in organic chemistry and nanomaterials from Ben-Gurion University of the Negev.

**Oren Elmaliach, Director of Finance**

*Mr. Oren Elmaliach*has served as our Director of Finance since 2019. In September 2015, Oren Elmaliach founded Accounting Team Ltd., a financial consultancy and service provider to public companies traded in Israel and abroad, and has acted as Account Manager since then. Since February 2017, Mr. Elmaliach has served as controller of Ayala Pharmaceuticals Inc. (NASDAQ: AYLA), and since Februray 2022 he has served as Chief Financial Officer of Igentify. In addition, since September 2015, Mr. Elmaliach has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he has served as Local Financial Report Consultant of Chiasma Inc. (NASDAQ: CHMA). From May 2017, Oren has served as chairman of the audit committee of Mysize, Inc (NASDAQ: MYSZ). From July 2011 until August 2015, Mr. Elmaliach served as CPA, Financial Director of CFO Director Ltd. and from June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliach holds a Bachelor of Arts in Accounting/Economics and a Msc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel.

**Dr. Ronnie Hershman, Director**

*Dr. Ronnie Hershman* has served on our board of directors since May 2020. He has been a cardiologist in New York for the last 30 years. In addition to being a medical practitioner, for the last 15 years, Dr. Hershman has also been an active Angel Investor. As an Angel Investor, he is the Founder and Principal Owner of Hershman Holdings LLC, a company he founded in 2004. He has also been co-founder of several other companies, including HealthEffect in August 2015 and InvestEffect in 2017. Dr. Hershman holds an M.D. from Icahn School of Medicine at Mount Sinai and a B.S. from Sophie Davis CCNY Center for Biomedical Education. We believe Dr. Hershman's skills and experiences as an active physician and as an experienced healthcare investor combined with his intimate familiarity with the US healthcare industry make him a beneficial addition to our board of directors.

**David Silberman, Director Nominee**

*David Silberman* is a director nominee and will serve on our compensation committee and on our audit and financial statement examination committee. Mr. Silberman has served as the Chief Financial Officer of Compugen Ltd. (NASDAQ: CGEN) Since August 2024. Mr. Silberman previously served as the Chief Financial Officer of Oramed Pharmaceuticals, Inc. (NASDAQ: ORMP) from May 2021 to May 2024. From April 2018 to May 2021, Mr. Silberman served as a Corporate Financial Planning and Analysis associate director and director at Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA), a global pharmaceutical company, committed to helping patients around the world to access affordable medicines and benefit from innovations to improve their health. From 2014 to 2018, Mr. Silberman served as Global Internal Audit senior manager at Teva Pharmaceutical Industries Ltd. From 2009 to 2014, Mr. Silberman provided internal audit and risk management services in the advisory department of Grant Thornton Fahn Kanne Control Management. From January 2009 until June 2009, Mr. Silberman worked in the audit department of KPMG, a certified public accounting firm. Mr. Silberman holds DCG and DSCG degrees from the French Ministry of Higher Study and Research and is a certified public accountant in Israel. We believe Mr. Silberman's in-depth knowledge in finance and experience in management positions, in particular in pharmaceutical publicly traded companies make him a beneficial addition to our board of directors.

**Dr. Sharon Shacham, Director Nominee**

*Dr. Sharon Shacham* is a director nominee and will serve on our compensation committee and on our audit and financial statement examination committee. Dr. Shacham has served as a director at Acrivon Theraputics, Inc. (NASDAQ: ACRV) since May 2021, non-executive director at exteRNA since August 2024 and director of Protai Therapeutics since January 2023. Dr. Shacham co-founded Karyopharm (NASDAQ: KPTI) in 2008 and served as its Chief Scientific Officer and head of Research and Development from 2010 until May 2022, and as President from 2013 until May 2021. Dr. Shacham has previously led scientific and clinical work that led to the discovery, development and regulatory approval of first-in-class drug candidates. Prior to joining Karyopharm, Dr. Shacham served as Senior Vice President of Drug Development at Epix Pharmaceuticals, Inc., and Director, Algorithm and Software Development at Predix Pharmaceuticals Inc., which merged into Epix Pharmaceuticals in 2006, where she led the company's efforts in GPCR modeling, computational chemistry, lead optimization and development of clinical trials. Dr. Shacham holds a B.S. in chemistry, a Ph.D. in biophysical chemistry, and an M.B.A. from Tel Aviv University. We believe Dr. Shacham's experience as board member, Chief Scientific Officer, co-founder and research and development positions, as well as her professional drug development capabilities make her a beneficial addition to our board of directors.

**Isaac Israel, Director Nominee**

*Isaac Israel* is a director nominee and will serve on our compensation committee and on our audit and financial statement examination committee. Mr. Israel served as a member of the board of directors since October 2012, and as chief executive officer of Purple Biotech (NASDAQ: PPBT) from 2012 until 2022 and served as Acting Chief Executive Officer from March 2023 to August 2023. Since 2008, Mr. Israel has served as founding chief executive officer of Uneri Capital Ltd., a consulting firm, owned by Mr. Israel, which specializes in the healthcare sector. Mr. Israel was the founding chief executive officer of BeeContact Ltd. (formerly TASE: BCNT), from 2001 until 2007. Mr. Israel served as a member of the board of directors of various private and public healthcare corporations, including as chairman of the board of a public healthcare corporation, NextGen Biomed Ltd. (TASE: NXGN). We believe Mr. Israel's skills and experiences as a founder, Chief Executive Officer and board member, including in healthcare companies and in publicly traded companies, make him a beneficial addition to our board of directors.

***Family Relationships***

There are no family relationships between any members of our executive management and our directors.

***Arrangements for Election of Directors and Members of Management***

There are currently no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected (see "*Related Party Transactions*").

**Compensation**

The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2024. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.

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| | | | |
|:---|:---|:---|:---|
|  | **Salary, Bonuses and Related Benefits** | **Pension, Retirement and Other Similar Benefits** | **Share Based Compensation** |
| All directors and senior management as a group, consisting of 5 persons | $513578 | $16619 | $4135 |

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For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis. Pursuant to Israeli Law, we will be required, after we become a public company, to disclose the annual compensation of our five most highly compensated officers on an individual basis. This disclosure will not be as extensive as that required of a U.S. domestic issuer. We intend to commence providing such disclosure, at the latest, in the annual proxy statement for our first annual meeting of shareholders following the closing of this offering, which will be filed under cover of a report on Form 6-K.

***Services Agreements with Executive Officers***

We have entered into written services agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors and officers insurance.

For a description of the terms of our share options and share option plan (see "*Management—Equity Incentive Plan*" below).

*Employment Agreement with Dan Teleman, our Chief Executive Officer*

On January 6, 2025, we entered into an agreement with Mr. Dan Teleman, pursuant to which, Mr. Teleman provides us with services as our Chief Executive Officer. Pursuant to the terms of the services agreement, Mr. Teleman is entitled to a gross monthly salary in the amount of NIS 30,000 ($8,238) as of the commencement date of January 7, 2025 and until March 2025. As of April 1, 2025, Mr. Teleman is entitled to a gross monthly salary of NIS 40,000 ($10,984), to be increased to NIS 70,000 ($19,222) as of and subject to consummation of this offering until the first anniversary of this offering, and thereafter to NIS 75,000 ($20,595) until the second anniversary of this offering and to NIS 80,000 ($21,968) thereafter. The services agreement also provides for other benefits such as reimbursement of expenses and certain bonus payments, including a one-time bonus payment of NIS 240,000 ($65,903) upon and subject to consummation of this offering, or the IPO Bonus. Mr. Teleman will be entitled to an annual bonus in between 10%-20% of Mr. Teleman's annual gross salary, or the Annual Bonus. Both parties may terminate the services agreement for any reason with 30 days' written notice during the first 12 months of employment or with 60 days' written notice thereafter. In addition, pursuant to an option agreement entered into in January 2025, Mr. Teleman was granted share options, with a grant date of January 16, 2025, to purchase up to 318,856 Ordinary Shares under our 2019 Plan at an exercise price of $6.05, vesting over a period of 36 months commencing on January 7, 2025. Mr. Teleman's option grant letter agreement contains an acceleration clause, whereby the options will become fully vested immediately prior to the closing of any transaction, as defined under the 2019 Plan to mean any merger in which we no longer continue to exist as a legal entity, or sale of all, or substantially all, of our issued and outstanding shares to a third party or the sale of all or substantially all of our assets. A transaction, for the avoidance of doubt, does not include an initial public offering. Any unexercised options will expire ten years from the date they were granted, in accordance with the 2019 Plan. In March 2025, our board of directors and shareholders ratified and amended the agreement with Mr. Teleman. The amendment to the agreement introduces several changes, to be effective upon completion of the offering as follows: (i) our compensation committee and our board of directors may increase, from time-to-time, without requiring shareholder approval, Mr. Teleman's monthly gross salary up to the maximum monthly gross salary determined in the Company's compensation policy, as may be in effect from time to time; (ii) our compensation committee and our board of directors may grant Mr. Teleman, without requiring shareholder approval, equity-based awards up to the maximum annual equity compensation in accordance with the Company's compensation policy, as may be in effect from time to time; (iii) an acceleration mechanism allowing for the acceleration of up to all of the equity-based awards granted to Mr. Teleman in the event of a change of control, as shall be determined by our compensation committee and our board of directors; (iv) the Annual Bonus range shall be adjusted from 10%-20% to 20%-30%; (v) Mr. Teleman shall be entitled to a one-time bonus of $75,000 if the Phase 3 clinical trial of NS002 successfully meets its primary end-point. Further, Mr. Teleman's car maintenance allowance shall be increased from NIS 3,500 ($961) to NIS 4,500 ($1,236), effective March 17, 2025.

*Services Agreement with Udi Gilboa, our Co-Founder and Executive Chairman*

On June 1, 2019, we entered into an agreement with TopNotch Ltd., a company beneficially owned by Mr. Udi Gilboa, pursuant to which Mr. Gilboa provides us with services as our Executive Chairman. Pursuant to the terms of the services agreement, Mr. Gilboa is entitled to a monthly salary in the amount of NIS 20,000 ($5,492), which was increased to NIS 45,000 ($12,357) on May 1, 2020 per an amendment to the services agreement. In February 2022, Mr. Gilboa agreed to a voluntarily reduction in his monthly salary to NIS 36,000 ($9,885). In November 2022, Mr. Gilboa again agreed to a voluntarily reduction in his monthly salary to NIS 18,000 ($4,943). The services agreement also provides for other benefits such as reimbursement of expenses and certain bonus payments. Both parties may terminate the services agreement for any reason with 90 days' written notice. In March 2025, our board of directors and shareholders ratified and amended the agreement with TopNotch Ltd, or the Second Amendment to the TopNotch Agreement.

The Second Amendment to the TopNotch Agreement provides compensation adjustments upon completion of the offering, as follows: (i) NIS 86,000 ($23,615) monthly consultation fee in the first year following the offering, (ii) NIS 90,300 ($24,796) monthly consultation fee in the second year following the offering, and (iii) NIS 94,814 ($26,036) monthly consultation fee from the third year following the offering; (iv) monthly car allowance and maintenance expenses of NIS 3,621 ($994); (v) annual bonus of up to 25% of the annual consulting fees, subject to approval of our board of directors; and (vi) one-time bonus of NIS 1,068,195 ($293,323) upon completion of the offering. Further, under the Second Amendment to the TopNotch Agreement, our compensation committee and our board of directors, may grant Mr. Gilboa: (i) a special bonus of up to 1.5% of the proceeds of a qualified merger, sale, or assignment as provided therein; (ii) an equity financing bonus equal to up to 2% of the cash proceeds in a private placement or other equity financing transaction, and (iii) a one-time bonus for special efforts performed by Mr. Gilboa and/or in respect of the significant contribution of Mr. Gilboa to the Company's operations, special projects or extra ordinary achievements which are not in the Company's ordinary course of business.

*Services Agreement with Dr. Dalia Megiddo, our Co-Founder, Chief Development Officer and Chief Medical Officer*

On June 1, 2019, we entered into a services agreement with D.M. Medica Ltd., a company beneficially owned by Dr. Dalia Megiddo, pursuant to which Dr. Megiddo provides us with services as our Chief Executive Officer. Pursuant to the terms of the services agreement, Dr. Megiddo is entitled to a monthly salary in the amount of NIS 20,000 ($5,492), which was increased to NIS 45,000 ($12,357) on May 1, 2020, per an amendment to the services agreement. In February 2022, Dr. Megiddo agreed to a voluntarily reduction in her monthly salary to NIS 36,000 ($9,885). In November 2022, she again agreed to a voluntarily reduction in her monthly salary to NIS 18,000 ($4,943) per month. The services agreement also provides for other benefits such as reimbursement of expenses. The amendment to the services agreement additionally provides for an annual bonus which is paid out for any top line revenues. Both parties may terminate the services agreement for any reason with 90 days' written notice. On January 7, 2025, Dr. Dalia Megiddo's service as our Chief Executive Officer has terminated with the appointment of Mr. Dan Teleman as our new Chief Executive Officer. Dr. Dalia Megiddo continues to serve as our Chief Development Officer and Chief Medical Officer, in addition to her service as our director. In March 2025, our board of directors and shareholders ratified and amended the agreement with D.M. Medical Ltd., or the Second Amendment to the D.M. Agreement.

The Second Amendment to the D.M. Agreement redefines the services provided by Dr. Megiddo from Chief Executive Officer to Chief Development Officer, and provides compensation adjustments upon completion of the offering, as follows: (i) NIS 86,000 ($23,615) monthly consultation fee in the first year following the offering, (ii) NIS 96,560 ($26,515) monthly consultation fee in the second year following the offering, and (iii) NIS 105,613 ($29,001) monthly consultation fee from the third year following the offering; (iv) monthly car allowance and maintenance expenses of NIS 4,344 ($1,193); (v) annual bonus of up to 25% of annual consulting fees, subject to approval of our board of directors; one-time bonus of NIS 854,556($234,658) upon completion of the offering. Further, under the Second Amendment to the D.M. Agreement, our compensation committee and our board of directors, may grant Dr. Megiddo (i) a special bonus of up to 1.5% of the proceeds of a qualified merger, sale, or assignment as provided therein; (ii) a one-time bonus for special efforts performed by Dr. Megiddo and/or in respect of the significant contribution of Dr. Megiddo to the Company's operations, special projects or extra ordinary achievements which are not in the Company's general course of business; (iii) a bonus of NIS 1,068,195 ($293,323) upon NDA submission of NS002 to the FDA; and (iv) a bonus of NIS 2,136,390 ($586,646) upon FDA approval of an NDA for NS002.

*Employment Agreement with Tair Lapidot, Pd.D., our Vice President of Research and Development and Clinical Development*

On June 2, 2019, we entered into an employment agreement with Dr. Tair Lapidot*,* pursuant to which Dr. Lapidot provides us with services as our Vice President of Research and Development and Clinical Development. Pursuant to the terms of the services agreement, Dr. Lapidot is entitled to a monthly salary in the amount of NIS 35,000 ($9,611), which was decreased to NIS 28,000 ($7,689) on March 13, 2022 pursuant to an amendment to the employment agreement. The agreement also provides for other benefits such as reimbursement of expenses. In addition, pursuant to an option agreement entered into on January 30, 2020, Dr. Lapidot was granted share options (with a grant date of November 28, 2019) to purchase up to 69,209 Ordinary Shares under our 2019 Plan, with 55,366 options having an exercise price of $1.23 and 13,843 options having an exercise price of $4.30, vesting over a period of four years commencing on July 17, 2019 and January 30, 2020. Both parties may terminate the services agreement for any reason with 30 days' written notice. Pursuant to an option agreement entered into on January 23, 2023, Dr. Lapidot was granted additional options to purchase 9,135 Ordinary Shares under our 2019 Plan, with a grant date of January 23, 2023, at an exercise price of $0.002, vesting over a period of 18 months commencing on January 31, 2023. Dr. Lapidot's option grant letter agreement contains an acceleration clause, whereby the options will become fully vested after the consummation of an initial public offering or after any transaction, as defined under the 2019 Plan to mean any merger in which we no longer continue to exist as a legal entity, or sale of all, or substantially all, of our issued and outstanding shares to a third party or the sale of all or substantially all of our assets. Any unexercised options will expire ten years from the date they were granted, in accordance with the 2019 Plan.

*Services Agreement with Oren Elmaliach, our Director of Finance*

On June 13, 2019, we entered into a consulting services agreement with Accounting Team Ltd., or Accounting Team, a company beneficially owned by Mr. Oren Elmaliach, pursuant to which Accounting Team provides us with part-time accounting services in consideration for a monthly fee of NIS 2,000 ($549). Pursuant to an amendment dated December 5, 2024, we have ratified the agreement to reflect that as of February 1, 2021, Accounting Team has been entitled to a monthly fee of NIS 8,000 ($2,197). Accounting Team is also entitled to receive an aggregate amount of NIS 325,000 ($89,244) in connection with accounting services related to this offering and will be entitled to a one-time payment of NIS 250,000 ($68,649) upon and subject to consummation of this offering. On December 5, 2024, we have also entered into a separate consulting agreement directly with Mr. Elmaliach, reflecting that since August 1, 2020, we have engaged Mr. Elmaliach directly as our part time external Director of Finance. Under such agreement, Mr. Elmaliach is entitled to an additional monthly fee of NIS 2,000 ($549) with effect from such date. In addition, pursuant to an option agreement entered into in January 2020, Mr. Elmaliach was granted share options, with a grant date of November 28, 2019, to purchase up to 27,681 Ordinary Shares under our 2019 Plan at an exercise price of $1.23, vesting over a period of four years commencing on June 13, 2019. Mr. Elmaliach's option grant letter agreement contains an acceleration clause, whereby the options will become fully vested six months after the consummation of an initial public offering or six months after any transaction, as defined under the 2019 Plan to mean any merger in which we no longer continue to exist as a legal entity, or sale of all, or substantially all, of our issued and outstanding shares to a third party or the sale of all or substantially all of our assets. Pursuant to an option agreement entered into in January 2025, Mr. Elmaliach was granted additional share options, with a grant date of January 16, 2025, to purchase up to 27,681 Ordinary Shares under our 2019 Plan at an exercise price of $6.05, vesting over a period of 36 months commencing on January 7, 2025. Mr. Elmaliach's option grant letter agreement contains an acceleration clause, whereby the options will become fully vested immediately prior to the closing of any transaction, as defined under the 2019 Plan to mean any merger in which we no longer continue to exist as a legal entity, or sale of all, or substantially all, of our issued and outstanding shares to a third party or the sale of all or substantially all of our assets. A transaction, for the avoidance of doubt, does not include an initial public offering. Any unexercised options will expire ten years from the date they were granted, in accordance with the 2019 Plan. Both parties may terminate the services agreement for any reason with 60 days' written notice.

***Directors' Service Contracts***

Other than with respect to our directors that are also executive officers, we do not have written agreements with any director providing for benefits upon the termination of his employment with our company.

***Differences between the Companies Law and NYSE American Requirements***

The Sarbanes-Oxley Act, as well as related rules subsequently implemented by the SEC, require foreign private issuers, such as us, to comply with various corporate governance practices. In addition, following the listing of the Ordinary Shares on the NYSE American, we will be required to comply with NYSE American rules. Under those rules, we may elect to follow certain corporate governance practices permitted under the Companies Law in lieu of compliance with corresponding corporate governance requirements otherwise imposed by the NYSE American rules for U.S. domestic issuers.

In accordance with Israeli law and practice and in reliance on the relief available to foreign private issuers pursuant to Section 110 of the NYSE American LLC Company Guide, or NYSE Rules, we have elected to follow the provisions of the Companies Law as well as Israeli practice, in lieu of such NYSE Rules, with respect to the following requirements:

● *Quorum*. In lieu of Section 123 of the NYSE Rules, which provides for a quorum of at least 33⅓%, to follow Israeli practice, pursuant to which a company is allowed to determine in its articles of association the required quorum for a shareholder meeting. Our amended and restated articles of association provide that the quorum for a general meeting of shareholders will consist of two or more shareholders holding at least 25% of the total voting rights in person or by proxy, or, for any adjourned shareholder general meeting, the quorum set forth in our amended and restated articles of association shall consist of at least one shareholder present in person or by proxy.

● *Nomination of our directors*. In lieu of Section 804 of the NYSE Rules, which provides that nominations by our board of directors may be made by a majority of independent directors or by a nominating committee of the board of directors consisting solely of independent directors, the nominations for directors, which are presented to the Company's shareholders by the board of directors, are generally made by the board of directors itself, in accordance with the provisions of our amended and restated articles of association and the Companies Law. With the exception of directors elected by the board of directors and external directors (if applicable), the Company's directors are then elected by an annual meeting of the Company's shareholders (i) to hold office until the next annual meeting following his or her election or (ii) for three-year term, as described below under "*Management—Board Practices—External Directors*."

● *Compensation of officers*. Israeli law and our amended and restated articles of association do not require that the independent members of our board of directors (or a compensation committee composed solely of independent members of our board of directors) determine an executive officer's compensation, as is generally required under NYSE Section 805 with respect to the chief executive officer and all other executive officers. Instead, compensation of executive officers is determined and approved by our compensation committee and our board of directors, and in certain circumstances by the Company's shareholders, either in consistency with the compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations stated in the Companies Law (see "*Management—Board Practices—Approval of Related Party Transactions under Israeli Law* ").

● *Shareholder approval*. The Company will not seek shareholder approval for corporate actions which are not subject to shareholder approval under Israeli law. In particular, Section 711 of the NYSE Rules requires shareholder approval for the establishment or material amendment of a stock option or purchase plan or other equity compensation arrangement pursuant to which options or stock may be acquired. Israeli law does not require shareholder approval for such plans. In addition, Section 713 of the NYSE Rules requires shareholder approval when the Company issues additional shares in a transaction that is not considered a public offering. Israeli law does not require shareholder approval for such transactions.

● *Annual Shareholders Meeting*. As opposed to Section 704 of the NYSE Rules, which mandates that a listed company hold its annual shareholders meeting within one year of the company's fiscal year-end, we are required, under the Companies Law, to hold an annual shareholders meeting each calendar year and within 15 months of the last annual shareholders meeting.

● *Written Notice*. As opposed to Section 703 of the NYSE Rules, that mandates each issuer to provide shareholders with written notice at least 10 days in advance of all shareholder meetings and to provide for such notice in its by-laws, the Company is required, under Companies Law and our amended and restated articles of association, to provide either 14 or 21 days written notice.

**Board Practices**

***Introduction***

Our board of directors presently consists of three members, as the Companies Law does not mandate the appointment of external directors to the board of directors. Immediately following the completion of this offering, our board of directors is expected to consist of seven directors. Based upon information requested from and provided by each director concerning such director's background, employment and affiliations, including family relationships, our board of directors of directors determined that, four members of our directors following the completion of this offering, are "independent directors" as defined under the listing standards of the NYSE American rules. Our amended and restated articles of association provide that the number of board of directors' members (including external directors) shall be set by the general meeting of the shareholders provided that it will consist of not less than two and not more than nine. Pursuant to the Companies Law, the management of our business is vested in our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to management. Our executive officers are responsible for our day-to-day management and have individual responsibilities established by our board of directors. Our Chief Executive Officer is appointed by, and serves at the discretion of, our board of directors, subject to the employment agreement that we have entered into with him. All other executive officers are appointed by our Chief Executive Officer. Their terms of employment are subject to the approval of the board of directors' compensation committee and of the board of directors, and are subject to the terms of any applicable employment agreements that we may enter into with them.

Each director, except external directors, will hold office until the next annual general meeting of our shareholders following his or her appointment, or until he or she resigns or unless he or she is removed by a majority vote of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association.

In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors), until the next annual general meeting or special general meeting in which directors may be appointed or terminated. External directors may be elected for up to two additional three-year terms after their initial three-year term under the circumstances described below, with certain exceptions as described in "External Directors" below. External directors may be removed from office only under the limited circumstances set forth in the Companies Law (see "*Management—Board Practices—External Directors*").

Under the Companies Law, nominations for directors may be made by any shareholder holding at least one percent or a higher percent, as may be required by the Companies Law from time to time, of our outstanding voting power. Under the Exemptions Regulations, one or more shareholders of an Israeli company whose shares are listed outside of Israel (e.g., listed on NYSE American), may request its company's board of directors to include an appointment of a candidate for a position on the board of directors or the termination of a board member as an item on the agenda of a future general meeting, provided that the shareholder hold at least five percent of the voting rights of the company, instead of the one percent required in the past.

Any such shareholder may make such a nomination only if a written notice of such shareholder's intent to make such nomination has been given to our board of directors. Any such notice must include certain information, the consent of the proposed director nominee(s) to serve as our director(s) if elected, and a declaration signed by the nominee(s) declaring that (i) there is no limitation under the Companies Law preventing their election and (ii) that all information that is required to be provided to us in connection with such election under the Companies Law and our amended and restated articles of association has been provided.

The decision whether to include the suggested item on the agenda is subject to the Company's discretion, under the provisions of the Companies Law.

Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise. In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that the minimum number of directors of our company who are required to have accounting and financial expertise is two. Upon the effectiveness of the registration statement for this offering, our directors who have financial expertise will be Mr. David Silberman, Mr. Isaac Israel, and Dr. Sharon Shacham.

The board of directors must elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman. Pursuant to the Companies Law, neither the chief executive officer nor any of his or her relatives is permitted to serve as the chairman of the board of directors, and a company may not vest the chairman or any of his or her relatives with the chief executive officer's authorities. In addition, a person who reports, directly or indirectly, to the chief executive officer may not serve as the chairman of the board of directors; the chairman may not be vested with authorities of a person who reports, directly or indirectly, to the chief executive officer; and the chairman may not serve in any other position in the company or a controlled company, but he or she may serve as a director or chairman of a controlled company. However, the Companies Law permits a company's shareholders to determine, for a period not exceeding three years from each such determination, that the chairman or his or her relative may serve as chief executive officer or be vested with the chief executive officer's authorities, and that the chief executive officer or his or her relative may serve as chairman or be vested with the chairman's authorities. Such determination of a company's shareholders requires either: (1) the approval of at least a majority of the shares of those shareholders present and voting on the matter (other than controlling shareholders and those having a personal interest in the determination) (shares held by abstaining shareholders shall not be considered); or (2) that the total number of shares opposing such determination does not exceed 2% of the total voting power in the company. Currently, we have a separate chairman and chief executive officer. In accordance with the Companies Law regulations, such determination of a company's shareholders that was made after a company first offered its securities to the public, or that the company described in the prospectus, will be for a period not exceeding five years from the date the company became public company.

The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board of directors, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations. Unless otherwise expressly provided by the board of directors, the committees shall not be empowered to further delegate such powers. The composition and duties of our audit committee, financial statement examination committee and compensation committee are described below.

The board of directors oversees how management monitors compliance with our risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by us. The board of directors will be assisted in its oversight role by an internal auditor. The internal auditor will undertake both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to our audit committee.

***External Directors***

Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors. External directors must meet stringent standards of independence. However, the Company adopted an exemption for appointment of external directors, as further specified below.

Under regulations promulgated pursuant to the Companies Law, a company with no controlling shareholder whose shares are listed for trading on specified exchanges outside of Israel, including the NYSE American, may adopt exemptions from various corporate governance requirements of the Companies Law, so long as such company satisfies the requirements of applicable foreign country laws and regulations, including applicable stock exchange rules, that apply to companies organized in that country and relating to the appointment of independent directors and the composition of audit and compensation committees. Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors' compensation. We do not currently have a controlling shareholder and we use this exemption from the requirement described herein.

***Independent Directors Under the Companies Law***

An "independent director" is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years. For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director's service.

Regulations promulgated pursuant to the Companies Law provide that a director in a public company whose shares are listed for trading on specified exchanges outside of Israel, including NYSE American, who qualifies as an independent director under the relevant non-Israeli rules and who meets certain non-affiliation criteria, which are less stringent than those applicable to independent directors as set forth above, would be deemed an "independent" director pursuant to the Companies Law provided: (i) he or she has not served as a director for more than nine consecutive years; (ii) he or she has been approved as such by the audit committee; and (iii) his or her remuneration shall be in accordance with the Companies Law and the regulations promulgated thereunder. For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director's service.

Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director's expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company's best interest.

Our independent directors, upon the effectiveness of the registration statement for this offering, will be Mr. David Silberman, Mr. Isaac Israel, Dr. Sharon Shacham and Ronnie Hershman.

***Alternate Directors***

Our amended and restated articles of association provide, as allowed by the Companies Law, that any director may, subject to the conditions set thereto including approval of the nominee by our board of directors, appoint a person as an alternate to act in his place, to remove the alternate and appoint another in his place and to appoint an alternate in place of an alternate whose office is vacated for any reason whatsoever. Under the Companies Law, a person who is not qualified to be appointed as a director, a person who is already serving as a director or a person who is already serving as an alternate director for another director, may not be appointed as an alternate director. Nevertheless, a director who is already serving as a director may be appointed as an alternate director for a member of a committee of the board of directors so long as he or she is not already serving as a member of such committee, and if the alternate director is to replace an external director, he or she is required to be an external director and to have either "financial and accounting expertise" or "professional expertise," depending on the qualifications of the external director he or she is replacing. A person who does not have the requisite "financial and accounting experience" or the "professional expertise," depending on the qualifications of the external director he or she is replacing, may not be appointed as an alternate director for an external director. A person who is not qualified to be appointed as an independent director, pursuant to the Companies Law, may not be appointed as an alternate director of an independent director qualified as such under the Companies Law. Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment.

**Committees of the Board of Directors**

Our board of directors will establish three standing committees, the audit committee, the compensation committee and the Financial Statement Examination Committee.

***Audit Committee***

Under the Companies Law, we are required to appoint an audit committee. The audit committee must be comprised of at least three directors, including all of the external directors (one of whom must serve as chairman of the committee). The audit committee may not include the chairman of the board of directors; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder.

In addition, a majority of the members of the audit committee of a publicly traded company must be independent directors under the Companies Law. However, under the Exemptions Regulations, a company with no controlling shareholder may be exempted from certain obligations mentioned above. Our audit committee will be comprised, upon the effectiveness of the registration statement for this offering, of Mr. David Silberman, Mr. Isaac Israel, and Dr. Sharon Shacham.

Under the Companies Law, our audit committee is responsible for:

● determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices;

● determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) and establishing the approval process for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest (see "*Management—Board Practices—Approval of Related Party Transactions under Israeli law* ");

● determining the approval process for transactions that are "non-negligible" (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee;

● examining our internal controls and internal auditor's performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities;

● examining the scope of our auditor's work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor;

● establishing procedures for the handling of employees' complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and

● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto.

Our audit committee may not conduct any discussions or approve any actions requiring its approval (see "*Management—Board Practices—Approval of Related Party Transactions under Israeli law*"), unless at the time of the approval a majority of the committee's members are present, which majority consists of independent directors under the Companies Law, including at least one external director.

Our board of directors adopted an audit committee charter to be effective upon the listing of our Ordinary Shares on NYSE American setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and NYSE American Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following:

● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law;

● recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting;

● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and

● reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities' findings, receive reports regarding irregularities and legal compliance, acting according to "whistleblower policy" and recommend to our board of directors if so required.

***NYSE American Requirements for Audit Committee***

Under the NYSE American rules, we are required to maintain an audit committee consisting of at least three members, each of whom is independent and financially literate, and at least one of whom has accounting or related financial management expertise.

As noted above, upon the effectiveness of the registration statement for this offering, the members of our audit committee will include Mr. David Silberman, Mr. Isaac Israel, and Dr. Sharon Shacham, each of whom is an independent director under the Companies Law and "independent," as such term is defined in under NYSE American rules. The chairman of our audit committee will be elected by the members of the audit committee following the offering. All members of our audit committee meet the requirements for financial literacy under the NYSE American rules. Our board of directors has determined that each member of our audit committee is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the NYSE American rules.

***Financial Statement Examination Committee***

Under the Companies Law, the board of directors of a public company incorporated in Israel must appoint a financial statement examination committee, which consists of members with accounting and financial expertise or the ability to read and understand financial statements. The function of a financial statements examination committee is to discuss and provide recommendations to its board of directors (including the report of any deficiency found) with respect to the following issues: (1) estimations and assessments made in connection with the preparation of financial statements; (2) internal controls related to the financial statements; (3) completeness and propriety of the disclosure in the financial statements; (4) the accounting policies adopted and the accounting treatments implemented in material matters of the company; and (5) value evaluations, including the assumptions and assessments on which evaluations are based and the supporting data in the financial statements. Our independent registered public accounting firm and our internal auditor are invited to attend all meetings of our financial statements examination committee.

In accordance with the provisions of the Companies Law and the regulations promulgated pursuant to it and under certain conditions, an Israeli company may merge its audit committee and the financial statement examination committee into one committee, or the Joint Committee. As of the date hereof, the Company meets such conditions and therefore formed a Joint Committee. The members of our Joint Committee will consist of Mr. David Silberman, Dr. Sharon Shacham and Mr. Isaac Israel.

***Compensation Committee***

Under the Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee. Each compensation committee member that is not an external director must be a director whose compensation does not exceed an amount that may be paid to an external director. The compensation committee is subject to the same Companies Law restrictions as the audit committee as to: (a) who may not be a member of the committee; and (b) who may not be present during committee deliberations as described above. However, under the Exemptions Regulations, a company with no controlling shareholder might be exempted from certain obligations mentioned above.

Our compensation committee will act pursuant to a written charter and will be comprised, upon the effectiveness of the registration statement for this offering, of Mr. David Silberman, Mr. Isaac Israel, Dr. Sharon Shacham. Our compensation committee will comply with the provisions of the Companies Law, the regulations promulgated thereunder, and our amended and restated articles of association, on all aspects referring to its independence, authorities and practice. Our compensation committee will follow home country practice as opposed to complying with the compensation committee membership and charter requirements prescribed under the NYSE American rules.

Our compensation committee will review and recommend to our board of directors: with respect to our executive officers' and directors': (1) annual base compensation (2) annual incentive bonus, including the specific goals and amounts; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements.

The duties of the compensation committee include the recommendation to the company's board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy, in the form adopted by our board of directors and shareholders for a period of five (5) years from the offering. Such policy must be adopted by the company's board of directors, after considering the recommendations of the compensation committee. The compensation policy is then brought for approval by our shareholders, which requires a special majority (see "*Management—Board Practices—Approval of Related Party Transactions under Israeli law*"). Under the Companies Law, the board of directors may adopt the compensation policy if it is not approved by the shareholders, provided that after the shareholders oppose the approval of such policy, the compensation committee and the board of directors revisit the matter and determine that adopting the compensation policy would be in the best interests of the company. Our compensation policy was approved by our shareholders on January 23, 2017.

The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must relate to certain factors, including advancement of the company's objectives, the company's business and its long-term strategy, and creation of appropriate incentives for executives. It must also consider, among other things, the company's risk management, size and the nature of its operations. The compensation policy must furthermore consider the following additional factors:

● the education, skills, expertise and accomplishments of the relevant director or executive;

● the director's or executive's roles and responsibilities and prior compensation agreements with him or her;

● the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), including the impact of disparities in salary upon work relationships in the company;

● the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and

● as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company's performance during that period of service, the person's contribution towards the company's achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.

The compensation policy must also include the following principles:

● with the exception of office holders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria;

● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant;

● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company's financial statements;

● the minimum holding or vesting period for variable, equity-based compensation; and

● maximum limits for severance compensation.

The compensation policy must also consider appropriate incentives from a long-term perspective.

The compensation committee is responsible for: (1) recommending the compensation policy to a company's board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company's office holders, including:

● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years);

● recommending to the board of directors periodic updates to the compensation policy;

● assessing implementation of the compensation policy;

● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and

● determining whether to approve the terms of compensation of office holders that require the committee's approval.

Our compensation policy is designed to promote our long-term goals, work plan and policy, retain, motivate and incentivize our directors and executive officers, while considering the risks that our activities involve, our size, the nature and scope of our activities and the contribution of an officer to the achievement of our goals and maximization of profits, and align the interests of our directors and executive officers with our long-term performance. To that end, a portion of an executive officer compensation package is targeted to reflect our short and long-term goals, as well as the executive officer's individual performance. On the other hand, our compensation policy includes measures designed to reduce the executive officer's incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation.

Our compensation policy also addresses our executive officer's individual characteristics (such as his or her respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers, and considers the internal ratios between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses, equity-based compensation, benefits and retirement and termination of service arrangements. All cash bonuses are limited to a maximum amount linked to the executive officer's base salary. In addition, our compensation policy provides for maximum permitted ratios between the total variable (cash bonuses and equity-based compensation) and non-variable (base salary) compensation components, in accordance with an officer's respective position with the company.

An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to executive officers other than our chairman or Chief Executive Officer may be based entirely on a discretionary evaluation. Our Chief Executive Officer will be entitled to recommend performance objectives to such executive officers, and such performance objectives will be approved by our compensation committee (and, if required by law, by our board of directors).

The performance measurable objectives of our chairman and Chief Executive Officer will be determined annually by our compensation committee and board of directors. A less significant portion of the chairman's and/or the Chief Executive Officer's annual cash bonus may be based on a discretionary evaluation of the chairman's or the Chief Executive Officer's respective overall performance by the compensation committee and the board of directors based on quantitative and qualitative criteria.

The equity-based compensation under our compensation policy for our executive officers (including members of our board of directors) is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers' interests with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term. Our compensation policy provides for executive officer compensation in the form of share options or other equity-based awards, such as restricted shares and phantom, options, in accordance with our equity incentive plan then in place. Share options granted to executive officers shall be subject to vesting periods in order to promote long-term retention of the awarded executive officers. The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.

In addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses paid in excess, enables our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance our compensation policy) and allows us to exculpate, indemnify and insure our executive officers and directors subject to certain limitations set forth thereto.

Our compensation policy also provides for compensation to the members of our board of directors either: (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel) of 2000, as such regulations may be amended from time to time; or (ii) in accordance with the amounts determined in our compensation policy.

 ****

***Internal Auditor***

Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee. We intend to appoint our internal auditor within 90 days following the consummation of this offering. The role of the internal auditor is to examine, among other things, whether a company's actions comply with the law and proper business procedure. The audit committee is required to oversee the activities, and to assess the performance of the internal auditor as well as to review the internal auditor's work plan. An internal auditor may not be an interested party or office holder, or a relative of any interested party or office holder, and may not be a member of the company's independent accounting firm or its representative. The Companies Law defines an interested party as a holder of 5% or more of the outstanding shares or voting rights of a company, any person or entity that has the right to appoint at least one director or the general manager of the company or any person who serves as a director or as the general manager of a company. Our internal auditor is not our employee, but partner of a firm which specializes in internal auditing.

***Remuneration of Directors***

Under the Companies Law, remuneration of directors is subject to the approval of the compensation committee, thereafter by the board of directors and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders. In case the remuneration of the directors is in accordance with regulations applicable to remuneration of the external directors then such remuneration shall be exempt from the approval of the general meeting. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.

***Fiduciary Duties of Office Holders***

The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.

The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of care of an office holder includes a duty to use reasonable means to obtain:

● information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and

● all other important information pertaining to these actions.

The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to:

● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs;

● refrain from any action that is competitive with the company's business;

● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and

● disclose to the company any information or documents relating to the company's affairs which the office holder has received due to his position as an office holder.

***Insurance***

Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company's articles of association:

● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder;

● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company's interests; and

● a financial liability imposed upon him or her in favor of another person.

We currently have directors' and officers' liability insurance, providing total coverage of $3.0 million for the benefit of all of our directors and officers, in respect of which we paid an 18-month premium of approximately $5,250, which expires on October 1, 2026. We are currently in the process of obtaining directors' and officers' liability insurance that will be in place upon completion of this offering, up to a maximum coverage of $25,000,000 as approved by our board of directors in March 2025.

***Indemnification***

The Companies Law and the Israeli Securities Law, 5728-1968, or the Securities Law, provide that a company may indemnify an office holder against the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:

● a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator's award approved by a court;

● reasonable litigation expenses, including attorneys' fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction;

● reasonable litigation expenses, including attorneys' fees, expended by the office holder or imposed on him or her by a court,: (1) in proceedings that the company institutes, or that another person institutes on the company's behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and

● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys' fees. An "Administrative Procedure" is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.

The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion:

● to events that in the opinion of the board of directors can be foreseen based on the company's activities at the time that the undertaking to indemnify is made; and

● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.

We have entered into indemnification agreements with all of our directors and with all members of our senior management. Each such indemnification agreement provides the office holder with indemnification permitted under applicable law and up to a certain amount, and to the extent that these liabilities are not covered by directors and officers insurance.

***Exemption***

Under the Companies Law, an Israeli company may not exempt an office holder from liability for a breach of his or her duty of loyalty, but may exempt in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exemption is included in its articles of association. Our amended and restated articles of association provide that we may exempt, in whole or in part, any office holder from liability to us for damages caused to the company as a result of a breach of his or her duty of care, but prohibit an exemption from liability arising from a company's transaction in which our controlling shareholder or officer has a personal interest. Subject to the aforesaid limitations, under the indemnification agreements, we exempt and release our office holders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law.

Our board of directors and shareholders entered into an indemnification and exemption agreements with certain directors and officers, as may be from time to time, effective upon the completion of the offering.

***Limitations***

The Companies Law provides that we may not exempt or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exemption) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.

Under the Companies Law, exemption, indemnification and insurance of office holders in a public company must be approved by the compensation committee and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders.

Our amended and restated articles of association permit us to exempt (subject to the aforesaid limitation), indemnify and insure our office holders to the fullest extent permitted or to be permitted by the Companies Law.

The foregoing descriptions summarize the material aspects and practices of our board of directors. For additional details, we also refer you to the full text of the Companies Law, as well as of our amended and restated articles of association, which are exhibits to this registration statement of which this prospectus forms a part, and are incorporated herein by reference.

There are no service contracts between us or our Subsidiary, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service.

**Approval of Related Party Transactions under Israeli Law**

*General*

Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if:

● the office holder acts in good faith and the act or its approval does not cause harm to the company; and

● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company's approval of such matter.

*Disclosure of Personal Interests of an Office Holder*

The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the meeting of the board of directors at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company. If the transaction is an extraordinary transaction, the office holder must also disclose any personal interest held by:

● the office holder's relatives; or

● any corporation in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.

An office holder is not, however, obliged to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction. Under the Companies Law, an extraordinary transaction is a transaction:

● not in the ordinary course of business;

● not on market terms; or

● that is likely to have a material effect on the company's profitability, assets or liabilities.

The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made. We require our office holders to make such disclosures to our board of directors.

Under the Companies Law, once an office holder complies with the above disclosure requirement, the board of directors may approve a transaction between the company and an office holder, or a third party in which an office holder has a personal interest, unless the articles of association provide otherwise and provided that the transaction is in the company's interest. If the transaction is an extraordinary transaction in which an office holder has a personal interest, first the audit committee and then the board of directors, in that order, must approve the transaction. Under specific circumstances, shareholder approval may also be required. Generally, a person who has a personal interest in a matter which is considered at a meeting of the board of directors or the audit committee may not be present at such a meeting unless the chairman of the audit committee or board of directors (as applicable) determines that he or she should be present in order to present the transaction that is subject to approval. A director who has a personal interest in a transaction, which is considered at a meeting of the board of directors or the audit committee, may not be present at this meeting or vote on this matter, unless a majority of members of the board of directors or the audit committee, as the case may be, has a personal interest. If a majority of the board of directors has a personal interest, then shareholder approval is generally also required.

*Disclosure of Personal Interests of a Controlling Shareholder*

Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company. Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest, as well as transactions for the provision of services whether directly or indirectly by a controlling shareholder or his or her relative, or a company such controlling shareholder controls, and transactions concerning the terms of engagement and compensation of a controlling shareholder or a controlling shareholder's relative, whether as an office holder or an employee, require the approval of the audit committee or the compensation committee, as the case may be, the board of directors and a majority of the shares voted by the shareholders of the company participating and voting on the matter in a shareholders' meeting. In addition, the shareholder approval must fulfill one of the following requirements:

● at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or

● the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.

In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.

The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question. Failure to so indicate will result in the invalidation of that shareholder's vote. However, according to the Companies Law Regulations (exemptions for companies whose securities are listed for trading on a stock exchange outside of Israel) 5760-2000, by signing and submitting a proxy card, a shareholder declares and approves that he has no personal interest in the approval of any of the items on a general meeting agenda that requires such declaration under the Companies Law, with the exception of a personal interest that the shareholder positively informed the Company about.

The term "controlling shareholder" is defined in the Companies Law as a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in a company or has the right to appoint 50% or more of the directors of the company or its general manager. In the context of a transaction involving a shareholder of the company, a controlling shareholder also includes a shareholder who holds 25% or more of the voting rights in the company if no other shareholder holds more than 50% of the voting rights in the company. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated.

*Approval of the Compensation of Directors and Executive Officers*

The compensation of, or an undertaking to indemnify, insure or exculpate, an office holder who is not a director requires the approval of the company's compensation committee, followed by the approval of the company's board of directors, and, if such compensation arrangement or an undertaking to indemnify, insure or exculpate is inconsistent with the company's stated compensation policy, or if the said office holder is the chief executive officer of the company (subject to a number of specific exceptions), then such arrangement is subject to the approval of our shareholders, subject to a special majority requirement.

*Directors*. Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and, unless exempted under the regulations promulgated under the Companies Law, the approval of the general meeting of our shareholders. If the compensation of our directors is inconsistent with our stated compensation policy, then, provided that those provisions that must be included in the compensation policy according to the Companies Law have been considered by the compensation committee and board of directors, shareholder approval by a special majority will be required.

*Executive officers other than the chief executive officer.* The Companies Law requires the approval of the compensation of a public company's executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company's board of directors, and (iii) only if such compensation arrangement is inconsistent with the company's stated compensation policy, the company's shareholders by a special majority. However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company's stated compensation policy, the compensation committee and board of directors may override the shareholders' decision if each of the compensation committee and the board of directors provide detailed reasons for their decision.

*Chief executive officer.* Under the Companies Law, the compensation of a public company's chief executive officer is required to be approved by: (i) the company's compensation committee; (ii) the company's board of directors, and (iii) the company's shareholders by a special majority. However, if the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders' decision if each of the compensation committee and the board of directors provides detailed reasons for their decision. In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders' approval, if the compensation committee determines that the compensation arrangement is consistent with the company's stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholder vote would impede the company's ability to attain the candidate to serve as the company's chief executive officer (and provide detailed reasons for the latter).

The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company's stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company's compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a special majority requirement.

***Duties of Shareholders***

Under the Companies Law, a shareholder has a duty to refrain from abusing his power in the company and to act in good faith and in an acceptable manner in exercising his rights and performing his obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters:

● amendment of the articles of association;

● increase in the company's authorized share capital;

● merger; and

● the approval of related party transactions and acts of office holders that require shareholder approval.

A shareholder also has a general duty to refrain from oppressing other shareholders. The remedies generally available upon a breach of contract will also apply to a breach of the above mentioned duties, and in the event of oppression of other shareholders, additional remedies are available to the injured shareholder.

In addition, any controlling shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote and any shareholder that, under a company's articles of association, has the power to appoint or prevent the appointment of an office holder, or has another power with respect to a company, is under a duty to act with fairness towards the company. The Companies Law does not describe the substance of this duty except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder's position in the company into account.

**Equity Incentive Plan**

Our 2019 Plan was adopted by our board of directors in July 2019. The 2019 Plan provides for the grant of share options to our directors, officers, employees, office holders, service providers and their employees, or charitable entities, or collectively, optionees or participants. On January 6, 2025, the Company increased the maximum number of Ordinary Shares reserved for issuance under the 2019 Plan from 246,170 Ordinary Shares to 723,178 Ordinary Shares. As of July 3, 2025, the total number of Ordinary Shares reserved for future grants of share options under our 2019 Plan was 184,612. As of July 3, 2025, the total number of Ordinary Shares issuable upon the exercise of share options to directors, employees and consultants under our 2019 Plan was 538,237.

Our 2019 Plan is administered by our board of directors or our compensation committee; however, the board of directors is empowered to alter, amend, or rescind any act taken by the compensation committee. The power to administer the 2019 Plan includes, but is not limited to: (i) approval of option grants, or Option Grants, and the determination of the terms and provisions of the respective Option Grants, including, the vesting schedules of the share options the exercise price thereof; provisions concerning the time or times when and the extent to which Options may be exercised; the nature and duration of restrictions as to transferability; or any other special conditions relating to an Option Grant; (ii) the acceleration of any participant's right to exercise Options, in whole or in part; (iii) the interpretation of the provisions of the 2019 Plan; (iv) altering, amending or rescinding any resolution or act previously taken by the compensation committee; and (v) the determination of any other matter which is necessary or desirable for, or incidental to, the administration of the 2019 Plan. The board of directors has the exclusive discretion and power to grant Options. The board of directors also has the power to grant optionees a cashless exercise mechanism for all or part of the Option Grants.

Unless otherwise determined by the board of directors with the consent of at least one investor director, Option Grants vest over four years—25% of which vests on the first anniversary of the Option Grant, and each additional one twelfth (1/12) balance vests on the last day of each three-month period following the first anniversary of the Option Grant.

Eligible employees, officers and directors would qualify for provisions of Section 102 of the Israeli Income Tax Ordinance of 1961 (New Version), or the Tax Ordinance. Section 102 of the Tax Ordinance allows employees, directors and officers who are not controlling shareholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or share options. Section 102 includes two alternatives for tax treatment involving the issuance of share options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of share options or shares directly to the grantee. Section 102(b)(2) of the Tax Ordinance, the most favorable tax treatment for the grantee, permits the issuance to a trustee under the "capital gain track." However, under this track we are not allowed to deduct an expense with respect to the issuance of the share options or shares. Non-employees may only be granted share options under section 3(i) of the Tax Ordinance, which does not provide for similar tax benefits.

As a default, our 2019 Plan provides that upon termination of a an optionee's employment or service with us or any of our affiliates, other than in the event of death, disability or cause, all unvested share options will terminate and the underlying Options will immediately expire, and all vested share options will generally be exercisable for 90 days following such termination, subject to the terms of the 2019 Plan and the governing option agreement. Notwithstanding the foregoing, in the event the engagement is terminated for cause (including, inter alia, due to breach of his/her employment agreement (whether written or oral) including without limitation, a breach of non-compete obligations, or breach of his/her fiduciary duties towards us or a related entity as determined by the Compensation Committee, in its sole discretion, or any other termination for "cause" or in the case that competent court or other authority resolves that such employee is not entitled to discharge compensation), all share options granted to such optionee, whether vested or unvested, will not be exercisable and will terminate on the date of the termination. Upon termination of a service agreement due to death or disability, all the share options vested at the time of termination will generally be exercisable for six months.

In the event of a merger or consolidation with or into another corporation resulting in such other corporation being the surviving entity, an acquisition of all or substantially all of our outstanding capital stock, or the sale of substantially all of our assets, each outstanding option shall be assumed for an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation, and appropriate adjustments shall be made in the number of share options in order to reflect such an action. In the event that the successor corporation refuses to assume or substitute for the option, the vesting periods defined in the Option Grants may be fully or partially accelerated by the Compensation Committee.

In the event of any variation in our share capital, including a share dividend, share split, combination or exchange of shares, recapitalization, or any other like event, the number, class and kind of shares subject to the 2019 Plan and outstanding options, and the exercise prices of the share options, will be appropriately and equitably adjusted so as to maintain the proportionate number of shares without changing the aggregate exercise price of the share options.

**BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT**

The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of July 3, 2025 by:

● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares;

● each of our directors and executive officers; and

● all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to Ordinary Shares. Ordinary Shares issuable under share options that are exercisable within 60 days after July 3, 2025, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the share options but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Percentage of shares beneficially owned before this offering is based on 7,362,906 shares outstanding on July 3, 2025. The number of Ordinary Shares deemed outstanding after this offering is based on 8,687,800 Ordinary Shares which assumes no exercise of the underwriters' over-allotment option.

We are not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to us which would result in a change in control of our company at a subsequent date. Except as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all securities shown to be beneficially owned by them, based on information provided to us by such shareholders. Unless otherwise noted below, each beneficial owner's address is: Nasus Pharma Ltd., Yigal Alon 65, Tel Aviv, 6744317, Israel.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Shares<br> Beneficially<br> Owned<br> Prior to this<br> Offering\*\*\*** | **Percentage**<br> **Owned<br> Prior to this<br> Offering\*\*\*** | **Shares<br> Beneficially<br> Owned<br> After this<br> Offering** | **Percentage**<br> **Owned<br> After this**<br> **Offering** |
| **Holders of more than 5% of our voting securities:** |  |  |  |  |
| Udi Gilboa\*(1) | 1865807 | 25% | 1865807 | 21% |
| Dalia Megiddo\*(2) | 1865853 | 25% | 1865853 | 21% |
| Ronnie Hershman\*(3) | 1295936 | 18% | 1295936 | 14% |
| Capital Point Ltd.(4) | 425129 | 6% | 425129 | 5% |
| Phoenix Solutions Ltd (5) | 429307 | 6% | 429307 | 5% |
| Hershman Holdings LLC (6) | 477008 | 6% | 477008 | 5% |
| **Directors, Director Nominees and senior management who are not 5% holders:** |  |  |  |  |
| Dan Teleman |  |  |  |  |
| Galia Temtsin Krayz(7) | 171723 | 2% | 171723 | 2% |
| Tair Lapidot, Pd.D.(8) | 78344 | 1% | 78344 | \*\*% |
| Oren Elmaliach(9) | 32294 | \*\*% | 32294 | \*\*% |
| David Silberman |  |  |  |  |
| Dr. Sharon Shacham |  |  |  |  |
| Isaac Israel |  |  |  |  |
| **All directors, director nominees and senior management as a group (10 persons)** | **5309957** | **70%** | **5309957** | **58**% |

---

\* Indicates director of the Company.

\*\* Less than 1%.

\*\*\* Assuming conversion of the 2024 SAFE at $11.00 into 324,894 Ordinary Shares.

(1) Consists of (i) 1,846,019 Ordinary Shares; (ii) 6,068 Class A-3A Ordinary Shares; (iii) 8,525 Ordinary Shares issuable upon conversion 2024 SAFEs; and (iv) 5,195 Class A-3A Ordinary Shares held by Formulex. Mr. Gilboa is a beneficial owner.

(2) Consists of (i) 1,846,019 Ordinary Shares; (i) 6,068 Class A-3A Ordinary Shares; (ii) 8,571 Ordinary Shares issuable upon conversion 2024 SAFEs; and (iii) 5,195 Class A-3A Ordinary Shares held by Formulex of which Dr. Megiddo is a beneficial owner. Dr. Megiddo does not have sole nor share voting and investment power over the shares held by Formulex.

(3) Consists of (i) 477,006 Ordinary Shares held by Hershman Holdings LLC, which Dr. Hershman beneficially owns; (ii) 133,639 Class A-1 Ordinary Shares held by Hershman Holdings LLC; (iii) 69,820 Class A-3A Ordinary Shares held by Hershman Holdings LLC; (iv) 26,002 Class A-3A Ordinary Shares held by Hershman Holdings LLC; (v) 30,276 Class A-3B Ordinary Shares held by Hershman Holdings LLC; (vi) 66,868 Ordinary Shares issuable upon conversion of 2024 SAFEs held by Hershman Holdings LLC; (vii) 429,307 Ordinary Shares held by Phoenix Solutions Ltd. Dr. Hershman is the controlling shareholder of Phoenix Solutions Ltd. Phoenix Solutions Ltd. is also a non-beneficial owner of Formulex; and (viii) 63,018 Ordinary Shares issuable upon exercise of outstanding share options that are exercisable within 60 days. Dr. Hershman has sole voting and investment power over the shares held by Hershman Holdings LLC but not over those held by Phoenix Solutions Ltd.

(4) Consists of (i) 407,699 Ordinary Shares; (ii) 17,430 Class A-3A Ordinary Shares. Capital Point Ltd. is a public company traded on the Tel Aviv Stock Exchange with an address of Azreli Tower 1, Floor 22, Tel Aviv Israel.

(5) Consists of 429,307 Ordinary Shares. Dr. Hershman is the beneficial owner of Phoenix Solutions Ltd. and has shared voting and investment power over the shares held by Phoenix Solutions Ltd. The address of Phoenix Solutions Ltd is Remez David 19, Tel Aviv, Israel. These shares are also included in Dr. Hershman's shares listed in footnote (3) above.

(6) Consists of 477,008 Ordinary Shares. These Ordinary Shares are also included in Dr. Hershman's shares under footnote (3). Dr. Hershman is the beneficial owner of Hershman Holdings LLC and has sole voting and investment power over the shares held by Hershman Holdings LLC. The address of Hershman Holdings LLC is 1999 Marcus Ave, # 220, New Hyde Park, New York 11042.

(7) Consists of 171,723 Ordinary Shares. Dr. Galia Temtsin Krayz is the chief executive officer of Formulex.

(8) Consists of 78,334 Ordinary Shares issuable upon exercise of outstanding share options that are exercisable within 60 days.

(9) Consists of 32,294 Ordinary Shares issuable upon exercise of outstanding share options that are exercisable within 60 days.

 **

***Record Holders***

 **

As of July 3, 2025, there were 77 shareholders of record of our Ordinary Shares, all of which are located in Israel. These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside, since many of these shares were held of record by brokers or other nominees.

**RELATED PARTY TRANSACTIONS**

**Services Agreements**

We have entered into written services agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors and officers insurance. Members of our senior management are eligible for bonuses each year. The bonuses are payable upon meeting objectives and targets that are set by our Chief Executive Officer and approved annually by our board of directors that also set the bonus targets for our Chief Executive Officer. For more information on the written services agreements with each of our executive officers, please see "Management—Compensation—Services Agreements with Executive Officers."

**Options**

Since our inception, we have granted share options to purchase our Ordinary Shares to our officers and certain of our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under "Management—Equity Incentive Plan." If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various option plan agreements), share options that are vested will generally remain exercisable for three months after such termination.

**Loan Agreements**

In July 2022, we received the July 2022 Loan from Dr. Ronnie Hershman, a director and shareholder, and Michael Gibber, a shareholder, pursuant to which we received a principal amount of $500 thousand, for a term of twelve (12) months, at an interest rate of 8% per annum. On August 28, 2024, we and each of Dr. Ronnie Hershman and Michael Gibber entered into an exchange letter, or the July 2022 Loan Exchange Letter, according to which our obligations in connection with the loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs, under which it is deemed that Dr. Hershman invested an amount of $284,154 and Michael Gibber invested an amount of $286,210.

As part of the February 2023 Loan, we received a loan in an aggregate amount of $60 thousand from Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa under substantially the same terms as the July 2022 Loan, for a term of twelve (12) months, at an interest rate of 8% per annum. A definitive agreement for the February 2023 Loan was not executed. On August 28, 2024, we and each of Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa entered into the February 2023 Loan Exchange Letter, according to which our obligations in connection with the February 2023 Loan were discharged in consideration for the issuance of a SAFE with the same terms as the 2024 SAFEs, under which Dr. Ronnie Hershman was deemed to have invested an amount of $43,954, Dr. Dalia Megiddo was deemed to have invested an amount of $11,286, and Mr. Udi Gilboa was deemed to have invested an amount of $10,963 in said SAFEs. See "*—SAFEs*" below for information regarding the terms of the 2024 SAFEs.

**Formulex License Agreement**

In May 2019, we entered into a license agreement with Formulex. Formulex is an Israeli corporation, owned by our co-founders, Mr. Ehud Gilboa, Dr. Dalia Megiddo, and director Dr. Ronnie Hershman. Ms. Galia Temtsin Kryaz, our director of product development, is the chief executive officer of Formulex. Pursuant to the license agreement, Formulex granted the company an exclusive license for the development, manufacture and commercialization of Formulex's patent for dry powder compositions for intranasal delivery and rights in the know-how of its intranasal and inhaled formulations, combination products, and particle engineering, together, the Licensed Products. Pursuant to the License Agreement, we pay Formulex royalties of the Licensed Products in the amount of 0.5% of net sales of the licensed products, which are capped at $100,000 in the aggregate. The royalty payment period commenced on the effective date of the agreement and will continue on a country-by-country, product-by-product basis for the longer of: (i) 15 years from the date of the first commercial sale of such Licensed Product in such country, or (ii) until the licensed patent expires in such country. We may terminate the license agreement for any reason upon 60 days prior written notice. The agreement does not provide for termination by Formulex. In the event of termination by us, we have the right to acquire the Licensed Technology in an amount equal to the balance between the amount actually paid to Formulex prior to the date of termination and the amount of $100,000. Termination of the agreement does not relieve the parties of obligation accrued prior to such termination.

**Formulex Service Agreement**

On June 3, 2019, we entered into a services agreement with Formulex, as amended in March 2020, for the provision of certain services by Formulex. Formulex provides us with services relating to chemical manufacturing and controls for our PBI products, including preclinical formulation development of dry intranasal powder, development and validation of analytical methods, packaging in an intranasal device, preparation of clinical batches for bioavailability studies, stability studies, and quality assurance, for a fixed monthly cost of $5,000. The services agreement was for a term of three years from the amendment date, and automatically renews every year for a period of one year, unless terminated by either party upon 30 days' written notice, in accordance with the terms and conditions set forth therein. We may also terminate the agreement for any reason upon 30 days' written notice to Formulex. In connection with the same, Formulex has provided the Company with one-time development services in 2023 and 2022 for additional fees of $22,000 and $11,000, respectively, and no such services were provided to the Company in 2024.

**Formulex Subcontractor Agreement**

On December 5, 2024, we entered into a subcontractor agreement with Formulex. Under the terms of the agreement, we may retain the services of Formulex as a subcontractor, on a non-exclusive basis, in connection with our potential participation in tenders to render certain services to end-clients. The services provided by Formulex shall be decided by the parties on a case-by-case basis, and may include, among other services, assisting us with applying to, and participating in, certain tenders, and performing certain tasks for the projects underlying tenders for which we are selected. Payment for services would be dependent upon the project and, pursuant to the contract, would need to be pre-itemized in the form of a budget before a project commences. However, the maximum consideration paid to Formulex in the aggregate under the agreement shall not exceed $800,000. The term of the subcontractor agreement is thirty-six months from its effective date, unless terminated by either party upon 30 days' written notice at any time and for any reason. Each subcontract under the agreement terminates upon the earlier of completion of the services provided thereunder or the expiration or termination of the subcontractor agreement, unless otherwise provided by the parties in any specific subcontract with respect thereto. The agreement is subject to ratification and approval by our shareholders, which we expect to obtain prior to the closing of this offering. In 2024, Formulex has provided the Company with subcontractor services for a total amount of $116,000.

**Secretarial Services**

On June 1, 2019, we entered into an agreement with Topnotch Consultancy (2009) Ltd., or Topnotch, a company owned by our co-founder and Executive Chairman of the Board of Directors, Mr. Udi Gibloa, pursuant to which Topnotch will provide us with secretarial and administrative services incurred in connection with Mr. Gilboa's services to the Company, in the amount of NIS 5,000 per month ($1,373), which was raised to NIS 15,000 ($4,119) in December 2024. Per the agreement, Mr. Gilboa is not entitled to any further compensation, reimbursement of expenses, fees, or commissions that are not in connection with the performance of office or secretarial services. The agreement shall continue until terminated by either party upon 30 days' written notice.

**Property Lease and Office Services**

On June 1, 2019, we entered into a services agreement with Topnotch, pursuant to which we receive certain office services and the lease of our office space in return for a monthly fee of NIS 12,000 ($3,295). Per the agreement, Mr. Gilboa is not entitled to any further compensation, reimbursement of expenses, fees, or commissions that are not in connection with the performance of office or secretarial services. The agreement shall continue until terminated by either party upon 30 days' written notice.

**SAFEs**

In February 2022 through April 2022, we entered into the 2022 SAFEs for aggregate proceeds of $966,000. Our co-founders, a member of our board of directors, several shareholders at that time, and Formulex participated in these 2022 SAFEs. Specifically, Mr. Udi Gilboa participated in the amount of $35,000, Dr. Dalia Megiddo participated in the amount of $35,000, Dr. Ronnie Hershman (through Hershman Holdings LLC) participated in the amount of $150,000 and Formulex participated in the amount of $30,000. Per the terms of the 2022 SAFEs, since an initial public offering, merger, acquisition, equity financing other liquidity event or dissolution event did not take place within 15 months from the execution of the 2022 SAFEs, on August 28, 2024, the subscription amounts under such SAFEs were converted into Class A-3A Ordinary Shares. Upon the effectiveness of the registration statement for this offering, such Class A-3A Ordinary Shares will automatically convert into Ordinary Shares.

In March 2023 through April 2023, we entered into the 2023 SAFEs for aggregate proceeds of $995,000. A member of our board of directors, Dr. Hershman (through Hershman Holdings LLC) participated in the amount of $100,000. Gabriel Hershman, a relative of Dr. Hershman, also participated in the amount of $25,000. Per the terms of the 2023 SAFEs, since an initial public offering, merger, acquisition, equity financing other liquidity event or dissolution event did not take place within 15 months from the execution of the 2023 SAFEs, in August 28, 2024, the subscription amounts under such SAFEs were converted into Class A-3B Ordinary Shares. Upon the effectiveness of the registration statement for this offering, such Class A-3B Ordinary Shares will automatically convert into Ordinary Shares.

In March 2024 through March 2025, we entered into the 2024 SAFEs in the aggregate amount of $1,986,500, of which $300,000 were canceled and terminated in November 2024. In addition, pursuant to the terms of the July 2022 Loan Exchange Letter and the February 2023 Loan Exchange Letter, the July 2022 Loan and February 2023 Loan were converted into 2024 SAFEs in the amount of $570,364 and $66,203, respectively; however, no additional proceeds were received pursuant to said exchanges. Our co-founders and members of our board of directors participated in the 2024 SAFEs. Specifically, Mr. Gilboa participated in the amount of $60,963, Dr. Megiddo participated in the amount of $61,286 and Dr. Hershman participated in the amount of $478,108. Per the terms of the 2024 SAFEs, upon an initial public offering, merger, acquisition, qualified equity financing other liquidity event, the subscription amounts under such SAFEs will be converted into our Ordinary Shares upon the effectiveness of the registration statement for this offering at a conversion price reflecting a discount of 35%. However, if such events do not occur within 18 months of the execution of such SAFEs, such SAFEs will be converted into our securities of such class of shares having certain rights identical to the respective rights of the most senior class of shares on the basis of a previous round of equity financing consummated by the Company at a conversion price reflecting a discount of 35%, as prescribed in such SAFEs.

**DESCRIPTION OF SHARE CAPITAL AND GOVERNING DOCUMENTS**

The following descriptions of our share capital and provisions of our amended and restated articles of association as in effect upon the effectiveness of the registration statement for this offering are summaries and do not purport to be complete. A form of our amended and restated articles of association was filed with the SEC as an exhibit to our registration statement, of which this prospectus forms a part.

Upon effectiveness of this offering, a 1-for-4.77008 forward share split of our Ordinary Shares will take effect.

Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein reflect the issuance of the foregoing forward share split, and the customary adjustments to our outstanding options and warrants. The description of the Ordinary Shares reflects changes to our capital structure that will occur upon the effectiveness of the registration statement for this offering.

***General***

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As of July 3, 2025, our authorized share capital consisted of 13,265,593 Ordinary Shares, par value NIS 0.01 per share, comprised of: 9,540,160 Ordinary Shares, 815,684 Class A Ordinary Shares; 1,431,034 Class A-1 Ordinary Shares; 477,008 Class A-2 Ordinary Shares; 524,709 Class A-3 Ordinary Shares, 171,723 Class A-3A Ordinary Shares and 305,285 Class A-3B Ordinary Shares, of which 7,362,906 shares were issued and outstanding as of such date. Under the Amended Articles, which will come into effect upon the closing of this offering, our authorized share capital will consist of 22,801,942 Ordinary Shares, no par value, of which 8,687,800 Ordinary Shares will be issued and outstanding, or 8,837,800 Ordinary Shares if the underwriters exercise in full the over-allotment option to purchase additional Ordinary Shares. All our outstanding Ordinary Shares have been validly issued, fully paid and non-assessable. Our Ordinary Shares are not redeemable and are not subject to any preemptive right.

Our registration number with the Israeli Registrar of Companies is 516022712.

**Conversion of Classes of Ordinary Shares**

Upon the effectiveness of the registration statement for this offering, all of our Class A, Class A-1, Class A-2, Class A-3, Class A-3A, and Class A-3B Ordinary Shares outstanding will automatically convert into Ordinary Shares.

**Ordinary Shares**

In the last three years, we have issued an aggregate of 329 Ordinary Shares for share options exercised as part of our option plan.

**Our Articles of Association**

***Purposes and Objects of the Company***

Our purpose is set forth in Article 1 of our articles of association and includes every lawful purpose.

***The Powers of the Directors***

Our board of directors shall direct our policy and shall supervise the performance of our Chief Executive Officer and his actions. Our board of directors may exercise all powers that are not required under the Companies Law or under our amended and restated articles of association to be exercised or taken by our shareholders.

***Rights Attached to Shares***

Our Ordinary Shares shall confer upon the holders thereof:

● equal right to attend and to vote at all of our general meetings, whether regular or special, with each Ordinary Share entitling the holder thereof, which attend the meeting and participate at the voting, either in person or by a proxy or by a written ballot, to one vote;

● equal right to participate in distribution of dividends, if any, whether payable in cash or in bonus shares, in distribution of assets or in any other distribution, on a per share pro rata basis; and

● equal right to participate, upon our dissolution, in the distribution of our assets legally available for distribution, on a per share pro rata basis.

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***Election of Directors***

Pursuant to our amended articles of association to be in effect upon the effectiveness of the registration statement for this offering, our directors are elected at an annual general meeting of our shareholders and serve on the board of directors until the next annual general meeting (except for external directors) or until he or she resigns or unless he or she is removed by a majority vote of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events, in accordance with the Companies Law and our articles of association. The directors are classified, excluding the external directors (when applicable), with respect to the term for which they each severally hold office, into three classes, as nearly equal in number as practicable, and designated as Class I, Class II and Class III. The board of directors may assign members of the board of directors already in office to such classes at the time such classification becomes effective. If the number of directors is changed, any newly created directors or decrease in directors must be apportioned by the board of directors among the classes to make them equal in number. Pursuant to our articles of association, other than the external directors, for whom special election requirements apply under the Companies Law, the vote required to appoint a director is a simple majority vote of holders of our voting shares, participating and voting at the relevant meeting. In addition, our articles of association allow our board of directors to appoint directors to fill vacancies and/or as an addition to the board of directors (subject to the maximum number of directors) to serve until the next annual general meeting. External directors are elected for an initial term of three years, may be elected for additional terms of three years each under certain circumstances, and may be removed from office pursuant to the terms of the Companies Law. See "*Management—Board Practices—External Directors*."

Our Class I members which will hold office initially for a term expiring at the annual general meeting of shareholders to be held in 2026, shall be Dr. Sharon Shacham and David Silberman;

Our Class II members which will hold office initially for a term expiring at the annual general meeting of shareholders to be held in 2027, shall be Isaac Israel and Dr. Ronnie Hershman;

Our Class III members which will hold office initially for a term expiring at the annual general meeting of shareholders to be held in 2028, shall be Dr. Dalia Megiddo and Udi Gilboa.

***Annual and Special Meetings***

Under the Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year, at such time and place which shall be determined by our board of directors, that must be no later than 15 months after the date of the previous annual general meeting. All meetings other than the annual general meeting of shareholders are referred to as special general meetings. Our board of directors may call special meetings whenever it sees fit and upon the request of: (a) any two of our directors or such number of directors equal to one quarter of the directors then at office; and/or (b) one or more shareholders holding, in the aggregate, (i) 5% or more of our outstanding issued shares and 1% of our outstanding voting power or (ii) 5% or more of our outstanding voting power.

Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board of directors, which may be between four and forty days prior to the date of the meeting. Resolutions regarding the following matters must be passed at a general meeting of our shareholders:

● amendments to our amended and restated articles of association;

● the exercise of our board of directors' powers by a general meeting if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management;

● appointment or termination of our auditors;

● appointment of directors, including external directors;

● approval of acts and transactions requiring general meeting approval pursuant to the provisions of the Companies Law (mainly certain related party transactions) and any other applicable law;

● increases or reductions of our authorized share capital; and

● a merger (as such term is defined in the Companies Law).

***Notices***

The Companies Law and our amended and restated articles of association require that a notice of any annual or special shareholders meeting be provided at least 21 days prior to the meeting, and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, approval of the company's general manager to serve as the chairman of the board of directors or an approval of a merger, notice must be provided at least 35 days prior to the meeting.

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***Quorum***

As permitted under the Companies Law, the quorum required for our general meetings consists of at least two shareholders present in person, by proxy, written ballot or voting by means of electronic voting system, who hold or represent between them at least 25% of the total outstanding voting rights. If within half an hour of the time set forth for the general meeting a quorum is not present, the general meeting shall stand adjourned the same day of the following week, at the same hour and in the same place, or to such other date, time and place as prescribed in the notice to the shareholders and in such adjourned meeting, if no quorum is present within half an hour of the time arranged, any number of shareholders participating in the meeting, shall constitute a quorum.

If a special general meeting was summoned following the request of a shareholder, and within half an hour a legal quorum shall not have been formed, the meeting shall be canceled.

***Adoption of Resolutions***

Our amended and restated articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required under the Companies Law or our amended and restated articles of association. A shareholder may vote in a general meeting in person, by proxy, by a written ballot.

***Changing Rights Attached to Shares***

Unless otherwise provided by the terms of the shares and subject to any applicable law, any modification of rights attached to any class of shares must be adopted by the holders of a majority of the shares of that class present a general meeting of the affected class or by a written consent of all the shareholders of the affected class.

The enlargement of an existing class of shares or the issuance of additional shares thereof, shall not be deemed to modify the rights attached to the previously issued shares of such class or of any other class, unless otherwise provided by the terms of the shares.

***Limitations on the Right to Own Securities in Our Company***

There are no limitations on the right to own our securities.

***Provisions Restricting Change in Control of Our Company***

There are no specific provisions of our amended and restated articles of association that would have an effect of delaying, deferring or preventing a change in control of the Company or that would operate only with respect to a merger, acquisition or corporate restructuring involving us (or our Subsidiary). However, as described below, certain provisions of the Companies Law may have such effect.

The Companies Law includes provisions that allow a merger transaction and requires that each company that is a party to the merger have the transaction approved by its board of directors and, unless certain requirements described under the Companies Law are met, a vote of the majority of shareholders, and, in the case of the target company, also a majority vote of each class of its shares. For purposes of the shareholder vote of each party, unless a court rules otherwise, the merger will not be deemed approved if shares representing a majority of the voting power present at the shareholders meeting and which are not held by the other party to the merger (or by any person or group of persons acting in concert who holds 25% or more of the voting power or the right to appoint 25% or more of the directors of the other party) vote against the merger. If, however, the merger involves a merger with a company's own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same Special Majority approval that governs all extraordinary transactions with controlling shareholders. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger the surviving company will be unable to satisfy the obligations of any of the parties to the merger, and may further give instructions to secure the rights of creditors. If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the petition of holders of at least 25% of the voting rights of a company. For such petition to be granted, the court must find that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders. In addition, a merger may not be completed unless at least (1) 50 days have passed from the time that the requisite proposals for approval of the merger were filed with the Israeli Registrar of Companies by each merging company and (2) 30 days have passed since the merger was approved by the shareholders of each merging company.

The Companies Law also provides that, subject to certain exceptions, an acquisition of shares in an Israeli public company must be made by means of a "special" tender offer if as a result of the acquisition (1) the purchaser would become a holder of 25% or more of the voting rights in the company, unless there is already another holder of at least 25% or more of the voting rights in the company or (2) the purchaser would become a holder of 45% or more of the voting rights in the company, unless there is already a holder of more than 45% of the voting rights in the company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholders' approval, subject to certain conditions, (2) was from a holder of 25% or more of the voting rights in the company which resulted in the acquirer becoming a holder of 25% or more of the voting rights in the company, or (3) was from a holder of more than 45% of the voting rights in the company which resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company. A "special" tender offer must be extended to all shareholders. In general, a "special" tender offer may be consummated only if (1) at least 5% of the voting power attached to the company's outstanding shares will be acquired by the offeror and (2) the offer is accepted by a majority of the offerees who notified the company of their position in connection with such offer (excluding the offeror, controlling shareholders, holders of 25% or more of the voting rights in the company or anyone on their behalf, or any person having a personal interest in the acceptance of the tender offer). If a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.

If, as a result of an acquisition of shares, the acquirer will hold more than 90% of an Israeli company's outstanding shares or of certain class of shares, the acquisition must be made by means of a tender offer for all of the outstanding shares, or for all of the outstanding shares of such class, as applicable. In general, if less than 5% of the outstanding shares, or of applicable class, are not tendered in the tender offer and more than half of the offerees who have no personal interest in the offer tendered their shares, all the shares that the acquirer offered to purchase will be transferred to it by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares. Any shareholders that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may request, by petition to an Israeli court, (i) appraisal rights in connection with a full tender offer, and (ii) that the fair value should be paid as determined by the court, for a period of six months following the acceptance thereof. However, the acquirer is entitled to stipulate, under certain conditions, that tendering shareholders will forfeit such appraisal rights.

Lastly, Israeli tax law treats some acquisitions, such as stock-for-stock exchanges between an Israeli company and a foreign company, less favorably than U.S. tax laws. For example, Israeli tax law may, under certain circumstances, subject a shareholder who exchanges his Ordinary Shares for shares in another corporation to taxation prior to the sale of the shares received in such stock-for-stock swap.

***Changes in Our Capital***

The general meeting may, by a simple majority vote of the shareholders attending the general meeting:

● increase our registered share capital by the creation of new shares from the existing class or a new class, as determined by the general meeting;

● cancel any registered share capital which have not been taken or agreed to be taken by any person;

● consolidate and divide all or any of our share capital into shares of larger nominal value than our existing shares;

● subdivide our existing shares or any of them, our share capital or any of it, into shares of smaller nominal value than is fixed; and

● reduce our share capital and any fund reserved for capital redemption in any manner, and with and subject to any incident authorized, and consent required, by the Companies Law.

**SHARES ELIGIBLE FOR FUTURE SALE**

Prior to this offering, no public market existed for our Ordinary Shares. Sales of substantial amounts of our Ordinary Shares following this offering, or the perception that these sales could occur, could adversely affect prevailing market prices of our Ordinary Shares and could impair our future ability to obtain capital, especially through an offering of equity securities. Assuming that the underwriters do not exercise their over-allotment option with respect to this offering and assuming no exercise of options outstanding following the offering, we will have an aggregate of Ordinary Shares outstanding upon completion of this offering. Of these shares, the Ordinary Shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, unless purchased by "affiliates" (as that term is defined under Rule 144 of the Securities Act), who may sell only the volume of shares described below and whose sales would be subject to additional restrictions described below.

The remaining Ordinary Shares will be held by our existing shareholders. Because substantially all of these shares were sold outside the United States to persons residing outside the United States at the time, they also will be freely tradable without restriction or further registration, except that shares held by affiliates must be sold pursuant to Rule 144 or another available exemption, and except for the lock-up restrictions described below. Further, substantially all of our Ordinary Shares outstanding prior to this offering are subject to lock-up agreements described below.

**Lock-Up Agreements**

We and our executive officers, directors, and certain shareholders have agreed not to offer, sell, agree to sell, directly or indirectly, or otherwise dispose of any Ordinary Shares or any other securities convertible into or exchangeable for Ordinary Shares except for the Ordinary Shares offered in this offering without the prior written consent of the representative for a period of six months after the date of this prospectus without the prior written consent of the Representative. After the expiration of such day period, the Ordinary Shares held by our directors, executive officers or certain of our other existing shareholders may be sold outside of the United States subject to the restrictions under applicable Israeli securities laws or by means of registered public offerings.

**Rule 144**

In general, under Rule 144, any person who is not our affiliate (and has not been an affiliate of ours for the last three months) and has held their shares for at least six months, including the holding period of any prior owner other than one of our affiliates, may sell shares without restriction as long as we continue to file required public information with the SEC. In addition, under Rule 144, any person who is not an affiliate of ours (and has not been an affiliate of ours for the last three months) and has held their shares for at least one year, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares immediately upon the completion of this offering without regard to whether current public information about us is available.

A person who is our affiliate or who was our affiliate at any time during the preceding three months and who has beneficially owned restricted securities for at least six months, including the holding period of any prior owner other than one of our affiliates, is entitled to sell a number of shares within any three-month period that does not exceed the greater of:

● one percent of the number of ordinary shares then outstanding; or

● the average weekly trading volume of our Ordinary Shares on the NYSE American during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

If an affiliate acquires "restricted securities," those securities will also be subject to holding period requirements.

Substantially all of our outstanding Ordinary Shares are expected to be either unrestricted or to be eligible for sale under Rule 144. We cannot estimate the number of our Ordinary Shares that our existing shareholders will elect to sell.

**Regulation S**

Regulation S under the Securities Act provides that securities owned by any person may be sold without registration in the United States, provided that the sale is affected in an offshore transaction and no directed selling efforts are made in the United States (as these terms are defined in Regulation S), subject to certain other conditions. In general, this means that our Ordinary Shares may be sold in some manner outside the United States without requiring registration in the United States.

**Rule 701**

In general, Rule 701 under the Securities Act, provides that each of our employees, consultants or advisors who received our Ordinary Shares from us in connection with a compensatory share plan or other written agreement executed prior to the completion of this offering is eligible to resell such Ordinary Shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144.

**Form S-8 Registration Statement**

Following the completion of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register Ordinary Shares issued or reserved for issuance under our 2019 Plan. The registration statement on Form S-8 will become effective automatically upon filing.

Ordinary shares issued upon exercise of a share option and registered under the Form S-8 registration statement will, subject to vesting and lock-up provisions and Rule 144 volume limitations applicable to our affiliates, be available for sale in the open market immediately unless they are subject to a lock-up, in which case, immediately after the term of the lock-up expires.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL SHARE TRANSFER RESTRICTION MATTERS THAT MAY BE OF IMPORTANCE TO A PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN LEGAL ADVISOR REGARDING THE PARTICULAR SECURITIES LAWS AND TRANSFER RESTRICTION CONSEQUENCES OF PURCHASING, HOLDING, AND DISPOSING OF THE ORDINARY SHARES INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.

**TAXATION**

*The following description is not intended to constitute a complete analysis of all tax consequences relating to the ownership or disposition of our Ordinary Shares. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign, including Israeli, or other taxing jurisdiction.*

**ISRAELI TAX CONSIDERATIONS AND GOVERNMENT PROGRAMS**

The following is a description of the material Israeli income tax consequences of the ownership of our Ordinary Shares. The following also contains a description of material relevant provisions of the current Israeli income tax structure applicable to companies in Israel, with reference to its effect on us. To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, there can be no assurance that the tax authorities will accept the views expressed in the discussion in question. The discussion is not intended, and should not be taken, as legal or professional tax advice and is not exhaustive of all possible tax considerations.

The following description is not intended to constitute a complete analysis of all tax consequences relating to the ownership or disposition of our Ordinary Shares. Shareholders should consult their own tax advisors concerning the tax consequences of their particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.

***General Corporate Tax Structure in Israel***

Israeli companies are generally subject to corporate tax. As of January 2016, the corporate tax rate was 25%. As of January 1, 2017, the corporate tax rate was reduced to 24% and as of January 1, 2018, the corporate tax rate is 23%. However, the effective tax rate payable by a company that derives income from a Preferred Enterprise (as discussed below) may be considerably less. Capital gains derived by an Israeli company are generally subject to the prevailing corporate tax rate.

Capital gains derived by an Israeli resident company are subject to tax at the prevailing corporate tax rate. Under Israeli tax legislation, a corporation will be considered as an "Israeli resident company" if it meets one of the following: (i) it was incorporated in Israel; or (ii) the control and management of its business are exercised in Israel.

***Law for the Encouragement of Industry (Taxes), 5729-1969***

The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax benefits for "Industrial Companies."

The Industry Encouragement Law defines an "Industrial Company" as an Israeli resident-company, of which 90% or more of its income in any tax year, other than income from defense loans, is derived from an "Industrial Enterprise" owned by it. An "Industrial Enterprise" is defined as an enterprise whose principal activity in a given tax year is industrial production.

The following corporate tax benefits, among others, are available to Industrial Companies:

● amortization of the cost of purchased a patent, rights to use a patent, and know-how, which are used for the development or advancement of the company, over an eight-year period, commencing on the year in which such rights were first exercised;

● under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; and

● expenses related to a public offering are deductible in equal amounts over three years.

Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.

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***Tax Benefits for Research and Development***

Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:

● the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;

● the research and development must be for the promotion of the company; and

● the research and development is carried out by or on behalf of the company seeking such tax deduction.

The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the income Tax Ordinance, 1961. Expenditures not so approved are deductible in equal amounts over three years.

From time to time, we may apply the Israel Innovation Authority for approval to allow a tax deduction for all research and development expenses during the year incurred. There can be no assurance that such application will be accepted.

***Taxation of our Shareholders***

Capital Gains Taxes Applicable to Non-Israeli Resident Shareholders. A non-Israeli resident who derives capital gains from the sale of shares in an Israeli resident company might be exempt from Israeli tax upon meeting the following terms: (1) the shares sold were purchased after January 1, 2009; (2) the capital gain is not derived from the permanent establishment of the foreign resident in Israel; (3) the purchase of shares was not from a relative; (4) and the shares are not traded on the Israeli stock exchange.

Additionally, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended, or the United States-Israel Tax Treaty, the sale, exchange or other disposition of shares by a shareholder who is a United States resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S.-Israel Tax Treaty, or a Treaty U.S. Resident, is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12-month period preceding the disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year.

In all instances where our shareholders may be liable for Israeli tax on the sale of their Ordinary Shares, the payment of the consideration may be subject to the withholding of Israeli tax at source. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale.

Taxation of Non-Israeli Shareholders on Receipt of Dividends. Non-Israeli residents are generally subject to Israeli income tax on the receipt of dividends paid on our Ordinary Shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder's country of residence. With respect to a foreign resident who is a "substantial shareholder" at the time of receiving the dividend or on any time during the preceding twelve months, the applicable tax rate is 30%. A "substantial shareholder" is generally a person who alone or together with such person's relative or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the "means of control" of the corporation. "Means of control" generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. However, a distribution of dividends to non-Israeli residents is subject to withholding tax at source at a rate of 20% if the dividend is distributed from income attributed to a Preferred Enterprise, unless a reduced tax rate is provided under an applicable tax treaty. For example, under the United States-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our Ordinary Shares who is a Treaty U.S. Resident is 25%. However, generally, the maximum rate of withholding tax on dividends, not generated by a Preferred Enterprise, that are paid to a United States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to a Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the condition related to our gross income for the previous year (as set forth in the previous sentence) is met. If the dividend is attributable partly to income derived from a Preferred Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders' tax liability.

**U.S. FEDERAL INCOME TAX CONSIDERATIONS**

THE FOLLOWING SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION AND IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSIDERED TO BE, LEGAL OR TAX ADVICE. EACH U.S. HOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND SALE OF ORDINARY SHARES, INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND POSSIBLE CHANGES IN THE TAX LAWS.

Subject to the limitations described in the next paragraph, the following discussion summarizes the material U.S. federal income tax consequences to a "U.S. Holder" arising from the purchase, ownership and sale of the Ordinary Shares. For this purpose, a "U.S. Holder" is a holder of Ordinary Shares that is: (1) an individual citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under U.S. federal income tax laws; (2) a corporation (or entity treated as a corporation for U.S. federal income tax purposes) or a partnership (other than a partnership that is not treated as a U.S. person under any applicable U.S. Treasury regulations) created or organized under the laws of the United States or the District of Columbia or any political subdivision thereof; (3) an estate, the income of which is includable in gross income for U.S. federal income tax purposes regardless of source; (4) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust; or (5) a trust that has a valid election in effect to be treated as a U.S. person to the extent provided in U.S. Treasury regulations.

This summary is for general information purposes only and does not purport to be a comprehensive description of all of the U.S. federal income tax considerations that may be relevant to a decision to purchase our Ordinary Shares. This summary generally considers only U.S. Holders that will own our Ordinary Shares as capital assets. Except to the limited extent discussed below, this summary does not consider the U.S. federal tax consequences to a person that is not a U.S. Holder, nor does it describe the rules applicable to determine a taxpayer's status as a U.S. Holder. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, or the Code, final, temporary and proposed U.S. Treasury regulations promulgated thereunder, administrative and judicial interpretations thereof, (including with respect to the Tax Cuts and Jobs Act of 2017), and the U.S./Israeli Income Tax Treaty, all as in effect as of the date hereof and all of which are subject to change, possibly on a retroactive basis, and all of which are open to differing interpretations. We will not seek a ruling from the IRS with regard to the U.S. federal income tax treatment of an investment in our Ordinary Shares by U.S. Holders and, therefore, can provide no assurances that the IRS will agree with the conclusions set forth below.

This discussion does not address all of the aspects of U.S. federal income taxation that may be relevant to a particular U.S. holder based on such holder's particular circumstances and in particular does not discuss any estate, gift, generation-skipping, transfer, state, local, excise or foreign tax considerations. In addition, this discussion does not address the U.S. federal income tax treatment of a U.S. Holder who is: (1) a bank, life insurance company, regulated investment company, or other financial institution or "financial services entity;" (2) a broker or dealer in securities or foreign currency; (3) a person who acquired our Ordinary Shares in connection with employment or other performance of services; (4) a U.S. Holder that is subject to the U.S. alternative minimum tax; (5) a U.S. Holder that holds our Ordinary Shares as a hedge or as part of a hedging, straddle, conversion or constructive sale transaction or other risk-reduction transaction for U.S. federal income tax purposes; (6) a tax-exempt entity; (7) real estate investment trusts or grantor trusts; (8) a U.S. Holder that expatriates out of the United States or a former long-term resident of the United States; or (9) a person having a functional currency other than the U.S. dollar. This discussion does not address the U.S. federal income tax treatment of a U.S. Holder that owns, directly or constructively, at any time, Ordinary Shares representing 10% or more of our voting power. Additionally, the U.S. federal income tax treatment of partnerships (or other pass-through entities) or persons who hold Ordinary Shares through a partnership or other pass-through entity are not addressed.

Each prospective investor is advised to consult his or her own tax adviser for the specific tax consequences to that investor of purchasing, holding or disposing of our Ordinary Shares, including the effects of applicable state, local, foreign or other tax laws and possible changes in the tax laws.

***Taxation of Dividends Paid on Ordinary Shares***

We do not intend to pay dividends in the foreseeable future. In the event that we do pay dividends, and subject to the discussion under the heading "*Passive Foreign Investment Companies*" below and the discussion of "qualified dividend income" below, a U.S. Holder, other than certain U.S. Holder's that are U.S. corporations, will be required to include in gross income as ordinary income the amount of any distribution paid on Ordinary Shares (including the amount of any Israeli tax withheld on the date of the distribution), to the extent that such distribution does not exceed our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. The amount of a distribution which exceeds our earnings and profits will be treated first as a non-taxable return of capital, reducing the U.S. Holder's tax basis for the Ordinary Shares to the extent thereof, and then capital gain. We do not expect to maintain calculations of our earnings and profits under U.S. federal income tax principles and, therefore, U.S. Holders should expect that the entire amount of any distribution generally will be reported as dividend income.

In general, preferential tax rates for "qualified dividend income" and long-term capital gains are applicable for U.S. Holders that are individuals, estates or trusts. For this purpose, "qualified dividend income" means, inter alia, dividends received from a "qualified foreign corporation." A "qualified foreign corporation" is, among others, a corporation that is entitled to the benefits of a comprehensive tax treaty with the United States which includes an exchange of information program. The IRS has stated that the Israeli/U.S. Tax Treaty satisfies this requirement and we believe we are eligible for the benefits of that treaty.

In addition, our dividends will be qualified dividend income if our Ordinary Shares are readily tradable on the NYSE American or another established securities market in the United States. Dividends will not qualify for the preferential rate if we are treated, in the year the dividend is paid or in the prior year, as a PFIC, as described below under "*Passive Foreign Investment Companies*." A U.S. Holder will not be entitled to the preferential rate: (1) if the U.S. Holder has not held our Ordinary Shares for at least 61 days of the 121-day period beginning on the date which is 60 days before the ex-dividend date, or (2) to the extent the U.S. Holder is under an obligation to make related payments on substantially similar property. Any days during which the U.S. Holder has diminished its risk of loss on our Ordinary Shares are not counted towards meeting the 61-day holding period. Finally, U.S. Holders who elect to treat the dividend income as "investment income" pursuant to Code section 163(d)(4) will not be eligible for the preferential rate of taxation.

The amount of a distribution with respect to our Ordinary Shares will be measured by the amount of the fair market value of any property distributed, and for U.S. federal income tax purposes, the amount of any Israeli taxes withheld therefrom. Cash distributions paid by us in NIS will be included in the income of U.S. Holders at a U.S. dollar amount based upon the spot rate of exchange in effect on the date the dividend is includible in the income of the U.S. Holder, and U.S. Holders will have a tax basis in such NIS for U.S. federal income tax purposes equal to such U.S. dollar value. If the U.S. Holder subsequently converts the NIS into U.S. dollars or otherwise disposes of it, any subsequent gain or loss in respect of such NIS arising from exchange rate fluctuations will be U.S. source ordinary exchange gain or loss.

***Taxation of the Disposition of Ordinary Shares***

Except as provided under the PFIC rules described below under "*Passive Foreign Investment Companies*," upon the sale, exchange or other disposition of our Ordinary Shares, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between such U.S. Holder's tax basis for the Ordinary Shares in U.S. dollars and the amount realized on the disposition in U.S. dollar (or its U.S. dollar equivalent determined by reference to the spot rate of exchange on the date of disposition, if the amount realized is denominated in a foreign currency). The gain or loss realized on the sale, exchange or other disposition of Ordinary Shares will be long-term capital gain or loss if the U.S. Holder has a holding period of more than one year at the time of the disposition. Individuals who recognize long-term capital gains may be taxed on such gains at reduced rates of tax. The deduction of capital losses is subject to various limitations.

***Passive Foreign Investment Companies***

Special U.S. federal income tax laws apply to U.S. taxpayers who own shares of a corporation that is a PFIC. We will be treated as a PFIC for U.S. federal income tax purposes for any taxable year that either:

● 75% or more of our gross income (including our pro rata share of gross income for any company, in which we are considered to own 25% or more of the shares by value), in a taxable year is passive; or

● At least 50% of our assets, averaged over the year and generally determined based upon fair market value (including our pro rata share of the assets of any company in which we are considered to own 25% or more of the shares by value) are held for the production of, or produce, passive income.

For this purpose, passive income generally consists of dividends, interest, rents, royalties, annuities and income from certain commodities transactions and from notional principal contracts. Cash is treated as generating passive income.

The tests for determining PFIC status are applied annually, and it is difficult to make accurate projections of future income and assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of our Ordinary Shares. We do not expect to be a PFIC for 2024 and we do not expect to become a PFIC in the future, although there can be no assurance in this regard.

If we currently are or become a PFIC, each U.S. Holder who has not elected to mark the shares to market (as discussed below), would, upon receipt of certain distributions by us and upon disposition of our Ordinary Shares at a gain: (1) have such distribution or gain allocated ratably over the U.S. Holder's holding period for the Ordinary Shares, as the case may be; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. In addition, when shares of a PFIC are acquired by reason of death from a decedent that was a U.S. Holder, the tax basis of such shares would not receive a step-up to fair market value as of the date of the decedent's death, but instead would be equal to the decedent's basis if lower, unless all gain were recognized by the decedent. Indirect investments in a PFIC may also be subject to these special U.S. federal income tax rules.

The PFIC rules described above would not apply to a U.S. Holder who makes a QEF election for all taxable years that such U.S. Holder has held the Ordinary Shares while we are a PFIC, provided that we comply with specified reporting requirements. Instead, each U.S. Holder who has made such a QEF election is required for each taxable year that we are a PFIC to include in income such U.S. Holder's pro rata share of our ordinary earnings as ordinary income and such U.S. Holder's pro rata share of our net capital gains as long-term capital gain, regardless of whether we make any distributions of such earnings or gain. In general, a QEF election is effective only if we make available certain required information. The QEF election is made on a shareholder-by-shareholder basis and generally may be revoked only with the consent of the IRS. We do not intend to notify U.S. Holders if we believe we will be treated as a PFIC for any tax year. In addition, we do not intend to furnish U.S. Holders annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we are a PFIC. Therefore, the QEF election will not be available with respect to our Ordinary Shares.

In addition, the PFIC rules described above would not apply if we were a PFIC and a U.S. Holder made a mark-to-market election. A U.S. Holder of our Ordinary Shares which are regularly traded on a qualifying exchange, including the NYSE American, can elect to mark the Ordinary Shares to market annually, recognizing as ordinary income or loss each year an amount equal to the difference as of the close of the taxable year between the fair market value of the Ordinary Shares and the U.S. Holder's adjusted tax basis in the Ordinary Shares. Losses are allowed only to the extent of net mark-to-market gain previously included income by the U.S. Holder under the election for prior taxable years.

U.S. Holders who hold our Ordinary Shares during a period when we are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC. U.S. Holders are strongly urged to consult their tax advisors about the PFIC rules.

**Tax on Net Investment Income**

U.S. Holders who are individuals, estates or trusts will generally be required to pay a 3.8% Medicare tax on their net investment income (including dividends on and gains from the sale or other disposition of our Ordinary Shares), or in the case of estates and trusts on their net investment income that is not distributed. In each case, the 3.8% Medicare tax applies only to the extent the U.S. Holder's total adjusted income exceeds applicable thresholds.

**Tax Consequences for Non-U.S. Holders of Ordinary Shares**

Except as provided below, an individual, corporation, estate or trust that is not a U.S. Holder referred to below as a non-U.S. Holder, generally will not be subject to U.S. federal income or withholding tax on the payment of dividends on, and the proceeds from the disposition of, our Ordinary Shares.

A non-U.S. Holder may be subject to U.S. federal income tax on a dividend paid on our Ordinary Shares or gain from the disposition of our Ordinary Shares if: (1) such item is effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States and, if required by an applicable income tax treaty is attributable to a permanent establishment or fixed place of business in the United States; or (2) in the case of a disposition of our Ordinary Shares, the individual non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the disposition and other specified conditions are met.

In general, non-U.S. Holders will not be subject to backup withholding with respect to the payment of dividends on our Ordinary Shares if payment is made through a paying agent, or office of a foreign broker outside the United States. However, if payment is made in the United States or by a U.S. related person, non-U.S. Holders may be subject to backup withholding, unless the non-U.S. Holder provides an applicable IRS Form W-8 (or a substantially similar form) certifying its foreign status, or otherwise establishes an exemption.

The amount of any backup withholding from a payment to a non-U.S. Holder will be allowed as a credit against such holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

***Information Reporting and Withholding***

A U.S. Holder may be subject to backup withholding at a rate of 24% with respect to cash dividends and proceeds from a disposition of Ordinary Shares. In general, backup withholding will apply only if a U.S. Holder fails to comply with specified identification procedures. Backup withholding will not apply with respect to payments made to designated exempt recipients, such as corporations and tax-exempt organizations. Backup withholding is not an additional tax and may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, provided that the required information is timely furnished to the IRS.

A U.S. Holder with interests in "specified foreign financial assets" (including, among other assets, our Ordinary Shares, unless such Ordinary Shares are held on such U.S. Holder's behalf through a financial institution) may be required to file an information report with the IRS if the aggregate value of all such assets exceeds $50,000 on the last day of the taxable year or $75,000 at any time during the taxable year (or such higher dollar amount as may be prescribed by applicable IRS guidance); and may be required to file a Report of Foreign Bank and Financial Accounts, or FBAR, if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. You should consult your own tax advisor as to the possible obligation to file such information report.

**UNDERWRITING**

Laidlaw & Company (UK) Ltd is acting as Representative. On , we entered into an underwriting agreement with the Representative, or the Underwriting Agreement. Subject to the terms and conditions of the Underwriting Agreement, we have agreed to sell, and each underwriter named below has severally agreed to purchase, the number of Ordinary Shares listed next to each underwriter's name in the following table, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus.

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| | |
|:---|:---|
| **Underwriters** | **Number <br> of Shares** |
| Laidlaw & Company (UK) Ltd |  |
| Craft Capital management LLC |  |
| Total |  |

---

The underwriters have committed to purchase all of the Ordinary Shares offered by us in this offering other than those covered by the over-allotment option described below. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the Underwriting Agreement. Furthermore, pursuant to the Underwriting Agreement, the underwriters' obligations are subject to customary conditions, representations, and warranties, such as receipt by the underwriters of officers' certificates and legal opinions.

The underwriters are offering Ordinary Shares subject to prior sale when, as, and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions. The underwriters reserve the right to withdraw, cancel, or modify offers to the public and to reject orders in whole or in part.

The underwriters propose to offer the Ordinary Shares to the public at the public offering price set forth on the cover of the prospectus. After Ordinary Shares are released for sale to the public, the underwriters may from time to time change the offering price and other selling terms.

**Over-Allotment Option**

We have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to additional 150,000 Ordinary Shares (15% of the Ordinary Shares sold in this offering) at the initial public offering price, less the underwriting discounts and commissions. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent that the option is exercised, each underwriter must purchase additional Ordinary Shares in an amount that is approximately proportionate to that underwriter's initial purchase commitment (set forth in the table above). Any Ordinary Shares issued or sold under the option will be issued and sold on the same terms and conditions as the other Ordinary Shares that are the subject of this offering. If this option is exercised in full, the total offering price to the public will be $12.7 million and the total net proceeds to us, before expenses, will be $11.8 million.

**Discounts and Commissions**

The Representative has advised that the underwriters propose to offer the Ordinary Shares to the public at the public offering price per share set forth on the cover page of this prospectus. The underwriters may offer the Ordinary Shares to securities dealers at that price less a concession of not more than $ per share, of which up to may be re-allowed to other dealers.

The following table summarizes the public offering price, underwriting discounts and commissions, and proceeds to us before expenses, assuming both no exercise and full exercise by the underwriters of the over-allotment option.

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| | | |
|:---|:---|:---|
|  | **Total** | **Total** |
|  | **Without <br> Over-<br> Allotment** | **With <br> Over-<br> Allotment** |
| Public offering price | $— |  |
| Underwriting discount (7%) <sup>(1)</sup> | $— |  |
| Proceeds, before expenses, to us | $— |  |

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(1) We
 have agreed to pay a non-accountable expense allowance to the Representative equal to 1.0% of the gross proceeds received
 in this offering (excluding proceeds received from exercise of the underwriters' over-allotment option) which is not included
 in the underwriting discounts and commission.

We have agreed to reimburse the Representative for the fees and expenses of its legal counsel in connection with the offering in an amount not to exceed $125,000, the fees and expenses related to the use of Ipreo's book building, prospectus tracking and compliance software for the offering in the amount of $29,500, up to $15,000 for background checks of our officers and directors, the costs associated with bound volumes of the offering materials as well as commemorative mementos and lucite tombstones in an amount not to exceed $3,000, data services and communications expenses up to $10,000, the actual accountable "road show" expenses up to $10,000 and the costs of market making and trading and clearing firm settlement expenses up to $30,000; provided however that the aggregate accountable expenses reimbursement will not exceed $175,000. As of July 3, 2025, we have paid $20,000 to the former underwriter for this offering, ThinkEquity LLC.

We expect that the expenses of this offering payable by us, not including underwriting discounts and commissions, will be approximately $935,000.

**Underwriters' Warrants**

We have agreed to issue to the underwriters, upon the consummation of this offering, warrants to purchase up to an aggregate of 30,000 Ordinary Shares (or up to 34,500 Ordinary Shares if the underwriters exercise their over-allotment option in full), representing 3% of the Ordinary Shares sold in this offering as the Underwriter's Warrants. The Underwriter's Warrants are exercisable at a per share price equal to 125% of the public offering price per share in this offering. The Underwriter's Warrants are exercisable at any time and from time to time, in whole or in part, commencing on the six-month anniversary of the effective date of the registration statement of which this prospectus is a part and expiring on the date that is five years following the commencement of sales of Ordinary Shares in this offering.

The Underwriter's Warrants are deemed underwriter compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(g)(1). The underwriters (or permitted assignees under Rule 5110(g)(1)) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from commencement of sales in this offering. In addition, the Underwriter's Warrants provide for registration rights upon request, in certain cases. The piggyback registration right provided will not be greater than seven years from the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Underwriter's Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the Underwriter's Warrants may be adjusted in certain circumstances including in the event of a stock dividend or our recapitalization, reorganization, merger, or consolidation. However, neither the Underwriter's Warrant exercise price, nor the number of Ordinary Shares underlying such warrants, will be adjusted for issuances of Ordinary Shares by us at a price below the exercise price of the Underwriter's Warrants.

**Discretionary Accounts**

The underwriters do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority.

**Tail Fee**

We have also agreed with the underwriters that If within 12 months from the effective date of termination of the Engagement Period, the Company's securities are sold by the Company or any of its affiliates in a transaction or series of transactions with any person whom the underwriters directly or indirectly introduced to the Company then the Company shall pay the underwriters, at the time of each such sale, a cash fee in the amount equal to seven percent (7.0%) of the gross proceeds received by the Company from each such sale, provided that payment of any such fee shall at all times be in compliance with FINRA Rule 5110(g)(5)(B). The Company may also terminate the Engagement Period for Cause (as defined in the Underwriting Agreement), and in such case the Company will not be responsible for paying for the fee as contemplated under this Section 6 in compliance with FINRA Rule 5110(g)(5)(B).

"Engagement Period" means the period between June 2025 and until the earliest of: (i) the Closing Date or the last Option Closing Date (until the later of them), and (ii) September 20, 2025.

**Lock-Up Agreements**

Pursuant to certain "lock-up" agreements, we for a period of six (6) months and our executive officers and directors as of the date of this prospectus have agreed, for a period of six (6) months from the date of this prospectus, and as for any other holder of our outstanding securities for period of six (6) months, not to engage in any of the following, whether directly or indirectly, without the Representative's consent: offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, our Ordinary Shares or any securities convertible into or exercisable or exchangeable for our Ordinary Shares, or the Lock-Up Securities; enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities; make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Lock-Up Securities; enter into any transaction, swap, hedge, or other arrangement relating to any Lock-Up Securities, subject to customary exceptions; or publicly disclose the intention to do any of the foregoing.

**Right of First Refusal**

For twelve (12) months from the closing date of this offering, the underwriters will have an irrevocable right of first refusal to act as a member of the syndicate for each and every future public and private equity and debt offering, including all equity linked financings, during such twelve (12) month period, for us, or any successor to or any subsidiary of us, with a fee no less than forty percent (40%) of the total placement agent or underwriter economics in connection with any such financing. This right of first refusal shall be subject to FINRA Rule 5110(g)(6)(A) and in no event shall exceed a term of three (3) years.

**Pricing of the Offering**

Prior to this offering, there was no established public market for our Ordinary Shares. The public offering price was negotiated between us and the underwriters. In determining the price, we considered our history and prospects, our business potential and earnings prospects, an assessment of our management, general securities market conditions at the time of the offering, and such other factors that we deemed relevant.

An active trading market for our Ordinary Shares may not develop. It is also possible that the Ordinary Shares will not trade in the public market or above the initial public offering price following the closing of this offering.

**Indemnification**

We have agreed to indemnify the underwriters against liabilities relating to this offering that may arise under the Securities Act and from any breach of the representations and warranties contained in the Underwriting Agreement. We have further agreed to contribute to payments that the underwriters may be required to make for these liabilities.

**Electronic Offer, Sale and Distribution of Shares**

This prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters, or by their affiliates. Other than this prospectus in electronic format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

**Offer Restrictions Outside of the United States**

Other than in the United States, no action has been taken that would permit a public offering of our Ordinary Shares in any jurisdiction where action for the purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that country or jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

***Australia***

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

***Canada***

The Ordinary Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

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***China***

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors."

***European Economic Area—Belgium, Germany, Luxembourg and Netherlands***

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC, or the Prospectus Directive, as implemented in Member States of the European Economic Area, each, a Relevant Member State, from the requirement to produce a prospectus for offers of securities. An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

● to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

● to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

● to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of the company or any underwriter for any such offer; or

● in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.

***France***

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers, or AMF. The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d'investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

***Ireland***

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005, or the Prospectus Regulations. The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

***Israel***

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority, or the ISA, nor have such securities been registered for sale in Israel. The Ordinary Shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be made effective only in compliance with the Israeli securities laws and regulations.

***Italy***

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, or "CONSOB") pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998, or Decree No. 58, other than:

● to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999, or Regulation no. 1197l as amended, or Qualified Investors; and

● in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

● Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

● made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

● in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.

 ****

***Japan***

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended, or the FIEL, pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

 ****

***Portugal***

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are "qualified investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

***Sweden***

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

***Switzerland***

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

***United Kingdom***

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended, or the FSMA) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the company.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, or FPO, (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts, or NI 33-105, the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

**Stabilization**

Over-allotment transactions involve sales by the underwriters of shares in excess of the number of shares that the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that the underwriters purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares that the underwriters purchase in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing shares in the open market.

Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which they may purchase shares through exercise of the over-allotment option. If the underwriters sell more shares than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the Ordinary Shares in the open market that could adversely affect investors who purchase in the offering.

Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the Ordinary Shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Ordinary Shares or preventing or retarding a decline in the market price of our Ordinary Shares. As a result, the price of our Ordinary Shares in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our Ordinary Shares. These transactions may be affected in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

**Other Relationships**

The underwriters and their affiliates may in the future provide various advisory, investment and commercial banking and other services for us in the ordinary course of business, for which they may receive customary fees and commissions. However, we have not yet had, and have no present arrangements with any of the underwriters for any further services.

**EXPENSES**

Set forth below is an itemization of the total expenses, excluding underwriting discounts, expected to be incurred in connection with the offer and sale of our Ordinary Shares by us. With the exception of the SEC registration fee and the FINRA filing fee, all amounts are estimates:

---

| | |
|:---|:---|
| SEC registration fee | $2192.01 |
| NYSE American listing fee | $\* |
| FINRA filing fee | $\* |
| Transfer agent fees and expenses | $\* |
| Printer fees and expenses | $\* |
| Legal fees and expenses | $\* |
| Accounting fees and expenses | $\* |
| Miscellaneous | $\* |
| Total | $\* |

---

\* To be filed by amendment.

**LEGAL MATTERS**

Certain legal matters concerning this offering will be passed upon for us by Sullivan & Worcester LLP, New York, New York. Certain legal matters with respect to the legality of the issuance of the securities offered by this prospectus and other legal matters concerning this offering relating to Israeli law will be passed upon for us by Sullivan & Worcester Tel Aviv (Har-Even & Co.), Tel Aviv, Israel. Certain legal matters related to the offering will be passed upon for the underwriters by Sichenzia Ross Ference Carmel LLP.

**EXPERTS**

The financial statements of Nasus Pharma Ltd. as of December 31, 2024 and 2023 and for each of the two years in the period ended December 31, 2024, included in this prospectus, have been audited by Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements are included in reliance upon the report of such firm given their authority as experts in accounting and auditing.

**ENFORCEABILITY OF CIVIL LIABILITIES**

We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and senior management and the Israeli experts named in the registration statement of which this prospectus forms a part, a substantial majority of whom reside outside of the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and a substantial of our directors and senior management are located outside of the United States, any judgment obtained in the United States against us or any of our directors and senior management may not be collectible within the United States.

We have been informed by our legal counsel in Israel, Sullivan & Worcester Tel Aviv (Har-Even & Co.), that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

We have irrevocably appointed Puglisi & Associates as our agent to receive service of process in any action against us in any U.S. federal or state court arising out of this offering or any purchase or sale of securities in connection with this offering. Subject to specified time limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that among other things:

● the judgment is obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel;

● the judgment is final and is not subject to any right of appeal;

● the prevailing law of the foreign state in which the judgment was rendered allows for the enforcement of judgments of Israeli courts; however, the court may enforce a foreign judgment, even without reciprocity, based on the request of the Attorney General, under certain circumstances;

● adequate service of process has been affected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence;

● the liabilities under the judgment are enforceable according to the laws of the State of Israel and the judgment and the enforcement of the civil liabilities set forth in the judgment is not contrary to the law or public policy in Israel nor likely to impair the security or sovereignty of Israel;

● the judgment was not obtained by fraud, there was reasonable opportunity for the defendant to present their case, the judgment was given by an authorized court to issue it under the applicable international private law rules in Israel, and the judgement does not conflict with any other valid judgments in the same matter between the same parties;

● an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court;

● the judgment is enforceable according to the laws of Israel and according to the law of the foreign state in which the relief was granted; and

● enforcement may be denied if it could harm the sovereignty or security of Israel.

If a foreign judgment is declared enforceable by an Israeli court, it generally will be payable in Israeli currency. The conversion to Israeli currency will be based on the latest official exchange rate published by the Bank of Israel before the payment date. However, the obligated party will fulfill its duty by the judgment even if they choose to make the payment in the same foreign currency, subject to the laws governing the foreign currency applicable at that time.

Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli CPI plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION**

We have filed with the SEC a registration statement on Form F-1 under the Securities Act relating to this offering of our Ordinary Shares. This prospectus does not contain all of the information contained in the registration statement. The rules and regulations of the SEC allow us to omit certain information from this prospectus that is included in the registration statement. Statements made in this prospectus concerning the contents of any contract, agreement or other document are summaries of all material information about the documents summarized, but are not complete descriptions of all terms of these documents. If we filed any of these documents as an exhibit to the registration statement, you may read the document itself for a complete description of its terms.

The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC's website at www.sec.gov.

We are subject to the information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements are filing reports with the SEC. Those other reports or other information may be inspected without charge at the locations described above. As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and intend to submit to the SEC, on Form 6-K, unaudited interim financial information.

We maintain a corporate website at www.nasuspharma.com. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. We will post on our website any materials required to be so posted on such website under applicable corporate or securities laws and regulations, including, posting any XBRL interactive financial data required to be filed with the SEC and any notices of general meetings of our shareholders.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

**Audited consolidated financial statements of Nasus Pharma Ltd. and its subsidiary**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#fw_001) (PCAOB ID 1197) | F-3 |
| [Consolidated Balance Sheets](#fw_002) | F-4 |
| [Consolidated Statements of Operations](#fw_003) | F-5 |
| [Consolidated Statements of Changes in Shareholders' Deficit](#fw_004) | F-6 |
| [Consolidated Statements of Cash Flows](#fw_005) | F-7 |
| [Notes to Consolidated Financial Statements](#fw_006) | F-8 |

---

The accompanying financial statements give effect to a 1-for-4.77008 forward share split of Nasus Pharma Ltd. which will take place on the effective date of the registration statement. The following report is in the form which will be furnished by Brightman Almagor Zohar & Co., an independent registered public accounting firm, upon completion of the 1-for-4.77008 share split of the ordinary shares of Nasus Pharma Ltd. described in Note 7(d) to the financial statements, assuming that from March 21, 2025 to the date of such completion, no other material events have occurred that would affect the accompanying financial statements or disclosures therein.

---

| |
|:---|
| **/s/ Brightman Almagor Zohar & Co.** |
| **Certified Public Accountants** |
| **A Firm in the Deloitte Global Network** |
| Tel-Aviv, Israel |
| March 21, 2025 |

---

**Report of Independent Registered Public Accounting Firm**

**To the Shareholders and the Board of Directors of Nasus Pharma Ltd**.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Nasus Pharma Ltd. and its subsidiary (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in shareholders' deficit, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1.B to the financial statements, the Company's lack of revenues and accumulated operating losses raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1.B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting 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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

---

| |
|:---|
| **Brightman Almagor Zohar & Co.** |
| **Certified Public Accountants** |
| **A Firm in the Deloitte Global Network** |
| Tel - Aviv, Israel |
| [ ] |
| We have served as the Company's auditor since 2024. |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| <br>**(Amounts in thousands, except share and per share amounts)** | **2024** | **2023** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $284 | $193 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 27 | 17 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets (of which $116 and $0 are to related parties as of December 31, 2024 and December 31, 2023, respectively) | 146 | 234 |
| Total current assets | 457 | 444 |
| Deferred offering cost | 260 |  |
| **Total Assets** | $**717** | $**444** |
| **Liabilities and Shareholders' Deficit** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $651 | $655 |
| &nbsp;&nbsp;&nbsp;Accrued expense and other current liabilities (of which $711 and $451 are to related parties as of December 31, 2024 and December 31, 2023, respectively) | 987 | 616 |
| &nbsp;&nbsp;&nbsp;Convertible securities (of which $605 and $365 are to related parties as of December 31, 2024 and December 31, 2023, respectively) | 1802 | 1830 |
| &nbsp;&nbsp;&nbsp;Short-term debt from shareholders (of which $- and $344 are to related parties as of December 31, 2024, and December 31, 2023, respectively) |  | 627 |
| &nbsp;&nbsp;&nbsp;Current liabilities related to discontinued operations | 489 | 513 |
| Total current liabilities | 3929 | 4241 |
| **Total Liabilities** | 3929 | 4241 |
| Commitments and contingencies (see Note 6) |  |  |
| Shareholders' deficit |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary Shares(\*)(\*\*), par value NIS 0.01 per share; 13,265,593 and 12,788,585 shares authorized as of December 31, 2024 and 2023, respectively; 7,362,906 and 6,889,709 shares issued as of December 31, 2024 and 2023, respectively. | 20 | 19 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 9432 | 7316 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (12664) | (11132) |
| **Total Shareholders' Deficit** | (3212) | (3797) |
| **Total Liabilities and Shareholders' Deficit** | $**717** | $**444** |

---

\* Unless otherwise stated, the term Ordinary Shares in these consolidated financial statements refers to all classes of shares, including Class Ordinary Shares, Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares and Class A-3 Ordinary Shares.

\*\* After giving effect to the forward share split, see also Note 7(d).

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

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| <br>**(Amounts in thousands, except share and per share amounts)** | **2024** | **2023** |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Research and development (of which $208 and $228 are with related parties in 2024 and 2023, respectively) | $335 | $567 |
| &nbsp;&nbsp;&nbsp;General and administrative (of which $307 and $288 are with related parties in 2024 and 2023, respectively) | 743 | 580 |
| Total operating expenses | 1078 | 1147 |
| Operating loss from continuing operations | (1078) | (1147) |
| &nbsp;&nbsp;&nbsp;Interest expense (of which $17 and $27 are with related parties in 2024 and 2023, respectively) | (29) | (49) |
| &nbsp;&nbsp;&nbsp;Change in fair value of convertible securities | (443) | 219 |
| &nbsp;&nbsp;&nbsp;Other expense, net | (2) | (28) |
| Loss from continuing operations | (1552) | (1005) |
| &nbsp;&nbsp;&nbsp;Net income (loss) from discontinued operations | 20 | (46) |
| Net loss | $(1532) | $(1051) |
| Per share data: |  |  |
| Loss per share attributable to shareholders: |  |  |
| Basic | $(0.22) | $(0.15) |
| Diluted | $(0.22) | $(0.20) |
| Weighted average Ordinary Shares outstanding – basic(\*) | 7027725 | 6889708 |
| Weighted average Ordinary Shares outstanding – diluted(\*) | 7027725 | 7057820 |

---

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

\* After giving effect to the forward share split, see also Note 7(d).

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT**

**(Amounts in thousands, except share and per share amounts)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares\* (\*\*)** | **Ordinary Shares\* (\*\*)** | | | |
|  | **Shares** | **Amount** | **Additional<br> Paid- in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total**<br> **Shareholders'**<br>**Deficit** |
| Balance as of January 1, 2023 | 6889709 | $19 | $7277 | $(10081) | $(2785) |
| Share-based compensation |  |  | 39 |  | 39 |
| Net loss | - | - | - | (1051) | (1051) |
| Balance as of December 31, 2023 | 6889709 | $19 | $7316 | $(11132) | $(3797) |
| Share-based compensation |  |  | 10 |  | 10 |
| Conversion of SAFE | 473197 | 1 | 2106 |  | 2107 |
| Net loss | - | - | - | (1532) | (1532) |
| Balance as of December 31, 2024 | 7362906 | $20 | $9432 | $(12664) | $(3212) |

---

\* Unless otherwise stated, the term Ordinary Shares in these consolidated financial statements refers to all classes of shares, including Class Ordinary Shares, Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares and Class A-3 Ordinary Shares.

\*\* After giving effect to the forward share split, see also Note 7(d).

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

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

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| | | |
|:---|:---|:---|
| | **Year ended** | **Year ended** |
| <br>**(Amounts in thousands)** | **December 31, 2024** | **December 31, 2023** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(1532) | $**(1051)** |
| Less: Net loss (income) from discontinued operations | (20) | 46 |
| Loss from continuing operations | (1552) | (1005) |
| Adjustments to reconcile loss from continuing operations to net cash used in operating activities: |  |  |
| Share-based compensation | 10 | 39 |
| Change in fair value of convertible securities | 443 | (219) |
| Effect of exchange rates | 4 | (13) |
| Accrued interest on short-term debt from shareholders | 29 | 49 |
| Change in operating assets and liabilities: |  |  |
| Prepaid expenses and other current assets | 88 | 12 |
| Accounts payable | (5) | (116) |
| Accrued expense and other current liabilities | 322 | 271 |
| Cash used in operating activities from continuing operations | (661) | (982) |
| Net cash used in operating activities from discontinued operations | (4) | (47) |
| **Net cash used in operating activities** | $**(665)** | $**(1029)** |
| **Cash flows from investing activities:** |  |  |
| Cash used in investing activities from continuing operations |  | - |
| Cash used in investing activities from discontinued operations |  |  |
| Cash used in investing activities | $**-** | $**-** |
| **Cash flows from financing activities:** |  |  |
| Proceeds from issuance of convertible securities (of which $200 and $100 are with related parties in 2024 and 2023, respectively) | 1000 | 995 |
| Proceeds from short-term debt from shareholders (of which $0 and $60 are with related parties in 2024 and 2023, respectively) |  | 60 |
| Payments in connection with deferred offering costs | (230) |  |
| **Net cash provided by financing activities** | $**770** | $**1055** |
| Cash used in financing activities from discontinued operations |  |  |
| Cash provided by financing activities | $**770** | **1055** |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4) | 13 |
| Net increase (decrease) in cash and cash equivalents | 101 | 39 |
| Cash, cash equivalents and restricted cash at beginning of year | 210 | 171 |
| **Cash, cash equivalents and restricted cash at end of year** | $**311** | $**210** |
| **Supplemental disclosure of non-cash financing activities:** |  |  |
| Offering cost included in accrued expense and other current liabilities | $30 | - |
| Conversion of short-term debt from shareholders to 2024 SAFEs | $636 | $- |

---

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

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown on the consolidated statements of cash flows.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Cash and cash equivalents | $284 | $193 |
| Restricted cash | 27 | 17 |
| **Cash, cash equivalents and restricted cash at end of year** | $**311** | $**210** |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

---

| | |
|:---|:---|
| **NOTE 1:** | **ORGANIZATION AND NATURE OF THE BUSINESS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **Description of the Business** 

Nasus Pharma Ltd. (the "Company") was incorporated in May 2019 under the laws of the State of Israel. The Company is a clinical stage specialty pharmaceutical company focused primarily on the development of intranasal drugs to treat emergency medical conditions. The Company is developing a powder-based intranasal technology with a specialized product portfolio to address acute medical conditions and public health threats. The Company's lead product candidate is NS002, an intranasal powder Epinephrine nasal spray for the treatment of type 1 severe allergies and anaphylaxis. The Company has also been developing NS001, an intranasal Naloxone powder nasal spray for the treatment of opioid overdose, however, the Company currently paused its work on NS001 and plans to pursue opportunities for further development of NS001.

The Company had a wholly-owned subsidiary in the United Kingdom which had no operations since its incorporation in September 2020 through its dissolution in February 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **Liquidity and Going Concern** 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Since inception, the Company has devoted most of its efforts to business planning, research and development, clinical trials and raising capital. The Company is still in its development and clinical stage and has not yet generated revenues from its existing products under development and, accordingly, the extent of the Company's future operating losses and the timing that the Company will become profitable are uncertain.

During the year ended December 31, 2024, the Company incurred a net loss of $1,532 (and a loss of $1,552 from continuing operations) and used net cash flows from operations of $665 (and cash used in continuing operations was $661). Additionally, as of December 31, 2024, the Company had cash and cash equivalents of $284 to fund its operations and an accumulated deficit of $12,664.

The Company has funded its operations to date primarily through equity financing and the issuance of convertible securities in the form of simple agreement of future equity ("SAFE") (see Note 4 and Note 14). Additional funding will be required to complete the Company's research and development and clinical trials, to attain regulatory approvals, to begin the commercialization efforts of the Company's products and to achieve a level of sales adequate to support the Company's cost structure.

Such conditions raise substantial doubts about the Company's ability to continue as a going concern. Management's plans include, but are not limited to, an initial public offering ("IPO") in the United States. While the Company has been able to raise outside capital in the past, there can be no assurance that it will be able to successfully consummate an IPO or obtain additional financing on a timely basis in terms acceptable to the Company, if at all.

Management expects that the Company will continue to generate losses from the clinical development and regulatory activities of its product candidates, which would result in negative cash flow from operating activity. This has led management to conclude that there is substantial doubt about the Company's ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Stock split** 

All share and per share amounts for Ordinary Shares, share options and loss per share amounts have been adjusted to give retroactive effect to the forward share split for all periods presented in these financial statements. See also Note 7(d).

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

---

| | |
|:---|:---|
| **NOTE 2:** | **SIGNIFICANT ACCOUNTING POLICIES** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Basis of presentation and principles of consolidation:** 

The accompanying consolidated financial statements are prepared in accordance with U.S. GAAP.

The consolidated financial statements include accounts of the Company's wholly-owned subsidiary in the United Kingdom that was dissolved in February 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Use of estimates:** 

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include identifying the existence of embedded derivatives, share-based compensation and the determination of the fair value of the Company's Ordinary Shares and share options and the fair value of convertible securities.

Management believes that the estimates, and judgments they made, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Financial statements in U.S. dollars:** 

The functional and reporting currency of the Company is the United States dollar ("USD" or "U.S. dollar") as the U.S. dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.

The Company balances and transactions denominated in U.S. dollars are presented at their original amounts. Non-U.S. dollar transactions and balances have been remeasured to U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830 of the Financial Accounting Standards Board ("FASB"). All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-U.S. dollar currencies are included within other expense , net in the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Cash equivalents:** 

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, and restricted cash. The Company's cash and cash equivalents consist of demand deposits with financial institutions. The associated risk of concentration is mitigated by banking with creditworthy institutions.

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with maturities of three months or less as of the date acquired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **Restricted cash:** 

Restricted cash primarily consists of amounts used to secure the Company's corporate credit cards, and are invested in highly liquid deposits, with maturities of three months or less.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** **Deferred offering costs:** 

Deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the planned IPO, are capitalized. The deferred offering costs will be reclassified to shareholders' equity and offset against the proceeds of the offering upon the consummation of the IPO. In the event the planned IPO is terminated, the deferred offering costs will be expensed. As of December 31, 2024, there were $260 deferred offering costs recorded on the consolidated balance sheet. There were no offering costs recorded as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g.** **Severance pay:** 

According to the Israeli Severance Pay Law, 1963 ("Severance Pay Law"), all of the Company's employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company's liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law ("Section 14").

Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees.

Therefore, the Company does not recognize a liability for severance pay due to its employees beyond the monthly deposits they are required to make and, accordingly, the amount deposited under Section 14 are not recorded as an asset in the Company's balance sheets. Severance expenses for the years ended December 31, 2024 and 2023 amounted to $10, and $10, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h.** **Fair value measurement:** 

The Company measures and discloses the fair value of financial assets and liabilities in accordance with ASC Topic 820, "Fair Value Measurement." Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

---

| |
|:---|
| Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| Level 2 – inputs other than quoted prices included within Level 1 that are observable directly or indirectly. |
| Level 3 – inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data). |

---

Balances included in the consolidated financial statements measured at fair value on a recurring basis include convertible securities. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for estimating the fair value of convertible securities the Company utilizes unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company's own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i.** **General and Administrative** 

General and administrative expenses consist primarily of compensation-related expenses for management and other employees. Also, it consists of expenses for facilities, professional services fees, management fees, insurance costs, and other general overhead costs. General and administrative expenses are expensed as incurred with the exception of share-based compensation, which is recognized over the requisite service period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**j.** **Research and development costs:** 

Research and development expenses include compensation-related expenses, consulting costs, external contract research and development expenses, clinical trial costs, raw materials, third party manufacturing costs. Research and development costs are expensed as incurred, except for share-based compensation, which is recognized over the requisite service period.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**k.** **Patent Costs** 

Legal and related patent costs are expensed as incurred as their realization is uncertain. Costs related to patent registration are classified as general and administrative expenses, and costs related to acquired patents are recorded in research and development expenses within the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**l.** **Contingent liabilities** 

The Company accounts for its contingent liabilities in accordance with ASC No. 450, "Contingencies". A provision is recorded when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. See Note 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**m.** **Income tax** 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management's consideration of all positive and contradictory evidence available. As of December 31, 2024, and 2023, a full valuation allowance was established by the Company to reduce the deferred tax assets to the amount supported by future reversals of existing taxable temporary differences.

The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense. The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company believes that its tax positions are all highly certain of being upheld upon examination. As such, as of December 31, 2024 and 2023, the Company has not recorded any liability for unrecognized tax benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**n.** **Share-based compensation:** 

The Company measures and records the expense related to share-based compensation awards made to employees, directors, and non-employee service providers based on estimated fair values of those awards as determined on the date of grant. The Company recognizes share-based compensation expenses based on the accelerated attribution method over the requisite service period. The Company recognizes forfeitures of awards as they occur.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

The Company uses the Black-Scholes-Merton ("Black-Scholes") option-pricing model to determine the fair value of share options. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of share-based compensation awards, including the Class Ordinary Share price, expected volatility of the underlying Class Ordinary Share, expected option term (the time from the grant date until the share options are exercised or expire), and expected divided yield. The Company calculates the fair value of share options granted using the following assumptions:

● Class Ordinary Share Price – Since the Company's Class Ordinary Shares are not publicly traded, the expected volatility is based on the historical and implied volatility of similar companies whose stock or option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization, and financial leverage of the other companies. The Company estimated its Class Ordinary Share price based on third party valuation.

● Expected Volatility – The Company estimated volatility for share option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the share option grant for a term that is approximately equal to the share options' expected term.

● Expected Term—The expected term of the Company's share options represents the period that the share options are expected to be outstanding. The Company has elected to use the "simplified" method for share options granted to employees and directors, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Under this approach, the midpoint of the share options vesting term and contractual expiration period to compute the expected term. The simplified method makes the assumption that the employee will exercise share options evenly over the period when the share options are vested and ending on the date when the share options expire. The expected term for share options granted to non-employees is based on the contractual term.

● Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the share options' expected term at the grant date.

● Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**o.** **Basic and diluted net loss per share** 

Basic loss per share attributable to holders of Ordinary Shares is computed by dividing the net loss by the weighted average number of Ordinary Shares outstanding during the period. Diluted loss per share attributable to holders of Ordinary Shares is computed by dividing the net loss attributable to holders of Ordinary Shares and assumed conversions by the weighted average number of Ordinary Shares outstanding together with the number of additional Ordinary Shares that would have been outstanding if all potentially dilutive Ordinary Shares had been issued. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive Ordinary Shares are anti-dilutive.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**p.** **Risks and Uncertainties** 

The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and reliance on third parties to assist in discovery and development activities, and conducting the Company's clinical trials and performing data collection and analysis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**q.** **Concentrations of Risk** 

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. Bank deposits are held by financial institutions and these deposits may at times not be insured. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions that it believes are of high-quality credit rating. The Company has not experienced any losses on its deposits of cash or cash equivalents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**r.** **Emerging Growth Company Status** 

The Company is an emerging growth company ("EGC"), as defined in Section 2(a) of the United States Securities Act of 1933 ("Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an EGC can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs but any such election to opt out is irrevocable. The Company has not elected to opt out of such extended transition period which means that when a financial accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. The Company will be eligible to use this extended transition period under the JOBS Act until the earlier of the date it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of the Company's financials to those of other public companies more difficult.

The Company will cease to be an EGC on the date that is the earliest of (i) the end of the Company's fiscal year in which its total annual gross revenue exceeds $1.235 billion, (ii) the last day of the Company's fiscal year following the fifth anniversary of the date on which initial public offering has been consummated, (iii) the date on which the Company has issued more than $1.0 billion in non-convertible debt during the preceding three-year period or (iv) the last day of the Company's fiscal year in which the market value of the Company's Ordinary Shares held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**s.** **Recently Adopted Accounting Standards** 

As an EGC, the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflects this election.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The new guidance was adopted for the Company on January 1, 2023 and the adoption did not have a material impact on the Company's consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures*. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for our annual fiscal year 2024, and interim periods starting in fiscal year 2025. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The new guidance was adopted by the Company for fiscal year 2024 annual consolidated financial statements and this standard was applied retrospectively for the prior period presented in the financial statements. See Note 10 – Segment Reporting for further information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**t.** **Recently Issued Accounting Standards Not Yet Adopted** 

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. This update aims to enhance the transparency of financial reporting by requiring public business entities (PBEs) to provide disaggregated disclosure of certain income statement expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU is effective for annual fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. Adoption of this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

---

| | |
|:---|:---|
| **NOTE 3:** | **SHORT-TERM DEBT FROM SHAREHOLDERS** |

---

During July 2022, the Company received a loan in the amount of $500 from two existing shareholders (Messrs. Ronnie Hershman and Michael Gibber), including a director of the Company, for a term of twelve (12) months, at an interest rate of 8% per annum (the "July 2022 Loan"). On August 28, 2024, the Company and each of said shareholders entered into an exchange letter (the "July 2022 Loan Exchange Letter"), according to which the Company's obligations in connection with the loan were discharged in consideration for the issuance of a Simple Agreement for Future Equity ("SAFE") under the same terms as the 2024 SAFEs (see Note 4). The balance of the July 2022 Loan was $560 as of December 31 2023 (included in short-term debt from shareholders), and after considering interest accrued during 2024 through the date the July 2022 Loan Exchange Letter was executed and withholding taxes to be paid on behalf of the said shareholders, it was deemed that Dr. Ronnie Hershman invested an amount in the SAFE of $284 and Michael Gibber invested an amount in the SAFE of $286.

In February 2023, the Company received a loan in an aggregate amount of $60 from its co-founders, Mr. Udi Gilboa and Dr. Dalia Megiddo, and director, Dr. Ronnie Hershman, or the February 2023 Loan, under substantially the same terms as the July 2022 Loan, for a term of twelve (12) months, at an interest rate of 8% per annum. The balance of the February 2023 Loan, including interest accrued, was $67 as of December 31, 2023 and included in Short-term debt from shareholders. On August 28, 2024, the Company and each of these investors entered into an exchange letter (the "February 2023 Loan Exchange Letter"), according to which the Company's obligations in connection with the February 2023 Loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs (see Note 4), under which Dr. Ronnie Hershman was deemed to have invested an amount in the SAFE of $44, Dr. Dalia Megiddo was deemed to have invested an amount in the SAFE of $11, and Mr. Udi Gilboa was deemed to have invested an amount in the SAFE of $11 in said SAFE.

---

| | |
|:---|:---|
| **NOTE 4:** | **CONVERTIBLE SECURITIES** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 Company has raised funds through the issuance of SAFE.

A SAFE requires conversion into shares of the Company upon the occurrence of certain events, or at the maturity date of the SAFE. The number of shares to be issued upon conversion of the SAFE are not fixed and will be dependent upon the nature of the event that occurred that resulted in its conversion, the fair value of shares as of the event's date, and other factors as defined in the related agreement.

SAFEs are classified as a liability and the Company elected the fair value option in accordance with ASC 825, Financial Instruments ("ASC 825"). Accordingly, the liability is adjusted to fair value at each balance sheet date, with the change in fair value being recorded as change in fair value of convertible securities within the consolidated statements of operations. The Company reclassifies the SAFE amount from liability to equity once it converts into Ordinary Shares.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. On
 February 17, 2022, the shareholders approved the issuance of SAFEs (the "2022 SAFEs") to certain shareholders and
 third parties up to a maximum aggregate amount of $1,000. In March 2022 and April 2022, the Company raised $966 under the 2022 SAFE.

The 2022 SAFE investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior shares outstanding upon conversion of the 2022 SAFEs in the event of an equity financing or liquidity event occurs prior to the termination of the 2022 SAFEs as defined in the related agreement. The investors will receive a 40% discount on the share price in any of such event. If a dissolution event occurs prior to the termination of the 2022 SAFE, each SAFE investor will be entitled to receive, prior to consummation of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution are insufficient to permit a full payment of the amounts invested under the 2022 SAFEs, a prorated amount in par with the other SAFE investors. In the event that the 2022 SAFEs mature after 15 months from its issuance, all amounts invested under the 2022 SAFEs are converted into the Company's outstanding most senior shares based on a $41,000 valuation divided by number of outstanding shares including any outstanding share options. The 2022 SAFEs will expire and terminate immediately upon the earliest to occur of (1) the issuance of shares upon its conversion due to equity financing or liquidity event, or upon maturity; or (2) the payment, or setting aside for payment, of amounts due to the occurrence of dissolution event.

As of June and July 2023, the 2022 SAFEs matured and, accordingly, it should have been converted into 168,112 most senior outstanding shares. As of December 31, 2023, the shares had not been issued, and therefore, the 2022 SAFEs remained outstanding. On August 28, 2024, the 2022 SAFEs were converted into 168,112 Class A-3A Ordinary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. On
 March 15, 2023, the shareholders approved the issuance of additional SAFEs to certain shareholders and third parties up to the maximum
 aggregate amount of $1,000 (the "2023 SAFEs"). In March and April 2023, the Company raised $995 under the 2023 SAFEs.
 In addition, the Company paid $15 as finder fees for issuance of the 2023 SAFEs which was recorded as other expense, net within
 the consolidated statements of operations.

The 2023 SAFEs investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior shares outstanding upon conversion of the 2023 SAFEs in the event of an equity financing or liquidity event occurs prior to the termination of the 2023 SAFEs as defined in the related agreement. The investors will receive a 40% discount on the share price in any of such event. If a dissolution event occurs prior to the termination of the 2023 SAFEs, each SAFE investor will be entitled to receive, prior to consummation of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution are insufficient to permit a full payment of the amounts invested under the 2023 SAFEs, a prorated amount in par with the other SAFE investors. In the event the 2023 SAFEs mature after 15 months without a conversion prior to 15 months from its issuance, all amounts invested under the 2023 SAFEs are converted into the Company's outstanding most senior shares based on a $24,600 valuation divided by number of outstanding shares including any outstanding share options. The 2023 SAFEs will expire and terminate immediately upon the earliest to occur of (1) the issuance of shares upon its conversion due to equity financing or liquidity event, or upon maturity; or (2) the payment, or setting aside for payment, of amounts due to the occurrence of dissolution event.

As of June, July and August 2024, the 2023 SAFEs have matured. On August 28, 2024, the 2023 SAFE were converted into 305,085 Class A-3B Ordinary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. On
 April 9, 2024, the Board of Directors approved the issuance of additional SAFEs to certain shareholders and third parties up to the
 maximum aggregate amount of $1,500, which increased on August 28, 2024 to $2,000 (the "2024 SAFEs"). The Company raised
 $1,000 under the 2024 SAFEs during the year ended December 31, 2024. In addition, 2024 SAFEs in the amount of $636 were issued in
 connection with the discharge of the Company's obligations under the July 2022 Loan and February 2023 Loan (see Note
 3).

The 2024 SAFEs investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior shares outstanding upon conversion of the 2024 SAFEs in the event that an initial public offering, merger, acquisition, qualified equity financing or other liquidity event occurs prior to the termination of the 2024 SAFEs as defined in the related agreement. The investors will receive a 35% discount on the share price in any of such event. If a dissolution event occurs prior to the termination of the 2024 SAFEs, each SAFE investor will be entitled to receive, prior to consummation of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution are insufficient to permit a full payment of the amounts invested under the 2024 SAFEs, a prorated amount in par with the other SAFE investors. If such events had not occurred within 18 months of the execution of the 2024 SAFEs, all amounts invested under the 2024 SAFEs are converted into the Company's outstanding most senior shares based on the previous round of equity financing consummated discounted in 35% and divided by number of outstanding shares including any outstanding share options. The 2024 SAFEs will expire and terminate immediately upon the earliest to occur of (1) the issuance of shares upon its conversion due to a qualified equity financing or liquidity event as aforesaid, or upon maturity; or (2) the payment, or setting aside for payment, of amounts due to the occurrence of a dissolution event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. The
 Company measured the 2022 SAFEs, the 2023 SAFEs and 2024 SAFEs upon receiving the cash and on each period end at its fair value in
 accordance with ASC 825-10 with the changes in fair value reported in the condensed consolidated statements of operations.

The SAFEs were valued at the end of the year using a probability-weighted expected return model, which incorporated significant unobservable inputs.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

The Company used the following significant inputs in measuring the SAFEs:

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2024 | December 31,<br>2023 |
| Fair value of Ordinary Share\* | $3.40 | $4.12 |
| Weighted average cost of capital | 23.5% | 21.70% |
| Risk free rate | 4.16% - 4.24 | 5.06% |
| Time to maturity | 0.49-0.93 | 0.48 |

---

\* Including inputs and assumptions on the likelihood of a SAFE mandatory conversion, qualified equity financing or liquidity event or dissolution.

---

| | |
|:---|:---|
| **NOTE 5:** | **FAIR VALUE MEASUREMENTS** |

---

The following table provide the liabilities carried at fair value measured on a recurring basis:

**Fair Value Measured as of December 31, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Financial liabilities at fair value:** | Level 1 | Level 2 | Level 3 | Total |
| Convertible securities | $- | $- | $1802 | $1802 |
| **Total financial liabilities at fair value** | $**-** | $**-** | $**1802** | $**1802** |

---

**Fair Value Measured as of December 31, 2023**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Financial liabilities at fair value:** | Level 1 | Level 2 | Level 3 | Total |
| Convertible securities | $- | $- | $1830 | $1830 |
| **Total financial liabilities at fair value** | $**-** | $**-** | $**1830** | $**1830** |

---

The changes in the fair value of the Company's Level 3 financial liabilities, which are measured on a recurring basis are as follows:

---

| | |
|:---|:---|
|  | Convertible securities |
| **January 1, 2023** | $1054 |
| Proceeds from issuance of 2023 SAFE | 995 |
| Change in fair value of convertible securities | (219) |
| **December 31, 2023** | $**1830** |
| Proceeds from issuance of 2024 SAFEs | 1000 |
| Conversion of SAFEs to Ordinary Shares\* | (2107) |
| Conversion of short-term debt from shareholders to 2024 SAFEs | 636 |
| Change in fair value of convertible securities | 443 |
| **December 31, 2024** | $**1802** |

---

(\*) This amount is measured based on the fair value of the Class A-3A Ordinary Shares and Class A-3B Ordinary Shares issued upon the conversion of the 2022 SAFEs and 2023 SAFEs, respectively (see Note 4b and 4c). The fair value of such shares is based on a probability-weighted expected return model. The calculation incorporated significant unobservable inputs, including inputs and assumptions on the likelihood of consummation of an IPO.

There were no transfers between fair value measurement levels during the years ended December 31, 2024 and 2023.

The estimated fair value of the Company's cash and cash equivalents, restricted cash, other current assets, accounts payable, accrued expense and other current liabilities and short-term debt from shareholders approximates their carrying values as these financial instruments are highly liquid or short-term in nature.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

---

| | |
|:---|:---|
| **NOTE 6:-** | **CONTINGENT LIABILITIES AND COMMITMENTS** |

---

**Litigation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. From
 time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter
 and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and
 the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. The Company discloses pending claims
 and legal proceedings litigation if the Company believes a possibility exists that the claims and legal proceedings litigation will
 have a material effect on its financial results. Legal costs are accounted for as they are incurred.

b. In
 May 2022, the Company received a letter from a supplier associated with the Taffix business, which demanded that the Company pay
 professional fees billed to the Company in connection with services provided by the supplier. In August 2022, the supplier commenced
 legal proceedings in the magistrate court of Tel Aviv, in an amount of $92. The Company recorded the entire contractual expenses
 prior to January 1, 2023 and a liability of $92 is recorded as current liabilities related to discontinued operations within the
 Company's consolidated balance sheets as of December 31, 2024 and 2023.

**Commitments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In
 May 2019, the Company entered into a license agreement ("License Agreement") with Formulex Pharma Innovations Ltd. ("Formulex").
 Formulex is an Israeli corporation, owned by the Company's shareholders, Mr. Ehud Gilboa, Dr. Dalia Megiddo and Dr. Ronnie
 Herschman. Pursuant to the License Agreement, Formulex granted the Company a license for the development, manufacture and commercialization
 of Formulex's patent for dry powder compositions for intranasal delivery and rights in the know-how of its intranasal and inhaled
 formulations, combination products, and particle engineering, together, the Licensed Products. Also pursuant to the License Agreement,
 the Company pay Formulex royalties of the Licensed Products in the amount of 0.5% of net sales of the licensed products, which are
 capped at $100 in the aggregate. The royalty payment period commenced on the effective date of the agreement and will continue on
 a country-by-country, product-by-product basis for the longer of: (i) 15 years from the date of the first commercial sale of such
 Licensed Product in such country, or (ii) until the licensed patent expires in such country. The Company may terminate the License
 Agreement for any reason upon 60 days prior written notice. In the event of such termination, the Company has the right to acquire
 the Licensed Technology in an amount equal to the difference between the amount of royalty actually paid to Formulex prior
 to the date of termination and the amount of $100. Termination of the agreement does not relieve the parties of obligation accrued
 prior to such termination.

In June 2019, the Company entered into a service agreement with Formulex, as subsequently amended in March 2020, to facilitate the flow of information and know how, as well as help develop the Company products. The Company pays $5 a month under the service agreement. The services agreement automatically renews every year for a period of one year, unless terminated by either party upon 30 days' written notice, in accordance with the terms and conditions set forth therein. In connection with the same, Formulex provided the Company with one-time development services in 2024 and 2023 for additional fees of $0 and $22, respectively.

In August 2024, the Company signed an additional agreement with Formulex to provide services which support the Company in providing services to the governmental body (see Note 6b). As of December 31, 2024, an amount of $116 paid by the Company for future services to be provided by Formulex to the Company is recorded in the consolidated balance sheet as part of prepaid expenses and other current assets .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In
 July 2024 the Company entered in a non-recurring research arrangement with a government
 body to perform research and development activities in connection with a new formulation,
 that is intended to be used through intranasal delivery. As of December 31, 2024, the research
 and development activity related to that arrangement have not commenced, and an amount of
 $108 received as advance from the governmental body is recorded in the consolidated
 balance sheet as part of accrued expenses and other current liabilities.

c. In
 September 2019, the Company entered into a master service agreement and schedules of work
 (the "Aptar Agreement") with Aptar Group Inc. ("Aptar")
 under which Aptar granted the Company technology access to co-development and support
 for the development and submissions to regulatory bodies of intranasal to deliver NS001 and
 NS002 using Aptar's technology.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

In connection with NS001, the Company is required to pay Aptar up to $1,350 in the aggregate comprising of $200 in development stage, $350 upon submission of New Drug Application ("NDA") with the U.S. Food and Drug Administration ("FDA") (or equivalent body outside the U.S.) and $800 at market launch. The Company paid $200 to Aptar prior to January 1, 2022. In August 2021, the Company entered into a change order with respect to NS001, for the provision of additional services and deliverables to be provided by Aptar for an additional fee of 100 Euro ($103), out of which 40 ($41) Euro paid to Aptar prior to January 1, 2022, and the remaining amounts will be paid upon NDA submission and FDA approval of NS001.

In connection with NS002, the Company is required to pay Aptar up to $675 in the aggregate comprising of $150 in development stage, $225 upon submission of NDA with the FDA (or equivalent) and $300 at market launch. The Company paid $150 to Aptar prior to January 1, 2022.

The Company is also obligated to pay Aptar for each final product that achieves certain sales-based milestone events and tiered royalties on net sales of each final product by the Company or its affiliates or sublicensees at rates ranging from a low single-digit percentage, depending on the total annual worldwide net sales of each such final product up to seven years after first commercial sale. The Aptar Agreement has an early termination fee in case the Company terminate NS001 or NS002 programs for whatever reason, other than a breach of the agreement by Aptar, of $450 for each product.

In April 2021, the Company entered into an agreement with Aptar's subdivision, NextBreath, which is subject to terms and conditions of the Aptar Agreement, to perform laboratory and development services in connection with NS001. For the services received under the agreement by April 2022, there is an amount of $529 outstanding payable to Aptar, which has not been paid to date.

On June 15, 2022, Aptar sent Nasus a Notice of Default Letter, which followed by Notice of Termination Letter sent on October 5, 2022, in which Aptar claimed for alleged breach of the contractual obligations of the Aptar Agreement made by Nasus and stated the outstanding amounts of $529 and in addition a termination fee of $450 related to NS001. The Company did not agree with the alleged breach made by Aptar and the existence of any grounds for termination of the Aptar's Agreement. Since then, the Company and Aptar discussed and exchanged further correspondence, but were unable to resolve the claims and allegations made by each party. There is no legal proceeding between Nasus and Aptar. As of December 31, 2024 and 2023, a liability of $529 is recorded as accounts payable within the consolidated balance sheets. The Company has not recorded a liability for the termination fees of $900 ($450 for NS001 and $450 for NS002), as the Company believes it is not probable that it will be required to pay such amounts.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

---

| | |
|:---|:---|
| **NOTE 7:** | **SHAREHOLDERS' DEFICIT** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 Company's authorized capital shares consist of 13,266 thousand shares of Ordinary Shares, comprised of: 9,540 thousand Class
 Ordinary Shares, 816 thousand Class A Ordinary Shares; 1,431 thousand Class A-1 Ordinary Shares; 477 thousand Class A-2 Ordinary
 Shares; 525 thousand Class A-3 Ordinary Shares ,172 thousand Class A-3A; and 305 thousand Class A-3B Ordinary Shares, of which 7,363
 shares were issued and outstanding. Holders of each share class have the right to one vote per share. All share classes have the
 similar rights attached to them (noting that there are certain shareholders rights which are triggered based on a holding rate),
 except that, (i) Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3; Class A-3A Ordinary Shares;
 and Class A-3B Ordinary Shares differ in Original Issue Price (as prescribed in the Company's Articles of Association and noted
 below), (ii) while the Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares ,Class A-3 Ordinary Shares Class
 A-3A Ordinary Shares and Class A-3B Ordinary Shares are entitled to certain conversion ratio adjustments, such adjustment is affected
 by split or reverse split of such shares (with no special rights provided as down-round protection) and (iii) the appointment of
 board members is not determined at a general meeting, but rather through a specific mechanism of nomination, as detailed in the Company's
 Articles of Association. Subject to the forgoing, each Class of the Company's Ordinary Shares are treated equally, identically
 and rateably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time.
 Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Ordinary Shares will
 be entitled to receive rateably all assets of the Company available for distribution to its shareholders. None of the shares have
 preferred rights in liquidation preferences or redemption rights. Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary
 Shares, Class A-3 Ordinary Shares, Class A-3A Ordinary Shares and Class A-3B Ordinary Shares will automatically be converted into
 Ordinary Shares upon completion of an IPO. See also Note 14(f) for changes made to the share capital of the Company after
 December 31, 2024.

b. Each
 of Class A Ordinary Shares; Class A-1 Ordinary Shares; Class A-2 Ordinary Shares; Class A-3 Ordinary Shares; Class A-3A Ordinary
 Shares; and Class A-3B Ordinary Shares is convertible, at the option of the holder at any time, into the number of Class Ordinary
 Shares as is determined by dividing the original issue price for such series of shares by the conversion price for such series of
 shares that is in effect at the time of conversion. The conversion price, adjusted to give effect to the forward stock split described
 in Note 7(c), for Class A Ordinary Shares; Class A-1 Ordinary Shares; Class A-2 Ordinary Shares; Class A-3 Ordinary Shares; Class
 A-3A Ordinary Shares; and Class A-3B Ordinary Shares is. $1.2264, $2.9931, $4.2965 and $6.0462, a price of applicable per share regarding
 each respective 2022 SAFE, as adjusted, and applicable price per share regarding each respective 2023 SAFE, as adjusted, respectively.
 The applicable conversion price of each is subject to adjustment upon share splits or combinations, recapitalizations, of the Company's
 Class Ordinary Shares, and distribution of bonus shares.

Each of Class A Ordinary Shares; Class A-1 Ordinary Shares; Class A-2 Ordinary Shares; Class A-3 Ordinary Shares; Class A-3A Ordinary Shares and Class A-3B Ordinary Shares will automatically be converted into Class Ordinary Shares, at the then effective conversion price, upon the consummation of an initial public offering or the affirmative consent of the holders of majority of the Class A Ordinary Shares with respect to the Class A Ordinary Shares; (iii) the affirmative consent of the holders of majority of the Class A-1 Ordinary Shares with respect to the Class A-1 Ordinary Shares; (iv) the affirmative consent of the holders of majority of the Class A-2 Ordinary Shares with respect to the Class A-2 Ordinary Shares and (v) the affirmative consent of the holders of majority of the Class A-3 Ordinary Shares, with respect to the Ordinary A-3 Shares (vi) the affirmative consent of the holders of majority of the Class A-3A Ordinary Shares with respect to the Ordinary A-3A Shares; and, (vii) the affirmative consent of the holders of majority of the Class A-3B Ordinary Shares with respect to the Ordinary A-3B Shares.

---

| | |
|:---|:---|
| c. | On August 28, 2024 the shareholders of the Company approved the issuance of Class A-3A Ordinary Shares and Class A-3B Ordinary Shares (see Note 7a and 7b).<br>|
| d. | On March 17, 2025, the shareholders of the Company approved, subject to the effectiveness of the registration statement, to effect a forward share split at a ratio of 1-for-4.77008, which will take place on the effective date of the registration statement.<br>|
|  | All share and per share amounts for Ordinary Shares, Share Options and loss per share amounts have been adjusted to give retroactive effect to the forward share split for all periods presented in these financial statements. Any fractional shares that resulted from the reverse share split have been rounded up to the nearest whole share. |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024\*** | **December 31, 2024\*** | **December 31, 2023\*** | **December 31, 2023\*** |
|  | **Authorized** | **Issued and outstanding** | **Authorized** | **Issued and outstanding** |
|  | **Number of shares** | **Number of shares** | **Number of shares** | **Number of shares** |
| Class Ordinary Shares | 9540160 | 4770409 | 9540160 | 4770409 |
| Class A Ordinary Shares | 815684 | 766476 | 815684 | 766476 |
| Class A-1 Ordinary Shares | 1431024 | 367506 | 1431024 | 367506 |
| Class A-2 Ordinary Shares | 477008 | 465479 | 477008 | 465479 |
| Class A-3 Ordinary Shares | 524709 | 519839 | 524709 | 519839 |
| Class A-3A Ordinary Shares | 171723 | 168112 |  |  |
| Class A-3B Ordinary Shares | 305285 | 305085 | - | - |
|  | 13265593 | 7362906 | 12788585 | 6889709 |

---

\* After giving effect to the forward share split, see also Note 7(d).

---

| | |
|:---|:---|
| **NOTE 8:** | **SHARE-BASED PAYMENTS** |

---

**Equity Incentive Plan** – The Company has established the 2019 Incentive Option Plan (the "2019 Plan") whereby the Company may grant share options to purchase its Class Ordinary Shares, for the purpose of providing incentives to our directors, officers, employees, office holders, service providers and their employees, or charitable entities. Share options granted under the 2019 Plan generally have 10-year terms and vest over a four-year period starting from the date specified in each agreement.

The maximum number of share options of Class Ordinary Shares that may be issued under the 2019 Plan is 246,170 shares. As of December 31, 2024, there were 54,140 share options available for issuance.

The following table presents a summary of share options activity for the years ended December 31, 2024 and 2023:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Share Options | Weighted Average Exercise Price Per Share Option | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value |
| Outstanding as of January 1, 2023 | 206010 | $2.64 | 7.23 | $79 |
| Granted | 13905 | 2.08 |  |  |
| Exercised |  |  |  |  |
| Expired | (36143) | 1.89 |  |  |
| Forfeited | (3997) | 4.30 |  |  |
| Outstanding as of December 31, 2023 | 179775 | $2.71 | 6.36 | $278 |
| Granted | 11925 | 3.71 |  |  |
| Exercised |  |  |  |  |
| Expired |  |  |  |  |
| Forfeited | - | - |  |  |
| Outstanding as of December 31, 2024 | 191700 | $2.77 | 5.64 | 227 |
| Vested and Exercisable as of December 31, 2024 | 180201 | $2.72 | 5.06 | $227 |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

The aggregate intrinsic value was calculated as the difference between the exercise price of the share options and the fair value of the underlying Class Ordinary Shares as December 31, 2024 and 2023. The weighted-average grant-date fair value of share options granted during the years ended December 31, 2024 and 2023 was $1.72 and $2.33, respectively.

The following table sets forth the total share-based compensation expense resulting from share options granted to employees, directors and non-employee service providers included in the Company's consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2024** | **2023** |
| Research and development | $9 | $34 |
| General and administrative | 1 | 5 |
| Total share-based compensation expenses | $10 | $39 |

---

As of December 31, 2024, and 2023, unamortized share-based compensation expense was $16 and $6, respectively, related to non-vested share options, which is expected to be recognized over weighted average period of 0.9 and 0.46 years, respectively.

**Fair Value of Share Options**– The Company estimates the fair value of share option awards on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each share option. The assumptions used to estimate the fair value of share options granted are as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| <br>(Amounts in dollars, except percentages) | **2024** | **2023** |
| Expected volatility | 63.63% | 66%-68 |
| Expected dividends | 0% | 0% |
| Expected term (in years) | 5.75 | 5-5.47 |
| Risk free rate | 4.64% | 3.59%-3.66 |
| Fair value of Class Ordinary Shares | $3.47 | $3.02-$2.64 |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

● **Fair Value of Class Ordinary Shares** – Since the Company's Class Ordinary Shares are not publicly traded, the fair value of the Company's Class Ordinary Shares was approved by the Company's Board of Directors.

In estimating the fair value of the Company's Class Ordinary Shares, management uses the assistance of third-party valuation specialist and consider factors management believes are material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the Company's Class Ordinary Shares at each grant date.

● **Expected Volatility** – The expected volatility is based on the historical and implied volatility of similar companies whose stock or share option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization, and financial leverage of the other companies.

● **Risk-Free Interest Rate** – The risk-free interest rate assumption is based on observed U.S. Treasury yield curve interest rates in effect at the time of grant appropriate for the expected term of the share options granted.

● **Expected term (years)** – Expected term represents the period that the Company's share option grants are expected to be outstanding. There is not sufficient historical share exercise data to calculate the expected term of the share options. Therefore, the Company elected to utilize the simplified method to value share option grants. Under this approach, the weighted-average expected life is presumed to be the average of the shortest vesting term and the contractual term of the share option.

● **Expected dividend yield** – The Company does not anticipate paying any dividends in the foreseeable future.

---

| | |
|:---|:---|
| **NOTE 9:-** | **TAXES ON INCOME** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Tax rates applicable to the income of the Company:** 

The Israeli corporate income tax rate was 23% in 2024 and 2023.

The following table displays net deferred income tax:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Deferred tax assets: |  |  |
| Net operating loss carryforward | $2262 | $2476 |
| Research and development | 94 | 172 |
| Vacation accrual | 1 | 1 |
| Gross deferred tax assets | 2357 | 2649 |
| Valuation allowance | (2357) | (2649) |
| Net deferred tax | $- | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **A reconciliation of the Company's Israeli corporate income tax rate to effective tax rate is as follows:** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
| Israel corporate income tax rate | 23% | 23% |
| Non-deductible share-based compensation | (0.16)% | (0.85)% |
| Effect of change in fair value of convertible securities | (28.92)% | 20.97% |
| Change in valuation allowance | 6.08% | (43.12)% |
| Effective tax rate | -% | -% |

---

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Carry forward losses for tax purposes and other temporary differences:** 

As of December 31, 2024, the Company's Israeli tax loss carryforward was approximately $10 million. Such losses can be carried forward indefinitely to offset against future taxable income of the Company.

Based on the available evidence, management believes that it is more likely than not that its deferred tax assets will not be realized and accordingly, a full valuation allowance has been provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Final tax assessments:** 

As of December 31, 2024, all of Company's tax assessments in Israel are not final.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **Uncertain tax positions:** 

The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxation authority. As of December 31, 2024, and 2023, the Company has not recorded any uncertain tax position liability.

---

| | |
|:---|:---|
| **NOTE 10:-** | **SEGMENT REPORTING** |

---

Segment information is prepared on the same basis that the Company's chief operating decision maker ("CODM"), the Chief Executive Officer, manages the business, makes business decisions and assesses performance. The Company has one operating and reportable segment specializing in the development of intranasal drugs to treat emergency medical conditions, as described in Note 1(a). All of the Company's assets are located in Israel.

The CODM assesses performance for this segment and decides how to allocate resources based on net loss. The measure of segment assets is reported on the balance sheet as cash and cash equivalents. The Chief Executive Officer performs the assessment of segment performance by using the reported measure of segment profit or loss to monitor actual results.

The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
| <u>Significant segment expenses</u> |  |  |
| &nbsp;&nbsp;&nbsp;Payroll and payroll related (\*) | $77 | $62 |
| &nbsp;&nbsp;&nbsp;Subcontractors and consultants (\*) | 444 | 737 |
| &nbsp;&nbsp;&nbsp;Professional services (\*) | 583 | 142 |
| &nbsp;&nbsp;&nbsp;Other | 224 | 167 |
| <u>Other segment items:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 10 | 39 |
| &nbsp;&nbsp;&nbsp;Loss (income) from change in fair value of convertible securities | 443 | (219) |
| &nbsp;&nbsp;&nbsp;Interest expense | 29 | 49 |
| &nbsp;&nbsp;&nbsp;Other expense, net | 2 | 28 |
| &nbsp;&nbsp;&nbsp;Deferred issuance costs | (260) |  |
| &nbsp;&nbsp;&nbsp;Net loss (income) from discontinued operations | (20) | 46 |
| Net loss | $(1532) | $(1051**)** |

---

(\*) Excluding share-based compensation expenses and including costs capitalized as deferred issuance costs.

---

| | |
|:---|:---|
| **NOTE 11:-** | **NET LOSS PER SHARE ATTRIBUTABLE TO SHAREHOLDER** |

---

Basic net loss per share is computed using the weighted average number of shares of Ordinary Shares outstanding for the period. Diluted net loss per share reflects the effect of the assumed exercise of any share options, and the conversion of any convertible securities, in each case only in the periods in which such effect would have been dilutive.

For the years ended December 31, 2024 and 2023, net loss per share amounts were the same for Class Ordinary Shares, Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3 Ordinary Shares, Class A-3A Ordinary Shares and Class A-3B Ordinary Shares because the holders of each class are entitled to equal per share dividends.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

The table below presents the computation of basic and diluted net loss per share:

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br>**December 31, 2024** | **Year ended**<br>**December 31, 2023** |
| **Numerator:** |  |  |
| Loss from continuing operations | 1552 | 1005 |
| Net loss (income) from discontinued operations | (20) | 46 |
| Net loss attributable to holders of Ordinary Shares | $1532 | $1051 |
| Effect of dilutive securities: |  |  |
| Change in fair value of convertible securities related to dilutive effect\* |  | 361 |
| Loss from continuing operations | 1552 | 1366 |
| Net loss (income) from discontinued operations | (20) | 46 |
| Net loss attributable to holders of Ordinary Shares and assumed conversions | $1532 | $1412 |
| **Denominator\*\*\*:** |  |  |
| Weighted-average number of Ordinary Shares used to compute net loss per share, basic | 7027725 | 6889708 |
| Effect of dilutive securities: |  |  |
| 2022 SAFE\*\* |  | 168112 |
| Weighted-average number of Ordinary Shares used to compute net loss per share, diluted | 7027725 | 7057820 |
| **Net income (loss) per share, basic:** |  |  |
| Continuing operations | (0.22) | (0.15) |
| Discontinued operations | 0.00 | (0.00) |
| **Net loss per share, basic** | $(0.22) | $(0.15) |
| **Net income (loss) per share, diluted:** |  |  |
| Continuing operations | (0.22) | (0.19) |
| Discontinued operations | 0.0 | (0.01) |
| **Net loss per share, diluted** | $(0.22) | $(0.20) |

---

\* The dilutive effect on the numerator (net loss) in calculating the diluted net loss per share for the year ended December 31, 2023 represents the change in fair value in connection with the 2022 SAFEs.

\*\* The dilutive effect on the denominator (the weighted average number of Ordinary Shares) in calculating the diluted net loss per share for the year ended December 31, 2023 is based on the assumption the conversion of the 2022 SAFE into shares will occur upon its maturity.

\*\*\* After giving effect to the forward share split, see also Note 7(d).

The table below presents the number of securities that were excluded from the calculation of diluted net loss per share as the effect would have been anti-dilutive:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended** | **Year ended** | **Year ended** | **Year ended** |
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
| Share options |  | 191700 |  | 179777 |
| 2022 SAFE\* |  | 168112 |  |  |
| 2023 SAFE\*\* |  | 305085 |  | 305085 |
| 2024 SAFE\*\*\* |  | 473197 |  |  |

---

\* The weighted average number of Ordinary Shares in connection with the 2022 SAFE for the year ended December 31, 2024 is based on the conversion of the 2023 SAFE into shares on its maturity.

\*\* The weighted average number of Ordinary Shares in connection with the 2023 SAFE for the years ended December 31, 2024 and 2023 is based on the conversion of the 2023 SAFE into shares on its maturity.

\*\*\* The weighted average number of Ordinary Shares in connection with the 2024 SAFE for the year ended December 31, 2024 is based on the assumption the conversion of the 2024 SAFE into shares will occur upon its maturity.

---

| | |
|:---|:---|
| **NOTE 12:-** | **RELATED PARTIES** |

---

&nbsp;&nbsp;&nbsp;&nbsp;a. Mr.
 Ehud Gilboa and Dr. Dalia Meggido are shareholders and each hold approximately 25% of the Company's issued and outstanding
 Ordinary Shares. Mr. Gilboa is the Chairman of the Board of Directors and Dr. Meggido is a member of the Board of Directors, Chief
 Development Officer and Chief Medical Officer of the Company, and former Chief Executive
 Officer of the Company (until January 6, 2025).

&nbsp;&nbsp;&nbsp;&nbsp;b. Dr.
 Ronnie Hershman is a member of the Board of Directors and beneficially holds approximately 18% of the Company's outstanding
 Ordinary Shares.

c. Mr.
 Gilboa and Dr. Meggido are each entitled to management fee of NIS 45 (approximately $13) plus customary social benefits of additional
 25% of the management fee. In February 2022, both Mr. Gilboa and Dr. Meggido agreed to a voluntary deferral of such fee of NIS 9
 (approximately $3), and an additional deferral of NIS 18 (approximately $5) in November 2022. As of December 31, 2024 and 2023, the
 aggregate deferred liability amounted to $530 and $318, respectively. For the years ended December 31, 2024 and 2023, management
 fees in the amount of $369 and 366, respectively, recorded as operating expense within the Company's consolidated statements
 of operations. See Notes 14(d) and 14(e) for changes in 2025 to the these arrangements with Mr. Gilboa and Dalia Meggido.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;d. Mr.
 Gilboa subleases office space for a monthly fee of NIS 12 (approximately $3) and Topnotch Consultancy (2009) Ltd., a company owned
 by Mr. Gilboa, provides the Company with secretarial services for a monthly fee of NIS 15 (approximately $4), which increased from
 a monthly fee of NIS 5 (approximately $2) starting April 2024.

e. Mr.
 Gilboa, Dr. Megiddo and Dr. Ronnie Hershman have all participated in SAFEs issued by the Company (see Note 4). Mr. Gilboa, Dr. Megiddo,
 Formulex and Dr. Hershman invested $35, $35 $30 and $100 respectively in the 2022 SAFEs, Dr. Hershman invested $100 in the 2023 SAFEs,
 Mr. Gilboa, Dr. Megiddo and Dr. Hershman invested $50, $50 and $100 respectively in the 2024 SAFEs.

f. Mr.
 Gilboa, Dr. Megiddo and Dr. Ronnie Hershman invested $10, $10 and $290 in the short-term debt from shareholders as part of the July
 2022 Loan and the February 2023 Loan, which was later exchanged to 2024 SAFEs (see Note 3).

g. Mr.
 Gilboa, Dr. Megiddo and Dr. Hirshman are major shareholders of Formulex which granted services and additional services and license
 to the Company (see Notes 6).

h. The
 following related party balances are included in the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| CURRENT ASSETS |  |  |
| Prepaid expenses and other current assets | $116 | $- |
| CURRENT LIABILITIES: |  |  |
| Short-term debt from shareholders | $- | $344 |
| Convertible securities | $605 | $365 |
| Accrued expense and other current liabilities | $711 | $451 |

---

&nbsp;&nbsp;&nbsp;&nbsp;i. The
 following related party transactions are included in the consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br>**December 31, 2024** | **Year ended**<br>**December 31, 2023** |
| Research and development | $208 | $228 |
| General and administrative | $307 | $288 |
| Interest expense | $17 | $27 |

---

---

| | |
|:---|:---|
| **NOTE 13:-** | **DISCONTINUED OPERATIONS** |

---

During 2020, the Company's research and development team in Israel developed a nasal powder that creates a hostile microenvironment in the nose where many airborne viruses can't survive, which was marketed as Taffix ("Taffix"). At the end of 2021, the Company started the wind-down of Taffix by selling of all the manufacturing equipment, ceasing marketing efforts, seeking alternatives, fulling final orders but not accepting new orders, disposal of inventory and terminating of engagements with employee contractors and manufacturers. As of December 2022, the Company was no longer engaged in the development, production, marketing or sales of Taffix.

**NASUS PHARMA LTD. AND ITS SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts in thousands, except share and per share amounts)**

In accordance with applicable accounting guidance, the results of Taffix are presented as net income (loss) from discontinued operations in the consolidated statements of operations. Further, the Company reclassified the liabilities of Taffix current liabilities related to discontinued operations on the consolidated balance sheets as of December 31, 2024 and 2023. The consolidated statements of cash flows are presented on a consolidated basis for both continuing operations and discontinued operations.

The following table presents key components of "Net income (loss) from discontinued operations":

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2024** | **2023** |
| General and administrative expense | (4) | (44) |
| Other income (expense), net | 24 | (2) |
| Net income (loss) from discontinued operations | $20 | $(46) |

---

The following table presents liabilities that are classified as discontinued operations on the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Liabilities |  |  |
| Current Liabilities: |  |  |
| Accounts payable | $142 | $158 |
| Accrued expense and other current liabilities | 92 | 85 |
| Advances from customers | 255 | 270 |
| Current liabilities related to discontinued operations | $489 | $513 |

---

---

| | |
|:---|:---|
| **NOTE 14:** | **SUBSEQUENT EVENTS** |

---

The Company evaluated subsequent events from the date of the consolidated balance sheet of December 31, 2024 through March 21, 2025, the date the consolidated financial statements were available to be issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the consolidated financial statements as follows :

---

| | |
|:---|:---|
| a. | In January through March 2025, the Company entered into agreements to raise additional $280 under the terms of the 2024 SAFEs (see Note 4). The proceeds from the issuance of the additional 2024 SAFEs were received during February and March 2025. |
| b. | In January 2025, the Board of Directors approved the engagement with Dan Teleman as Chief Executive Officer ("CEO"). The CEO is entitled to a gross monthly salary in the amount of NIS 30 ($8) beginning January 7, 2025 and until March 2025. As of April 1, 2025, the CEO is entitled to a gross monthly salary of NIS 40 ($11), to be increased to NIS 70 ($19) as of and subject to consummation of the IPO until the first anniversary of the IPO, and thereafter to NIS 75 ($21) until the second anniversary of the IPO and to NIS 80 ($22) thereafter. Additionally, the CEO will be entitled to an annual bonus in between 10%-20% of his annual gross salary (the "CEO Annual Bonus").<br>|
|  | The CEO also entitled for other benefits such as reimbursement of expenses and certain bonus payments, including a one-time bonus payment of NIS 120 ($33) upon and subject to consummation of the IPO (the "CEO IPO Bonus"). |
|  | In March 2025, the shareholders and the Board of Directors approved, subject to the consummation of the IPO, the following amendments to the agreement with the CEO (1) an increase in the CEO Annual Bonus from 10%-20% of his annual gross salary to 20%-30%; (2) one-time bonus of $75 if the Phase 3 clinical trial of NS002 successfully meets its primary end-point; and (3) an increase in the CEO IPO Bonus to NIS 240 ($66). |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. In
 January 2025, the Company granted the CEO and its Director of Finance 318,856 share options and 27,681 share options, respectively,
 to purchase 346,537 Class Ordinary Shares at an exercise price of $6.05. The share options are to vest over a period of 36 months,
 commencing January 7, 2025, with the share options granted to the CEO vesting fully upon change of control, other than IPO, as defined
 in the agreement. In addition, the Company increased the maximum number of Ordinary Shares reserved for issuance under the 2019 Plan
 by 477,008, from 246,170 Ordinary Shares to 723,178 Ordinary Shares.

d. In
 March 2025, the shareholders and the Board of Directors approved compensation adjustments upon completion of the IPO to Mr.
 Udi Gilboa, as follows: (i) NIS 86 ($24) monthly consultation fee in the first year following the IPO, (ii) NIS 90 ($25) monthly
 consultation fee in the second year following the IPO, and (iii) NIS 95 ($26) monthly consultation fee from the third year following
 the IPO; (iv) monthly car allowance and maintenance expenses of NIS 4 ($1); (v) annual bonus of up to 25% of the annual consulting
 fees, the specific amount of which is subject to further approval of our Board of Directors; and (vi) one-time bonus of NIS
 905 plus VAT ($250) upon completion of the IPO. Further, the compensation committee and Board of Directors, may grant Mr. Gilboa:
 (i) a special bonus of up to 1.5% of the proceeds of a qualified merger, sale, or assignment as provided therein; (ii) an equity
 financing bonus equal to up to 2% of the cash proceeds in a private placement or other equity financing transaction, and (iii) a
 one-time bonus for special efforts performed by Mr. Gilboa and/or in respect of the significant contribution of Mr. Gilboa to the
 Company's operations, special projects or extra ordinary achievements which are not in the Company's ordinary course
 of business.

e. In
 March 2025, the Board of Directors and the Company's shareholders approved compensation adjustments upon completion of the
 IPO to Dr. Dalia Megiddo, as follows: (i) NIS 86 ($24) monthly consultation fee in the first year following the IPO, (ii) NIS 97
 ($27) monthly consultation fee in the second year following the IPO, and (iii) NIS 106 ($29) monthly consultation fee from the third
 year following the IPO; (iv) monthly car allowance and maintenance expenses of NIS 4 ($1); (v) annual bonus of up to 25% of annual
 consulting fees, subject to approval of our Board of Directors; one-time bonus of NIS 724 plus VAT ($200) upon completion of the
 IPO. Further, the compensation committee and the Board of Directors, may grant Dr. Megiddo (i) a special bonus of up to 1.5% of the
 proceeds of a qualified merger, sale, or assignment as provided therein; (ii) a one-time bonus for special efforts performed by Dr.
 Megiddo and/or in respect of the significant contribution of Dr. Megiddo to the Company's operations, special projects or extra
 ordinary achievements which are not in the Company's general course of business; (iii) a bonus of NIS 905plus VAT ($249) upon
 NDA submission for NS002 to the FDA; and (iv) a bonus of NIS 1,811 plus VAT ($497) upon FDA approval of an NDA for NS002.

f. On
 March 17, 2025, the shareholders approved, subject to the effectiveness of
 the registration statement, the following changes to the Company's share capital, which
 will take place on the effective date of the registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Convert
 all shares of Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3 Ordinary Shares, Class A-3A
 Ordinary Shares and Class A-3B Ordinary Shares into Class Ordinary Shares on a ratio of 1-for-1;

2. Effect
 a forward share split at a ratio of 1-for-4.77008. See also Note 7(d);

3. Execute
 a change in the par value of its Class Ordinary Shares such that following the change the Class Ordinary Shares have no
 par value; and

4. Increase
 the Company's authorized Class Ordinary Shares by 9,536 thousand shares. Following such increase, the Company's
 authorized capital shares will consist of 22,802 thousand shares of Class Ordinary Shares, no par value.

**1,000,000** **Ordinary Shares**

![](image_020.jpg)

**Nasus Pharma Ltd.**

**PRELIMINARY PROSPECTUS**

---

| | |
|:---|:---|
| **Laidlaw & Company (UK) Ltd** | **CRAFT CAPITAL MANAGEMENT LLC** |

---

, 2025

Through and including , 2025 (the 25<sup>th</sup> day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 6. Indemnification of Directors, Officers and Employees**

***Indemnification***

 ****

The Israeli Companies Law 5759-2999, or the Companies Law, and the Israeli Securities Law, 5728-1968, or the Securities Law, provide that a company may indemnify an office holder against the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:

● a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator's award approved by a court;

● reasonable litigation expenses, including attorneys' fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction;

● reasonable litigation expenses, including attorneys' fees, expended by the office holder or imposed on him or her by a court,: (1) in proceedings that the company institutes, or that another person institutes on the company's behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and

● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys' fees. An "Administrative Procedure" is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.

The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion:

● to events that in the opinion of the board of directors can be foreseen based on the company's activities at the time that the undertaking to indemnify is made; and

● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.

We have entered into indemnification agreements with all of our directors and with all members of our senior management. Each such indemnification agreement provides the office holder with indemnification permitted under applicable law and up to a certain amount, and to the extent that these liabilities are not covered by directors and officers insurance.

 ****

***Exculpation***

Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association. Our amended and restated articles of association provide that we may exculpate, in whole or in part, any office holder from liability to us for damages caused to the company as a result of a breach of his or her duty of care, but prohibit an exculpation from liability arising from a company's transaction in which our controlling shareholder or officer has a personal interest. Subject to the aforesaid limitations, under the indemnification agreements, we exculpate and release our office holders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law.

***Limitations***

The Companies Law provides that the Company may not exculpate or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exculpation) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.

Under the Companies Law, exculpation, indemnification and insurance of office holders in a public company must be approved by the compensation committee and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders.

Our amended and restated articles of association permit us to exculpate (subject to the aforesaid limitation), indemnify and insure our office holders to the fullest extent permitted or to be permitted by the Companies Law.

**Item 7. Recent Sales of Unregistered Securities**

Set forth below are the sales of all securities by the Company since July 2022, which were not registered under the Securities Act. The Company believes that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Rule 701 and/or Regulation S under the Securities Act.

In July 2022, we received a loan, or the July 2022 Loan, from Dr. Ronnie Hershman, a director and shareholder, and Michael Gibber, a shareholder, pursuant to which we received a principal amount of $500 thousand, for a term of twelve (12) months, at an interest rate of 8% per annum. On August 28, 2024, we and each of Dr. Ronnie Hershman and Michael Gibber entered into an exchange letter, or the July 2022 Loan Exchange Letter, according to which our obligations in connection with the loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs, under which it is deemed that Dr. Hershman invested an amount of $284,154 and Michael Gibber invested an amount of $286,210.

In February 2023, we received a loan in an aggregate amount of $60 thousand from Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa, or the February 2023 Loan, under substantially the same terms as the July 2022 Loan, for a term of twelve (12) months, at an interest rate of 8% per annum. A definitive agreement for the February 2023 Loan was not executed. On August 28, 2024, we and each of Dr. Ronnie Hershman, Dr. Dalia Megiddo, and Mr. Udi Gilboa entered into an exchange letter, or the February 2023 Loan Exchange Letter, according to which our obligations in connection with the February 2023 Loan were discharged in consideration for the issuance of a SAFE under the same terms as the 2024 SAFEs, under which Dr. Ronnie Hershman was deemed to have invested an amount of $43,954, Dr. Dalia Megiddo was deemed to have invested an amount of $11,286, and Mr. Udi Gilboa was deemed to have invested an amount of $10,963 in said SAFEs.

In March 2023 through April 2023, we entered into SAFEs for aggregate proceeds of $995,000, collectively, the 2023 SAFEs, Per the terms of the 2023 SAFEs, since an initial public offering, merger, acquisition, equity financing other liquidity event or dissolution event did not take place within 15 months from the execution of the 2023 SAFEs, on August 28, 2024, the subscription amounts under such SAFEs were converted into 305,085 Class A-3B Ordinary Shares. Upon the effectiveness of the registration statement for this offering, such Class A-3B Ordinary Shares will automatically convert into Ordinary Shares.

In March 2024 through March 2025, we entered into SAFEs in the aggregate amount of $1,986,500, or the 2024 SAFEs, of which $300 thousand were canceled and terminated during November 2024. In addition, pursuant to the terms of the July 2022 Loan Exchange Letter and the February 2023 Loan Exchange Letter, the July 2022 Loan and February 2023 Loan were converted into 2024 SAFEs in the amount of $570,364 and $66,203, respectively; however, no additional proceeds were received pursuant to said exchanges. Per the terms of the 2024 SAFEs, upon an initial public offering, merger, acquisition, qualified equity financing or other liquidity event, the subscription amounts under such SAFEs will be converted into our Ordinary Shares upon the effectiveness of the registration statement for this offering at a conversion price reflecting a discount of 35%. However, if such events do not occur within 18 months of the execution of such SAFEs, such SAFEs will be converted into our securities of such class of shares having certain rights identical to the respective rights of the most senior class of shares on the basis of a previous round of equity financing consummated by the Company at a conversion price reflecting a discount of 35%, as prescribed in such SAFEs.

Since July 2022, we granted our directors, officers, consultants and employees options to purchase 372,367 Ordinary Shares under our 2019 Incentive Option Plan, at an exercise price ranging between $0.002 and $6.05 per Ordinary Share. Further, since March 2022, 329 Ordinary Shares were issued upon exercise of options at an exercise price of $8.80, and options to purchase 79,164 Ordinary Shares were forfeited and expired.

**Item 8. Exhibits and Financial Statement Schedules**

**Exhibits:**

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 1.1\* | [Form of Underwriting Agreement.](ex1-1.htm) |
| 3.1\* | [Articles of Association of Nasus Pharma Ltd.](ex3-1.htm) |
| 3.2\* | [Articles of Association of Nasus Pharma Ltd. to be in effect upon the effectiveness of the registration statement for this offering.](ex3-2.htm) |
| 4.1\*+ | [Form of Indemnification Agreement.](ex4-1.htm) |
| 4.2& | Form of Underwriter's Warrants. |
| 4.3\*+ | [Nasus Pharma Compensation Policy.](ex4-3.htm) |
| 5.1& | Opinion of Sullivan & Worcester Tel Aviv (Har-Even & Co.), Israeli counsel to Nasus Pharma Ltd. |
| 5.2& | Opinion of Sullivan & Worcester LLP, U.S. counsel to Nasus Pharma Ltd. |
| 10.1\* | [Nasus Pharma 2019 Incentive Option Plan.](ex10-1.htm) |
| 10.2\* | [License Agreement, dated May 1, 2019, by and between Nasus Pharma Ltd. and Formulex Pharma Innovations Ltd.](ex10-2.htm) |
| 10.3\* | [Form of 2022 SAFE.](ex10-3.htm) |
| 10.4\* | [Form of 2023 SAFE.](ex10-4.htm) |
| 10.5\* | [Form of 2024 SAFE.](ex10-5.htm) |
| 23.1\* | [Consent of Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network.](ex23-1.htm) |
| 23.2& | Consent of Sullivan & Worcester Tel Aviv (Har-Even & Co.) (included in Exhibit 5.1). |
| 23.3& | Consent of Sullivan & Worcester LLP (included in Exhibit 5.2). |
| 24.1\* | [Power of Attorney (included on the signature page of this Registration Statement).](#one_013) |
| 99.1\* | [Consent of David Silberman as director nominee.](ex99-1.htm) |
| 99.2\* | [Consent of Dr. Sharon Shacham as director nominee.](ex99-2.htm) |
| 99.3\* | [Consent of Isaac Israel as director nominee.](ex99-3.htm) |
| 107\* | [Filing Fee Table.](ex107.htm) |

---

\* Filed herewith. <br> & To be filed by amendment. <br> + Indicates a management contract or any compensatory plan, contract or arrangement.

**Financial Statement Schedules:**

All financial statement schedules have been omitted because either they are not required, are not applicable or the information required therein is otherwise set forth in the Company's financial statements and related notes thereto.

**Item 9. Undertakings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 undersigned Registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To
 file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. To
 include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

ii. To
 reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
 post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
 forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
 the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end
 of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
 if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set
 forth in the "Calculation of Registration Fee" table in the effective registration statement;

iii. To
 include any material information with respect to the plan of distribution not previously disclosed in the registration statement
 or any material change to such information in the registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That,
 for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
 to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
 be deemed to be the initial bona fide offering thereof.

(3) To
 remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
 termination of the offering.

(4) To
 file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F
 at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required
 by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective
 amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other
 information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with
 respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and
 information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are
 contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d)
 of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

(5) That,
 for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. If
 the registrant is relying on Rule 430B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Each
 prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the
 date the filed prospectus was deemed part of and included in the registration statement; and

B. Each
 prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
 Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
 required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
 as of the earlier of the date such form of prospectus is first used after effectiveness of the date of the first contract or sale
 of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
 person that is at that date and underwriter, such date shall be deemed to be a new effective date of the registration statement relating
 to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
 shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement
 or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into
 the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract
 sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that
 was part of the registration statement or made in any such document immediately prior to such effective date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. If
 the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
 to an offering, other than registration statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall
 be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
 however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a
 document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
 statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
 was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
 prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) That,
 for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
 of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
 to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
 are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
 to the purchaser and will be considered to offer or sell securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any
 preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
 424;

ii. Any
 free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
 the undersigned registrant;

iii. The
 portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
 or its securities provided by or on behalf of the undersigned registrant; and

iv. Any
 other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements,
 certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each
 purchaser.

(c) Insofar
 as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
 persons of the registrant pursuant to the provisions described in Item 6 hereof, or otherwise, the registrant has been advised that
 in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
 or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
 is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
 unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
 the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final
 adjudication of such issue.

(d) The
 undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) That
 for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed
 as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
 to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the
 time it was declared effective.

(2) That
 for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
 of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of
 such securities at that time shall be deemed to be the initial *bona fide* offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement on Form F-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel, on July 9, 2025.

---

| | |
|:---|:---|
| **Nasus Pharma Ltd.** | **Nasus Pharma Ltd.** |
| By: | */s/ Dan Teleman* |
|  | Dan Teleman |
|  | Chief Executive Officer |

---

**POWER OF ATTORNEY**

The undersigned officers and directors of Nasus Pharma Ltd. hereby constitute and appoint each of Mr. Udi Gilboa and Mr. Dan Teleman with full power of substitution, each of them singly our true and lawful attorneys-in-fact and agents to take any actions to enable the Company to comply with the Securities Act, and any rules, regulations and requirements of the SEC, in connection with this registration statement on Form F-1, including the power and authority to sign for us in our names in the capacities indicated below any and all further amendments to this registration statement and any other registration statement filed pursuant to the provisions of Rule 462 under the Securities Act.

Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement on Form F-1 has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Dan Teleman* | Chief Executive Officer | July 9, 2025 |
| Dan Teleman | (Principal Executive Officer) |  |
| */s/ Oren Elmaliach* | Director of Finance | July 9, 2025 |
| Oren Elmaliach | (Principal Financial and Accounting Officer) |  |
| */s/ Udi Gilboa* | Co-Founder and Executive Chairman of the<br>| July 9, 2025 |
| Udi Gilboa | Board of Directors |  |
| */s/ Dr. Dalia Megiddo* | Co-Founder, Director | July 9, 2025 |
| Dr. Dalia Megiddo |  |  |
| */s/ Dr. Ronnie Hershman* | Director | July 9, 2025 |
| Dr. Ronnie Hershman |  |  |

---

**SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES**

Pursuant to the Securities Act of 1933, as amended, the undersigned, Puglisi & Associates, the duly authorized representative in the United States of Nasus Pharma Ltd., has signed this registration statement on July 9, 2025.

---

| |
|:---|
| */s/ Donald J. Puglisi* |
| Donald J. Puglisi |
| Managing Director |

---

## Exhibit 1.1

**Exhibit 1.1**

**NASUS PHARMA LTD.**

**UNDERWRITING AGREEMENT**

**[\*] Ordinary Shares**

July [\*], 2025

Laidlaw & Company (UK) Ltd.

 

*As the Representative of the*

*Several Underwriters Named on Schedule I hereto*

c/o Laidlaw & Company (UK) Ltd.

521 5<sup>th</sup> Avenue, 12<sup>th</sup> Fl.

New York, NY 10175

Ladies and Gentlemen:

Nasus Pharma Ltd., a company organized under the laws of the State of Israel (the "<u>Company</u>"), proposes, subject to the terms and conditions stated herein, to issue and sell to the underwriters named in <u>Schedule I</u> hereto (the "<u>Underwriters,</u>" or each, an "<u>Underwriter</u>), for whom Laidlaw & Company (UK) Ltd. is acting as the representative of the Underwriters (the "<u>Representative</u>"), an aggregate of [\*] authorized but unissued ordinary shares (the "<u>Firm Shares</u>") of the Company, no par value (the "<u>Ordinary Shares</u>"). In addition, the Company proposes to sell to the Underwriters, upon the terms and conditions set forth in Section 4 hereof, up to an additional [\*] authorized but unissued shares of Ordinary Shares (the "<u>Option Shares</u>"). The Firm Shares and the Option Shares are hereinafter collectively referred to as the "<u>Shares</u>". The Shares, the Underwriter Warrants (as defined below) and the Underwriter Warrant Shares (as defined below) are collectively referred to as the "<u>Securities</u>."

The Company and the several Underwriters hereby confirm their agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. ***Registration Statement and Prospectus***.

The Company has prepared and filed with the Securities and Exchange Commission (the "<u>Commission</u>") a registration statement covering the Shares on Form F-1 (File No. 333-[\*]) under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), and the rules and regulations (the "<u>Rules and Re</u>g<u>ulations</u>") of the Commission thereunder, and such amendments to such registration statement (including post effective amendments) as may have been required to the date of this Agreement. Such registration statement, as amended (including any post effective amendments), has been declared effective by the Commission. Such registration statement, including amendments thereto (including post effective amendments thereto) at the time of effectiveness thereof (the "<u>Effective Time</u>"), the exhibits and any schedules thereto at the Effective Time or thereafter during the period of effectiveness and the documents and information otherwise deemed to be a part thereof or included therein by the Securities Act or otherwise pursuant to the Rules and Regulations at the Effective Time or thereafter during the period of effectiveness, is herein called the "<u>Re</u>g<u>istration Statement</u>." If the Company has filed or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the "<u>Rule 462 Re</u>g<u>istration Statement</u>"), then any reference herein to the term Registration Statement shall include such Rule 462 Registration Statement. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act is hereinafter called a "<u>Preliminary Prospectus</u>." The Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the pricing of the offering contemplated hereby is hereinafter called the "<u>Pricin</u>g <u>Prospectus</u>."

The Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus covering the Shares, which includes the information permitted to be omitted therefrom at the Effective Time by Rule 430A under the Securities Act. Such final prospectus, as so filed, is hereinafter called the "<u>Final Prospectus</u>." The Final Prospectus, the Pricing Prospectus and any preliminary prospectus in the form in which they were included in the Registration Statement or filed with the Commission pursuant to Rule 424 under the Securities Act is hereinafter called a "<u>Prospectus</u>."

The Commission has not notified the Company of any objection to the use of the Registration Statement or any post-effective amendment thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. ***Representations and Warranties of the Company Regarding the Offering.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company represents and warrants to, and agrees with, the several Underwriters, as of the date hereof, as of the Closing Date (as defined in Section 4(d) below) and as of each Option Closing Date (as defined in Section 4(b) below), as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **No Material Misstatements or Omissions**. At each time of effectiveness, at the date hereof, at the Closing Date, and at each Option Closing Date, if any, the Registration Statement and any post-effective amendment thereto complied or will comply in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not, does not, and will not, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Time of Sale Disclosure Package (as defined in Section 2(a)(v)(A)(1) below) as of [\*] a/p.m. (Eastern time) (the "<u>Applicable Time</u>") on the date hereof, at the Closing Date and on each Option Closing Date, if any, and the Final Prospectus, as amended or supplemented, as of its date, at the time of filing pursuant to Rule 424(b) under the Securities Act, at the Closing Date and at each Option Closing Date, if any, and any individual Written Testing-the-Waters Communication, when considered together with the Time of Sale Disclosure Package, did not, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences shall not apply to statements in or omissions from the Registration Statement, the Time of Sale Disclosure Package or any Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f). The Registration Statement contains all exhibits and schedules required to be filed by the Securities Act or the Rules and Regulations. No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Marketing Materials**. The Company has not distributed any prospectus or other offering material in connection with the offering and sale of the Shares other than the Time of Sale Disclosure Package, any Testing-the-Waters Communications, and the roadshow or investor presentations delivered to and approved by the Underwriter for use in connection with the marketing of the offering of the Securities (the "<u>Marketing Materials</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Emerging Growth Company**. The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act (an "<u>Emer</u>g<u>ing Growth Company</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) **Testing-the-Waters Communications.** The Company (i) has not alone engaged in any Testing-the-Waters Communication in connection with the offering contemplated hereby other than Testing-the-Waters Communications with the consent of the Underwriter with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Underwriter to engage in Testing-the-Waters Communications. The Company has not distributed any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act ("<u>Written Testin</u>g<u>-the-Waters Communications</u>"), other than those previously provided to the Underwriter and listed on <u>Schedule IV</u>. "<u>Testin</u>g<u>-the-Waters Communication</u>" means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act. Each Written Testing-the-Waters Communications, did not, as of the Applicable Time, and at all times through the completion of the public offer and sale of Shares will not, include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) **Accurate Disclosure**. (A) The Company has provided a copy to the Underwriters of each Issuer Free Writing Prospectus (as defined below) used in the sale of the Shares. The Company has filed all Issuer Free Writing Prospectuses required to be so filed with the Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Final Prospectus, no Issuer Free Writing Prospectus, as of its issue date and at all subsequent times though the completion of the public offer and sale of Shares, has, does or will include (1) any untrue statement of a material fact or omission to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (2) information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Final Prospectus in any material respect. The representations and warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f). As used in this paragraph and elsewhere in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) "<u>Time of Sale Disclosure Package</u>" means the Prospectus most recently filed with the Commission before the time of this Agreement, each Issuer Free Writing Prospectus, and the description of the transaction provided by the Underwriters included on Schedule II.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) "<u>Issuer Free Writing Prospectus</u>" means any "issuer free writing prospectus," as defined in Rule 433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g) under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) At the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an "ineligible issuer," as defined in Rule 405 under the Securities Act or an "excluded issuer" as defined in Rule 164 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Each Issuer Free Writing Prospectus listed on Schedule III satisfied, as of its issue date and at all subsequent times through the Prospectus Delivery Period, all other conditions as may be applicable to its use as set forth in Rules 164 and 433 under the Securities Act, including any legend, record-keeping or other requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) **Financial Statements**. The financial statements of the Company, together with the related notes and schedules, included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the "<u>Exchan</u>g<u>e Act</u>"), and the rules and regulations of the Commission thereunder, and fairly present, in all material respects, the financial condition of the Company as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity with U.S. generally accepted accounting principles ("<u>GAAP</u>") consistently applied throughout the periods involved. No other financial statements or schedules are required under the Securities Act, the Exchange Act, or the Rules and Regulations to be included in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) **[Reserved]**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) **Independent Accountants.** To the Company's knowledge, Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, which has expressed its opinion with respect to the financial statements and schedules included as a part of the Registration Statement and included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, is an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) **Accounting and Disclosure Controls.** Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company maintains systems of "internal control over financial reporting" (as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language (if any) included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus fairly present the information called for in all material respects and are prepared in accordance with the Commission's rules and guidelines applicable thereto. Since the date of the latest audited financial statements included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there has been no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Except as disclosed in the Registration Statement, the Company maintains disclosure controls and procedures (as defined under Rules 13a-15(e) under the Exchange Act) that have been designed to ensure that material information relating to the Company is made known to the Company's principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) **Forward-Looking Statements**. The Company had a reasonable basis for, and made in good faith, each "forward-looking statement" (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus or the Marketing Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) **Statistical and Marketing-Related Data**. All statistical or market-related data included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, or included in the Marketing Materials, are based on or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources, to the extent required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) **Trading Market**. The Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act and are approved for listing on the NYSE American LLC (the "NYSE"). To the Company's knowledge, there is no action pending by NYSE to delist the Ordinary Shares from the NYSE, nor has the Company received any notification that the NYSE is contemplating terminating such listing. When issued, the Shares and the Underwriter Warrant Shares will be listed on the NYSE. The Company has taken all actions it deems reasonably necessary or advisable to take on or prior to the date of this Agreement to assure that it will be in compliance in all material respects with all applicable corporate governance requirements set forth in the rules of the NYSE that are then in effect and will take all action it deems reasonably necessary or advisable to assure that it will be in compliance in all material respects with other applicable corporate governance requirements set forth in the NYSE rules not currently in effect upon and all times after the effectiveness of such requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) **Absence of Manipulation**. The Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) **Investment Company Act**. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the net proceeds thereof, will not be an "investment company," as such term is defined in the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. ***Representations and Warranties Regarding the Company.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company represents and warrants to, and agrees with, the several Underwriters, as of the date hereof and as of the Closing Date and as of each Option Closing Date, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Good Standing**. The Company has been duly organized and is validly existing as a corporation or other entity in good standing under the laws of its jurisdiction of incorporation. The Company has the power and authority (corporate or otherwise) to own its properties and conduct its business as currently being carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, and is duly qualified to do business as a foreign corporation or other entity in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification necessary, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on (i) the condition (financial or otherwise), results of operations, management, shareholders' equity, properties, business or prospects of the Company taken as a whole, (ii) the ability of the Company to consummate the transactions contemplated hereby or (iii) the ability of the Company to list the Ordinary Shares on, or result in the delisting of the Ordinary Shares from, the NYSE (in each case, a "**Material Adverse Effect**"). The Company is not designated as a "breaching company" (within the meaning of the Israeli Companies Law, 5759-1999 (the "Israeli Companies Law")) by the Registrar of Companies of the State of Israel, nor has a proceeding been instituted in Israel by the Registrar of Companies of the State of Israel for the dissolution of the Company. The articles of association of the Company and other constitutive or organizational documents of the Company comply with the requirements of applicable Israeli law and are in full force and effect; and the Company has all power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged and as disclosed in the Pricing Disclosure Package.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Authorization**. The Company has the power and authority to enter into this Agreement and the Underwriter Warrants and to authorize, issue and sell the Shares, the Underwriter Warrants and the Underwriter Warrant Shares as contemplated by this Agreement and the Underwriter Warrants. This Agreement and the Underwriter Warrants have been duly authorized by the Company, and when executed and delivered by the Company, and will constitute the valid, legal and binding obligations of the Company, enforceable against the Company in accordance with its their respective terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Contracts**. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the execution, delivery and performance of this Agreement and the Underwriter Warrants and the consummation of the transactions herein contemplated will not (A) result in a material breach or material violation of any of the terms and provisions of, or constitute a default under, any law, order, rule or regulation to which the Company is subject, or by which any property or asset of the Company is bound or affected, (B) materially conflict with, result in any material violation or material breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) (a "<u>Default Acceleration Event</u>") of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (the "<u>Contracts</u>") or material obligation or other material understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, except to the extent that such conflict, default, or Default Acceleration Event not reasonably likely to result in a Material Adverse Effect, or (C) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company's articles of association or by-laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) **No Violations of Governing Documents**. The Company is not in violation, breach or default under its articles of association or other equivalent organizational or governing documents, except for any such violation that could not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) **Consents**. No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection with the execution, delivery or performance of this Agreement and the Underwriter Warrants and the issue and sale of the Securities, except (A) the registration under the Securities Act of the Shares, which has been effected, (B) the necessary filings and approvals from NYSE to list the Shares and the Underwriter Warrant Shares, (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws and the rules of the Financial Industry Regulatory Authority, Inc. ("<u>FINRA</u>") in connection with the purchase and distribution of the Shares by the Underwriter, (D) such consents and approvals as have been obtained and are in full force and effect, and (E) such consents, approvals, orders, authorizations and filings the failure of which to make or obtain is not reasonably likely to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) **Capitalization**. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All of the issued and outstanding Ordinary Shares of the Company are duly authorized and validly issued, fully paid and non-assessable, and have been issued in compliance with all applicable securities laws, and conform to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All of the issued shares of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and, except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus for the issuances of options in the ordinary course of business, since the respective dates as of which information is provided in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company any Ordinary Shares of the Company. The Shares, when issued and paid for as provided herein, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights and will conform to the description of the share capital of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. The Ordinary Shares issuable upon the exercise of the Underwriter Warrants (the "<u>Underwriter Warrant Shares</u>"), when issued, paid for and delivered upon due exercise of the Underwriter Warrants, as applicable, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights. The Underwriter Warrant Shares have been reserved for issuance. The Underwriter Warrants, when issued, will conform in all material respects to the descriptions thereof set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) **Taxes**. The Company has (a) filed all foreign, federal, state and local tax returns (as hereinafter defined), as applicable, required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (b) paid all taxes (as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed on or assessed against the Company. The provisions for taxes payable, if any, shown on the financial statements included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. To the Company's knowledge, no issues have been raised (and are currently pending) by any tax authority in connection with any of the returns or taxes asserted as due from the Company, and no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company. The term "<u>taxes</u>" mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term "<u>returns</u>" means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) **Material Change**. Since the respective dates as of which information is given in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, (a) the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its share capital; (c) there has not been any change in the share capital of the Company (other than a change in the number of outstanding Ordinary Shares due to the issuance of shares upon the exercise of outstanding options or warrants, upon the conversion of outstanding preferred shares or other convertible securities or issuances under the Company's existing equity awards plan, or any new grants thereof in the ordinary course of business), (d) there has not been any material change in the Company's long-term or short-term debt, and (e) there has not been the occurrence of any Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) **Absence of Proceedings**. There is not pending or, to the knowledge of the Company, threatened, any action, suit or proceeding to which the Company is a party or of which any property or assets of the Company is the subject before or by any court or governmental agency, authority or body, or any arbitrator or mediator, which is reasonably likely to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) **Permits**. The Company holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders ("<u>Permits</u>") of any governmental or self-regulatory agency, authority or body required for the conduct of its business, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) **Good Title**. The Company has good and marketable title to all property (whether real or personal) described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus as being owned by it that are material to the business of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those that are disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus and those that are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company is held by it under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) **Intellectual Property**. The Company owns or possesses or has valid right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights ("<u>Intellectual Property</u>") necessary for the conduct of the business of the Company as currently carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. To the knowledge of the Company, no action or use by the Company involves or gives rise to any infringement of, or license or similar fees for, any Intellectual Property of others, except where such action, use, license or fee is not reasonably likely to result in a Material Adverse Effect. The Company has not received any notice alleging any such infringement or fee. To the Company's knowledge, none of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company's knowledge, any of the officers, directors or employees of the Company, or, to the Company's knowledge, otherwise in violation of the rights of any persons, except in each case for such violations as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) **Regulatory**. All preclinical and clinical studies conducted by or on behalf of the Company that are material to the Company, taken as a whole, are or have been adequately described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus in all material respects. The clinical and preclinical studies conducted by or on behalf of the Company that are described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus or the results of which are referred to in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus were and, if still ongoing, are being conducted in material compliance with all laws and regulations applicable thereto in the jurisdictions in which they are being conducted and with all laws and regulations applicable to preclinical and clinical studies from which data will be submitted to support marketing approval. The descriptions in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus of the results of such studies are accurate and complete in all material respects and fairly present the data derived from such studies, and the Company has no knowledge of, or reason to believe that, any large well-controlled clinical study the aggregate results of which are inconsistent with or otherwise call into question the results of any clinical study conducted by or on behalf of the Company that are described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus or the results of which are referred to in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company has not received any written notices or statements from the U.S. Food and Drug Administration ("<u>FDA</u>"), the European Medicines Agency ("<u>EMA</u>") or any other governmental agency or authority imposing, requiring, requesting or suggesting a clinical hold, termination, suspension or material modification for or of any clinical or preclinical studies that are described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus or the results of which are referred to in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company has not received any written notices or statements from the FDA, the EMA or any other governmental agency, and otherwise has no knowledge of, or reason to believe that, (i) any investigational new drug application for potential product of the Company is or has been rejected or determined to be non-approvable or conditionally approvable; and (ii) any license, approval, permit or authorization to conduct any clinical trial of any potential product of the Company has been, will be or may be suspended, revoked, modified or limited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) **Employment Matters**. There is (A) no unfair labor practice complaint pending against the Company, nor to the Company's knowledge, threatened against it, before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company, or, to the Company's knowledge, threatened against it and (B) no labor disturbance by the employees of the Company exists or, to the Company's knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its, principal suppliers, manufacturers, customers or contractors, that could reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key employee or significant group of employees of the Company plans to terminate employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) **Environmental Matters**. The Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to their businesses ("<u>Environmental Laws</u>"), except where the failure to comply has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company (or, to the Company's knowledge, any other entity for whose acts or omissions the Company is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) **SOX Compliance**. The Company has taken all actions it deems reasonably necessary or advisable to take on or prior to the date of this Agreement to assure that, upon and at all times after the effectiveness of the Registration Statement, it will be in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations promulgated thereunder or implementing the provisions thereof (the "<u>Sarbanes-Oxle</u>y <u>Act</u>") that are then in effect and will take all action it deems reasonably necessary or advisable to assure that it will be in compliance in all material respects with other applicable provisions of the Sarbanes-Oxley Act not currently in effect, upon it and at all times after the effectiveness of such provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) **Money Laundering Laws**. The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Israeli Prohibition on Money Laundering Law, 5760-2000, Israel Prohibition on Money Laundering Order, 5761-2001 and the Israeli Counter-Terrorism Law, 5776-2016, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the "<u>Mone</u>y Laundering Laws"); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. "<u>Governmental Entit</u>y" shall be defined as any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency (whether foreign or domestic) having jurisdiction over the Company or any of its respective properties, assets or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) **Foreign Corrupt Practices Act**. Neither the Company nor any director or officer of the Company, nor, to the knowledge of the Company, any employee, representative, agent, affiliate of the Company or any other person acting on behalf of the Company, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the "<u>FCPA</u>"), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any "foreign official" (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) **OFAC**. Neither the Company, nor any director or officer of the Company, nor, to the knowledge of the Company, any employee, representative, agent or affiliate of the Company or any other person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("<u>OFAC</u>"), the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty's Treasury, or other relevant sanctions authority, including by virtue of similar laws or regulations of the State of Israel; and the Company will not directly or indirectly use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute or otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently subject to any sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) **Insurance**. The Company carries, or is covered by, insurance in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in similar industries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) **Books and Records**. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and to the knowledge of the Company such books (i) contain in all material respects a complete summary of all meetings and actions of the board of directors (including each board committee, if any) and shareholders of the Company (or analogous governing bodies and interest holders, as applicable), since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) **No Undisclosed Contracts**. There is no Contract or document required by the Securities Act or by the Rules and Regulations to be described in the Registration Statement, the Time of Sale Disclosure Package or in the Final Prospectus or to be filed as an exhibit to the Registration Statements which is not so described or filed therein as required; and all descriptions of any such Contracts or documents contained in the Registration Statement, the Time of Sale Disclosure Package and in the Final Prospectus are accurate and complete descriptions of such documents in all material respects. Other than as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, no such Contract has been suspended or terminated for convenience or default by the Company or any of the other parties thereto, and, except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company has not received notice, and the Company has no knowledge, of any such pending or threatened suspension or termination, except for such pending or threatened suspensions or terminations that have not had, and would not reasonably be expected to have, a Material Adverse Effect, individually or in the aggregate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) **No Undisclosed Relationships**. No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, shareholders (or analogous interest holders), customers or suppliers of the Company on the other hand, which is required to be described in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus and which is not so described.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) **Insider Transactions**. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company, or any of their respective family members, except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All transactions by the Company with office holders or control persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent required under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi) **No Registration Rights**. No person or entity has the right to require registration of Shares or other securities of the Company within 270 days of the date hereof because of the filing or effectiveness of the Registration Statement or otherwise, except for persons and entities who have expressly waived such right in writing or who have been given timely and proper written notice and have failed to exercise such right within the time or times required under the terms and conditions of such right. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there are no persons with registration rights or similar rights to have any securities registered by the Company under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii) **D&O Questionnaires**. To the Company's knowledge, all information contained in the questionnaires (the "<u>Questionnaires</u>") completed by each of the Company's directors and officers immediately prior to the Offering (the "<u>Insiders</u>") as supplemented by its riders and all information concerning the Company's directors, officers and principal shareholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.25 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii) **Continued Business**. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, no supplier, customer, distributor or sales agent of the Company has notified the Company that it intends to discontinue or decrease the rate of business done with the Company, except where such discontinuation or decrease has not resulted in and could not reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxix) **No Finder's Fee**. There are no claims, payments, issuances, arrangements or understandings for services in the nature of a finder's, consulting or origination fee with respect to the introduction of the Company to the Underwriter or the sale of the Shares hereunder or any other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect the Underwriter's compensation, as determined by FINRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx) **No Fees.** Except as disclosed to the Representative in writing, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder's fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement was filed with the Commission ("<u>Filin</u>g <u>Date</u>") or thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxi) **Proceeds**. None of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any affiliate or associate of any participating FINRA member, except as specifically authorized herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxii) **No FINRA Affiliations**. To the Company's knowledge, no (i) officer or director of the Company, (ii) owner of 10% or more of any class of the Company's securities or (iii) owner of any amount of the Company's unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will advise the Underwriter and counsel to the Underwriter if it becomes aware that any officer, director of the Company or any owner of 10% or more of any class of the Company's securities is or becomes an affiliate or associated person of a FINRA member participating in the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxiii) **No Financial Advisor**. Other than the Underwriters, no person has the right to act as an underwriter or as a financial advisor to the Company in connection with the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxiv) **Certain Statements**. The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, insofar as they purport to describe the provisions of the laws, regulations and documents referred to therein, are accurate, complete and fair in all material respects, and under the caption "Description of Securities" insofar as they purport to constitute a summary of (i) the terms of the Company's outstanding securities, (ii) the terms of the Shares, and (iii) the terms of the documents referred to therein, are accurate, complete and fair in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxv) **Prior Sales of Securities**. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company has not sold or issued any Ordinary Shares during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, option plans or other employee compensation plans or pursuant to outstanding preferred shares, options, rights or warrants or other outstanding convertible securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any certificate signed by any officer of the Company and delivered to the Representative or to counsel for the Representative shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. ***Purchase, Sale and Delivery of Shares***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm Shares, and the Underwriters agree, severally and not jointly, to purchase the Firm Shares set forth opposite the names of the Underwriters in <u>Schedule I</u> hereto. The purchase price to be paid by the Underwriters to the Company for the Firm Shares shall be $[\*] per share and related Underwriter Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company hereby grants to the Underwriters the option to purchase some or all of the Option Shares and, upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Underwriters shall have the right to purchase all or any portion of the Option Shares as may be necessary to cover over-allotments made in connection with the transactions contemplated hereby. The purchase price to be paid by the Underwriters for the Option Shares shall be $[\*] per share. This option may be exercised by the Representative on behalf of the Underwriters at any time and from time to time on or before the forty-fifth (45th) day following the date hereof, by written notice to the Company (the "<u>Option Notice</u>"). The Option Notice shall set forth the aggregate number of Option Shares as to which the option is being exercised, and the date and time when the Option Shares are to be delivered (such date and time being herein referred to as the "<u>Option Closing Date</u>"); *provided*, *however*, that the Option Closing Date shall not be earlier than the Closing Date (as defined below) nor earlier than the first business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised unless the Company and the Underwriter otherwise agree.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Payment of the purchase price for and delivery of the Option Shares shall be made on an Option Closing Date in the same manner and at the same office as the payment for the Firm Shares, as set forth in subparagraph (d) below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Firm Shares will be delivered by the Company to the Representative, for the respective accounts of the several Underwriters, against payment of the purchase price therefor by wire transfer of same day funds payable to the order of the Company at the offices of Laidlaw & Company (UK) Ltd., 521 5<sup>th</sup> Avenue, 12<sup>th</sup> Fl., New York, NY 10175, or such other location as may be mutually acceptable, at 10:00 a.m. Eastern Time, on the first (or if the Firm Shares are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the second) full business day following the date hereof, or at such other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the Option Shares, at such date and time set forth in the Option Notice. The time and date of delivery of the Firm Shares is referred to herein as the "<u>Closin</u>g <u>Date</u>." On the Closing Date, the Company shall deliver the Firm Shares, which shall be registered in the name or names and shall be in such denominations as the Representative may request on behalf of the Underwriters at least one (1) business day before the Closing Date, to the respective accounts of the several Underwriters, which delivery shall be made through the facilities of the Depository Trust Company's DWAC system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) It is understood that the Representative has been authorized, for its own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any Option Shares that the Underwriters have agreed to purchase. The Representative, individually and not as the Representative of the Underwriters, may (but shall not be obligated to) make payment for any Shares to be purchased by any Underwriter whose funds shall not have been received by the Representative by the Closing Date or any Option Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve the Underwriter from any of its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company shall issue to the Representative (and/or it's designee(s)) (i) on the Closing Date warrants (the "<u>Underwriter Warrants</u>"), in form and substance acceptable to the Representative, for the purchase of an aggregate of [\*] shares of Ordinary Shares, representing 3.0% of the aggregate number of Firm Shares, and (ii) on each Option Closing Date, if any, Underwriter Warrants for the purchase of an aggregate of 3.0% of the Closing Shares sold in the Over-allotment Option, on that Option Closing Date. The Underwriter Warrants shall be registered in the name or names and shall be in such denominations as Representative may request at least one (1) business day before the Closing Date or any Option Closing Date, as the case may be, and shall be exercisable at any time and from time to time, in whole or in part, during the four-and-a-half year period commencing on the six month anniversary of the Closing Date and expiring five years from the Effective Date at an initial exercise price per Share of $[\*], which is equal to 125.0% of the initial public offering price of the Firm Shares. The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Underwriter Warrants during the one hundred eighty (180) days after the Closing Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Underwriter Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180) days following the Closing Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. ***Covenants.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company covenants and agrees with the Underwriters as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company shall prepare the Final Prospectus in a form approved by the Representative and file such Final Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) During the period beginning on the date hereof and ending on the later of the Closing Date or such date as determined by the Underwriter the Final Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer (the "<u>Prospectus Delivery Period</u>"), prior to amending or supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company shall furnish to the Representative for review and comment a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representative reasonably objects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) From the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Representative in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or the use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Ordinary Shares from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time during the Prospectus Delivery Period, the Company will use its reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A or 430C as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and hereafter amended, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions hereof, the Time of Sale Disclosure Package, the Registration Statement and the Final Prospectus. If during the Prospectus Delivery Period any event occurs the result of which would cause the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Representative or counsel to the Underwriters to amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to comply with the Securities Act, the Company will promptly notify the Representative, allow the Representative the opportunity to provide reasonable comments on such amendment, prospectus supplement or document, and will amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If at any time during the Prospectus Delivery Period there occurred or occurs an event or development the result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or any Prospectus or included or would include, when taken together with the Time of Sale Disclosure Package, an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company shall take or cause to be taken all necessary action to qualify the Shares for sale under the securities laws of such jurisdictions as the Representative reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company will furnish to the Underwriters and counsel to the Underwriters copies of the Registration Statement, each Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Underwriters may from time to time reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 full calendar months after the end of the Company's current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid (a) all filing fees and expenses relating to the registration of the Securities with the Commission; (b) all fees and expenses relating to the listing of the Ordinary Shares on a national exchange, if applicable; (c) all fees, expenses and disbursements relating to the registration or qualification of the Securities under the "blue sky" securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company's "blue sky" counsel, which will be the Underwriters' counsel) unless such filings are not required in connection with the Company's proposed listing on a national exchange, if applicable; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (e) the costs of all mailing and printing of the Offering documents; (f) transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to the Underwriters; (g) the fees and expenses of the Company's accountants; (h) all filing fees and communication expenses associated with the review of the Offering by FINRA; (i) fees and disbursements related to background checks of the Company's officers and directors in an amount not to exceed $15,000 and (j) reasonable out of pocket expenses and legal fees for the Underwriters' legal counsel, in an amount not to exceed $175,000, of which legal expenses shall not exceed $125,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Company further agrees that, in addition to the expenses payable pursuant to Section 5(a)(viii), on the Closing Date and on each Option Closing Date, if any, it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a management fee equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares and Option Shares, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Company intends to apply the net proceeds from the sale of the Shares to be sold by it hereunder for the purposes set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus under the heading "Use of Proceeds".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) The Company has not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or which might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) The Company represents and agrees that, unless it obtains the prior written consent of the Representative, and each Underwriter, severally, and not jointly, it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule IV. Any such free writing prospectus consented to by the Company and the Representative is hereinafter referred to as a "<u>Permitted Free Writin</u>g <u>Prospectus</u>." The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus," as defined in Rule 433, and has complied or will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record-keeping.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) The Company hereby agrees to, for a period commencing on the date hereof and ending on the 80th day after the Closing Date (the "<u>Lock-Up Period</u>"), not to, directly or indirectly, (1) offer for sale, sell, issue, contract to sell, pledge or otherwise dispose of, directly or indirectly (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Ordinary Shares or other equity securities of the Company (or securities of the Company convertible into or exercisable or exchangeable for Ordinary Shares or other equity securities of the Company) (collectively, "<u>Lock-Up Securities</u>"), or sell or grant options, rights or warrants with respect to any Lock-Up Securities (other than the grant of options or other equity awards in the ordinary course of business pursuant to incentive plans described in the Registration Statement), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of Ordinary Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Ordinary Shares or other securities, in cash or otherwise, (3) offer to purchase, purchase or contract to purchase or grant any option, right or warrant to purchase Ordinary Shares or securities convertible, exercisable or exchangeable into Ordinary Shares or any other Lock-Up Securities, (4) file or cause to be filed a registration statement, including any amendments, with respect to the registration of any Lock-Up Securities, (5) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities or (6) agree to or publicly disclose the intention to do any of the foregoing, in each case without the prior written consent of the Representative on behalf of the Underwriters; provided, however, that the following shall not be prohibited by the foregoing: (i) the adoption of an equity incentive plan, and the grant of awards or equity pursuant to any such equity incentive plan or existing plan disclosed in the Registration Statement to officers, directors, employees or consultants of the Company, or transfer or issuance upon the exercise of options to purchase the Company's Ordinary Shares, and the filing of a registration statement on Form S-8 relating thereto; and (ii) the issuance of equity securities in connection with an acquisition or a strategic relationship, which may include the sale of Lock-Up Securities, and the filing of a registration statement on Form F-4 relating thereto, provided that any such issuance shall only be to an entity (or to the equity holders of an entity) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. Additionally, the Company's directors, officers, and any other holder(s) of the outstanding shares of Ordinary Shares as of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into shares of Ordinary Shares) shall enter into customary "lock-up" agreements in favor of the Underwriters pursuant to which such persons and entities specified in Schedule V shall agree, for a period of 180 days after the Closing of the Offering, that they shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company, subject to customary exceptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) The Company hereby agrees, during a period of three years from the effective date of the Registration Statement, to furnish to the Underwriters copies of all reports or other communications (financial or other) furnished to shareholders, and to deliver to the Underwriters as soon as reasonably practicable upon availability, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; provided, that any information or documents available on the Commission's Electronic Data Gathering, Analysis and Retrieval System shall be considered furnished for purposes of this Section 5(a)(xiv).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) Tail Financing. If within 12 months from the earlier of expiration or effective date of termination of the Engagement Period, the Company's securities are sold by the Company or any of its affiliates in a transaction or series of transactions with any person whom the Underwriters directly or indirectly introduced to the Company then the Company shall pay the Underwriters, at the time of each such sale, a cash fee in the amount equal to seven percent (7.0%) of the gross proceeds received by the Company from each such sale, provided that payment of any such fee shall at all times be in compliance with FINRA Rule 5110(g)(5)(B). The Company may also terminate the Engagement Period for Cause, and in such case the Company will not be responsible for paying for the fee as contemplated under this Section 6 in compliance with FINRA Rule 5110(g)(5)(B).

"Cause" means, in each case as reasonably determined by the other party, (i) general incompetence or non-performance, (ii) failure to fulfill the applicable party's obligations under this Agreement including the performance of the services in a manner reasonably acceptable to the other party, (iii) gross negligence or willful misconduct. If the Company believes that the Representative has engaged in Cause, it must first notify the Representative in writing of the facts and circumstances supporting such assertion(s) and allow the Representative twenty (20) days to cure such alleged defaults.

"Engagement Period" means the period between June 22, 2025 and until the earliest of: (i) the Closing Date or the last Option Closing Date (until the later of them), and (ii) September 20, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) Right of First Refusal. During the twelve month period following the completion of the Offering, if the Company decides to raise funds by means of a public offering or a private placement or any other capital-raising financing of equity, equity-linked, or debt securities, the Underwriters (or any affiliate designated by the Underwriters) shall have the right to act as a member of the syndicate for such financing with a fee of no less than 40% the aggregate underwriter or placement agent economics for such a financing. If the Underwriters or one of their affiliates decides to accept any such engagement, the agreement governing such engagement will contain, among other things, provisions for customary fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which are appropriate to such a transaction. For avoidance of doubt, this Section (xvi) shall not limit the Company from raising funds with a third party under an At-the-Market agreement or similar facility. Notwithstanding anything to the contrary contained herein, in accordance with FINRA Rule 5110(g)(6)(A)(i), any such right of first refusal described above shall not have a duration of more than three (3) years from the commencement of sale of the first Offering or the termination date of the Engagement Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) The Company hereby agrees to engage and maintain, at its expense, a transfer agent for the Ordinary Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) The Company hereby agrees to use its commercially reasonable efforts to obtain approval to list the Shares and the Underwriter Warrant Shares on NYSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) The Company hereby agrees not to take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) the end of the Prospectus Delivery Period and (b) the expiration of the lock-up period described in Section 5(a)(xiii) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. ***Conditions of the Underwriter's Obligations.*** The respective obligations of the several Underwriters hereunder to purchase the Shares are subject to the accuracy, as of the date hereof and at all times through the Closing Date, and on each Option Closing Date (as if made on the Closing Date or such Option Closing Date, as applicable), of and compliance with all representations, warranties and agreements of the Company contained herein, the performance by the Company of its obligations hereunder and the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If filing of the Final Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company shall have filed the Final Prospectus (or such amendment or supplement) or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated or threatened by the Commission; any request of the Commission or the Representative for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been complied with to the satisfaction of the Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Shares and the Underwriter Warrant Shares shall be approved for listing on NYSE, subject to official notice of issuance and evidence of satisfactory distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Representative shall not have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact which is material, or omits to state a fact which is material and is required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) On the Closing Date and on each Option Closing Date, there shall have been furnished to the Representative, for the benefit of the Underwriters, (i) the opinion and negative assurance letter of Sullivan & Worcester LLP, U.S. counsel to the Company, and (ii) the opinion of Sullivan & Worcester Tel Aviv (Har-Even & Co.), Israeli counsel to the Company, each dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) On the Closing Date and on each Option Closing Date, there shall have been furnished to the Representative, for the benefit of the Underwriters, the negative assurance letter of Sichenzia Ross Ference Carmel LLP, counsel to the Underwriters, dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriters, in form and substance reasonably satisfactory to Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Representative, for the benefit of the Underwriters, shall have received a comfort letter from Brightman Almagor Zohar & Co., on the date hereof and on the Closing Date and on each Option Closing Date, addressed to the Underwriters, confirming that they are independent public accountants within the meaning of the Securities Act and all applicable regulations, and containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in each of the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus; provided, that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a "cut-off" date no more than two business days prior to the date hereof or such Closing Date or such Option Closing Date, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) On the Closing Date and on each Option Closing Date, there shall have been furnished to the Representative, for the benefit of the Underwriters, a certificate, dated the Closing Date and on each Option Closing Date and addressed to the Underwriters, signed by the chief executive officer and the chief financial officer of the Company, in their capacity as officers of the Company, to the effect that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement are true and correct, in all material respects, as if made at and as of the Closing Date and on the Option Closing Date, and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part required to be performed or satisfied at or prior to the Closing Date or on the Option Closing Date, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof, (B) suspending the qualification of the Shares for offering or sale, or (C) suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from and after the date of this Agreement and prior to the Closing Date or on the Option Closing Date, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) On the Closing Date and on each Option Closing Date, there shall have been furnished to the Representative, for the benefit of the Underwriters, a certificate, dated the Closing Date and on each Option Closing Date and addressed to the Underwriters, signed by the [\*] of the Company, in its capacity as officer of the Company, certifying: (i) that the articles of association in effect after the Closing is true and complete, has not been modified and is in full force and effect as of after the Closing; (ii) that the resolutions of the Company's Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) On or before the date hereof, the Representative shall have received duly executed lock-up agreement (each a "<u>Lock- Up Agreement</u>") in the form set forth on <u>Exhibit A</u> hereto, by and between the Representative and each of the parties specified in Schedule V.

If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreement for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of <u>Exhibit B</u> hereto through a major news service at least two business days before the effective date of the release or waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Representative shall have received on and as of the date hereof, the Closing Date and on each Option Closing Date satisfactory evidence of the good standing of the Company in its respective jurisdiction of organization and its good standing in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.

If any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative by notice to the Company at any time at or prior to the Closing Date or on the Option Closing Date, as applicable, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii), Section 7 and Section 8 shall survive any such termination and remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7. ***Indemnification and Contribution***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its affiliates, directors and officers and employees, and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Indemnified Party"), from and against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package, any Written Testing-the-Waters Communications, any Prospectus, the Final Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or the Marketing Materials or in any other materials used in connection with the offering of the Shares, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) in whole or in part, any material inaccuracy in the representations and warranties of the Company contained herein, or (iv) in whole or in part, any material failure of the Company to perform its obligations hereunder or under law, and will reimburse such party for any legal or other expenses reasonably incurred by such party in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action; *provided, however*, that such indemnity shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, any Written Testing-the-Waters Communications, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the related Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f). The Company will not be liable to any Indemnified Party under the foregoing indemnification and reimbursement provisions (i) for any settlement by an Indemnified Party effected without its prior written consent (not to be unreasonably withheld); or (ii) to the extent that any loss, claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from the Indemnified Party's willful misconduct or gross negligence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Underwriter, severally and not jointly, will indemnify, defend and hold harmless the Company, its directors and each officer of the Company who signs the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by such Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f), and will reimburse such party for any legal or other expenses reasonably incurred by such party in connection with evaluating, investigating, and defending against any such loss, claim, damage, liability or action. The obligation of each Underwriter to indemnify the Company (including any controlling person, director or officer thereof) shall be limited to the amount of the underwriting discount applicable to the Shares to be purchased by such Underwriter hereunder actually received by such Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially prejudiced by such failure. In case any such action shall be brought against any indemnified party, and it notifies the Company of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party's election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof; *provided*, *however*, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, the indemnified party shall have the right to employ a single counsel to represent it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this Section 7, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred.

The indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering and sale of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discount received by the Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim that is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount of the underwriting discount applicable to the Shares to be purchased by such Underwriter hereunder actually received by such Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' respective obligations to contribute as provided in this Section 7 are several in proportion to their respective underwriting commitments and not joint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The obligations of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of each Underwriter under this Section 7 shall be in addition to any liability that each Underwriter may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to the Company, its officers, directors and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) For purposes of this Agreement, each Underwriter severally confirms, and the Company acknowledges, that there is no information concerning such Underwriter furnished in writing to the Company by such Underwriter specifically for preparation of or inclusion in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, other than the statement set forth in the last paragraph on the cover page of the Prospectus, the marketing and legal names of each Underwriter, and the statements set forth in the "Underwriting" section of the Registration Statement, the Time of Sale Disclosure Package, and the Final Prospectus only insofar as such statements relate to the amount of selling concession and re- allowance, if any, or to over-allotment, stabilization and related activities that may be undertaken by such Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. ***Representations and Agreements to Survive Delivery***. All representations, warranties, and agreements of the Company contained herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the several Underwriters and the Company contained in Section 5(a)(viii) and Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the several Underwriters or any controlling person thereof, or the Company, any of its officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Shares to and by the Underwriters hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. ***Termination of this Agreement***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Representative shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any time at or prior to the Closing Date or any Option Closing Date (as to the Over-Allotment Option to be purchased on such Option Closing Date only), if in the discretion of the Representative, (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Representative, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the reasonable judgment of the Representative, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares (ii) trading in the Company's Ordinary Shares shall have been suspended by the Commission or NYSE or trading in securities generally on the Nasdaq Stock Market, the New York Stock Exchange or the NYSE shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the Nasdaq Stock Market, the New York Stock Exchange or the NYSE, by such exchange or by order of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been declared by federal or state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or war, any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions or any other calamity or crisis, or (vi) the Company suffers any material loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance, or (vii) in the reasonable judgment of the Representative, there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company considered as a whole, whether or not arising in the ordinary course of business. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(a)(viii) and Section 7 hereof shall at all times be effective and shall survive such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Representative elects to terminate this Agreement as provided in this Section, the Company and the other Underwriters shall be notified promptly by the Representative by telephone, confirmed by letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. ***Substitution of Underwriters***. If any Underwriter or Underwriters shall default in its or their obligations to purchase Securities hereunder on the Closing Date and the aggregate number of Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed ten percent (10%) of the total number of Securities to be purchased by all Underwriters on such Closing Date, the other Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase on the Closing Date. If any Underwriter or Underwriters shall so default and the aggregate number of Securities with respect to which such default or defaults occur is more than ten percent (10%) of the total number of Securities to be purchased by all Underwriters on such Closing Date and arrangements satisfactory to the remaining Underwriters and the Company for the purchase of such Securities by other persons are not made within forty-eight (48) hours after such default, this Agreement shall terminate.

If the remaining Underwriters or substituted Underwriters are required hereby or agree to take up all or part of the Securities of a defaulting Underwriter or Underwriters on the Closing Date as provided in this Section 10, (i) the Company shall have the right to postpone the Closing Date for a period of not more than five (5) full business days in order to permit the Company to effect whatever changes in the Registration Statement, the Prospectus, or in any other documents or arrangements, which may thereby be made necessary, and the Company agrees to promptly file any amendments to the Registration Statement or the Prospectus which may thereby be made necessary, and (ii) the respective numbers of Securities to be purchased by the remaining Underwriters or substituted Underwriters shall be taken as the basis of their underwriting obligation for all purposes of this Agreement. Nothing herein contained shall relieve any defaulting Underwriter of its liability to the Company or any other Underwriter for damages occasioned by its default hereunder. Any termination of this Agreement pursuant to this Section 10 shall be without liability on the part of any non-defaulting Underwriters or the Company, except that the representations, warranties, covenants, indemnities, agreements and other statements set forth in Section 2 and 3, the obligations with respect to expenses to be paid or reimbursed pursuant to Section 5(a)(viii) and the provisions of Section 7 and Sections 11 through 18, inclusive, shall not terminate and shall remain in full force and effect.

As used in this Agreement, the term "Underwriter" shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. ***Notices***. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Underwriter, shall be mailed, delivered or telecopied to the parties as follows:

if to the Representative:

Laidlaw & Company (UK) Ltd.

521 5<sup>th</sup> Avenue, 12<sup>th</sup> Fl.

New York, NY 10175

Attention: Managing Director

*with copies to*:

Sichenzia Ross Ference Carmel LLP

1185 Avenue of the Americas, 31<sup>st</sup> Fl.

New York, New York 10036

Attention: Ross D. Carmel, Esq.

if to the Company:

Nasus Pharma Ltd.

Yigal Alon 65

Tel Aviv, Israel

Attention: Chief Executive Officer, Dan Teleman

*with copies to*:

Sullivan & Worcester LLP

1251 Avenue of the Americas, 19th Floor

New York, NY 10020

Attention: Eric Victorson, Esq.

or in each case to such other address as the person to be notified may have requested in writing. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. ***Persons Entitled to Benefit of Agreement***. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successors and assigns" as herein used shall not include any purchaser, as such purchaser, of any of the Shares from any Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. ***Absence of Fiduciary Relationship***. The Company acknowledges and agrees that: (a) each Underwriter has been retained solely to act as underwriter in connection with the sale of the Shares and that no fiduciary, advisory or agency relationship between the Company and any Underwriter has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether such Underwriter has advised or is advising the Company on other matters; (b) the price and other terms of the Shares set forth in this Agreement were established by the Company following discussions and arms-length negotiations with the Underwriters and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriters and their affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that no Underwriter has any obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and (d) it has been advised that each Underwriter is acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of such Underwriter and not on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. ***Amendments and Waivers***. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. ***Partial Unenforceability***. The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. ***Governing Law***. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. ***Submission to Jurisdiction***. The Company irrevocably (a) submits to the jurisdiction of the Supreme Court of the State of New York, County of New York, or the United States District Court for the Southern District of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement, the Registration Statement, the Time of Sale Disclosure Package, any Prospectus and the Final Prospectus (each a "<u>Proceedin</u>g"), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE, ANY PROSPECTUS AND THE FINAL PROSPECTUS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. ***Counterparts.*** This Agreement may be executed and delivered (including by facsimile transmission or electronic mail) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.

[*Signature Page Follows*]

Please sign and return to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company and the several Underwriters in accordance with its terms.

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| | |
|:---|:---|
| Very truly yours, | Very truly yours, |
| **Nasus Pharma Ltd.** | **Nasus Pharma Ltd.** |
| By: |  |
| Name: | Dan Teleman |
| Title: | Chief Executive Officer |

---

---

| |
|:---|
| Confirmed as of the date first above-mentioned by the Representative acting on behalf of itself and as Representative of the several Underwriters. |
| Laidlaw & Company (UK) Ltd. |
| By: |
| Name: |
| Title: |

---

[*Signature page to Underwriting Agreement*]

**SCHEDULE I**

---

| | | |
|:---|:---|:---|
| Name | Number of Firm<br> Shares to be Purchased | Number of Option <br> Shares to be Purchased |
| Laidlaw & Company (UK) Ltd. |  |  |
| Craft Capital Management LLC |  |  |
| &nbsp;&nbsp;&nbsp;Total: |  |  |

---

**SCHEDULE II**

**Final Term Sheet**

---

| | |
|:---|:---|
| Issuer: | Nasus Pharma Ltd. (the "Company") |
| NYSE Symbol: | NSRX |
| Securities: | [ ] ordinary shares, no par value (the "Ordinary Shares"), of the Company |
| Underwriter's Warrants: | Underwriter Warrants entitling the Underwriters to purchase 3% of the aggregate number of shares of Ordinary Shares issued in this offering at an exercise price of $[ ] per share. The warrants will have a term of five (5) years and may be exercised 180 days following the effective date of the Registration Statement. |
| Over-allotment option: | Up to an additional [ ] shares of Ordinary Shares at a public offering price of $[ ] per share |
| Public offering price: | $[ ] per share of Ordinary Shares |
| Underwriting discount: | $[ ] per share of Ordinary Shares |
| Expected gross proceeds: | $[ ] million ($[ ] if the overallotment option is exercised in full). |
| Trade date: |  |
| Settlement date: |  |
| Underwriters: | Laidlaw & Company (UK) Ltd.<br>Craft Capital Management LLC |

---

**SCHEDULE III**

**<u>Free Writing Prospectus</u>**

**<u> </u>**

1. None

**SCHEDULE IV**

**<u>Written Testin</u>g<u>-the-Waters Communications</u>**

**SCHEDULE V**

**List of officers, directors, employees and shareholders executing lock-up agreements**

[\*]

**EXHIBIT A**

**Form of Lock-Up Agreement**

Laidlaw & Company (UK) Ltd.

521 5<sup>th</sup> Avenue, 12<sup>th</sup> Fl.

New York, NY 10175

Ladies and Gentlemen:

The undersigned understands that you, as the representative (the "Representative") of the several underwriters named therein, propose to enter into an Underwriting Agreement (the "Underwriting Agreement") with Nasus Pharma Ltd., company organized under the laws of the State of Israel (the "Company"), relating to a proposed offering of securities of the Company (the "Offering") including its ordinary shares, no par value (the "Ordinary Shares"). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

In consideration of the foregoing, and in order to induce you to participate the Offering, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative (which consent may be withheld in its sole discretion), the undersigned will not, during the period (the "Lock-Up Period") beginning on the date hereof and ending on the date that is 180 days after the Closing date of the Offering, (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or other equity securities of the Company, or any securities convertible into or exercisable or exchangeable for Common Shares or other equity securities of the Company, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the "**Lock-Up Securities**"); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; (4) engage in any short selling of Lock-Up Securities; or (5) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in the Public Offering or in open market transactions after the completion of the Public Offering; provided that no filing under Section 13 or Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other public announcement shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the undersigned or a family member (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; (d) if the undersigned is a corporation, partnership, limited liability company or other business entity, (i) any transfers of Lock-Up Securities to another corporation, partnership, limited liability company or other business entity that controls, is controlled by or is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners, shareholders, subsidiaries or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned; (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) (d) or (e), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made; (f) the receipt by the undersigned from the Company of Ordinary Shares upon the vesting of restricted share awards or share units or upon the exercise of options to purchase the Company's Ordinary Shares issued under an equity incentive plan of the Company or an employment arrangement described in the Pricing Prospectus (as defined in the Underwriting Agreement) (the "Plan Shares") or the transfer of Ordinary Shares or any securities convertible into Ordinary Shares to the Company upon a vesting event of the Company's securities or upon the exercise of options to purchase the Company's securities, in each case on a "cashless" or "net exercise" basis or to cover tax obligations of the undersigned in connection with such vesting or exercise, but only to the extent such right expires during the Lock-up Period, provided that no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made within 180 days after the date of the Underwriting Agreement, and after such 180th day, if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Ordinary Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise and, provided further, that the Plan Shares shall be subject to the terms of this lock-up agreement; (g) the transfer of Lock-Up Securities pursuant to agreements described in the Pricing Prospectus under which the Company has the option to repurchase such securities or a right of first refusal with respect to the transfer of such securities, provided that if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Ordinary Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report describing the purpose of the transaction; (h) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Securities, provided that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such public announcement or filing shall include a statement to the effect that no transfer of Lock-Up Securities may be made under such plan during the Lock-Up Period; (i) the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, provided that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this lock-up agreement for the balance of the Lock-Up Period, and provided further, that any filing under Section 13 or Section 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that such transfer has occurred by operation of law; and (j) the transfer of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of the Ordinary Shares involving a change of control (as defined below) of the Company after the closing of the Public Offering and approved by the Company's board of directors; provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Lock-Up Securities owned by the undersigned shall remain subject to the restrictions contained in this lock-up agreement. For purposes of clause (j) above, "change of control" shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any "person" (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power of the voting shares of the Company.

The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or reasonably expected to lead to or result in a sale or disposition of shares of Ordinary Shares even if such securities would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put option or put equivalent position or call option or call equivalent position) with respect to any of the shares of Ordinary Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such shares.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar or depositary against the transfer of the undersigned's shares of Ordinary Shares except in compliance with the foregoing restrictions.

If the undersigned is an officer or director of the Company, (i) the Representative agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Ordinary Shares, the Representative will notify the Company of the impending release or waiver, and (ii) the Company will agree in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.

The undersigned understands that, if the Underwriting Agreement does not become effective by September 20, 2025, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the securities to be sold thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement.

This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. The undersigned irrevocably (i) submits to the jurisdiction of the Supreme Court of the State of New York, County of New York, and the United States District Court for the Southern District of New York, for the purpose of any suit, action, or other proceeding arising out of this Lock-Up Agreement (each a "Proceeding"), (ii) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (iii) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (iv) agrees not to commence any Proceeding other than in such courts, and (v) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum.

---

| |
|:---|
| Very truly yours, |
| Name: |

---

**EXHIBIT B**

**Form of Press Release**

Nasus Pharma Ltd.

[Date]

Nasus Pharma Ltd., an Israeli company (the "Company") announced today that Laidlaw & Company (UK) Ltd., the Representative of the several Underwriters in the Company's recent public sale of shares of Ordinary Shares are [waiving][releasing] a lock-up restriction with respect to shares of the Company's Ordinary Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver][release] will take effect on , 20 , and the shares may be sold on or after such date.

**This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.**

## Exhibit 3.1

**Exhibit 3.1**

**Articles of Association**

**OF**

**Nasus Pharma Ltd.** 

**<u>GENERAL</u>**

1. **Definition and Interpretation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. The following terms in these Articles of Association shall have the respective meanings ascribed to them below:

 

---

| | |
|:---|:---|
| *2022 SAFE* | shall mean all Simple Agreements For Future Equity entered between the Company and respective holders thereof, between February 2022 and May, 2022. |
| *2023 SAFE* | shall mean all Simple Agreements For Future Equity entered between the Company and respective holders thereof, between February 2023 and May, 2023. |
| *Additional Securities* | shall mean all Ordinary Shares or Convertible Securities issued or deemed to be issued by the Company after the date of these Articles of Association, whether or not authorized on the date hereof, other than: (A) Securities issued to employees, directors, consultants or contractors of the Company or any of its subsidiaries, pursuant to a share purchase/option plan approved by the Board; (B) Securities issued in any public offering of the Company's securities; (C) Securities issued as part of stock splits, bonus shares, stock dividends or like transactions; (D) Securities issued in connection with a merger, consolidation or reorganization of the Company, or any other acquisition of another entity; (E) securities issued pursuant to any transaction which are approved by shareholders holding more than two thirds (2/3) of the shares of the Company (each of (A) through (E), collectively "**Excluded Issuances**"). |
| *Affiliate* | (i) in the case of a Shareholder who is an individual - a spouse, child, brother, sister, or parent of the Shareholder and any corporate entity which is controlled by him or her, and *vice versa*; (ii) in the case of any incorporated Shareholder (whether a company or other entity) - any legal entity which controls, is controlled by, or is under common control with such incorporated Shareholder, where "control" means the holding, directly or indirectly, of more than 50% of the equity and voting power; and (iii) in the case of a Shareholder which is a general or limited partnership – its partners, and affiliated partnerships managed by the same management company or managing general partner or by an entity which controls, is controlled by, or is under common control with, such management company or managing general partner. |

---

 

 

---

| | |
|:---|:---|
| *Articles* | The Articles of Association of the Company, as set forth herein or as amended expressly or pursuant to the Law. |
| *Board* | The Board of Directors of the Company. |
| *Business Day* | Sunday to Thursday, inclusive, with the exception of holidays and official days of rest in the State of Israel. |
| *Companies Law* | The Companies Law, 1999 and respective regulation, as may be amended from time to time. |
| *Company* | NASUS PHARMA Ltd. |
| *Convertible Securities* | shall mean at any time, any options, warrants, convertible notes or other securities or rights convertible, exchangeable or exercisable, with or without the payment of additional consideration, into or for Ordinary Shares, directly or indirectly. |
| *Director* | A director of the Company in accordance with the definition of the Companies Law. |
| *Founders* | Udi Gilboa and Dalia Megiddo. |
| *General Meeting* | A general meeting of the Shareholders of the Company. |
| *Law* | The provisions of any law ("din") as defined in the Interpretation Law, 1981. |
| *Ordinary Majority* | Majority of more than fifty percent (50%) of the voting rights in a General Meeting whether in person or by means of a proxy (voting as one class on an as converted basis). |
| *Ordinary Shares* | The Company's Ordinary Shares, nominal value NIS 0.01 each. |
| *Original Issue Price* | with respect to: (i) Ordinary A Shares, a price of US$5.85 per share (ii) Ordinary A-1 Shares, a price of US$14.2775 per share; (iii) Ordinary A-2 Shares, a price of US$20.4947 per share (iv) Ordinary A- 3 Shares, a price of US$28.8409 per share (v) Ordinary A-3A Shares, a price of per share as determined with respect to each 2022 SAFE, and (vi) Ordinary A-3B a price per share as determined with respect to each 2023 SAFE. |

---

 

 

---

| | |
|:---|:---|
| *Permitted Transferee* | Either: (i) a transferee by operation of law; (ii) an Affiliate of a Shareholder; (iii) a trustee of a Shareholder or a Shareholder which is the beneficiary of such trustee (including the direct transfer of shares from one trustee to another); or (iv) the Company, in case of a transfer from a Shareholder. |
| *Person* | An individual, corporation, partnership, joint venture, trust, and any other body corporate or unincorporated organization. |
| *Securities* | Shares, bonds, capital notes or securities convertible, exchangeable or exercisable into shares, and certificates conferring a right in such securities, issued by the Company. |
| *Shareholder* | Anyone registered as a shareholder in the Shareholder Register. |
| *Shareholder Register* | The Register of Shareholders of the Company, administered in accordance with the Companies Law. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. Unless the subject or the context otherwise requires, each word and expression not specifically defined herein and defined in the Companies Law as in effect on the date when these Articles first became effective shall have the same meaning herein, and to the extent that no meaning is attached to it in the Companies Law the meaning ascribed to it in the Securities Law, 1968 or the regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. Words and expressions importing the singular shall include the plural and *vice versa*, words and expressions importing the masculine gender shall include the feminine gender and words and expressions importing persons shall include corporate entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction of any provision hereof.

2. **Private Company** 

The Company is a private company, as defined in the Companies Law. Furthermore:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. Any invitation to the public to subscribe for any shares or debentures of the Company is hereby prohibited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. The right to transfer shares in the Company shall be restricted as hereinafter provided.

3. **The Objectives of the Company** 

The Company shall engage in any lawful business. The Company may donate reasonable amounts to worthy causes, as the Board may determine in its discretion, even if such donations are not within the framework of business considerations.

4. **Limited Liability** 

The liability of the Shareholders of the Company is limited, each one up to the full amount he undertook to pay for the shares of the Company allotted to him.

**SHARE CAPITAL**

5. **Share Capital** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. The authorized and registered share capital of the Company is NIS 27,810, divided into 2,000,000 Ordinary Shares, 171,000 Ordinary A Shares, nominal value NIS 0.01 each ("**Ordinary A Shares**"), 300,000 Ordinary A-1 Shares, nominal value NIS 0.01 each ("**Ordinary A-1 Shares**") 100,000 Ordinary A-2 Shares nominal value NIS 0.01 each ("**Ordinary A-2 Shares**") 110,000 Ordinary A-3 Shares nominal value NIS 0.01 each ("**Ordinary A-3 Shares**"), 36,000 Ordinary A-3A Shares, nominal value NIS 0.01 each ("**Ordinary A-3A Shares**") and 64,000 Ordinary A-3B Shares, nominal value NIS 0.01 each ("**Ordinary A-3B Shares**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. The Ordinary Shares shall have all the rights attached to the Ordinary Shares in these Articles, including, without limitation, the right to receive notices of General Meetings, to attend and vote at General Meetings, to participate in distribution of dividends and to participate in distribution of surplus assets and funds in the Company, and no other rights except as may be provided for herein or under the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. All the Ordinary Shares rank *pari passu* in relation to the amounts of capital paid or credited as paid on their nominal value, in connection with dividend, the distribution of bonus shares and any other distribution, return of the capital, redemption of shares and participation in a distribution of the Company's surplus assets on winding up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. The Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall confer upon the holders thereof all rights conferred upon the holders of Ordinary Shares in the Company, and, in addition, only the rights, preferences and privileges granted to the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares Ordinary A-3A Shares and Ordinary A-3B Shares in these Articles and under applicable Law. Every holder of Ordinary A Share, Ordinary A-1 Share, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall have one (1) vote for each Ordinary Share into which the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares held by it of record could be converted (as provided in Article 6), on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written ballot or by any other means.

6. **Conversion Rights** 

The holders of the Ordinary A, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall have the following conversion rights (the "**Conversion Rights**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Right to Convert</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject
 to Article 6.3, each share of Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares
 Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall be convertible or
 reclassified, in the manner permitted by law, at the option of the holder thereof, at any
 time after the date of issuance of such share at the office of the Company, into such number
 of fully paid and non-assessable Ordinary Shares as is determined by dividing the applicable
 Original Issue Price of such share by the applicable Conversion Price (as defined below)
 at the time in effect for such share (the result of such a division is hereinafter referred
 to as the "**Conversion Ratio** "). The issuance of the Ordinary Shares upon
 conversion of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3
 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall be deemed to be made for value
 and fully paid up, for the consideration initially paid for each Ordinary A Share, Ordinary
 A-1 Share, Ordinary A-2 Share, Ordinary A-3 Share, Ordinary A-3A Shares and Ordinary A-3B
 Shares, surrendered to the Company upon conversion thereof. The initial conversion price
 per share of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3
 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares shall be the applicable Original Issue
 Price of such share (the "**Conversion Price** "). The Conversion Price will
 be subject to adjustment as set forth in Article 6.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Automatic Conversion</u>. Each Ordinary A Share, Ordinary A-1 Share, Ordinary A-2 Share Ordinary A-3
 Share, Ordinary A-3A Shares and Ordinary A-3B Shares shall automatically be converted into
 Ordinary Shares in accordance with its applicable Conversion Ratio upon the earlier of: (i)
 immediately prior to the consummation of the Company's initial public offering or (ii) the
 affirmative consent of the holders of majority of the Ordinary A Shares with respect to the
 Ordinary A Shares; (iii) the affirmative consent of the holders of majority of the Ordinary
 A-1 Shares with respect to the Ordinary A-1 Shares; (iv) the affirmative consent of the holders
 of majority of the Ordinary A-2 Shares with respect to the Ordinary A-2 Shares (v) the affirmative
 consent of the holders of majority of the Ordinary A-3 Shares with respect to the Ordinary
 A-3 Shares (vi) the affirmative consent of the holders of majority of the Ordinary A-3A Shares
 with respect to the Ordinary A-3A Shares, and (vii) the affirmative consent of the holders
 of majority of the Ordinary A-3B Shares with respect to the Ordinary A-3B Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Mechanics of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A
 conversion of Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares,
 Ordinary A-3A Shares or Ordinary A-3B Shares pursuant to the election of the holder thereof
 (in accordance with Article (a) above), shall be made by surrendering the applicable certificate
 or certificates (for such Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary
 A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares, as the case may be) therefor, duly
 endorsed, and giving written notice by mail, postage prepaid, or by hand to the Company at
 its registered office, of the election of such holder to convert the same and shall state
 therein the name or names of any nominee for such holder in which the certificate or certificates
 for shares of Ordinary Shares are to be issued. If required by the Company, certificates
 surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments
 of transfer, in form satisfactory to the Company, duly executed by the registered holder.
 The date of receipt of such certificates and notice by the Company, or, in the case of an
 automatic conversion pursuant to Section (b) above, the date of the consummation of the initial
 public offering or the date on which the holders of a majority of the then issued and outstanding
 Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary
 A-3A Shares or Ordinary A-3B Shares on an as converted basis have provided their affirmative
 consent to convert all Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary
 A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares into Ordinary Shares, as applicable,
 shall be the conversion date (the "**Conversion Date** "). The Company shall,
 as soon as practicable thereafter, issue and deliver at such Office to such holder of Ordinary
 A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares
 or Ordinary A-3B Shares, or to the nominee or nominees of such holder, a certificate or certificates
 for the number of Ordinary Shares to which such holder shall be entitled as aforesaid. Such
 conversion shall be deemed to have been made immediately prior to the close of business on
 the date of such surrender of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares
 Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares to be converted, and the
 person or persons entitled to receive the Ordinary Shares issuable upon such conversion shall
 be treated for all purposes as the record holder or holders of such Ordinary Shares as of
 such date. In the event that under the law such conversion may be only effected by the reclassification
 of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares,
 Ordinary A-3A Shares or Ordinary A-3B Shares as Ordinary Shares, then the conversion of the
 Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary
 A-3A Shares or Ordinary A-3B Shares, shall be regarded as reclassification of the Ordinary
 A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares
 or Ordinary A-3B Shares, whereby such Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2
 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares shall only be entitled
 to the rights attributed to the Ordinary Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A
 conversion of Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares,
 Ordinary A-3A Shares or Ordinary A-3B Shares in accordance with the election of holders of
 the majority of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary
 A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares, as applicable, then outstanding
 or in connection with an initial public offering (in accordance with Article (b) above),
 shall be deemed to have taken place automatically regardless of whether the certificates
 representing such shares have been tendered to the Company, and from and after such conversion,
 any such certificates not tendered to the Company shall be deemed to evidence solely the
 Ordinary Shares received upon such conversion and the right to receive a certificate for
 such Ordinary Shares and all rights with respect to the Ordinary A Shares, Ordinary A-1 Shares,
 Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares so
 converted, including the rights, if any, to receive notices and vote (other than as a holder
 of Ordinary Shares), will terminate, other than the rights of the holders thereof, upon surrender
 of their certificate or certificates therefor, to receive certificates for the number of
 Ordinary Shares into which such Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares,
 Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares have been converted, and
 the Company shall not be obligated to issue certificates evidencing the Ordinary Shares issuable
 upon such automatic conversion unless the certificates evidencing such Ordinary A Shares,
 Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares Ordinary A-3A Shares or Ordinary
 A-3B Shares are either delivered to the Company as provided above, or the holder notifies
 the Company or its transfer agent that such certificates have been lost, stolen or destroyed
 and such holder executes an agreement reasonably satisfactory to the Company to indemnify
 the Company from any loss incurred by it in connection with such certificates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>Conversion Price Adjustments of Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares</u>, Ordinary A-3A Shares and Ordinary A-3B Shares.

The Conversion Price of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares and Ordinary A-3B Shares as applicable shall be subject to adjustment from time to time as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If
 the Company shall subdivide or combine its Ordinary Shares, the Conversion Price shall be
 proportionately reduced, in case of subdivision of shares, as at the effective date of such
 subdivision, or if the Company shall fix a record date for the purpose of so subdividing,
 as at such record date, whichever is earlier, or shall be proportionately increased, in the
 case of combination of shares, as at the effective date of such combination, or, if the Company
 shall fix a record date for the purpose of so combining, as at such record date, whichever
 is earlier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If
 the Company at any time shall pay a dividend payable in additional shares of Ordinary Shares
 or other securities or rights convertible into, or entitling the holder thereof to receive
 directly or indirectly, additional shares of Ordinary Shares (the "**Ordinary Shares Equivalents** "), then the Conversion Price shall be adjusted as at the date the Company
 shall fix as the record date for the purpose of receiving such dividend (or if no such record
 date is fixed, as at the date of such payment), to that price determined by multiplying the
 Conversion Price in effect immediately prior to such record date (or if no such record date
 is fixed then immediately prior to such payment) by a fraction (a) the numerator of which
 shall be the total number of shares of Ordinary Shares outstanding and those issuable with
 respect to such Ordinary Shares Equivalents immediately prior to the payment of such dividend,
 and (b) the denominator of which shall be the total number of shares of Ordinary Shares outstanding
 and those issuable with respect to such Ordinary Shares Equivalents (determined as aforesaid)
 immediately after the payment of such dividend (plus, in the event that the Company paid
 cash for fractional shares, the number of additional shares which would have been outstanding
 had the Company issued fractional shares in connection with such dividend).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Recapitalizations</u>. If at any time or from time to time there shall be a recapitalization of the Ordinary Shares (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere as Realization Event) provision shall be made so that the holders of the Ordinary A Shares, Ordinary A- 1 Shares, Ordinary A-2 Shares or Ordinary A-3 Shares shall thereafter be entitled to receive upon conversion of the Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B Shares the number of Ordinary Shares or other securities or property of the Company or otherwise, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled immediately prior to such recapitalization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>No Fractional Shares and Certificate as to Adjustments</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No
 fractional Ordinary Shares shall be issued upon conversion of the Ordinary A Shares, Ordinary
 A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares or Ordinary A-3B
 Shares, and the number of Ordinary Shares to be issued shall be rounded to the nearest whole
 share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon
 the occurrence of each adjustment or readjustment of the applicable Conversion Price of Ordinary
 A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares, Ordinary A-3 Shares, Ordinary A-3A Shares
 or Ordinary A-3B Shares pursuant to this Article 6, the Company, at its expense, shall compute
 such adjustment or readjustment in accordance with the terms hereof and prepare and furnish
 to each holder of Ordinary A Shares, Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3
 Shares Ordinary A-3A Shares or Ordinary A-3B Shares, as applicable, a certificate setting
 forth each adjustment or readjustment.

7. **Increase of Share Capital** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. The Company may, from time to time, by a resolution of the General Meeting adopted by an Ordinary Majority, whether or not all the shares then authorized and registered have been issued, and whether or not all the shares theretofore issued have been called up for payment, increase its share capital by the creation of new shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts, and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as such resolution of the General Meeting shall provide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. Except to the extent otherwise provided in such resolution of the General Meeting, such new shares shall be subject to all the provisions applicable to the shares of the original capital.

8. **Special Rights; Modifications of Rights** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. The Company may, from time to time, by a resolution of the General Meeting adopted by an Ordinary Majority, provide for shares with such preferred or deferred rights or rights of redemption or other special rights and/or such restrictions, whether with respect to liquidation, dividends, voting, conversion, repayment of share capital or otherwise, as may be stipulated in such resolution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. Subject to the exclusions below, if at any time the share capital is divided into different classes or series of shares, the rights attached to any class may be modified or abrogated by the Company, by a resolution of the General Meeting adopted by an Ordinary Majority. For the avoidance of doubt, Section 20(c) of the Companies Law, as may be amended from time to time, shall not apply to the Company. Subject to Article 8.4 below, rights attached to the Ordinary A Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A Shares, the rights attached to the Ordinary A-1 Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A-1 Shares, the rights attached to the Ordinary A-2 Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A-2 Shares, the rights attached to the Ordinary A-3 Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A-3 Shares, the rights attached to the Ordinary A-3A Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A-3A Shares and the rights attached to the Ordinary A-3B Shares may only be modified or canceled with the approval of the holders of majority of the Ordinary A-3B Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. Any right or limitation expressly provided for the benefit or protection of a specifically named shareholder may not be modified, abrogated or waived without the prior written consent of such shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. To the maximum extent permitted under applicable law, and unless otherwise explicitly provided by these Articles: (a) any alteration or change in the rights, preferences, or privileges which are granted to all the shareholders of the Company, as a single group, without preferences or differences among them; or (b) any alteration or change in any rights, preferences, or privileges of any class of shares which is applied in the same manner to all the shareholders of the Company, or to the entire group of holding certain class of shares, (c) issuance of additional existing shares or the creation or issuance of any new class or series of shares or any other securities convertible into equity securities of the Company having a preference over, or being on parity with, an existing class of shares (including with respect to voting, dividends or rights upon liquidation); shall not be deemed to be a change of rights of the existing class of shares and shall be approved by the holders of the majority of the voting power represented at the meeting of all shareholders of all classes voting together as a single class, on as converted basis, and such issuance or amendment shall not be deemed, solely for purposes of this Article 8.4, to modify or abrogate the rights attached to the previously issued shares or class.

9. **Consolidation** **, Subdivision, Cancellation and Reduction of Share Capital** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. The Company may, from time to time, by a resolution of the General Meeting adopted by an Ordinary Majority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Consolidate and divide all or any of its issued or unissued share capital into shares of larger nominal value than its existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subdivide its shares (issued or unissued) or any of them, into shares of smaller nominal value than is fixed by these Articles (subject to the provisions of the Companies Law), and the resolution whereby any share is subdivided may determine that, as among the holders of the shares resulting from such subdivision, one or more of the shares may, as compared with the others, have any such preferred or deferred rights or rights of redemption or other special rights, or be subject to any such restrictions, as the Company has power to attach to unissued or new shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Cancel any shares which, at the date of the adoption of such resolution of the General Meeting, have not been allotted, so long as the Company is not under an obligation to allot these shares, and diminish the amount of its share capital by the amount of the shares so cancelled; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Reduce its share capital in any manner, and with and subject to any incident authorized, and consent required, by Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. With respect to any consolidation of issued shares into shares of larger nominal value, and with respect to any other action which may result in fractional shares, the Board may settle any difficulty which may arise with regard thereto, as it deems appropriate, including*, inter alia*, resort to one or more of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Determine, as to the holder of shares so consolidated, which issued shares shall be consolidated into each share of larger nominal value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Allot, in contemplation of or subsequent to such consolidation or other action, such shares or fractional shares sufficient to preclude or remove fractional share holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Redeem, subject to applicable Law, such shares or fractional shares sufficient to preclude or remove fractional share holdings;

**SHARES**

10. Issuance
 of Share Certificates; Replacement of Lost Certificates; Bearer Certificates

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. The Company shall maintain a Shareholder Register, to be administered by the corporate secretary of the Company, subject to the oversight of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. Share certificates shall bear the signatures of one Director and the corporate secretary, or of two Directors, or of any other person or persons authorized thereto by the Board, provided, however, that in the event the Board consists of one Director, the share certificate shall bear the signature of such Director or of any other person or persons authorized thereto by the Board. Every certificate shall bear the Company's printed name or its seal or stamp, if existent pursuant to Article 84.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. Each Shareholder shall be entitled to one certificate for all the shares of any class registered in his name, and if the Board so approves, to several certificates, each for one or more of such shares. Each certificate may specify the serial numbers of the shares represented thereby and may also specify the amount paid up thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4. A share certificate registered in the names of two or more persons shall be delivered to the person first named in the Shareholder Register in respect of such co-ownership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5. If a share certificate is defaced, lost or destroyed, it may be replaced, upon payment of such fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board may deem appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6. The Company shall not issue bearer share certificates which grant the bearer rights in the shares specified therein.

11. **Registered Holder** 

Except as otherwise provided in these Articles, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and, shall be entitled to treat the holder of any share in trust as a Shareholder and to issue to him a share certificate, provided that the trustee notify the Company of the identity of the beneficiary, and, accordingly, the Company shall not, except as ordered by a court of competent jurisdiction, or as required by Law, be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person.

12. **Issuance of Shares and other Securities** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. Subject to compliance with the provisions of Article 13, the Board may issue shares and other Securities of the Company, up to the limit of the Company's authorized and registered share capital. If the Company's share capital includes a number of classes of shares and Securities, shares and securities exceeding the limit of the authorized and registered share capital of such class shall not be issued. In such regard, Securities convertible or exercisable into shares shall be deemed to have been converted or exercised on the date of their issue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. The issuance of shares and other Securities, in accordance with Article 12.1, from time to time, shall be under the control of the Board, who shall have the power to allot shares and other Securities or otherwise dispose of them to such persons, on such terms and conditions (including *inter alia* terms relating to calls as set forth in Article 14 hereof), and either at par or at a premium, or, subject to the provisions of the Companies Law, at a discount, and at such times, as the Board may deem appropriate, and the power to give to any person the option to acquire from the Company any shares, either at par or at a premium, or, subject as aforesaid, at a discount, during such time and for such consideration as the Board may deem appropriate.

13. **Preemptive Rights on Company Share Issuance.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. Until the closing of an initial public offering, each Shareholder holding at least 2.5% of the issued and outstanding share capital of the Company ("**Eligible Shareholder**") shall have the right to purchase its pro rata share of Additional Securities (as defined above) that the Company may, from time to time, propose to sell and issue. Such pro rata share, for purposes of this Article 13, is the ratio of (X) the number of outstanding shares, owned by such Eligible Shareholder immediately prior to the issuances of Additional Securities, to (Y) the total number of outstanding shares, owned by all Eligible Shareholders immediately prior to the issuances of Additional Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. In the event that the Company proposes to undertake an issuance of Additional Securities, it shall give each Eligible Shareholder written notice (the "**Rights Notice**") of its intention to offer such Additional Securities, describing the type of Additional Securities, the number of such Additional Securities to be offered, the price and the general terms upon which the Company proposes to issue the same. Each Eligible Shareholder shall have fourteen (14) days after receipt of the Rights Notice to agree to purchase up to its pro rata share of such Additional Securities, at the price and upon the terms specified in the Rights Notice by giving written notice to the Company and stating therein the quantity of Additional Securities to be purchased. Failure to timely agree to purchase Additional Securities, in whole or in part, shall be deemed as a decision not to purchase any of the Additional Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3. In the event that by the end of the fourteen (14) day period specified above, not all of the Additional Securities have been subscribed for by Eligible Shareholders, the Company shall have one hundred twenty (120) days thereafter to sell all or part of the remaining Additional Securities with respect to which the rights of the Eligible Shareholders were not exercised, at a price not lower and upon terms no more favorable to the purchasers thereof than specified in the Rights Notice. In the event the Company has not sold the Additional Securities within such one hundred twenty (120) day period the Company shall not thereafter issue or sell any Additional Securities, without first offering such Additional Securities to the Eligible Shareholders in the manner provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4. It is hereby clarified that this Section 13 is in lieu of Section 290 of the Companies Law which shall not apply to the Company.

14. **Calls on Shares** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. The Board may, from time to time, make such calls as it may deem appropriate upon Shareholders in respect of any sum unpaid in respect of shares held by such Shareholders which is not, by the terms of allotment thereof or otherwise, payable at a fixed time, and each Shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments), to the person(s) and at the time(s) and place(s) designated by the Board, as any such time(s) may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated in the resolution of the Board (and in the notice referred to in Article 14.1), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all shares in respect of which such call was made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. Notice of any call shall be given in writing to the applicable Shareholder(s) not less than fourteen (14) days prior to the time of payment, specifying the time and place of payment, and designating the person to whom and the place where such payment shall be made; provided, however, that before the time for any such payment, the Board may, by notice in writing to such Shareholder(s), revoke such call in whole or in part, extend such time, or alter such designated person and/or place. In the event of a call payable in installments, only one notice thereof need be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3. If, by the terms of allotment of any share or otherwise, any amount is made payable at any fixed time, every such amount shall be payable at such time as if it were a call duly made by the Board and of which due notice had been given, and all the provisions herein contained with respect to calls shall apply to each such amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof and all interest payable thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5. Any amount unpaid in respect of a call shall bear interest from the date on which it is payable until actual payment thereof, at such rate (not exceeding the then prevailing debitory rate charged by leading commercial banks in Israel), and at such time(s) as the Board may prescribe.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6. A Shareholder shall not be entitled to his rights as shareholder, including dividend, unless he has paid all the amounts detailed in the calls made on him, together with interest and expenses, if any, unless otherwise prescribed by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7. Upon the allotment of shares, the Board may provide for differences among the allottees of such shares as to the amount of calls and/or the times of payment thereof.

15. **Forfeiture and Surrender** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1. If any Shareholder fails to pay any amount payable in respect of a call, or interest thereon as provided herein, on or before the day fixed for payment of the same, the Company, by resolution of the Board, may at any time thereafter, so long as such amount or interest remains unpaid, forfeit all or any of the shares in respect of which such call had been made. Any expense incurred by the Company in attempting to collect any such amount or interest, including, *inter alia,* attorneys' fees and costs of suit, shall be added to, and shall, for all purposes (including the accrual of interest thereon), constitute a part of the amount payable to the Company in respect of such call.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2. Upon the adoption of a resolution of forfeiture, the Board shall cause notice thereof to be given to the Shareholder whose shares are the subject of such forfeiture, which notice shall state that, in the event of the failure to pay the entire amount so payable within a period stipulated in the notice (which period shall not be less than fourteen (14) days and which may be extended by the Board), such shares shall be *ipso facto* forfeited, provided, however, that, prior to the expiration of such period, the Board may nullify such resolution of forfeiture, but no such nullification shall estop the Board from adopting a further resolution of forfeiture in respect of the non-payment of such amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3. Whenever shares are forfeited as herein provided, all distributions theretofore declared in respect thereof and not actually paid or distributed shall be deemed to have been forfeited at the same time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4. The Company, by resolution of the Board, may accept the voluntary surrender of any share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5. Any share forfeited or surrendered as provided herein shall become the property of the Company, and the same, subject to the provisions of these Articles, may be sold, re-allotted or otherwise disposed of as the Board deems appropriate. Any such share shall become a dormant share, and shall not confer any rights, so long as it is held by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6. Any Shareholder whose shares have been forfeited or surrendered shall cease to be a Shareholder in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all calls, interest and expenses owing upon or in respect of such shares at the time of forfeiture or surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate prescribed in Article 14.4 above, and the Board, in its discretion, may enforce the payment of such moneys, or any part thereof, but shall not be under any obligation to do so. In the event of such forfeiture or surrender, the Company, by resolution of the Board, may accelerate the date(s) of payment of any or all amounts then owing by the Shareholder in question (but not yet due) in respect of all shares owned by such Shareholder, solely or jointly with another, and in respect of any other matter or transaction whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7. Upon any sale of shares after forfeiture or surrender or for enforcing a lien, the Board may appoint a person to execute an instrument of transfer of the shares so sold and cause the purchaser's name to be entered in the Shareholder Register in respect of such shares, and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money, and after his name has been entered in the Shareholder Register in respect of such shares, the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

16. **Lien** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. Except to the extent the same may be waived or subordinated in writing, the Company shall have a first and paramount lien upon all the shares registered in the name of each Shareholder which are not fully paid up (without regard to any equitable or other claim or interest in such shares on the part of any other person), and upon the proceeds of the sale thereof, for his debts, liabilities and engagements arising from any cause whatsoever, solely or jointly with another, to or with the Company, whether the period for the payment, fulfillment or discharge thereof shall have actually arrived or not. Such lien shall extend to all distributions from time to time declared in respect of such shares. Unless otherwise provided, the registration by the Company of a transfer of shares shall be deemed to be a waiver on the part of the Company of any lien existing on such shares immediately prior to such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. The Board may cause the Company to sell any shares subject to such lien when any such debt, liability or engagement has matured, in such manner as the Board may deem appropriate, but no such sale shall be made unless such debt, liability or engagement has not been satisfied within fourteen (14) days after written notice of the Company's intention to sell shall have been served on such Shareholder, his executors or administrators.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3. The net proceeds of any such sale, after payment of the costs thereof, shall be applied in or toward satisfaction of the debts, liabilities or engagements of such Shareholder (whether or not the same have matured), or any specific part of the same (as the Board may determine), and the balance, if any, shall be paid to the Shareholder, his executors, administrators or assigns.

17. **Redeemable Securities** 

The Board may, subject to applicable Law, issue redeemable Securities, with such rights and on such conditions as the Board prescribes, and redeem the same.

**<u>TRANSFER OF SHARES</u>**

18. **Transfer of Shares - General; Limitations** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.1. No sale, assignment, conveyance, pledge, grant of any security interest or gift, or any other disposition or transfer (collectively "**Transfer**") of Company shares shall be effective unless such Transfer is effected in compliance with the provisions of Articles 19-21 Any proposed, direct or indirect, Transfer to a competitor of the Company or a Transfer that would result in the Company having more than 50 shareholders (excluding employees or former employees) shall be invalid. Any proposed Transfer shall be subject to a prior approval of the Board. The Company shall refuse to register a Transfer of shares in the event that such a Transfer is in violation of these Articles. The Company may refuse to register a Transfer of Shares if the transferee does not agree, in writing, prior to such Transfer, to assume and be bound by all obligations of the transferor under any instrument and agreement between the transferor and the Company.

Notwithstanding the above, any Transfer of shares by a Shareholder to any of such Shareholder's Permitted Transferees shall not be subject to the provisions of Article 19 or **Error! Reference source not found.**, provided that any such Permitted Transferee undertake in writing towards the Company and the Shareholders to assume and be bound by all obligations of the transferor under any instrument and agreement involving the transferor and the Company; and provided further that such Transfer has been approved by the Board, which shall not be withheld unless for good reasons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.2. No Transfer of shares shall be registered unless the Company receives a duly executed deed of transfer or other proper instrument of transfer (in form and substance satisfactory to the Board or the corporate secretary of the Company), together with the share certificate(s) and such other evidence of title as the Board or the corporate secretary of the Company may reasonably require. Until the transferee has been registered in the Shareholder Register in respect of the shares so transferred, the Company may continue to regard the transferor as the owner thereof. The Board may, from time to time, prescribe a fee for the registration of a Transfer. A deed of transfer shall be in the following form or in any substantially similar form, including any such form as is acceptable to the transfer agent for the Company's shares, or in any form otherwise approved by the Board or the corporate secretary of the Company.

**<u>Deed of Transfer</u>**

I, ___________, (hereinafter: the "**Transferor**") of <u>______________</u>, do hereby transfer, in consideration for _____________, to <u>_______________</u> (hereinafter: the "**Transferee**"), <u>_____________</u>share(s) NIS 0.01 par value each of Nasus Pharma Ltd. (hereinafter: the "**Company**") to be held by the Transferee and/or his executors, administrators and assigns, subject to the same terms and conditions under which I held the same at the time of execution hereof; and the Transferee, do hereby agree to take the said share(s) subject to the conditions aforesaid.

In witness whereof we hereby execute this Deed of Transfer, this _________day of <u>________</u>, 20 _____.

The Transferor The Transferee <br>Name: Name:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.3. In case of a death of a Shareholder, the Company shall recognize the custodian or administrator of the estate or executor of the will, and in the absence of such, the lawful heirs of the Shareholder, as the only holders of the right for the shares of the deceased Shareholder, after receipt of evidence to the entitlement thereto, as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.4. The Company may recognize the receiver or liquidator of any corporate Shareholder in liquidation or dissolution, or the receiver or trustee in bankruptcy of any Shareholder, as being entitled to the shares registered in the name of such Shareholder, after receipt of evidence to the entitlement thereto, as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.5. A person acquiring a right in shares as a result of being a custodian, administrator of the estate, executor of a will or the heir of a Shareholder, or a receiver, liquidator or a trustee in a bankruptcy of a Shareholder or according to another provision of Law, is entitled, after providing evidence of his right to the satisfaction of the Board, to be registered as the Shareholder or to transfer such shares to another person, subject to the provisions of this Article 18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.6. Unless otherwise provided elsewhere, the provisions of this Article 18 shall also apply to other Securities issued by the Company, *mutatis mutandis*.

19. **Rights of First Refusal.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1. Any Shareholder (the "**Offeror"**) proposing to transfer all or any of his shares in the Company (the "**Offered Shares**") to a Person other than to a Permitted Transferee shall first give written notice to the Company, which notice shall include the proposed price and terms of sale of the Offered Shares (the "**Offer Notice**"). The Company shall then send the Offer Notice to all other Eligible Shareholders (collectively, the "**Offerees**"). Any Offeree may accept such offer (under the same terms set forth in the Offer Notice) in respect of all or any of the Offered Shares by giving the Offeror (with a copy to the Company) notice to that effect within fourteen (14) days after receipt of the Offer Notice. Failure to timely accept such offer, in whole or in part, shall be deemed as a decision not to purchase any of the Offered Shares. If the acceptances, in the aggregate, are in respect of all of, or more than, the Offered Shares, then the accepting Offerees shall be entitled to acquire the Offered Shares, on the terms aforementioned, in proportion to their respective holdings of shares (among the Offerees), <u>provided</u> that no Offeree shall be entitled or required to acquire under the provisions of this Article more than the number of Offered Shares initially accepted by such Offeree, and upon the allocation to him of the full number of shares so accepted, he shall be disregarded in any subsequent computations and allocations hereunder. Any shares remaining after the computation of such respective entitlements shall be re-allocated among the Offerees who accepted such offer (other than those to be disregarded as aforesaid), in the same manner, until one hundred percent (100%) of the Offered Shares have been allocated as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2. If the acceptances by Offerees, in the aggregate, are in respect of less than one hundred percent (100%) of the Offered Shares, then the accepting Offerees shall not be entitled to acquire any Offered Shares (except as set forth below), and the Offeror, at the expiration of the aforementioned fourteen (14) day period, shall be entitled, subject to compliance with the provisions of Articles 19-21, to transfer the Offered Shares to the buyer(s) identified in the Offer Notice and/or to any of the Offerees (at Offeror's sole discretion) at a price not lower and on terms no more favorable than those stated in the Offer Notice, and <u>provided</u> further that if the Offered Shares are not transferred within one hundred twenty (120) days after the expiration of such fourteen (14) day period, any subsequent sale shall again be subject to the provisions of this Article.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3. The right of first refusal granted under this Article shall expire upon the consummation of an initial public offering. The right of first refusal shall not apply to a Proposed Transaction (as set forth in Article 20 below).

20. **Bring Along.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1. Subject to the provisions of the Companies Law, until the consummation of an initial public offering, if (i) a *bona fide* offer from any Person (the "**Third Party**") is made to purchase share capital of the Company (the "**Proposed Transaction**"), (ii) such sale is conditioned upon the sale of all the share capital of the Company to the Third Party, and (iii) Shareholders holding at least two thirds (2/3) of the Company's issued and outstanding share capital (on an As Converted Basis) (the "**Proposing Shareholders**") propose to sell all of their shares to such Third Party, then all remaining Shareholders (the "**Remaining Shareholders**") will be required, if so demanded in writing by the Proposing Shareholders (the "**Bring Along Notice**"), to sell all of their shares to such Third Party upon the terms and conditions of the Proposed Transaction; provided however that the consideration payable with respect to each share in each class or series as a result of such transaction is allocated among the Shareholders in accordance with Article 80. The aforesaid two thirds (2/3) requirement is hereby determined also for the purposes of Sections 341 and 342 of the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2. Upon receipt of the Bring Along Notice, each Remaining Shareholder shall be obligated to sell all of its shares in connection with such Proposed Transaction, notwithstanding any other no sale right, first refusal rights or other rights, and the proceeds of such Proposed Transaction shall be distributed among all Shareholders in accordance with the provisions of Article 80 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.3. At the closing of the Proposed Transaction (which place, date and time shall be designated by the Proposing Shareholders and provided to each of the Remaining Shareholders at least 5 days in advance), each such Remaining Shareholder shall deliver certificates evidencing all of its shares, duly endorsed or accompanied by written instruments of transfer in form satisfactory to the Third Party, duly executed by such Remaining Shareholder, against delivery of the purchase price therefor.

21. **[ Reserved ].** 

**<u>GENERAL MEETINGS</u>**

22. **Annual Meeting** 

An annual General Meeting shall be held, once in every calendar year at such time within a period of not more than fifteen (15) months after the last preceding annual General Meeting and at such place either within or without the State of Israel as may be determined by the Board. These General Meetings shall be referred to as "**Annual Meetings**".

23. **Special Meetings** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.1. All General Meetings other than Annual Meetings shall be referred to as "**Special Meetings**". A Special Meeting shall discuss and decide in all matters for which the Special Meeting was convened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.2. The Board may, whenever it deems appropriate, convene a Special Meeting at such time and place, within or without the State of Israel, as may be determined by the Board, and shall be obliged to do so upon the demand of one of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any Director; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any one or more Shareholders, holding alone or together at least ten percent (10%) of the issued share capital of the Company and at least one percent (1%) of the voting rights in the Company or one or more Shareholders holding at least ten percent (10%) of the voting rights in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.3. The Board, upon demand to convene a Special Meeting in accordance with Article 23.1 above, shall announce the convening of the General Meeting within twenty one (21) days from the receipt of a demand in that respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.4. If the Board does not convene a Special Meeting as aforesaid, the person requisitioning the meeting, and where Shareholders are involved - also some of them, who have more than half the voting rights in the Company, may convene the meeting themselves, provided that it is not held more than three months after the date the requisition was made, and it shall be convened, insofar as possible, in the same way in which meetings are convened by the Board. Where a General Meeting is convened as aforesaid, the Company shall cover the reasonable expenses incurred by the Person requisitioning it.

24. **Class Meetings** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.1. Without derogating from the last sentence of Article 8.2 hereof, and only to the extent that any class meeting is required by applicable Law or these Articles, the provisions of these Articles with respect to General Meetings shall apply, *mutatis mutandis*, to meetings of the holders of a class of shares of the Company (hereinafter: "**Class Meetings**"); provided, however, that the requisite quorum at any such Class Meeting shall be one or more Shareholders present in person or by proxy, and holding together not less than thirty percent (30%) of the issued shares of such class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.2. Without limiting the provisions of Article 8.2, it is hereby clarified that any resolution required to be adopted pursuant to these Articles by the consent of a General Meeting of any class, or of all classes, of shares, or by way of written consent, shall be given by the holders of shares of such class or classes entitled to vote or give consent thereon, and no holder of shares of a such class or classes shall be banned from voting or consenting by virtue of being a holder of more than one class of shares of the Company, irrespective of any conflicting interests that may exist between such different classes of shares. A Shareholder shall not be required to refrain from participating in the discussion, voting and/or consenting on any resolution concerning an amendment to any class of shares held by such Shareholder, due to the fact that such Shareholder may benefit in one way or another from the outcome of such resolution.

25. **Notice of General Meetings** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.1. Unless a shorter period is permitted by Law, a notice of a General Meeting shall be sent to each Shareholder of the Company registered in the Shareholder Register and entitled to attend and vote at such meeting, at least seven (7) days prior to the date fixed for the General Meeting; provided however that such notice shall not be sent more than forty five (45) days from the date fixed for the General Meeting. Subject to the provisions of any Law, each such notice shall specify the place, the day and hour of the meeting, the agenda of the meeting and a concise description of the items for discussion. Anything herein to the contrary notwithstanding, with the written consent of all Shareholders entitled to vote thereon, a resolution may be proposed and passed at such meeting although a shorter notice than hereinabove prescribed has been given. A waiver by a Shareholder can also be made in writing after the fact and even after the convening of the General Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.2. The Board's authority to determine the time and the place for the convening of the General Meeting shall include the power to change such time and/or place, prior to the convening of the General Meeting and subject to the provisions of these Articles and any Law, including with regard to the sending of a new notice to the Shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.3. Any accidental omission with respect to the giving of a notice of a General Meeting to any Shareholder or the non-receipt of a notice with respect to a meeting or any other notice on the part of any Shareholder shall not cause the cancellation of a resolution adopted at that meeting, or the cancellation of acts based on such notice.

26. **The Agenda of General Meetings** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.1. The agenda of General Meetings shall be determined by the Board and shall also include issues for which a Special Meeting is being convened in accordance with Article 23 above, or as may be required upon the request of Shareholders in accordance with the provisions of the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.2. The General Meeting shall only adopt resolutions on issues, which are on its agenda.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.3. The General Meeting is entitled to accept or reject a proposed resolution, which is on the agenda of the General Meeting. Subject to applicable Law, the General Meeting may adopt a resolution, which is different from the description thereof included in the notice of the General Meeting, provided that such resolution is not materially different from the proposed resolution.

27. Entitlement to participate in a General Meeting
 and to vote thereat

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.1. Subject to the provisions of the Companies Law, the Shareholders who are entitled to participate in and vote at a General Meeting shall be the Shareholders on the date of the General Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.2. An objection to the right of a Shareholder to participate in and vote at a General Meeting must be raised at such meeting and any vote not disqualified thereat shall be deemed valid for any purpose. The Chairman of the meeting shall decide whether to accept or reject any objection raised at the appointed time with regard to the participation and vote of a Shareholder and his decision shall be final.

28. **Quorum** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.1. No business shall be transacted at a General Meeting, or at any adjournment thereof, unless a lawful quorum is present when the meeting proceeds to business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.2. Subject to the requirements of the Companies Law and the provisions of these Articles, any two or more Shareholders (not in default in payment of any sum referred to in Article 14 hereof), present in person or by proxy, and who hold or represent in the aggregate at least fifty percent (50%) of the voting power of the Company, shall constitute a lawful quorum at General Meetings. A Shareholder or its proxy, who also serves as a proxy for other Shareholder(s), shall be regarded as two or more Shareholders, in accordance with the number of Shareholders it is representing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.3. If within an hour from the time appointed for the General Meeting a quorum is not present, the meeting shall stand adjourned to the same day in the next week (or the first Business Day thereafter), at the same time and place, or to such later day and at such time and place as the Chairman may determine with the consent of the holders of a majority of the voting power represented at the meeting in person or by proxy and voting on the question of adjournment. No business shall be transacted at any adjourned meeting except business, which might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, any two (2) Shareholders (not in default as aforesaid) present in person or by proxy, shall constitute a lawful quorum.

29. **Chairman** 

The Chairman of the Board shall preside as Chairman at every General Meeting. If there is no such Chairman, or if the Chairman is not present within fifteen (15) minutes after the time fixed for holding such meeting or is unwilling to act as Chairman, the Shareholders present shall choose someone of their number or any other person to be Chairman. The position of Chairman shall not, by itself, entitle the holder thereof to vote at any General Meeting nor shall it entitle such holder to a second or casting vote (without derogating, however, from the rights of such Chairman to vote as a Shareholder or proxy of a Shareholder if, in fact, he is also a Shareholder or proxy, respectively).

30. **Adoption of Resolutions at General Meetings** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.1. All resolutions of the General Meeting shall be adopted by an Ordinary Majority, except for any matters with respect to which a greater or different majority is required by these Articles (to the extent applicable), or by the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.2. Every matter submitted to a General Meeting shall be decided by a show of hands, but if a written ballot is demanded by any Shareholder, present in person or by proxy and entitled to vote at the meeting, the same shall be decided by such ballot. A written ballot may be demanded before the proposed resolution is voted upon or immediately after the declaration by the Chairman of the results of the vote by a show of hands. If a vote by written ballot is taken after such declaration, the results of the vote by a show of hands shall be of no effect, and the proposed resolution shall be decided by such written ballot. The demand for a written ballot may be withdrawn at any time before the same is conducted, in which event another Shareholder may then demand such written ballot. The demand for a written ballot shall not prevent the continuance of the meeting for the transaction of business other than the question on which the written ballot has been demanded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.3. A declaration by the Chairman of the meeting that a resolution has been adopted unanimously, or adopted by a particular majority, or rejected, and an entry to that effect in the minute book of the Company, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.

31. **Resolutions in Writing** 

A resolution in writing signed by all Shareholders of the Company then entitled to attend and vote at General Meetings or to which all such Shareholders have given their written consent (by letter, facsimile, telegram, telex, e-mail or otherwise), or their oral consent by telephone (provided that a written summary thereof has been approved and signed by the Chairman of the Board) shall be deemed to have been unanimously adopted by a General Meeting duly convened and held. Such resolution could be stated in several counterparts of the same document, each of them signed by one Shareholder or by several Shareholders.

32. **Conducting a General Meeting Through Means of Communication** 

The Company may conduct a General Meeting through the use of any means of communication, provided all of the participating Shareholders can hear each other simultaneously. A resolution approved by use of means of communications as aforesaid, shall be deemed to be a resolution lawfully adopted at a General Meeting.

33. **Voting Power** 

Subject to the provisions of Article 34.1 and subject to any provision hereof conferring special rights as to voting, or restricting the right to vote, every Shareholder shall have one vote for each Ordinary Share held by him of record, on an As Converted Basis, on every resolution, without regard to whether the vote thereon is conducted in person, by proxy, by a show of hands, by written ballot or by any other means.

34. **Voting Rights** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34.1. No Shareholder shall be entitled to vote at any General Meeting (or be counted as a part of the lawful quorum thereat), unless all calls and other sums then payable by him in respect of his shares in the Company have been paid, or the issue conditions of the shares otherwise provide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34.2. A company or other corporate entity being a Shareholder of the Company may, by resolution of its directors or any other managing body thereof, authorize any person to be its representative at any General Meeting. Any person so authorized shall be entitled to exercise on behalf of such Shareholder all the power, which the latter could have exercised if it were an individual shareholder. Upon the request of the Chairman of the General Meeting, written evidence of such authorization (in form acceptable to the Chairman) shall be delivered to him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34.3. Any Shareholder entitled to vote may vote either personally (or, if the Shareholder is a company or other corporate entity, by a representative authorized pursuant to Article 34.1) or by proxy (subject to Article 37 below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34.4. If two or more persons are registered as joint holders of any share, the vote of the senior who tenders a vote, in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s), and for this purpose seniority shall be determined by the order in which the names stand in the Shareholder Register.

35. [ **Reserved** ].

36. **Validity of Acts Despite Defects** 

Subject to the provisions of the Companies Law, a defect in convening or conducting the General Meeting, including a defect deriving from the non-fulfillment of any provision or condition laid down in the Law or these Articles, including with regard to the manner of convening or conducting the General Meeting, shall not disqualify any resolution passed at the General Meeting and shall not affect the discussions which took place thereat.

37. **Voting by Means of a Proxy** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37.1. A Shareholder registered in the Shareholder Register is entitled to appoint by deed of authorization a proxy (who is not required to be a Shareholder of the Company) to participate and vote in his stead, whether at a certain General Meeting or generally at General Meetings of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37.2. In the event that the deed of authorization is not limited to a certain General Meeting, then the deed of authorization, which was deposited prior to a certain General Meeting, shall also be good for other General Meetings thereafter. This Article 37 shall also apply to a Shareholder which is a company, appointing a person to participate and vote in a General Meeting in its stead.

38. **A Deed of Authorization** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38.1. The deed of authorization of a proxy shall be in writing and shall be in any usual or common form or in such other form as may be approved by the Board or the corporate secretary of the Company. It shall be duly signed by the appointer or his duly authorized attorney or, if such appointer is a company or other corporate entity, under its common seal or stamp or the hand of its duly authorized agent(s) or attorney(s). The Company may demand that it be given written confirmation to its satisfaction of the authority of those signing to bind such company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38.2. The deed of authorization of a proxy (and the power of attorney or other authority, if any, under which such instrument has been signed) shall either be delivered to the Company (at its registered office or at such place as the Board may specify) not less than the time fixed for the meeting at which the person named in the deed of authorization proposes to vote, or presented to the Chairman at such meeting.

39. **Effect of Death of Appointer or Revocation of Appointment** 

A vote cast pursuant to a deed of authorization of a proxy shall be valid notwithstanding the previous death, incapacity or bankruptcy, or if a company or other corporate entity, the liquidation, of the appointing Shareholder (or of his attorney-in-fact, if any, who signed such instrument), or the revocation of the appointment or the transfer of the share in respect of which the vote is cast, provided no written notice of any such event shall have been received by the Company or by the Chairman of the General Meeting before such vote is cast and provided, further, that the appointing Shareholder, if present in person at said General Meeting, may revoke the appointment by means of a writing, oral notification to the Chairman, or otherwise.

**40.** [ **Reserved** ].

**<u>BOARD OF DIRECTORS</u>**

41. **The Authority of the Board** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41.1. The authority of the Board is as specified in the Companies Law and in the provisions of these Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41.2. The Board may exercise any authority of the Company that is not, by the Companies Law or by these Articles, required to be exercised by another organ of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41.3. Without derogating from the generality of Articles 41.1 and 41.2 above, the Board's authority shall include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board may, from time to time, in its discretion, cause the Company to borrow or secure the payment of any sum or sums of money for the purposes of the Company, and may secure or provide for the repayment of such sum or sums in such manner, at such times and upon such terms and conditions in all respects as it deems appropriate, including, without limitation, by the issuance of bonds, perpetual or redeemable debentures or other Securities, or any mortgages, charges, or other liens on the undertaking or the whole or any part of the property of the Company, both present and future, including its uncalled or called but unpaid capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board may, from time to time, set aside any amount(s) out of the profits of the Company as a reserve or reserves for any purpose(s) which the Board, in its sole discretion, shall deem appropriate, and may invest any sum so set aside in any manner and from time to time deal with and vary such investments, and dispose of all or any part thereof, and employ any such reserve or any part thereof in the business of the Company without being bound to keep the same separate from other assets of the Company, and may subdivide or re-designate any reserve or cancel the same or apply the funds therein for another purpose, all as the Board may from time to time deem appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to the provisions of any Law, the Board may, from time to time, authorize any person to be the representative of the Company with respect to those objectives and subject to those conditions and for that time period, as the Board deems appropriate, and may also grant any such representative the authority to delegate any or all of the authorities, powers and discretion given to him by the Board.

42. **Convening Meetings of the Board** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42.1. The Chairman of the Board, and in the event that a Chairman has not been appointed, any Director, may convene a meeting of the Board at any time; provided that a meeting of the Board be convened at least once a year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42.2. The Chairman of the Board shall convene a meeting of the Board at any time or in any event that such meeting is required by the provisions of the Companies Law.

43. **Notice of a Meeting of the Board** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43.1. Any notice with respect to meeting of the Board may be given orally or in writing, so long as the notice is given at least three (3) days prior to the date fixed for the meeting, unless all members of the Board or their Alternate Directors (as defined in Article 53.1) or their Representatives (as defined in Article 53.3) agree on a shorter time period. Such notice shall be delivered personally, by mail, or transmitted via facsimile or e-mail or through another means of communication, to the address, facsimile number or to the e-mail address or to an address where messages can be delivered through other means of communication, as the case may be, as the Director informed the Company in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43.2. A notice with respect to a meeting of the Board shall include the place, date and time of the meeting of the Board, the issues on its agenda and any other material that the Chairman of the Board, or the Director who convened the meeting, requests to be included in the notice with respect to the meeting.

44. **The Agenda of Board Meetings** 

The agenda of any meeting of the Board shall be as determined by the Chairman of the Board, and if there is no Chairman, by the Director convening the meeting, and shall include the following matters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44.1. Matters for which the meeting is required to be convened in accordance with the Companies Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44.2. Any matter requested by a Director or by the Chief Executive Officer to be included in the meeting within a reasonable time (taking into account the nature of the matter) prior to the date of the meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44.3. Any other matter determined by the Chairman of the Board, or if there is no Chairman, by the Director convening the meeting.

45. **Quorum** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45.1. Unless otherwise unanimously decided by the Board, a quorum at a meeting of the Board shall be constituted by the presence of a majority of the Directors then in office who are lawfully entitled to participate in the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45.2. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to the next forty eight (48) hours, at the same place, or to such day and at such time and place as the Chairman may determine with the consent of the majority of the Directors represent. No business shall be transacted at any adjourned meeting except business, which might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, any two (2) Directors present shall constitute a lawful quorum.

46. **Conducting a Meeting Through Means of Communication** 

The Board may conduct a meeting of the Board through the use of any means of communication, provided all of the participating Directors can hear each other simultaneously. A resolution approved by use of means of communications as aforesaid, shall be deemed to be a resolution lawfully adopted at a meeting of the Board.

47. **Voting in the Board** 

Unless otherwise provided by these Articles, and specifically by Article 49, issues presented at meetings of the Board shall be decided upon by a majority of the votes of Directors present (or participating, in the case of a vote through a permitted means of communications) and lawfully entitled to vote thereon and actually voting, excluding abstentions. With respect to representatives of Directors that are companies, each Director shall have a single vote.

48. **Adoption of Resolutions Without Convening** 

The Board may adopt resolutions without actually convening with the written consent (given by letter, facsimile, e-mail or otherwise) or oral consent (provided that such consent has been confirmed in writing by the Chairman of the Board) of all the Directors then in office and lawfully entitled (as conclusively determined by the Chairman of the Board) to participate and to vote thereon. Subject to compliance with the provisions of Article 40, matters presented in accordance with this Article 48 shall be decided upon by a majority of the votes of such Directors. Resolutions adopted pursuant to this Article 48 shall be deemed to have been duly adopted by a meeting of the Board duly convened and held. Minutes of such resolutions shall be approved and signed by the Chairman of the Board.

49. **Written Resolution** 

A resolution in writing signed by all Directors then in office and lawfully entitled to vote thereon or to which all such Directors have given their consent (by letter, telegram, telex, facsimile, e-mail or otherwise), or their oral consent by telephone (provided that a written summary thereof has been approved and signed by the Chairman of the Board or, in the case there is only one Director in the Board, by such director), shall be deemed to have been unanimously adopted by a meeting of the Board duly convened and held.

50. **Number of Directors** 

The Board shall consist of up to seven (7) Directors.

51. **Directors Generally** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51.1. Subject to the provisions of the Companies Law, a Director may hold another position in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51.2. A company or other corporate entity may serve as a Director in the Company, subject to the provisions of Article 53 below.

52. **Election of Directors** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52.1. The Directors of the Company shall not be elected by a General Meeting of the Shareholders, but instead shall be appointed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each
 of the Founders will be entitled to appoint one (1) member to the Board of Directors; Mr.
 Udi Gilboa shall serve as Chairman of the Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) One
 (1) director shall be appointed by Capital Point Ltd. as long as it holds at least 5% of
 the issued and outstanding share capital of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The
 Founders together shall be entitled to appoint up to additional three (3) members to the
 Board of Directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The
 holders of the majority of the Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares,
 Ordinary A-3A Shares and Ordinary A-3B Shares, voting together as one class on an as converted
 basis shall be entitled to appoint one (1) member to the Board of Directors as long as the
 amount of Ordinary A-1 Shares, Ordinary A-2 Shares Ordinary A-3 Shares, Ordinary A-3A Shares,
 and Ordinary A-3B Shares issued by the Company represents at least 8% of the issued and outstanding
 share capital of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52.2. Any Director(s) may only be removed from office (by written notice) by the Shareholder(s) that designated such Director, and any vacancy, however created, in the Board of Directors may only be filled (by written notice) by the Shareholder(s) that designated the previous incumbent of such vacancy. Any such act shall become effective on the date fixed in such notice, or upon the delivery thereof to the Company, whichever is later.

53. **Alternate Directors and Representative of a Director that is a Company** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.1. Subject to the provisions of the Companies Law, any Director may, by written notice to the Company, appoint an alternate for himself (in these Articles, an "**Alternate Director**"), dismiss such Alternate Director and appoint another Alternate Director in place of any Alternate Director appointed by him whose office has been vacated for any reason whatsoever, whether for a certain meeting or a certain period of time or generally. Any notice given to the Company pursuant to this Article shall be in writing, delivered to the Company and signed by the appointing or dismissing Director, and shall become effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.2. Anyone who is not qualified to be appointed as a Director may not be appointed and may not serve as an Alternate Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.3. A Director that is a company or other corporate entity shall appoint an individual, qualified to be appointed as a Director in the Company, in order to serve on its behalf, either for a certain meeting or for a certain period of time or generally and such company or other entity may also dismiss that individual and appoint another in his stead (hereinafter: "**Director's Representatives**"). Any notice given to the Company pursuant to this Article shall be in writing, delivered to the Company and signed by the appointing or dismissing body, and shall become effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.4. Each of an Alternate Director and a Director's Representative shall have all the authority of the Director who appointed him (except that neither an Alternate Director nor a director's Representative may appoint an alternate for himself, unless the instrument appointing him otherwise expressly provides), provided, however, that an Alternate Director shall have no standing at any meeting of the Board or any committee thereof while the Director who appointed him is present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.5. The office of an Alternate Director or a Director's Representative shall be vacated under the circumstances, *mutatis mutandis*, set forth in Article 54, and such office shall *ipso facto* be vacated if the Director who appointed such Alternate Director or Director's Representative ceases to be a Director.

54. **Termination of the Term of a Director** 

The term of a Director shall terminate in any of the following cases:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.1. If he resigned from his office by way of a signed letter, filed with the corporate secretary at the Company's office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.2. If he is declared bankrupt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.3. If he is declared by an appropriate court to be incapacitated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.4. Upon his death and, in the event of a company or other corporate entity, upon the adoption of a resolution for its voluntary liquidation or the issuance of a liquidation order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.5. If he is removed from his office by way of a written notice to the Company of the termination of his appointment by the persons or entities that appointed him, or pursuant to the circumstances set forth in Article 52.1(d);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.6. If he is convicted of a crime requiring his termination pursuant the Companies Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54.7. If his term of office is terminated by the Board in accordance with the provisions of the Companies Law.

55. **Continuing Directors in the Event of Vacancies** 

In the event of one or more vacancies in the Board, the continuing Directors may continue to act in every matter, subject to compliance with the provisions of Article 41.

56. **Compensation of Directors** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56.1. Directors who do not hold other positions in the Company shall not receive any compensation from the Company, unless such compensation and its amount are approved by the General Meeting, subject to applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56.2. The compensation of the Directors may be fixed, as an all-inclusive payment or as payment for participation in meetings or as any combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56.3. The Company may reimburse expenses incurred by a Director in connection with the performance of his duties as a Director, to the extent provided in a resolution of the Board. The Company shall reimburse all reasonable out-of-pocket expenses (including air travel) incurred by the directors for attending the Board and committees meetings and performing their duties as directors.

57. **Committees of the Board of Directors** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57.1. Subject to the provisions of the Companies Law and these Articles, the Board may delegate its authorities or any part of them to committees, as it deems appropriate, and it may from time to time cancel the delegation of any such authority. Any such committee, while utilizing an authority as stated, is obligated to fulfill all of the instructions given to it from time to time by the Board. The Board may adopt a charter, or guidelines, for any such committee and amend the same from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57.2. The provisions of these Articles with respect to meetings of the Board shall apply, *mutatis mutandis,* to the meetings and discussions of each committee of the Board, provided that no other terms are set by the Board in this matter, and provided that the lawful quorum for the meetings of the committee, as stated, shall be at least a majority of the members of the committee, unless otherwise required by Law.

58. **Chairman of the Board** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58.1. The Directors, with the affirmative consent of all Directors then in office, from time to time may choose one of the members of the Board to serve as the Chairman of the Board, remove such Chairman from office and choose another in its place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58.2. The Chairman of the Board shall preside at every meeting of the Board, but if there is no such Chairman, or if at any meeting he is not present within fifteen (15) minutes of the time fixed for the meeting, or if he is unwilling to take the chair, the Board shall appoint one of the Directors present to preside at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58.3. The Chairman of the Board shall preside over meetings of the Board and shall sign the minutes of the meetings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58.4. The Chairman of the Board shall not have any additional or casting vote.

59. **Validity of Acts Despite Defects** 

Subject to the provisions of the Companies Law, all acts done bona fide at any meeting of the Board, or of a committee of the Board, or by any person(s) acting as Director(s), shall, notwithstanding that it may afterwards be discovered that there was some defect in the appointment of the participants in such meetings or any of them or any person(s) acting as aforesaid, or that they or any of them were disqualified, be as valid as if there was no such defect or disqualification.

**<u>OFFICERS; AUDITOR</u>**

60. **The Chief Executive Officer** 

The Board may appoint a Chief Executive Officer, and may appoint more than one Chief Executive Officer. The Chief Executive Officer may be a Director. Such appointment(s) may be either for a fixed term or without any limitation of time, and the Board may from time to time (subject to the provisions of Article 40, the Companies Law and of any contract between any such person and the Company) fix his or their salaries and emoluments, remove or dismiss him or them from office and appoint another or others in his or their place. The Chief Executive Officer is responsible for the day-to-day management of the affairs of the Company within the framework of the policies set by the Board and subject to its instructions.

61. **Other Officers of the Company** 

The Board may appoint, in addition to the Chief Executive Officer, other officers, define their positions and authorities, and set their compensation and terms of employment. The Board may authorize the Chief Executive Officer to exercise any or all of its authorities stated in this Article.

62. **The Auditor** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62.1. The Shareholders at the Annual Meeting shall appoint an independent auditor for a period until the completion of the performance of one audit, or for a longer period not to extend beyond the completion of the performance of three audits. Where the independent auditor is appointed for such a period, the Annual Meeting shall not discuss the appointment of an independent auditor during the said period, unless a resolution is passed to terminate his office. The General Meeting is entitled at any time to terminate the service of the Auditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62.2. The Board shall fix the compensation of the independent auditor of the Company for his auditing activities, and shall also fix the compensation of the independent auditor for additional services, if any, which are not auditing activities, and, in each case, shall report thereon to the Annual Meeting.

**<u>DISTRIBUTIONS</u>**

63. **Permitted Distribution** 

The Company may effect a distribution to its Shareholders to the extent permitted by the Companies Law.

64. **Right to Dividend or Bonus Shares** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64.1. A Shareholder shall be entitled to receive dividends or bonus shares, upon the resolution of the Company, consistent with the rights attached to the shares held by such Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64.2. Subject to the provisions of Article 14.5 above, the Shareholders entitled to receive dividends or bonus shares shall be those who are registered in the Shareholder Register on the date of the resolution approving the distribution or allotment, or on such later date, as may be determined in such resolution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64.3. In the event of any dividend distributions paid by the Company, such dividends shall be distributed to the Shareholders in accordance with Article 80.

65. **Specific Dividend** 

Subject to compliance with the provisions of Article 64.3, a dividend may be paid, in whole or in part, by the distribution of specific assets of the Company or by distribution of paid up shares, debentures or other Securities of the Company or of any other companies, or in any combination thereof.

66. **Deductions from Dividends** 

The Board may deduct from any distribution or other moneys payable to any Shareholder in respect of a share any and all sums of money then payable by him to the Company on account of calls or otherwise in respect of shares of the Company and/or on account of any other debt permitted to be setoff in accordance with applicable Law.

67. **Retention of Dividends** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67.1. The Board may retain any dividend, bonus shares or other moneys payable or property distributable in respect of a share on which the Company has a lien, and may apply the same in or toward satisfaction of the debts, liabilities, or engagements in respect of which the lien exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67.2. The Board may retain any dividend, bonus shares or other moneys payable or property distributable in respect of a share in respect of which any person is, under Article 18.4, entitled to become a Shareholder, or which any person is, under said Article, entitled to transfer, until such person shall become a Shareholder in respect of such share or shall transfer the same.

68. **Mechanics of Payment** 

Any dividend or other moneys payable in cash in respect of a share, less the tax required pursuant to the Law, may be paid by check sent by registered mail to, or left at, the registered address of the person entitled thereto or by transfer to a bank account specified by such person (or, if two or more persons are registered as joint holders of such share or are entitled jointly thereto as a result of the death or bankruptcy of the holder or otherwise, to any one of such persons or to his bank account), or to such person and at such address as the person entitled thereto may direct in writing. Every such check shall be made payable to the order of the person to whom it is sent, or to such person as the person entitled thereto as aforesaid may direct, and payment of the check by the banker upon whom it is drawn shall be a good discharge to the Company. Every such check shall be sent at the risk of the person entitled to the money represented thereby.

69. **An Unclaimed Dividend** 

All unclaimed dividends or other moneys payable in respect of a share may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. The payment by the Board of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trustee in respect thereof, and any dividend unclaimed after a period of seven (7) years from the date of declaration of such dividend, and any such other moneys unclaimed after a like period from the date the same were payable, shall be forfeited and shall revert to the Company; provided, however, that the Board may, at its discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a person who would have been entitled thereto had the same not reverted to the Company. The Company shall not be liable to pay interest or linkage for unclaimed dividend.

70. **Receipt from a Joint Holder** 

If two or more persons are registered as joint holders of any share, or are entitled jointly thereto as a result of the death or bankruptcy of the holder or otherwise, any one of them may give effectual receipts for any dividend, bonus shares or other moneys payable or property distributable in respect of such share.

71. **Funds** 

The Board may, in its discretion make provisions to special funds of any amount from the Company's profits, or from a revaluation of its assets, or its proportional part in the revaluation of the assets of its affiliates, and determine the purpose of these funds.

72. **Manner of Capitalization of Profits and the Distribution of Bonus Shares.** 

The Company may cause any moneys, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of a reserve fund, or to the credit of a reserve fund for the redemption of capital, or in the hands of the Company and available for distribution, or representing premiums received on the issuance of shares and standing to the credit of the share premium account, to be capitalized and distributed as capital among such of the Shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion, or may cause any part of such capitalized fund to be applied on behalf of such Shareholders in paying up in full, either at par or at such premium as the resolution may provide, any unissued shares or debentures or other Securities of the Company which shall be distributed accordingly, in payment, in full or in part, of the uncalled liability on any issued shares or debentures or other Securities, and may cause such distribution or payment to be accepted by such Shareholders in full satisfaction of their interest in such capitalized sum.

73. **Settlement by the Board** 

The Board may settle, as it deems fit, any difficulty arising with regard to the distribution of bonus shares or other distributions and in particular, to set the value for the distribution of certain assets and to determine that cash payments shall be paid to the Shareholders on the basis of such value, or that fractions whose value is less than NIS 0.01 shall not be taken into account. The Board may pay cash or convey these certain assets to a trustee in favor of those people, who are entitled to a dividend or to a capitalized fund, as the Board shall deem appropriate.

74. **Allotment for a consideration lower than the nominal value** 

Where the Company resolves to allot shares, which have a nominal value for a consideration lower than their nominal value, including bonus shares, it must convert into share capital part of its profits, from premium on shares or from any other source included in its equity, which are mentioned in its last financial statements, in an amount equal to the difference between the nominal value and the consideration. Notwithstanding the foregoing, the Company may, with the court's approval, allot shares for a consideration lower than their nominal value.

**<u>INSURANCE, INDEMNIFICATION AND EXEMPTION OF OFFICE HOLDERS</u>**

75. **Office Holder** 

For purposes of Articles 76, 77 and 78 below, the term "Office Holder" shall have the meaning ascribed to such term in the Companies Law.

76. **Insurance of Office Holders** 

The Company may, to the extent permitted by the Companies Law, enter into a contract for the insurance of the liability of an Office Holder of the Company, in respect of a liability imposed on him as a result of an act done by him in his capacity as an Office Holder of the Company, in any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76.1. a breach of his duty of care to the Company or to another person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76.2. a breach of his duty of loyalty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds to assume that such act would not harm the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76.3. a financial liability imposed on him in favor of another person.

77. **Indemnification of Office Holders** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;77.1. The Company may, to the extent permitted by the Companies Law, indemnify an Office Holder of the Company for liability or expense he incurs as a result of an act done by him in his capacity as an Office Holder of the Company, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a
 monetary liability imposed on him/her in favor of a third party in any judgment, including
 any settlement confirmed as judgment and an arbitrator's award which has been confirmed by
 the court, in respect of an act performed by the Office Holder by virtue of the Office Holder
 being an Office Holder of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) reasonable
 litigation expenses, including legal fees paid for by the Office Holder, or which the Office
 Holder is obligated to pay under a court order, in a proceeding brought against the Office
 Holder by the Company, or on its behalf, or by a third party, or in a criminal proceeding
 in which the Office Holder is found innocent, or in a criminal proceeding in which the Office
 Holder was convicted of an offense that does not require proof of criminal intent, all in
 respect of an act performed by the Office Holder by virtue of the Office Holder being an
 Office Holder of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) reasonable
 litigation expenses, including legal fees, expended by him as a result of an investigation
 or proceeding instituted against him by a competent authority, which investigation or proceeding
 has not ended in a criminal charge or in a financial liability in lieu of a criminal proceeding,
 or has ended in a financial obligation in lieu of a criminal proceeding for an offence that
 does not require proof of criminal intent; or financial liability ("כספי
 עיצום") (the phrases "proceeding that has not ended
 in a criminal charge" and "financial obligation in lieu of a criminal proceeding"
 shall have the meaning as defined in Section 260(a)(1a) of the Companies Law); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;77.2. The Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that the undertaking according to Article 77 above is limited to categories of events which in the opinion of the Board can be foreseen, in view of the Company's then current activities, when the undertaking to indemnify is given, and to an amount set by the Board as reasonable under the circumstances, and (ii) retroactively.

78. **Release of Office Holders** 

The Company may, to the extent permitted by the Companies Law, release an Office Holder of the Company, in advance, from his liability, in whole or in part, for damages resulting from the breach of his duty of care to the Company.

79. **General** 

The provisions of Articles 76, 77 and 78 above are not intended, and shall not be interpreted, to restrict the Company in any manner in respect of the procurement of insurance and/or in respect of indemnification and/or release from liability in connection with any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder, or in connection with any Office Holder to the extent that such insurance and/or indemnification and/or release from liability is permitted under the Law.

**<u>LIQUIDATION</u>**

80. **Liquidation/Dividend Distribution.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80.1. In any Realization Event (as defined below), funds, assets or proceeds (whether cash, capital, surplus, earnings, funds, shares, securities or assets of any kind) legally available for distribution to Shareholders or payable to Shareholders in connection with such Realization Event, as the case may be ("**Distributable Assets**") shall be distributed to the Shareholders pro rata to their holdings in the Company on such date of distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80.2. The amount deemed paid or distributed to the Shareholders upon any Realization Event shall be the cash or the value of the property, rights or securities paid or distributed to such Shareholders by the Company or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80.3. A "**Realization Event**" shall mean (i) any liquidation, dissolution, bankruptcy or winding up of the Company, whether voluntary or involuntary, or (ii) a merger, consolidation or similar transaction or series of related transactions involving the Company, provided however, that in each case, as a result of such transaction the Shareholders of the Company immediately prior to such transaction do not hold more than fifty percent (50%) of the voting securities of the Company (or the surviving or resulting entity) after giving effect to such transaction; provided however that shares of the surviving entity held by Shareholders of the Company acquired by means other than as a result of the exchange and/or conversion of the shares of the Company for the shares of the surviving entity in such transaction, shall not be used in determining whether the Shareholders of the Company own more than fifty percent (50%) of the shares of the surviving entity, but shall be used for determining the total number of issued and outstanding shares of such entity, or (iii) the sale or exclusive license of all or substantially all of the Company's intellectual property, (iv) any other transaction as a result of which the control of the Company is transferred (*i.e*., the transfer of more than fifty percent (50%) of the shares or voting rights in the Company) except for a change of control resulting from a public offering of the Company's shares or a change of control which occurs as a result of an investment transaction the primary purpose of which is to provide financing to the Company and in which the Company issues its securities in consideration solely for cash, or (v) distribution of dividends and any other distribution to the Shareholders in the scope of any of the transactions set forth in (i) – (iv) above.

81. **Minutes** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81.1. Minutes of each General Meeting and of each meeting of the Board shall be recorded and duly entered in books provided for that purpose. Such minutes shall set forth all resolutions adopted at the meeting and, with respect to minutes of a meeting of the Board, the names of the persons present at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81.2. Any minutes as aforesaid, if purporting to be signed by the Chairman of the meeting or by the Chairman of the next succeeding meeting (or, in the case of Board meetings where there is only one Director on the Board, by such Director), shall constitute *prima facie* evidence of the matters recorded therein.

82. **Books of Account** 

The Board shall cause accurate books of account to be kept in accordance with the provisions of the Companies Law and of any other applicable Law. Such books of account shall be kept at the registered office of the Company or at such other place or places as the Board may deem appropriate, and they shall always be open to inspection by all Directors.

83. **Access and Visitation Rights** 

Until initial public offering, each Eligible Shareholder shall have, at reasonable times and upon reasonable notice (but in no event more than twice annually) full access to all books and records of the Company, and shall be entitled to inspect the properties of the Company and consult with management of the Company, all subject to standard confidentiality undertakings.

84. **Rights of Signature, Stamp and Seal** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84.1. The Board shall be entitled to authorize any person or persons (who need not be Directors) to act and sign on behalf of the Company, and the acts and signature of such person(s) on behalf of the Company shall bind the Company insofar as such person(s) acted and signed within the scope of his or their authority. The Board may determine separate signatory rights in respect of different matters of the Company and in respect of the amounts in respect of which such persons are authorized to sign.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84.2. The Board may provide for an official stamp and/or seal. If the Board provides for a seal, it shall also provide for the safe custody thereof. Such seal shall not be used except by the authority of the Board and in the presence of the person(s) authorized to sign on behalf of the Company, who shall sign every instrument to which such seal is affixed.

85. **Notices** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85.1. Any written notice or other document may be served by the Company upon any Shareholder either personally or by sending it by prepaid registered mail (airmail if sent to a place outside Israel) addressed to such Shareholder at his address as described in the Shareholder Register or such other address as he may have designated in writing for the receipt of notices and other documents. Any written notice or other document may be served by any Shareholder upon the Company by tendering the same in person to the corporate secretary or the Chief Executive Officer of the Company at the principal office of the Company or by sending it by prepaid registered mail (airmail if posted outside Israel) to the Company at its registered office. Any such notice or other document shall be deemed to have been served two (2) Business Days after it has been posted (seven (7) Business Days if sent internationally), or when actually received by the addressee if sooner than two days or seven days, as the case may be, after it has been posted, or when actually tendered in person, to such Shareholder (or to the corporate secretary or the Chief Executive Officer), provided, however, that notice may be sent by facsimile or electronic mail, and such notice shall be deemed to have been given twenty four (24) hours after such facsimile or electronic mail has been sent or when actually received by such Shareholder (or by the Company), whichever is earlier. If a notice is, in fact, received by the addressee, it shall be deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some respect, to comply with the provisions of this Article 85.1. Unless otherwise provided in these Articles, the provisions of this Article 85.1 shall also apply to written notices permitted or required to be given by the Company to any Director or by any Director to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85.2. All notices to be given to the Shareholders shall, with respect to any share held by persons jointly, be given to whichever of such persons is named first in the Shareholder Register, and any notice so given shall be sufficient notice to the holders of such share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85.3. Any Shareholder whose address is not described in the Shareholder Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85.4. Any Shareholder and any Director may waive his right to receive notices generally or during a specific time period and he may consent that a General Meeting of the Company or a meeting of the Board, as the case may be, shall be convened and held notwithstanding the fact that he did not receive a notice with respect thereto, or notwithstanding the fact that the notice was not received by him within the required time, in each case subject to the provisions of any Law prohibiting any such waiver or consent.

\* \* \* \* \* \* \* \*

## Exhibit 3.2

**Exhibit 3.2**

THE COMPANIES LAW, 1999

A LIMITED LIABILITY COMPANY

**AMENDED AND RESTATED ARTICLES OF ASSOCIATION**

**OF**

**Nasus Pharma Ltd.**

**Preliminary**

1.  **<u>Definitions; Interpretation</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In these Articles, the following terms (whether or not capitalized) shall bear the meanings set forth opposite to them respectively, unless inconsistent with the subject or context.

"Articles" shall mean these Articles of Association, as amended from time to time.

"Board of Directors" shall mean the Board of Directors of the Company.

"Chairperson" shall mean the Chairperson of the Board of Directors, or the Chairperson of the General Meeting, as the context provides.

---

| | |
|:---|:---|
| "Company" | shall mean **Nasus Pharma Ltd.**. |

---

"Companies Law" shall mean the Israeli Companies Law, 5759-1999 and the regulations promulgated thereunder. The Companies Law shall include reference to the Companies Ordinance (New Version), 5743-1983, of the State of Israel, to the extent in effect according to the provisions thereof.

"Director(s)" shall mean the member(s) of the Board of Directors holding office at any given time, including alternate directors.

"External Director(s)" shall mean as defined in the Companies Law.

"General Meeting" shall mean an Annual General Meeting or Special General Meeting of the Shareholders, as the case may be.

"Office" shall mean the registered office of the Company at any given time.

"Office Holder" or "Officer" shall mean as defined in the Companies Law.

"Securities Law" Shall mean the Israeli Securities Law 5728 – 1968. <br>"Shareholder(s)" shall mean the shareholder(s) of the Company, at any given time.

"in writing" or "writing" shall mean written, printed, photocopied, photographic, typed, sent via email, facsimile or produced by any visible substitute for writing, or partly one and partly another, and signed shall be construed accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless otherwise defined in these Articles or required by the context, terms used herein shall have the meaning provided therefor under the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Unless the context shall otherwise require: words in the singular shall also include the plural, and vice versa; any pronoun shall include the corresponding masculine, feminine and neuter forms; the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; the words "herein", "hereof" and "hereunder" and words of similar import refer to these Articles in its entirety and not to any part hereof; all references herein to Articles, Sections or clauses shall be deemed references to Articles, Sections or clauses of these Articles; any references to any agreement or other instrument or law, statute or regulation are to it as amended, supplemented or restated, from time to time (and, in the case of any law, to any successor provisions or re-enactment or modification thereof being in force at the time); any reference to "law" shall include any supranational, national, federal, state, local, or foreign statute or law and all rules and regulations promulgated thereunder (including, any rules, regulations or forms prescribed by any governmental authority or securities exchange commission or authority, if and to the extent applicable); any reference to a "day" or a number of "days" (without any explicit reference otherwise, such as to business days) shall be interpreted as a reference to a calendar day or number of calendar days; reference to month or year means according to the Gregorian calendar; any reference to a "company", "corporate body" or "entity" shall include a, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof, and reference to a "person" shall mean any of the foregoing or an individual.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction or interpretation of any provision hereof.

**Limited Liability**

2. The
 Company is a limited liability company, and therefore each Shareholder's obligations to the Company shall be limited to the
 payment of the nominal value of the shares held by such Shareholder, subject to the provisions of the Companies Law.

**Public Company; Company's Objectives**

3.  **<u>Public Company; Objectives</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Company is a Public Company as such term is defined in and as long as it so qualifies under the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 Company's objectives are to carry on any business, and do any act, which is not prohibited by law.

4.  **<u>Donations</u>** .

The Company may donate a reasonable amount of money (in cash or in kind, including the Company's securities), even if the donation is not within the framework of the company's business considerations, for any purpose that the Board of Directors finds appropriate.

**Share Capital**

5.  **<u>Authorized Share Capital</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The registered share capital of the Company shall be 22,801,942 Ordinary Shares, no par-value each (the "**Ordinary Shares**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Ordinary Shares shall rank *pari passu* in all respects.

6.  **<u>Increase of Authorized Share Capital</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company may, from time to time, by a Shareholders' resolution, whether or not all the shares then authorized have been issued, and whether or not all the shares theretofore issued have been called up for payment, increase its authorized share capital by the creation of new shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts, and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as such resolution shall provide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except to the extent otherwise provided in such resolution, any new shares included in the authorized share capital increased as aforesaid shall be subject to all the provisions of these Articles which are applicable to shares of such class included in the existing share capital without regard to class (and, if such new shares are of the same class as a class of shares included in the existing share capital, to all of the provisions which are applicable to shares of such class included in the existing share capital).

7.  **<u>Special or Class Rights; Modification of Rights</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class, unless otherwise provided by the Companies Law or these Articles, may be modified or cancelled by the Company by a resolution of the General Meeting of the holders of all shares as one class, without any required separate resolution of any class of shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The provisions of these Articles relating to General Meetings shall, *mutatis mutandis*, apply to any separate General Meeting of the holders of the shares of a particular class, it being clarified that the requisite quorum at any such separate General Meeting shall be two or more Shareholders present in person or by proxy and holding not less than twenty-five percent (25%) of the issued shares of such class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Unless otherwise provided by these Articles, an increase in the authorized share capital, the creation of a new class of shares, an increase in the authorized share capital of a class of shares, or the issuance of additional shares thereof out of the authorized and unissued share capital, shall not be deemed, for purposes of this Article 7, to modify or derogate or cancel the rights attached to previously issued shares of such class or of any other class.

8.  **<u>Consolidation, Division, Cancellation and Reduction of Share Capital</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company may, from time to time, by or pursuant to an authorization of a Shareholders' resolution, and subject to applicable law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) consolidate all or any part of its issued or unissued authorized share capital into shares of a per share nominal value, which is larger, equal to or smaller than the per share nominal value of its existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) divide or sub-divide its shares (issued or unissued) or any of them, into shares of smaller or the same nominal value (subject, however, to the provisions of the Companies Law), and the resolution whereby any share is divided may determine that, as among the holders of the shares resulting from such subdivision, one or more of the shares may, in contrast to others, have any such preferred or deferred rights or rights of redemption or other special rights, or be subject to any such restrictions, as the Company may attach to unissued or new shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) cancel any shares which, at the date of the adoption of such resolution, have not been taken or agreed to be taken by any person, and reduce the amount of its share capital by the amount of the shares so canceled; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reduce its share capital in any manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to any consolidation of issued shares and with respect to any other action which may result in fractional shares, the Board of Directors may settle any difficulty which may arise with regard thereto, as it deems fit, and, in connection with any such consolidation or other action which could result in fractional shares, may, without limiting its aforesaid power:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) determine, as to the holder of shares so consolidated, which issued shares shall be consolidated into shares of a larger, equal or smaller nominal value per share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) issue, in contemplation of or subsequent to such consolidation or other action, shares sufficient to preclude or remove fractional share holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) redeem such shares or fractional shares sufficient to preclude or remove fractional share holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) round up, round down or round to the nearest whole number, any fractional shares resulting from the consolidation or from any other action which may result in fractional shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) cause the transfer of fractional shares by certain Shareholders of the Company to other Shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees of such fractional shares to pay the transferors thereof the fair value thereof, and the Board of Directors is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractional shares, with full power of substitution, for the purposes of implementing the provisions of this sub-Article 8(b)(v).

9.  **<u>Issuance of Share Certificates, Replacement of Lost Certificates</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent that the Board of Directors determines that all shares shall be certificated or, if the Board of Directors does not so determine, to the extent that any Shareholder requests a share certificate, share certificates shall be issued under the corporate seal of the Company or its written, typed or stamped name and may bear the signature of one Director, the Company's CEO, CFO or of any other person or persons authorized therefor by the Board of Directors. Signatures may be affixed in any mechanical or electronic form, as the Board of Directors may prescribe. For the avoidance of doubt, any transfer agent designated by the Company may issue share certificates on behalf of the Company even if the signatories on the share certificate no longer serve in the relevant capacities at the time of such issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to Article 9(a) above, each Shareholder shall be entitled to one numbered certificate for all the shares of any class registered in his name. Each certificate may also specify the amount paid up thereon. The Company (as determined by an officer of the Company to be designated by the Chief Executive Officer) shall not refuse a request by a Shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of such officer, unreasonable. Where a Shareholder has sold or transferred some of such Shareholder's shares, such Shareholder shall be entitled to receive a certificate in respect of such Shareholder's remaining shares, provided that the previous certificate is delivered to the Company before the issuance of a new certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A share certificate registered in the names of two or more persons shall be delivered to the person first named in the Register of Shareholders in respect of such co-ownership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A share certificate which has been defaced, lost or destroyed, may be replaced, and the Company shall issue a new certificate to replace such defaced, lost or destroyed certificate upon payment of such fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board of Directors in its discretion deems fit.

10.  **<u>Registered Holder</u>** .

Except as otherwise provided in these Articles or the Companies Law, the Company shall be entitled to treat the registered holder of each share as the absolute owner thereof, and accordingly, shall not, except as ordered by a court of competent jurisdiction, or as required by the Companies Law, be obligated to recognize any equitable or other claim to, or interest in, such share on the part of any other person.

11.  **<u>Issuance and Repurchase of Shares</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The unissued shares from time to time shall be under the control of the Board of Directors (and to the full extent permitted by law any Committee (as defined herein) thereof), which shall have the power to issue or otherwise dispose of shares and of securities convertible or exercisable into or other rights to acquire from the Company to such persons, on such terms and conditions (including inter alia terms relating to calls set forth in Article 13(f) hereof), and either at par or at a premium, or subject to the provisions of the Companies Law, at a discount and/or with payment of commission, and at such times, as the Board of Directors (or the Committee, as the case may be) deems fit, and the power to give to any person the option to acquire from the Company any shares or securities convertible or exercisable into or other rights to acquire from the Company, either at par or at a premium, or, subject as aforesaid, at a discount and/or with payment of commission, during such time and for such consideration as the Board of Directors (or the Committee, as the case may be) deems fit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company may at any time and from time to time, subject to the Companies Law, repurchase or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as the Board of Directors shall determine, whether from any one or more Shareholders. Such purchase shall not be deemed as payment of dividends and no Shareholder will have the right to require the Company to purchase his shares or offer to purchase shares from any other Shareholders.

12.  **<u>Payment in Installment</u>** .

If pursuant to the terms of issuance of any share, all or any portion of the price thereof shall be payable in installments, every such installment shall be paid to the Company on the due date thereof by the then registered holder(s) of the share or the person(s) then entitled thereto.

13.  **<u>Calls on Shares</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors may, from time to time, as it, in its discretion, deems fit, make calls for payment upon shareholders in respect of any sum (including premium) which has not been paid up in respect of shares held by such shareholders and which is not, pursuant to the terms of issuance of such shares or otherwise, payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments), to the person(s) and at the time(s) and place(s) designated by the Board of Directors, as any such times may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated in the resolution of the Board of Directors (and in the notice hereafter referred to), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all the shares in respect of which such call was made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notice of any call for payment by a shareholder shall be given in writing to such shareholder not less than fourteen (14) days prior to the time of payment fixed in such notice, and shall specify the time and place of payment, and the person to whom such payment is to be made. Prior to the time for any such payment fixed in a notice of a call given to a shareholder, the Board of Directors may in its absolute discretion, by notice in writing to such shareholder, revoke such call in whole or in part, extend the time fixed for payment thereof, or designate a different place of payment or person to whom payment is to be made. In the event of a call payable in installments, only one notice thereof needs to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If pursuant to the terms of issuance of a share or otherwise, an amount is made payable at a fixed time (whether on account of such nominal value of such share or by way of premium), such amount shall be payable at such time as if it were payable by virtue of a call made by the Board of Directors and for which notice was given in accordance with paragraphs (a) and (b) of this Article 13, and the provision of these Articles with regard to calls (and the non-payment thereof) shall be applicable to such amount or such installment (and the non-payment thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Joint holders of a share shall be jointly and severally liable to pay all calls for payment in respect of such share and all interest payable thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any amount called for payment which is not paid when due shall bear interest from the date fixed for payment until actual payment thereof, at such rate (not exceeding the then prevailing debitory rate charged by leading commercial banks in Israel), and payable at such time(s) as the Board of Directors may prescribe.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Upon the issuance of shares, the Board of Directors may provide for differences among the holders of such shares as to the amounts and times for payment of calls for payment in respect of such shares.

14.  **<u>Prepayment</u>** .

With the approval of the Board of Directors, any shareholder may pay to the Company any amount not yet payable in respect of such shareholder's shares, and the Board of Directors may approve the payment by the Company of interest on any such amount until the same would be payable if it had not been paid in advance, at such rate and time(s) as may be approved by the Board of Directors. The Board of Directors may at any time cause the Company to repay all or any part of the money so advanced, without premium or penalty. Nothing in this Article 14 shall derogate from the right of the Board of Directors to make any call for payment before or after receipt by the Company of any such advance.

15.  **<u>Forfeiture and Surrender</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If any shareholder fails to pay an amount payable by virtue of a call, installment or interest thereon as provided for in accordance herewith, on or before the day fixed for payment of the same, the Board of Directors, may at any time after the day fixed for such payment, so long as such amount (or any portion thereof) or interest thereon (or any portion thereof) remains unpaid, forfeit all or any of the shares in respect of which such payment was called for. All expenses incurred by the Company in attempting to collect any such amount or interest thereon, including, without limitation, attorneys' fees and costs of legal proceedings, shall be added to, and shall, for all purposes (including the accrual of interest thereon) constitute a part of, the amount payable to the Company in respect of such call.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the adoption of a resolution as to the forfeiture of a shareholder's share, the Board of Directors shall cause notice thereof to be given to such shareholder, which notice shall state that, in the event of the failure to pay the entire amount so payable by a date specified in the notice (which date shall be not less than fourteen (14) days after the date such notice is given and which may be extended by the Board of Directors), such shares shall be ipso facto forfeited, provided, however, that, prior to such date, the Board of Directors may cancel such resolution of forfeiture, but no such cancellation shall stop the Board of Directors from adopting a further resolution of forfeiture in respect of the non-payment of the same amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Without derogating from Articles 52 and 56 hereof, whenever shares are forfeited as herein provided, all dividends, if any, theretofore declared in respect thereof and not actually paid shall be deemed to have been forfeited at the same time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company, by resolution of the Board of Directors, may accept the voluntary surrender of any share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any share forfeited or surrendered as provided herein, shall become the property of the Company as a dormant share, and the same, subject to the provisions of these Articles, may be sold, re-issued or otherwise disposed of as the Board of Directors deems fit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any person whose shares have been forfeited or surrendered shall cease to be a shareholder in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all calls, interest and expenses owing upon or in respect of such shares at the time of forfeiture or surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate prescribed in Article 13(e) above, and the Board of Directors, in its discretion, may, but shall not be obligated to, enforce or collect the payment of such amounts, or any part thereof, as it shall deem fit. In the event of such forfeiture or surrender, the Company, by resolution of the Board of Directors, may accelerate the date(s) of payment of any or all amounts then owing to the Company by the person in question (but not yet due) in respect of all shares owned by such shareholder, solely or jointly with another.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Board of Directors may at any time, before any share so forfeited or surrendered shall have been sold, re-issued or otherwise disposed of, nullify the forfeiture or surrender on such conditions as it deems fit, but no such nullification shall stop the Board of Directors from re-exercising its powers of forfeiture pursuant to this Article 15.

16.  **<u>Lien</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except to the extent the same may be waived or subordinated in writing, the Company shall have a first and paramount lien upon all the shares registered in the name of each shareholder (without regard to any equitable or other claim or interest in such shares on the part of any other person), and upon the proceeds of the sale thereof, for his debts, liabilities and engagements to the Company arising from any amount payable by such shareholder in respect of any unpaid or partly paid share, whether or not such debt, liability or engagement has matured. Such lien shall extend to all dividends from time to time declared or paid in respect of such share. Unless otherwise provided, the registration by the Company of a transfer of shares shall be deemed to be a waiver on the part of the Company of the lien (if any) existing on such shares immediately prior to such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board of Directors may cause the Company to sell a share subject to such a lien when the debt, liability or engagement giving rise to such lien has matured, in such manner as the Board of Directors deems fit, but no such sale shall be made unless such debt, liability or engagement has not been satisfied within fourteen (14) days after written notice of the intention to sell shall have been served on such shareholder, his executors or administrators.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The net proceeds of any such sale, after payment of the costs and expenses thereof or ancillary thereto, shall be applied in or toward satisfaction of the debts, liabilities or engagements of such shareholder in respect of such share (whether or not the same have matured), and the residue (if any) shall be paid to the shareholder, his executors, administrators or assigns.

17.  **<u>Sale After Forfeiture of Surrender or in Enforcement of Lien</u>** .

Upon any sale of a share after forfeiture or surrender or for enforcing a lien, the Board of Directors may appoint any person to execute an instrument of transfer of the share so sold and cause the purchaser's name to be entered in the Register of Shareholders in respect of such share. The purchaser shall be registered as the shareholder and shall not be bound to see to the regularity of the sale proceedings, or to the application of the proceeds of such sale, and after his name has been entered in the Register of Shareholders in respect of such share, the validity of the sale shall not be impeached by any person, and person, and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

18.  **<u>Redeemable Shares</u>** .

The Company may, subject to applicable law, issue redeemable shares or other securities and redeem the same upon terms and conditions to be set forth in a written agreement between the Company and the holder of such shares or in their terms of issuance.

**Transfer of Shares**

19.  **<u>Registration of Transfer</u>** .

No transfer of shares shall be registered unless a proper writing or instrument of transfer (in any customary form or any other form satisfactory to the Board of Directors) has been submitted to the Company (or its transfer agent), together with any share certificate(s) and such other evidence of title as the Board of Directors may reasonably require. Until the transferee has been registered in the Register of Shareholders in respect of the shares so transferred, the Company may continue to regard the transferor as the owner thereof. The Board of Directors, may, from time to time, prescribe a fee for the registration of a transfer, and may approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company's Ordinary Shares on the Nasdaq or on any other stock exchange on which the Company's shares are then listed for trading.

20.  **<u>Suspension of Registration</u>** .

The Board of Directors may, in its discretion to the extent it deems necessary, close the Register of Shareholders for registration of transfers of shares for a period determined by the Board of Directors, and no registrations of transfers of shares shall be made by the Company during any such period during which the Register of Shareholders is so closed.

**Transmission of Shares**

21.  **<u>Decedents' Shares</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In case of a share registered in the names of two or more holders, the Company may recognize the survivor(s) as the sole owner(s) thereof unless and until the provisions of Article 21(b) have been effectively invoked.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any person becoming entitled to a share in consequence of the death of any person, upon producing evidence of the grant of probate or letters of administration or declaration of succession (or such other evidence as the Board of Directors may reasonably deem sufficient (or to an officer of the Company to be designated by the Chief Executive Officer)), shall be registered as a Shareholder in respect of such share, or may, subject to the provisions as to transfer contained herein, transfer such share.

22.  **<u>Receivers and Liquidators</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company may recognize any receiver, liquidator or similar official appointed to wind-up, dissolve or otherwise liquidate a corporate Shareholder, and a trustee, manager, receiver, liquidator or similar official appointed in bankruptcy or in connection with the reorganization of, or similar proceeding with respect to a shareholder or its properties, as being entitled to the shares registered in the name of such Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such receiver, liquidator or similar official appointed to wind-up, dissolve or otherwise liquidate a corporate Shareholder and such trustee, manager, receiver, liquidator or similar official appointed in bankruptcy or in connection with the reorganization of, or similar proceedings with respect to a shareholder or its properties, upon producing such evidence as the Board of Directors (or an officer of the Company to be designated by the Chief Executive Officer) may deem sufficient as to his authority to act in such capacity or under this Article, shall with the consent of the Board of Directors (which the Board of Directors may grant or refuse in its absolute discretion), be registered as a shareholder in respect of such shares, or may, subject to the regulations as to transfer herein contained, transfer such shares.

**General Meetings**

23.  **<u>General Meetings</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An annual General Meeting ("**Annual General Meeting**") shall be held at each calendar year at such time and at such place, either within or out of the State of Israel, as may be determined by the Board of Directors, no later than fifteen (15) months after the last Annual General Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All General Meetings other than Annual General Meetings shall be called "**Special General Meetings**".

24.  **<u>Record Date for General Meeting</u>** .

Notwithstanding any provision of these Articles to the contrary, and to allow the Company to determine the Shareholders entitled to notice of or to vote at any General Meeting or any adjournment or postponement thereof, or entitled to receive payment of any dividend or other distribution or grant of any rights, or entitled to exercise any rights in respect of or to take or be the subject of any other action, the Board of Directors may fix a record date, which shall not be more than the maximum period and not less than the minimum period permitted by law. A determination of Shareholders of record entitled to notice of or to vote at a meeting shall apply to any adjournment or postponement of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned or postponed meeting.

25.  **<u>Shareholder Proposal Request</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any
 Shareholder or Shareholders of the Company holding at least one percent (1%) or a higher
 percent, as may be required by the Companies Law from time to time, of the voting rights
 of the Company (the "**Proposing Shareholder(s)**") may request, subject to
 the Companies Law, that the Board of Directors include a matter on the agenda of a General
 Meeting to be held in the future, provided that the Board determines that the matter is appropriate
 to be considered in a General Meeting (a "**Proposal Request** ").

In order for the Board of Directors to consider a Proposal Request and whether to include the matter stated therein in the agenda of a General Meeting, notice of the Proposal Request must be timely delivered in accordance with applicable laws, and the Proposal Request must comply with the requirement of these Articles (including this Article 25) and any applicable law and stock exchange rules and regulations.

The Proposal Request must be in writing, signed by all of the Proposing Shareholder(s) making such request, delivered, either in person or by certified mail, postage prepaid, and received by the Secretary (or, in the absence thereof by the Chief Executive Officer of the Company).

To be considered timely, a Proposal Request must be received within the time periods prescribed by applicable law.

The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extend any time period) for the delivery of a Proposal Request as described above.

In addition to any information required to be included in accordance with applicable law, the Proposal Request must include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the name, address, telephone number, fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the number of Shares held by the Proposing Shareholder(s), directly or indirectly (and, if any of such Shares are held indirectly, an explanation of how they are held and by whom), which shall be in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Company of the record holding of such Shares by the Proposing Shareholder(s) as of the date of the Proposal Request, and a representation that the Proposing Shareholder(s) intends to appear in person or by proxy at the meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the matter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matter is proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a position statement in support of the Proposal Request, a copy of such position statement that complies with the requirement of any applicable law (if any),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a description of all arrangements or understandings between the Proposing Shareholders and any other Person(s) (naming such Person or Persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by all Proposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detail of such personal interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a declaration that all of the information that is required under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Company in connection with such matter, if any, has been provided to the Company.

The Board of Directors, may, in its discretion, to the extent it deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a matter in the agenda of a General Meeting, as the Board of Directors may reasonably require.

*A "**Derivative Transaction**"* means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proposing Shareholder or any of its affiliates or associates, whether of record or beneficial:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) which provides the right to vote or increase or decrease the voting power of, such Proposing Shareholder, or any of its affiliates or associates, with respect to any shares or other securities of the Company, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proposing Shareholder in the securities of the Company held by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly, a general partner or managing member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The information required pursuant to this Article shall be updated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting, and (iii) as of the General Meeting, and any adjournment or postponement thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The provisions of Articles 25(a) and 25(b) shall apply, *mutatis mutandis*, on any matter to be included on the agenda of a Special General Meeting which is convened pursuant to a request of a Shareholder duly delivered to the Company in accordance with the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary herein, this Article 25 may only be amended or replaced by a resolution adopted at a General Meeting by a majority of 70% of the voting power represented at the General Meeting in person or by proxy and voting thereon, disregarding abstentions from the count of the voting power present and voting ("**Special Majority**").

26.  **<u>Notice of General Meetings; Omission to Give Notice</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is not required to give notice of a General Meeting, subject to any mandatory provision of the Companies Law, and any other requirements applicable to the Company. Notwithstanding anything herein to the contrary, to the extent permitted under the Companies Law, with the consent of all Shareholders entitled to vote thereon, a resolution may be proposed and passed at such meeting although a lesser notice period than hereinabove prescribed has been given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The accidental omission to give notice of a General Meeting to any Shareholder, or the non-receipt of notice sent to such Shareholder, shall not invalidate the proceedings at such meeting or any resolution adopted thereat.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Shareholder present, in person or by proxy, at any time during a General Meeting shall be entitled to seek the cancellation or invalidation of any proceedings or resolutions adopted at such General Meeting on account of any defect in the notice of such meeting relating to the time or the place thereof, or any item acted upon at such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company may add additional places for Shareholders to review the full text of the proposed resolutions to be adopted at a General Meeting, including an internet site.

**Proceedings at General Meetings**

27.  **<u>Quorum</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No business shall be transacted at a General Meeting, or at any adjournment thereof, unless the quorum required under these Articles for such General Meeting or such adjourned meeting, as the case may be, is present when the meeting proceeds to business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the absence of contrary provisions in these Articles, two or more Shareholders, present in person or by proxy and holding shares conferring in the aggregate at least twenty-five percent (25%) of the voting power of the Company, shall constitute a quorum of General Meetings. A proxy may be deemed to be two (2) or more Shareholders pursuant to the number of Shareholders represented by the proxy holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If within half an hour from the time appointed for the meeting a quorum is not present, then without any further notice the meeting shall be adjourned either (i) to the same day in the next week, at the same time and place, (ii) to such day and at such time and place as indicated in the notice to such meeting (which may be earlier or later than the date pursuant to clause (i) above), or (iii) to such day and at such time and place as the Chairperson of the General Meeting shall determine (which may be earlier or later than the date pursuant to clause (i) above). No business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, if the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more Shareholders, present in person or by proxy, and holding the number of shares required for making such requisition, shall constitute a quorum, but in any other case any Shareholder (not in default as aforesaid) present in person or by proxy, shall constitute a quorum.

28.  **<u>Chairperson of General Meeting</u>** .

The Chairperson of the Board of Directors or his or her designee shall preside as Chairperson of every General Meeting of the Company. If at any meeting the Chairperson is not present within fifteen (15) minutes after the time fixed for holding the meeting or is unwilling to act as Chairperson, any of the following may preside as Chairperson of the meeting (and in the following order): a Director, Chief Executive Officer, Chief Financial Officer, Secretary or any person designated by any of the foregoing. If at any such meeting none of the foregoing persons is present or all are unwilling to act as Chairperson, the Shareholders present (in person or by proxy) shall choose a Shareholder or its proxy present at the meeting to be Chairperson. The office of Chairperson shall not, by itself, entitle the holder thereof to vote at any General Meeting nor shall it entitle such holder to a second or casting vote (without derogating, however, from the rights of such Chairperson to vote as a Shareholder or proxy of a Shareholder if, in fact, he is also a Shareholder or such proxy).

29.  **<u>Adoption of Resolutions at General Meetings</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as required by the Companies Law or these Articles, including, without limitation, Article 25, 38, 39 and 42 below, a resolution of the Shareholders shall be adopted if approved by the holders of a simple majority of the voting power represented at the General Meeting in person or by proxy and voting thereon, as one class, and disregarding abstentions from the count of the voting power present and voting. Without limiting the generality of the foregoing, a resolution with respect to a matter or action for which the Companies Law prescribes a higher majority or pursuant to which a provision requiring a higher majority would have been deemed to have been incorporated into these Articles, but resolutions with respect to which the Companies Law allows the Company's Articles to provide otherwise, shall be adopted by a simple majority of the voting power represented at the General Meeting in person or by proxy and voting thereon, as one class, and disregarding abstentions from the count of the voting power present and voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Every question submitted to a General Meeting shall be decided by a show of hands, but the Chairperson of the General Meeting may determine that a resolution shall be decided by a written ballot. A written ballot may be implemented before the proposed resolution is voted upon or immediately after the declaration by the Chairperson of the results of the vote by a show of hands. If a vote by written ballot is taken after such declaration, the results of the vote by a show of hands shall be of no effect, and the proposed resolution shall be decided by such written ballot.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A declaration by the Chairperson of the General Meeting that a resolution has been carried unanimously, or carried by a particular majority, or rejected, and an entry to that effect in the minute book of the Company, shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.

30.  **<u>Power to Adjourn</u>** .

A General Meeting, the consideration of any matter on its agenda or the resolution on any matter on its agenda, may be postponed or adjourned, from time to time and from place to place: (i) by the Chairperson of a General Meeting at which a quorum is present (and he shall if so directed by the meeting, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment), but no business shall be transacted at any such adjourned meeting except business which might lawfully have been transacted at the meeting as originally called, or a matter on its agenda with respect to which no resolution was adopted at the meeting originally called; or (ii) by the Board (whether prior to or at the General Meeting).

If the Company's Board decided to convene a General Meeting, the Board may cancel the General Meeting before the date and time of the General Meeting or any adjournment thereon.

31.  **<u>Voting Power</u>** .

Subject to the provisions of Article 32(a) and to any provision hereof conferring special rights as to voting, or restricting the right to vote, every Shareholder shall have one vote for each share held by him of record, on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written ballot or by any other means.

32.  **<u>Voting Rights.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A company or other corporate body being a Shareholder of the Company may duly authorize any person to be its representative at any meeting of the Company or to execute or deliver a proxy on its behalf. Any person so authorized shall be entitled to exercise on behalf of such Shareholder all the power which the Shareholder could have exercised if it were an individual. Upon the request of the Chairperson of the General Meeting, written evidence of such authorization (in form acceptable to the Chairperson) shall be delivered to him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Shareholder entitled to vote may vote either in person or by proxy (who need not be Shareholder of the Company), or, if the Shareholder is a company or other corporate body, by representative authorized pursuant to Article (a) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If two or more persons are registered as joint holders of any share, the vote of the senior who tenders a vote, in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s). For the purpose of this Article 32(c), seniority shall be determined by the order of registration of the joint holders in the Register of Shareholder.

**Proxies**

33.  **<u>Instrument of Appointment</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An instrument appointing a proxy shall be in writing and shall be substantially in the following form:

---

| | | | |
|:---|:---|:---|:---|
| "I | | of | |
|  | *(Name of Shareholder)* |  | *(Address of Shareholder)* |
| Being a shareholder of **Nasus Pharma Ltd.**hereby appoints | Being a shareholder of **Nasus Pharma Ltd.**hereby appoints | Being a shareholder of **Nasus Pharma Ltd.**hereby appoints | Being a shareholder of **Nasus Pharma Ltd.**hereby appoints |
|  | | of | |
|  | *(Name of Proxy)* |  | *(Address of Proxy)* |
| as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the ___ day of _______, _______ and at any adjournment(s) thereof. | as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the ___ day of _______, _______ and at any adjournment(s) thereof. | as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the ___ day of _______, _______ and at any adjournment(s) thereof. | as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the ___ day of _______, _______ and at any adjournment(s) thereof. |
| Signed this ____ day of ___________, ______. | Signed this ____ day of ___________, ______. | Signed this ____ day of ___________, ______. | Signed this ____ day of ___________, ______. |
| (Signature of Appointor)" | (Signature of Appointor)" | (Signature of Appointor)" | (Signature of Appointor)" |

---

or in any such form as may be approved by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the Companies Law, the original instrument appointing a proxy or a copy thereof (and the power of attorney or other authority, if any, under which such instrument has been signed) shall be delivered to the Company (at its Office, at its principal place of business, or at the offices of its registrar or transfer agent, or at such place as notice of the meeting may specify) not less than forty eight (48) hours (or such shorter period as the notice shall specify) before the time fixed for such meeting. Notwithstanding the above, the Chairperson shall have the right to waive the time requirement provided above with respect to all instruments of proxies and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the General Meeting to which the document relates.

34.  **<u>Effect of Death of Appointor of Transfer of Share and or Revocation of Appointment</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the prior death or bankruptcy of the appointing Shareholder (or of his attorney-in-fact, if any, who signed such instrument), or the transfer of the share in respect of which the vote is cast, unless written notice of such matters shall have been received by the Company or by the Chairperson of such meeting prior to such vote being cast.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the Companies Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the Chairperson, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and such other documents, if any, required under Article 33(b) for such new appointment), provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article 33(b) hereof, or (ii) if the appointing Shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairperson of such meeting of written notice from such Shareholder of the revocation of such appointment, or if and when such Shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of the appointing Shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 34(b) at or prior to the time such vote was cast.

**Board of Directors**

35.  **<u>Powers of Board of Directors</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors may exercise all such powers and do all such acts and things as the Board of Directors is authorized by law or as the Company is authorized to exercise and do and are not hereby or by law required to be exercised or done by the General Meeting. The authority conferred on the Board of Directors by this Article 35 shall be subject to the provisions of the Companies Law, these Articles and any regulation or resolution consistent with these Articles adopted from time to time at a General Meeting, provided, however, that no such regulation or resolution shall invalidate any prior act done by or pursuant to a decision of the Board of Directors which would have been valid if such regulation or resolution had not been adopted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without
 limiting the generality of the foregoing, the Board of Directors may, from time to time,
 set aside any amount(s) out of the profits of the Company as a reserve or reserves for any
 purpose(s) which the Board of Directors, in its absolute discretion, shall deem fit, including
 without limitation, capitalization and distribution of bonus shares, and may invest any sum
 so set aside in any manner and from time to time deal with and vary such investments and
 dispose of all or any part thereof, and employ any such reserve or any part thereof in the
 business of the Company without being bound to keep the same separate from other assets of
 the Company, and may subdivide or re-designate any reserve or cancel the same or apply the
 funds therein for another purpose, all as the Board of Directors may from time to time think
 fit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The
 Board of Directors may, at any time in its sole discretion, adopt protective measures to
 prevent

or delay a coercive takeover of the Company, including without limitation the adoption of a "Shareholder Rights Plan".

36.  **<u>Exercise of Powers of Board of Directors</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A meeting of the Board of Directors at which a quorum is present shall be competent to exercise all the authorities, powers and discretion vested in or exercisable by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a majority of the Directors present, entitled to vote and voting thereon when such resolution is put to a vote. In case of an equality of votes of the Board, the Chairman of the Board shall not have a second casting vote.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Board of Directors may adopt resolutions, without convening a meeting of the Board of Directors, in writing or in any other manner permitted by the Companies Law.

37.  **<u>Delegation of Powers</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees (in these Articles referred to as a "**Committee of the Board of Directors**", or "**Committee**"), each consisting of one or more Directors, and it may from time to time revoke such delegation or alter the composition of any such Committee. No regulation imposed by the Board of Directors on any Committee and no resolution of the Board of Directors shall invalidate any prior act done pursuant to a resolution by the Committee which would have been valid if such regulation or resolution of the Board had not been adopted. The meeting and proceedings of any such Committee of the Board of Directors shall, *mutatis mutandis*, be governed by the provisions herein contained for regulating the meetings of the Board of Directors, so far as not superseded by any regulations adopted by the Board of Directors or by the Companies Law. Unless otherwise expressly prohibited by the Board of Directors in delegating powers to a Committee of the Board of Directors, such Committee shall be empowered to further delegate such powers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without derogating from the provisions of Article 49, the Board of Directors may from time to time appoint a Secretary to the Company, as well as officers, agents, employees and independent contractors, as the Board of Directors deems fit, and may terminate the service of any such person. The Board of Directors may, subject to the provisions of the Companies Law, determine the powers and duties, as well as the salaries and compensation, of all such persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Board of Directors may from time to time, by power of attorney or otherwise, appoint any person, company, firm or body of persons to be the attorney or attorneys of the Company at law or in fact for such purposes(s) and with such powers, authorities and discretions, and for such period and subject to such conditions, as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board of Directors deems fit, and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him.

38.  **<u>Number of Directors.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors shall consist of such number of Directors, not less than three (3) and no more than nine (9), including the External Directors (if any), which will be elected if and as required under the Companies Law, as may be fixed from time to time by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary herein, this Article 38 may only be amended or replaced by a resolution adopted at a General Meeting by a Special Majority.

39.  **<u>Election and Removal of Directors</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Directors, excluding the External Directors if any (who shall be elected and serve in office in strict accordance with the provisions of the Companies Law, if so required by the Companies Law), shall be classified, with respect to the term for which they each severally hold office, into three classes, as nearly equal in number as practicable, hereby designated as Class I, Class II and Class III.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term of office of the initial Class I directors shall expire at the first Annual General Meeting to be held in 2025 and when their successors are elected and qualified,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The term of office of the initial Class II directors shall expire at the first Annual General Meeting following the Annual General Meeting referred to in clause (i) above and when their successors are elected and qualified, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The term of office of the initial Class III directors shall expire at the first Annual General Meeting following the Annual General Meeting referred to in clause (ii) above and when their successors are elected and qualified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Directors (other than External Directors), may only be elected in Annual Meetings. At each Annual General Meeting, commencing with the Annual General Meeting to be held in 2025, each of the successors elected to replace the Directors of a Class whose term shall have expired at such Annual General Meeting shall be elected to hold office until the third Annual General Meeting next succeeding his or her election and until his or her respective successor shall have been elected and qualified. Notwithstanding anything to the contrary, each Director shall serve until his or her successor is elected and qualified or until such earlier time as such Director's office is vacated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the number of Directors (excluding External Directors) that constitutes the Board of Directors is hereafter changed, the then-serving Directors shall be redesignated to other Classes and/or any newly created directorships or decrease in directorships shall be apportioned by the Board of Directors among the classes so as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prior to every Annual General Meeting of the Company at which Directors are to be elected, and subject to clauses (a) and (f) of this Article, the Board of Directors (or a Committee thereof) shall select, by a resolution adopted by a majority of the Board of Directors (or such Committee), a number of Persons to be proposed to the Shareholders for election as Directors to the relevant class at such Annual General Meeting (the "**Nominees**").

The Board may consider, among other things, the following methods: (i) election of competing slates of Nominees (determined in a manner approved by the Board) by a majority of the voting power represented at the Annual Meeting in person or by proxy and voting on such competing slates, (ii) election of individual directors by a plurality of the voting power represented at the Annual Meeting in person or by proxy and voting on the election of directors (which shall mean that the Nominees receiving the largest number of "for" votes will be elected in such Contested Election), (iii) election of each Nominee by a majority of the voting power represented at the Annual Meeting in person or by proxy and voting on the election of directors, provided that if the number of such Nominees exceeds the number of directors to be elected, then as among such Nominees the election shall be by plurality of the voting power as described above, and (iv) such other method of voting as the Board deems appropriate, including use of a "universal proxy card" listing all Nominees and Alternate Nominees by the Company.

For the purposes of these Articles, election of directors at a Annual Meeting shall be considered a "Contested Election" if the aggregate number of Nominees and Alternate Nominees at such meeting exceeds the total number of Directors to be elected at such meeting, with the determination thereof being made by the Secretary (or, in the absence thereof, by the CEO of the Company) as of the close of the applicable notice of nomination period under these Articles or under applicable law, based on whether one or more notice(s) of nomination were timely filed in accordance herewith; provided, however, that the determination that an election is a Contested Election shall not be determinative as to the validity of any such notice of nomination; and provided further, that, if, prior to the time the Company mails its initial proxy statement in connection with such election of directors, one or more notices of nomination of an Alternate Nominee are withdrawn such that the number of candidates for election as director no longer exceeds the number of directors to be elected, the election shall not be considered a Contested Election. At any Annual Meeting at which Directors are to be elected, each shareholder shall be entitled to cast a number of votes with respect to nominees for election to the Board up to the total number of Directors to be elected at such meeting. Shareholders shall not be entitled to cumulative voting in the election of Directors, except to the extent specifically set forth in this Article.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any Proposing Shareholder requesting to include on the agenda of an Annual General Meeting a nomination of a Person to be proposed to the Shareholders for election as Director (such person, an "**Alternate Nominee**"), may so request provided that it complies with this Article 39(c) and Article 25 and applicable law.

Unless otherwise determined by the Board, a Proposal Request relating to Alternate Nominee is deemed to be a matter that is appropriate to be considered only in an Annual General Meeting.

In addition to any information required to be included in accordance with applicable law, such a Proposal Request shall include information required pursuant to Article 25, and shall also set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the name, address, telephone number, fax number and email address of the Alternate Nominee and all citizenships and residencies of the Alternate Nominee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a description of all arrangements, relations or understandings between the Proposing Shareholder(s) or any of its affiliates and each Alternate Nominee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a declaration signed by the Alternate Nominee that he consents to be named in the Company's notices and proxy materials relating to the Annual General Meeting, if provided or published, and, if elected, to serve on the Board of Directors and to be named in the Company's disclosures and filings,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a declaration signed by each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations for the appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchange rules and regulations to be provided to the Company in connection with such an appointment has been provided (including, information in respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under Form 20-F or any other applicable form prescribed by the U.S. Securities and Exchange Commission);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a declaration made by the Alternate Nominee of whether he or she meets the criteria for an independent director and/or External Director of the Company under the Companies Law and/or under any applicable law, regulation or stock exchange rules, and if not, then an explanation of why not; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any other information required at the time of submission of the Proposal Request by applicable law, regulations or stock exchange rules. In addition, the Proposing Shareholder shall promptly provide any other information reasonably requested by the Company.

The Board of Directors may refuse to acknowledge the nomination of any person not made in compliance with the foregoing. The Company shall be entitled to publish any information provided by a Proposing Shareholder pursuant to this Article 39(c) and Article 25, and the Proposing Shareholder shall be responsible for the accuracy and completeness thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Nominees or Alternate Nominees shall be elected by a resolution adopted at the Annual General Meeting at which they are subject to election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary in these Articles, the election, qualification, removal or dismissal of External Directors shall be only in accordance with the applicable provisions set forth in the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Directors whose terms of office have expired or terminated may be re-elected. The aforesaid will not apply to external directors, whose reappointment shall be in accordance with the provisions of the Companies Law and the regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Notwithstanding anything to the contrary herein, this Article 39 and Article 42(f) may only be amended, replaced or suspended by a resolution adopted at a General Meeting by a Special Majority.

40.  **<u>Commencement of Directorship</u>** .

Without derogating from Article 39, the term of office of a Director shall commence as of the date of his appointment or election, or on a later date if so specified in his appointment or election.

41.  **<u>Continuing Directors in the Event of Vacancies</u>** .

The Board may at any time and from time to time appoint any person as a Director to fill a vacancy (whether such vacancy is due to a Director no longer serving or due to the number of Directors serving being less than the maximum number stated in Article 38 hereof). In the event of one or more such vacancies in the Board of Directors, the continuing Directors may continue to act in every matter, provided, however, that if they number less than the minimum number provided in Article 38 hereof, they may only act in an emergency or to fill the office of director which has become vacant up to a number equal to the minimum number provided for pursuant to Article 38 hereof. The office of a Director that was appointed by the Board of Directors to fill any vacancy shall only be for the remaining period of time during which the Director whose service has ended was filled would have held office, or in case of a vacancy due to the number of Directors serving being less than the maximum number stated in Article 38 hereof, the Board shall determine at the time of appointment the class pursuant to Article 39 to which the additional Director shall be assigned. Other than as provided in this Article 41 directors may be elected only at Annual Meetings.

42.  **<u>Vacation of Office</u>** .

The office of a Director shall be vacated and he or she shall be dismissed or removed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *ipso facto*, upon his or her death;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if he or she is prevented by applicable law from serving as a Director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if he or she is declared bankrupt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if the Board determines that due to his or her mental or physical state he or she is unable to serve as a director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) if his or her directorship expires pursuant to these Articles and/or applicable law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) by a resolution adopted at an Annual Meeting by a Special Majority. Such removal shall become effective on the date fixed in such resolution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) by his or her written resignation, such resignation becoming effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) with respect to an External Director, and notwithstanding anything to the contrary herein, only pursuant to applicable law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if his or her office is vacated by virtue of the order or decision of a competent court (in a litigation to which the Company is a party). Such removal shall become effective on the date fixed by the court order or decision.

43.  **<u>Conflict of Interests; Approval of Related Party Transactions</u>** .

Subject to the provisions of the Companies Law and these Articles, no Director shall be disqualified by virtue of his office from holding any office or place of profit in the Company or in any company in which the Company shall be a Shareholder or otherwise interested, or from contracting with the Company as vendor, purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any Director shall be in any way interested, be avoided, nor, other than as required under the Companies Law, shall any Director be liable to account to the Company for any profit arising from any such office or place of profit or realized by any such contract or arrangement by reason only of such Director's holding that office or of the fiduciary relations thereby established, but the nature of his interest, as well as any material fact or document, must be disclosed by him at the meeting of the Board of Directors at which the contract or arrangement is first considered, if his interest then exists, or, in any other case, at no later than the first meeting of the Board of Directors after the acquisition of his interest.

44.  **<u>Alternate Directors</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of the Companies Law, a Director may, by written notice to the Company, appoint, remove or replace any person as an alternate for himself; provided that the appointment of such person shall have effect only upon and subject to its being approved by the Board (in these Articles, an "**Alternate Director**"). Unless the appointing Director, by the instrument appointing an Alternate Director or by written notice to the Company, limits such appointment to a specified period of time or restricts it to a specified meeting or action of the Board of Directors, or otherwise restricts its scope, the appointment shall be for all purposes, and for a period of time concurrent with the term of the appointing Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notice to the Company pursuant to Article 44(a) shall be given in person to the Chairperson of the Board of Directors, or by sending the same in writing to the attention of the Chairperson of the Board of Directors at the principal office of the Company or to such other person or place as the Board of Directors shall have determined for such purpose, and shall become effective on the date fixed therein, upon the receipt thereof by the Company (at the place as aforesaid) or upon the approval of the appointment by the Board, whichever is later.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) An Alternate Director shall have all the rights and obligations of the Director who appointed him, provided however, that (i) he may not in turn appoint an alternate for himself (unless the instrument appointing him otherwise expressly provides), and (ii) an Alternate Director shall have no standing at any meeting of the Board of Directors or any Committee thereof while the Director who appointed him is present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any individual, who qualifies to be a member of the Board of Directors, may act as an Alternate Director. One person may not act as Alternate Director for several directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The office of an Alternate Director shall be vacated under the circumstances, *mutatis mutandis*, set forth in Article 42, and such office shall ipso facto be vacated if the office of the Director who appointed such Alternate Director is vacated, for any reason.

**Proceedings of the Board of Directors**

45.  **<u>Meetings</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors may meet and adjourn its meetings and otherwise regulate such meetings and proceedings as the Directors think fit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Director may at any time, and the Secretary (upon the request of such Director), shall, convene a meeting of the Board of Directors, but not less than forty-eight (48) hours' notice shall be given of any meeting so convened, unless such notice is waived by all of the Directors as to a particular meeting or unless the matters to be discussed at such meeting are of such urgency and importance, as determined by the Chairperson, that notice ought reasonably to be waived under the circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notice of any such meeting shall be given in writing, including by email.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary herein, failure to deliver notice to a director of any such meeting in the manner required hereby may be waived by such Director, and a meeting shall be deemed to have been duly convened notwithstanding such defective notice if such failure or defect is waived prior to action being taken at such meeting, by all Directors entitled to participate at such meeting to whom notice was not duly given as aforesaid. Without derogating from the foregoing, no Director present at any time during a meeting of the Board of Directors shall be entitled to seek the cancellation or invalidation of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of such meeting relating to the date, time or the place thereof or the convening of the meeting.

46.  **<u>Quorum</u>** .

Until otherwise unanimously decided by the Board of Directors (or each of the Board's committees), a quorum at a meeting of the Board of Directors shall be constituted by the presence in person or by any means of communication of a majority of the Directors then in office who are lawfully entitled to participate and vote in the meeting. No business shall be transacted at a meeting of the Board of Directors (or each of the Boar's committees) unless the requisite quorum is present (in person or by any means of communication) when the meeting proceeds to business.

47.  **<u>Chairperson of the Board of Directors</u>** .

The Board of Directors shall, from time to time, elect one of its members to be the Chairperson of the Board of Directors, remove such Chairperson from office and appoint in his place. The Chairperson of the Board of Directors shall preside at every meeting of the Board of Directors, but if there is no such Chairperson, or if at any meeting he is not present within fifteen (15) minutes of the time fixed for the meeting or if he is unwilling to take the chair, the Directors present shall choose one of the Directors present at the meeting to be the Chairperson of such meeting. The office of Chairperson of the Board of Directors shall not, by itself, entitle the holder to a second or casting vote.

48.  **<u>Validity of Acts Despite Defects</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All acts done or transacted at any meeting of the Board of Directors, or of a Committee of the Board of Directors, or by any person(s) acting as Director(s), shall, notwithstanding that it may afterwards be discovered that there was some defect in the appointment of the participants in such meeting or any of them or any person(s) acting as aforesaid, or that they or any of them were disqualified, be as valid as if there were no such defect or disqualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The General Meeting shall be entitled to ratify any act taken by the Board or any committee without authority or which was tainted by some other defect. From the time of such ratification, every act ratified shall be treated as though lawfully preformed from the outset.

**Chief Executive Officer**

49.  **<u>Chief Executive Officer</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors shall from time to time appoint one or more persons, whether or not Directors, as Chief Executive Officer of the Company and may confer upon such person(s), and from time to time modify or revoke, such titles and such duties and authorities of the Board of Directors as the Board of Directors may deem fit, subject to such limitations and restrictions as the Board of Directors may from time to time prescribe. Such appointment(s) may be either for a fixed term or without any limitation of time, and the Board of Directors may from time to time (subject to any additional approvals required under, and the provisions of, the Companies Law and of any contract between any such person and the Company) fix their salaries and compensation, remove or dismiss them from office and appoint another or others in his or their place or places.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless otherwise determined by the Board of Directors, the Chief Executive Officer shall have authority with respect to the management and operations of the Company in the ordinary course of business.

**Minutes**

50.  **<u>Minutes</u>** <u>.</u> 

Any minutes of the General Meeting or the Board of Directors or any committee thereof, if purporting to be signed by the Chairperson of the General Meeting, the Board or a committee thereof, as the case may be, or by the Chairperson of the next succeeding General Meeting, meeting of the Board or meeting of a committee thereof, as the case may be, shall constitute prima facie evidence of the matters recorded therein.

**Dividends**

51.  **<u>Declaration of Dividends</u>** .

The Board of Directors may from time declare, and cause the Company to pay, such dividend as may appear to the Board of Directors to be justified by the profits of the Company and as permitted by the Companies Law. The Board of Directors shall determine the time for payment of such dividends and the record date for determining the Shareholders entitled thereto.

52.  **<u>Amount Payable by Way of Dividends</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of these Articles and subject to the rights or conditions attached at that time to any share in the capital of the Company granting preferential, special or deferred rights or not granting any rights with respect to dividends, any dividend paid by the Company shall be allocated among the shareholders (not in default in payment of any sum referred to in Article 13 hereof) entitled thereto in proportion to their respective holdings of the shares in respect of which such dividends are being paid.

53.  **<u>Interest</u>** .

No dividend shall carry interest as against the Company.

54.  **<u>Capitalization of Profits, Reserves, etc</u>** .

The Board of Directors may determine that the Company (i) may cause any moneys, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of a reserve fund, or to the credit of a reserve fund for the redemption of capital, or in the hands of the Company and available for dividends, or representing premiums received on the issuance of shares and standing to the credit of the share premium account, to be capitalized and distributed among such of the Shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion, on the footing that they become entitled thereto as capital, or may cause any part of such capitalized fund to be applied on behalf of such shareholders in paying up in full, either at par or at such premium as the resolution may provide, any unissued shares or debentures or debenture stock of the Company which shall be distributed accordingly, in payment, in full or in part, of the uncalled liability on any issued shares or debentures or debenture stock; and (ii) may cause such distribution or payment to be accepted by such Shareholders in full satisfaction of their interest in the said capitalized sum.

55.  **<u>Implementation of Powers</u>** .

For the purpose of giving full effect to any resolution under Article 54, and without derogating from the provisions of Article 56 hereof, the Board of Directors may settle any difficulty which may arise in regard to the distribution as it thinks expedient, and, in particular, may fix the value for distribution of any specific assets and may determine that cash payments shall be made to any Shareholders upon the footing of the value so fixed, or that fractions of less value than a certain determined value may be disregarded in order to adjust the rights of all parties, and may vest any such cash, shares, debentures, debenture stock or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalized fund as may seem expedient to the Board of Directors. Where requisite, a proper contract shall be filed in accordance with Section 291 of the Companies Law, and the Board of Directors may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalized fund.

56.  **<u>Deductions from Dividends</u>** .

The Board of Directors may deduct from any dividend or other moneys payable to any Shareholder in respect of a share any and all sums of money then payable by such Shareholder to the Company on account of calls or otherwise in respect of shares of the Company and/or on account of any other matter of transaction whatsoever.

57.  **<u>Deductions from Retaining Dividends</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share on which the Company has a lien and may apply the same in or toward satisfaction of the debts, liabilities, or engagements in respect of which the lien exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share in respect of which any person is, under Articles 26 or 27, entitled to become a Shareholder, or which any person is, under said Articles, entitled to transfer, until such person shall become a Shareholder in respect of such share or shall transfer the same.

58.  **<u>Unclaimed Dividends</u>** .

All unclaimed dividends or other moneys payable in respect of a share may be invested or otherwise made use of by the Board of Directors for the benefit of the Company until claimed. The payment by the Directors of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trustee in respect thereof, and any dividend unclaimed after a period of seven years from the date of declaration of such dividend, and any such other moneys unclaimed after a like period from the date the same were payable, shall be forfeited and shall revert to the Company, provided, however, that the Board of Directors may, at its discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a person who would have been entitled thereto had the same not reverted to the Company. The principal (and only the principal) of any unclaimed dividend of such other moneys shall be, if claimed, paid to a person entitled thereto.

59.  **<u>Mechanics of Payment</u>** .

Any dividend or other moneys payable in cash in respect of a share may be paid by check or payment order sent through the post to, or left at, the registered address of the person entitled thereto or by transfer to a bank account specified by such person (or, if two or more persons are registered as joint holders of such share or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, to the joint holder whose name is registered first in the Register of Shareholders or his bank account or the person who the Company may then recognize as the owner thereof or entitled thereto under Article 21 or 22 hereof, as applicable, or such person's bank account), or to such person and at such other address as the person entitled thereto may by writing direct, or in any other manner the Board deems appropriate. Every such check or warrant or other method of payment shall be made payable to the order of the person to whom it is sent, or to such person as the person entitled thereto as aforesaid may direct, and payment of the check or warrant by the banker upon whom it is drawn shall be a good discharge to the Company.

60.  **<u>Receipt from a Joint Holder</u>** .

If two or more persons are registered as joint holders of any share, or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, any one of them may give effectual receipts for any dividend or other moneys payable or property distributable in respect of such share.

**Accounts**

61.  **<u>Books of Account</u>** .

The Company's books of account shall be kept at the Office of the Company, or at such other place or places as the Board of Directors may think fit, and they shall always be open to inspection by all Directors. No Shareholder, not being a Director, shall have any right to inspect any account or book or other similar document of the Company, except as conferred by law or authorized by the Board of Directors. The Company shall make copies of its annual financial statements available for inspection by the Shareholders at the principal offices of the Company. The Company shall not be required to send copies of its annual financial statements to the Shareholders.

62.  **<u>Auditors</u>** .

The appointment, authorities, rights and duties of the auditor(s) of the Company, shall be regulated by applicable law, provided, however, that in exercising its authority to fix the remuneration of the auditor(s), the Shareholders in General Meeting may act (and in the absence of any action in connection therewith shall be deemed to have so acted) to authorize the Board of Directors (with right of delegation to management) to fix such remuneration subject to such criteria or standards, and if no such criteria or standards are so provided, such remuneration shall be fixed in an amount commensurate with the volume and nature of the services rendered by such auditor(s).

---

| | |
|:---|:---|
| 62A. | **<u>Internal auditor</u>**. |

---

To the extent required by the Companies Law the Board of Directors will appoint an internal auditor according to the audit committee's recommendation ("**Internal Auditor**").

The Internal Auditor shall submit, for the approval of the audit committee, unless determines otherwise by the Board of Directors, a proposal for an annual or periodic work plan, and the audit committee shall approve such plan with such changes as it deem fit. Unless the Board of Directors determines otherwise, the work plan shall be submitted to the audit committee and approved by it.

**Supplementary Registers**

63.  **<u>Supplementary Registers</u>** .

Subject to and in accordance with the provisions of Sections 138 and 139 of the Companies Law, the Company may cause supplementary registers to be kept in any place outside Israel as the Board of Directors may think fit, and, subject to all applicable requirements of law, the Board of Directors may from time to time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers.

**Exemption, Indemnity and Insurance**

64.  **<u>Insurance</u>** .

Subject to the provisions of the Companies Law with regard to such matters, the Company may enter into a contract for the insurance of the liability, in whole or in part, of any of its Office Holders imposed on such Office Holder due to an act performed by or an omission of the Office Holder in the Office Holder's capacity as an Office Holder of the Company arising from any matter permitted by law, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a breach of duty of care to the Company or to any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a breach of duty of loyalty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds to assume that the act that resulted in such breach would not prejudice the interests of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a financial liability imposed on such Office Holder in favor of any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) a payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1(a) of the Securities Law, and expenses that the Office Holder incurred in connection with a proceeding under Chapters H'3, H'4, or I'1 of the Securities Law, including reasonable legal expenses, which term includes attorney fees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any other event, occurrence, matter or circumstance under any law with respect to which the Company may, or will be able to, insure an Office Holder, and to the extent such law requires the inclusion of a provision permitting such insurance in these Articles, then such provision is deemed to be included and incorporated herein by reference.

65.  **<u>Indemnity</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of the Companies Law, the Company may retroactively indemnify an Office Holder of the Company with respect to the following liabilities and expenses, provided that such liabilities or expenses were imposed on such Office Holder or incurred by such Office Holder due to an act performed by or an omission of the Office Holder in such Office Holder's capacity as an Office Holder of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a financial liability imposed on an Office Holder in favor of another person by any court judgment, including a judgment given as a result of a settlement or an arbitrator's award which has been confirmed by a court in respect of an act performed by the Office Holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) reasonable litigation expenses, including attorneys' fees, expended by the Office Holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding (including in connection with defending, being a witness in or participating in (including on appeal), or in connection with a financial sanction, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability in lieu of a criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding or if such financial liability was imposed, it was imposed with respect to an offence that does not require proof of criminal intent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) reasonable litigation costs, including attorney's fees, expended by an Office Holder or which were imposed on an Office Holder by a court in proceedings filed against the Office Holder by the Company or in its name or by any other person or in a criminal charge in respect of which the Office Holder was acquitted or in a criminal charge in respect of which the Office Holder was convicted for an offence which did not require proof of criminal intent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) expenses incurred by an Office Holder in connection with a proceeding pursuant to Article D of Chapter Four of Part Nine of the Companies Law, as amended from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) expenses incurred by an Office Holder in connection with a proceeding under the Israeli Economic Competition Law, 5748-1988, which is conducted with respect to Office Holder, including reasonable litigation expenses, and including attorneys' fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a payment which an Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and expenses incurred by an Office Holder in connection with a proceeding under Chapters H'3, H'4, or I'1 of the Securities Law, as amended, including reasonable legal expenses, which term includes attorney fees; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any other event, occurrence, matter or circumstance under any law with respect to which the Company may, or will be able to, indemnify an Office Holder ((including, without limitation, indemnification with respect to the matters referred to under Section 56h(b)(1) of the Securities Law, as amended), and to the extent such law requires the inclusion of a provision permitting such indemnity in these Articles, then such provision is deemed to be included and incorporated herein by reference.

For purposes of this Article ‎65:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the "conclusion of a proceeding without the filing of an indictment" regarding a matter in which a criminal proceeding was initiated, means, unless otherwise prescribed in the Companies Law in connection thereof, the closing of a file pursuant to Section 62 of the Criminal Procedure Law [Consolidated Version], 5742-1982 (the "Criminal Procedure Law") or a stay of process by the Attorney General pursuant to Section 231 of the Criminal Procedure Law; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a "financial obligation imposed in lieu of a criminal proceeding" means, unless otherwise prescribed in the Companies Law in connection thereof, a financial obligation imposed by law as an alternative to a criminal proceeding, including an administrative fine pursuant to the Administrative Offenses Law, 5746-1982, a fine for committing an offense categorized as a finable offense pursuant to the provisions of the Criminal Procedure Law, a monetary sanction or a penalty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the provisions of the Companies Law, the Company may undertake to indemnify an Office Holder, in advance, with respect to those liabilities and expenses described in the following Articles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Sub-Article 65(a)(ii) to 65(a)(iv); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Sub-Article 65(a)(i), provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the undertaking to indemnify is limited to such events which the Board of Directors shall deem to be likely to occur in light of the operations of the Company at the time that the undertaking to indemnify is made and for such amounts or criterion which the Directors may, at the time of the giving of such undertaking to indemnify, deem to be reasonable under the circumstances; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the undertaking to indemnify shall set forth such events which the Directors shall deem to be likely to occur in light of the operations of the Company at the time that the undertaking to indemnify is made, and the amounts and/or criterion which the Directors may, at the time of the giving of such undertaking to indemnify, deem to be reasonable under the circumstances.

The maximum amount of indemnification payable by the Company with respect to those liabilities and expenses described in Sub-Article 65(a)(i), for each Office Holder and for all Office Holders together, individually or in aggregate, under all letters of indemnification issued or to be issued by the Company, up to a total amount of the greater of: (i) 25% of the effective shareholders' equity of the Company; or (ii) USD 5,000,000 (Five Million United States Dollars) in the aggregate, or as may be determined amended from time to time, under the circumstances of indemnification of Indemnitee as set forth in the Indemnification and Exemption Agreement.

66.  **<u>Exemption</u>** .

Subject to the provisions of the Companies Law, the Company may exempt and release, in advance, any Office Holder from any liability to the Company for damages arising out of a breach of the Office Holder's duty of care towards the Company.

Notwithstanding the foregoing, the Company may not exempt a Director in advance from his liability for damages with respect to violation of his duty of care to the Company with respect to distributions. In addition, the Company may not exempt an Office Holder from his liability to the Company with regard to a resolution and/or a transaction in which the controlling Shareholder and/or any Office Holder has a personal interest.

67. The
 provisions of Articles 64 through 66 shall also apply to an alternate director .

68. The
provisions of Articles ‎64 through ‎66 above are not intended, and shall not be interpreted, to restrict the Company in any manner
in respect of the procurement of insurance and/or in respect of indemnification (i) in connection with any person who is not an Office
Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder, and/or
(ii) in connection with any Office Holder to the extent that such insurance and/or indemnification is not specifically prohibited under
law; provided that the procurement of any such insurance and/or the provision of any such indemnification shall be approved by the Board
of Directors.

69.  **<u>General</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 64 to 68 and any amendments to Articles 64 to 68 shall be prospective in effect, and shall not affect the Company's obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The provisions of Articles 64 to 68 (i) shall apply to the maximum extent permitted by law (including, the Companies Law); and (ii) are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or in respect of indemnification (whether in advance or retroactively) and/or exemption, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any Office Holder to the extent that such insurance and/or indemnification is not specifically prohibited under law.

**Winding Up**

70.  **<u>Winding Up</u>** .

If the Company is wound up, then, subject to applicable law and to the rights of the holders of shares with special rights upon winding up, the assets of the Company available for distribution among the Shareholders shall be distributed to them in proportion to the nominal value of their respective holdings of the shares in respect of which such distribution is being made.

**Exclusive Forum**

71.  **<u>Exclusive Forum.</u>** 

**Notices**

72.  **<u>Notices</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any written notice or other document may be served by the Company upon any Shareholder either personally, by facsimile, email or other electronic transmission, or by sending it by prepaid mail (airmail if sent internationally) addressed to such Shareholder at his address as described in the Register of Shareholders or such other address as he may have designated in writing for the receipt of notices and other documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any written notice or other document may be served by any Shareholder upon the Company by tendering the same in person to the Secretary or the Chief Executive Officer of the Company at the principal office of the Company, by facsimile transmission, or by sending it by prepaid registered mail (airmail if posted outside Israel) to the Company at its Office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any such notice or other document shall be deemed to have been served:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of mailing, forty-eight (48) hours after it has been posted, or when actually received by the addressee if sooner than forty-eight hours after it has been posted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of overnight air courier, on the next business day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner than three business days after it has been sent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the case of personal delivery, when actually tendered in person, to such addressee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) in the case of facsimile, email or other electronic transmission, on the first business day (during normal business hours in place of addressee) on which the sender receives automatic electronic confirmation by the addressee's facsimile machine that such notice was received by the addressee or delivery confirmation from the addressee's email or other communication server.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If a notice is, in fact, received by the addressee, it shall be deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 70.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All notices to be given to the Shareholders shall, with respect to any share to which persons are jointly entitled, be given to whichever of such persons is named first in the Register of Shareholders, and any notice so given shall be sufficient notice to the holders of such share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any Shareholder whose address is not described in the Register of Shareholders, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required by applicable law and these Articles to be set forth therein, which is published, within the time otherwise required for giving notice of such meeting, in the manner required by applicable law.

\* \* \*

## Exhibit 4.1

**Exhibit 4.1**

**Indemnification and Exemption Agreement**

Mr. / Ms. _________

---

| | |
|:---|:---|
| WHEREAS, | at the request of Nasus Pharma Ltd. (the "**Company**"), you served in the past, are currently serving or will serve in the future as an "Office Holder" ("*nosse misra*") of the Company, as such term is defined in Section 1 of the Israeli Companies Law, 5759-1999 (the "**Companies Law**"); and |
| WHEREAS, | the Company has determined that (i) the increased difficulty in attracting and retaining competent persons is detrimental to the best interests of the Company's shareholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future, and (ii) it is reasonable, prudent and necessary for the Company to contractually obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and |
| WHEREAS, | in recognition of your need for substantial protection against personal liability in order to assure your continued service to the Company in an effective manner and, in part, in order to provide you with specific contractual assurance that the indemnification, insurance and exculpation afforded by the Company's Articles of Association will be available to you, the Company wishes to undertake in this Indemnification, Insurance and Exculpation Undertaking (this "Undertaking") to indemnify you and to advance expenses to you to the maximum extent permitted by applicable law and as set forth in this Undertaking and provide for insurance and exculpation of you as set forth in this Undertaking; and |
| WHEREAS, | Article 65 of the Company's Articles of Association provides that the Company may indemnify its Office Holders to the maximum extent permitted by applicable law, and Article 66 of the Company's Articles of Association provides that the Company may exculpate its Office Holders to the maximum extent permitted by applicable law; and |
| WHEREAS, | on [_] [_], 2025, the Company's shareholders in general meeting approved the issuance of this Undertaking; |

---

![](ex4-1_001.jpg)

THEREFORE, The Company hereby confirms to you that:

**I. Indemnification**

**1. *Undertaking to Indemnify****.* the Company hereby undertakes to indemnify you to the maximum extent permitted by applicable law for any liability and expense specified in subsections (a) through (f) below, imposed on you due to or in connection with an act performed by you, either prior to or after the date hereof, in your capacity as an Office Holder, including as a director, officer, employee, observer, agent or fiduciary of *.* the Company, any subsidiary thereof or any another corporation, collaboration, partnership, joint venture, trust or other enterprise, in which you serve at any time at the request of the Company (a "**Corporate Capacity**"). The term "act performed in your capacity as an Office Holder" shall include any act, omission and failure to act and any other circumstances relating to or arising from your service in a Corporate Capacity.

a. Financial
 liability imposed on you in favor of any person pursuant to a judgment, including a judgment rendered in the context of a settlement
 or an arbitration award confirmed by a court. For purposes of Section 1 of this Undertaking, the term "person" shall
 include a natural person, firm, partnership, joint venture, trust, company, corporation, limited liability entity, unincorporated
 organization, estate, government, municipality, or any political, governmental, regulatory or similar agency or body.

b. Reasonable
 litigation expenses, including attorneys' fees, incurred by you as a result of an investigation or any proceeding instituted
 against you by an authority that is authorized to conduct an investigation or proceeding, and that was concluded without the filing
 of an indictment against you in a matter in which a criminal investigation has been instigated and without there being imposed on
 you a financial obligation in lieu of a criminal proceeding, or that was concluded without the filing of an indictment against you
 in a matter in which a criminal investigation has been instigated but with the imposition of a financial obligation in lieu of a
 criminal proceeding with respect to an offense that does not require proof of *mens rea*, or in connection with a financial
 sanction. In this paragraph:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. "conclusion
 of a proceeding without the filing of an indictment in a matter in which a criminal investigation has been instigated" **–** shall have the meaning specified in Section 260(a)(1A) of the Companies Law;

ii. "financial
 obligation in lieu of a criminal proceeding" – a financial liability imposed by applicable law in lieu of a criminal
 proceeding, including an administrative fine under the Administrative Offenses Law, 5746-1985, a fine for an offense categorized
 as a fine-bearing offense under the provisions of the Criminal Procedure Law, a financial sanction or a penalty;

c. Reasonable
 litigation expenses, including attorneys' fees, incurred by you, or assessed against you by a court, in a proceeding instituted
 against you by the Company or on its behalf or by another person, or in a criminal charge from which you are acquitted or in which
 you are convicted of an offense that does not require proof of *mens rea*.

d. Expenses
 incurred by you in connection with a proceeding pursuant to Article D of Chapter Four of Part Nine of the Companies Law, as amended
 from time to time, including reasonable litigation expenses, and including attorneys' fees.

![](ex4-1_001.jpg)

e. Expenses
 incurred by you in connection with a proceeding under the Israeli Economic Competition Law, 5748-1988, which is conducted with respect
 to you, including reasonable litigation expenses, and including attorneys' fees.

f. Any
 other liability or other expense for which it is permitted or will be permitted by applicable law to indemnify you, including without
 limitations, in accordance with Sections 52(54)(a)(1)(a) and 56h(b)(1) of the Israeli Securities Law, 5728-1968 and/or in connection
 with a proceeding under Chapters H'3, H'4, or I'1 of the Israeli Securities Law.

For the purpose of this Undertaking, "expenses" shall include attorneys' fees and all other costs, expenses and obligations paid or incurred by you in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any claim relating to any matter for which indemnification hereunder may be provided. Expenses shall be considered paid or incurred by you at such time as you are required to pay or incur such cost or expenses, including upon receipt of an invoice or payment demand.

Subject to the below paragraph, if you so request in writing, and subject to the Company's repayment and reimbursement rights set forth in this Undertaking and to any limitation imposed by applicable law, the Company shall pay amounts to cover expenses with respect to which you are entitled to be indemnified under Section 1 above, as and when incurred. The payments of such amounts shall be made promptly by the Company directly to your legal and other advisors, and any such payment shall be deemed to constitute indemnification hereunder. As part of such undertaking, the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim decision given by a court, governmental or administrative body, or an arbitrator, including for the purpose of substituting for liens imposed on your assets.

If required by law, the Company's authorized organs will consider the request for indemnification and the amount thereof and will determine if you are entitled to indemnification and the amount thereof. In the event that you make a request for payment of an amount of indemnification hereunder or a request for an advancement of indemnification expenses hereunder and the Company fails to determine your right to indemnification hereunder or fails to make such payment or advancement, you may petition any court which has jurisdiction to enforce the Company's obligations hereunder. The Company agrees to reimburse you in full for any reasonable expenses incurred by you in connection with investigating, preparing for, litigating, defending or settling any action brought by you under the immediately preceding sentence, except where such action or any claim or counterclaim in connection therewith is resolved in favor of the Company.

**2. *Scope of Coverage****.* the Company's undertaking to indemnify you pursuant to Section 1(a) above and advance expenses is limited to liabilities and expenses deriving from your actions in the cases detailed below<sup>1</sup> (in the subsections below, the Company – including subsidiaries and affiliated companies in which you serve as an Office Holder in matters related thereto):

&nbsp;&nbsp;&nbsp;&nbsp;1. actions
 or omissions deriving from the Company being public or traded on a stock exchange, or relating to an offer to the public or the public
 or private issuance of securities of the Company by the Company or by a shareholder, whether such liabilities and expenses relate
 to the securities laws of the United States, of Israel or of any other jurisdiction;

2. any
 claims that matters that were required to be included in public disclosures were not disclosed as required by applicable law, whether
 such liabilities and expenses relate to the securities laws of the United States, of Israel or of any other jurisdiction;

<sup>1</sup> Israeli law requires that indemnification in advance be limited to specified matters that are expected to be relevant to the company's BOD.

![](ex4-1_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;3. your
 actions or omissions in a Corporate Capacity relating to the operations and management of the Company;

4. actions
 or omissions in connection with investments the Company makes in other entities, whether before or after the investment is made,
 for the purpose of entering into, effecting, developing, monitoring and supervising the transaction;

5. actions
 or omissions relating to the purchase or sale of companies, legal entities or their assets, their splitting or merging;

6. any
 sale, purchase or holding of marketable securities, or other investments for or on behalf of the Company;

7. actions
 or omissions relating to patents, trademarks, copyrights and other intellectual property of the Company, including their protection,
 including by registration or assertion of rights to intellectual property and the defense of claims relating thereof;

8. actions
 or omissions relating to the Company's labor relations or the Company's commercial relationships, including with employees,
 independent contractors, customers, suppliers and other service providers;

9. any
 "Transaction" as defined in Section 1 of the Companies Law;

10. actions
 or omissions relating to the distribution of dividends or repurchase of shares or returns of capital or loans of the Company;

11. actions
 or omissions relating to the application of anti-takeover measures, tender offers, including actions relating to delivery of opinions
 in relation thereto, of the Company;

12. Without
 derogating from the generality of the above, actions in connection with the purchase or sale of companies, legal entities or assets,
 licensing or acquisition of rights in products, assets or technologies of other persons or legal entities, and the sale, licensing
 or grant of license in the same to other persons or legal entities, and the division or consolidation thereof;

13. Actions
 in connection with the developing, testing (including clinical trials) and manufacturing of products (including a third party's
 products, solutions and technologies) by the Company and/or Subsidiary and/or Affiliate or in connection with the distribution, sale,
 license or use of such products, solutions or technologies, and management of projects whether of the Company and/or Subsidiary and/or
 affiliate and/or any third party;

14. Actions
 taken pursuant to or in accordance with the policies and procedures of the Company and/or Subsidiary and/or Affiliate, that have
 been decided upon, whether such policies and procedures are published or not, and actions relating to the operations and management
 of the Company and/or of any Subsidiaries and/or Affiliates;

![](ex4-1_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;15. Any
 claim or demand made by any lenders or other creditors or for monies borrowed by, or other indebtedness of, the Company and\or Subsidiary
 and/or any Affiliate;

16. claims
 in connection with data protection and/or privacy laws and regulations regarding invasion of privacy, including with respect to databases,
 laws and regulations in regard of slander and/or personal health information.

17. Any
 claim or demand made in connection with any preparation or formulation of work plans, including pricing, marketing, distribution,
 instructions to employees, customers and suppliers, and collaboration with competitors;

18. Claims
 in connection with publishing or providing any information, including any filings with governmental authorities in the U.S., Israel
 and elsewhere, on behalf of the Company, in the circumstances required under applicable laws;

19. Decisions
 and/or actions relating to environmental compliance, including pollution, contamination and hazardous materials;

20. claims
 by any third party suffering any personal injury or any property damage to business or personal property through any act or omission
 attributed to the Company, or its employees, agents or other persons acting or allegedly acting on their behalf, including failure
 to make proper safety arrangements for the Company or its employees and liabilities arising from any accidental or continuous damage
 or harm to the Company's employees, its contractors, its guests and visitors as a result of an accidental or continuous event,
 or employment conditions, permanent or temporary, in the Company's offices;

21. claims
 relating to participation or non-participation at the Company's board meetings, or bona fide expression of opinion or voting
 or abstention from voting at such board meetings including, in each case, any committee thereof, as well as expression of any opinion
 publicly in connection with service as an Office Holder;

22. The
 filing of a report and/or announcement required by the Companies Law and/or any securities law which is applicable or may be applicable
 to the Company from time to time, including the U.S. Securities Laws, including the regulations pertaining to these laws, the Israeli
 Securities Law - 1968, and/or according to rules and/or regulations adopted by the stock market LLC or any other stock exchange and/or
 securities market and/or any law of any other country pertaining to these issues and/or the failure to file such a report and/or
 announcement, and/or actions relating to tender offers of the Company, including actions relating to delivery of opinions in relation
 thereto;

23. Claims
 in connection with the preparation, approval or providing of any annual or quarterly financial statements, profit and loss statements,
 balance sheets and similar financial information or forecasts;

![](ex4-1_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;24. violations
 of or failure to comply with securities laws, and any regulations or other rules promulgated thereunder, of any jurisdiction, including
 claims under the U.S. Securities Act of 1933, as amended, or the U.S. Securities Exchange Act of 1934, as amended, or under the Israeli
 Securities Law, 5728-1968, fraudulent disclosure claims, failure to comply with any securities authority or any stock exchange disclosure
 or other rules and any other claims relating to relationships with investors, debt holders, shareholders, option holders, holders
 of any other equity or debt instrument of the Company, and otherwise with the investment community (including any such claims relating
 to merger, change in control, issuances of securities, restructuring, spin out, spin off, divestiture, recapitalization or any other
 transaction relating to the corporate structure or organization of the Company); claims relating to or arising out of financing arrangements,
 any breach of financial covenants or other obligations towards investors, lenders or debt holders, class actions, violations of laws
 requiring the Company to obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction, including in
 connection with disclosure, offering or other transaction related documents; actions taken in connection with the issuance, purchase,
 holding or disposition of any type of securities of the Company, including the grant of options, warrants or other rights to purchase
 any of the same or any offering of the Company's securities (whether on behalf of the Company or on behalf of any holders of
 securities of the Company) to private investors, underwriters, resellers or to the public, and listing of such securities, or the
 offer by the Company to purchase securities from the public or from private investors or other holders, and any undertakings, representations,
 warranties and other obligations related to any of the foregoing or to the Company's status as a public company or as an issuer
 of securities; and

25. Any
 administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters,
 directives, claims, liens, investigations, proceedings or notices of noncompliance or violation
 by any governmental or regulatory entity or authority or any other person alleging the failure
 to comply with any statute, law, ordinance, rule, regulation, order or decree of any governmental
 entity applicable to the Company or any of its businesses, assets or operations, or the terms
 and conditions of any operating certificate or licensing agreement; and

26. Any
 claim or demand, not covered by any of the categories of events described above, which, pursuant
 to any applicable law, a director or officer of the Company may be held liable to any government
 or agency thereof, or any person or entity, in connection with actions taken by such director
 or officer in such capacity.

**3. *Exclusions****.* the Company shall not indemnify you for any financial liability imposed upon you for any of the following:

a. breach
 of the duty of loyalty, unless you acted in good faith and had a reasonable basis to assume that such action would not prejudice
 the best interests of the Company;

b. intentional
 or reckless breach of the duty of care, but specifically excluding negligence;

c. an
 action taken with the intention to unlawfully gain personal profit; or

d. any
 fine, civil fine, financial sanction or penalty imposed on you.

![](ex4-1_001.jpg)

**4. *Amount of indemnification***.

a. The
 maximum aggregate amount of indemnification to be paid by the Company to all Office Holders
 who are entitled to indemnification, whether in advance or retroactively, according to all
 the indemnification undertakings that the Company will grant to the Office Holders (including
 indemnification undertakings granted to Office Holders of its direct and indirect subsidiaries),
 if and to the extent it will grant the same, shall not exceed, in the aggregate, the greater
 of (i) 25% of shareholders' equity (ii) USD 5 million (the "**Maximum Indemnification Amount** "). For
 that purpose, the "effective shareholders' equity of the Company" means the amount of the Company's shareholders'
 equity in accordance with the last consolidated audited or reviewed financial statements of the Company (as applicable) at the time
 of actual payment of the indemnification. It is hereby clarified that the indemnification shall be paid in excess of any amount paid
 under the D&O Insurance, which the Company has purchased or will purchase from time to time.

b. If
 the total of the amounts for which all Office Holders are entitled to indemnification exceeds the Maximum Indemnification Amount,
 each relevant Office Holder, including you, will receive indemnification based on the ratio between the amount for which such Office
 Holder is liable and the aggregate amount for which all Office Holders are liable with respect to such matter.

c. In
 the event that you receive indemnification from an insurer in accordance with a directors
 and officers liability insurance policy with respect to a matter that is the subject of indemnification,
 the indemnification shall be granted in the amount of the difference between the indemnification
 due to the Office Holder according to this Undertaking for such indemnification, and the
 amount received from the insurer in respect of such matter, provided that the indemnification
 amount to which the Company has committed does not exceed the Maximum Indemnification Amount.
 In the event that you receive indemnification from the insurer as stated, the Company's
 liability shall not be reduced according to this Undertaking and the amounts of the total
 indemnification may be beyond the amounts received from the insurance company up to the Maximum
 Indemnification Amount.

d. Advances
 given, if given, to cover legal expenses in criminal proceedings will be repaid by you to
 the Company you are found guilty of a crime, which requires proof of *mens rea*. Other
 advances will be repaid by you to the Company if it is determined by a court of competent
 jurisdiction that Indemnitee is not lawfully entitled to such indemnification.

**5. *Conditions for granting indemnification***.

a. You
 shall notify the Company of any judicial or administrative proceeding ()"**Legal Proceeding**") that may be initiated
 against you, and of any suspicion or threat that any such Legal Proceeding may be initiated against you, promptly after you first
 become aware of it, and you shall forward to the Company or to whomever is designated by the Company, without delay, any document
 you receive in connection with such proceeding. The failure to so notify the Company shall not relieve the Company of any obligation
 which it may have to the you under this Undertaking, or otherwise, unless and only to the extent that such failure or delay materially
 prejudices the Company.

b. the
 Company shall be entitled to assume your legal defense of such Legal Proceeding or to turn over such defense to any counsel selected
 by the Company for this purpose.

![](ex4-1_001.jpg)

c. the
 Company or such counsel shall be exclusively entitled to conduct your legal defense and to conclude such proceeding as they deem
 fit. At the request of the Company, you shall sign any document authorizing the Company or such counsel to handle your defense in
 such proceeding and to represent you in all matters related thereto, in accordance with the above. the Company shall not be liable
 to indemnify you under this Undertaking for any amounts or expenses paid in connection with a settlement of any action, claim or
 otherwise, effected by you without the Company's prior written consent.

d. If
 the Company acts in accordance with the provisions of subsection (c) above and you enable it to do so, the Company will cover all
 the other expenses and payments that are involved so that you will not be required to pay or finance them yourself, without this
 detracting from the indemnification to which you are entitled pursuant to this Undertaking.

e. You
 shall fully cooperate with the Company or any such counsel as may be required of you by any of them as part of their dealing with
 such Legal Proceeding, provided that the Company will cover all expenses involved so that you will not be required to pay or finance
 them yourself.

**6. *Legal Proceeding Involving* the Company*.*** the Company may, from time to time, ask you to participate in or otherwise assist in a Legal Proceeding brought by, against or otherwise involving the Company. In such case, the Company will advance or promptly reimburse your reasonable expenses incurred in connection with your participation or assistance in such Legal Proceeding, subject to such guidelines and procedures as may be established by the Company from time to time. The Company's obligations under this Section 6 shall not be subject to the provisions or limitations of Sections 1 through 5 above.

**II.** **Insurance** 

**7.** The Company undertakes that, subject to the mandatory limitations under applicable law, as long as it may be obligated to provide indemnification and advance expenses under this Undertaking, The Company will purchase and maintain in effect directors and officers liability insurance, which will include coverage for your benefit to the maximum extent of the coverage available for individual insured persons under such policy or policies, providing coverage in amounts as reasonably determined by the Board; provided that The Company shall have no obligation to obtain or maintain directors and officers liability insurance if The Company determines in good faith that such insurance is not reasonably available, the premium for such insurance is disproportionate to the amount of coverage provided, or the coverage provided by such insurance is so limited by exclusions that it provides an insufficient benefit. The Company hereby undertakes to notify you at least 30 days prior to the expiration or termination of any such directors and officers liability insurance.

8. The Company undertakes to give prompt written notice of the commencement of any claim hereunder to its insurers in accordance with the procedures set forth in each of the potentially applicable policies. The Company shall thereafter diligently take all actions reasonably necessary under the circumstances to cause such insurers to pay, on your behalf, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies. The above shall not derogate from The Company's authority to freely negotiate or reach any compromise with the insurers that, in The Company's sole discretion, is reasonable, provided that The Company shall act in good faith and in a diligent manner.

![](ex4-1_001.jpg)

9. The Company shall not be liable under this Undertaking to make any payment in connection with any indemnifiable event to the extent you have otherwise actually received payment under any insurance policy or otherwise (without any obligation on your part to repay any such amount) of the amounts otherwise indemnifiable hereunder. Any amounts paid to you under such insurance policy or otherwise after the Company has indemnified you for such liability or expense shall be repaid to the Company promptly upon receipt by you. The Company hereby acknowledges that from time to time you may have certain rights to indemnification, advancement of expenses or insurance provided by shareholders of The Company, and certain of its affiliates and third parties (collectively, the "**Secondary Indemnitors**"). Subject to the terms and conditions of this Undertaking, the Company hereby agrees that (i) the Company is the indemnitor of first resort (i.e. its obligations to you are primary and any obligation of the Secondary Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by you is secondary); (ii) the Company shall be required to advance the full amount of expenses incurred by you and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Undertaking (or any other agreement between The Company and you), without regard to any rights you may have against the Secondary Indemnitors; and (iii) the Company irrevocably waives, relinquishes and releases the Secondary Indemnitors from any and all claims The Company may have against the Secondary Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Without altering or expanding any of The Company's indemnification obligations hereunder, The Company further agrees that no advancement or payment by the Secondary Indemnitors on behalf of you with respect to any claim for which you have sought indemnification from The Company shall affect the foregoing and the Secondary Indemnitors shall have a right of contribution and be subrogated to the extent of such advancement or payment to all of the rights of recovery of you against The Company. The Company agrees that the Secondary Indemnitors are express third party beneficiaries of the terms of this section.

**III.** **Exculpation** 

10. To the maximum extent permitted by applicable law, The Company hereby exculpates and releases you in advance and retrospectively from your responsibility, in whole or in part, to The Company with respect to damages related to any breach of the duty of care to The Company, except in those instances where The Company cannot exculpate you in advance from your responsibility to The Company, including with respect to the breach of the duty of care in connection with a "distribution" as such term is defined in the Companies Law.

**IV.** **Validity of the Undertaking** 

11. This Undertaking relates to your performance as an Office Holder of The Company, or a director or officer, employee, observer, agent or fiduciary in the entities specified in the first paragraph of Section 1, and will be valid both with respect to proceedings taken against you during your term as an Office Holder, or director or officer, employee, observer, agent or fiduciary as above, and with respect to proceedings against you following the end of your term, provided that they relate to actions that were performed by you from the date on which your term of office commenced, either directly or indirectly, during or as a result of your being an Office Holder of The Company, or a director or officer, employee, observer, agent or fiduciary in the entities specified in the first paragraph of Section 1, and as a result thereof. This Undertaking shall also inure to the benefit of your heirs and other legal substitutes.

12. This Undertaking supersedes any prior undertaking for indemnification, if given to you in the past; however, this Undertaking does not derogate from or waive any other indemnification or exculpation to which you are entitled from any other source by applicable law or by any other undertaking.

13. This Undertaking shall not restrict The Company or prevent it from granting additional or special indemnification or exculpation, provided that this does not prejudice the indemnification and exculpation that are the subject of this Undertaking.

14. Your rights hereunder shall not be deemed exclusive of any other rights that you may have under The Company's Articles of Association, applicable law or otherwise, and to the extent that during the indemnification period the indemnification rights of the then-serving Office Holders are more favorable to such Office Holders than the indemnification rights provided hereunder to you, you shall be entitled to the full benefits of such more favorable indemnification rights to the extent permitted by law. To the extent that a change in the law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under The Company's Articles of Association of The Company and this Undertaking, then you shall enjoy by this undertaking the greater benefits so afforded by such change.

![](ex4-1_001.jpg)

**V.** **Miscellaneous** 

15. ***Duration of Undertaking***. All agreements and obligations of The Company contained herein shall continue during the period you are an Office Holder of The Company (or are or were serving at the request of The Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as you may be subject to any proceeding by reason of your Corporate Capacity, whether or not you are acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Undertaking. This Undertaking shall continue in effect regardless of whether you continue to serve as an Office Holder of The Company or any affiliated company at The Company's request.

**16. *Amendments and Waivers***. This Undertaking shall constitute a binding undertaking by The Company enforceable in accordance with its terms. Any amendment, addition or omission will be valid only upon execution of a written agreement signed by the parties hereto. No amendment, alteration or repeal of this Undertaking or of any provision hereof shall limit or restrict any of your rights under this Undertaking in respect of any action taken or omitted by you prior to such amendment, alteration or repeal, unless caused by a change to the law that cannot be altered contractually. No waiver of any of the provisions of this Undertaking shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. Any waiver shall be in writing.

**17. *Notices***. All notices and other communications given or made pursuant to this Undertaking shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b), if sent by electronic mail or facsimile (with electronic confirmation of receipt) on the recipient's next business day, (c) four (4) days after having been sent by a recognized overnight courier, postage prepaid.

**18. *Successors and Assigns***. This Undertaking shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of The Company), assigns, spouses, heirs, executors and personal and legal representatives.

**19. *Governing Law***. This Undertaking shall be governed by the laws of the State of Israel. The competent courts of the State of Israel located in Tel Aviv shall have exclusive jurisdiction over all matters in connection with this Undertaking, including its validity, construction, extent or cancellation. Each party irrevocably submits to the exclusive jurisdiction of such courts, and no other forum shall have any jurisdiction.

**20. *Enforcement***. The Company expressly confirms and agrees that it has entered into this Undertaking and assumed the obligations imposed on it hereby in order to induce you to serve as an Office Holder of The Company, and The Company acknowledges that you are relying upon this Undertaking in serving as an Office Holder of The Company.

**21. *Counterparts; Facsimile***. This Undertaking may be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

![](ex4-1_001.jpg)

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

---

| | |
|:---|:---|
| Indemnitee | Nasus Pharma Ltd. |
| Name: | Name: |
| Title: | Title: |

---

## Exhibit 4.3

**Exhibit 4.3**

**Nasus Pharma Ltd.**

**(the "Company")**

**Compensation Policy for Company's Office Holders**

Dated: [_] 2025

**<u>Introduction</u>**

&nbsp;&nbsp;&nbsp;&nbsp;1.1 Pursuant
 to the provisions of the Companies Law, 5759-1999 (hereafter – the **"Companies Law** "), on [_], 2025 and [_], 2025, the Company's board of directors (the
 "**Board of Directors**") and the Company's general meeting of shareholders
 (the "**General Meeting** "), respectively, approved a compensation policy
 (hereafter – the "**Policy**") with respect to the terms of service
 and / or employment of Company's office holders (as defined in section 2.1 in this
 Policy) (hereafter - the "**Office Holder** ").

&nbsp;&nbsp;&nbsp;&nbsp;1.2 The
 provisions of the Policy shall be subject to the provisions of any cogent law applicable
 to the Company and its Office Holders in any territory.

&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>The underlying principles and purposes of the Policy are as follows</u>: (a) promoting the Company's
 goals, its work plan and its long-term policy; (b) compensating and providing incentives
 to Company's Office Holders, while considering the risks that the Company's activities
 involve; (c) adjusting the compensation package to the size of the Company and the nature
 and scope of its activities; (d) creating incentives that are suitable to Company's
 Office Holders by compensating those entitled for compensation under the Policy in accordance
 with their positions, areas of responsibility and contribution to the development of the
 Company's business, the promotion of its targets and the maximization of profits in
 the short and long-term, taking into account, among other things, the need to recruit and
 retain qualified, highly-skilled office holders in a global and competitive market; and (e)
 adjusting the compensation of Company's Office Holders to the contribution of the Office
 Holder to the achievement of the Company's goals.

&nbsp;&nbsp;&nbsp;&nbsp;1.4 This
 Policy is a multi-annual policy that will be effective for a period of five (5) years from
 the date in which the Company completed an initial public offering of its ordinary shares
 ()"**IPO** "). This policy shall be brought forward for re-approval by the Company's
 compensation committee of the Board of Directors (the "**Compensation Committee** "),
 the Company's Board of Directors and the General Meeting after five (5) years have
 elapsed since the date of completing the IPO and after every three (3) years after first
 re-approval, unless any changes need to be made to the Policy in accordance with the Companies
 Law and/or in accordance with the Company's needs.

&nbsp;&nbsp;&nbsp;&nbsp;1.5 Without
 derogating from the provisions set out in Section 1.4 above, the Company's Compensation
 Committee and Board of Directors shall examine, from time to time, whether the compensation
 that is granted under the Policy, does, indeed, comply with its terms and the parameters
 set therein for each Company Office Holder.

&nbsp;&nbsp;&nbsp;&nbsp;1.6 This
 Policy is based, among other things, on the Company's assessments as to the competitive
 environment in which it operates and the challenges it faces in recruiting and retaining
 high-quality office holders in such environment; This Policy is also based on employment
 terms generally accepted in public companies operating in the Company's area of activity
 and on existing employment agreements between the Company and its Office Holders, which –
 in order to remove any doubt – this policy cannot change. In addition, it is clarified
 that this Policy does not create a commitment between the company and its office holders.

&nbsp;&nbsp;&nbsp;&nbsp;1.7 For
 the avoidance of doubt, any compensation of Office Holders (as defined below), which are
 controlling shareholders of the Company (as the meaning of "control" is defined
 in the Companies Law), if applicable, may require additional approvals (such as shareholders'
 approval) under any applicable law.

**2.**  **<u>The Policy</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;2.1  **<u>Definitions</u>** 

<u>"Applicable Law"</u> shall mean any applicable law, rule, regulation, statute, extension order, judgment, order or decree of any federal, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading or quotation system on which the securities of the Company are then traded, listed or quoted.

<u>"Board of Directors"</u> means the Board of Directors of the Company.

<u>"Change of Control Event"</u> means (i) acquisition (including an exchange) of more than 50% of the share capital of the Company, or a sale (including an exchange) of all or substantially all of the shares of the Company to any person, or a purchase by a shareholder of the Company or by an Affiliate of such shareholder of all the shares of the Company held by all or substantially all other shareholders or by other shareholders who are not Affiliated with such acquiring party; (ii) a sale of all or substantially all of the assets of the Company; and (iii) a merger (including, a reverse merger and a reverse triangular merger), consolidation amalgamation or like transaction of the Company with or into another corporation. It is clarified that the Company's Board of Directors will be entitled to change the definition of "Change of Control Event" at any time.

<u>"Committee"</u> means the Compensation Committee of the Board of Directors, within the meaning of the Companies Law.

<u>"Companies Law"</u> means the Israeli Companies Law, 5759-1999 together with the regulations promulgated thereunder, all as amended from time to time.

<u>"Office Holder"</u> or <u>"Executive"</u> means as set forth in the Companies Law. To the extent that an Office Holder's or an Executive's engagement or service is not through employment relations with the Company or any Affiliate thereof, then this Policy shall apply, with the necessary changes and any reference to basic and/or gross salary shall apply to the respective consultation and/or service fees, which shall be calculated as the basic and/or gross salary defined pursuant to this Policy, as may be amended from time to time, multiplied by 1.4.

<u>"Subordinate Office Holder"</u> means an Office Holder reporting directly to the Company's Chief Executive Officer (the "**CEO**").

<u>"Foreign Office Holder"</u> means Foreign CEO or a Subordinate Office Holder who his/her residency is outside of Israel.

<u>"Terms of Office and Engagement"</u> means as defined in the Companies Law.

Terms not otherwise defined herein shall have the meaning ascribed to them in the Companies Law, unless the context dictates otherwise. To the extent any provision herein conflicts with the conditions of any Applicable Law, the provisions of the Applicable Law shall prevail over this Policy and the Board of Directors is empowered hereunder to interpret and enforce such prevailing provisions. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". References to any law or regulation, rule or ordinance, including any section or other part thereof, shall refer to that as amended from time to time and shall include any successor law. The use of captions and titles in this Policy is for the convenience of reference only and shall not affect the meaning of any provision of this Policy.

Nothing in this Policy shall confer upon any person, including, any Executive, any rights, entitlements, benefits or remedies whatsoever, including any right or entitlement to any compensation, remuneration or benefits of any kind or nature or to interfere with or limit in any way the right and authority of the Company or any its Affiliates to determine any compensation, remuneration or benefits or to terminate the service or employment of any Executive. The Terms of Office and Engagement of an Executive shall only be as set in an agreement between such Executive and the Company or its Affiliates or in a written undertaking of the Company or its Affiliates or in a resolution of the relevant organ of the Company or such Affiliate setting forth the Terms of Office and Engagement and their applicability to the relevant Executive, and, in each case, as prescribed by Applicable Law. No representation or warranty is made by the Company in adopting this Policy, and no custom or practice shall be inferred from this Policy or the implementation thereof, which is specific and applied on a case-by-case basis.

To the extent that after the date on which this Policy is approved in accordance with the Companies Law, relief is granted as to the mandatory or minimum requirements prescribed by Applicable Law to be included in a Compensation Policy as of the date hereof, or any limitation contained in this Policy is more stringent than that required by Applicable Law, than such relief or less stringent limitation shall be deemed incorporated by reference into this Policy notwithstanding anything else to the contrary, unless otherwise determined by the Board of Directors.

Terms of Office and Engagement of any Executive that were in effect prior to the date of adoption of this Policy and were in compliance with prior compensation policies or Company practices, will remain in effect even if those may not be in compliance, in full or in part, with this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;2.2  **<u>Components of the Policy</u>** 

In accordance with the Policy, the compensation of the Company's Office Holders shall be based on all or some of the following components:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.1 **Basic salary** – refers to the monthly salary of that employee, excluding any social benefits
 and related benefits, and in respect to compensation paid as consultancy fee or equivalent
 (to a non-employee Office Holder) – the monthly gross consultation fees, excluding
 VAT (if applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.2 **Social and related benefits** - social benefits as prescribed by any local law (pension savings,
 contributions towards severance pay, contributions towards training fund, vacation pay, sick
 leave, recreation pay, etc.) and related benefits, such as company vehicle/vehicle maintenance,
 telephone expenses, laptop, meals at the workplace, gifts on public holidays, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.3 **Variable cash compensation (bonus) –** short and medium-term compensation, which includes
 annual bonuses, which are based on results and achievement of targets. The Company may also
 determine that a certain Office Holder will be paid discretionary annual/one-time/special
 bonuses, considering his/her contribution to the Company and the restrictions placed under
 this policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.4 **Variable equity-based compensation** – equity-based payment or another long-term compensation
 (subject to the existence of valid long-term compensation plans and provided that the Company
 decides to award such compensation).

(the components in sections 2.2.3 and 2.2.4 above shall be called together hereafter: "**variable components**").

At the time of approval of the compensation package of an Office Holder, the Compensation Committee and Board of Directors shall assess the compliance of each of those components and of the total cost of employment and/or consultancy fee with the criteria set out in this Policy.

Any deviation of up to 10% from the ratios and caps set forth in this policy shall not be deemed as a deviation from this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;2.3  **<u>Parameters for reviewing compensation terms</u>** 

Generally, some or all of the following parameters will be considered when reviewing the compensation terms of an Office Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.1 Education,
 skills, expertise, tenure (specifically in the Company and in the Office Holder's field
 of expertise in general), professional experience and achievements of the Office Holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.2 The
 role of the Office Holder, his areas of responsibility and his employment or services terms
 under previous signed employment/service agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.3 The
 Office Holder's contribution to the Company's business, the achievement of its
 strategic goals and implementation of its work plans, the maximization of its profits and
 the enhancement of its strength and stability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.4 The
 extent of responsibility delegated to the Office Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.5 The
 Company's need to recruit or retain an Office Holders with unique skills, knowledge,
 or expertise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.6 Whether
 a material change has been made to the role or function of the Office Holder, or to the Company's
 requirements from the Office Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.7 The
 size of the Company and the nature of its activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.8 As
 to service and employment terms that include retirement grants – the term of service
 or employment of the Office Holder, the Office Holder's terms of service and employment
 over the relevant period, the Company's performances in the said period, the Office
 Holder's contribution to the achievement of the Company's goals and the circumstances
 of the Office Holder retirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.9 (a)
 The market conditions of the industry in which the Company operates at any relevant time,
 including the Office Holder's salary or consultation fee compared to the salaries or
 consultation fees of other office holders working in similar positions (or in position of
 comparable level) in companies whose characteristics are similar to those of the Company
 in terms of its activity (as described in section 2.4.1 below); (b) the availability of suitable
 candidates that can serve as Office Holders in the Company, the recruitment and retainment
 of the Office Holders and the need to offer an attractive compensation package in a global
 competitive market; and (c) changes in the Company's area of activity and in the scope
 and complexity of its activities.

&nbsp;&nbsp;&nbsp;&nbsp;2.4  **<u>Payroll review</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.1 For
 the purpose of determining the payroll that can be offered to an Office Holder upon recruitment,
 the Company will review from time to time the payroll generally accepted in the relevant
 markets for similar positions in companies, which are similar to the Company in terms of
 its area of activity/scope of activity/complexity of activity/market value/revenues and other
 relevant parameters (if such companies exist).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.2 The
 payroll review will be conducted by the Company itself, or by an external advisor, at the
 Company's discretion, after the Compensation Committee has issued its recommendations
 regarding this matter.

&nbsp;&nbsp;&nbsp;&nbsp;2.5  **<u>Basic salary, benefits and other related benefits</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.1 The
 basic salary of an Office Holder shall be determined taking into accounts the parameters
 described in section 2.3 above and the conclusions of the payroll review described in section
 2.4 above (should such a review be conducted).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.2 The
 basic salary shall be in absolute numbers and will include additional costs as requires by
 any Applicable Law and according to the Office Holders position (such as a Company vehicle
 etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.2.1. The
 Compensation Committee and the Board of Directors may decide to exchange basic salary with
 equity-based compensation (the "**Exchange Basic Salary** "), such as options
 to purchase ordinary shares, no par value of the Company ()"**Options**" and
 "**Ordinary Shares** ", respectively), Restricted Shares of the Company ()"**RS** ")
 or Restricted Shares Units of the Company ()"**RSUs** "), either in whole or
 in part, which may be granted under the Company's equity incentive plan (the "**Equity Incentive Plan** "), as amended, and in a minimum exercise price per share as allowed
 under any Applicable Law, and may be vested on a monthly basis, in accordance with any Applicable
 Law.

In such case, the calculation of the Exchange Basic Salary value in comparison to the basic salary will be times 1.3 of the basic salary for the relevant month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.2.2 The
 Compensation Committee and the Board of Directors may decide to exchange accrued and unpaid
 cash salary to Office Holders, including controlling shareholders and/or relative of controlling
 shareholder (only in the event described in this section 2.10.2), with RSU or any other equity-based
 compensation in accordance with the Equity Incentive Plan (the "**Exchanged equity-based compensation** ").

<u>The Exchanged equity-based compensation terms will be determined according to the following:</u> 

**Vesting Period**- will be no less than one month.

**Share Price**- will be determined at the Board of Directors' discretion and granted in the minimum par value per share as allowed under Applicable Law. In such case the calculation of RS and RSU value in comparison to the basic cash salary will be times 1.3 of the basic cash salary for the relevant month.

All other relevant Exchanged equity-based compensation terms will be determined as specified in section 2.11.1 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.3 In
 any case, the basic monthly gross salary, or alternatively, the monthly services fees (as
 defined above) shall not exceed the maximum amount set out below (linked to the Consumer
 Price Index commencing May 2015):

---

| | |
|:---|:---|
| **Position\*** | **Maximum basic monthly gross salary\*** |
| Active Chairperson of the Board of Directors ("**Active Chairperson**")\*\* | NIS 128,000 |
| Company's CEO ("**CEO**") | NIS 160,000 |
| Company's Foreign CEO ("**Foreign CEO**") | $44400 |
| Subordinate Office Holders | NIS 120,000 |
| Foreign Office Holder | $33300 |

---

\* The amounts presented above are in respect of a full-time position (**other than the Active Chairperson**); those amounts shall change in proportion to the scope of position of the Office Holder.

\*\* Unless the Active Chairperson hold another position in the Company, in which case he will not be entitled to a dual compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.4  **<u>Social benefits<sup>1</sup>, related benefits, reimbursement of expenses</u>** 

The Terms of office and engagement of an Executive will include benefits or entitlements mandated by any Applicable Law and may include benefits generally acceptable in the local market or industry or generally available to other employees of the Company (or any applicable Affiliate or division) in accordance with Company policies, including (without limitation) the following benefits listed below. For avoidance of doubt, Executives who are based outside of Israel may receive other similar, comparable, or customary benefits as applicable in the relevant jurisdiction in which they are employed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Pension,
 including 401K

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Education
 fund

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Severance
 pay

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Managers
 insurance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Medical
 insurance (including vision and dental) and life insurance, including with respect to immediate
 family members

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Disability
 insurance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Leased
 car or company car, as well as bearing the cost of related expenses or reimbursement thereof,
 or the value of the use thereof, including the gross up of car use value, or transportation
 allowance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Telecommunication
 and electronic devices and communication expenses, including (without limitation) cellular
 telephone and other devices, personal computer/laptop, internet services, or the value of
 the use thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Paid
 vacation and the number of vacation days that may be accrued, including, if applicable, the
 redemption thereof

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Sick
 days

<sup>1</sup> As to an Office Holder that has entered into engagement with the Company whereby no employer-employee relationship exists, the Company may pay the social benefits described above as part of his monthly fee in lieu of the said expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Holiday
 and special occasion gifts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Recuperation
 pay

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Expense
 reimbursement (including domestic and international travel expenses and per diem payments)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Payments
 for meals during working hours, according to the Company's policy

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Payments
 or participation in relocation and related costs and expenses

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Loans
 or advances (subject to Applicable Law)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Professional
 or academic courses or studies

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Newspaper
 or online subscriptions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Professional
 membership dues or subscription fees

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Exculpation
 and indemnification to the fullest extent permitted by Applicable Law

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) Directors'
 and officers' liability insurance, to the fullest extent permitted by Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.5 Any of the above benefits
 may include gross up of taxes and/or mandatory payments required to be made by Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6  **<u>Insurance, indemnification, and exemption</u>** 

**<u>D&O Insurance</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.1 The
 Company's Office Holders, as may be from time to time, shall be entitled to benefit
 from coverage provided by liability insurance of directors and Office Holders, which the
 Company will purchase from time to time (the "**D&O Insurance** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.2 The
 D&O Insurance and any extension, renewal or replacement of the D&O Insurance, may
 be approved by the Committee alone (and the Board of Directors, if required by the Companies
 Law), if the insurance policy meets the following criteria and provided that the engagement
 with the insurer is entered into under market conditions and will not have a material effect
 on the Company's profitability, its assets or liabilities, and in case of an Office
 Holder which is a controlling shareholder of the Company or his relative, provided that the
 terms of the D&O Insurance apply equally for all relevant Office Holders of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 limit of insurer's liability under the insurance policy (including Side "A"
 coverage) shall not exceed USD 50,000,000 (fifty million U.S. Dollars) per claim and during
 the insurance period covered by that policy, plus reasonable litigation expenses in excess
 of the abovementioned limit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The
 total annual premium that the Company will pay to an insurance company for the Office Holders
 liability insurance as described above, shall be (i) determined by the Company's Compensation
 Committee and after consulting with an insurance expert; in market conditions and in an immaterial
 cost at the time of purchasing; or (ii) Shall not exceed a total of USD 5,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. the
 Compensation Committee has determined that the sums are reasonable considering the Company's
 exposures covered under such policy, the scope of cover and the market conditions, and that
 the D&O Insurance is on market terms and shall not have a material impact on the Company's
 profitability, assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.3 **Run Off Coverage** - Upon circumstances to be approved by the Compensation Committee (and, if
 required by the Companies Law, by the Board of Directors), the Company shall be entitled
 to enter into a "run off" Insurance Policy of up to seven (7) years, with the
 same insurer or any other insurance (the "**Run Off Coverage** "). The limit
 of liability of the insurer shall not exceed USD 50,000,000 per claim and in the aggregate
 for the term of the policy, the premium for the insurance period shall not exceed 400% of
 the last paid annual premium and the deductible (except for extraordinary matters as prescribed
 in the D&O Insurance, such as lawsuits against the Company pursuant to securities laws
 and/or lawsuits to be filed in the US/Canada) shall not exceed USD 150,000 per claim. The
 Run Off Coverage, as well as the limit of liability and the premium for each extension or
 renewal, shall be approved by the Compensation Committee which shall determine whether the
 sums are reasonable considering the Company's exposures, the scope of coverage and
 market conditions and if the Run Off Coverage reflects then prevailing market conditions,
 and, provided, further, that the Run Off Coverage shall not materially affect the Company's
 profitability, assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.4 The
 D&O Insurance may include an entity cover that will cover the Company itself in case
 of lawsuits filed against it under securities laws (whether those lawsuits are filed only
 against the Company and whether they are filed against the Company and Office Holder thereof
 or an Office Holder in its related companies). Such cover will be subject to priorities for
 payment of any insurance benefits according to which the rights of the Directors and Officers
 to receive indemnity from the Insurer's take precedence over the right of the Company
 itself.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.5 In
 this section 2.5.6.5, if the determined amounts do not exceed 10%, this will not be considered
 as an exemption of the Policy.

**<u>Indemnification and Exemption</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.6 The
 Company's Office Holders may be entitled to an indemnification arrangement in accordance
 with arrangements that are normally acceptable and subject to the provisions of the Companies
 Law and the Company's articles of association, as amended (the "**Articles of Association** "). The overall amount of indemnification per event to each Office Holder
 and to all Office Holders together, individually or in aggregate, shall not exceed the greater
 of: (i) 25% of the effective shareholders' equity of the Company; or (ii) USD 5 million
 (the maximum indemnification amount).

For that purpose, the "**effective shareholders' equity of the Company"** means the amount of the Company's shareholders' equity in accordance with the last consolidated audited or reviewed financial statements of the Company (as applicable) at the time of actual payment of the indemnification. It is hereby clarified that the indemnification shall be paid in excess of any amount paid under the D&O Insurance, which the Company has purchased or will purchase from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5.6.7 Company's
 Office Holders may be entitled to an exemption arrangement in accordance with arrangements
 that are normally acceptable and subject to the provisions of the Companies Law and the Company's
 Articles of Association.

&nbsp;&nbsp;&nbsp;&nbsp;2.6  **<u>Compensation in connection with termination of employment</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.1  **<u>Advance notice period</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.1.1 An
 Office Holders may be entitled to advance notice period or payment in lieu of advance notice
 period, as follows:

**<u>Active Chairperson</u>** - up to 6 months advance notice period.

**<u>CEO</u>** - up to 12 months advance notice period.

**<u>Foreign CEO</u>** - up to 12 months advance notice period.

**<u>Subordinate Office Holder</u>**s - up to 8 months advance notice period.

**<u>Foreign Office Holder</u>**s - up to 8 months advance notice period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.1.2 Over
 the course of the advance notice period, Office Holders shall continue fulfill their duties
 at the request of the Company, in which case the Office Holders may be entitled to continue
 and receive over the advance notice period all employment and service terms, as agreed upon
 in the employment/service agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.1.3 The
 service or employment terms of the Office Holders may include a provision whereby the Company
 may terminate the services or employment of the Office Holder without an advance notice period
 in cases which deny eligibility for severance pay according to the Companies Law, including,
 but not limited to the following events: (a) conviction of an offence involving moral turpitude;
 (b) an Office Holder who will conduct himself in a disloyal and/or unreliable and/or dishonest
 manner in his relations with the Company and/or while carrying out actions on its behalf
 of the Company and/or will harm the Company's reputation; (c) in case the Office Holder
 will breach the confidentiality duty towards the Company and/or his duty to protect the Company's
 rights which were developed due to or as part of his work at the Company; (d) Any other event
 in which the Company is legally entitled to refrain from payment of severance pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.2  **<u>Retirement terms</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6.2.1 The
 retirement terms of Office Holders shall be determined by the Compensation Committee and
 the Board of Directors, in accordance with the following table, while taking into account,
 among other things, the parameters set out in section 2.3 above, the terms of service and
 employment of the Office Holder over the course of his office, his contribution to the achievement
 of the Company and the circumstances of the retirement:

---

| | |
|:---|:---|
| **Position** | **Validation of the right from termination of employment / services date** |
| Active Chairperson | Up to 6 months gross salary |
| CEO | Up to 6 months gross salary |
| Foreign CEO | Up to 6 months gross salary |
| Subordinate Office Holders | Up to 6 months gross salary |
| Foreign Office Holder | Up to 6 months gross salary |

---

&nbsp;&nbsp;&nbsp;&nbsp;2.7  **<u>Annual bonus</u>** 

In addition to the basic salary, the compensation package of Company's Office Holders may include eligibility to an annual bonus that is based on measurable targets and to an annual discretionary bonus (hereafter jointly: "**the Annual Bonus**").

For the purpose of this Annual bonus section, whenever the term "salary" is used, it means (i) in the case of an employed Office Holder – the gross salary as paid to the Office Holder in the month before the grant of such bonus, including any social benefits and related benefits as detailed in section 2.5 herein, and in any case for the benefit of the employee; and (ii) in the case of Office Holder with no employer-employee relationship – the fee paid to the Office Holder in the month before the grant of such bonus, excluding VAT (if applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.1 <u>Components of the Annual Bonus</u> 

The Company may grant an Office Holder with an Annual Bonus of up to the maximum Annual Bonus as described in the table in section 2.7.7 below, based on the compensation plan which will be approved by the compensation committee and the Board of Directors for each year in advance.

At the end of each year, the Compensation Committee and Board of Directors will review the Office Holders' meeting their measurable targets in order to determine that component of the Annual Bonus, which is based on measurable targets.

The Compensation Committee and Board of Directors may determine to pay only part of the component of the Annual Bonus, which is based on measurable targets, if the Office Holder meets only some of the targets.

The Compensation Committee and the Board of Directors alone may decide to change the measurable targets of an Office Holder at any time during the year, if the change is for the best interest of the Company and for special circumstances (for example: change of job description, regulatory changes, other material events), that the Compensation Committee and Board of Directors believes that justify making such change (including retroactive change).

According to the rates stated below, the components for each of the Office Holders of the Annual Bonus will be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Measurable
 Targets (from the categories in the list below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Discretionary
 Bonus (according to the limitations set forth herein).

---

| | | |
|:---|:---|:---|
| **Position** | **Measurable Targets** | **Discretionary Bonus** |
| Active Chairperson / CEO | 0-100% | 0-25% (by Compensation Committee and Board of Directors), see section 2.7.3(1) below |
| Foreign CEO | 0-100% | 0-25% (by Compensation Committee and Board of Directors), see section 2.7.3(1) below |
| Subordinate Office Holders | 0-100% | 0-100% (by CEO), see section 2.7.3(2) below. |
| Foreign Office Holder | 0-100% | 0-100% (by CEO), see section 2.7.3(2) below. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.2  **<u>Measurable Targets (Company and Personal)</u>** 

Set forth below are several suggested criteria for an Annual Bonus that is based on measurable targets. It should be clarified that this list is not a closed and binding list. The Compensation Committee and the Board of Directors may consider adding other criteria or removing some of those criteria, considering the role of each Office Holder, his areas of responsibility and the Company's activity.

These performance metrics may include, among other things:

**<u>Active Chairperson and CEO Measurable Targets Criteria</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sales
 and marketing targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Increase
 of revenue targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Engagement
 in contracts with revenue potential in a determined amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Engagement
 in collaboration contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Engagement
 of material contracts and/or strategic contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Achievement
 of product development milestones.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Reducing
 costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Budget
 and work plan related targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Achievement
 of targets/milestones relating to Company's products and projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Promotion
 of strategic plans and targets, including targets which were set for the office holder, and
 which are relevant to the relevant Office Holder's area of activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Achievement
 of regulatory approvals and/or IP related approvals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Achievement
 of financial indicators targets: gross margin, operational profit/loss, net profit/loss,
 cash balance, revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Achievement
 of reimbursement for the Company's products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Company's
 market value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Achievement
 of funding targets: raising loans, private placement, public or rights offering of shares,
 bonds, etc.

**<u>Subordinate Office Holder Measurable Targets Criteria</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sales
 and marketing targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Increase
 of revenue targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Engagement
 in contracts with revenue potential in a determined amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Engagement
 in collaboration contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Engagement
 of material contracts and/or strategic contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Achievement
 of product development milestones.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Reducing
 costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Achievement
 of targets/milestones relating to Company's products and projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Promotion
 of strategic plans and targets, including targets which were set for the Office Holder, and
 which are relevant to the relevant Office Holder's area of activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Achievement
 of regulatory approvals and/or IP related approvals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Achievement
 of reimbursement for the Company's products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Budget
 and work plan related targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Inventory
 and Production related targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Achievement
 of financial indicators targets: gross margin, operational profit/loss, net profit/loss,
 cash balance, revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Achievement
 of funding targets: raising loans, private placement, public or rights offering of shares,
 bonds, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.3  **<u>Discretionary bonus</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>With regard to the Company's CEO and an Active Chairperson of the Board of Directors</u> – most of the Annual Bonus will be based on measurable targets and an immaterial portion
 of the Annual Bonus (for that purpose "**immaterial portion**" – the
 higher of (a) a total of three (3) (gross) monthly salaries or (b) 25% of the variable components
 of the bonus (actual bonus and equity-based payment) shall be a discretionary bonus that
 is based on qualitative criteria.

Notwithstanding the above, if in a specific year the Company does not pay the CEO or the Active Chairperson (as applicable) an Annual Bonus that is based on measurable targets (i.e., if the discretionary Annual Bonus paid to the CEO or the Active Chairperson (as applicable) constitutes the total Annual Bonus paid on that year), then the amount of the discretionary bonus that the Company may pay to the CEO and to the Active Chairperson (as applicable and separately) shall not exceed three (3) gross monthly salaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>With regard to Subordinate Office Holders</u> – subject to the provisions of the Companies
 Law, Subordinate Office Holders, may be eligible to an Annual Bonus that is based on measurable
 targets and to a discretionary Annual Bonus. It should be clarified that the amount of the
 discretionary bonus that the Company may pay to Subordinate Office Holders, shall be in the
 same amount of gross monthly salaries approved by the Compensation Committee and the Board
 of Directors for an Annual Bonus in the same year.

Notwithstanding the foregoing, subject to any Applicable Law, the Company's competent organs shall be entitled to approve payment of Annual Bonus based on all or some of the measurable targets and/or of discretionary bonus, on an Annual, quarterly, monthly, or otherwise basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.4  **<u>Neutralization of one-off events</u>** 

As part of the calculation of the eligibility to Annual Bonus that is based measurable targets on the basis of financial statements data (if such targets are set) the Board of Directors or the Compensation Committee will be authorized to neutralize the effect of "one-off events", or alternatively to decide that such events should not be neutralized in a certain year, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.5 The Company's competent
 organs shall approve this component based, among other things, on data presented by the Company's management and based on personal
 assessment and recommendation issued by the CEO (with regard to Subordinate office holders) and by the Board of Directors with regard
 to Active Chairperson and the CEO, while listing the underlying reasons for their recommendation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.6  **<u>Annual Bonus that is based on measurable targets only</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.6.1 Subject
 to the provisions of the Companies Law and the positions of the Israeli securities authority
 (the "**Israeli Securities Authority**") (as amended from time to time):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 Compensation Committee and Board of Directors alone will be allowed to determine the measurable
 targets applicable to an  **<u>Active Chairperson or any other director</u>** , if <u>one of the following (1) or (2) is fulfilled</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All
 of the following conditions are met: (a) the resolution is in line with the Policy; (b) the
 grant in question is based only on meeting measurable targets; (c) the amount of the potential
 grant is immaterial, as defined below; and (d) the targets were pre-determined by the Compensation
 Committee and Board of Directors.

"**immaterial**" in this section means (i) up to three (3) monthly salaries; or (ii) if no monthly salaries are paid, the average monthly payment (annual fee and per-meeting fee) for a non-executive director in the previous year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) All
 of the following conditions are met: (a) the resolution is in line with the Policy; (b) the
 Office Holder in question serves both as a director and in an operational role in the Company;
 (c) The Compensation Committee and Board of Directors approved the measurable targets, other
 than the said directors, who receive from the Company a bonus based on measurable targets,
 did not take part in the approval of those targets (whether in their capacity as directors
 or in their capacity as other office holders in the Company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The
 Compensation Committee and Board of Directors alone will be allowed to determine the measurable
 targets applicable to an Office Holder, who is a  **<u>controlling shareholder or a relative</u>** thereof (as these terms are defined in the Companies Law), if one of the following (1) or
 (2) is fulfilled:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All
 of the following conditions are met: (a) the resolution is in line with the Policy; (b) the
 grant in question is based only on measurable targets; (c) the amount of the potential grant
 is immaterial (as defined above); and (d) the targets were pre-determined by the Compensation
 Committee and Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The
 Board of Directors has determined a clear target that is based on financial statements data,
 and which applies in the same manner to the controlling shareholder and his relative and
 to other Office Holders, who are not related to the controlling shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.7  **<u>Maximum Annual Bonus</u>** 

The Maximum Annual Bonus of Office Holders as of date of payment thereof (in respect of a bonus based on measurable targets only):

---

| | |
|:---|:---|
| **Position** | **Maximum Annual Bonus<sup>2</sup>** |
| Active Chairperson | Up to 12 monthly salaries. |
| CEO | Up to 12 monthly salaries |
| Foreign CEO | Up to 12 monthly salaries |
| Subordinate Office Holders | Up to 9 monthly salaries |
| Foreign Office Holder | Up to 9 monthly salaries |

---

<sup>2</sup> The maximum values are in respect of the aggregate annual bonus – bonus based on measurable targets and discretionary bonus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.8 The
 amount of the Annual Bonus that is based on measurable targets shall be calculated based
 on measurable criteria, that will be determined (if they are determined) for each and every
 Office Holder at a time close to the date of the discussion held by the Board of Directors
 for review of the Company's budget for the forthcoming year, in accordance with the
 role of the relevant Office Holder, by the competent organs of the Company (in accordance
 with the provisions of the Companies law and the positions of the Israeli Securities Authority,
 as amended from time to time), provided that the targets applicable to Subordinate Office
 Holders, shall be determined by the Compensation Committee and Board of Directors, at the
 recommendation of the CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.9 In
 case the Office Holder fulfilled any of the measurable targets that was determined in advance
 by the Compensation Committee and the Board of Directors, the Compensation Committee and
 the Board of Directors may determine to pay the Office Holder part of the component of the
 Annual Bonus at any time during the said year, following their approval that the Office Holder
 did fulfill a measurable target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.10 The
 Compensation Committee and Board of Directors may decide to pay the Annual Bonus in cash
 and/or equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.11 The
 Compensation Committee and Board of Directors may decide to postpone the payment of the Annual
 Bonus or reduce the amount of the Annual Bonus to which the Office Holder is entitled, at
 their own discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.12 The
 Company may pay an Office Holder, who has not completed a full year of employment in the
 Company, a proportionate share of the Annual Bonus according to the period of employment
 of the Office Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7.13 The
 Office Holder shall repay to the Company that portion of the Annual Bonus he received, which
 was based on measurable targets, should it be determined that this component was paid to
 him on the basis of erroneous data and/or data that were restated in the Company's
 financial statements, provided that the date of restatement of the financial statements does
 not fall later than three (3) years after the original approval of the relevant financial
 statements.

&nbsp;&nbsp;&nbsp;&nbsp;2.8  **<u>One-Time Bonus</u>** 

The Board of Directors, subject to the recommendation of the Compensation Committee and the Office Holder's direct supervisor, may decide to grant a one-time bonus (in addition to the Annual Bonus, as described in Section 2.7 above), to an Office Holder, including an Active Chairperson and directors, in respect of special efforts performed by the Office Holder and/or in respect of the significant contribution of the Office Holder to the Company's operations, special projects or extra ordinary achievements which are not in the Company's general course of business, including but not limited to: completing of an IPO, completion of a merger or sale of operations, material agreement, etc. (the "**One-Time Bonus**").

An approval of a One-Time Bonus to the CEO which is not a controlling shareholder, that meets the aforesaid conditions, shall not be subject to the approval of the General Meeting, as long as the aggregate amount of all of the discretionary bonuses paid to the CEO in the relevant year does not exceed three (3) monthly salaries.

The aggregate amount of an Annual Bonus and a One-Time Bonus, other than for the CEO, shall not exceed 18 monthly salaries.

&nbsp;&nbsp;&nbsp;&nbsp;2.9  **<u>Special Bonus - merger or sale or assignment by the Company of all or substantially all of its shares or assets.</u>** 

The Board of Directors, subject to the recommendation of the Compensation Committee and the Office holder's direct supervisor, may decide to grant a special bonus (beyond the Annual Bonus and/or the One-Time bonus), as described in Section 2.7 and 2.8 above), to an Office Holder, including directors and Chairperson, in case of a consummation of a merger, or sale or assignment by the Company of all or substantially all of the issued and outstanding shares of the Company and/or all or substantially all of the Company's assets (the "**Special Bonus**"). The Special Bonus for all Office Holders together will be subject to a limit of 10% of the transaction value, and in accordance with Applicable Law.

The Special Bonus is separate from the One-Time Bonus and the Annual Bonus.

An approval of a Special Bonus to the CEO, that meets the aforesaid conditions, shall not be subject to the approval of the General Meeting, as long as the aggregate amount of all discretionary bonuses does not exceed three (3) monthly salaries.

&nbsp;&nbsp;&nbsp;&nbsp;2.10  **<u>Phase III Bonus</u>** . In the event that, the Company's Phase III clinical trial successfully
 meets its primary end-point, the CEO shall be granted a one-time gross bonus in an amount
 of USD 75,000.

&nbsp;&nbsp;&nbsp;&nbsp;2.11  **<u>Equity-based compensation</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1 The
 purpose of granting long term compensation is to create an identity of interests between
 the company's long term business results and the director's or Office Holder's
 compensation. In addition, granting long term compensation is a tool for preserving personnel.
 The principles for the long-term compensation are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.1 The
 Company will provide equity-based compensation, which can include Options, **RSUs**, RS
 and/or any other equity-based compensation in accordance with the Equity Incentive Plan (the
 "**Award**" or "**equity-based compensation** ", to directors
 and/or Office Holders, from time to time at the Board of Director's discretion, and
 subject to the applicable approvals according to the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.2 **Vesting Period** - The vesting period will not be less than three (3) months cliff before the first
 installment, except in cases of acceleration, in accordance with the Policy, the Equity Incentive
 Plan, the employment and/or service agreement with the Office Holder, or subject to meeting
 specific milestones.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.3 **Acceleration Mechanism** - The Board of directors (and in relation to the CEO or directors, as required
 by Applicable Law) may allow immediate acceleration for any unvested Award granted to directors
 and/or Office Holders, upon a Change of Control Event (as defined in the Policy) or following
 termination of employment or services of a directors and/or Office Holder, subject to the
 full discretion of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.4 **Exercise Price** - The exercise price of the equity-based compensation shall not be less than the
 higher of (i) the Company's share price at the date of grant; or (ii) the Company's
 average share price of the last 30 trading days, prior to the grant date, as decided by the
 Compensation Committee and the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.5 **Expiration date** - up to ten (10) years from the date of grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.6 The
 grant of equity-based compensation will be granted as possible under section 102 of the Income
 Tax Ordinance to employees employed in Israel (in cases of employees abroad, the equity-based
 compensation will be granted under the existing law in those countries).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.7 The
 maximum equity-based compensation value as specified below is for one-year term and shall
 be calculated on a linear basis<sup>3</sup>:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Position** | Active Chairperson | CEO / Foreign CEO | Subordinate Office Holders | Director |
| **Maximum amount** | NIS3,465,000 | NIS4,335,000 / USD1,204,000 | NIS3,250,000 | NIS3,250,000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.8 Other
 conditions for long-term compensation will be in accordance with the Company's Equity
 Incentive Plan or any other long-term compensation plan that will be adopted by the Company.

<sup>3</sup> The total annual equity-based compensation value will be calculated as an accumulated amount of granted securities throughout each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.9 Any
 other terms of the equity-based compensation will be determined by the Compensation Committee
 and the Board of Directors, in accordance with the Company's Equity Incentive Plan
 in effect from time to time, subject to any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11.1.10 <u>Repricing and exchange equity-based compensation</u> -

With approval of the Compensation Committee and the Board of Directors, the Company may decide to replace existing Options with RSUs or existing Options with other Options, in different quantities of RSUs and/or Options as well as with different vesting periods and/or exercise price or in different quantities or RSUs and/or Options.

&nbsp;&nbsp;&nbsp;&nbsp;2.12  **<u>The ratio between the variable components and the basic salary component<sup>4</sup></u>** 

---

| | |
|:---|:---|
| **Position** | **The percentage of the total variable components out of the total annual compensation** |
| Active Chairperson | Up to 100% |
| CEO\* | Up to 100% |
| Foreign CEO | Up to 100% |
| Subordinate Office Holders | Up to 100% |
| Foreign Office holders | Up to 100% |

---

\*Subject to applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;2.12  **<u>Extending the term of and amendments to existing agreements with Office Holders and</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12.1 Prior
 to extending the term of the services or employment agreement with an Office Holder (whether
 this involves changes to the terms of employment or not), the Office Holder's existing
 compensation package will be assessed in relation to the parameters set out in section 2.3
 above and bearing in mind the payroll review, which was conducted by the Company as per section
 2.4 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12.2 Subject
 to the provisions of the Companies Law and the position statements of the Israeli Securities
 Authority, as amended from time to time, immaterial changes (as defined below) made to the
 service or employment terms of the Company's CEO (other than a CEO which is a controlling
 shareholder, as applicable) will require the approval of the Compensation Committee alone,
 if it will be determined that the changes are, indeed, immaterial and the change complies
 with the provisions of this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12.3 Subject
 to the provisions of the Companies Law and the position statements of the Israeli Securities
 Authority, as amended from time to time, immaterial changes (as defined below) made to the
 service or employment terms of the Subordinate Office Holders (other than a Subordinate office
 holder which is a controlling shareholder or a relative thereof, as applicable) shall require
 the approval of the CEO alone, and the approval of the Compensation Committee will not be
 required, provided that the service and employment terms of that Subordinate Office Holder
 comply with the provisions of this Policy.

In sections 2.12.2 and 2.12.3 above, "**immaterial changes to the service and employment terms**" are changes, the aggregate value of which does not exceed 20% of the overall annual cost of compensation of the office holder.

<sup>4</sup> For that purpose, the "variable components" include the annual bonus, one-time bonus, special bonus and annual value of the equity-based payment.

&nbsp;&nbsp;&nbsp;&nbsp;2.13  **<u>Components Of Terms of Office and Engagement of Directors</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.1 External
 directors of the Company (as defined in the Companies Law), as applicable, will be entitled
 to annual compensation and participation compensation which will be determined in accordance
 with the provisions of the Companies Regulations (rules regarding remuneration and expenses
 for an external director), 2000 hereafter and the Companies Regulations (exemptions for dual
 companies), 2000 ()"**the compensation regulations** "), as may be from time
 to time and according to the Company's rank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.2 Directors
 who also serve as Company's Office Holders will be able to receive directors compensation
 in addition to the Office Holders compensation, subject to Applicable Law and required approvals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.3 In
 addition, the directors of the Company will be entitled to compensation of travel and parking
 expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.4 In
 the case of a non-executive director (except for external directors) with additional expertise
 in the Company's operations and/or in other areas where the Board of Directors has
 decided that they are necessary for the Company, the Company will be entitled, to award that
 director, solely that the aggregate amount of the annual compensation to which the director
 is entitled, does not exceed USD 200,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.5 The
 Company may grant equity-based compensation to directors, including external directors and
 independent directors, from time to time, all in accordance with Applicable Law.

The annual fair value<sup>5</sup> of equity-based compensation at the grant date, as reflected in the Company's financial statements, granted to external directors (if applicable) and independent directors and non-executive directors and any other directors in the Company, will be calculated on the basis of accepted valuation methods (such as Black & Scholes/Intermediate) and will be as described in section 2.11.1.7 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.6 All
 other provisions regarding the long-term compensation that apply to the Office Holders under
 this Policy, will also apply to the long-term compensation granted to directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13.7 All
 directors may be reimbursed for their reasonable expenses (against invoices) incurred in
 connection with attending meetings of the Board of Directors and its committees thereof (including
 domestic and international travel expenses) and travelling on behalf of the Company, consistent
 with the Company's practices and policies.

&nbsp;&nbsp;&nbsp;&nbsp;2.14  **<u>Recoupment Policy</u>** 

The Company may seek reimbursement of all, or a portion of any compensation paid to an Office Holder based on financial data included in Company's financial statements in any fiscal year that are found to be inaccurate and are subsequently restated.

In any such event, the Company will seek reimbursement from the Office Holders to the extent such Office Holders would not have been entitled to all or a portion of such compensation, based on the financial data included in the restated financial statements.

The Compensation Committee will be responsible for approving the amounts to be recouped and for setting terms for such recoupment from time to time in accordance with a recoupment policy adopted from time to time by the Compensation Committee or the Board of Directors. Any recoupment under this Section 2.14 may be in addition to (and not limited by) any other remedies or rights of recoupment available to the Company pursuant to the terms of any similar policy or under any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;2.15  **<u>Exchange Rate</u>** 

Monetary amounts in this Policy that are quoted in USD, subject to the applicable currency exchange rates or any exchange rate determined by the Board of Directors.

<sup>5</sup> The annual fair value will be calculated as an accumulated amount of granted securities throughout each year

&nbsp;&nbsp;&nbsp;&nbsp;2.16  **<u>The ratio between the gross salary of office holders and the gross salary of all other Company employees as of the date of the compensation policy</u>** 

The ratio of the average and median gross salary between the officers to the other employees (in practice as of the date of approval of the compensation policy):

---

| | | |
|:---|:---|:---|
| **Role** | **Ratio to the average salary<sup>6</sup>** | **Ratio to Median salary** |
| CEO | 48% | 51% |
| Subordinate Office Holders | 28% | 32% |

---

As of the date of the Policy, there is one Company employee who is not an Office Holder. It is clarified that for the purpose of calculating the aforesaid ratios, only the employees of Nasus Pharma Ltd. Were included.

At the time of approval of the Policy, the Compensation Committee examined the existing gaps between the Office Holders and the other employees and found that in light of the nature and structure of the Company, the above ratios will not affect the existing employment relationship in the company. In addition, the Compensation Committee and the Board of Directors believe that these data have a limited effect on determining the salaries of the Company's Office Holders, given the structure of the Company.

**3.**  **<u>Annual Equity-based Plan for directors</u>** 

In addition to all of the above mentioned in section 2.11.1, once a year, in a date close to the date of the annual general meeting of the Company, the Compensation Committee and the Board of Directors may, without the need of further approval of the Company's shareholders, grant each member of the Board of Directors, other than a director who is also serving as the Company's Chief Executive Officer or a Subordinate Office holder, equity-based compensation under the Company's Equity Incentive Plan, in an annual fair value<sup>7</sup> (calculated on the basis of accepted valuation methods, such as Black & Scholes/Intermediate) which will not exceed NIS 200,000 (the "**Annual Equity-based Plan**")**<u>.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1. <u>Vesting Schedule</u>: will be set in accordance with the terms of this policy. In the event of termination
 of engagement between the Company and any of the Non-Executive Directors, any unvested equity-based
 compensation at the time of such termination shall be automatically cancelled, unless otherwise
 accelerated as described below. All other Annual Equity-based Plan terms will be as set forth
 in section 2.11.1 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2. All
 other provisions regarding the long-term compensation that apply to the Company's Office
 Holders under this Policy, will also apply to the long-term compensation granted to directors.

**4.**  **<u>Non-Exclusivity of this Policy</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;4.1 Neither
 the adoption of this Policy or any amendment thereof nor the submission of this Policy or
 any amendment thereof to shareholders of the Company for approval (to the extent required
 under the Companies Law), shall be construed as creating any limitations on the power or
 authority of the Board of Directors or the Compensation Committee to adopt such other or
 additional incentive or other compensation arrangements of whatever nature as they may deem
 necessary or desirable or preclude or limit the continuation of any other policy, practice
 or arrangement for the payment of compensation or benefits.

&nbsp;&nbsp;&nbsp;&nbsp;4.2 The
 Terms of Office and Engagement of a director may contain such other terms and conditions
 that are not inconsistent with this Policy (to the extent required by the Companies Law).

<sup>6</sup> The ratio to the average salary and the median salary refers to the gross salary cost of the employees of Nasus Pharma Ltd.only, and does not include the cost of the salaries of the Office Holders.

<sup>7</sup> The annual fair value will be calculated as an accumulated amount of granted securities throughout each year.

**5.**  **<u>Governing Law</u>** 

This Policy shall be governed by the laws of the State of Israel, excluding its conflict of law rules, except with respect to matters that are subject to tax or labor laws in any specific jurisdiction, which shall be governed by the respective laws of such jurisdiction. Certain definitions, which refer to laws other than the laws of such jurisdiction, shall be construed in accordance with such other laws.

**6.**  **<u>SEVERABILITY</u>** 

If any provision of this Policy shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. In addition, if any particular provision contained in this Policy shall for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable to fullest extent compatible with the Applicable Law as it shall then appear.

Adopted by the Company's Board of Directors: [●], 2025

\*\*\*

## Exhibit 10.1

**Exhibit 10.1**

**Nasus Pharma Ltd.**

**<u>The 2019 Incentive Option Plan</u>**

**1.** **PURPOSE OF THE PLAN** 

The purpose of this 2019 Incentive Option Plan (the **"Plan"**) is to advance the interests of Nasus Pharma Ltd. (the **"Company"**) and its shareholders by attracting and retaining the best available personnel for positions of substantial responsibility, providing additional incentive to employees, office holders and service providers and promoting a close identity of interests between those individuals and entities and the Company, and to enable the Company, under appropriate circumstances, to donate share capital for charitable purposes.

**2.** **DEFINITIONS** 

As used herein, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. "**Administrator** "
 means the Board or the Committee, as shall administer the Plan, as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. "**Articles** "
 mean the Company's Articles of Association, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. "**Board** "
 means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. "**Committee** "
 means the Company's compensation committee, or in the case there is no such committee,
 a committee appointed in order to administer the Plan, and until such committee is appointed,
 the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. "**Companies Law**" means the Israeli Companies Law 5759 - 1999.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. "**Employee** "
 means: (I) any person, employed by the Company or employed by any Related Entity; and (II)
 any Office Holder (as such term is defined in the Companies Law), officer or Director of
 the Company or a Related Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. "**Exercise Price**" means the price that is to be paid in order to exercise an Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. "**Group** "
 means the Company and the Related Entities taken together.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. "**IPO** "
 means an initial public offering of the Company's Shares (as such term is defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. "**Option** "
 means an option to purchase a Share according to the provisions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. "**Option Grant**" means a single grant of Options to a certain Participant as determined by
 the Board or the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. "**Option Grant Letter Agreement**" means the notice letter attached to this Plan as Exhibit
 A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. "**Participant** "
 means a person or entity that has been granted Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14. "**Related Entity**" means any parent or subsidiary of the Company. In addition, Related Entity
 shall include any business, corporation, partnership, limited liability company or other
 entity in which the Company, or the Company's parent or a subsidiary holds a substantial
 ownership and/or interest, directly or indirectly, and is determined by the Board to be a
 Related Entity.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15. "**Service Provider**" means a person or entity who is engaged by the Company or any Related
 Entity to render services (e.g., consulting services, advisory services, development services,
 marketing and sale services or any other services, including suppliers) to the Company or
 a Related Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16. "**Share** "
 means the Company's Ordinary Share of NIS 0.01 par value, or that was issued following
 an exercise of an Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17. "**Total Option Amount**" means the amount of Options granted to a Participant in a single
 Option Grant.

**3.** **ADMINISTRATION OF THE PLAN** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. Subject
 to the provisions of the Plan, any applicable law, the Articles and any other binding commitments
 taken by the Company, the Board or the Committee shall have the power and authority to administer
 the Plan. Such power and authority shall include, but not be limited to: (i) approval of
 Option Grants and the determination of the terms and provisions of respective Option Grants,
 including, the vesting schedules of the Options; the Exercise Price thereof; provisions concerning
 the time or times when and the extent to which Options may be exercised; the nature and duration
 of restrictions as to transferability; or any other special conditions relating to an Option
 Grant; (ii) the acceleration of any Participant's right to exercise Options, in whole
 or in part; (iii) the interpretation of the provisions of the Plan; (iv) altering, amending
 or rescinding any resolution or act previously taken by the Committee; and (v) the determination
 of any other matter which is necessary or desirable for, or incidental to, the administration
 of the Plan, as set forth in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. Notwithstanding
 the above, the Board shall have the power and authority to take any act the Committee is
 empowered and authorized to take and to alter amend or rescind any act or resolution taken
 by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. The
 Committee shall consist of such number of directors as may be appointed by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. The
 Board shall have the exclusive discretion and power to grant Options. Such power may be delegated
 by the Board to the Committee subject to the provisions of the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. All
 Committee resolutions and decisions, including the interpretation and construction of any
 provision of the Plan, shall be final and conclusive unless otherwise determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6. No
 member of the Board or of the Committee shall be held liable for any act or determination
 made in good faith with respect to the Plan or any Option Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7. Cashless
 Exercise. Without derogating from the foregoing, the Board of Directors may allow grant of
 Optionees with respect to certain or all Options held by such Optionee to exercise the Options
 through a cashless exercise mechanism as will be set by the Board of Directors. Such cashless
 exercise mechanism may be approved together with the grant of Options or retroactively with
 respect to any existing Options that were granted.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

**4.** **SHARES RESERVED FOR THE PLAN** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. The
 Board may from to time determine the number of Shares from the Company's authorized
 share capital to be reserved and subject to the Plan (the "**Reserved Shares** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. Until
 termination of the Plan the Company shall at all times reserve sufficient number of Ordinary
 Shares in its authorized share capital to cover for all Reserved Shares that were not issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. Without
 derogating from Section ‎4.2 above:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1. The
 Company need not reserve Shares with respect to Options that terminated, expired or were
 canceled for any reason prior to exercise thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.2. In
 the case that there are certain Reserved Shares, which remain unissued and which are not
 subject to outstanding Options, then the Board may resolve that such Reserved Shares shall
 cease to be reserved.

**5.** **DESIGNATION OF PARTICIPANTS; OPTION GRANTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. The
 Board may grant Option Grants to the following persons and entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1. Employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2. Service
 Providers and their employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3. Charitable
 entities or other persons or entities that Option Grants may be donated to in order to promote
 charitable purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. Unless
 determined otherwise by the Board or Committee, a Participant shall not be required to pay
 any consideration for an Option Grant.

**6.** **VESTING; EXERCISE PERIOD** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. Unless
 determined otherwise by the Board with the consent of at least one Investor Director, upon
 approval of the Option Grant or thereafter, Options underlying an Option Grant shall vest
 over four (4) years, commencing on the vesting commencement date (the "**Vesting Commencement Date**") as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. The vesting schedule of each Option Grant shall
 be as determined by the Board. However, unless determined otherwise by the Board with the
 consent of at least one Investor Director, upon approval of the Option Grant or thereafter,
 the following shall apply:

Twenty five percent (25%) of the Total Option Amount shall vest on the first anniversary of the Vesting Commencement Date, and additional one twelfth (1/12) of the balance of the Total Option Amount shall vest on the last day of each three months period immediately after the first anniversary of the Vesting Commencement Date.

It is hereby agreed that the Investor Director(s) shall be granted options under the Plan on terms not less favorable in any material aspect than Board members, advisory board members and other consultants.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

In the case that as a consequence of the vesting schedule mentioned above a fraction of vested Option is created, then such fraction shall be rounded up or down, as determined by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. Notwithstanding
 anything to the contrary in this Plan, all Options shall terminate and not bestow any rights
 on their owner after ten years from the date the Options were granted. All Options that have
 not been exercised by such date shall expire immediately and the Participants shall not have
 any claim against the Company with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. The
 period within which Options are exercisable shall be called the "**Exercise Period** ".
 Options which have not been exercised during the Exercise Period shall expire immediately,
 and will be automatically returned to the Options pool and may be re-allocated.

**7.** **TERMINATION OF EMPLOYMENT WITH THE GROUP** 

In the event that the Participant is an Employee at the time of the Option Grant, whose employment with the Group was subsequently terminated, for whatever reason but subject to Section 7.6 (including but not limited to (i) dismissal of a Participant or (ii) a Participant's resignation, or (iii) death of a Participant or (iv) disability of a Participant), then the following provisions shall apply:

---

| | |
|:---|:---|
| 7.1. | The date on which employment was terminated under applicable labor laws, or, in the case an Employee is not an employee under applicable labor laws the date in which such Employee ceases to be an Employee as defined in the Plan, shall be deemed the date in which such Employee's employment was terminated ("**Employment Termination Date**"). |
| 7.2. | On the Employment Termination Date, all Options that are not vested shall immediately expire. |
| 7.3. | In the event that the Participant's termination of employment is not due to the Participant's death (but does include termination due to Disability), then the Participant will be entitled to exercise all, or part of, the vested Options that have not expired, for a period of ninety (90) days after the Employment Termination Date. After such ninety (90) days period, all unexercised Options will automatically expire. |
|  | For purposes of this Section 7.3, "Disability" shall mean the inability, due to illness or injury, to engage in any gainful occupation for which the individual is suited by education, training or experience, which condition continues for at least six (6) months. |
| 7.4. | Notwithstanding the above, in the event of termination of employment due to the Participant's death or Disability, the Participant (if applicable) or Participant's estate, or other person who acquired the right to exercise the Options by way of bequest or inheritance, may, but only within six (6) months after the date of such death, exercise all, or part of, the vested Options that have not expired. After such six (6) months period, all unexercised options shall automatically expire. |

---

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5. Notwithstanding
 Section 7.3 above, all Options granted to a certain Employee (whether vested or unvested)
 will immediately expire if the termination of the Participant's employment is due to
 Participant's breach of his/her employment agreement (whether written or oral) including
 without limitation, a breach of non-compete obligations, or breach of his/her fiduciary duties
 towards the Company or a Related Entity as determined by the Committee, in its sole discretion,
 or any other termination by the company for "cause" (if such term is defined
 otherwise in the employment agreement with the Employee) or in the case that competent court
 or other authority resolves that such employee is not entitled to discharge compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6. For
 the purposes of this Plan, the Committee or Board is authorized to determine if and when
 a Participant terminated his/her employment with the Company, and due to what reason, subject
 to the provisions of Israeli labor laws with respect to Israeli employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7. The
 Committee or the Board shall be entitled, prospectively and retroactively, to extend the
 periods in which Options (either vested or unvested) do not expire and remain exercisable
 after the Employment Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8. In
 no event shall the Company be required to notify a Participant regarding the expiration of
 the applicable exercise period prior thereto.

**8.** **TERMINATION OF ENGAGEMENT WITH THE GROUP** 

In the event that a Participant is not an Employee, and the engagement of such Participant with the Group is terminated, or such engagement materially and adversely changes, then, unless otherwise specified in the Option Grant Letter Agreement, or otherwise determined by the Committee, on the date of such termination or change, all Options that have not vested by then shall expire and the vested options shall remain exercisable as specified in sections 7.3, 7.4 or 7.5, as the case may be, which shall apply *mutatis mutandis* to such Participant.

**9.** **ADJUSTMENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. Merger,
 Sale of the Company or Sale of the Company's Assets.

In the event of a merger of the Company into another corporation, in a way that the Company shall no longer continue to exist as a legal entity subsequent to such merger, the sale of all, or substantially all of the Company's issued and outstanding shares to a third party or the sale of all, or substantially all of the assets of the Company (each of them, a "**Transaction**"), then the following provisions shall apply, as will be determined by the Board, at its sole discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.1. Each
 outstanding Option shall be assumed by, or an equivalent option shall be substituted by the
 successor corporation or a parent or subsidiary of the successor corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.2. In
 the event that the successor corporation does not agree to assume the Options or to substitute
 them with equivalent options, the Committee may in lieu of such assumption or substitution,
 provide for the Participant to have the right to exercise the Options as to all, or part
 of the Shares, including certain Shares as to which it would not otherwise be exercisable.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.3. In
 addition to Section 9.1.2 above, and if Section 9.1.1 does not apply, the Committee may notify
 the Participants that all Options that are exercisable shall remain so for a period of no
 less than seven (7) days from the date of such notice, and that all Options will terminate
 upon the expiration of such period. In any case, the Committee may condition the termination
 of all said Options upon consummation of the Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. Bonus
 Shares

In the event that the Company issues any of its shares as bonus shares to all its shareholders, on a pro rata basis, then the number of Shares received upon exercise of certain Options shall be increased to the number of Shares the Participant would have held after the issuance of the bonus shares had such Participant exercised such Options immediately before the issuance of the bonus shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3. Reorganization;
 Separation

If the Company is separated, reorganized, or consolidated with another corporation (other than as part of a Transaction) while Options which were not yet exercised remain outstanding under this Plan, the Company shall use reasonable efforts to maintain the rights of each Participant through such separations, reorganizations or consolidations, or compensate the Participant for such event in lieu of the Options such Participant holds. The Committee, at its sole discretion, shall determine what steps shall be taken according to this section 9.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4. Changes
 in Capitalization

If the outstanding shares of the Company shall at anytime be changed or exchanged by declaration of a share split, reverse share split, combination or reclassification of Ordinary Shares, or any other increase or decrease in the number of the Company's Ordinary Shares effected without receipt of consideration by the Company from the shareholders, then the number, class and kind of Shares subject to this Plan or subject to any Options therefore granted, and the Exercise Prices of the Options, shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate Exercise Prices of the Options (except in case the Exercise Price is equal to the par value of the shares, in which case the Exercise Price will be increased respectively). However no adjustment shall be made by reason of the distribution of subscription rights on outstanding shares, or conversion of securities into shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5. Other
 terms and conditions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5.1. The
 allocation of each Option Grant hereunder is subject to the relevant Participant's
 agreement to sign any document he/she is required to sign pursuant to the provisions of this
 section 9. If a Participant refuses to sign any such documents, the Committee or Board may
 determine that the Options held by the Participant or by a trustee for such Participant's
 benefit shall immediately expire.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5.2. Such
 adjustments as mentioned in this Section 9 shall be made by the Committee, whose determination
 in such respect shall be final, binding and conclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5.3. Anything
 herein to the contrary notwithstanding, if prior to an IPO, there is a bona fide offer to
 purchase all or substantially all of the issued and outstanding shares of the Company, or
 upon a reorganization separation or the like, all or substantially all of the shares of the
 Company are to be exchanged for securities of another company, then each Participant shall
 be obliged to sell or exchange (in accordance with the value of such Participant's
 Options and Shares pursuant to the terms of such transaction) as the case may be, any Shares
 such Participant purchases hereunder, in accordance with the instructions issued by the Board
 in connection with such transaction, which will be given according to a policy of the Board
 concerning all of the Participants under the Plan and the Participant shall have no claim
 against the Board and its policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6. Dividend
 Distribution.

In the event that the Company distributes dividend in cash to the Company's shareholder, the Board of Directors may determine to adjust the exercise price respectively. The Board of Directors will determine the mechanism of such adjustment of the exercise price which may allow full or partial adjustment of the exercise price of each outstanding Option.

**10.** **ASSIGNABILITY AND SALE OF OPTIONS** 

No Option shall be assignable, transferable, given as collateral, hypothecated pledged or encumbered and no right with respect to the Options shall be given to any third party whatsoever, and during the lifetime of each Participant, each and all of such Participant's rights to purchase Shares hereunder shall be exercisable only by such Participant.

**11.** **TERM AND EXERCISE OF OPTIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1. Options
 shall be exercised by a Participant by giving written notice to the Company, in the form
 substantially attached hereto as  **<u>Exhibit B</u>** or such other form(s) and method
 as may be determined by the Company from time to time (the "**Exercise Notice** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2. The
 Exercise Price shall be payable upon the exercise of the Option in cash or by check, or other
 form satisfactory to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3. The
 Exercise Price will be paid in NIS, or if the Exercise Price is fixed in U.S. dollars, in
 U.S. dollars or in accordance with the representative rate of exchange of the U.S. dollar,
 last published by the Bank of Israel at the time of actual payment, or as provided for by
 the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4. Each
 Participant will be entitled to exercise, upon signing the Exercise Notice and any additional
 documents as required by the Company, and paying the Exercise Price, all, or part of the
 Options that are vested at the Exercise Period.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5. Options
 shall not be deemed exercised unless: (I) the Company receives a duly signed Exercise Notice
 including all relevant details; and (II) the Company receives the Exercise Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6. The
 Options may be exercised only to purchase whole Shares, and in no case may a fraction of
 a Share be purchased. If any fractional Shares would be deliverable upon exercise, such fraction
 shall be rounded up or down, to the nearest whole number. Half of a Share will be rounded
 up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7. Each
 Option granted under this Plan shall be exercisable during the Exercise Period. Subject to
 adjustments, as set forth in Section 9 above, the exercise of one Option shall entitle the
 Participant to hold one Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8. Without
 derogating from any restrictions mentioned hereinabove, the exercise of the Options is being
 subject to the following terms, restrictions and conditions as may be in effect on the time
 of the exercise of the Options is requested: (i) any applicable law or regulation; (ii) any
 order or limitation set by any stock exchange in which the Company's securities may
 be traded (e.g., blackout periods, and lock up after an IPO); and (iii) any limitation undertaken
 by the Company with respect of the shares of the Company, including limitations set forth
 by Company's underwriters. Such period of restriction of sale or exercise shall not
 be counted as part of the applicable exercise period.

**12.** **RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. No
 Participant shall have any of the rights or privileges of a shareholder of the Company with
 respect to any of the Shares, unless and until, following exercise, the registration of the
 Participant as holder of such Shares in the Company's register of members is duly completed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. The
 rights and obligations attached to the Shares will be as set forth in the Articles. The Shares
 may be subject to rights of first refusal, co-sale rights and other rights specified in the
 Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3. The
 Participant waives any of the following rights to the extent such rights are attached to
 the Shares: (i) pre-emptive rights in relation to issuance of new securities in the Company;
 (ii) rights of first refusal in relation with any sale of shares of the Company; (iii) co-sale
 rights in relation with any sale of shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4. Unless
 provided otherwise by the Committee, until an IPO, all voting rights, and rights to receive
 information from the Company with respect to the Shares shall be granted to the Board or
 as determined by the Board, in accordance with  **<u>Exhibit C</u>** attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5. Without
 derogating from any restrictions mentioned hereinabove, by accepting an Option Grant, each
 Participant agrees that the sale or disposal of Shares is subject to the following terms,
 restrictions and conditions as may be in effect on the time when such sale or disposal is
 requested: (i) any applicable law or regulation; (ii) any order or limitation set by any
 stock exchange in which the Company's securities may be traded (e.g., blackout periods,
 and lock up after an IPO); and (iii) any limitation undertaken by the Company with respect
 of the shares of the Company, including limitations set forth by Company's underwriters.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6. Until
 an IPO the Company shall have the authority to endorse upon the certificate or certificates
 representing the Shares such legends referring to the foregoing restrictions, and any other
 applicable restrictions, as it may deem appropriate (and which do not violate the Participant's
 rights according to this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7. By
 accepting an Option Grant, each Participant agrees that in the case of an IPO or after registering
 the Company's securities for trading, to sign any document and approve any resolution
 or restriction upon the Shares, or modify the terms of allocation of the Shares, if such
 Participants signature or approval or such restriction or modification were reasonably required,
 in the Committee's discretion, in order to facilitate the Company in meeting all the
 underwriters and stock exchange demands and all applicable securities and corporate laws
 and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8. The
 Participant shall not sell, pledge, transfer or otherwise dispose of any Shares in transactions
 which violate, according to the Company's sole discretion, any applicable laws, rules
 and regulations, or the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9. No
 transfer of Shares shall be effective if the Committee determines that the transferee is
 a competitor of the Company (either directly or indirectly).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10. Notwithstanding
 anything to the contrary in this Section 12, as long as Shares are held by a trustee for
 the benefit of a Participant (if applicable) the Shares shall not be sold, pledged, transferred
 or otherwise disposed of, by the Participant until an IPO, or until such time or event as
 determined by the Committee, either individually or with respect to all Participants.

**13.** **TERM OF THE PLAN** 

This Plan shall be effective as of June _, 2019, which is the day it was adopted by the Board and shall terminate when all the Options are exercised into Shares or expired in accordance with the provisions of this Plan or such other date as shall be determined by the Board, which date shall be no later than June _, 2029.

**14.** **AMENDMENTS; TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. The
 Board may, at any time and from time to time, amend, alter or terminate the Plan, provided,
 however, that the rights of the Participants shall not be adversely affected, unless such
 Participants agreed to such amendment, alteration or termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. The
 Plan may be terminated at any time by an action of the Board, but any such termination will
 not terminate any Options granted under this Plan, which are then outstanding, without the
 consent of the Participant that is holding such Options.

**15.** **BINDING EFFECT** 

The provisions of the Plan shall be binding upon the heirs, executors, administrators, and successors of the Participants.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

**16.** **GOVERNMENT REGULATIONS AND OTHER RESTRICTIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. This
 Plan, the Option Grant Letter Agreements, the grant and exercise of Options hereunder, the
 obligation of the Company to issue the Shares, and any other act or obligation of the Company
 or any related individual or entity acting in connection with this Plan are all subject to
 the Articles, all applicable laws, rules, and regulations, whether of the State of Israel
 or of the United States or any other state having jurisdiction over the Company and any Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. By
 accepting an Option Grant, each Participant agrees not to sell, pledge, transfer or otherwise
 dispose of any of the Shares such Participant may hold except in compliance with: (I) the
 United States Securities Act of 1933, as amended, and the rules and regulations thereunder
 if applicable; and (II) the Israeli Securities Law 5728 – 1968; and (III) any other
 applicable securities law, regulations or other rules set by any stock exchange in which
 the Company's securities may be traded; and to further agree that certificates evidencing
 any of such Shares shall bear appropriate legend to reflect such restrictions. The Company
 does not obligate itself to register any shares under the United States Securities Act of
 1933, as amended or any other securities laws.

**17.** **TAX CONSEQUENCES, INDEMNIFICATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1. Any
 tax consequences (pursuant to Israeli or any other applicable law that the relevant Participant
 is subject to), including tax consequences due to adjustments, made in accordance with Section
 9 above, arising from the grant or exercise of any Option, the payment for Shares covered
 thereby, or any other event or act (of the Company or any Participant) relating to the Plan,
 shall be borne solely by each Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2. The
 Company and/or the Board and/or the Committee and/or a trustee for the Plan shall not be
 required to release any Share certificates or transfer any Shares to a Participant until
 all required tax payments have been fully made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3. The
 Company may withhold taxes according to the requirements under the applicable laws, rules,
 and regulations, including withholding taxes at source. In the case that applicable law requires
 so, the Company shall deduct taxes at source. Such deduction may be made from any proceeds
 attributed to the exercise of the Options and sale of Shares, or from any proceeds the Participant
 is entitled to receive from the Group or other proceeds such Participant owns and are held
 by the Group, including from Participant's salary or other proceeds he/she is entitled
 to receive from the Company or a Related Entity. It is explicitly stated herein that each
 Participant who is an Employee, by accepting an Option Grant agrees to the deduction from
 his/her salary of any amounts that in the Company's determination are required to be
 deducted under applicable law in connection with the Plan. In any such case, the Company
 shall be entitled to offset any amounts due to such Participant on account of such taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4. In
 the case that the Company, or any other person on its behalf is required to pay taxes, that
 under applicable law should have been paid by the Participant, then such Participant shall
 immediately either pay such tax, or, if such tax was already paid, reimburse the Company,
 or such other person for the total amount paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.5. Neither
 the Company, nor any Related Entity nor anyone on their behalf, shall give, or be deemed
 to be giving any Participant, or a potential Participant, advice regarding tax consequences
 relating to the Plan and issuance of securities thereunder. Each Participant shall rely solely,
 while considering participation in the Plan, on the advice of such Participant's consultants.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

**18.** **CONTINUANCE OF EMPLOYMENT OR ENGAGEMENT** 

Neither the Plan nor any Option Grant shall be construed to impose any obligation on any entity included in the Group to continue any Participant's employment with it (in the case that the Participant is an Employee) or to maintain any business engagement with such Participant. Nothing in the Plan or in any Option Grant shall confer upon any Participant any right to continue to be employed by the Group or to maintain any other business engagement with it, or restrict the right of any entity included in the Group to terminate such employment or business engagement at any time.

**19.** **RULES PARTICULAR TO SPECIFIC COUNTRIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1. Notwithstanding
 anything herein to the contrary, the terms and conditions of the Plan may be amended with
 respect to particular types of Participants as determined by the Board (for example, Israeli
 employees, employees that are subject to US taxation) by an addendum to the Plan (the "**Appendix** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2. The
 Company may adopt one or more Appendixes. Each Appendix shall be approved by the Board and
 as required or advisable under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3. The
 terms of an Appendix shall govern only with respect to the types of Participants specified
 in such Appendix.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.4. In
 the case that the terms and conditions set forth in an Appendix conflict with any provisions
 of the Plan, the provisions of the Appendix shall govern with respect to Participants that
 are subject to such Appendix, provided, however, that such Appendix shall not be construed
 to grant the Participants rights not consistent with the terms of the Plan, unless specifically
 provided in such Appendix.

**20.** **NON-EXCLUSIVITY OF THE PLAN** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1. The
 adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding
 any previously approved incentive arrangements or as creating any limitations on the power
 of the Board to adopt such other incentive arrangements as it may deem desirable, including,
 without limitation, the granting of Options other than under this Plan, and such arrangements
 may be either applicable generally or only in specific cases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2. The
 grant of Options hereunder shall neither entitle the recipient thereof to participate, nor
 disqualify him from participating in, any other grant of Options pursuant to this Plan or
 any other option or stock plan of the Company.

**21.** **MULTIPLE AGREEMENTS; OTHER CORPORATE ACTIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.1. The
 terms of each Option Grant may differ from other Options Grants granted under the Plan at
 the same time, or at any other time. The Board may also grant more than one Option Grant
 to a certain Participant during the term of this Plan, either in addition to, or in substitution
 for, one or more Option Grants previously granted to such Participant.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.2. Under
 no circumstances shall the Plan be construed to grant any right to a Participant, or any
 other third party, to postpone, delay or affect any corporate action resolved by the Company.

**22.** **GOVERNING LAW & JURISDICTION** 

This Plan shall be governed by, construed and enforced in accordance with the laws of the State of Israel, without giving effect to the principles of conflict of laws. Any dispute or claim shall be put to the Board's resolution. Subject to the above, the competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matter pertaining to this Plan, and any other issue related to it.

**23.** **NO WAIVER** 

The failure of the Company or any other party acting on its behalf or assisting it in implementing the Plan to enforce at any time any provisions of the Plan shall not be construed to constitute a waiver of such provision or of any other provision hereof.

**24.** **NOTICES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.1. Any
 notice, request, demand or other communication required or permitted under the Plan shall
 be in writing and shall be deemed to have been duly given, made and received only by personal
 delivery or if sent by certified mail, postage prepaid, return receipt requested, overnight
 delivery service, facsimile transmission (with confirmation of delivery), or confirmed e-mail
 to the address of the Company (if sent to the Company), or to the address of the Participant
 as such was provided by him in the Option Grant Letter Agreement, unless such address is
 changed by written notice received by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.2. Except
 as otherwise set forth herein, any notice sent by mail shall be deemed to be given six days
 after deposit with the relevant post service; any notice sent by overnight delivery service
 shall be deemed given the first business day after deposited with the delivery service; and
 any notice sent by facsimile transmission or e-mail, shall be deemed given when transmitted
 if sent during normal business hours or if not, on the next business day; and any notice
 given by personal delivery shall be deemed given on the date of delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.3. In
 the case a certain Participant changes his or her contact details, in a way that the contact
 details provided to the Company by him do not enable the Company to provide notices and other
 communications to such Participant, then such Participant shall be deemed to have waived
 his or her right to receive any notices, and the Committee shall have the right, in its sole
 discretion, to take any appropriate action under the circumstances.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

Appendix:

Appendix A: Terms of grant of options to Israeli employees

Exhibits:

Exhibit A: Option Grant Letter Agreement

Exhibit B: Form of Exercise Notice

Exhibit C: Proxy

*Nasus Pharma Ltd. – 2019 Incentive Option Plan*

 

**<u>Appendix A</u>**

**<u>Terms of grant of Options to Israeli employees</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Purpose of the Appendix** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. This
 Appendix (the "**Appendix**") is made as part of the Plan (as defined herein
 whereas all terms not otherwise defined herein shall have the meaning ascribed to them in
 the Plan) and pursuant to the provisions of Section 102 of the Income Tax Ordinance (as defined
 herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. This
 Appendix governs grants of Options to Israeli Employees, either by a Trustee, or without
 a Trustee.

**2.** **Definitions** 

As used herein, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. "**Capital Gain Method**" means choosing the alternative of capital gain method under Section

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. "**Eligible Participant**" means any employee as such term is defined in Section 102. Without
 derogating from the foregoing, Eligible Participant shall include any employee or Office
 Holder (as such term is defined in the Companies Law) of the Company or any Subsidiary except
 for such persons that are deemed to be ' *Ba'al Shlita* ' under Section
 32 to the Income Tax Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. "**Deposit Date**" means the date in which options were deposited with the Trustee for the benefit
 of a certain Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. "**Income Tax Authorities**" mean the Israeli income tax authorities that are authorized to
 give approvals in relation with this Appendix and Option Grants to Eligible Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. "**Income Tax Ordinance**" means the Israeli Income Tax Ordinance (New Version) 1961, as amended
 from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. "**Labor Income Method**" means choosing the alternative of labor income method under Section

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. "**Participant** "
 means any Eligible Participant who is granted with Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. "**Plan** "
 means the 2019 Incentive Option Plan this Appendix is attached to.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. "**Realization Event**" means, with respect to each Option Grant granted to a certain Participant,
 the earlier to occur of: (I) transfer of Securities from the Trustee to such Participant;
 or (II) the sale of Shares by the Trustee; or (III) one day before such Participant is no
 longer an Israeli resident (as provided for in Section 100A to the Income Tax Ordinance).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. "**Release Term**" means: (i) in the case of Capital Gains Method, a period ending twenty four
 (24) months after the Deposit Date; (ii) In the case of Labor Income Method 'Release
 Term' shall mean a period ending twelve (12) months after the Deposit Date.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. "**Section 102**" means Section 102 to the Income Tax Ordinance as amended from time to time,
 and / or as superseded and any rules regulations or instructions promulgated or enacted under
 such Section 102.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. "**Securities** "
 mean Options subject to a certain Option Grant and Shares received subsequent exercise of
 such Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. "**Tax Method**" means either Capital Gains Method or Labor Income Method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14. "**Trust** "
 means a trust, maintained under the Trust Agreement entered into between the Company and
 the Trustee for administration of grant of Options under Section 102.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15. "**Trust Agreement**" means the agreement between the Company and the Trustee as may be in
 effect from time to time specifying the duties and authorities of the Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16. "**Trust Assets**" mean all Securities and other assets held in Trust for the benefit of the
 Participants pursuant to this Appendix and the Trust Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17. "**Trustee** "
 means such entity who was, or shall be appointed by the Board of Directors of the Company
 and approved by the Income Tax Authorities to hold the Trust Assets.

**3.** **Provisions of the Appendix shall govern** 

The provisions of the Appendix shall supersede and govern in the case of any inconsistency or conflict arising between the provisions of the Appendix and the provisions of the Plan, provided, however, that this Appendix shall not be construed to grant Participant rights not consistent with the terms of the Plan, unless specifically provided herein.

**4.** **Selection of Tax Method – Capital Gains Method** 

The Company chooses the Capital Gain Method ('*Maslul Revach Hon*'). This choice may be changed in the future, by a Board resolution, provided, however, that the change in selection is permissible under the provisions of Section 102.

**5.** **Holding of Securities by the Trustee** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. All
 Securities shall be issued to the Trustee to be held in the Trust for the benefit of the
 relevant Participants. All certificates representing Securities issued to the Trustee under
 this Appendix shall be deposited with the Trustee, and shall be held by the Trustee until
 such time that such Options or Shares are released from the Trust as herein provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. After
 the Release Term is over, a Participant shall be entitled to instruct the Trustee to transfer
 the Shares held for such Participant's benefit to such Participant, provided, however,
 that the Trustee confirms that all applicable tax as set in Section 102 was actually paid
 and the Trustee holds a confirmation to that effect from Income Tax Authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. In
 the case that the Company distributes dividends, than the amount of dividends with respect
 of Shares held in Trust shall be paid to the Participants that are the beneficial holders
 of such Shares, subject to deduction at source of the applicable tax.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

**6.** **Provisions governing this Appendix and Plan** 

Notwithstanding anything to the contrary in the Plan or elsewhere in this Appendix:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. The
 Plan shall have one, sole, Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. The
 Appendix shall be subject to one Tax Method, unless the provisions of Section 102 allow otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. Unless
 the provisions of Section 102 allow otherwise, the Participants shall not be entitled to
 cause a Realization Event to occur unless the Release Term is fulfilled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. All
 rights or benefits that are received subsequent to the grant or exercise the Options or the
 Shares underlying such Options (including and not limited to bonus shares) shall be deposited
 with the Trustee until the end of the Release Term, and all such rights and benefits shall
 be subject to the Tax Method selected by the Company.

**7.** **Effectiveness of the Appendix.** 

This Appendix shall become effective, and Option Grants may be granted hereunder only after receipt the required approvals under Section 102 from the Income Tax Authorities.

**8.** **Additional limitations** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. The
 Company shall not issue Options to a Participant unless such Participant confirmed in writing
 that he/she is aware of the provisions of Section 102 and the applicable Tax Method, and
 such Participant agreed in writing to the terms of the Trust Agreement, and that he/she shall
 not cause a Realization Event to occur before the Release Term is over. The form for the
 above confirmation shall be determined by the Committee, and shall be attached to the Plan
 as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. By
 accepting an Option Grant, each Participant agrees irrevocably to discharge the Trustee,
 the Company and any other office holder, employee or agent thereof from any liability with
 respect of any action or decision duly taken and *bona fide* executed in relation with
 the Plan, or relating to any Option Grant or Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. The
 Trustee shall use the voting rights vested in any such shares issued upon the exercise of
 any Options granted under the Plan, in accordance with Exhibit C of the Plan.

**9.** **Grant of Options not by a Trustee** 

Notwithstanding the above, the Company shall be entitled to allocate Option Grants not according to the Tax Methods, but by direct grant to Participants, provided, however, that the requirements of Section 102 are met.

**10.** **Governing Law** 

Notwithstanding anything to the contrary in the Plan, this Appendix shall be governed by, construed and enforced in accordance with the laws of the state of Israel, without giving effect to the principles of conflict of laws. Any dispute or claim shall be put to the Board's resolution. Subject to the above, the competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matter pertaining to this Appendix, and any other issue related to it.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

**Exhibit A**

**Option Grant Letter Agreement**

This letter agreement (the "**Agreement**") is made as of _______ __, 201_, by and among Nasus Pharma Ltd. (the "**Company**"), an Israeli Company with main place of business at 35 Ehad Ha'am, Tel Aviv, Israel and [____________], an Israeli citizen, I.D number _______ (the "**Participant**").

---

| | |
|:---|:---|
| **Whereas** | The Company adopted an Incentive Option Plan (together with applicable Appendixes, the "**Plan**"), a copy of which was reviewed by the Participant; and |
| **Whereas** | The Company resolved to grant to the Participant an Option Grant, subject to the terms and conditions herein; and |

---

**NOW, THEREFORE**, it is agreed as follows:

1. All
 terms not defined herein shall have the meaning ascribed to them in the Plan.

2. The
 Company resolved to grant certain options (the "**Option Grant**") to purchase
 the Company's Ordinary Shares to the Participant.

3. The
 terms of the Option Grant are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. Number
 of Options:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. Vesting
 Schedule:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. Vesting
 Commencement Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. Exercise
 Price per options:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. Date
 of Grant:

4. The
 grant of the Option Grant is conditioned upon, and shall not become effective unless and
 until the Participant agreeing to the terms of this Agreement.

5. Contact
 details and personal details of the Participant as supplied by it:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. Full
 name: __________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. Identification
 number: _____________. [For Israeli citizens or entities]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. Address:
 ______________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. Telephone
 (home): _________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. Cellular
 Phone: ____________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. Facsimile:
 __________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. E-mail:
 ____________.

6. The
 grant is made in accordance with the terms of the Plan.

7. Prior
 to signing this Agreement Participant had the reasonable opportunity to review the Plan and
 consult with his / her advisors (such advisors shall not include the Company or anyone on
 the Company's behalf) as Participant deemed fit.

*Nasus Pharma Ltd. – 2019 Incentive Option Plan* 

8. Participant
 hereby confirms that he /she received reasonable opportunity to review the Plan and understand
 its terms, and that Participant agrees to the terms and provisions of the Plan.

9. The
 Participant acknowledges and agrees that the Company may be merged, or acquired or sold to
 a third party, and in such case, by signing this Agreement, the Participant grants the Board,
 or anyone on behalf of the Board, the right to sign on behalf of such Participant any document
 or agreement reasonably necessary, in the Board's discretion, in order to consummate
 such acquisition, merger or sale.

10. Participant
 hereby confirms that he /she is aware of the provisions of Section 102 (the updated Section
 102 is attached hereto as <u>Schedule A</u>) and the applicable Tax Method.

11. Participant
 shall not exercise shares (as such term is defined in Section 102) before the Release Term.

12. Participant
 agrees to the terms in the Trust Agreement (attached hereto as <u>Schedule B</u>).

Sincerely yours,

---

| | |
|:---|:---|
| **Nasus Pharma Ltd.** |  |
| By: | Name: |
| Title: |  |

---

*Nasus Pharma Ltd. – 2019 Incentive Option Plan*

**Exhibit B**

**<u>Form of Exercise Notice</u>**

**To: Nasus Pharma Ltd.** (the **"Company**")

Attention: **CEO**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Exercise of Option</u>. Effective as of today, _________ ___, 20__, I the undersigned ("**Participant**") hereby elects to exercise Participant's option to _________ Shares, each 1.00 NIS par value of the Company (hereinafter the: "**Shares**"), under and pursuant to the Company's 2019 Incentive Option Plan (the "**Plan**") and the Option Grant Letter Agreement dated ________ __, 20__ (the "**Option Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Delivery of Payment</u>. Participant herewith delivers to the Company the full payment for the Shares, as set forth in the Option Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations of Participant</u>. Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Rights as Shareholder</u>. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Shares, notwithstanding the exercise of the Option. The Shares shall be issued to Participant as soon as practicable after the Option is exercised. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Waiver of Rights</u>. The Participant hereby waives any of the following rights to the extent such rights are attached to the Shares: (i) pre-emptive rights in relation to issuance of new securities in the Company; (ii) rights of first refusal in relation with any sale of shares of the Company; (iii) co-sale rights in relation with any sale of shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Tax Consultation</u>. Participant understands that Participant may suffer adverse tax consequences as a result of Participant's purchase or disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company or any Related Entity for any tax advice.

---

| |
|:---|
| Submitted by: |
| PARTICIPANT |
| Signature: |
| Print Name: |
| Address: |

---

*Nasus Pharma Ltd. – 2019 Incentive Option Plan*

**Exhibit C**

**Nasus Pharma Ltd.**

**IRREVOCABLE PROXY**

The undersigned holder, being [an employee / a service provider] of Nasus Pharma Ltd. (the "**Company**"), an Israeli corporation, or a subsidiary thereof, who holds (or will hold, after exercising options to purchase the Company's Ordinary Shares) Ordinary Shares of the Company (the "**Shares**"), hereby appoint the Company's CEO (or another person, in the Company's discretion) (the "**Proxy Holder**") as my proxy to vote for me and on my behalf at shareholders meetings of the Company with respect to the Shares. The Proxy Holder is hereby appointed as my true and lawful proxy and attorney-in-fact, with full power of substitution and revocation, to attend meetings of the shareholders of the Company to be held at any time, or any continuation or adjournment thereof, to vote or take action by written consent with respect to the Shares, on all matters, in the same proportion with the split of votes of the Company's shareholders at such meeting or written consent and their agenda, and without any discretion, including, without limitation, shareholders meetings, shareholders actions by written consent and waivers. In addition, the undersigned hereby appoint the Proxy Holder as my true and lawful proxy and attorney-in-fact, with full power of substitution, to receive all notices to which I am entitled to by virtue of contract or the Company's Articles of Association. Furthermore, the undersigned hereby appoint the Proxy Holder as my exclusive true and lawful proxy and attorney-in-fact, with full power of substitution, to request from the Company and to receive all information or documentation which I am entitled to by virtue of contract, the Company's Articles of Association or applicable law, as the Proxy Holder shall deem fit in its discretion.

This Proxy is irrevocable, for an indefinite time, or until another date as determined by the Company's Compensation Committee or Board. Notwithstanding the foregoing, this Proxy shall terminate automatically upon the consummation of an initial public offering of the Company's securities. The undersigned further agrees that this proxy is coupled with an interest.

In the case that the Shares shall be held for my benefit by a trustee (the "**Trustee**"), then this Proxy shall act as irrevocable instructions in writing to the Trustee, so the Trustee shall perform all of the above with respect to the Shares.

This Irrevocable Proxy shall be governed by and construed in accordance with the laws of the State of Israel, without regard to its conflict of laws principles.

This Irrevocable Proxy is effective as of ______, 201_.

---

| |
|:---|
| **Signature** |
| Name: |
| Date: |
| Witness: |
| Witness Name: |

---

---

| |
|:---|
| **Acknowledged and Agreed to:** |
| Proxy Holder: |
| _________ |

---

*Nasus Pharma Ltd. – 2019 Incentive Option Plan*

## Exhibit 10.2

**Exhibit 10.2**

LICENSE AGREEMENT

This License Agreement is entered into as of this day of May, 2019 (the "Effective Date"), by and between Nasus Pharma Ltd., a company formed under the laws of Israel, having a place of business at 35 Ehad Haam St. Tel Aviv, Israel (the "Company") and Formulex Pharma Innovations Ltd. having a place of business at 18 Einstein Ncs Tziona, Israel (the "Formulex"). Formulex and the Company shall each be referred to in this Agreement as a "Party" and together as the "Parties".

---

| | |
|:---|:---|
| WHEREAS: | the rights and title to Licensed Technology, vest solely with Fomulex; and |
| WHEREAS: | the Company wishes to obtain an exclusive license to Formulexs' rights in the Licensed Technology for the development, manufacture and commercialization of Products (as defined herein); and |
| WHEREAS: | Formulex agrees to grant the Company such an exclusive license, all in accordance with the terms and conditions of this Agreement. |

---

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions.

Whenever used in this Agreement with an initial capital letter, the terms defined in this Section I, whether used in the singular or the plural, shall have the meanings specified below.

"Calendar Year" will mean successive one year periods beginning on January I and ending on December 31 for so long as this Agreement is in effect.

"Know-how" will mean any discoveries, inventions (whether patentable or not), materials, information, data, designs, formulae, ideas, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and testing (including results of research or development) processes (including manufacturing processes, specifications and techniques), laboratory records, chemical, pharmacological, toxicological, clinical, analytical and quality control data, trial data, case report forms, data analyses, reports or summaries and information contained in submissions to, and information from, ethical committees and regulatory authorities.

"Licensed Know-how" will mean Know-how that shall be transferred to the Company promptly following the Effective Date and which is related or otherwise required in connection with the Licensed Patents, and which shall be described in Exhibit A to the Agreement

"Licensed Patents" will mean (i) the patent applications'patents described in <u>Exhibit B</u> attached hereto, (ii) all patent applications claiming the Licensed Know-how that are not already included in (i) above, (iii) all divisional, continuation, and continuation in-part applications of the foregoing applications, (iv) all patents issuing from any of the foregoing applications, and (v) all reissues, reexaminations, extensions and restorations of any of the foregoing patents.

"Licensed Technology" will mean the Licensed Patents and the Licensed Know-how.

"Net Sales" will mean the amount actually received by the Company on sales of Products to a third party, less the following: (a) amounts repaid or credited by reason of rejection or return; (b) to the extent separately stated in the invoices, any taxes or other governmental charge's (value added tax and/or any similar sales tax) levied on the sale, delivery, which is imposed on the Company; and (d) to the extent separately stated in the invoices, reasonable freight and handling charges, provided that in the event that the Company receives non-monetary consideration for any Products.

"Produce(s)" will mean any product which (i) contains, comprises, utilizes or incorporates Licensed Technology, in whole or in part, or (ii) is developed or manufactured with the use of the Licensed Technology, in whole or in part, at any stage

"Valid Claim" will mean a claim of a patent application or unexpired issued patent included in the Licensed Patents so long as such claim shall not have been held invalid in a final court judgment or patent office decision that has not been appealed within the time allowed by law for an appeal, or from which there is no further appeal.

3. Title.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 As between the Parties, all rights, title and interest in and to the Licensed Technology are and shall be owned solely and exclusively by Formulex.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Formulex represents and warrants that the Licensed Technology was developed solely by Formulex and it is solely and exclusively owned by Formulex and during the term of this Agreement Formulex shall not take any action to transfer, assign, pledge or otherwise dispose of any right in the Licensed Technology.

4. Patent Filing, Prosecution and Maintenance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Filing and Prosecution. All Licensed Patents shall be filed, prosecuted and maintained by the Company, using the patent counsel elected by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 No Warranty. Nothing contained herein shall be deemed to be a warranty by Formulex that the patent application's included in the Licensed Patent will result in an issued patent, or that any patent application or issued patent that is or may be included in the Licensed Patents will be valid or of any value or will afford adequate or commercially worthwhile protection.

5. Lieense Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. Exclusive License.

Formulax hereby grant to the Company an exclusive, worldwide, irrevocable, transferable, sub-licensable, royalty-bearing license in the Licensed Technology for the purpose of developing, manufacturing, using, offering for sale, disposing, selling and exporting Products or otherwise commercializing the Licensed Technology and or the Products.

6. Consideration for Grant of Lieense

In consideration for the rights and licenses granted to the Company pursuant to this Agreement, the Company shall pay to Formulex the following consideration:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 Royalty Payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1. Royalty Rate. The Company shall pay Formulex royalties on Net Sales of Products by the Company at the rates set forth below. Within 30 days of the end of each Calendar Year, the Company shall remit to Formulex all royalties due for the applicable Calendar Year.

● 0.5% of Net Sales of Products which are capped by the aggregate amount to be paid to Formulex not to exceed US$100,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.2. Royalty Period. The royalty set forth in Section 6.1 will be payable during a period which shall commence on the Effective Date and shall continue on a country-by-country, Product-by- Product basis, for the longer of: (a) fifteen (15) years from the date of the first commercial sale of such Product in such country; and (b) until the last to expire of the Licensed Patents in such country (the "Royalty Period").

7. Reports; Payments; Records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. Reports and Payments.

Reports on Net Sales. Within thirty (30) days after the conclusion of each Calendar Year commencing with the first Calendar Year in which Net Sales are generated, the Company shall deliver to Formulex reports on Net Sales by the Company containing the amount sold and the percentage received by Formulex. Notwithstanding the foregoing, the reports shall be delivered to Formulex only until the Company reaches the cap of US$100,000 in royalties payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. VAT; Withholding Similar Taxes. All amounts to be paid to Ramot pursuant to this Agreement are exclusive of Value Added Tax. The Company shall add value added tax, as required by law, to all such amounts. If applicable laws require that taxes be withheld from any amounts due to Ramot under this Agreement, the Company shall (a) deduct these taxes from the remittable amount, (b) pay the taxes to the proper taxing authority, and (c) promptly deliver to Ramot a statement including the amount of tax withheld and justification therefore, and such other information as may be necessary for tax credit purposes.

9. Enforcement of Patent Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. Notice. In the event any party becomes aware of any possible or actual infringement or unauthorized possession, knowledge or use of the Licensed Patents ("Infringement"), that party shall promptly notify the other party parties and provide it with details regarding such Infringement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. Suit by the Company. The Company shall have the right, but not the obligation, to take action in the prosecution, prevention, or termination of any Infringement. The expenses of such suit or suits that the Company elects to bring, including any expenses incurred in conjunction with the prosecution of such suits or the settlement thereof, shall be paid for entirely by the Company. In the event the Company exercises its right to sue pursuant to this section, it shall first reimburse itself out of any sums recovered in such suit or in settlement thereof for all out of pocket costs and expenses of every kind and character, including reasonable attorney's fees, necessarily involved in the prosecution of any such suit. If, after such reimbursement, any funds shall remain from said recovery, then Formulex shall receive an amount equal to 0.5% of such funds (up to the said aggregate amount of $100,000) and the remaining of such funds shall be retained by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3. Cooperation. Each party agrees to cooperate fully in any action under this Section 9 which is controlled by the other parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4. Standing. If a party lacks standing and another party has standing to bring any such suit, action or proceeding, then such other party shall do so at the request of and at the expense of the requesting party. If either party determines that it is necessary or desirable for another party to join any such suit, action or proceeding, the other party shall execute all papers and perform such other acts as may be reasonably required in the circumstances.

10. Term and Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. Term. The term of this Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Section 13, shall continue in full force and effect until the expiration of all payment obligations of the Company pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.1. Termination Without Cause. The Company may terminate this Agreement for any reason upon sixty (60) days prior written notice to Formulex.10.2.2.

Bankruptcy. Company may terminate this Agreement upon notice to Formulex in the event of the granting of a winding-up order in respect of Formulex, or upon an order being granted against Formulex for the appointment of a receiver, or if Formulex passes a resolution for its voluntary winding-up, or if a temporary or permanent liquidator or receiver is appointed in respect of Formulex, or if a temporary or permanent attachment order is granted on Formulex's assets, or a substantial portion thereof, or if Formulex shall seek protection under any laws or regulations, the effect of which is to suspend or impair the rights of any or all of its creditors, or to impose a moratorium on such creditors, or if anything analogous to any of the aforegoing in this section under the laws of any jurisdiction occurs in respect of Formulex; provided that in the case that any such order or act is initiated by any third party, the right of termination shall apply only if such order or act as aforesaid is not cancelled within 90 (ninety) days of the grant of such order or the performance of such act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. Effect of Termination. 10.3.1 Transfer of Patents. In case of termination of the Agreement by the Company in accordance with Section 10.2.2, then the Company shall have the first right (but not an obligation) to acquire the Licensed Technology in an amount equal to the balance between the amount actually paid to Formulex prior to such date and the amount of $100,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.2. Accruing Obligations. Termination of this Agreement shall not relieve the parties of obligations occurring prior to such termination, including obligations to pay amounts accruing hereunder up to the date of termination. Without limiting the generality of the foregoing, the Company shall be obligated to pay all patent related expenses with respect to patent activities.

11. Miscellaneous.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1. Entire Agreement. This Agreement is the sole agreement with respect to the subject matter hereof and except as expressly set forth herein, supersedes all other agreements and understandings between the parties with respect to the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2. Notices. Unless otherwise specifically provided, all notices required or permitted by this Agreement shall be in writing and may be delivered personally, or may be sent by facsimile or certified mail, return receipt requested, to the addresses set forth in the preamble or any other address or communication method used by the parties.

Any notice shall be deemed to have been received as follows: (i) by personal delivery, upon receipt; (ii) by facsimile, one business day after transmission or dispatch; (iii) by airmail, seven (7) business days after delivery to the postal authorities by the party giving notice. If notice is sent by facsimile, a confirming copy of the same shall be sent by mail to the same address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of Israel, without regard to the application of principles of conflicts of law, except for matters of patent law, which, other than for matters of inventorship on patents, shall be governed by the patent laws of the relevant country of the patent. The parties hereby consent to personal jurisdiction in Israel and agree that the competent court in Tel Aviv. Israel shall have sole jurisdiction over any and all matters arising from this Agreement, except that Licensors may bring suit against the Company in any other jurisdiction outside Israel in which the Company has assets or a place of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the panics and their respective legal representatives, successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5. Headings. Section and subsection headings are inserted for convenience of reference only and do not form a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7. Amendment; Waiver. This Agreement may be amended, modified, superseded or canceled, and any of the terms may be waived, only by a written instrument executed by each party or, in the case of waiver, by the party waiving compliance. The delay or failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the rights at a later time to enforce the same. No waiver by either party of any condition or of the breach of any term contained in this Agreement, whether by conduct, or otherwise, in any one or more instances, shall be deemed to be, or considered as, a further or continuing waiver of any such condition or of the breach of such term or any other term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8. No Agency or Partnership. Nothing contained in this Agreement shall give any party the right to bind another, or be deemed to constitute either party as agents for each other or as partners with each other or any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9. Assignment and Successors. The Company will be entitled to assign or encumber all or any of its rights or obligations under this Agreement to any other entity without the prior written consent of Formulex.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10. Force Majeure. No party will be responsible for delays resulting from causes beyond the reasonable control of such party, including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11. Interpretation. The parties hereto acknowledge and agree that: (i) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (ii) the rule of construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement; and (iii) the terms and provisions of this Agreement shall be construed fairly as to both parties hereto and not in favor of or against either party, regardless of which party was generally responsible for the preparation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12. Severability. If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is deemed unenforceable, it is the intention of the parties that the remainder of this Agreement shall not be affected.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

![](ex10-2_001.jpg)

Exhibit A

Licensed Know How

<u>Know How in the fields of:</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>1. Intranasal and inhaled formulations</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>2. Combination products</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>3. Particle engeeniring"</u>

Exhibit B<br>

Licensed Patents

<u>WO 2019 038756 Dry Powder Compositions for Intranasal Delivery</u>

## Exhibit 10.3

**Exhibit 10.3**

**SAFE INSTRUMENT**

**(Simple Agreement for Future Equity)**

THIS CERTIFIES THAT in exchange for the payment by [_________] (the "**Investor**") of $[______] (the "**Purchase Amount**") on or about [______] (the "**Effective Date**"), **Nasus Pharma Ltd**., a company incorporated in the state of Israel (C.R.# 516022712) (the "**Company**"), hereby issues to the Investor the right to certain shares of the Company, subject to the terms set forth below.

See **Section 2** for defined terms.

This Safe instrument is part of a series of Safe instruments with substantially similar terms (each additional Safe instrument, together with this Safe instrument, shall be referred to herein collectively as the "**Safes**") issued and/or to be issued by the Company to various additional investors (each additional investor, together with the Investor, shall be referred to herein collectively as the "**Investors**"), at any time after February 21, 2022, but prior to the consummation of the Company's Equity Financing (as defined herein).

**1.**  ***Events*** 

(a) **<u>Equity Financing</u>**. If there is an Equity Financing before the expiration or termination of this instrument, the Company will automatically issue to the Investor a number of Investor Shares equal to the Purchase Amount provided by the Investor divided by the Conversion Price. In connection with the issuance of Investor Shares by the Company to the Investor pursuant to this Section 1(a), the Investor will execute and deliver to the Company all transaction documents related to the Equity Financing; *provided,* that such documents are substantially the same documents to be entered into with the purchasers of the Standard Shares, with appropriate variations for the Investor Shares (if applicable).

(b) **<u>Liquidity Event</u>**. If there is a Liquidity Event before the expiration or termination of this Safe, the Investor shall be entitled to automatically receive from the Company such number of shares of the most senior class of shares of the Company equal to the Purchase Amount divided by the Liquidity Price. If any of the Company's shareholders are given a choice as to the form and amount of Proceeds to be received in a Liquidity Event, the Investor will be given the same choice, *provided* that the Investor may not choose to receive a form of consideration that the Investor would be ineligible to receive as a result of the Investor's failure to satisfy any requirement or limitation generally applicable to the Company's shareholders, or under any applicable laws.

(c) **<u>Dissolution Event</u>**. If there is a Dissolution Event before the termination of this Safe, the Investor will automatically be entitled to receive a portion of proceeds equal to the Purchase Amount, due and payable to the Investor immediately prior to the consummation of the Dissolution Event. The Purchase Amount will be (i) junior to and paid after the payment of outstanding indebtedness and creditor claims, (ii) on par with payments for other Safes and/or Preferred Shares, and if the applicable Proceeds are insufficient to permit full payments to the Investor and such other Safes and/or Preferred Shares, the applicable Proceeds will be distributed pro rata to the Investor and such other Safes and/or Preferred Shares in proportion to the full payments that would otherwise be due, and (iii) prior and in preference to any distribution of any of the assets of the Company to holders of Ordinary Shares by reason of their ownership thereof. If immediately prior to the consummation of the Dissolution Event, the assets of the Company legally available for distribution to the Investor and all holders of all other Safes (the "**Dissolving Investors**"), as determined in good faith by the Company's board of directors, are insufficient to permit the payment to the Dissolving Investors of their respective Purchase Amounts, then the entire assets of the Company legally available for distribution will be distributed with equal priority and *pro rata* among the Dissolving Investors in proportion to the Purchase Amounts they would otherwise be entitled to receive pursuant to this Section 1(c).

(d) **<u>Conversion upon Maturity Date</u>**. In the event that the Purchase Amount shall not have been converted or repaid pursuant to the terms of this Safe prior to the Maturity Date, then on the Maturity Date the Company will automatically issue to the Investor such number of the Company's then outstanding most senior shares equal to the quotient obtained by dividing the outstanding Purchase Amount by the Maturity Price.

(e) **<u>Termination</u>**. This instrument will automatically expire and terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this instrument) immediately upon the earliest to occur of: (i) the issuance of shares to the Investor pursuant to Sections 1(a), 1(b)(ii) or 1(d); or (ii) the payment, or setting aside for payment, of amounts due to the Investor pursuant to Section 1(c).

**2.**  ***Definitions*** 

"**Articles of Association**" mean the Company's Amended and Restated Articles of Association, as may be amended from time to time.

"**Change of Control**" means (i) a merger, consolidation or similar transaction or series of related transactions involving the Company, provided however, that in each case, as a result of such transaction the shareholders of the Company immediately prior to such transaction do not hold more than fifty percent (50%) of the voting securities of the Company (or the surviving or resulting entity) after giving effect to such transaction; provided however that shares of the surviving entity held by shareholders of the Company acquired by means other than as a result of the exchange and/or conversion of the shares of the Company for the shares of the surviving entity in such transaction, shall not be used in determining whether the shareholders of the Company own more than fifty percent (50%) of the shares of the surviving entity, but shall be used for determining the total number of issued and outstanding shares of such entity, (ii) the sale or exclusive license of all or substantially all of the Company's intellectual property, or (iii) any other transaction as a result of which the control of the Company is transferred (i.e., the transfer of more than fifty percent (50%) of the shares or voting rights in the Company) except for a change of control resulting from a public offering of the Company's shares or a change of control which occurs as a result of an investment transaction the primary purpose of which is to provide financing to the Company and in which the Company issues its securities in consideration solely for cash.

"**Conversion Price**" means the lowest price per share of the Standard Shares sold in the Equity Financing multiplied by the Discount Rate.

"**Converting Securities**" includes this Safe and other convertible securities issued by the Company, including but not limited to: (i) other Safes; (ii) convertible promissory notes and other convertible debt instruments; and (iii) convertible securities that have the right to convert into share capital of the Company.

"**Discount Rate**" means 60%.

"**Dissolution Event**" means (i) a voluntary termination of operations, or (ii) any other receivership, liquidation, dissolution or winding up of the Company (**<u>excluding</u>** a Liquidity Event), whether voluntary or involuntary.

"**Equity Financing**" means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells shares at a fixed valuation, including but not limited to, a pre-money or post-money valuation.

"**Initial Public Offering**" means the closing of the Company's first firm commitment underwritten initial public offering of its ordinary shares pursuant to a registration statement filed under applicable securities laws or the consummation of a SPAC Transaction.

"**Investor Shares**" means the shares of the most senior series of shares issued to the investor(s) in the Equity Financing, having the identical rights, privileges, preferences and restrictions as the shares of Standard Shares, other than with respect to: (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, as applicable, which will equal the Conversion Price; (ii) the basis for any dividend rights, which will be based on the Conversion Price, and (iii) certain rights, which may be specifically granted to the lead Investor in the Equity Financing or that are contingent upon a minimum shareholding threshold.

"**Liquidity Event**" means a Change of Control or an Initial Public Offering.

"**Liquidity Price**" means the price per share equal to the fair market value of the most senior class of shares of the Company then outstanding at the time of the Liquidity Event, as determined by reference to the purchase price payable in connection with such Liquidity Event, multiplied by the Discount Rate.

"**Maturity Capitalization**" is calculated as of immediately prior to the Maturity Date, and (without double-counting):

● Includes all issued and outstanding share capital of the Company;

● Includes all issued and outstanding Options;

● Excludes all Converting Securities; and

● Excludes the Unissued Option Pool.

"**Maturity Date**" means fifteen (15) months following the Effective Date.

"**Maturity Price**" means the price per share equal to the Valuation Cap divided by the Maturity Capitalization.

"**Options**" includes options, restricted share awards or purchases, RSUs, SARs, warrants or similar securities, vested or unvested.

"**Ordinary Shares**" means Ordinary Shares of the Company, nominal value NIS 0.01 each. "**Preferred Shares**" means, if and when applicable, any Preferred Shares of the Company.

"**SPAC Transaction**" means an acquisition by or of, or a merger (including but not limited to a reverse triangular merger), consolidation, share exchange, share purchase or other business combination, involving a special purpose acquisition company and the Company, and resulting in any shares of the Company becoming publicly traded, or exchanged for shares in a publicly traded company.

"**Standard Shares**" means the shares of the most senior series of shares issued to the investors investing new money in the Company in the Equity Financing (and excluding for the avoidance of doubt, any shares issued upon (i) conversion of convertible loans and Safe instruments, and/or (ii) exercise of any preemptive rights that were provided by the Company to existing shareholders).

"**Unissued Option Pool**" means all shares that are reserved, available for future grant and not subject to any outstanding Options under any equity incentive or similar Company plan.

"**Valuation Cap**" is US$41,000,000.

**3.**  ***Company Representations*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is duly organized and validly existing under the laws of the State of Israel, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution, delivery and performance by the Company of this instrument is within the power of the Company and, other than with respect to the actions to be taken when equity is to be issued to the Investor, has been duly authorized by all necessary actions on the part of the Company. This instrument constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity. To the knowledge of the Company, it is not in violation of (i) its current Articles of Association, (ii) any material statute, rule or regulation applicable to the Company or (iii) any material indenture or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the Company's knowledge, the performance and consummation of the transactions contemplated by this instrument do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material indenture or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien upon any property, asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No consents or approvals are required in connection with the performance of this instrument that have not otherwise been received prior to the Effective Date.

**4.**  ***Investor Representations*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Investor has full legal capacity, power and authority to execute and deliver this instrument and to perform its obligations hereunder. This instrument constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor is a qualified investor as such term is defined in section 15a(b)(1) of the Israeli Securities Law, 5728-1968 and an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act of 1933. The Investor has been advised that this instrument and the underlying securities have not been registered under any securities laws and, therefore, cannot be resold unless they are registered under the applicable securities laws or unless an exemption from such registration requirements is available. The Investor is purchasing this instrument and the securities to be acquired by the Investor hereunder, for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Investor's financial condition and is able to bear the economic risk of such investment for an indefinite period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Investor acknowledges that it is not relying upon any shareholder or other investors in a Safe in making its investment or decision to enter into this instrument. The Investor agrees that neither any shareholder or other investors in a Safe nor the respective controlling persons, officers, directors, partners, agents, or employees of any of such shall be liable to the Investor for any action heretofore taken or omitted to be taken by any of them in connection with the entering into of this instrument.

**5.**  ***Miscellaneous*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any provision of this Safe may be amended, waived or modified (either prospectively or retroactively and either generally or in a particular instance) by written consent of the Company and either (i) the Investor or (ii) the majority-in-interest of all then-outstanding Safes (which shall be effective with respect to all of the Investors) (the "**Investors' Majority**"); *provided*, *however*, that the Investors' Majority may not – without the consent of the other relevant Investors - agree to any amendment which increases the liability of any other Investor hereunder, which disproportionately decreases the rights of any other Investor vis-à-vis the majority in interest of the Investors or any other Investor or which disproportionately increases the rights of the majority in interest of the Investors or any other Investor vis-à-vis any other Investor. "Majority-in-interest" refers to the Investors investing a total Purchase Amount greater than 50% of the total Purchase Amount of all Safes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notice required or permitted by this instrument will be deemed sufficient when delivered personally or sent by email to the relevant address listed on **<u>Schedule 1</u>**, or 5 days after being deposited in the mail as registered mail with postage prepaid, addressed to the party to be notified and with respect to the Company to Address: <u>29 Harakevet, Tel Aviv, Israel</u>, Attention: <u>Oren Elmaliah</u>, email: <u>Oren@atil.co.il</u> and with respect to the Investor, the address listed on <u>Schedule 1</u>, all as subsequently modified by written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Investor is not entitled, as a holder of this Safe, to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor will anything contained herein be construed to confer on the Investor, as a holder of this Safe instrument, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise until shares have been issued upon the terms described herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Neither this Safe nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; *provided, however*, that this Safe instrument and/or the rights contained herein may be assigned without the Company's consent by the Investor to any of its Permitted Transferee(s) (as defined in the Articles of Association); and *provided, further*, that the Company may assign this instrument in whole, without the consent of the Investor, in connection with a reincorporation to change the Company's domicile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event any one or more of the provisions of this instrument is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this instrument operate or would prospectively operate to invalidate this instrument, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this instrument and the remaining provisions of this instrument will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) All rights and obligations hereunder will be governed by the laws of the State of Israel, without regard to the conflicts of law provisions of such jurisdiction. The parties hereto agree to submit to the jurisdiction of the courts of Tel Aviv-Jaffa with respect to the breach or interpretation of this Agreement or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile or pdf. signatures of any party hereto shall constitute and be deemed an original signature.

(*Signature page follows*)

**IN WITNESS WHEREOF**, the undersigned have caused this instrument to be duly executed and delivered.

---

| |
|:---|
| **Nasus Pharma LTD.** |
| By: |
| Name: |
| Title: |
| **INVESTOR:** |
| **[_______________]** |
| By: |
| Name: |
| Title: |

---

**<u>Schedule 1</u>**

---

| | |
|:---|:---|
| **Investor's Name** | **Address and email** |

---

## Exhibit 10.4

**Exhibit 10.4**

**SAFE INSTRUMENT**

**(Simple Agreement for Future Equity)**

THIS CERTIFIES THAT in exchange for the payment by ____________ (the "**Investor**") of [$] (the "**Purchase Amount**") on or about _____, 2023 (the "**Effective Date**"), **Nasus Pharma Ltd**., a company incorporated in the state of Israel (C.R.# 516022712) (the "**Company**"), hereby issues to the Investor the right to certain shares of the Company, subject to the terms set forth below.

See **Section 2** for defined terms.

This Safe instrument is part of a series of Safe instruments with substantially similar terms (each additional Safe instrument, together with this Safe instrument, shall be referred to herein collectively as the "**Safes**") issued and/or to be issued by the Company to various additional investors (each additional investor, together with the Investor, shall be referred to herein collectively as the "**Investors**"), at any time after _____, 2023, but prior to the consummation of the Company's Equity Financing (as defined herein).

**1.**  ***Events*** 

(a) **<u>Equity Financing</u>**. If there is an Equity Financing before the expiration or termination of this instrument, the Company will automatically issue to the Investor a number of Investor Shares equal to the Purchase Amount provided by the Investor divided by the Conversion Price. In connection with the issuance of Investor Shares by the Company to the Investor pursuant to this Section 1(a), the Investor will execute and deliver to the Company all transaction documents related to the Equity Financing; *provided,* that such documents are substantially the same documents to be entered into with the purchasers of the Standard Shares, with appropriate variations for the Investor Shares (if applicable).

(b) **<u>Liquidity Event</u>**. If there is a Liquidity Event before the expiration or termination of this Safe, the Investor shall be entitled to automatically receive from the Company such number of shares of the most senior class of shares of the Company equal to the Purchase Amount divided by the Liquidity Price. If any of the Company's shareholders are given a choice as to the form and amount of Proceeds to be received in a Liquidity Event, the Investor will be given the same choice, *provided* that the Investor may not choose to receive a form of consideration that the Investor would be ineligible to receive as a result of the Investor's failure to satisfy any requirement or limitation generally applicable to the Company's shareholders, or under any applicable laws.

(c) **<u>Dissolution Event</u>**. If there is a Dissolution Event before the termination of this Safe, the Investor will automatically be entitled to receive a portion of proceeds equal to the Purchase Amount, due and payable to the Investor immediately prior to the consummation of the Dissolution Event. The Purchase Amount will be (i) junior to and paid after the payment of outstanding indebtedness and creditor claims, (ii) on par with payments for other Safes and/or Preferred Shares, and if the applicable Proceeds are insufficient to permit full payments to the Investor and such other Safes and/or Preferred Shares, the applicable Proceeds will be distributed pro rata to the Investor and such other Safes and/or Preferred Shares in proportion to the full payments that would otherwise be due, and (iii) prior and in preference to any distribution of any of the assets of the Company to holders of Ordinary Shares by reason of their ownership thereof. If immediately prior to the consummation of the Dissolution Event, the assets of the Company legally available for distribution to the Investor and all holders of all other Safes (the "**Dissolving Investors**"), as determined in good faith by the Company's board of directors, are insufficient to permit the payment to the Dissolving Investors of their respective Purchase Amounts, then the entire assets of the Company legally available for distribution will be distributed with equal priority and *pro rata* among the Dissolving Investors in proportion to the Purchase Amounts they would otherwise be entitled to receive pursuant to this Section 1(c).

(d) **<u>Conversion upon Maturity Date</u>**. In the event that the Purchase Amount shall not have been converted or repaid pursuant to the terms of this Safe prior to the Maturity Date, then on the Maturity Date the Company will automatically issue to the Investor such number of the Company's then outstanding most senior shares equal to the quotient obtained by dividing the outstanding Purchase Amount by the Maturity Price.

(e) **<u>Termination</u>**. This instrument will automatically expire and terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this instrument) immediately upon the earliest to occur of: (i) the issuance of shares to the Investor pursuant to Sections 1(a), 1(b)(ii) or 1(d); or (ii) the payment, or setting aside for payment, of amounts due to the Investor pursuant to Section 1(c).

**2.**  ***Definitions*** 

"**Articles of Association**" mean the Company's Amended and Restated Articles of Association, as may be amended from time to time.

"**Change of Control**" means (i) a merger, consolidation or similar transaction or series of related transactions involving the Company, provided however, that in each case, as a result of such transaction the shareholders of the Company immediately prior to such transaction do not hold more than fifty percent (50%) of the voting securities of the Company (or the surviving or resulting entity) after giving effect to such transaction; provided however that shares of the surviving entity held by shareholders of the Company acquired by means other than as a result of the exchange and/or conversion of the shares of the Company for the shares of the surviving entity in such transaction, shall not be used in determining whether the shareholders of the Company own more than fifty percent (50%) of the shares of the surviving entity, but shall be used for determining the total number of issued and outstanding shares of such entity, (ii) the sale or exclusive license of all or substantially all of the Company's intellectual property, or (iii) any other transaction as a result of which the control of the Company is transferred (i.e., the transfer of more than fifty percent (50%) of the shares or voting rights in the Company) except for a change of control resulting from a public offering of the Company's shares or a change of control which occurs as a result of an investment transaction the primary purpose of which is to provide financing to the Company and in which the Company issues its securities in consideration solely for cash.

"**Conversion Price**" means the lowest price per share of the Standard Shares sold in the Equity Financing multiplied by the Discount Rate.

"**Converting Securities**" includes this Safe and other convertible securities issued by the Company, including but not limited to: (i) other Safes; (ii) convertible promissory notes and other convertible debt instruments; and (iii) convertible securities that have the right to convert into share capital of the Company.

"**Discount Rate**" means 60%.

"**Dissolution Event**" means (i) a voluntary termination of operations, or (ii) any other receivership, liquidation, dissolution or winding up of the Company (**<u>excluding</u>** a Liquidity Event), whether voluntary or involuntary.

"**Equity Financing**" means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells shares at a fixed valuation, including but not limited to, a pre-money or post-money valuation.

"**Initial Public Offering**" means the closing of the Company's first firm commitment underwritten initial public offering of its ordinary shares pursuant to a registration statement filed under applicable securities laws or the consummation of a SPAC Transaction.

"**Investor Shares**" means the shares of the most senior series of shares issued to the investor(s) in the Equity Financing, having the identical rights, privileges, preferences and restrictions as the shares of Standard Shares, other than with respect to: (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, as applicable, which will equal the Conversion Price; (ii) the basis for any dividend rights, which will be based on the Conversion Price, and (iii) certain rights, which may be specifically granted to the lead Investor in the Equity Financing or that are contingent upon a minimum shareholding threshold.

"**Liquidity Event**" means a Change of Control or an Initial Public Offering.

"**Liquidity Price**" means the price per share equal to the fair market value of the most senior class of shares of the Company then outstanding at the time of the Liquidity Event, as determined by reference to the purchase price payable in connection with such Liquidity Event, multiplied by the Discount Rate.

"**Maturity Capitalization**" is calculated as of immediately prior to the Maturity Date, and (without double-counting):

● Includes all issued and outstanding share capital of the Company;

● Includes all issued and outstanding Options;

● Excludes all Converting Securities; and

● Excludes the Unissued Option Pool.

"**Maturity Date**" means fifteen (15) months following the Effective Date.

"**Maturity Price**" means the price per share equal to the Valuation Cap divided by the Maturity Capitalization.

"**Options**" includes options, restricted share awards or purchases, RSUs, SARs, warrants or similar securities, vested or unvested.

"**Ordinary Shares**" means Ordinary Shares of the Company, nominal value NIS 0.01 each. "**Preferred Shares**" means, if and when applicable, any Preferred Shares of the Company.

"**SPAC Transaction**" means an acquisition by or of, or a merger (including but not limited to a reverse triangular merger), consolidation, share exchange, share purchase or other business combination, involving a special purpose acquisition company and the Company, and resulting in any shares of the Company becoming publicly traded, or exchanged for shares in a publicly traded company.

"**Standard Shares**" means the shares of the most senior series of shares issued to the investors investing new money in the Company in the Equity Financing (and excluding for the avoidance of doubt, any shares issued upon (i) conversion of convertible loans and Safe instruments, and/or (ii) exercise of any preemptive rights that were provided by the Company to existing shareholders).

"**Unissued Option Pool**" means all shares that are reserved, available for future grant and not subject to any outstanding Options under any equity incentive or similar Company plan.

"**Valuation Cap**" is US$41,000,000 multiped by the Discount Rate.

**3.**  ***Company Representations*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is duly organized and validly existing under the laws of the State of Israel, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution, delivery and performance by the Company of this instrument is within the power of the Company and, other than with respect to the actions to be taken when equity is to be issued to the Investor, has been duly authorized by all necessary actions on the part of the Company. This instrument constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity. To the knowledge of the Company, it is not in violation of (i) its current Articles of Association, (ii) any material statute, rule or regulation applicable to the Company or (iii) any material indenture or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the Company's knowledge, the performance and consummation of the transactions contemplated by this instrument do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material indenture or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien upon any property, asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No consents or approvals are required in connection with the performance of this instrument that have not otherwise been received prior to the Effective Date.

**4.**  ***Investor Representations*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Investor has full legal capacity, power and authority to execute and deliver this instrument and to perform its obligations hereunder. This instrument constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor is a qualified investor as such term is defined in section 15a(b)(1) of the Israeli Securities Law, 5728-1968 and an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act of 1933. The Investor has been advised that this instrument and the underlying securities have not been registered under any securities laws and, therefore, cannot be resold unless they are registered under the applicable securities laws or unless an exemption from such registration requirements is available. The Investor is purchasing this instrument and the securities to be acquired by the Investor hereunder, for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Investor's financial condition and is able to bear the economic risk of such investment for an indefinite period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Investor acknowledges that it is not relying upon any shareholder or other investors in a Safe in making its investment or decision to enter into this instrument. The Investor agrees that neither any shareholder or other investors in a Safe nor the respective controlling persons, officers, directors, partners, agents, or employees of any of such shall be liable to the Investor for any action heretofore taken or omitted to be taken by any of them in connection with the entering into of this instrument.

**5.**  ***Miscellaneous*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any provision of this Safe may be amended, waived or modified (either prospectively or retroactively and either generally or in a particular instance) by written consent of the Company and either (i) the Investor or (ii) the majority-in-interest of all then-outstanding Safes (which shall be effective with respect to all of the Investors) (the "**Investors' Majority**"); *provided*, *however*, that the Investors' Majority may not – without the consent of the other relevant Investors - agree to any amendment which increases the liability of any other Investor hereunder, which disproportionately decreases the rights of any other Investor vis-à-vis the majority in interest of the Investors or any other Investor or which disproportionately increases the rights of the majority in interest of the Investors or any other Investor vis-à-vis any other Investor. "Majority-in-interest" refers to the Investors investing a total Purchase Amount greater than 50% of the total Purchase Amount of all Safes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notice required or permitted by this instrument will be deemed sufficient when delivered personally or sent by email to the relevant address listed on **<u>Schedule 1</u>**, or 5 days after being deposited in the mail as registered mail with postage prepaid, addressed to the party to be notified and with respect to the Company to Address: <u>29 Harakevet, Tel Aviv, Israel</u>, Attention: <u>___________</u>, email: ___________ and with respect to the Investor, the address listed on <u>Schedule 1</u>, all as subsequently modified by written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Investor is not entitled, as a holder of this Safe, to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor will anything contained herein be construed to confer on the Investor, as a holder of this Safe instrument, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise until shares have been issued upon the terms described herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Neither this Safe nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; *provided, however*, that this Safe instrument and/or the rights contained herein may be assigned without the Company's consent by the Investor to any of its Permitted Transferee(s) (as defined in the Articles of Association); and *provided, further*, that the Company may assign this instrument in whole, without the consent of the Investor, in connection with a reincorporation to change the Company's domicile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event any one or more of the provisions of this instrument is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this instrument operate or would prospectively operate to invalidate this instrument, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this instrument and the remaining provisions of this instrument will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) All rights and obligations hereunder will be governed by the laws of the State of Israel, without regard to the conflicts of law provisions of such jurisdiction. The parties hereto agree to submit to the jurisdiction of the courts of Tel Aviv-Jaffa with respect to the breach or interpretation of this Agreement or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile or pdf. signatures of any party hereto shall constitute and be deemed an original signature.

(*Signature page follows*)

**IN WITNESS WHEREOF**, the undersigned have caused this instrument to be duly executed and delivered.

---

| |
|:---|
| **Nasus Pharma LTD.** |
| By: |
| Name: |
| Title: |
| **INVESTOR:** |
| **[_______________]** |
| By: |
| Name: |
| Title: |

---

**<u>Schedule 1</u>**

---

| | |
|:---|:---|
| **Investor's Name** | **Address and email** |

---

## Exhibit 10.5

**Exhibit 10.5**

THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "**SECURITIES ACT**"), OR UNDER ISRAELI THE SECURITIES LAW, 1968 OR OF ANY OTHER JURISDICTION (COLLECTIVELY, "**SECURITIES LAWS**"). THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.

**NASUS PHARMA LTD.**

**SAFE**

**(Simple Agreement for Future Equity)**

THIS CERTIFIES THAT in exchange for the payment by [_________________] (the "**Investor**") of US$ [______] (the "**Purchase Amount**"), payable up to 3 business days from the execution date hereof, Nasus Pharma Ltd., C.N. 516022712, a company incorporated under the laws of the State of Israel (the "**Company**"), hereby issues to the Investor the right to certain shares of the Company's Share Capital, subject to the terms set forth below. This SAFE is made under a contemplated financing round of up to US$1,500,000 in the aggregate (the "**Aggregate Purchase Amount**").

The "**Discount Rate**" is 65% (i.e., 35% discount)

See **Section 2** below for certain additional defined terms.

**1. Events**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Liquidity Event</u>**. If there is a Liquidity Event before the expiration or termination of this instrument, the Investor will receive Liquidity Shares in an amount equal to the Purchase Amount divided by the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Automatic Conversion upon Qualified Equity Financing</u>**. If there is a Qualified Equity Financing before the expiration or termination of this instrument, but not earlier than the lapse of the fifteen (15) months following the date hereof, the Company will automatically issue to the Investor a number of Safe Shares equal to the Purchase Amount divided by the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Automatic Conversion upon Trigger Round</u>**. If there has been no Qualified Equity Financing, a Liquidity Event or a Dissolution by the lapse of the eighteen (18) months following the date hereof, the Company will automatically issue to the Investor a number of Safe Shares equal to the Purchase Amount divided by the Conversion Price derived in respect of a Trigger Round.

In connection with the issuance of Safe Shares by the Company to the Investor pursuant to this Section 1(b) and 1(c), the Investor will execute and deliver to the Company all applicable transaction documents related to the Qualified Equity Financing, or in the Trigger Round (as applicable); *provided,* that such documents are materially the same documents to be entered into with the purchasers of Standard Shares, with appropriate variations for the Safe Shares if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Dissolution Event</u>**. If there is a Dissolution Event before this instrument expires or terminates, the Company will pay an amount equal to the Purchase Amount, due and payable to the Investor immediately prior to, or concurrent with the consummation of the Dissolution Event. The Purchase Amount will be paid prior and in preference to any distribution of any of the assets of the Company to holders of outstanding shares by reason of their ownership thereof. If upon the consummation of the Dissolution Event, the assets of the Company legally available for distribution to the Investor and all holders of all other outstanding Safes (the "**Dissolving Investors**"), as determined in good faith by the Company's board of directors ("**Board**"), are insufficient to permit the payment to the Dissolving Investors of their respective Purchase Amounts, then the entire assets of the Company legally available for distribution will be distributed with equal priority and *pro rata* among the Dissolving Investors in proportion to the Purchase Amounts they would otherwise be entitled to receive pursuant to this Section 1(d) and/or other Safe instruments then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **<u>Liquidation Priority</u>.** In a Dissolution Event. The Investor's right to receive its Purchase Amount following the issuance of shares thereto will be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Junior to payment of outstanding
 indebtedness and creditor claims, including contractual claims for payment and convertible promissory notes (to the extent such convertible
 promissory notes are not actually or notionally converted into ordinary shares);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Senior to payments for Ordinary
 Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **<u>Termination</u>**. This instrument will expire and terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this instrument) upon either (the "**Termination Date**"): (i) the issuance of shares to the Investor pursuant to Section 1(a), Section ‎1‎(b) or Section 1(c); or (ii) the payment of amounts due to the Investor pursuant to Section 1(d)

**2. Definitions**

"**Change of Control**" means (i) any reorganization, merger or consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting shares of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting shares of the Company or such other surviving or resulting entity, and excluding any sale to a wholly owned subsidiary of the Company or a reorganization for the purpose of change of domicile that does not affect, in each case, the percentage ownership interest of the shareholders of the Company, or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company.

"**Conversion Price**" means the applicable Discount Price

"**Conversion Shares**" means Liquidity Shares or Safe Shares

"**Discount Price**" means the lowest (and for avoidance of doubt, no discounts granted under any Safe or convertible instrument shall be considered) price per share of the Standard Shares sold in the Qualified Equity Financing, or in the Trigger Round (as applicable) multiplied by the Discount Rate.

"**Dissolution Event**" means: (i) a voluntary termination of operations, (ii) a general assignment for the benefit of the Company's creditors or (iii) any other liquidation, dissolution or winding up of the Company (excluding a Liquidity Event), whether voluntary or involuntary.

"**Equity Financing**" means a bona fide transaction or series of related transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells shares at a fixed valuation.

"**Initial Public Offering**" or "**IPO**" means the closing of the Company's first initial public offering of the Company's shares pursuant to a registration statement filed under the Securities Act, or under any other applicable Securities Laws, or any other transaction resulting in a surviving corporation being traded on a stock exchange.

"**Liquidity Event**" means a Change of Control or an Initial Public Offering.

"**Liquidity Shares**" means such class of shares having anti-dilution, preference and catch-up rights (as applicable) identical to the respective rights most senior class of shares existing prior to the Liquidity Event, and other rights identical to the rights attached to the Ordinary Shares, and will automatically be converted to Ordinary Shares immediately prior to a Liquidity Event.

"**Ordinary Shares**" means ordinary shares of the Company, nominal value NIS 0.01 each.

"**Qualified Equity Financing**" means an Equity Financing pursuant to which the Company raises issues and sells shares at a fixed valuation with an aggregate consideration of at least US$2,000,000.

"**Safe**" means an instrument containing a future right to shares of the Share Capital, similar in form and content to this instrument, purchased by investors for the purpose of funding the Company's business operations.

"**Safe Shares**" means the shares of the most senior class of series of shares issued to the Investor in a Qualified Equity Financing, or the Trigger Round (as applicable) having the identical rights, privileges, preferences and restrictions as the Standard Shares, other than with respect to: (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the Conversion Price; and (ii) the basis for any dividend rights and all other economic rights, to the extent provided to the investors investing new money in a Qualified Equity Financing, which will be based on the Conversion Price; (iii) any individual rights which may be granted to specific investors and/or governance related rights (such as the right to appoint a director to the Company's board of directors, veto rights, etc.).

"**Share Capital**" means the outstanding share capital of the Company.

"**Standard Shares**" means the shares of the most senior class of series of shares issued to the investors investing new money in the Company in connection with the initial closing of the Equity Financing.

"**Trigger Round**" means the last Equity Financing which has been consummated by Company prior to the lapse of eighteen (18) months from the date hereof.

**3. Company Representations**

The Company hereby represents and warrants to the Investor that as of the execution date of this instrument:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution, delivery and performance by the Company of this instrument is within the corporate power of the Company and, other than with respect to the actions to be taken when equity is to be issued in connection with the Qualified Equity Financing, Trigger Round and Liquidity Event, shall have been duly authorized by all necessary actions on the part of the Company prior to the consummation of the Qualified Equity Financing or Liquidity Event. This instrument constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity. To the knowledge of the Company, it is not in violation of: (i) any material statute, rule or regulation applicable to the Company; or (ii) any material debt or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The performance and consummation of the transactions contemplated by this instrument do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) violate the Company's amended articles of association as in effect at the closing of the Qualified Equity Financing (if applicable); (iii) result in the acceleration of any material debt or contract to which the Company is a party or by which it is bound; or (iv) result in the creation or imposition of any lien upon any property, asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No consents or approvals are required in connection with the performance of this instrument, other than: (i) the Company's corporate approvals and waiver of participation rights by the Company's applicable shareholders; and (ii) necessary corporate approvals for the authorization of Safe Shares issuable pursuant to Section 1 hereof, which shall be secured prior to their issuance thereof.

**4. Effectiveness; Survival**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each representation and warranty detailed in Section 3 above is deemed to be made on the execution date of this instrument and shall remain in full force and effect until the earlier of (i) Termination Date; or (ii) upon 12 months anniversary of the execution date of this instrument. Save in the event of fraud or intentional misrepresentation by the Company hereunder, the liability of Company towards an Investor as a result of any breach of covenant or any representation or warranty made by the Company under this Agreement or otherwise shall not exceed the Purchase Amount actually provided to the Company by such Investor in accordance with this Agreement.

**5. Investor Representations**

The Investor represents that it:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) has full legal capacity, corporate power and authority to execute and deliver this instrument and to perform its obligations hereunder. This instrument constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing its financial condition and is able to bear the economic risk of such investment for an indefinite period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Investor has had an opportunity to discuss the Company's business, operations, properties, prospects, technology, plans, management, financial affairs and the terms and conditions of the offering of the Conversion Shares with the Company's management and has had an opportunity to review the Company's facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Investment Experience; Accredited Investor; Non-U.S. Person</u>. The Investor acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating and understanding the merits and risks of the investment in the Conversion Shares. Investor understands that there is no assurance of any economic benefit which may arise in favor of Investor, and Investor further acknowledges that it may incur material financial losses in entering into the transactions contemplated hereunder. The Investor is either (i) an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933 (together with the rules and regulations promulgated thereunder, all as amended, the "**Securities Act**"), or (ii) a Non-U.S. Person as defined under Regulation S promulgated under the Securities Act. To the extent that the Investor is a non U.S. Person, such Investor (x) is not acquiring Conversion Shares for the account or benefit of any U.S. Person, (y) is not, at the time of execution of this Safe, and will not be, at the time of the issuance of the Conversion Shares, in the United States and (z) is not a "distributor" (as defined in Regulation S promulgated under the Securities Act). The Investor (i) is a qualified investor as defined in Annex 1 of the Israeli Securities Law, 5728-1968, and (ii) is fully familiar, following advice of its own legal counsel, with the implications of being such an investor who is subscribing for the shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Investor is not relying upon any other investor in making its investment or decision to invest in the Company. Neither of the other Investors nor the respective controlling persons, officers, directors, partners, agents, employees or legal or other advisors of any such other Investors shall be liable to any the Investor for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Conversion Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Investor acknowledges and agrees that in case of an IPO, Investor may be subject to such lock-up periods required under applicable Securities Laws and/or stock exchange rules, and Investor agrees and undertakes, if applicable, to sign, execute and deliver all instruments, consents and documents required with respect thereto.

**6. Miscellaneous**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Insofar as the Purchase Amount is made by the Investor in currency other than US$, then for purposes hereto, the determining exchange rate shall be the exchange rate published by the Bank of Israel on the date on which the Purchase Amount has been transferred to Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party shall bear its own taxes in accordance with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No fractional shares shall be issued, and the number of shares issued to the Investor in consideration of the Purchase Amount shall be rounded to the nearest whole number.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any provision of this instrument may be amended, waived or modified by written consent of the Company and the Majority-in-interest of all then-outstanding Safes. "Majority-in-interest" refers to the holders of the Safes whose Safes have a total aggregate Purchase Amount that is greater than 50% of the Aggregate Purchase Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any notice required or permitted by this instrument will be deemed sufficient when delivered personally or by overnight courier or sent by email to the relevant address listed on the signature page, or 3 business days after being deposited in the mail as registered mail with postage prepaid, addressed to the party to be notified at such party's address listed on the signature page, as subsequently modified by written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Investor is not entitled, as a holder of this instrument, to vote or receive dividends or be deemed the holder of Share Capital for any purpose, nor will anything contained herein be construed to confer on the Investor, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights (except as explicitly stated in this instrument, if any) or otherwise until shares have been issued upon the terms described herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Neither this instrument nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; provided, however, that this instrument and/or the rights contained herein may be assigned without the Company's consent by the Investor to a Permitted Transferee, as defined under the Company's Articles of Association, by furnishing the Company with an advanced notice of such transfer and a confirmation of the transferee's status as a Permitted Transferee; and provided, further, that the Company may assign this instrument in whole, without the consent of the Investor, in connection with a reincorporation to change the Company's domicile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) In the event any one or more of the provisions of this instrument is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this instrument operate or would prospectively operate to invalidate this instrument, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this instrument and the remaining provisions of this instrument will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) All rights and obligations hereunder will be governed by the laws of the State Israel, without regard to its conflicts of law provisions. The competent courts of the city of Tel Aviv-Jaffa shall have exclusive jurisdiction over any dispute arising herefrom or in connection herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same Agreement. The Parties agree that scanned or PDF copies of such counterparts shall be considered originals for purposes of giving effect to this Agreement.

[*Signature Page Follows*]

**IN WITNESS WHEREOF**, the undersigned have caused this instrument to be duly executed and delivered on this __ day of __________, 2024.

---

| |
|:---|
| **NASUS PHARMA LTD.** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **INVESTOR:** |
| **[_______________________________]** |
| By: |
| Name: |
| Title: |

---

## Exhibit 23.1

**Exhibit 23.1**

The accompanying financial statements give effect to a 1-for-4.77008 forward share split of Nasus Pharma Ltd. which will take place on the effective date of the registration statement. The following report is in the form which will be furnished by Brightman Almagor Zohar & Co., an independent registered public accounting firm, upon completion of the 1-for-4.77008 share split of the ordinary shares of Nasus Pharma Ltd. described in Note 7(d) to the financial statements, assuming that from March 21, 2025 to the date of such completion, no other material events have occurred that would affect the accompanying financial statements or disclosures therein.

**/s/ Brightman Almagor Zohar & Co.**

**Certified Public Accountants**

**A Firm in the Deloitte Global Network**

Tel Aviv, Israel

July 9, 2025

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the use in this Registration Statement on Form F-1 of our report dated [ ] relating to the financial statements of Nasus Pharma Ltd. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

**Brightman Almagor Zohar & Co.**

**Certified Public Accountants**

**A Firm in the Deloitte Global Network**

Tel Aviv, Israel

July , 2025

## Exhibit 99.1

**Exhibit 99.1**

CONSENT OF DIRECTOR NOMINEE

I hereby consent, pursuant to Rule 438 under the Securities Act of 1933, as amended, to being named as a nominee to the board of directors of Nasus Pharma Ltd. in its Registration Statement on Form F-1, and any amendments or supplements thereto, and to the filing or attachment of this consent with such Registration Statement and any amendment or supplement thereto.

---

| |
|:---|
| */s/ David Silberman* |
| David Silberman |
| July 9, 2025 |

---

## Exhibit 99.2

**Exhibit 99.2**

CONSENT OF DIRECTOR NOMINEE

I hereby consent, pursuant to Rule 438 under the Securities Act of 1933, as amended, to being named as a nominee to the board of directors of Nasus Pharma Ltd. in its Registration Statement on Form F-1, and any amendments or supplements thereto, and to the filing or attachment of this consent with such Registration Statement and any amendment or supplement thereto.

---

| |
|:---|
| */s/ Sharon Shacham* |
| Sharon Shacham |
| July 9, 2025 |

---

## Exhibit 99.3

**Exhibit 99.3**

CONSENT OF DIRECTOR NOMINEE

I hereby consent, pursuant to Rule 438 under the Securities Act of 1933, as amended, to being named as a nominee to the board of directors of Nasus Pharma Ltd. in its Registration Statement on Form F-1, and any amendments or supplements thereto, and to the filing or attachment of this consent with such Registration Statement and any amendment or supplement thereto.

---

| |
|:---|
| */s/ Isaac Israel* |
| Isaac Israel |
| July 9, 2025 |

---

## Ex-Filing

?xml version='1.0' encoding='ASCII'?

**Exhibit 107**

**Calculation of Filing Fee Table**

**FORM F-1**

(Form Type)

**Nasus Pharma Ltd.** 

(Exact Name of Registrant as Specified in its Charter)

**Table 1: Newly Registered Securities**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Security**<br> **Type** | **Security**<br> **Class**<br> **Title** | **Fee**<br> **Calculation**<br> **Rate** | **Maximum**<br> **Aggregate**<br> **Offering**<br> **Price (1)(2)(3)** | **Fee Rate** | **Amount of**<br> **Registration**<br> **Fee** |
| Fees to be Paid | Equity | Ordinary Shares | 457(o) | $13800000.00 | 0.0001531 | $2112.78 |
| Fees to be Paid | Other | Underwriter's Warrants(4) | 457(o) 457(g) |  |  |  |
| Fees to be Paid | Equity | Ordinary Shares upon exercise of Underwriter's Warrants(5) | 457(o) 457(g) | $517500.00 | 0.0001531 | $79.23 |
|  |  | **Total Offering Amount** |  | $14317500.00 |  | $2192.01 |
|  |  | **Total Fees Previously Paid** |  |  |  |  |
|  |  | **Total Fee Offsets** |  |  |  | - |
|  |  | **Net Fee Due** |  |  |  | $2192.01 |

---

(1) This
 registration statement also includes an indeterminate number of ordinary shares, no par value of Nasus Pharma Ltd., or the Ordinary
 Shares, that may become offered, issuable or sold to prevent dilution resulting from stock splits, stock dividends and similar transactions,
 which are included pursuant to Rule 416 under the Securities Act of 1933, as amended, or the Securities Act.

(2) Estimated
 solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.

(3) Includes
 the offering price of additional Ordinary Shares that the underwriters have the option to purchase to cover over-allotments, if any.

(4) In
 accordance with Rule 457(g) under the Securities Act, because the Ordinary Shares of the registrant underlying the Underwriter's
 Warrants (as defined below) are registered hereby, no separate registration fee is required with respect to the Underwriter's
 Warrants registered hereby.

(5) Represents
 warrants to purchase a number of Ordinary Shares equal to 3% of the Ordinary Shares sold in this offering (including Ordinary Shares
 that the underwriters have the option to purchase to cover over-allotments) at an exercise price equal to 125% of the public offering
 price per share, or the Underwriter's Warrants.