# EDGAR Filing Document

**Accession Number:** 0001614744
**File Stem:** 0001213900-23-017024
**Filing Date:** 2023-3
**Character Count:** 1011587
**Document Hash:** fc1d496bc52e3f1ee76609d787cbd592
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-23-017024.hdr.sgml**: 20230303

**ACCESSION NUMBER**: 0001213900-23-017024

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 104

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230303

**DATE AS OF CHANGE**: 20230303

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PURPLE BIOTECH LTD.
- **CENTRAL INDEX KEY:** 0001614744
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37643
- **FILM NUMBER:** 23701665

**BUSINESS ADDRESS:**
- **STREET 1:** 4 OPPENHEIMER STREET
- **STREET 2:** SCIENCE PARK
- **CITY:** REHOVOT
- **STATE:** L3
- **ZIP:** 7670104
- **BUSINESS PHONE:** 97239333121

**MAIL ADDRESS:**
- **STREET 1:** 4 OPPENHEIMER STREET
- **STREET 2:** SCIENCE PARK
- **CITY:** REHOVOT
- **STATE:** L3
- **ZIP:** 7670104

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Kitov Pharma Ltd.
- **DATE OF NAME CHANGE:** 20180125

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Kitov Pharmaceuticals Holdings Ltd.
- **DATE OF NAME CHANGE:** 20140724

?xml version="1.0" encoding="ASCII"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **<u>December 31, 2022</u>**

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report ________

Commission file number **<u>001-37643</u>**

---

| |
|:---|
| **Purple Biotech Ltd.** |
| (Exact name of Registrant as specified in its charter) |
| **N/A** |
| (Translation of Registrant's name into English) |
| **Israel** |
| (Jurisdiction of incorporation or organization) |
| **4 Oppenheimer Street**<br> **Science Park**<br> **Rehovot 7670104, Israel** |
| (Address of principal executive offices) |
| **Lior Fhima, Chief Financial Officer** |
| **4 Oppenheimer Street**<br> **Science Park**<br> **Rehovot 7670104, Israel** |
| **Tel: +972-3-933-3121; Fax: +972-3-5097196** |
| (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |

---

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

---

| | | |
|:---|:---|:---|
| **Title of class** | **Trading Symbols** | **Name of each exchange on which registered** |
| **American Depositary Shares, each representing 10 Ordinary Shares <sup>(1)</sup>** | **PPBT** | **NASDAQ Capital Market** |

---

**(1)** **Evidenced by American Depositary Receipts.** 

---

| |
|:---|
| Securities registered or to be registered pursuant to Section 12(g) of the Act: |
| (Title of Class) |
| Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: |
| (Title of Class) |

---

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 184,815,092 Ordinary Shares, no par value (including 1 share held in treasury)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒

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 13(a) of the Exchange 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.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

U.S. GAAP ☐

International Financing Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **ITEM 1.** | [**IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**](#a_001) | 1 |
| **ITEM 2.** | [**OFFER STATISTICS AND EXPECTED TIMETABLE**](#a_002) | 1 |
| **ITEM 3.** | [**KEY INFORMATION**](#a_003) | 1 |
| **ITEM 4.** | [**INFORMATION ON THE COMPANY**](#a_004) | 42 |
| **ITEM 4A.** | [**UNRESOLVED STAFF COMMENTS**](#a_005) | 71 |
| **ITEM 5.** | [**OPERATING AND FINANCIAL REVIEW AND PROSPECTS**](#a_006) | 72 |
| **ITEM 6.** | [**DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**](#a_007) | 80 |
| **ITEM 7.** | [**MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**](#a_008) | 101 |
| **ITEM 8.** | [**FINANCIAL INFORMATION**](#a_009) | 104 |
| **ITEM 9.** | [**THE OFFER AND LISTING**](#a_010) | 106 |
| **ITEM 10.** | [**ADDITIONAL INFORMATION**](#a_011) | 106 |
| **ITEM 11.** | [**QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**](#a_012) | 121 |
| **ITEM 12.** | [**DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**](#a_013) | 123 |
| **ITEM 13.** | [**DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**](#a_014) | 124 |
| **ITEM 14.** | [**MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**](#a_015) | 124 |
| **ITEM 15.** | [**CONTROLS AND PROCEDURES**](#a_016) | 124 |
| **ITEM 16.** | [**\[RESERVED\]**](#a_017) | 125 |
| **ITEM 16A.** | [**AUDIT COMMITTEE FINANCIAL EXPERT**](#a_018) | 125 |
| **ITEM 16B.** | [**CODE OF ETHICS**](#a_019) | 125 |
| **ITEM 16C.** | [**PRINCIPAL ACCOUNTANT FEES AND SERVICES**](#a_020) | 125 |
| **ITEM 16D.** | [**EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.**](#a_021) | 126 |
| **ITEM 16E.** | [**PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**](#a_022) | 126 |
| **ITEM 16F.** | [**CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**](#a_023) | 126 |
| **ITEM 16G.** | [**CORPORATE GOVERNANCE**](#a_024) | 126 |
| **ITEM 16H.** | [**MINE SAFETY DISCLOSURE**](#a_025) | 127 |
| **ITEM 16I.** | [**DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**](#a_026) | 127 |
| **ITEM 17.** | [**FINANCIAL STATEMENTS**](#a_027) | 128 |
| **ITEM 18.** | [**FINANCIAL STATEMENTS**](#a_028) | 128 |
| **ITEM 19.** | [**EXHIBITS**](#a_029) | 128 |

---

i

Unless the context otherwise indicates or requires, all references to:

● the terms "Registrant," "Purple", "Purple Biotech", "Company," "we," "us," "our," "our company" and similar designations refer to Purple Biotech Ltd., together with (i) its former wholly-owned subsidiary, Kitov Pharmaceuticals, (ii) its majority owned subsidiary, TyrNovo, (iii) its wholly owned subsidiary, FameWave, (iv) its wholly owned subsidiary, Immunorizon Ltd., and (v) its wholly owned subsidiary Purple Biotech GmbH, except where otherwise stated or where it is clear that the terms mean only Purple Biotech Ltd. exclusive of any subsidiaries,

● "TyrNovo" refers to TyrNovo Ltd., the majority owned subsidiary of Purple Biotech,

● "FameWave" refers to FameWave Ltd., the wholly owned subsidiary of Purple Biotech,

● "Immunorizon" refers to Immunorizon Ltd., the wholly owned subsidiary of Purple Biotech,

● the terms "dollar", "US$" or "$" refer to U.S. dollars, the lawful currency of the United States of America,

● the terms "Euro" or "€" refer to the Euro, the lawful currency of the European Union member states,

● the terms "NIS" refer to the New Israeli Shekel, the lawful currency of the State of Israel,

● "ordinary shares," "our shares" and similar expressions refer to the Registrant's ordinary shares, no par value per share,

● "ADSs" refers to the Registrant's American Depositary Shares,

● "Companies Law" refers to Israel's Companies Law, 5759-1999, as amended,

● "Securities Act" refers to the Securities Act of 1933, as amended,

● "SEC" refers to the United States Securities and Exchange Commission,

● "NASDAQ" refers to The NASDAQ Capital Market, except where otherwise stated or where it is clear that the term means any of the NASDAQ exchanges, and

● "TASE" refers to the Tel Aviv Stock Exchange.

Unless otherwise indicated, all information contained in this Annual Report on Form 20-F gives retrospective effect to:

● Effective as January 4, 2019, we effected a consolidation of our share capital at a ratio of 1:20, such that: (i) each 20 ordinary shares of Purple Biotech were consolidated into one ordinary share of Purple Biotech and (ii) each 20 options of Purple Biotech (tradable and non-tradable) exercisable into ordinary shares outstanding immediately prior to the consolidation were consolidated into one option exercisable into one ordinary share of Purple Biotech at an exercise price equal to the pre-consolidation exercise price multiplied by 20.

● Effective as of August 21, 2020, we effected a change in the ratio of ordinary shares to each ADS, such that the ratio of ADSs to ordinary shares changed from one (1) ADS representing one (1) ordinary share to a new ratio of one (1) ADS representing ten (10) ordinary shares. All ADS numbers in this Annual Report on Form 20-F are reflected on a post-ratio change basis.

ii

**Glossary of Industry Terms** 

Additionally, for convenience, the following terms used in this Annual Report on Form 20-F are defined as follows:

---

| | |
|:---|:---|
| **"API"** | **Active Pharmaceutical Ingredient** – any substance or mixture of substances intended to be used in the manufacture of a drug product and that, when used in the production of a drug product, becomes one active ingredient in the drug product. |
| **"approved product"** | A product that has been approved for marketing by a regulatory authority. |
| **"BLA"** | **Biologics License Application** – A request for permission to market a new biological product. |
| "**cGMP**" | **Current Good Manufacturing Practice** – minimum requirements of the FDA and other regulatory authorities for the methods, facilities, and controls used in the manufacturing, processing, and packing of a drug product that is intended for human use to ensure that the product is safe for use and has the ingredients and strength that it claims to have. |
| "**Clinical**" | Pertaining to human studies. |
| "**CMC**" | Chemistry, manufacturing, and controls. |
| **"Consensi"** | An FDA approved fixed-dose combination drug treatment intended for the treatment of osteoarthritis pain and for hypertension, previously developed and commercialized by the Company. During 2021, the Company determined to discontinue operations related to Consensi. |
| "**EGFR**" | **Epidermal Growth Factor Receptor** (EGFR; ErbB-1; HER1 in humans) is a transmembrane protein that is a receptor for members of the epidermal growth factor family (EGF family) of extracellular protein ligands. |
| **"FDA"** | United States Food and Drug Administration. |
| **"Formulation"** | All the active and inactive materials contained in a final medical product. |
| **"IND"** | **Investigational New Drug (Application) –** an application to test an experimental drug in human beings and that requires clearance by the FDA for clinical trials to be initiated. |
| **"NDA"** | **New Drug Application -** an application submitted to the FDA to approve marketing a new drug. |
| **"PDX"** | An animal model in which patient-derived tumor tissue at low passage are implanted in animals, used to conserve original tumor characteristics and to provide relevant predictive insights into clinical outcomes when evaluating new cancer therapies. |
| **"Pharmacokinetics"**, **"PK"** | The study of the absorption, distribution, metabolism and excretion of a drug from the body; the pharmacokinetic indices provide, among other things, information on the extent and time of the patient's exposure to the material. It is the study of how the body affects the drug. |
| **"preclinical"** | Drug development studies performed outside of a human living organism or cell, using living cells, or appropriate animal models. The studies begin before trials in humans and assess safety, toxicity, and efficacy. Since drug development is dynamic, preclinical studies are performed throughout the drug development lifecycle. |

---

---

| | |
|:---|:---|
| **"therapeutic candidate"** | A product that is undergoing development, preclinical trials, clinical trials and/or has a pending NDA in review by the FDA or similar marketing application being reviewed by a foreign regulatory authority, but has not been approved for commercialization. |

---

**Trademarks**

We have proprietary rights to trademarks used in this Annual Report on Form 20-F that are important to our business, some of which are registered under applicable intellectual property laws. Solely for convenience, trademarks and trade names referred to in this Annual Report may appear without the "®" or "™" symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Each trademark, trade name or service mark of any other company appearing in this Annual Report on Form 20-F is the property of its respective holder.

iii

***FORWARD-LOOKING STATEMENTS***

Some of the statements under the sections entitled "Item 3. Key Information — D. Risk Factors," "Item 4. Information on the Company," "Item 5. Operating and Financial Review and Prospects" and elsewhere in this Annual Report on Form 20-F may include forward looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including "anticipates", "believes", "could", "estimates", "expects", "intends", "may", "plans", "potential", "predicts", "projects", "should", "will", "would", and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. In addition, the section of this Annual Report on Form 20-F entitled "Item 4. Information on the Company" contains information obtained from independent industry and other sources. You should not put undue reliance on any forward-looking statements. Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

● the initiation, timing, progress and results of our research, manufacturing, preclinical studies, clinical trials, and other therapeutic candidate development efforts, including the safety and efficacy of our therapeutic candidates, as well as the extent and number of additional studies that we may be required to conduct;

● our ability to advance our therapeutic candidates into the next stages of clinical trials, or to successfully complete our planned and ongoing preclinical studies or clinical trials;

● our receipt of regulatory clarity and approvals for our therapeutic candidates and the timing of other regulatory filings and approvals;

● our ability to acquire or in-license additional therapeutic candidates, integrate acquired therapeutic candidates successfully into our business and to realize the anticipated benefits of acquisitions, such as our recent Immunorizon acquisition;

● a delay or rejection of an IND, NDA or BLA for one or more of our therapeutic candidates;

● our ability to maintain compliance with the NASDAQ listing standards;

● the regulatory environment and changes in the health policies and regimes in the countries in which we operate including the impact of any change in regulation and legislation that could affect the pharmaceutical industry, and the difficulty of predicting actions of the FDA or any other applicable regulator of pharmaceutical products;

● the research, manufacturing, preclinical and clinical development, commercialization, and market acceptance of our therapeutic candidates;

● our ability to successfully acquire, develop or commercialize our pharmaceutical products;

● our ability to establish collaborations for our therapeutic candidates;

● the interpretation of the properties and characteristics of our therapeutic candidates and of the results obtained with our therapeutic candidates in preclinical studies or clinical trials;

● the implementation of our business model, strategic plans for our business and therapeutic candidates;

● the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates and our ability to operate our business without infringing the intellectual property rights of others;

● estimates of our expenses, revenues, capital requirements and our needs for additional financing;

● the impact of competitive companies, technologies on our industry; and

● the impact of the public health, political and security situation in Israel, the U.S. and other countries in which we may operate or obtain approvals for our products or our business.

Our ability to predict our operating results or the effects of various events on our operating results is inherently uncertain. Therefore, we caution you to review carefully the risks and uncertainties described under the heading "Item 3. Key Information – D. Risk Factors" in this Annual Report on Form 20-F for a discussion of these and other risks that relate to our business and investing in Purple Biotech's ADSs and ordinary shares. Such factors and many other factors beyond our control could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by the forward-looking statements. The forward-looking statements contained in this Annual Report on Form 20-F are expressly qualified in their entirety by this cautionary statement.

iv

***SUMMARY OF RISK FACTORS***

The following is a summary of some of the principal risks we face. The list below is not exhaustive, and investors should read the "Risk Factors" section included in Item 3 in full.

● We are a clinical-stage pharmaceutical company with a history of operating losses. We expect to incur significant additional losses in the future and may never be profitable;

● Our limited operating history as a pharmaceutical research and development company makes it difficult to evaluate our business and prospects, and we depend on the success of a limited portfolio of therapeutic candidates for our future revenue, which could impair our ability to achieve profitability;

● We will need to raise additional capital to achieve our strategic objectives of developing and commercializing our therapeutic candidates, and to develop, acquire and/or in-license additional therapeutic candidates, and our failure to raise sufficient capital would significantly impair our ability to fund our future operations, develop our current or future therapeutic candidates, seek regulatory approval that is a prerequisite to selling any product, attract development or commercial partners, and retain key personnel;

● Our long-term capital requirements are uncertain and subject to numerous risks;

● Our clinical trials may fail to demonstrate adequately the safety and efficacy of our therapeutic candidates, which would prevent or delay regulatory approval and commercialization;

● Our therapeutic candidates may cause undesirable side effects or have other properties that could halt clinical development, prevent regulatory approval, limit commercial potential, or result in significant negative consequences;

● If we and/or our potential commercialization partners are unable to obtain FDA and/or other foreign regulatory authority approval for our therapeutic candidates, we and/or our potential commercialization partners, will be unable to commercialize our therapeutic candidates;

● Preclinical studies, CMC, and clinical trials may involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future results. We and/or our potential commercialization partners will not be able to commercialize our therapeutic candidates without developing CMC satisfactory to regulatory authorities, completing preclinical and clinical studies, and then seeking to obtain regulatory approval, if such trials show that our therapeutic candidates are safe and effective;

● If we do not establish collaborations for our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future and/or commercialize such therapeutic candidates, or otherwise raise substantial additional capital, we will likely need to alter our development and any commercialization plans;

● Any collaborative arrangements that we establish may not be successful or we may otherwise not realize the anticipated benefits from these collaborations. We do not control third parties with whom we have or may have collaborative arrangements, and we rely on them to achieve results which may be significant to us. In addition, any future collaboration arrangements may place the development, manufacturing and commercialization of our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future, outside our control, and may require us to relinquish important rights or may otherwise be on terms unfavorable to us;

● Our current business model is based largely upon the development or acquisition and commercialization of new combination products and new therapeutic candidates that may have not yet been administered to humans or have limited history of treatment with humans. Unexpected difficulties or delays in successfully developing, acquiring or commercializing such combination and new drugs could have an adverse effect on our business, financial condition and results of operations;

● We rely mainly on third parties to conduct our CMC, research and development, preclinical studies and clinical trials, and those third parties may not perform satisfactorily, including, but not limited to, failing to conform with quality standards for our therapeutic candidates, which may endanger our clinical trial participants and/or fail to meet established deadlines for the completion of such studies and trials;

● If third parties do not manufacture our current therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future in sufficient quantities in the required timeframe, at the required quality standards and at an acceptable cost, preclinical, clinical development and commercialization of our therapeutic candidates could be delayed;

● We rely on third-party contract vendors to manufacture and supply us with APIs to be compliant with the International Conference of Harmonization Q7 guidance and applicable laws and regulations, in the quantities we require on a timely basis;

● We anticipate continued reliance on third-party manufacturers if we are successful in obtaining marketing approval from the FDA and/or other regulatory agencies for NT219, CM24, IM1240 or any other therapeutic candidates we may develop or acquire in the future;

v

● We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities;

● Our oncology therapeutic candidates and/or any other therapeutic candidate that we may develop or acquire in the future, if approved, will be subject to ongoing regulatory review. If we fail to comply with continuing U.S. and applicable foreign laws, regulations and guidelines, we could lose the FDA and/or other regulatory agencies' approval(s) we will obtain (if any), and our business would be seriously harmed;

● The manufacture of our therapeutic candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-up of our manufacturing capabilities. If we, or any of our third-party manufacturers, encounter such difficulties, our ability to supply drugs for clinical trials or our products (if approved) for patients on a timely basis could be materially delayed or adversely affected. In addition, this may cause an increase in costs that could result in our inability to maintain a commercially viable cost structure;

● Because each of CM24, NT219 and IM1240 represents a novel approach to the treatment of disease, there are many uncertainties regarding the development, the production, the market acceptance, third-party reimbursement coverage and the commercial potential of these therapeutic candidates;

● We may depend on a partner to conduct clinical trials with CM24, NT219, and/or other therapeutic candidates and we may enter into future collaboration agreements with collaboration partners to develop and conduct clinical trials with, obtain regulatory approvals for, and to market and sell our therapeutic candidates. If such collaboration fails to perform as expected, our clinical trials and/or development plans will be delayed, and we will be required to seek other partners, which we may not be able to engage in a timely manner, if at all, and which may delay our development plans and therefore the potential for us to generate future revenue from our therapeutic candidates would be significantly reduced and our business would be significantly harmed;

● Our shareholders may not realize a benefit from our acquisitions of therapeutic candidates commensurate with the ownership dilution they experienced in connection with the transactions;

● Third-party claims of intellectual property infringement and other legal challenges may require us to spend substantial time and money and could prevent us from, or delay us in, developing or commercializing our therapeutic candidates. An adverse result in any infringement claims or other legal challenges could have a material adverse effect on our business, results of operations and on our financial condition;

● Our business and operations may be materially adversely affected in the event of computer system failures or security or breaches due to cyber-attacks or cyber intrusions, including ransomware, phishing attacks and other malicious intrusions;

● We may be unable to adequately protect or enforce our rights to intellectual property, causing us to lose valuable rights. Loss of any of our intellectual property rights may lead us to lose market share and could have an adverse effect on our business, results of operations and financial condition.

vi

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

A. **Directors and Senior Management** 

Not applicable

B. **Advisors** 

Not applicable

C. **Auditors** 

Not applicable

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

**A.** **[Reserved]** 

**B**. **Capitalization and Indebtedness** 

Not applicable.

**C**. **Reasons for the Offer and Use of Proceeds** 

Not applicable.

**D.** **Risk Factors** 

*You should carefully consider the risks we describe below, in addition to the other information set forth elsewhere in this Annual Report on Form 20-F, including our consolidated financial statements and the related notes beginning on page F-1, which could materially adversely affect our business, financial condition and future results. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of Purple Biotech's ordinary shares and American Depositary Shares could decline.*

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

***We are a clinical-stage pharmaceutical company with a history of operating losses. We expect to incur significant additional losses in the future and may never be profitable.***

We are a clinical-stage pharmaceutical company, and we are focused on the development and commercialization of innovative pharmaceutical drugs. We currently have two oncology therapeutic candidates in clinical trials, NT219 and CM24, neither of which has been approved for marketing and they are not being sold, marketed or commercialized, and a preclinical therapeutic candidate, IM1240, which we acquired in connection with our recent acquisition of Immunorizon in February 2023. Each will require additional preclinical and/or clinical trials or other testing before we can obtain regulatory approval, if we are able to obtain regulatory approval at all. We must obtain regulatory approval for these therapeutic candidates, or any other therapeutic candidate that we may develop or acquire in the future before we can sell such therapeutic candidates. We have incurred losses from commencement of our pharmaceutical research and development activities through December 31, 2022 of approximately $117.6 million as a result of revenue and cost of goods, research and development activities, clinical trial related activities, investment/acquisition activities, listing for trading and fund-raising related activities, selling, general and administrative, finance expenses and other expenses. We may incur significant additional losses as we continue to focus our resources on advancing NT219, CM24, IM1240 or other therapeutic candidates that we may develop, in-license, or acquire in the future. Our ability to generate revenue and achieve profitability depends mainly upon our ability, alone or with others, to successfully develop, in-license, or acquire, and obtain the required regulatory approvals for our oncology therapeutic candidates in the United States and various other territories and then to successfully commercialize our oncology therapeutic candidates. We may be unable to achieve any or all these goals with regard to NT219, CM24, IM1240 or any other therapeutic candidates that we may develop, in-license, or acquire in the future. As a result, we may never be profitable or achieve significant or sustained revenues.

***Our limited operating history as a pharmaceutical research and development company makes it difficult to evaluate our business and prospects, and we depend on the success of a limited portfolio of therapeutic candidates for our future revenue, which could impair our ability to achieve profitability.***

We have a limited operating history as a pharmaceutical research and development company, and our operations to date have been limited primarily to developing our NT219 and CM24 therapeutic candidates as well as to developing, gaining regulatory approval and commercializing Consensi; research and development; raising capital; and recruiting scientific, CMC, regulatory and management personnel and third-party partners. To date the only revenue we have received has been the initial milestone payments in connection with commercialization agreements for Consensi, which were terminated in 2021. We may not be able to commercialize or obtain regulatory approval for our NT219, CM24 and IM1220 therapeutic candidates or any additional therapeutic candidates we may develop, in-license and/or acquire in the future. Our future growth and success depend upon our ability to continue funding the development of our therapeutic candidates and on the successful commercialization of such therapeutic candidates. If we are unable to obtain regulatory clearances or approvals for our therapeutic candidates and future products, our ability to gain any revenues and to achieve profitability would be adversely affected. Consequently, any predictions about our future performance may not be accurate, and you may not be able to fully assess our ability to complete development of or commercialize our therapeutic candidates, acquire or in-license other therapeutic candidates, obtain regulatory approvals, or achieve market acceptance or favorable pricing for our therapeutic candidates.

***We will need to raise additional capital to achieve our strategic objectives of developing and commercializing our therapeutic candidates, and to develop, acquire and/or in-license additional therapeutic candidates, and our failure to raise sufficient capital would significantly impair our ability to fund our future operations, develop our current or future therapeutic candidates, seek regulatory approval that is a prerequisite to selling any product, attract development or commercial partners and retain key personnel.***

We will need to continue to expend substantial funds in research and development, including CMC, preclinical and clinical trials of our NT219, CM24 and IM1240 therapeutic candidates, as well as to acquire or in-license additional therapeutic candidates. We plan to fund our future operations through the out-licensing and/or commercialization of our therapeutic candidates and by raising additional capital through either debt or equity financing. However, we cannot be certain that we will be able to raise capital on commercially reasonable terms or at all, or that our actual cash requirements will not be greater than anticipated. We may have difficulty raising needed capital or securing a development or commercialization partner in the future as a result of, among other factors, our lack of revenues from commercialization of the therapeutic candidates, as well as the inherent business risks associated with our company and present and future market conditions. In addition, global and local economic and geopolitical conditions may make it more difficult for us to raise needed capital or secure a development or commercialization partner in the future and may impact our liquidity. If we are unable to obtain future financing, we may be forced to delay, reduce the scope of, or eliminate one or more of our research, development or commercialization programs related to our therapeutic candidates or any other therapeutic candidates that we may acquire, in-license or develop in the future, or to delay the acquisition or in-license of any additional therapeutic candidates, any of which may have a material adverse effect on our business, financial condition and results of operations.

On June 9, 2021, we entered into an open market sale agreement (the "Sales Agreement"), with Jefferies LLC ("Jefferies"), for the sale of ADSs, representing our ordinary shares. In accordance with the terms of the Sales Agreement, we may offer and sell ADSs having an aggregate offering price of up to $19,564,607 from time to time through Jefferies, acting as our agent. Any future sales of ADS under the Sales Agreement could result in substantial dilution to existing shareholders. As of March 3, 2023, we have sold approximately 760 thousand ADSs for total gross proceeds of $2.2 million under the Sales Agreement.

On December 8, 2022, we filed a registration statement on Form F-3 with the SEC utilizing a "shelf" registration process, under which we may offer and sell, from time to time in one or more offerings, up to an aggregate $200,000,000 of ADSs (representing our ordinary shares), ordinary shares, preferred shares, warrants, overallotment purchase rights, subscription rights, units and/or capital notes.

To the extent that we raise additional capital through the sale of equity, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates, or grant licenses on terms that are not favorable to us.

***Our long-term capital requirements are uncertain and subject to numerous risks.***

We estimate that so long as no significant revenues are generated from our oncology therapeutic candidates, we will need to raise substantial additional funds to develop and/or commercialize our therapeutic candidates and to develop, acquire or in-license any additional therapeutic candidates, as our current cash and short-term investments are not sufficient to complete the research and development of our therapeutic candidates in their current phase of development and any additional therapeutic candidates that we may acquire, in-license or develop in the future, and to fund our related expenses. Our long-term capital requirements are expected to depend on many potential factors, including, among others:

● the costs of seeking out and acquiring or engaging in-licensing or similar transactions for other oncological candidates;

● our ability to successfully complete the required CMC development for our oncology therapeutic candidates or any other therapeutic candidates that we may acquire, in-license, or develop in the future;

● our ability to successfully out-license and/or commercialize our oncology therapeutic candidates, or any other therapeutic candidates that we may acquire, in-license, or develop in the future, including securing commercialization agreements with third parties and favorable pricing and market share;

● the progress, success, and cost of our preclinical and/or clinical trials and research and development programs;

● the costs, timing and outcome of regulatory review and obtaining and maintaining regulatory approval of our oncology therapeutic candidates or any other therapeutic candidates that we may acquire, in-license, or develop in the future and addressing regulatory and other issues that may arise post-approval for such oncology therapeutic candidates;

● the costs of obtaining and enforcing our issued patents and defending intellectual property-related claims;

● the costs of developing and maintaining our third parties' cGMP manufacturing standards;

● our consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated;

● our ability to obtain recommendations and publish studies regarding the efficacy and/or safety of our oncology therapeutic candidates or any other therapeutic candidates that we may acquire or develop in the future that may be published by government agencies, professional organizations, academic or medical journals or other key opinion leaders; and

● sufficient coverage and reimbursement by third-party payers for our therapeutic candidates.

If we are unable to obtain approval, commercialize or out-license our oncology therapeutic candidates, or any other therapeutic candidates that we may acquire, in-license or develop in the future, maintain approval, or obtain future financing, we may be forced to delay, reduce the scope of, or eliminate one or more of our research and development programs related to the therapeutic candidates, which may have a material adverse effect on our business, financial condition and results of operations.

**Risks Related to Our Business, Operations and Regulatory Matters**

***Our clinical trials may fail to demonstrate adequately the safety and efficacy of our therapeutic candidates, which would prevent or delay regulatory approval and commercialization.***

The clinical trials of our therapeutic candidates are, and the manufacturing and marketing of our products will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where we intend to test and market our therapeutic candidates. Before obtaining regulatory approvals for the commercial sale of any of our therapeutic candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our therapeutic candidates are both safe and effective for use in each target indication. In particular, because some of our therapeutic candidates are subject to regulation as biological drug products, we will need to demonstrate that they are safe, pure and potent for use in their target indications. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use. The risk/benefit profile required for drug product approval will vary depending on these factors and may include not only the ability to show tumor shrinkage, but also adequate duration of response, a delay in the progression of the disease, and/or an improvement in survival. For example, response rates from the use of our therapeutic candidates may not be sufficient to obtain regulatory approval unless we can also show an adequate duration of response. 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. The results of preclinical studies and early clinical trials of our therapeutic candidates may not be predictive of the results of later-stage clinical trials. The results of studies in one set of patients or line of treatment may not be predictive of those obtained in another. We expect that there may be greater variability in results for products processed and administered on a patient-by-patient basis, as anticipated for our therapeutic candidates, than for "off-the-shelf" products, like many other drugs. There is typically an extremely high rate of attrition from the failure of therapeutic candidates proceeding through clinical trials. Therapeutic candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. Many companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most therapeutic candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

In addition, even if such trials are successfully completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our therapeutic candidates for approval. To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our therapeutic candidates.

***Our therapeutic candidates may cause undesirable side effects or have other properties that could halt clinical development, prevent regulatory approval, limit commercial potential, or result in significant negative consequences.***

Undesirable side effects or adverse events caused by our therapeutic candidates, or related to the combination therapies, could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

If unacceptable toxicities arise in the development of our therapeutic candidates, the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our therapeutic candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment, or the ability of enrolled subjects to complete the trial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. Any of these occurrences may harm our business, financial condition and prospects significantly.

***If we and/or our potential commercialization partners are unable to obtain FDA and/or other foreign regulatory authority approval for our therapeutic candidates, we and/or our potential commercialization partners, will be unable to commercialize our therapeutic candidates.***

To date, we have not marketed, distributed or sold any oncology drug product. Our oncology therapeutic candidates are each subject to extensive governmental laws, regulations and guidelines relating to development, preclinical and clinical trials, manufacturing, and commercialization of drugs. We may not be able to obtain regulatory approval for any of our therapeutic candidates in a timely manner or at all.

Any material delay in obtaining, or the failure to obtain, required regulatory approvals will increase our costs and materially and adversely affect our ability to generate future revenues. Any regulatory approval to market a therapeutic candidate may be subject to restrictive conditions of use, including cautionary information, thereby limiting the size of the market for the therapeutic candidate. We also are, and will be, subject to numerous regulatory requirements from both the FDA and foreign state agencies that govern the conduct of preclinical and clinical trials, manufacturing and marketing authorization, pricing, and third-party reimbursement. Moreover, approval by one regulatory authority does not ensure approval by other regulatory authorities in separate jurisdictions. Each jurisdiction may have different approval processes and may impose additional testing requirements for our therapeutic candidates than other jurisdictions. Additionally, the FDA or other foreign regulatory bodies may change their approval policies or adopt new laws, regulations or guidelines in a manner that delays or impairs our ability to obtain the necessary regulatory approvals to commercialize our therapeutic candidates.

***Preclinical studies, CMC, and clinical trials may involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future results. We and/or our potential commercialization partners will not be able to commercialize our therapeutic candidates without developing CMC satisfactory to regulatory authorities, completing preclinical and clinical studies, and then seeking to obtain regulatory approval, if such trials show that our therapeutic candidates are safe and effective.***

We have limited experience in conducting and managing CMC, preclinical studies and clinical trials that are required to commence commercial sales of our therapeutic candidates. Developing and implementing CMC, and planning and conducting preclinical studies and clinical trials are expensive, complex, can take many years to complete and have uncertain outcomes. We cannot predict whether we, independently or through third parties, will encounter problems with any of the completed, ongoing or planned CMC, preclinical studies and/or clinical trials that will cause delays, including suspension of preclinical studies and/or clinical trials, delays in recruiting patients into the clinical trials, or delay of data analysis or release of the final report in our preclinical studies or clinical studies. Implementation of CMC and the preclinical studies and clinical trials of our therapeutic candidates may take significantly longer to complete than is estimated. Failure can occur at any stage of the testing, and we may experience numerous unforeseen events during, or as a result of, CMC, the preclinical studies and/or clinical trial process that could delay or prevent commercialization of our current or future therapeutic candidates.

In connection with CMC and the preclinical studies and clinical trials for our therapeutic candidates and other therapeutic candidates that we may seek to develop in the future, either on our own or through licensing or partnering agreements, we face various risks, including but not limited to:

● delays in manufacturing the drug substance and drug product for preclinical studies and clinical trials;

● delays in manufacturing the drug substance and drug product following NDA or BLA approval, if we receive such approval at all;

● delays in securing clinical investigators or trial sites for clinical trials that must be completed for us to obtain any approval that we seek;

● delays in receiving import or other government approvals to ensure appropriate drug supply, and shortages of combination drugs used in our clinical studies.

● delays in obtaining institutional review board (human ethics committee) and other regulatory approvals to commence a clinical trial;

● negative or inconclusive results from preclinical and/or clinical trials;

● the FDA or other foreign regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical studies and may not approve initiation of certain clinical trials;

● the clinical trials may be delayed or not completed due to the failure to recruit suitable candidates or if there is a lower rate of suitable candidates than anticipated or if there is a delay in recruiting suitable candidates;

● an inability to monitor patients adequately during or after treatment;

● problems with investigator or patient compliance with the trial protocols;

● a therapeutic candidate may not prove safe or efficacious;

● there may be unexpected or even serious adverse events and side effects from the use of a therapeutic candidate;

● the results with respect to any therapeutic candidate may not confirm the positive results from earlier preclinical studies or clinical trials;

● the results may not meet the level of statistical significance required by the FDA or other foreign regulatory authorities;

● the results will leave only limited and/or restrictive uses, including the inclusion of warnings and contraindications, which could significantly limit the marketability and profitability of the therapeutic candidate;

● our therapeutic candidates may not be reimbursed under different healthcare programs such as Medicare, Medicaid or private health insurance programs;

● changes to the current regulatory requirements related to clinical trials which can delay, hinder or lead to unexpected costs in connection with our receiving the applicable regulatory approvals; and

● the availability of other drugs that provide alternative and/or superior treatments to our drugs and therapeutic candidates.

A number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical trials, even after seeing promising results in earlier preclinical studies and/or clinical trials. As such, we do not know whether any clinical trials we may conduct will demonstrate adequate efficacy and safety sufficient to obtain regulatory approval to market our therapeutic candidates. If any of the preclinical studies and/or clinical trials of any therapeutic candidate do not produce favorable results, our ability to obtain regulatory approval for the therapeutic candidate may be adversely impacted, which will have a material adverse effect on our business, financial condition and results of operations.

***If we do not establish collaborations for our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future, and/or commercialize such therapeutic candidates, or otherwise raise substantial additional capital, we will likely need to alter our development and any commercialization plans.***

Our drug development programs, mainly the potential commercialization of our oncology therapeutic candidates, or any other therapeutic candidates that we may develop or acquire in the future, will require additional cash to fund expenses. As such, our strategy includes selectively partnering or collaborating with multiple pharmaceutical and biotechnology companies (including by way of out-licensing) to assist us in furthering development and potential commercialization of our therapeutic candidates, in some or all jurisdictions. We may not be successful in such collaborations with such third parties on acceptable terms, or at all. In addition, if we fail to negotiate and maintain suitable development (such as out-licensing) or commercialization agreements, we may have to limit the size or scope of our activities or we may have to delay one or more of our development or commercialization programs. Any failure to enter into or maintain development or commercialization agreements with respect to the development, marketing and commercialization of our therapeutic candidates in foreign jurisdictions where we do not have approval for commercialization, or any other therapeutic candidates that we may develop or acquire in the future, or failure to develop or acquire, market and commercialize such therapeutic candidates, will have an adverse effect on our business, financial condition and results of operation.

***Any collaborative arrangements that we establish may not be successful or we may otherwise not realize the anticipated benefits from these collaborations. We do not control third parties with whom we have or may have collaborative arrangements, and we rely on them to achieve results which may be significant to us. In addition, any future collaboration arrangements may place the development, manufacturing and commercialization of our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future, outside our control, and may require us to relinquish important rights or may otherwise be on terms unfavorable to us.***

Our collaborative arrangements require us to rely on external consultants, advisors, experts and service providers for assistance in several key functions, including preclinical and clinical development, manufacturing, regulatory, market research, and intellectual property. We do not control these third parties, but we rely on them to achieve results, which may be significant to us. Our collaborative arrangements may not be successful or we may otherwise not realize the anticipated benefits from these collaborations. Additionally, we are responsible for any quality or regulatory issue that a collaborator may have that affects one or more of our therapeutic candidates. Relying upon collaborative arrangements to develop and/or commercialize our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future subjects us to a number of risks, including:

● we may not be able to control the amount and timing of resources that our collaborators may devote to our drug product or therapeutic candidates;

● we may be held liable should a collaborator fail to comply with applicable laws, rules, or regulations when performing services for us;

● our collaborators may experience financial difficulties or changes in business focus;

● our collaborators may experience quality or regulatory issues that negatively affect our therapeutic candidates;

● our collaborators may fail to secure adequate commercial supplies in a timely manner for our drug products upon marketing approval, if at all;

● we may suffer losses due to our collaborators' failure to perform their duties and we may not be able to be reimbursed by our collaborators for such losses;

● our collaborators may have a shortage of qualified personnel;

● we may be required to relinquish important rights, such as local trademark, marketing and distribution rights;

● business combinations or significant changes in a collaborator's business strategy may adversely affect a collaborator's willingness or ability to complete its obligations under any arrangement;

● under certain circumstances, a collaborator could move forward with a competing therapeutic candidate developed either independently or in collaboration with others, including our competitors; and

● collaborative arrangements are often terminated or allowed to expire, which could delay and increase the cost of development of our therapeutic candidates.

If any of these or other scenarios materialize, they could have an adverse effect on our business, financial condition or results of operations.

***Our current business model is based largely upon the development or acquisition and commercialization of new combination products and new therapeutic candidates that may have not yet been administered to humans or have limited history of treatment with humans. Unexpected difficulties or delays in successfully developing, acquiring or commercializing such combination and new drugs could have an adverse effect on our business, financial condition and results of operations.***

We currently have two oncology therapeutic candidates in clinical trials, NT219 and CM24, both of which have limited safety and efficacy data for treatment in humans. The previous owners of CM24 conducted the first human clinical trials for this therapeutic candidate, which were initiated in 2015, and discontinued in 2017. In March 2021, we initiated a Phase 1b/2 clinical trial evaluating CM24, in advanced cancer patients, with expansion cohorts in subjects with non-small cell lung cancer (NSCLC) and pancreatic cancer, and in May 2022, we advanced that trial to a randomized, controlled, open label, multicenter Phase 2 study in subjects with metastatic pancreatic cancer to evaluate the safety and tolerability of CM24 in combination with nivolumab and chemotherapy. In the second half of 2020 we commenced a first in human phase 1/2 study of NT219, as a single agent in patients with recurrent and/or metastatic advanced solid tumors, followed by a dose escalation phase of NT219 in combination with cetuximab for the treatment of recurrent and/or metastatic squamous cell carcinoma of the head and neck or colorectal adenocarcinoma, and an expansion phase of NT219 at its recommended phase 2 level in combination with cetuximab in patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. Further, our third therapeutic candidate, IM1240, which we recently acquired in connection with our recent acquisition of Immunorizon in February 2023, is in preclinical development and no human clinical trials have been conducted for this therapeutic candidate. We cannot be certain whether any of our therapeutic candidates will be safe and efficacious when used in either monotherapy settings or in combination with other known cancer treatments.

In addition, we cannot be certain that the FDA or any foreign regulatory body will consider our oncology therapeutic candidates, whether alone or combined with other cancer treatments, or any other therapeutic candidate that we may develop or acquire in the future to be superior to the then current gold standard of care. Any delays in perfecting the combination, the production of the combination, or in market acceptance of the combination or new therapeutic candidates could have an adverse effect on our business, financial condition and results of operations.

Further, as part of our strategy for growth, we may consider the acquisition of additional therapeutic candidates at various stages of development and in a variety of therapeutic areas, and we may consider the acquisition or marketing rights of approved drug products as well. However, we may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions successfully into our business. In this regard, acquisitions involve numerous risks, including difficulties in the integration of the acquired therapeutic candidates and/or drug product and the diversion of management's attention from other business concerns. For example, our ability to successfully transition and integrate the recently acquired Immunorizon may be critical for our future growth and financial stability, and given the challenges involved with the development of a biological product and the financial challenges, we may not be able to realize the anticipated benefits of the acquisition, which may materially adversely affect our growth and future operating results as well as our financial condition. Although we will endeavor to evaluate the risks inherent in any particular transaction, there can be no assurance that we will properly ascertain all such risks. In addition, acquisitions could result in the incurrence of substantial additional indebtedness and other expenses or in potentially dilutive issuances of equity securities. There can be no assurance that difficulties encountered with acquisitions will not have a material adverse effect on our business, financial condition and results of operations.

***We rely mainly on third parties to conduct our CMC, research and development, preclinical studies and clinical trials, and those third parties may not perform satisfactorily, including, but not limited to, failing to conform quality standards for our therapeutic candidates, which may endanger our clinical trial participants, and/or fail to meet established deadlines for the completion of such studies and trials.***

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We do not have the ability independently to conduct CMC, research and development, preclinical studies or clinical trials for our product candidates, and to a large degree we rely on third parties, such as contract manufacturing organizations, contract research organizations, medical institutions, contract laboratories, current and potential development or commercialization partners, clinical investigators and independent study monitors, to perform these functions. Our reliance on these third parties for development activities reduces our control over these activities.

Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. Although we have, in the ordinary course of business, entered into agreements with these third parties, we continue to be responsible for confirming that each of our preclinical studies and clinical trials is conducted in accordance with its general investigational plan and protocol. Moreover, the FDA and other regulatory agencies require us and our applicable third-party collaborators to comply with regulations and standards, commonly referred to as current good laboratory practices (cGLP), current good manufacturing practices (cGMP), and current good clinical practices (cGCP), for manufacturing and conducting, recording and reporting the results of preclinical and clinical trials to assure that data and reported results are credible and accurate and that the clinical trial participants are adequately protected. We cannot guarantee that our third-party collaborators will remain compliant with the applicable regulations. Regulatory authorities in other jurisdictions may have similar responsibilities and requirements. Our reliance on third parties does not relieve us of these responsibilities and requirements.

To date, we believe our contract manufacturing organizations, contract research organizations and other third-party entities that support our manufacturing, research and development, preclinical or clinical practices with which we are working have generally performed well. However, if these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not meet our deadlines or we may be required to replace them. Although we believe that there are a number of other third-party contractors we could engage to continue these activities, finding replacements may result in a delay of clinical trials and/or commercialization of products and additional costs. Accordingly, we may be delayed in obtaining regulatory approvals for our oncology therapeutic candidate or any therapeutic candidate that we may develop or acquire in the future, and we may be delayed in our efforts to successfully commercialize such therapeutic candidates for targeted diseases or fail to maintain marketing authorization to our drug products.

In addition, we rely substantially on third-party data managers for CMC and the preclinical study and clinical trial data that we present to regulatory authorities in order to obtain marketing authorizations. Although we attempt to audit and control the quality of third-party data, we cannot guarantee the authenticity or accuracy of such data, nor can we be certain that such data has not been fraudulently generated. There is no assurance that these third parties will pass FDA or regulatory audits, which could delay or prevent regulatory approval or cause revocation of already approved marketing authorization.

***If third parties do not manufacture our current therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future in sufficient quantities in the required timeframe, at the required quality standards and at an acceptable cost, preclinical, clinical development and commercialization of our therapeutic candidates could be delayed.***

We do not currently own or operate manufacturing facilities, and we rely, and expect to continue to rely, on third parties to manufacture preclinical, clinical and commercial quantities of our oncology therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future. Our reliance on third parties includes our reliance on them to manufacture such therapeutic candidates at a required standard of quality, including quality assurance related to regulatory compliance. Our current and anticipated future reliance upon others for the manufacture of our oncology therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future may adversely affect our future profit margins, if any, and our ability to develop such therapeutic candidates and commercialize any such therapeutic candidates at a required standard of quality and on a timely and competitive basis.

We may not be able to maintain our existing or future third-party manufacturing arrangements on acceptable terms, if at all. If for some reason our existing or future manufacturers do not perform as agreed or expected, or our existing or future manufacturers otherwise terminate their arrangements with us, we may be required to replace them. Although we are not entirely dependent upon our existing manufacturing agreements since we could replace them with other third-party manufacturers, we may incur added costs and delays in identifying, engaging, qualifying and training any such replacements, and in receiving regulatory approval for such replacements.

***We rely on third-party contract vendors to manufacture and supply us with APIs to be compliant with the International Conference of Harmonization Q7 guidance and applicable laws and regulations, in the quantities we require on a timely basis****.*

We currently do not manufacture any API ourselves. Instead, we rely on third-party vendors for the manufacture and supply of our APIs that are used to formulate our oncology therapeutic candidates. While there are many potential API manufacturers and suppliers in the market, if these manufacturers or suppliers are incapable or unwilling to meet our current or future needs on acceptable terms or at all, or the current or future demand of the public, if any, we could experience delays in developing or conducting clinical trials for our current therapeutic candidates, NT219, CM24 and IM1240, or any other therapeutic candidate that we may develop or acquire in the future, and incur additional costs.

While there may be several alternative manufacturers or suppliers of API in the market, we have not conducted extensive audits and investigations into the quality or availability of their APIs. In addition, we may acquire therapeutic candidates which already have long term commitments to a specific API supplier. As a result, we can provide no assurances that supply sources will not be interrupted from time to time. Changing API manufacturers or suppliers or finding and qualifying new API manufacturers or suppliers can be costly and take a significant amount of time. Many APIs require significant lead time to manufacture. There can also be challenges in maintaining similar quality or technical standards from one manufacturing batch to the next.

If we are not able to find stable, reliable manufacturers or suppliers of our APIs, we may not be able to produce enough supplies of our oncology therapeutic candidates to meet our needs for further development and/or to conduct clinical trials, which could affect our business, financial condition and results of operation.

***We anticipate continued reliance on third-party manufacturers if we are successful in obtaining marketing approval from the FDA and/or other regulatory agencies for NT219, CM24, IM1240 or any other therapeutic candidates we may develop or acquire in the future.***

To date, our NT219, CM24 and IM1240 therapeutic candidates have been manufactured in relatively small quantities by third-party manufacturers. Once our oncology therapeutic candidates and/or any other therapeutic candidate that we may develop or acquire in the future is approved for marketing and commercial sale, if at all, we still expect that we would continue to rely, at least initially, on third-party manufacturers to produce commercial quantities of such approved therapeutic candidates. These manufacturers may not be able successfully to increase the manufacturing capacity for any such therapeutic candidates that may be approved in the future in a timely or economic manner, or at all. Significant scale-up of manufacturing may require additional validation studies, which the FDA must review and approve. If we are unable successfully to increase the manufacturing capacity for our oncology therapeutic candidates or any therapeutic candidate that we may develop or acquire in the future, or we are unable to establish alternative manufacturing capabilities and in a timely manner, the commercial launch of any such therapeutic candidates that are approved in the future may be delayed or there may be a shortage in supply.

***We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities.***

We and our third-party contract manufacturers are, and will be, required to adhere to laws, regulations and guidelines of the FDA and other foreign regulatory authorities setting forth cGMPs. These laws, regulations and guidelines cover all aspects of the manufacturing, testing, quality control and recordkeeping relating to our oncology therapeutic candidates when we initiate their clinical trials. We and our third-party contract manufacturers may not be able to comply with applicable laws, regulations and guidelines. We and our third-party contract manufacturers are and will be subject to unannounced inspections by the FDA, state regulators and similar foreign regulatory authorities outside the U.S. Our failure, or the failure of our third-party contract manufacturers, to comply with applicable laws, regulations and guidelines could result in the imposition of sanctions on us, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our therapeutic candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of our therapeutic candidates, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect regulatory approval and supplies of our therapeutic candidates and materially and adversely affect our business, financial condition and results of operations.

***Our oncology therapeutic candidates and/or any other therapeutic candidate that we may develop or acquire in the future, if approved, will be subject to ongoing regulatory review. If we fail to comply with continuing U.S. and applicable foreign laws, regulations and guidelines, we could lose the FDA and/or other regulatory agencies' approval(s) we will obtain (if any), and our business would be seriously harmed.***

If our oncology therapeutic candidates and/or any other therapeutic candidate that we may develop or acquire in the future receives regulatory approval to commercialize, such therapeutic candidate will be subject to ongoing post-marketing surveillance programs and regulatory review. We and our commercialization partners, as applicable, are subject to ongoing reporting obligations, including pharmacovigilance, or drug safety, and our manufacturing operations, and those of contract manufacturers that we select, will be subject to continuing regulatory review, including inspections by the FDA and other foreign regulatory authorities, if a product is approved for commercialization in such foreign jurisdictions. The results of this ongoing review may result in the withdrawal of an approved product from the market, the interruption of manufacturing operations or the imposition of labeling or marketing limitations. In addition, since many more patients are treated with drugs following their marketing post-approval, unanticipated adverse reactions or serious adverse reactions that were not observed in preclinical and/or clinical trials may be observed during the commercial marketing of a drug product.

As we move forward with commercializing drug products, we may also periodically discuss with the FDA and other regulatory authorities certain clinical, regulatory and manufacturing matters and, our views may, at times, differ from those of the FDA and other regulatory authorities. If we are required to conduct additional clinical trials or other testing of an approved drug product, we may face substantial additional expenses, and/or we have our approval to commercialize a drug product revoked by the FDA or a foreign regulatory body, should we obtain approval to commercialize in such foreign jurisdiction.

In addition, the manufacturer and the facilities that we or our commercialization partners use or may use to manufacture drug products in the future will be subject to periodic and unannounced review and inspection by the FDA and other foreign regulatory authorities. Later discovery of previously unknown problems with a drug product or a therapeutic candidate, the manufacturer or manufacturing process, or failure to comply with our post-approval requirements, rules and regulatory requirements, may result in actions such as:

● restrictions on such drug product, therapeutic candidate, manufacturer or manufacturing process;

● issuance of Form 483 inspection observations, untitled letters, warning letters from the FDA or other foreign regulatory authorities;

● withdrawal of the product or therapeutic candidate from the market;

● suspension or withdrawal of regulatory approvals;

● refusal to approve pending applications or supplements to approved applications that we or our potential commercialization partners submit;

● voluntary or mandatory recall;

● refusal to permit the import or export of our therapeutic candidates;

● product seizure or detentions;

● injunctions or the imposition of civil or criminal penalties and fines; or

● adverse publicity or changes to the drug's labeling.

The FDA or foreign regulatory authorities' policies may change, or additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our oncology therapeutic candidates. If we, or our current or potential commercialization partners, suppliers, third-party contractors or clinical investigators are slow to adapt, or are unable to adapt, to changes in existing regulatory requirements or the adoption of new regulatory requirements or policies, we or our potential commercialization partners may lose marketing approval for our oncology therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future, that obtain regulatory approval, resulting in decreased or lost revenue from milestones, product sales or royalties and could also result in other civil or criminal sanctions, including fines and penalties.

***Regulatory approval of our oncology therapeutic candidates (if any) will be limited by the FDA and similar foreign authorities to those specific indications and conditions for which clinical safety and efficacy have been demonstrated, and the promotion of such product candidates for off-label uses, or in a manner that otherwise violates applicable FDA regulations, could adversely affect our business.***

Any regulatory approval of therapeutic candidates is limited to those specific diseases and indications for which such therapeutic candidates have been deemed safe and effective by the FDA or similar foreign authorities. Marketing or commercializing of therapeutic candidates to treating a new symptom or indication, that was not approved by the FDA or similar foreign authorities would be considered promotion of off-label, or unapproved use, and would require us to file a supplemental new drug application and obtain regulatory approval. We will rely on physicians to prescribe and administer our therapeutic candidates (if approved for marketing by the FDA or similar foreign authorities) or as the product labeling directs and for the indications described on the labeling. To the extent any physicians prescribe such product to patients for off-label uses, or the use of such products depart from the approved use, this may increase the risk of injury or other adverse events to the patients and the risk of filing product liability claims against us. Product liability claims are expensive to defend regardless of merit and could result in substantial damage awards against us or harm our reputation. Furthermore, any off-label use may not effectively treat the conditions associated with such use, which could harm our reputation in the marketplace among physicians and patients, adversely affecting our operations.

While physicians may choose to prescribe drugs for uses that are not described in the product's labeling and for uses that differ from those approved by regulatory authorities, our ability to promote our therapeutic candidates (if approved for marketing by the FDA or similar foreign authorities) is limited to those indications that are specifically approved by the FDA or other regulatory authorities. Although regulatory authorities generally do not regulate the behavior of physicians, they do restrict communications by companies on the subject of off-label use. If the promotional activities related to our therapeutic candidates fail to comply with these regulations or guidelines, we may be subject to warnings from, or enforcement action by, the FDA or other regulatory authorities. In addition, failure to follow FDA rules and guidelines relating to promotion and advertising can lead to other negative consequences that could adversely affect our operations, such as the suspension or withdrawal of our therapeutic candidates from the market, enforcement letters, and corrective actions. Other regulatory authorities may impose separately penalties including, but not limited to, fines, disgorgement of money, operating restrictions, or criminal prosecution.

The FDA requires that our and our future distribution partners' sales and marketing efforts, as well as promotions, comply with various laws and regulations. Prescription drug promotions must be consistent with and not contrary to labeling, present "fair balance" between risks and benefits, be truthful and not false or misleading, be adequately substantiated (when required), and include adequate directions for use. In addition to the requirements applicable to approved drug products, we may also be subject to enforcement action in connection with any promotion of an investigational new drug. A sponsor or investigator, or any person acting on behalf of a sponsor or investigator, may not represent in a promotional context that an investigational new drug is safe or effective for the purposes for which it is under investigation or otherwise promote the drug candidate.

If the FDA investigates the marketing and promotional materials or other communications for our current or future commercial products and finds that any of our commercial products are being marketed or promoted in violation of the applicable regulatory restrictions, we and our distribution partners could be subject to FDA enforcement action. Any enforcement action (or related lawsuit, which could follow such action) brought against us in connection with alleged violations of applicable drug promotion requirements, or prohibitions, could harm our business and our reputation, as well as the reputation of any approved drug products we may promote or commercialize.

***We may encounter substantial delays in the clinical trials for our therapeutic candidates, or we may not be able to conduct their trials on the timelines we expect, or we may not be able to complete them at all.***

Clinical testing is expensive, time-consuming, and subject to uncertainty. Currently, two of our therapeutic candidates are in clinical trials, NT219 and CM24, and we cannot guarantee that any of these therapeutic candidate's and/or future therapeutic candidate's clinical studies will be initiated or conducted as planned, or completed on schedule, if at all. We intend to continue our clinical testing of CM24 and NT219, but issues may yet arise that could delay or prevent future clinical trials. A failure of one or more clinical studies can occur at any stage of testing, and clinical studies for any of our therapeutic candidates may not be successful. Events that may prevent successful or timely completion of clinical development include:

● delays in reaching a consensus with regulatory agencies on study design;

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

● delays in obtaining required Institutional Review Board, or IRB, approval at each clinical study site;

● the departure of a principal investigator from a clinical site, which could cause delays in conducting the clinical trial at a particular clinical site;

● the shortage of staff in the clinical sites;

● imposition of a temporary or permanent clinical hold by regulatory agencies;

● delays in recruiting suitable patients to participate in clinical studies for NT219, CM24 or future therapeutic candidates;

● failure by us or our CROs, or third parties, to adhere to clinical study requirements;

● failure to perform in accordance with the FDA's cGCPs, requirements, or applicable regulatory guidelines in other countries;

● patients dropping out of a study;

● occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

● changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

● the cost of clinical studies of CM24 and NT219 and/or future therapeutic candidates being greater than we anticipate;

● management's decision to allocate internal resources to other projects;

● clinical studies of CM24, NT219 and/or future therapeutic candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring, conduct of additional clinical studies or abandon product development programs; and

● delays in manufacturing, testing, release, validating, or import/export of sufficient stable quantities of CM24, NT219, and/or future therapeutic candidates or approved drugs for use in clinical studies or the inability to do any of the foregoing, including any quality issues associated with contract manufacturers.

In addition, the COVID-19 pandemic affected the conduct of clinical trials of investigational therapeutic candidates by causing, among other things, slowdowns in site activities, difficulties or slowdown in patient enrollment, travel limitations, and other limitations for site personnel or trial subjects who became infected with COVID-19, all of which led to difficulties in performing studies, such as recruiting patients and timely performance of the study activities. Any future limitations that may be implemented as a result of an additional outbreak of COVID-19 or other pandemics may lead to difficulties in meeting protocol-specified procedures.

We also may conduct clinical research in collaboration with other biotechnology and biologics entities in which we combine CM24, NT219 and/or other or future therapeutic candidates with the technologies of such collaborators. Such collaborations may be subject to additional delays because of the management of the trials or the necessity of obtaining additional approvals for therapeutics used in the combination trials, or a shortage in the availability of such collaborators' drug products. These combination therapies will require additional testing and clinical trials, will require additional FDA regulatory approval, and will increase our future expenses.

In addition, if we make manufacturing or formulation changes to CM24, NT219 and/or other or future therapeutic candidates, we may be required, or may elect, to conduct additional studies to bridge the modified therapeutic candidates to earlier versions. Clinical study delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to commercialize these therapeutic candidates successfully and may harm our business and the results of our operations.

A number of factors, including scheduling conflicts with participating clinicians and clinical institutions, and difficulties in identifying and enrolling patients who meet trial eligibility criteria, may cause significant delays in clinical studies. We may not commence or complete clinical trials involving any of our therapeutic candidates as projected or may not conduct them successfully.

We expect to rely on medical institutions, academic institutions, or clinical research organizations to conduct, supervise, or monitor some or all aspects of clinical trials involving our therapeutic candidates. If we fail to commence or complete, or experience delays in, any of its planned clinical trials, we may experience delays in its clinical development and/or commercialization plans.

***If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.***

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including:

● the size and nature of the patient population;

● the patient eligibility criteria defined in the protocol;

● the size of the study population required for analysis of the trial's endpoints;

● the proximity of patients to trial sites;

● the design of the trial;

● our ability to recruit clinical trial investigators with the appropriate competencies and experience;

● competing clinical trials for similar therapies or other new therapeutics;

● clinicians' and patients' perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating;

● our ability to obtain and maintain patient consents;

● the risk that patients enrolled in clinical trials will not complete a clinical trial; and

● the effect of epidemics or pandemics, such as the COVID-19 pandemic, on the ability of patients to visit the testing sites and the effect of the disease on potential patients who contracted the disease.

Our clinical trials will compete with other clinical trials for therapeutic candidates that are in the same therapeutic areas as our therapeutic candidates, and this competition may reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Accordingly, we cannot guarantee that the trials will progress as planned or as scheduled. Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing clinical trial and planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our therapeutic candidates.

Even if we can enroll a sufficient number of patients in our clinical trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our therapeutic candidates.

***We may depend on a partner to conduct clinical trials with CM24, NT219 and/or other therapeutic candidates, and we may enter into future collaboration agreements with collaboration partners to develop and conduct clinical trials with, obtain regulatory approvals for, and to market and sell our therapeutic candidates. If such collaboration fails to perform as expected, our clinical trials and/or development plans will be delayed, and we will be required to seek other partners, which we may not be able to engage in a timely manner, if at all, and which may delay our development plans and therefore the potential for us to generate future revenue from our therapeutic candidates would be significantly reduced and our business would be significantly harmed.***

We have entered into a clinical collaboration agreement with Bristol Myers Squibb Company (NYSE:BMY) for a phase 1/2 study of CM24 in combination with a PD-1 antibody nivolumab, and an expansion study to also evaluate CM24 and nivolumab, together with nab-paclitaxel, in patients with pancreatic cancer. We initiated the phase 1b/2 portion of the phase 1/2 study in March 2021 and in May 2022, we initiated a randomized Phase 2 portion of this study in subjects with metastatic pancreatic cancer (PDAC) to evaluate the safety and tolerability of CM24 in combination with nivolumab and chemotherapy. We rely and may in the future continue to rely on our collaboration partners to develop, supply, conduct clinical trials, and/or commercialize our therapeutic candidates and approved products we may market in the future, if any. We may also enter into collaboration agreements with other parties in the future relating to such therapeutic candidates. Ultimately, if such therapeutic candidates are advanced through clinical trials, certain of the collaboration partners may have certain rights in connection with the commercialization of the therapeutic candidate, such as rights of first offer to be responsible for commercialization of these therapeutic candidates. If these collaboration partners do not perform in the manner we expect or fail to fulfill their responsibilities in a timely manner or at all, if the agreements with them terminate or if the quality or accuracy of the clinical data they obtain is compromised, the clinical development, regulatory approval and commercialization efforts related to our therapeutic candidates could be delayed or terminated, and it could become necessary for us to assume the responsibility at our own expense for the clinical development of such therapeutic candidates and seek replacement collaboration and/or development partners. In that event, we would likely be required to limit the size and scope of efforts for the development and commercialization of such product candidate; we would likely be required to seek additional financing to fund further development or identify alternative strategic collaboration partners; our potential to obtain regulatory approval for, and to generate future revenue from, such therapeutic candidates would be significantly reduced or delayed; and it could have a material adverse effect on our business, financial position, results of operations and future growth prospects.

Collaborations involving our therapeutic candidates pose a number of risks, including the following:

● collaboration partners have significant discretion in determining the efforts and resources that they will apply to these partnerships;

● collaboration partners may have limited supply of products, such as a PD-1 antibody, which we require for the development of our therapeutic candidates;

● collaboration partners may not perform their obligations as expected;

● collaboration partners may not pursue development of our therapeutic candidates or may elect not to continue or renew development programs, based on clinical trial results, changes in the collaboration partners' strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

● collaboration partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

● collaboration partners may have or could independently develop, or develop with third parties, products that compete directly or indirectly with our out-licensed therapeutic candidates;

● disagreements with collaboration partners, including disagreements over proprietary rights, contract interpretation or the conduct of product research, development or commercialization programs, may cause delays or lead to termination of such programs, or require us to assume unplanned expenditures, responsibilities or liabilities with respect to therapeutic candidates we have out licensed, or may result in costly and time-consuming litigation or arbitration;

● collaboration partners may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

● collaboration agreements may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable therapeutic candidates.

In addition, collaboration agreements may provide the collaboration partners with rights to terminate such agreements and licenses granted under such agreements under various conditions, which, if exercised, would adversely affect our product development efforts, could make it difficult for us to attract new collaboration partners and may adversely affect our reputation. Any such termination of any current or future agreement with a collaboration partner could have a material adverse effect on our business, financial position and results of operations.

***The manufacture of our therapeutic candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-up of our manufacturing capabilities. If we, or any of our third-party manufacturers encounter such difficulties, our ability to supply drugs for clinical trials or our products (if approved) for patients on a timely basis could be materially delayed or adversely affected. In addition, this may cause an increase in costs that could result in our inability to maintain a commercially viable cost structure.***

NT219 is a small molecule chemical compound and CM24 and IM1240 are biologic compounds, and the process of manufacturing each is complex, highly regulated and subject to multiple risks. Even minor deviations from normal manufacturing processes for each of NT219, CM24 and IM1240 could result in reduced production yields, product defects, and other supply disruptions.

Developing commercially viable processes is a difficult and uncertain task, and there are risks associated with scaling to the level required for advanced clinical trials or commercialization, including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, lot consistency, and timely availability of raw materials. As a result of these challenges, we may experience delays in our therapeutic candidates' preclinical development, clinical development and/or commercialization plans. We may ultimately be unable to reduce the cost of goods for each of our therapeutic candidates to levels that will allow for an attractive return on investment if and when those therapeutic candidates are commercialized.

***Because each of CM24, NT219 and IM1240 represents a novel approach to the treatment of disease, there are many uncertainties regarding the development, the market acceptance, third-party reimbursement coverage and the commercial potential of these therapeutic candidates.***

There is no assurance that the approaches offered by CM24 NT219 or IM1240 will gain broad acceptance among physicians or patients, or that governmental agencies or third-party medical insurers will be willing to provide reimbursement coverage for proposed therapeutic candidates. Since each of CM24, NT219 and IM1240 represents a new approach to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from these therapeutic candidates. Accordingly, we may spend large amounts of money trying to obtain approval for therapeutic candidates that have an uncertain commercial market. The market for any products that we may successfully develop utilizing our therapeutics candidates will also depend on the cost of the product. We do not yet have sufficient information to reliably estimate what it will cost to commercially manufacture these therapeutic candidates, and the actual cost to manufacture these therapeutic products could materially and adversely affect the commercial viability of these products. Our goal is to reduce the cost of manufacturing our therapeutic candidates. However, unless we reduce those costs to an acceptable amount, we may never be able to develop a commercially viable product. If we do not successfully develop and commercialize our therapeutic candidates based upon this approach or find suitable and economical sources for materials used in the production of these therapeutic candidates, these therapeutic candidates will not become profitable.

Our therapeutic candidates may be provided to patients in combination with other agents provided by third parties. The cost of such combination therapy may increase the overall cost of our therapeutic candidates' based therapies and may result in issues regarding the allocation of reimbursements between our therapeutic candidates and the other agents, all of which may adversely affect the ability to obtain reimbursement coverage for the combination therapy from third-party medical insurers.

***If we fail to comply with any obligations under our license agreements, or disputes arise with respect to those agreements, it could have a negative impact on our business and our intellectual property rights.***

We are a party to a license agreement with each of Yissum Research and Development Company of the Hebrew University of Jerusalem Ltd. ("Yissum"), the technology transfer company of the Hebrew University of Jerusalem, and Tel Hashomer – Medical Research Infrastructure and Services Ltd. ("THM") that impose, and we may enter into additional licensing arrangements with third parties that may impose, diligence, development and commercialization timelines, milestone payment, royalty, insurance and other obligations on us. Our rights to use the licensed intellectual property are subject to the continuation of and our compliance with the terms of these agreements. Disputes may arise regarding our rights to intellectual property licensed to us from a third-party, including but not limited to:

● the scope of rights granted under the license agreement and other interpretation-related issues;

● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

● the sublicensing of patent and other rights;

● our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

● the ownership of inventions and know-how resulting from the creation or use of intellectual property by us, alone or with our licensors and collaborators;

● the scope and duration of our payment obligations;

● our ability to further license the technology to third parties;

● our rights upon termination of such agreement; and

● the scope and duration of exclusivity obligations of each party to the agreement.

If disputes over intellectual property and other rights that we have licensed or acquired from third parties prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected therapeutic candidates. If we fail to comply with our obligations under current or future licensing agreements, these agreements may be terminated or the scope of our rights under them may be reduced and we might be unable to develop, manufacture or market any product that is licensed under these agreements.

In addition, we may have disputes over intellectual property rights related to our therapeutic candidates developed under service agreements or material transfer agreements with third parties. Such third parties may claim rights to certain know-how or intellectual property that may require us to enter into license agreements with such parties and pay royalties for such rights or to engage in legal proceedings with these parties.

***Our shareholders may not realize a benefit from our acquisitions of therapeutic candidates commensurate with the ownership dilution they experienced in connection with the transactions.***

If we are unable to realize the strategic and financial benefits anticipated from an acquisition (through the acquisition of a company or a company's assets), or in-licensing of therapeutic candidates, our shareholders may have experienced substantial dilution of their ownership interest without receiving any commensurate benefit. Due to the substantial number of the ADSs (including ADSs issuable upon exercise of the warrants to purchase ADSs) which were issued to shareholders in the acquisitions and the private placements we completed and may complete in the future in order to acquire our therapeutic candidates, the ownership stake and relative voting power of each ordinary share held by our previous shareholders was and may in the future be significantly reduced. Significant management attention and resources will be required to integrate and operate any acquired company or new product. Delays in this process could adversely affect our business, financial results, financial condition and price of our ordinary shares and/or ADSs following any acquisition or in-licensing agreement. Even if we are able to integrate the acquired business operations successfully, there can be no assurance that its integration will result in the realization of the full benefits of synergies, innovation, and operational efficiencies that may be possible from such integration and that the benefits will be achieved within a reasonable period of time.

For example, in February 2023 we completed the acquisition of 100% of the shares of Immunorizon, which is developing potential multi-specific T and NK cell engager oncology therapies that selectively activate the immune response within the tumor microenvironment, in exchange for an aggregate upfront payment of $3.5 million in cash and an aggregate $3.5 million in ADSs (or 2,215,190 ADSs representing ordinary shares) and additional long-term milestones set at an aggregate amount of $94 million, with royalties out of net sales. We have initiated a process for the integration of Immunorizon's portfolio of tri-specific antibodies and allocated resources to such process and the ongoing research and development related to the acquired portfolio. Our ability to successfully transition and integrate the acquired business is critical for our future growth and financial stability. Given the challenges involved with the development of a biological product and the financial challenges, we may not be able to realize the anticipated benefits of the acquisition, which may materially adversely affect our growth and future operating results as well as our financial condition.

***If we cannot meet our obligations under our in-license agreement with Yissum and/or THM, or if other events occur that are not within our control, we could lose our rights to our therapeutic candidates, experience delays in developing or commercializing our therapeutic candidates or incur additional costs, which could have a material adverse effect on our business, financial condition and results of operations.***

We license rights to our therapeutic candidates from Yissum and THM pursuant to certain license agreements. If we do not meet our obligations under these license agreements, or if other events occur that are not within our control, we could lose the rights to our therapeutic candidates, experience delays in developing or commercializing our therapeutic candidates or incur additional costs, any of which could have a material adverse effect on our business, financial condition and results of operations.

***We depend on our ability to identify and acquire or in-license therapeutic candidates to achieve commercial success.***

We own the rights to our therapeutic candidates, each of which was acquired by us from a third-party: NT219 (acquired in connection with the acquisition of the majority shareholdings of TyrNovo in 2017), CM24 (acquired in connection with the acquisition of FameWave in 2020) and IM1240 (acquired in connection with the acquisition of Immunorizon in February 2023). We evaluate internally and with external consultants each potential therapeutic candidate. However, there can be no assurance as to our ability to accurately or consistently select therapeutic candidates that have the highest likelihood to achieve commercial success.

***The recent COVID-19 pandemic may adversely affect our revenues, results of operations and financial condition***.

The COVID-19 pandemic, identified in late 2019, resulted in government-imposed quarantines, travel restrictions and other public health safety measures worldwide, including Israel. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19 had an adverse effect on the global markets and global economy, including on the availability and pricing of resources, materials, manufacturing and delivery efforts and other aspects of the global economy. The COVID-19 pandemic and resulting measures and effects led to a slowdown of the clinical trials for our therapeutic candidates, including slowed patient enrollment in the trials and development activities during the last three years. The COVID-19 pandemic also adversely affected the ability of our US distributor to market and sell Consensi in the United States, which resulted in the discontinuation of the marketing and manufacturing of the drug in 2021. While the COVID-19 pandemic has not materially affected our operations to date other than as mentioned above, the extent to which the COVID-19 pandemic shall impact our operations in the future will depend on future developments.

***Our business could suffer if we are unable to attract and retain key employees.***

The loss of the services of members of senior management or other key personnel could delay or otherwise adversely impact the successful completion of our planned CMC, research and development, preclinical studies and/or clinical trials or the commercialization of our therapeutic candidates or otherwise affect our ability to manage our company effectively and to carry out our business plan. We do not maintain key-man life insurance for any of our personnel. Although we have entered into employment or consultancy agreements with every member of our senior management team, members of our senior management team may resign at any time. High demand exists for senior management and other key personnel in the pharmaceutical industry. There can be no assurance that we will be able to continue to retain and attract such personnel.

Our growth and success also depend on our ability to attract and retain additional highly qualified scientific, technical, business development, marketing, managerial and finance personnel. If we purchase or in-license new products or product candidates, we may need to expand our qualified personnel to advance the development and commercialization of such products. In addition, if we elect to independently commercialize any therapeutic candidate, we will need to expand our marketing and sales capabilities. We experience intense competition for qualified personnel, and the existence of non-competition agreements between prospective employees and their former employers may prevent us from hiring those individuals or subject us to liability from their former employers. While we attempt to provide competitive compensation packages to attract and retain key personnel, many of our competitors are likely to have greater resources and more experience than we have, making it difficult for us to compete successfully for key personnel. Compensation packages for our senior officers are subject to approval of our compensation committee and board of directors and, in certain instances, our shareholders. We may not be able to achieve the required corporate approvals for proposed compensation packages, further making it difficult for us to compete successfully with other companies to attract and retain key personnel. If we cannot attract and retain sufficiently qualified technical employees on acceptable terms, we may not be able to develop and commercialize competitive therapeutic candidates. Further, any failure to effectively integrate new personnel could prevent our business from successfully growing.

***We are an international business, and we are exposed to various global and local risks that could have an adverse effect on our business*.** 

We operate our business in multiple international jurisdictions. Such operations could be affected by changes in foreign exchange rates, capital and exchange controls, travel restrictions, public health restrictions, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, trade regulations and procedures and actions affecting approval, production, export and import of pharmaceutical products, pricing, and marketing of, reimbursement for and access to, our products, as well as by political unrest, unstable governments and legal systems and inter-governmental disputes. Any of these changes could adversely affect our business.

***Our subsidiary, TyrNovo, has received Israeli governmental grants to assist in the funding of its research and development activities. The IIA grants which TyrNovo's technology, including NT219, has received for research and development expenditures restrict its ability to manufacture products and transfer (including by way of license for R&D purposes) know-how outside of Israel and require it to satisfy specified conditions. In addition, we may encounter difficulties partnering TyrNovo's therapeutic candidates with entities outside of Israel due to certain restrictions regarding manufacturing and transferring of know-how (including by a way of license for R&D purposes) outside of Israel imposed due to the receipt of the IIA grants.***

TyrNovo's technologies, including NT219, were developed, in part, with grants from the Israel Innovation Authority, or IIA (formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry) in the aggregate amount of approximately NIS 5.5 million (or approximately $1.56 million). As of December 31, 2022, TyrNovo had not paid any royalties to the IIA and has a contingent obligation to the IIA, excluding interest, in that amount. The requirements and restrictions for such grants are set forth in the Encouragement of Research, Development and Technological Innovation in Industry Law, 5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry, 5744-1984), or the Innovation Law, the IIA's rules and guidelines and the terms of these grants.

In general, the recipients of IIA grants are obligated to pay the IIA royalties from the revenues generated from the sale of products and related services developed as a result of a research and development program funded, in whole or in part, by the IIA, at rates which are determined under the IIA's rules and guidelines (generally of 3% to 6% on sales of products or services developed under the approved programs, which rates may be increased under certain circumstances) up to the aggregate amount of the total grants received by the IIA (which may be increased under certain circumstances, as described below), plus annual interest (as determined in the IIA's rules and guidelines). Following the full payment of such royalties and interest, there is generally no further liability for royalty payments; however, other restrictions under the Innovation Law continue to apply, as described below.

Under the IIA's rules and guidelines, TyrNovo is generally prohibited from manufacturing products developed using the IIA funding outside of the State of Israel without the prior approval of the IIA (except for the transfer of less than 10% of the manufacturing capacity in the aggregate which requires only a notice) and subject to payment of increased royalties (up to 300% of the grant amount plus accrued interest, depending on the manufacturing volume that is performed outside of Israel). TyrNovo received the IIA's approval for the production of NT219's API and final product by certain third-party manufacturers outside of Israel in consideration for (among other things) the future payment of increased royalties as stipulated under the IIA's rules and guidelines. Additionally, under the IIA's rules and guidelines, TyrNovo is prohibited from transferring the IIA-funded know-how and related intellectual property rights outside of the State of Israel, except under limited circumstances and only with the prior approval of the IIA. TyrNovo may not receive the required approvals for any proposed transfer, and even if received, TyrNovo may be required to pay the IIA a redemption fee of up to 600% of the grant amounts plus accrued interest. Approval of the transfer of know-how to an Israeli company is also required, and may be granted if the recipient assumes all of our responsibilities towards the IIA, including the restrictions on the transfer of know-how and the manufacturing rights outside of Israel and the obligation to pay royalties, and, although such transfer will not be subject to the payment of a redemption fee, there will be an obligation to pay royalties to the IIA from the income of such sale transaction as part of the royalty payment obligation. No assurance can be given that approval to any such transfer, if requested, will be granted.

These restrictions may impair our ability to perform or outsource manufacturing outside of Israel, or otherwise transfer or sell TyrNovo's IIA funded know-how outside of Israel. Furthermore, the consideration available to TyrNovo's and/or our shareholders in a transaction involving the transfer outside of Israel of know-how developed with IIA funding (such as a merger or similar transaction) may be reduced by any amounts that TyrNovo is required to pay to the IIA. If TyrNovo fails to comply with the requirements of the Innovation Law and the IIA's rules and guidelines, TyrNovo may be required to return certain grants previously received along with interest and penalties and may become subject to criminal proceedings.

***We have in the past, and may in the future, become subject to litigation or claims arising in or outside the ordinary course of business that could negatively affect our business operations and financial condition.***

We have in the past, and may in the future, become subject to litigation or claims arising in or outside the ordinary course of business (other than intellectual property infringement actions) that could negatively affect our business operations and financial condition, including securities class actions and shareholder derivative actions, both of which are typically expensive to defend. Such claims and litigation proceedings may be brought by third parties, including our competitors, advisors, service providers, partners or collaborators, employees, and governmental or regulatory bodies. For information on past legal proceedings, please see "Item 8. Financial Information – A. Financial Statements and Other Financial Information – Legal Proceedings." 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. We may not be able to determine the amount of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the event we are required or decide to pay amounts in connection with any claims or lawsuits, such amounts could be significant and could have a material adverse impact on our liquidity, business, financial condition and results of operations. In addition, depending on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our cash flows or both. Additionally, we may be unable to maintain our existing directors' and officers' liability insurance in the future at satisfactory rates or adequate coverage amounts and may incur significant increases in insurance costs.

**Risks Related to Our Industry**

***Even if our oncology therapeutic candidates or any other therapeutic candidate that we develop or in-license in the future receive regulatory approval, they may not become or remain commercially viable products.***

In the event that our oncology therapeutic candidates and/or any other therapeutic candidate that we may develop or acquire in the future are approved for commercialization by the FDA or a foreign authority, they may not be commercially viable products. For example, if we or our potential commercialization partners receive regulatory approval to market a therapeutic candidate, approval may be subject to limitations on the indicated uses or subject to labeling or marketing restrictions which could materially and adversely affect the marketability and profitability of the therapeutic candidate. In addition, a new therapeutic candidate may appear promising at an early stage of development or after preclinical studies and/or clinical trials but never reach the market, or it may reach the market but not result in sufficient product sales, if any. A therapeutic candidate may not result in commercial success for various reasons, including:

● difficulty in large-scale manufacturing, including yield and quality;

● low market acceptance by physicians, healthcare payers, patients and the medical community as a result of lower demonstrated clinical safety or efficacy compared to other products, prevalence and severity of adverse side effects, or other potential disadvantages relative to alternative treatment methods;

● insufficient or unfavorable levels of reimbursement from government or third-party payers, such as insurance companies, health maintenance organizations and other health plan administrators;

● infringement on proprietary rights of others for which we or our potential commercialization partners have not received licenses;

● incompatibility with other therapeutic candidates;

● other potential advantages of alternative treatment methods and competitive forces that may make it more difficult for us to penetrate a particular market segment;

● ineffective marketing and distribution support;

● lack of significant competitive advantages over existing products on the market;

● lack of cost-effectiveness; or

● timing of market introduction of competitive products.

If we are unable, either on our own or through third parties, to manufacture, commercialize and market our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future when planned, or develop or acquire commercially viable therapeutic candidates, we may not achieve any market acceptance or generate revenue.

***The markets for our oncology therapeutic candidates are rapidly changing and competitive, and new drug delivery mechanisms, drug delivery technologies, new drugs and new treatments which may be developed by others could impair our ability to maintain and grow our business and remain competitive.***

The pharmaceutical and biotechnology industry is highly competitive, and we face significant competition from many pharmaceutical, biopharmaceutical and biotechnology companies that are researching and marketing products designed to address the indications treated by our oncology therapeutic candidates. There are various other companies that currently market or are in the process of developing products that address all of the indications or diseases treated by our therapeutic candidates, some of them are in a more progressed stage of development than us and may reach the market before we do.

New drug delivery mechanisms, drug delivery technologies, new drugs and new treatments that have been developed or that are in the process of being developed by others may render our oncology therapeutic candidates noncompetitive or obsolete, or we may be unable to keep pace with technological developments or other market factors. Some of these technologies may have an entirely different platform or means of treating the same indications as NT219, CM24, IM1240 or other therapeutic candidates that we may develop or in-license in the future. Technological competition from pharmaceutical and biotechnology companies, universities, governmental entities and others, is intense and is expected to increase. Many of these entities have significantly greater research and development capabilities, human resources and budgets than we do, as well as substantially more marketing, manufacturing, financial and managerial resources. These entities represent significant competition for us. Acquisitions of, or investments in, competing pharmaceutical or biotechnology companies by large corporations could increase such competitors' financial, marketing, manufacturing and other resources.

The potential widespread acceptance of therapies that are alternatives to ours may limit market acceptance of our formulations or therapeutic candidates, even if commercialized. Many of our targeted diseases and conditions can also be treated by other medications or drug delivery technologies. These treatments may be widely accepted in medical communities and have a longer history of use. The established use of these competitive drugs may limit the potential for our oncology therapeutic candidates to receive widespread acceptance.

***If third-party payers do not adequately reimburse customers for our oncology therapeutic candidates, if approved for marketing in the U.S. or other markets, they might not be purchased or used, and our revenues and profits will not develop or increase.***

Our revenues and profits will depend heavily upon the availability of adequate coverage and reimbursement for the use of our oncology therapeutic candidates, if approved, from governmental and/or other third-party payers, both in the U.S. and in foreign markets. There may be significant delays in obtaining coverage for newly approved therapeutic candidates. Moreover, eligibility for coverage does not necessarily signify that an approved product will be reimbursed in all cases or at a sufficient rate, including one that covers our costs, such as research, development, manufacture, sale, and distribution costs. Accordingly, even if we succeed in bringing one or more of our therapeutic candidates to the market, they may not be considered cost-effective, and the amount reimbursed may be insufficient to allow us to sell our approved products on a competitive basis. Reimbursement by a third-party payer may depend upon a number of factors, including the third-party payer's determination that the use of an approved product is, among others:

● a covered benefit under its health plan;

● safe, effective and medically necessary;

● appropriate for the specific patient;

● cost-effective, including compared to approved alternate therapies; and

● neither experimental nor investigational.

Obtaining reimbursement approval for an approved product from each government or other third-party payer is a time-consuming and costly process that could require us or our current or potential development and commercialization partners to provide supporting scientific, clinical and cost-effectiveness data for the use of an approved product to each payer. Even when a payer determines that an approved product is eligible for reimbursement, the payer may impose coverage limitations that preclude or restrict payment for some uses that are approved by the FDA or other foreign regulatory authorities. Reimbursement rates may vary according to the use of the approved product and the clinical setting in which it is used, may be based on payments allowed for lower-cost products that are already reimbursed, may be incorporated into existing payments for other products or services, and may reflect budgetary constraints or imperfections in Medicare, Medicaid or other data used to calculate these rates.

Increasingly, the third-party payers who reimburse patients or healthcare providers, such as government and private insurance plans, are seeking greater upfront discounts, additional rebates, and other concessions to reduce the prices for approved products. If the price we are able to charge for any approved product, or the reimbursement provided for such approved product, is inadequate or becomes inadequate in light of our development and other costs, our return on investment could be adversely affected.

In the U.S., there have been, and we expect that there will continue to be, federal and state proposals to constrain expenditures for medical products and services which may affect payments for our oncology therapeutic candidates, if approved. We believe that legislation that reduces reimbursement for our oncology therapeutic candidates, if approved, could adversely impact how much or under what circumstances healthcare providers will prescribe or administer our oncology therapeutic candidates, if approved. This could materially and adversely impact our business by reducing our ability to generate revenue, raise capital, obtain additional collaborators and market our oncology therapeutic candidates, if approved. At this stage, we are unable to estimate the extent of the direct or indirect impact of any such federal and state proposals.

Further, coverage and reimbursement policies are subject to change and are not always consistent across different payers or even federal healthcare programs. For example, the Centers for Medicare and Medicaid Services (CMS) frequently change product descriptors, coverage policies, product and service codes, payment methodologies and reimbursement values which may be revised or interpreted in ways that could significantly affect our business and products. Government and private third-party payers often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Moreover, both CMS and other third-party payers may have sufficient market power to demand significant price reductions. Such price reductions and/or other significant coverage policies or payment limitations could materially and adversely affect our business, financial condition and results of operations.

***Legislative or regulatory reform of the healthcare system in the United States may harm our business.***

On March 23, 2010, President Obama signed the "Patient Protection and Affordable Care Act" (P.L. 111-148) (the "ACA") and on March 30, 2010, he signed the "Health Care and Education Reconciliation Act" (P.L. 111-152), collectively commonly referred to as the "Healthcare Reform Law." The Healthcare Reform Law included a number of new rules regarding health insurance, the provision of healthcare, conditions to reimbursement for healthcare services provided to Medicare and Medicaid patients, and other healthcare policy reforms. Through the law-making process, substantial changes have been and continue to be made to the current system for paying for healthcare in the U.S., including changes made to extend medical benefits to certain Americans who lacked insurance coverage and to contain or reduce healthcare costs (such as by reducing or conditioning reimbursement amounts for healthcare services and drugs, and imposing additional taxes, fees, and rebate obligations on pharmaceutical and medical device companies). This legislation was one of the most comprehensive and significant reforms ever experienced by the U.S. in the healthcare industry and has significantly changed the way healthcare is financed by both governmental and private insurers. This legislation has impacted the scope of healthcare insurance and incentives for consumers and insurance companies, among others. Additionally, the Healthcare Reform Law's provisions were designed to encourage providers to find cost savings in their clinical operations. Pharmaceuticals represent a significant portion of the cost of providing care. This environment has caused changes in the purchasing habits of consumers and providers and resulted in specific attention to the pricing negotiation, product selection and utilization review surrounding pharmaceuticals which could result in lower pricing and/or reduced market acceptance for any drug products we may commercialize in the U.S. in the future. At this stage, it is difficult to estimate the full extent of the direct or indirect impact of the Healthcare Reform Law on us.

Further, the healthcare regulatory environment has seen significant changes in recent years and is still in flux. Legislative initiatives to modify, limit, replace, or repeal the ACA and judicial challenges have continued for over a decade. However, as of the Supreme Court's ruling ordering the dismissal of, arguably, the most promising case challenging the ACA to-date on June 17, 2021, it appears that the ACA will remain in-effect in its current form for the foreseeable future; however, we cannot predict what additional challenges may arise in the future, the outcome thereof, or the impact any such actions may have on our business. The Biden administration also introduced various measures in 2021 focusing on healthcare and drug pricing, in particular. For example, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began on February 15, 2021, and remained open through August 15, 2021. 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 ACA. On the legislative front, the American Rescue Plan Act of 2021 was signed into law on March 11, 2021, which, in relevant part, eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug's average manufacturer price, for single source drugs and innovator multiple source drugs, beginning January 1, 2024. And, in July 2021, the Biden administration released an executive order entitled, "Promoting Competition in the American Economy," with multiple provisions aimed at prescription drugs. In response, 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. And, in August 2022, the Inflation Reduction Act ("IRA") was signed into law, which will, among other things, allow U.S. Department of Health and Human Services ("HHS") to negotiate the selling price of certain drugs and biologics that the Centers for Medicare & Medicaid Services ("CMS") reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price. Beginning in October 2023, the IRA will also penalize drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

There is uncertainty as to what healthcare programs and regulations may be implemented or changed at the federal and/or state level in the U.S. or the effect of any future legislation or regulation. Furthermore, we cannot predict what actions the Biden administration will implement in connection with the Health Reform Law. However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the U.S. in the future, as applicable.

***We are subject to additional federal and state healthcare laws and regulations relating to our business, and our failure to comply with those laws could have a material adverse effect on our results of operations and financial conditions.***

Healthcare providers, physicians, and third-party payers play a primary role in the recommendation and prescription of any therapeutic candidates for which we obtain marketing approval. Our current or future arrangements with healthcare providers, physicians, marketers or sales personnel, third-party payers, patients, and others in a position to refer, recommend, purchase, or use our products may expose us to broadly applicable U.S. federal and state fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any product candidates for which we obtain FDA approval. The applicable healthcare laws to which we have been and/or may be subject include, but are not limited to, the following:

● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under government healthcare programs such as the Medicare and Medicaid programs;

● the federal Anti-Inducement Law (also known as the Civil Monetary Penalties Law), which prohibits a person from offering or transferring remuneration to a Medicare or State healthcare program beneficiary that the person knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State healthcare program;

● the Ethics in Patient Referrals Act of 1989, commonly referred to as the Stark Law, which prohibits physicians from referring Medicare or Medicaid patients for certain designated health services where that physician or family member has a financial relationship with the entity providing the designated health service, unless an exception applies;

● federal false claims laws that prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other government healthcare programs that are false or fraudulent;

● the so-called federal "Sunshine Act", which requires certain pharmaceutical and medical device companies to monitor and report certain payments and other transfers of value to physicians, as defined by such law, certain other healthcare professionals, and teaching hospitals and ownership and investment interests held by physicians and their immediate family members to CMS for disclosure to the public;

● the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing regulations, which impose obligations on certain covered entities and their business associates with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals, regulatory authorities, and potentially the media of certain breaches of security of individually identifiable health information;

● HIPAA's fraud and abuse provisions, which impose criminal and civil liability for executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

● the federal Food, Drug, and Cosmetic Act, which, among other things, strictly regulate drug product and medical device marketing, prohibits manufacturers from marketing such products for off-label use, and regulates the distribution of samples;

● federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and

● state law equivalents of each of the above federal laws, such as anti-kickback, false claims, transparency and reporting laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, many of which differ from each other in significant ways, thus complicating compliance efforts.

Compliance efforts may involve substantial costs and resources, and if our operations or business arrangements are found to be in violation of any such requirements, we may be subject to penalties, including civil or criminal penalties, monetary damages, the curtailment or restructuring of our operations, or exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, any of which could adversely affect our financial results. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our management's attention from the operation of our business, even if our defense is successful.

Most recently, there has been a trend in federal and state legislation aimed at lowering costs for drug products, including by requiring pharmaceutical companies to disclose information about their pricing and production and marketing costs, and heightened governmental scrutiny over the manner in which pharmaceutical manufacturers set prices for their marketed products. There have been several presidential executive orders and U.S. Congressional inquiries and proposed and enacted federal and state legislation 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, on October 10, 2018 the Patient Right to Know Drug Prices Act (for private plans) and the Know the Lowest Price Act (for Medicare Parts C and D) were signed into law, which prohibited health plans from restricting pharmacies from informing individuals regarding prices for certain drugs. On November 20, 2020, the U.S. Department of Health and Human Services finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed in response to ongoing litigation. In addition, in November 2020, CMS issued an interim final rule implementing President Trump's Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. Given resulting litigation and preliminary injunctions that were issued, the rule was not implemented and will not be implemented without further rulemaking. At the state level, legislatures have increasingly passed legislation and implemented 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. For example, in June 2016 Vermont became the first state to pass legislation requiring certain drug companies to disclose information relating to justification of certain price increases, and many other states have since followed suit. These efforts and any other such legislation requiring publication of drug costs could materially and adversely impact our business, financial condition, and results of operations by promoting a reduction in drug prices or encouraging purchasers to use other low-cost, established drugs or therapies.

In addition, there has been a trend of increased federal and state regulation of payments made to physicians or others in a position to refer, purchase, or recommend drug products. For example, some states impose a legal obligation on companies to adhere to voluntary industry codes of behavior (e.g., the PhRMA Code), which apply to pharmaceutical companies' interactions with healthcare providers, some mandate implementation of corporate compliance programs, along with the tracking and reporting of gifts, compensation, and other remuneration to physicians, and some states limit or prohibit such gifts. Further, the Healthcare Reform Law, among other things, amended the intent requirement of the federal Anti-Kickback Statute so that a person or entity can now be found guilty of fraud or an anti-kickback violation without actual knowledge of the statute or specific intent to violate it. In addition, the Healthcare Reform Law provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statue constitutes a false or fraudulent claim for purposes of the False Claims Act.

The scope and enforcement of these laws are broad, often uncertain and subject to change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and guidance in many areas. We cannot predict the impact that new legislation or any changes in existing legislation will have on our business, financial condition, or results of operations. Federal or state regulatory authorities may challenge our prior and/or future activities under these laws. Any such challenge could have a material adverse effect on our reputation, business, results of operations, and financial condition. Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming and could negatively and adversely affect our business and results of operations.

***We could be exposed to significant drug product liability claims, which could be time consuming and costly to defend, divert management attention and adversely impact our ability to obtain and maintain insurance coverage.***

The clinical trials that we conduct, conducted or may have to conduct, and the testing, manufacturing, marketing and commercial sale of our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future, involve and will involve an inherent risk that significant liability claims may be asserted against us. Should we decide to seek additional insurance against such risks before we initiate clinical trials or commence our product sales, there is a risk that such insurance will be unavailable to us, or if it can be obtained at such time, that it will be available only at an unaffordable cost. Even if we obtain insurance, it may prove inadequate to cover claims or litigation costs, especially in the case of wrongful death claims. Product liability claims or other claims related to our therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future, regardless of their outcome and merit, could require us to spend significant time and money in litigation or to pay significant settlement amounts or judgments. Any successful product liability or other claim may prevent us from obtaining adequate liability insurance in the future on commercially desirable or reasonable terms. An inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the commercialization of our therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future. A product liability claim could also significantly harm our reputation and delay market acceptance of our therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future.

***Our business involves risks related to handling regulated substances which could severely affect our ability to conduct research and development of our therapeutic candidates.***

In connection with our current or potential development and commercialization partners' research and clinical development activities, as well as the manufacture of materials and therapeutic candidates, we and our current or potential development and commercialization partners are subject to foreign, federal, state and local laws, rules, regulations and policies governing the use, generation, manufacture, storage, air emission, effluent discharge, handling and disposal of certain materials, biological specimens and wastes. We and our current or potential development and commercialization partners may be required to incur significant costs to comply with environmental and health and safety regulations in the future. Our research and clinical development, as well as the activities of our manufacturing and current or potential development and commercialization partners, both now and in the future, may involve the controlled use of hazardous materials, including but not limited to certain hazardous chemicals. We cannot eliminate the risk of accidental contamination or injury from these materials. In the event of such an occurrence, we could be held liable for any damages that result and any such liability could exceed our resources.

***Unfavorable macroeconomic conditions and other adverse macroeconomic factors could adversely affect our business, financial condition, cash flow or results of operations.***

Unfavorable macroeconomic conditions and other adverse macroeconomic factors have resulted, among other matters, in tightening in the debt and equity markets, and high levels of inflation. For example, tightening of the equity markets, makes it more difficult to raise capital at a reasonable valuation or at all. In addition, the U.S. Bureau of Labor Statistics has reported for the period from January 2021 to January 2022, the Consumer Price Index for All Urban Consumers rose 7.5 percent, which is the largest 12-month increase since the 12-month period ended February 1982, and from January 2022 to January 2023, the Consumer Price Index for All Urban Consumers rose 6.4 percent. If the inflationary pressure continues for a prolonged period, it may continue to result in increased costs of labor, cost of clinical trials, and costs of manufacturing which could adversely affect our results of operations. Furthermore, during 2022 there was a significant increase in interest rates that impacted the cost of debt, liquidity and valuations of companies and other assets. Our results of operations could be adversely affected by general conditions in the global and local macroeconomic economy conditions affecting the financial markets. An economic downturn could result in a variety of risks to our business, including weakened demand for our therapeutic candidates and our inability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our partners and suppliers, possibly resulting in supply disruption, or cause future customers to delay making payments for our products. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

***Our business and operations may be materially adversely affected in the event of computer system failures or security or breaches due to cyber-attacks or cyber intrusions, including ransomware, phishing attacks and other malicious intrusions.***

In recent years, cybersecurity threats have become a greater risk and focus for companies. In particular, ransomware attacks, where a hacker locks and threatens to delete or disclose the victim's data unless a ransom is paid, has become a major risk. We and those of our third-party contract manufacturers and other third parties on which we rely are at risk of cyber-attacks or cyber intrusions via the Internet, computer viruses, break-ins, malware, ransomware, phishing attacks, hacking, denial-of-service attacks or other attacks and similar disruptions from the unauthorized use of, or access to, computer systems (including from internal and external sources). These types of incidents continue to be prevalent and pervasive across industries, including in our industry. In addition, we expect information security risks to continue to increase due to the proliferation of new technologies and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state actors.

Despite the implementation of security measures, our internal computer systems, and those of our third-party contract manufacturers and other third parties on which we rely, are vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, cyber intrusions, natural disasters, fire, terrorism, war, and telecommunication and electrical failures. If such an event were to occur and interrupt our operations, it could result in a material disruption of our drug development programs. For example, the loss of clinical trial data from 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 results in a loss of or damage to our data or applications, loss of trade secrets or inappropriate disclosure of confidential or proprietary information, including protected health information or personal data of employees or former employees, access to our clinical data, we could incur liability and the further development of our therapeutic candidates could be delayed.

***Increasing scrutiny of, and evolving expectations for, sustainability and environmental, social, and governance ("ESG") initiatives could increase our costs or otherwise adversely impact our business.***

Public companies are facing increasing scrutiny related to ESG practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants and other stakeholder groups. For example, certain institutional and individual investors have requested various ESG-related information and disclosures as they increasingly incorporate ESG criteria in making investment and voting decisions. With this increased focus, public reporting regarding ESG practices is becoming more broadly expected. Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. If our ESG practices and reporting do not meet investor or other stakeholder expectations, which continue to evolve, we may be subject to investor or regulator engagement regarding such matters. In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions. For example, the SEC has published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors. Our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, access to capital and employee retention. Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations.

**Risks Related to Intellectual Property**

***Third-party claims of intellectual property infringement and other legal challenges may require us to spend substantial time and money and could prevent us from or delay us in developing or commercializing our therapeutic candidates. An adverse result in any infringement claims or other legal challenges could have a material adverse effect on our business, results of operations and on our financial condition.***

The development, manufacture, use, offer for sale, sale or importation of our therapeutic candidates may infringe on the claims of third-party patents or other intellectual property rights. The nature of claims contained in unpublished patent filings around the world is unknown to us, and it is impossible to know which countries patent holders may choose for the extension of their filings under the Patent Cooperation Treaty, or other mechanisms. We may also be subject to claims based on the actions of employees and consultants with respect to the usage or disclosure of intellectual property learned at other employers. The cost to us of any intellectual property litigation or other infringement proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation or defense of intellectual property litigation or other legal proceedings or litigation could have a material adverse effect on our ability to compete in the marketplace. Intellectual property litigation and other proceedings may also absorb significant cash resources and management attention and time. Consequently, we are unable to guarantee that we will be able to manufacture, use, offer for sale, sell or import our therapeutic candidates in the event of an infringement action.

In the event of patent infringement claims, or to avoid potential claims, we may choose or be required to seek a license from a third-party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we were able to obtain a license, the rights may be non-exclusive, which could potentially limit our competitive advantage. Ultimately, we could be prevented from commercializing a therapeutic candidate or be forced to cease some aspect of our business operations if, as a result of actual or threatened patent infringement or other claims, we are unable to enter into licenses on acceptable terms.

***We may be unable to adequately protect or enforce our rights to intellectual property, causing us to lose valuable rights. Loss of any of our intellectual property rights may lead us to lose market share and could have an adverse effect on our business, results of operations and financial condition.***

Our success depends, in part, on our ability, and the ability of our potential development and commercialization partners to obtain patent protection for our therapeutic candidates, maintain the confidentiality of our trade secrets and know-how, operate without infringing on the proprietary rights of others and prevent others from infringing our proprietary rights.

We try to protect our proprietary position by, among other things, filing U.S. and other patent applications related to our therapeutic candidates, inventions and improvements that may be important to the continuing development of our therapeutic candidates.

Because the patent position of pharmaceutical companies involves complex legal and factual questions, we cannot predict the validity and enforceability of any patents we may obtain with certainty. Our competitors may independently develop drug delivery technologies or products similar to ours or design around or otherwise circumvent any patents that may be issued to or licensed by us. Our pending patent applications, and those that we may file in the future or those we may license from third parties may not result in patents being issued. If these patents are issued, they may not provide us with proprietary protection or competitive advantages. The degree of future protection to be afforded by our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.

Patent rights are territorial; thus, the patent protection we have sought will only extend, if issued, to those countries, if any, in which we will be issued patents. Even so, the laws of certain countries do not protect our intellectual property rights to the same extent as do the laws of the U.S. Competitors may successfully challenge any of our patents, produce similar drugs or products that do not infringe such patents, or produce drugs in countries where we have not applied for patent protection or that do not respect such patents. Furthermore, it is not possible to know the scope of claims that will be allowed in published applications and it is also not possible to know which claims of granted patents, if any, will be deemed enforceable in a court of law.

After the completion of development and registration of any future patents, third parties may still act to manufacture or market our therapeutic candidates in infringement of our patent protected rights. Such manufacture or marketing of our therapeutic candidates in infringement of any patent-protected rights is likely to cause us damage and lead to a reduction in the prices of our therapeutic candidates, thereby reducing our potential profits.

We may invest a significant amount of time and expense in the development of our therapeutic candidates only to be subject to significant delay and patent litigation before they may be commercialized. In addition, due to the extensive time needed to develop, test and obtain regulatory approval for our therapeutic candidates, any patents that may be issued that protect our therapeutic candidates may expire early during commercialization. This may reduce or eliminate any market advantages that such patents may give us. Following patent expiration, we may face increased competition through the entry of generic products into the market and a subsequent decline in market share and profits.

We are developing some of our therapeutic candidates in collaboration with academic and other research institutes and biopharmaceutical companies. While we attempt to ensure that our intellectual property is protected under the terms of our collaboration agreements with such institutes, these institutes may have claims to our intellectual property.

***We do not have patent protection in certain countries, and we may not be able to effectively enforce our intellectual property rights in certain countries, which could significantly erode the market for our product candidates.***

We intend to seek regulatory approval to market our oncology therapeutic candidates in a number of foreign countries. Our oncology therapeutic candidates are not protected by patents in certain countries, which means that competitors may be free to sell products that incorporate the same technology that is used in our products in those countries. In addition, the laws and practices in some foreign countries may not protect intellectual property rights to the same extent as in the United States. We or our licensors may not be able to effectively obtain, maintain or enforce rights with respect to the intellectual property relating to our oncology product candidates in those countries. In that regard, we believe that although China is one of the largest potential markets for some of our products under development, some of our product candidates are less protected by patents in China than in the U.S., and it may be difficult to enforce intellectual property rights in China. Our lack of patent protection in one or more countries, or the inability to obtain, maintain or enforce intellectual property rights in one or more countries, could adversely affect our ability to commercialize our products in those countries and could otherwise have a material adverse effect on our business.

***If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us.***

In addition to filing patents, we generally try to protect our trade secrets, know-how and technology by entering into confidentiality or non-disclosure agreements with parties that have access to it, such as our current or potential development and commercialization partners, employees, contractors and consultants. We also enter into agreements that purport to require the disclosure and assignment to us of all, or certain, rights to the ideas, developments, discoveries and inventions of our employees, advisors, research collaborators, contractors and consultants while we employ or engage them. However, these agreements can be difficult and costly to enforce or may not provide adequate remedies. Any of these parties may breach the confidentiality agreements and willfully or unintentionally disclose our confidential information, or our competitors might learn of the information in some other way. The disclosure to, or independent development by, a competitor of any trade secret, know-how or other technology not protected by a patent could materially adversely affect any competitive advantage we may have over any such competitor. In addition, monitoring infringement of intellectual property rights is difficult, and we cannot be certain that the steps we have taken will prevent unauthorized use of our know-how, particularly in China and other countries in which the laws may not protect our proprietary rights as fully as the laws of the United States. Accordingly, other parties, including competitors, may improperly duplicate our products using our proprietary technologies. Pursuing legal remedies against persons infringing our patents or otherwise improperly using our proprietary information is a costly and time-consuming process that would divert management's attention and other resources from the conduct of our normal business.

To the extent that any of our employees, advisors, research collaborators, contractors or consultants independently develop, or use independently developed, intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to this type of information. If a dispute arises with respect to any proprietary right, enforcement of our rights can be costly and unpredictable, and a court may determine that the right belongs to a third-party.

***We may be subject to other patent-related litigation or proceedings that could be costly to defend and uncertain in their outcome.***

In addition to infringement claims against us, we may in the future become a party to other patent litigation or proceedings before regulatory agencies, including interference or re-examination proceedings filed with the U.S. Patent and Trademark Office (USPTO) or opposition proceedings in other foreign patent offices regarding intellectual property rights with respect to our therapeutic candidates, as well as other disputes regarding intellectual property rights with our current and potential development and commercialization partners, or others with whom we have contractual or other business relationships. Post-issuance oppositions are not uncommon, and we and our current and potential development and commercialization partners will be required to defend these opposition procedures as a matter of course. Opposition procedures may be costly, and there is a risk that we may not prevail.

**Risks Related to our Operations in Israel**

***It may be difficult to enforce a U.S. judgment against us and our officers and directors in Israel or the U.S., to assert U.S. securities laws claims in Israel or to serve process on our officers and directors.***

We are incorporated in Israel. Most of our executive officers and directors reside outside of the U.S., and all of our assets and most of the assets of our executive officers and directors are located outside of the U.S. Therefore, a judgment obtained against us or such executive officers and our directors in the U.S., including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the U.S. In addition, it may be difficult for you to affect service of process on these persons in the U.S. or to assert U.S. securities law claims in original actions instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws against us or our non-U.S. officers and directors on the grounds that Israel is not the most appropriate forum 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 United States law is applicable to the claim. If United States law is found to be applicable, the content of applicable United States 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.

Additionally, Israeli courts might not enforce judgments obtained in the United States against us or our non-U.S. directors and executive officers, which may make it difficult to collect on judgments rendered against us or our non-U.S. officers and directors by either a U.S. or foreign court. Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought.

***Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful shareholder claims against us and may reduce the amount of money available to us.***

The Companies Law and our amended and restated articles of association permit us to indemnify our directors and officers for acts performed by them in their capacity as directors and officers. The Companies Law and our amended and restated articles of association provide that a company may not exempt or indemnify a director or an office holder nor enter into an insurance contract, which would provide coverage for any monetary liability incurred as a result of (a) a breach by the director or officer of his duty of loyalty, except for insurance and indemnification where the director or officer acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; (b) a breach by the director or officer of his duty of care if the breach was done intentionally or recklessly, except if the breach was solely as a result of negligence; (c) any act or omission done with the intent to derive an illegal personal benefit; or (d) any fine, civil fine, monetary sanctions, or forfeit imposed on the officer or director.

We have issued letters of indemnification to our directors and officers, pursuant to which we have agreed to indemnify them in advance for any liability or expense imposed on or incurred by them in connection with acts they perform in their capacity as a director or officer, to the fullest extent permitted by applicable law, to the extent that these liabilities are not covered by insurance. The total amount of the indemnity will not exceed 25% of our then consolidated shareholders' equity, per our most recent audited or reviewed consolidated financial statements.

Our indemnification obligations limit the personal liability of our directors and officers for monetary damages for breach of their duties as directors by shifting the burden of such losses and expenses to us. Although we have obtained directors' and officers' liability insurance, certain liabilities or expenses covered by our indemnification obligations may not be covered by such insurance or the coverage limitation amounts may be exceeded.

As a result of the class action motions and lawsuits, the Atzmon Claim described in "Item 8. Financial Information – A. Financial Statements and Other Financial Information – Legal Proceedings", or other claims which may be filed against our directors and officers, we may need to use a significant amount of our funds to satisfy our indemnification obligations, which could severely harm our business and financial condition and limit the funds available to shareholders who may choose to bring a claim against our company. See the risk factor titled "*Third-party claims of intellectual property infringement and other legal challenges may require us to spend substantial time and money and could prevent us from or delay us in developing or commercializing our therapeutic candidates. An adverse result in any infringement claims or other legal challenges could have a material adverse effect on our business, results of operations and on our financial condition*" under the risk factor section titled "Risks Related to Intellectual Property".

These provisions and resultant costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their duties and may similarly discourage the filing of derivative litigation by our shareholders against the directors and officers even though such actions, if successful, might otherwise benefit our shareholders.

***We conduct our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel and its region.***

We are incorporated under the laws of the State of Israel, our principal offices are located in central Israel and most of our officers, employees, consultants and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region 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 its Arab neighbors. These conflicts have often involved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. The tension between Israel and Iran or extremist groups in the region, such as Hamas in the Gaza Strip and Hezbollah in Lebanon, may escalate in the future and turn violent, which could affect the Israeli economy generally and us in particular.

Any hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raise capital. Parties with whom we may do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary. The conflict situation in Israel could cause situations where medical product certifying or auditing bodies could not be able to visit manufacturing facilities of our subcontractors in Israel in order to review our certifications or clearances, thus possibly leading to temporary suspensions or even cancellations of our product clearances or certifications. The conflict situation in Israel could also result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.

Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. 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. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts, terrorist activities or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business and trade activity with the State of Israel and with Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in the region continue or intensify. Such restrictions may seriously limit our ability to sell our products to customers in those countries.

In addition, many Israeli citizens are obligated to perform several weeks of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) 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. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition, and results of operations.

Furthermore, the Israeli government is currently pursuing extensive changes to Israel's judicial system. In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed judicial changes, if adopted, may negatively impact the business environment in Israel, including due to reluctance of foreign investors to invest or conduct business in Israel, as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, and other changes in macroeconomic conditions. Such proposed judicial changes may also adversely affect the labor market in Israel or lead to political instability or civil unrest. To the extent that any of these negative developments do occur, they may have an adverse effect on our business, financial condition, results of operations and prospects and the market price of our shares, as well as on our ability to raise additional capital.

Any of the factors set forth above may have an adverse impact on our operating results, financial condition or the expansion of our business.

***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 the Company, or an acquisition of a significant portion of our shares, which could prevent a change of control, and negatively affect the market price of our ordinary shares.***

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. These provisions of Israeli law may delay, prevent or make difficult an acquisition of us, which could prevent a change of control and therefore depress the price of our shares.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders, especially for those shareholders whose country of residence does not have a tax treaty with Israel which exempts 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 fulfillment 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 shares of the participating companies are subject to certain restrictions. Moreover, with respect to certain share exchange transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred.

In addition, our amended and restated articles of association also contain provisions that could delay or prevent changes in control. These provisions include matters in connection with the election and removal of directors, such as our staggered board of directors, the right of our board of directors to appoint additional directors to fill vacancies on the board of directors, the size of our board of directors, the terms of office of our directors and the special majority required to amend such provision in our amended and restated articles of association.

In addition, under our amended and restated articles of association, we have 50,000,000 shares of authorized non-voting senior preferred shares, which can be issued by our board of directors, which contain superior liquidation and dividend rights, and may contain other rights, including conversion, redemption, optional and other special rights, qualifications, limitations or restrictions, equivalent or superior to our ordinary shares, without further action by our shareholders, unless shareholder approval is otherwise required by applicable law, the rules of any exchange or other market on which our securities may then be listed or traded, our articles of association then in effect, or any other applicable rules and regulations. Furthermore, in a merger between Israeli companies, if the non-surviving entity has more than one class of shares, the merger may need to be approved by each class of shareholders, including any classes of otherwise non-voting shares, such as our authorized non-voting senior preferred shares. See *"We can issue non-voting senior preferred shares without shareholder approval, which could adversely affect the rights of holders of ordinary shares."*

These and other similar provisions could delay, prevent or impede an acquisition of us by a third-party or our merger with another company, or an acquisition of a significant portion of our shares, and may make it more difficult for our shareholders to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders, and may limit the price that investors may be willing to pay in the future for our ordinary shares.

***Because a certain portion of our expenses is incurred in currencies other than the U.S. dollar, our results of operations may be harmed by currency fluctuations and inflation.***

Our reporting and functional currency is the U.S. dollar. Most of the royalty payments from potential development and commercialization partners are expected to be payable in U.S. dollars, and we expect our revenues from future sales or licensing agreements to be denominated mainly in U.S. dollars. We pay a portion of our expenses in U.S. dollars; however, a portion of our expenses, related to salaries of our employees in Israel, our office lease and payment to part of the service providers in Israel, are paid in NIS and in other currencies such as euro to our suppliers in Europe. In addition, a portion of our financial assets is held from time to time in NIS. As a result, we are exposed to currency fluctuation risks and inflation. For example, if the NIS appreciates against the U.S. dollar, our NIS expenses as reported in U.S. dollars may be higher than anticipated. In addition, if the NIS depreciates against the U.S. dollar, the U.S. dollar value of our financial assets held in NIS will decline.

***Your rights and responsibilities as a shareholder are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. companies. Israeli law may impose obligations and responsibilities on a shareholder of an Israeli company that are not imposed upon shareholders of corporations in the U.S.***

We are incorporated under Israeli law. The rights and responsibilities of the holders of our ordinary shares are governed by our amended and restated articles of association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S.-based corporations. 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 fulfilling its obligations toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on matters such as amendments to a company's articles of association, increases in a company's authorized share capital, mergers and acquisitions and related party transactions requiring shareholder approval under the Companies Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or executive officer in the company or has other powers toward the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders' actions. These provisions may be interpreted to impose additional obligations and responsibilities on holders of our ordinary shares and/or ADSs that are not typically imposed on shareholders of U.S. corporations.

***Our amended and restated articles of association designate courts located either within the State of Israel, or the Federal District Courts of the United States, as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders' ability to bring a favorable or convenient judicial forum for disputes with us.***

Our amended and restated articles of association provide that, unless we consent in writing to the selection of an alternative forum, the Tel Aviv District Court (Economic Division in the State of Israel (or, if the Tel Aviv District Court does not have jurisdiction, and no other Israeli court has jurisdiction, the federal district court for the District of New York) shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, and (3) any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law 5728-1968, in all cases subject to the court's having personal jurisdiction over the indispensable parties named as defendants. In addition, other than with respect to plaintiffs or a class of plaintiffs which may be entitled to assert a cause of action arising under the Securities Act of 1933 in the courts of the State of Israel, the federal district courts of the United States for the District of New York shall otherwise be the exclusive forum for any complaint asserting a cause of action arising under the Securities Act of 1933. Any person or entity purchasing or otherwise acquiring any interest in our shares or ADSs shall be deemed to have notice of and consented to these provisions. This forum selection provision limits shareholders' choice in selecting a judicial forum for disputes with us that it finds favorable or convenient and may have the effect of discouraging lawsuits against us or our directors and officers.

**Risks Primarily Related to Our ADSs and Ordinary Shares**

***The market price of our ordinary shares and ADSs is subject to fluctuation, which could result in substantial losses by investors.***

The stock market in general, and the market price of our ordinary shares on the TASE and ADSs on NASDAQ, are subject to fluctuation, and changes in the price of our listed securities may be unrelated to our operating performance. The market prices of our ordinary shares on the TASE and ADSs on NASDAQ have fluctuated in the past, and we expect it will continue to do so. The market price of our ordinary shares and ADSs is and will be subject to a number of factors, including:

● announcements of technological innovations or new therapeutic candidates by us or by others;

● announcements by us of significant acquisitions, strategic partnerships, in-licensing, out-licensing, joint ventures or capital commitments;

● announcement by us of preclinical and clinical results;

● our need to raise additional capital;

● expiration or terminations of licenses, research contracts or other development or commercialization agreements;

● public concern as to the safety of drugs that we, our current or potential development and commercialization partners or others develop;

● the volatility of market prices for shares of biotechnology companies generally;

● success or failure of research and development projects;

● departure of key personnel;

● developments concerning intellectual property rights or regulatory approvals;

● variations in our and our competitors' results of operations;

● changes in earnings estimates or recommendations by securities analysts;

● the outcome of any litigation and other legal proceedings;

● changes in government regulations or patent decisions;

● developments by our current or potential development and commercialization partners; and

● general economic and market conditions and other factors, including factors unrelated to our operating performance and including the impact of COVID-19.

These factors and any corresponding price fluctuations may materially and adversely affect the market price of our ordinary shares and ADSs and result in substantial losses by investors.

Additionally, market prices for listed securities of biotechnology and pharmaceutical companies have been very volatile and have experienced significant price and volume fluctuations for reasons often unrelated to the operating performance of any one company. These fluctuations may be attributed, among other reasons, to the COVID-19 pandemic or more recently to general global economic environment and the instability in markets. In the past, following periods of market volatility, shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and attention of management from our business, even if we are successful. See "*Third-party claims of intellectual property infringement and other legal challenges may require us to spend substantial time and money and could prevent us from or delay us in developing or commercializing our therapeutic candidates. An adverse result in any infringement claims or other legal challenges could have a material adverse effect on our business, results of operations and on our financial condition*."

A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price ADSs or ordinary shares.

***Future sales of our ordinary shares or ADSs or other warrants or convertible securities could reduce the market price of our ordinary shares and ADSs.***

As of March 3, 2023, we had an aggregate of 207,873,862 issued and outstanding ordinary shares (including 1 dormant ordinary share held in treasury), no non-voting senior preferred shares, 3,860,092 non-listed warrants to purchase 3,860,092 ADSs (representing 38,601,060 ordinary shares) issued to investors, underwriters and placement agents as part of a number of public and registered direct offerings by us.

On June 9, 2021, we entered into the Sales Agreement with Jefferies for the sale of ADSs, pursuant to which we may offer and sell ADSs having an aggregate offering price of up to $19,564,607 from time to time through an "at-the-market" equity program, with Jefferies acting as our agent. As of March 3, 2023, we have sold approximately 760 thousand of our ADSs for total gross proceeds of $2.2 million under the Sales Agreement.

On December 8, 2022, we filed a registration statement on Form F-3 with the SEC utilizing a "shelf" registration process, under which we may offer and sell, from time to time in one or more offerings, up to an aggregate $200,000,000 of ADSs (representing our ordinary shares), ordinary shares, preferred shares, warrants, overallotment purchase rights, subscription rights, units and/or capital notes.

Any future sales by us or our shareholders of a substantial number of our ordinary shares or ADSs or other warrants or securities convertible into ordinary shares or ADSs, or the perception that such sales may occur in the future, including sales of ordinary shares or ADSs issuable upon the exercise of options or the conversion of convertible securities, may cause the market price of our ordinary shares or ADSs or other listed securities to decline.

***We may not meet the continued listing requirements of The NASDAQ Capital Market, which could result in a delisting of ADSs.***

The ADSs are listed on NASDAQ. We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of ADSs on NASDAQ. We have in the past received deficiency letters (that were eventually cured) from the Listing Qualifications Department of NASDAQ indicating that we did not meet the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2).

If NASDAQ delists ADSs from trading on its exchange for failure to meet the listing standards, an investor would likely find it significantly more difficult to dispose of or obtain ADSs, and our ability raise future capital through the sale of ADSs could be severely limited. We additionally may not be able to list ADSs on another national securities exchange, which could result in our securities being quoted on an over-the-counter market. If this were to occur, our shareholders could face significant material adverse consequences, including limited availability of market quotations for ADSs and reduced liquidity for the trading of our securities. In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future. There can be no assurance that an active trading market for ADSs will develop or be sustained. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.

***In the event that our ADSs are delisted from NASDAQ, U.S. broker-dealers may be discouraged from effecting transactions in shares of our ADSs because they may be considered penny stocks and thus be subject to the penny stock rules.***

The SEC has adopted a number of rules to regulate "penny stock" that restrict transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). These rules may have the effect of reducing the liquidity of penny stocks. "Penny stocks" generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on NASDAQ if current price and volume information with respect to transactions in such securities is provided by the exchange or system). Following a delisting from NASDAQ our ADSs may constitute "penny stock" within the meaning of these rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions involving our ADSs, which could severely limit the market liquidity of such ADSs and impede their sale in the secondary market.

A U.S. broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the "penny stock" regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a "penny stock", a disclosure schedule prepared in accordance with SEC standards relating to the "penny stock" market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the "penny stock" held in a customer's account and information with respect to the limited market in "penny stocks".

Securities holders should be aware that, according to the SEC, the market for "penny stocks" has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses.

***We incur increased costs and risks as a result of operating as a public company in the U.S. and Israel, and our management is and will continue to be required to devote substantial time to compliance initiatives.***

Our ADSs have been traded on The NASDAQ Capital Market since November 20, 2015, and prior to that our ordinary shares traded on the TASE, where they continue to trade. As a public company whose securities are listed in the United States and Israel, we incur accounting, legal and other expenses, including costs associated with our reporting requirements under the Exchange Act and the Israeli Securities Law. We also incur costs associated with corporate governance requirements, including requirements under Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the SEC and NASDAQ, and provisions of Israeli corporate and securities laws applicable to public companies. Certain aspects of Israeli securities laws are different than U.S. securities law, and our dual listing on TASE exposes us and our management to differing regulatory regimes which may involve increased regulatory risk.

Pursuant to Section 404 of the Sarbanes-Oxley Act and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, our management is required to report on the effectiveness of our internal control over financial reporting. In addition, if we become an "accelerated filer" or a "large accelerated filer" as those terms are defined under Rule 12b-2 of the Exchange Act, our independent registered public accounting firm will be required to attest to our evaluation of internal controls over financial reporting. Unless we successfully design and implement changes to our internal controls and management systems, or if we fail to maintain the adequacy of these controls as such standards are modified or amended from time to time, we may not be able to comply with Section 404. As a result, our auditors may be unable to attest to the effectiveness of our internal controls over financial reporting. This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things, adversely affect the price of our ordinary shares and our ability to raise additional capital.

The process of determining whether our existing internal controls over financial reporting systems are compliant with Section 404 and whether there are any material weaknesses or significant deficiencies in our existing internal controls, requires the investment of substantial time and resources, including by our chief executive officer, chief financial officer and other members of our senior management. As a result, this process may divert internal resources and take a significant amount of time and effort to complete.

We cannot predict the outcome of evaluations we will conduct in the future, and whether we will need to implement additional remedial actions in order to implement effective controls over financial reporting. The determination and any remedial actions required could result in us incurring additional costs that we did not anticipate, including the hiring of outside consultants. Irrespective of compliance with Section 404, any failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses, as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of the required changes to our internal control over financial reporting effectively or efficiently, it could adversely affect our operations, financial reporting and/or results of operations and could result in an adverse opinion on internal controls from our independent auditors and cause the market price of our ordinary shares and ADSs to decline.

Changes in the laws and regulations affecting public companies may result in increased costs to us as we respond to their requirements. These laws and regulations could make it more difficult or costlier for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. We cannot predict or estimate the amount or timing of additional costs we may incur in order to comply with such requirements.

***We are a non-accelerated filer, and we cannot be certain if the reduced disclosure requirements applicable to us will make our ADSs less attractive to investors.***

We are currently a "non-accelerated filer", as those terms are defined in the Securities Act. Accordingly, we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not a "non-accelerated filers," in particular, reduced disclosure obligations regarding exemptions from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting. Decreased disclosures in our SEC filings due to our status as a "non-accelerated filer" may make it harder for investors to analyze our results of operations and financial prospects.

We cannot predict if investors will find our ADSs less attractive if we rely on exemptions applicable to smaller reporting companies and non-accelerated filers. If some investors find our ADSs less attractive as a result, there may be a less active trading market for our ADSs and our ordinary share price may be more volatile.

***We may be classified as a Passive Foreign Investment Company, or PFIC, for U.S. federal income tax purposes in 2023 and may continue to be, or become, a PFIC in future years, which may have negative tax consequences for U.S. investors.***

We will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (i) at least 75% of our gross income is "passive income" or (ii) on average at least 50% of our assets by value produce passive income or are held for the production of passive income. Based on our estimated gross income, the average value of our gross assets, and the nature of our business, we believe it is likely that we were a PFIC in 2022 and we may also be classified as a PFIC in future years. If we are treated as a PFIC for any taxable year during which a U.S. investor held our ADSs, certain adverse U.S. federal income tax consequences could apply to the U.S. investor.

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

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the NASDAQ Listing Rules for U.S. domestic issuers. We follow home country practice in Israel with regard to (among other things) director nomination procedures, quorum requirement at shareholder meetings and approval of related party transactions and executive compensation. In addition, we follow our home country law, instead of the NASDAQ Listing Rules, which require that we obtain shareholder approval for certain dilutive events, such as for the establishment or amendment of certain equity-based compensation plans, an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the Company and certain acquisitions of the stock or assets of another company. In the future we may elect to follow additional home country corporate governance practices instead of those otherwise required under the NASDAQ Listing Rules for U.S. domestic issuers. Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on NASDAQ may provide less protection than is accorded to investors under the NASDAQ Listing Rules applicable to domestic issuers. See "Item 16G. Corporate Governance."

***We are a "foreign private issuer" and have disclosure obligations that are different from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.***

We are a foreign private issuer and, as a result, are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and/or less frequent than those of U.S. domestic reporting companies. For example, as a foreign private issuer, we are exempt from the rules and regulations 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 domestic companies whose securities are registered under the Exchange Act.

We intend to file with the SEC, within 120 days after the end of each fiscal year ending December 31, an annual report on Form 20-F containing financial statements which will be examined and reported on, with an opinion expressed, by an independent registered public accounting firm. In accordance with NASDAQ Listing Rules, as a foreign private issuer we are required to submit on a Form 6-K an interim balance sheet and income statement as of the end of the second quarter of each fiscal year. We have also agreed contractually under the Sales Agreement to provide an interim balance sheet and income statement as of the end of the first and third quarters of each fiscal year.

Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

***We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.***

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2023. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities continue to be owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the NASDAQ Listing Rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we do not incur as a foreign private issuer.

***The ADS holders may not be able to fully exercise their voting rights to the same extent as our ordinary shareholders. The depositary for the ADSs will give us a discretionary proxy to vote our ordinary shares underlying ADSs if a holder of the ADSs does not provide voting instructions, except in limited circumstances, which could adversely affect their interests.***

The ADS holders may instruct the depositary how to vote the number of deposited ordinary shares their ADSs represent. Except by instructing the depositary, you will not be able to exercise voting rights unless you surrender your ADSs and withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise voting rights and there may be nothing you can do if your shares are not voted as you requested, and you cannot vote in person at meetings as a holder of ADSs.

Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our ordinary shares underlying ADSs at shareholders' meetings if a holder of the ADSs does not provide voting instructions, unless we notify the depositary that:

● we do not wish to receive a discretionary proxy;

● there is substantial shareholder opposition to the particular question; or

● the particular question would have an adverse impact on our shareholders' rights.

The effect of this discretionary proxy is that a holder of the ADSs cannot prevent our ordinary shares underlying such ADSs from being voted, absent the situations described above, and it may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares listed for trading on the TASE are not subject to this discretionary proxy.

***We currently do not anticipate paying cash dividends, and accordingly, shareholders must rely on the appreciation in our ordinary shares and ADSs for any return on their investment.***

We currently anticipate that we will retain future earnings, if any, for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. The ability of an Israeli company to pay dividends or repurchase its shares is governed by Israeli law, which provides that unless otherwise approved by a court, distributions, including cash dividends and share repurchases, may be made only out of retained earnings as determined for statutory purposes, and only if there is no reasonable concern that the dividend distribution will prevent us from meeting our existing and foreseeable obligations, as they become due. Subject to the foregoing, payment of future dividends, if any, will be at the discretion of our board of directors and will depend on various factors, such as our financial condition, operating results, current and anticipated cash needs and other business and economic factors that our board of directors may deem relevant. Since we do not have earnings, we currently do not have any ability to pay dividends or repurchase our shares, absent court approval. Therefore, the success of an investment in our ordinary shares and ADSs will depend upon any future appreciation in their value. There is no guarantee that our ordinary shares and ADSs will appreciate in value or even maintain the price at which our holders have purchased their shares and ADSs.

***Investors in the ADSs may not receive the same distributions or dividends as those we make to the holders of our ordinary shares, and, in some limited circumstances, investors in the ADSs may not receive any value for them, if it is illegal or impractical to make them available to investors in the ADSs.***

The depositary for the ADSs has agreed to pay investors in the ADSs the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. Investors in our ADSs will receive these distributions in proportion to the number of ordinary shares their ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act of 1933, as amended, or the Securities Act, but that are not properly registered or distributed under an applicable exemption from registration. In addition, conversion into U.S. dollars from foreign currency that was part of a dividend which was distributed in foreign currency made in respect of deposited ordinary shares may require the approval or license of, or a filing with, any government or agency thereof, which may be unobtainable. In these cases, the depositary may determine not to distribute such property and hold it as "deposited securities" or may seek to affect a substitute dividend or distribution, including net cash proceeds from the sale of the dividends that the depositary deems an equitable and practicable substitute. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. In addition, the depositary may withhold from such dividends or distributions its fees and an amount on account of taxes or other governmental charges to the extent the depositary believes it is required to make such withholding. This means that investors in our ADSs may not receive the same distributions or dividends as those we make to the holders of our ordinary shares, and, in some limited circumstances, investors in the ADSs may not receive any value for such distributions or dividends if it is illegal or impractical for us to make them available to investors in the ADSs. These restrictions may cause a material decline in the value of the ADSs.

***Holders of ADSs must act through the depositary to exercise rights of shareholders of our company.***

Holders of the ADSs do not have the same rights as our shareholders and may only exercise the voting rights with respect to the underlying ordinary shares in accordance with the provisions of the deposit agreement for the ADSs. Under Israeli law, the minimum notice period required to convene a shareholders' meeting is no less than 35 or 21 calendar days, depending on the proposals on the agenda for the shareholders' meeting. When a shareholder meeting is convened, holders of the ADSs may not receive sufficient notice of the meeting to permit them to withdraw their ordinary shares to allow them to cast their vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send notice to holders of the ADSs or carry out their voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to holders of the ADSs in a timely manner, but we cannot assure holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote the ordinary shares underlying their ADSs. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of the ADSs may not be able to exercise their right to vote and they may lack recourse if the ordinary shares underlying their ADSs are not voted as they requested. In addition, ADS holders will not be able to call a shareholders' meeting unless they first withdraw their ordinary shares from the ADS program and receive delivery of the underlying ordinary shares held in the Israeli market in order to allow them to submit to us a request to call a meeting with respect to any specific matter, in accordance with the applicable provisions of the Companies Law and our amended and restated articles of association.

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***Our ordinary shares and our ADSs are traded on different markets and this may result in price variations.***

Our ordinary shares trade on the TASE, and the ADSs trade on NASDAQ. Trading on these markets take place in different currencies (U.S. dollars on NASDAQ and NIS on the TASE), and at different times (resulting from different time zones, different trading days and different public holidays in the U.S. and Israel). The trading prices of our securities on these two markets may differ due to these and other factors. Any decrease in the price of our securities on one of these markets could cause a decrease in the trading price of our securities on the other market.

***The ADSs have relatively limited trading volume, which may limit the ability of our investors to sell their ADSs in the U.S.***

The ADSs have been traded at low volumes in the past and may be traded at low volumes in the future for reasons related or unrelated to our performance. This low trading volume may result in lesser liquidity and lower than expected market prices for ADSs, and our investors may not be able to resell their ADSs for more than they paid for them.

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***We can issue non-voting senior preferred shares without shareholder approval, which could adversely affect the rights of holders of ordinary shares.***

Our amended and restated articles of association permit us to establish the rights, privileges, preferences and restrictions of future series of our non-voting senior preferred shares, which contain superior liquidation and dividend rights, and may contain other rights, including conversion, redemption, optional and other special rights, qualifications, limitations or restrictions, equivalent or superior to our ordinary shares and to issue such non-voting senior preferred shares without further approval from our shareholders. The rights of holders of our ordinary shares and ADSs may suffer as a result of the rights granted to holders of non-voting senior preferred shares that we may issue in the future. In addition, we could issue non-voting senior preferred shares containing rights that prevent a change in control or merger, thereby depriving holders of our ordinary shares and ADSs of an opportunity to sell their shares at a price in excess of the prevailing market price.

***If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares or ADSs, the price of our ordinary shares and ADSs could decline.***

The trading market for our ordinary shares and ADSs will rely in part on the research and reports that equity research analysts publish about us and our business. The price of our ordinary shares and ADSs could decline if such research or reports are not published or if one or more securities analysts downgrade the ADSs or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.

***We have broad discretion as to the use of the net proceeds from our previous offerings and may not use them effectively.***

We currently intend to use the net proceeds from our previous offerings including the "at-the-market" equity offering program ("ATM program") to expand our clinical development program, expand our clinical development pipeline for additional drug products, including by way of possible acquisitions, expand our pre-clinical development activity and for general corporate purposes, including working capital requirements. However, our management will have broad discretion in the application of the net proceeds from our previous offerings. Our shareholders may not agree with the manner in which our management chooses to allocate the net proceeds from our previous offerings. The failure by our management to apply these funds effectively could have a material adverse effect on our business, financial condition and results of operations. Pending their use, we may invest the net proceeds from our previous offerings in a manner that does not produce income. The decisions made by our management may not result in positive returns on any investment by shareholders and shareholders will not have an opportunity to evaluate the economic, financial or other information upon which our management bases its decisions.

**ITEM 4. INFORMATION ON THE COMPANY**

**A.** **History and Development of the Company** 

We were incorporated under the laws of the State of Israel (under a previous name) on August 12, 1968. Our ordinary shares were originally listed for trading on the TASE in 1978 and our ADSs have been traded on NASDAQ since November 2015. Our ordinary shares are currently traded on the TASE under the symbol "PPBT", and our ADSs are currently traded on NASDAQ under the symbol "PPBT". The Company is headquartered in Rehovot, Israel and our telephone number is +972-3-933-3121. Our website address is www.purple-biotech.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included our website address in this Annual Report solely for informational purposes. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the SEC at www.sec.gov.

In October 2012, the District Court in Lod, Israel approved the creditors arrangement in accordance with Section 350 of the Companies Law in order to effectuate the sale by our company (then known as Mainrom Line Logistics Ltd.) of all its activities, assets, rights, obligations and liabilities to a private company held by its then controlling shareholders, and all rights of our creditors against us were extinguished. From the completion of these transactions until the completion of the acquisition of Kitov Pharmaceuticals described below, Purple Biotech (then known as Kitov Pharma) did not conduct any business activities and was a public shell company listed on the TASE with no assets, debt and/or liabilities.

On July 11, 2013, we acquired Kitov Pharmaceuticals, which, prior to the completion of its merger with and into our company in December 2017, together with our company, was engaged in the research and development of Consensi. As part of the acquisition, Mainrom Line Logistics Ltd. changed its name to Kitov Pharmaceuticals Holdings Ltd., which name was subsequently changed in January 2018 to Kitov Pharma Ltd.

On January 13, 2017, we announced that we had acquired a majority equity stake in TyrNovo, a privately held developer of novel small molecules in the oncology therapeutic field.

On April 25, 2017, the boards of directors of each of Kitov Pharma and Kitov Pharmaceuticals approved a merger between the two entities, with Kitov Pharma remaining as the surviving entity. The merger was completed in December 2017. Kitov Pharmaceuticals was dissolved upon the merger, and Kitov Pharma remained as the surviving entity.

In January 2020, we completed the acquisition of FameWave, a privately held biopharmaceutical company, whose main asset is CM24, a clinical stage humanized monoclonal antibody in the oncology therapeutic field.

On December 7, 2020, we changed our name to Purple Biotech Ltd.

In December 2021, we decided to discontinue the manufacturing and distribution of Consensi.

In February 2023, we completed the acquisition of Immunorizon, a privately held biopharmaceutical company developing multi-specific antibodies as oncology therapies that selectively activate the immune response within the tumor microenvironment. For information regarding the Immunorizon acquisition, see "Item 10 – Additional Information – C. Material Contracts – Immunorizon Acquisition."

For a description of our principal capital expenditures for the three years ended December 31, 2022, see Item 5. "*Operating and Financial Review and Prospects*."

**B.** **Business Overview** 

We are a clinical-stage company developing first-in-class, effective and durable therapies that that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance.

We are focused on oncology and our pipeline includes: (i) CM24, a humanized monoclonal antibody that blocks the interactions of Carcinoembryonic Antigen Related Cell Adhesion Molecule 1 ("CEACAM1"), an immune checkpoint protein that supports tumor immune evasion and survival through multiple pathways, (ii) NT219, a small molecule that simultaneously targets and inhibits Insulin Receptor Substrate 1 and 2 ("IRS1/2") and Signal Transducer and Activator of Transcription ("STAT3"), two signal transduction pathways involved in the development of cancer drug resistance mechanisms, as further described below and (iii) IM1240, a conditionally-activated tri-specific antibody that engages both T cells and NK cells. The third arm of IM1240 specifically targets the Tumor Associated Antigen (TAA) 5T4. In developing these therapeutic candidates, we address not only the tumor itself but also the tumor microenvironment, which we believe may improve patient outcome.

● We are conducting a randomized, controlled, open label multicenter phase 2 study to investigate CM24 in combination with the anti-PD-1 checkpoint inhibitors nivolumab for the treatment of pancreatic ductal adenocarcinoma (PDAC) when administered in combination with standard of care chemotherapy compared to chemotherapy alone. We have entered into a clinical collaboration agreement with Bristol Myers Squibb to evaluate the combination of CM24 with the PD-1 inhibitor nivolumab and nab-paclitaxel in this study. We expect to release interim results in the second half of 2023 and a topline report on the overall study by the end of 2024;

● We are conducting a phase 1/2 dose escalation study of NT219 as a single agent in patients with solid tumors, and a dose escalation phase of NT219 in combination with cetuximab for the treatment of recurrent and/or metastatic squamous cell carcinoma of the head and neck cancer or colorectal adenocarcinoma. These studies will be followed by an expansion phase of NT219 at its recommended phase 2 dose level in combination with cetuximab in patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. We expect to release phase 1 topline results in the second half of 2023; and

● We are conducting preclinical studies with IM1240 and expect to reach IND submission in approximately two years.

In addition, we are seeking the acquisition of additional oncology therapeutic candidates at various stages of development to expand and diversify our portfolio and to leverage our development capabilities.

**Background on our therapeutic candidates** 

CM24 is a clinical stage humanized monoclonal antibody directed against CEACAM1, a multi-faceted membrane protein belonging to the Human CEA (Carcino-Embryonic Antigen) protein family that acts as an immune checkpoint inhibitor, a pro-angiogenic, anti-apoptotic agent and a promoter of tumor invasiveness and metastases. Evidence has shown that CEACAM1 is expressed on different white blood cells including lymphocytes neutrophils and monocytes and its expression is up-regulated in several cancer types. Additionally, previous publications in the scientific literature\* indicate that CEACAM1 is expressed on neutrophil extracellular traps (NETs) which, among other activities, are believed to promote metastatic processes of tumors. Preclinical studies have shown evidence that CM24 enhances the cytotoxic activity of tumor-infiltrating lymphocytes (TILs) against various CEACAM1-positive tumor cell lines in vitro and in vivo. We have recently shown that CM24 attenuates NET-induced tumor cell migration. CM24 is being developed for multiple oncological indications according to the expression pattern of its target protein. Preclinical studies provide strong justification for CM24's mechanism of action in activating the immune system through multiple pathways. Additional preclinical studies showed that a combination of CM24 with PD-1 and PDL-1 antibodies resulted in a synergistic anti-cancer effect. In a Phase 1 dose escalation study of CM24 as a single agent, a stable disease rate of approximately 33% among the evaluable patients was noted. In a second Phase 1 dose escalation study of CM24 in combination with the PD-1 inhibitor nivolumab, a disease control rate of 36% among the evaluable patients was noted, including one partial response and three stable diseases. We are developing CM24 as a combination therapy with anti-PD-1 checkpoint inhibitors and standard of care chemotherapy in a Phase 2 study in patients with pancreatic cancer. We entered into a clinical collaboration agreement with Bristol Myers Squibb for this study. For more information regarding CM24, see, "Item 4. Business Overview - Our Therapeutic Candidates – CM24".

\* Rayes RF, et al. Neutrophil Extracellular Trap-Associated CEACAM1 as a Putative Therapeutic Target to Prevent Metastatic Progression of Colon Carcinoma. J Immunol. 2020 Apr 15;204(8):2285-2294. PMID: 32169849;

\* Masucci MT, et. al. The Emerging Role of Neutrophil Extracellular Traps (NETs) in Tumor Progression and Metastasis. Front Immunol. 2020 Sep 16;11:1749. PMID: 33042107;

NT219 is a novel small molecule that presents what we believe to be a new concept in cancer therapy by targeting two key oncology-related proteins, IRS1/2, as well as STAT3. Our NT219 therapeutic candidate's anti-cancer effect is achieved by overcoming tumors' cancer drug resistance, and it is being developed both as a standalone drug as well as in combination with other cancer drugs or treatments. NT219 has been preclinically tested alone and in combination with various classes of cancer drugs such as with chemotherapies, targeted therapies and immuno-oncology therapies. We are conducting a phase 1/2 dose escalation study of NT219 as a single agent in patients with solid tumors, and a dose escalation of NT219 in combination with cetuximab for the treatment of recurrent and/or metastatic squamous cell carcinoma of the head and neck cancer or colorectal adenocarcinoma, to be followed by an expansion phase of NT219 at its recommended phase 2 dose level in combination with cetuximab in patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. For more information regarding NT219, see, "Item 4. Business Overview - Our Therapeutic Candidates – NT219."

In February 2023, we acquired Immunorizon, a private company developing multi-specific T cell and NK cell engager oncology therapy technology that selectively activates the immune response within the tumor microenvironment. The acquisition provided us with an expanded portfolio of investigational tri-specific antibody compounds that target multiple antigens and offer the potential to further expand to additional targets. The lead asset, IM1240, is a conditionally-activated tri-specific antibody that engages both T cells (anti-CD3) and NK cells to mount a strong, localized immune response within the tumor microenvironment. The third arm of IM1240 specifically targets the tumor-associated antigen ("TAA") 5T4, which is expressed on a variety of solid tumors and is correlated with advanced disease, increased cancer invasiveness and poor clinical outcome. The IM1240 compound is distinguished from other multi-specific cell therapies targeting 5T4+ tumors by its cleavable capping technology, which confines the compound's therapeutic activity to the tumor microenvironment, and thereby has the potential to increase the anticipated therapeutic index in patients. The acquired portfolio includes additional early-stage assets, targeting other receptors and TAA. For more information regarding IM1240, see, "Item 4. Business Overview – Our Therapeutic Candidates – IM1240." For information regarding the Immunorizon acquisition, see "Item 10 – Additional Information – C. Material Contracts – Immunorizon Acquisition."

**Our competitive strengths**

The pharmaceutical market is characterized by large international pharmaceutical companies that develop a wide range of products, both generic and innovative, which operate alongside smaller companies, such as ours, that develop a specific drug or a combination of drugs. Therefore, many small companies enter into agreements with such global companies during the drug development stage in order to continue the development or marketing of the drug, taking advantage of the financial, marketing and/or other resources available to such global companies. At the same time, the global companies tend to enter into agreements with smaller companies in order to save development time and resources. The global drug sector is a highly developed market with a turnover of hundreds of billions of U.S. dollars and intense competition.

We believe there are several advantages to the therapeutic candidate we are developing, as set forth below.

<u>CM24:</u>

CEACAM1 is unique among the CEACAM family members in that it is widely distributed among various species and it has the largest number of splice variants compared to other members of the family. Moreover, CEACAM1 also has the widest tissue distribution of all characterized family members (source: Current Opinion in Cell Biology Volume 18, Issue 5, October 2006, Pages 565-571). Accordingly, CM24 may have a competitive advantage over other CEACAM-targeting agents in that its inhibitory effect may be more general and target several splice variants and more tissues.

Additional potential advantages of CM24 over other CEACAM-targeting technologies may include:

● As CM24 blocks the homo- as well as the hetero-dimerization, i.e. blocks both CEACAM1-CEACAM1 as well as CEACAM1-CEACAM5 interaction - it has the potential to be more effective in controlling the contact inhibition of cancerous cells with cells of the immune system. CM24 acts as an immune adhesion inhibitor molecule – a mechanism that is central to the immune evasion mechanism of neoplastic cells.

● In addition to its contribution to tumor suppression, CEACAM1 also has a modulatory role in multiple cell types such as T-cells, NK cells, monocytes and neutrophils.

● CEACAM1 has been proposed to be a ligand for T-cell Immunoglobulin and Mucin domain-3 (TIM-3) – another immune checkpoint inhibitor. By activating TIM-3 with CM24, a synergistic effect may be expected. The relationship between CEACAM1 and TIM-3 has recently been described as a mechanism that may overcome immune fatigue and T-cell exhaustion (Nature. 2015 Jan 15; 517(7534): 386–390; Acharya N, et al. J Immunotherapy 8:e911-22, 2020).

● CEACAM1 has been associated with trophism for cancer cells and the metastatic phenotype manifested through its expression on neutrophil extracellular traps (Rayes RF, et al. J Immunology. 2020) and our data.

Finally, CM24 has been evaluated as monotherapy at escalating doses up to 10mg/kg in a phase 1 clinical trial, where 27 patients with different cancers in advanced stages were treated with the monoclonal antibody. There were no dose limiting toxicities which were associated with CM24, nor any drug related mortalities. In a second Phase 1b study, CM24 at 3 dose levels, 10, 15 and 20mg/kg, was administered in combination with standard dose of nivolumab to a total of 13 patients with PDAC, CRC and papillary thyroid cancer. The combination of CM24 and nivolumab has been well tolerated and demonstrated initial signals of efficacy. A randomized, controlled open labeled Phase 2 study evaluating CM24 in combination with nivolumab and standard of care chemotherapy have recently been initiated.

<u>NT219</u>:

NT219 is a small molecule, and small molecules typically are less expensive to develop and have less complex CMC as compared to proteins or antibodies. In addition, in preclinical development NT219 has demonstrated several advantageous effects, such as:

● single agent activity in PDX models and xenografts;

● overcoming drug resistance acquired by various cancer types; and

● efficacy in combination with a number of approved cancer therapies belonging to various anti-cancer drug classes such as chemotherapy, targeted therapy and immune-oncology therapies.

In the monotherapy portion and the combination portion of the current phase 1/2 study, to date, no dose limiting toxicities have been observed and NT219 has been found to be largely well-tolerated with a few serious adverse events and preliminary efficacy signals were demonstrated.

<u>IM1240:</u>

IM1240 is a multi-valent antibody designed to activate anti-tumoral immune response against 5T4-positive tumors. This therapeutic candidate has several distinctive features that could allow it to outperform competitors:

● 5T4 is a well-studied TAA, minimally expressed in healthy tissues and associated to poor prognosis in multiple cancer types;

● Dual activation of T cells and NK cells to mount a stronger specific immune response against cancer cells (Kyrysyuk et al., Annu. Rev. Immunol. 2023. 41:17–38); and

● A cleavable capping system aimed to prevent systemic T cell engagement and widen the therapeutic index.

**Our strategy**

Our goal is to become a leading player in the development and commercialization of innovative drugs that treat unmet medical needs and can capitalize on significant market opportunities, focusing on oncology therapeutics.

Key elements of our strategy are to:

● focus on oncology therapeutic assets for treatment of unmet medical need, representing a significant market opportunity;

● leverage our expertise in the clinical and regulatory processes in the United States, together with our research and development capabilities and network of professional advisors, to efficiently develop therapeutic candidates in pre-clinical and clinical stages of development and achieve marketing authorization;

● expand our line of therapeutic candidates through the acquisition or in-licensing of technologies, products and drugs in the oncology space intended to meet clinical needs;

● develop new disruptive and innovative technologies in collaboration with third parties, as well as using our in-house capabilities; and

● cooperate with third parties, to both develop and commercialize therapeutic candidates in order to share costs and leverage the expertise of others.

Our oncology therapeutic candidates, CM24, NT219 and IM1240, are further described below.

**CM24**

*Background*

CM24 is a humanized monoclonal antibody directed against CEACAM1, a multi-faceted membrane protein belonging to the Human CEA (Carcino-Embryonic Antigen) protein family that acts as an immune checkpoint inhibitor, a pro-angiogenic, anti apoptotic agent, and a protein that promotes tumor invasiveness and metastases. Evidence has shown that CEACAM1 is expressed on tumor infiltrating lymphocytes and its expression is up-regulated in several cancer types. Moreover, CEACAM1 is associated with mechanisms of trophism and metastases in cancer, manifest through mechanisms such as neutrophil extracellular traps.

The technology originated from the laboratory of Dr. Gal Markel from Sheba Medical Center and initially developed by cCAM Biotherapeutics Ltd. (cCAM), which was acquired by Merck Sharp and Dohme Corp., or MSD, in 2015.

MSD conducted a phase 1 clinical trial, including patients with metastatic melanoma, non-small cell lung cancer, bladder, gastric, colorectal and ovarian cancer patients. In this initial Phase 1 dose ranging study of CM24 as single agent, a stable disease rate of approximately 33% among the evaluable patients was noted as best overall response. Despite no known safety risks, MSD discontinued the clinical study and returned the rights of CM24 to former cCAM shareholders and founders of FameWave. Review of the Phase 1 study results by external scientific advisors retained by us suggested that while CM24 was generally safe, higher doses of the antibody along with a modified dosing regimen in a defined patient population would be warranted.

*The Therapeutic Candidate*

CM24 is a humanized monoclonal antibody directed against CEACAM1, a multi-faceted membrane protein belonging to the Human CEA (Carcino-Embryonic Antigen) protein family that acts as an immune checkpoint inhibitor, a pro-angiogenic, anti apoptotic agent, and a protein that promotes tumor invasiveness and metastases.

CEACAM1 belongs to the CEA superfamily. CEACAM1 interacts with itself (i.e., hemophilic interaction) and with CEACAM5 (heterophilic interaction), as well as with various bacterial proteins. Different functions have been attributed to the CEACAM1 protein: anti-proliferative properties in carcinomas of the colon and prostate, or facilitation of proliferation in melanoma; central involvement in angiogenesis, insulin clearance and immune-modulation. CEACAM1 is expressed by many types of tumors and is associated with poor prognosis in cutaneous melanoma, uveal melanoma, hepatocellular carcinoma, colorectal cancer and lung cancer. In addition, increased CEACAM1 expression on cancer tissues and peripheral blood lymphocytes and elevated serum CEACAM1 were observed in patients with melanoma, osteosarcoma and pancreatic carcinoma. These collective observations provide a strong justification for the development of a therapeutic approach that targets the immuno-suppressive function of CEACAM1.

Earlier preclinical studies revealed CM24 reversed CEACAM1-mediated immune evasion by abrogating CEACAM1-CEACAM1 interactions, restoring ZAP70 phosphorylation and TCR-driven effector functions, while maintaining antigen-restricted recognition. This abrogates the immunosuppressive function of CEACAM1, promoting cell killing by T cells and NK cells.

CM24 is a blocking monoclonal antibody that prevents CEACAM1-CEACAM1 and CEACAM1-CEACAM5 interactions, thus enhancing the cytotoxic activity of lymphocytes, attenuating NET-induced and independent metastatic processes, preventing angiogenesis, and promoting tumor apoptosis.

![](image_001.jpg)

*Preclinical and Mechanism of Action and Target Validation*

The preclinical studies have shown evidence that CM24 enhances the cytotoxic activity of tumor-infiltrating lymphocytes (TILs) against various CEACAM1-positive tumor cell lines. Additional preclinical studies provide strong justification for CM24's mechanism of action in activating the immune system through multiple pathways as validated by world renowned researchers at Harvard Medical School and MIT, in an article published in Nature<sup>\*</sup> as well as by Dr. Gal Markel from the Tel HaShomer Medical Center<sup>\*\*</sup>. Recently, we (Reuveni H., et al, C*ancer Res* (2023) 83 (2_Supplement_2): B029.) have demonstrated that CM24 binds to the NET structures, significantly suppresses the NET-induced cancer cell migration and inhibits metastases in mice xenografts.

\* Huang Y-H, et al., (2015) Nature, 517(7534): 386–390. doi:10.1038/nature13848 <br> \*\* Markel G., et al., (2006) J Immunol., 177:6062-6071; doi: 10.4049/jimmunol.177.9.6062

*Phase 1 Clinical Trial*

MSD conducted an interventional, Phase 1, first in human, non-randomized, single group assignment, open-label, multi-centered and multiple escalating doses study to assess the safety, efficacy, pharmacokinetics and tolerability of the CM24 antibody in the treatment of subjects with selected advanced or recurrent malignancies including melanoma, non-small cell lung adenocarcinoma (NSCLC) and bladder, gastric, colorectal or ovarian cancer.

The main objectives of the MSD clinical study were to assess the safety and tolerability of CM24 and to determine the recommended dose for Phase 2 trials, characterization of the pharmacokinetic profile and immunogenicity of CM24, and to evaluate the preliminary efficacy of the drug. The trial was conducted at four sites in the U.S. and Israel and was designed as a dose escalation stage that was to be followed by an expansion stage. The trial was concluded following administration of CM24 to 27 patients and prior to determining the recommended phase 2 level and reaching the expansion stage.

Main conclusions by us from the Phase 1 clinical trials results:

● CM24 was found to be generally safe and well tolerated. There were no DLTs up to 10mg/kg and no drug related morbidity

● Target saturation was not reached up to 10mg/kg. PK modeling suggests that slower clearance with increasing dose and higher half-life with increasing dose, PK variability across patients, and full receptor occupancy may likely require doses >10mg/kg administered every 2 weeks.

● Treatment related adverse events noted in 17 subjects: 82% Grade 1, 16% Grade 2 and 2.7% Grade 3. Most frequent were increased liver function tests (LFTs) and anorexia. The two Grade 3 events were headache and abdominal pain; there were 2 deaths that occurred within 30 days from the last administration of CM24 due to disease progression.

● A stable disease rate of approximately 33% among the 24 evaluable patients was achieved, mostly in the two highest dose groups, where approximately half of the evaluable patients achieved stable disease.

*Our Clinical Development Plans for CM24*

We believe that CM24 is a promising agent, which has a potential to be efficacious as a standalone and in combination with other anti-cancer agents, including anti PD-1 agents and other checkpoint inhibitors and chemotherapy for patients with cancer. The Phase 1 study noted above showed that CM24 was generally well tolerated and resulted in a stable disease rate of approximately 33% in the evaluable patients. The Phase 1 study was not designed to pre-screen CEACAM-1 levels on tumor tissue. Furthermore, in this Phase 1 study, no PD-1 inhibitor was tested in combination with CM24. And as noted, the doses used in the aforementioned study were below those required to reach target saturation as determined by pharmacokinetic evaluations.

A Phase 1/2 study that includes three parts is ongoing. The first part which has already been completed included a dose escalation of CM24 at 10, 15 and 20mg/kg, in combination with standard dose of the PD-1 inhibitor nivolumab, in patients with selected solid tumors who have received up to 2 prior regimens for their advanced and/or metastatic disease. The primary objective of this part of the study was to evaluate safety, tolerability, PK and determine the recommended Phase 2 dose (RP2D).

In June 2021 we reported on the first dose cohort of the dose escalation phase (10mg/kg), where one patient with refractory advanced MSI-S pancreatic cancer having been previously treated with two previous regimens, had a confirmed partial response to CM24 and nivolumab, both with respect to imaging and biochemical markers. The responsive patient showed a 40% reduction in tumor size following two cycles of treatment with CM24 in combination with nivolumab 480mg/kg. In addition, levels of CA19-9 tumor marker dropped by 56%, compared to baseline levels. Additionally, there were no dose-limiting toxicities or serious adverse events observed in any of the three patients enrolled in the first dose cohort of the study.

In April 2022, we presented interim data from this part of the study in 11 evaluable patients with refractory cancers, including 8 with PDAC, two with colorectal cancer (CRC) and one with papillary thyroid cancer (PTC). All patients but one had received two prior regimens for metastatic disease. No DLTs were observed across all dose levels; no Grade 4 AEs or treatment related deaths have been reported. Six Grade 3 adverse events (AEs), that were unrelated to CM24 or PD-1 inhibitor nivolumab, were observed, each in a single patient, including diarrhea, hypokalemia, abdominal pain, small bowel obstruction, atrial flutter, and GI bleed.

Of the evaluated patients, best overall response included one confirmed PR (PDAC patient) and three SD (two PDAC and one PTC patient), with a disease control rate of 36%. Pharmacokinetic analysis of CM24 showed exposure was dose-proportional across the three doses assessed in this study; Complete receptor occupancy of peripheral CEACAM1 receptors on T cells and neutrophils was demonstrated following the first administration of CM24 at doses of 15 or 20mg/kg. A number of other immune and adhesion-related parameters are being evaluated as potential biomarkers in the study.

The second part of the study that is designed as a safety (primary endpoint) run-in stage, enrolls patients with advanced/metastatic PDAC who have received up to one prior regimen for their disease. In this part of the study, PDAC patients are receiving CM24 at 20mg/kg plus nivolumab at 240mg and one of the following two standard of care chemotherapy regimens of either gemcitabine and nab-paclitaxel or liposomal-irinotecan (Nal-IRI), 5-fluorouracil and leucovorin. A total 12 and up to 18 PDAC patients are planned to be enrolled to this part of the trial. In February 2023, we reported that 10 patients are being treated in this part and no DLTs have been noted in them, while enrolment of the remaining patients is ongoing.

In February 2023 we reported enrolment of the first patient to the third part of the study. This part of the study is a randomized, controlled, opened labeled, multi-center study, comparing treatment of PDAC patients who have received up to one treatment regimen for their advanced/metastatic disease with CM24, nivolumab and standard of care (SoC) chemotherapy (experimental cohort) vs. SoC chemotherapy (control cohort). This randomized Phase 2 study is designed to include approximately 30 patients in the experimental cohort and approximately additional 30 patients in the control cohort. The study is currently being conducted in 11 sites in the United States, Spain and Israel, and we expect to open approximately 10 additional sites in the upcoming months. The primary endpoint of this randomized part of the trial is overall survival while additional efficacy (e.g., PFS, OS rate at 6 and 12 months, PFS rates at 3 and 6 months, ORR and DOR) and safety measures will be part of the secondary endpoint of the trial. The study will also include different assessments of tumor tissue and blood aimed at exploring potential biomarkers. The trial is conducted in clinical collaboration with Bristol Myers Squibb. Additional information about the trial can be found at www.clinicaltrials.gov, NCT Identifier NCT04731467.

**NT219**

NT219 is a small molecule that presents what we believe is a new concept in cancer therapy by inhibiting two oncology-related pathways, namely the IRS 1 and IRS 2 and STAT3 pathways. NT219 technology has been tested in a number of PDX models where biopsies from patients are implanted into mice and used to test various cancer drugs. In such models, NT219, alone and in combination with several approved oncology drugs, displayed potent anti-tumor effects and increased survival in experimental animals harboring various cancers by preventing the tumors from developing resistance to approved cytotoxic, immune-oncologic, and targeted drug treatments, and by re-sensitizing tumors to the approved drugs even after resistance has been acquired*.*

 

***Background on Cancer Drug Resistance***

The following are high-level summaries of the therapeutic areas we are currently investigating for NT219:

*Solid malignancies (e.g., head and neck, pancreatic, colon and non-small cell lung cancer).* According to the Journal of Oncology Practice, in 2020 roughly one in every 19 people worldwide would either be diagnosed with a solid tumor or be a cancer survivor. According to the American Cancer Society, lung, pancreatic, and colon malignancies have high mortality rates and poor five-year survival prognosis. Novel, emerging therapeutic approaches for targeting solid tumors are being developed and tested.

*Tumor Resistance to Cancer Therapies*. Resistance to chemotherapy and to targeted therapies is a major problem facing oncology. The mechanisms of resistance to 'classical' cytotoxic chemotherapeutics and to therapies that are designed to be selective for specific target proteins share many features, such as alterations in the drug target, activation of pro-survival pathways and ineffective induction of cell death.

Evidence suggests that among other mechanisms of resistance, inhibition of central oncological target kinases such as EGFR, MEK and mutated-BRAF could trigger feedback activation of STAT3 and IRS-to-PI3K/AKT, major survival pathways that bypass (prevent) the anti-cancer effects of various drugs.

*IRS*. Insulin Receptor Substrate (IRS) is a junction protein that mediates various mitogenic and anti-apoptotic signals mainly from Insulin-like Growth Factor-1 Receptor (IGF1R) and Insulin Receptor (IR), but also from other oncogenes such as v-Src and ALK-fusion proteins. IRS expression is often up-regulated in human tumors, such as prostate, pancreatic, liver, renal and ovarian cancer. Resistance to several anti-cancer therapies (e.g., inhibitors of EGFR, MEK, mutated-BRAF, mechanistic target of rapamycin (mTOR), as well as cytotoxic chemotherapy) may be mediated by IRS up-regulation, as demonstrated in peer reviewed research articles published in scientific journals.

*STAT3.* Signal Transducer and Activator of Transcription 3 (STAT3) plays crucial roles in several cellular processes such as cell proliferation and survival and has been found to be aberrantly activated in many cancer types (such as NSCLC, head and neck cancer, pancreatic cancer and many others). Much research has explored the leading mechanisms for regulating the STAT3 pathway and its role in promoting tumorigenesis. Evidence suggests that feedback activation of STAT3 plays a prominent role in mediating drug resistance to a broad spectrum of targeted cancer therapies and chemotherapies (such as inhibitors of EGFR, MEK, ALK, as well as 5FU, oxaliplatin and irinotecan).

***Mechanism of Action***

The NT219 therapeutic candidate is a small molecule that we believe presents a new concept in cancer therapy, acting as a dual inhibitor of IRS1/2 and STAT3, which putatively play major roles in oncogenesis and cancer drug resistance. While targeted anti-cancer drugs inhibit the "ON" signal, NT219 activates the "OFF" switch, leading to the degradation of IRS-1/2, altering STAT3 phosphorylation, and extensively blocking major oncogenic pathways.

IRS down-regulation can be mediated by several oncogenic pathways (EGFR, MAPK, mTOR, etc.). Blockade of these pathways by various drugs, could inhibit serine phosphorylation of IRS, leading to the activation of IRS to AKT survival bypass. Therefore, degradation of IRS1/2 by NT219 could potentially prevent resistance and prolong the tumor's response to various targeted drugs, as depicted below:

![](image_002.jpg)

There have been reports in peer reviewed academic literature describing the involvement of Insulin-like Growth Factor-1 Receptor (IGF1R) up-regulation in drug-resistance. In these cases, blockage of IGF1R direct substrates, IRS1/2, by NT219 could potentially overcome drug resistance.

The same principal is true for STAT3. Feedback activation of STAT3 is a common resistance mechanism to many targeted cancer therapies (such as the inhibitors of EGFR, MEK, HER2) and cytotoxic chemotherapies. Combining these cancer therapies with NT219, which disrupt this feedback mechanism, could potentially enhance cell death and delay resistance, suggesting a co-treatment strategy that may be broadly effective in oncogene-addicted tumors.

Degradation of IRS proteins and blockage of STAT3 by NT219 could potentially prevent resistance to multiple anti-cancer drugs, extend the duration of effective drug treatment, and restore drug sensitivity in resistant tumors.

NT219 has high affinity and selective binding to its target proteins. NT219 binds covalently to Insulin Receptor Substrates (IRS) 1/2 and with low nano-molar affinity to the Signal Transducer and Activator of Transcription 3 (STAT3). Data from preclinical work showed that a short exposure of cancerous cells to NT219 was sufficient to trigger irreversible shutdown of these pathways, resulting in a long-term anti-cancer effect.

In April 2021, we reported additional preclinical data supporting the mechanism of action of NT219, that was presented in a poster entitled "Adaptation of colorectal cancer cells to the brain microenvironment: The role of IRS2," at the American Association of Cancer Research (AACR) 2021 Annual Meeting. Colorectal cancer (CRC) represents the fourth most frequent cause of brain metastasis, which is the most common brain tumor. The preclinical data updates and expands on the results previously reported by the Company in collaboration with Dr. Ido Wolf, Head of the Oncology Division at Tel Aviv Sourasky Medical Center. The study included an analysis of more than 16,000 human CRC local and metastasis samples and revealed an increased amplification of IRS2 in brain metastases. In an in vitro system mimicking the brain microenvironment, IRS2-overexpressed CRC cells showed prolonged survival. Importantly, transcriptomic analysis demonstrated significant enrichment of the oxidative phosphorylation (OXPHOS) pathway by IRS2. CRC cells expressing IRS2 showed increased mitochondrial activity and glycolysis-independent viability. Inhibition of IRS2 using NT219 dose- dependently inhibited IRS2-expressing cells viability and OXPHOS genes expression. The Wnt/β-catenin pathway was among the most significantly enriched pathways in the brain metastasis, as IRS2-expressing cells showed increased transcriptional activity of the β-catenin. In addition, NT219 decreased the transcriptional activity of β-catenin in IRS2- expressing CRC cells to a greater extent than AKT and PI3K inhibitors, and most significantly suggested relevance of IRS2 in activating β- catenin. It was further shown that 5-FU, a chemotherapy approved for treating CRC, elevated β-catenin expression, and that NT219 diminished both 5FU-induced and the basal level of the β-catenin expression. Utilizing an intracranial animal model, it was also demonstrated that while 5-FU alone had no significant effect, the combination of 5-FU and NT219 significantly inhibited the formation of brain metastasis and extended survival rates of the study mice.

In October 2021, an article was published in Nature Cancer demonstrating mechanisms behind cancer cell persistence frequency and potential of NT219 to reduce therapeutic resistance. The article titled, "IRS1 phosphorylation underlies the non-stochastic probability of cancer cells to persist during EGFR inhibition therapy". The lead author of the publication is Ravid Straussman, M.D., Ph.D., Department of Molecular Cell Biology, Weizmann Institute of Science, Rehovot, Israel. The article demonstrated mechanistic evidence of cancer cells' inherited therapeutic resistance, termed chance to persist (CTP). It was shown in preclinical models, that the CTP EGFR inhibition is modulated by serine/threonine phosphorylation of the IRS1. Specifically, it has been shown that higher phosphorylation of IRS1 multiple serine/threonine sites, which blocks IRS1 activity, results in increased susceptibility to EGFR inhibitors. A combination of NT219, which triggers serine phosphorylation and subsequent degradation of IRS1 and EGFR inhibitors, resulted in a synergistic effect, leading to tumor regression and delayed recurrence upon treatment withdrawal.

***Preclinical results***

In preclinical studies, NT219, in combination with several approved cancer drugs, displayed potent anti-tumor effects and increased survival in various cancers by preventing the tumors from developing drug resistance and restoring sensitivity to the drugs after resistance is acquired. NT219 has shown efficacy in various PDX models originated from head and neck, cancer, non-small cell lung cancer (NSCLC), sarcoma, melanoma, pancreatic, and colon cancers.

Efficacy of NT219 was demonstrated in combination with three major classes of oncology drugs:

1) Antibodies such as the anti-epidermal growth factor receptor (EGFR) antibody (Erbitux) and the immuno-oncology anti-PD1 antibody (Opdivo™, Keytruda);

2) Kinase Inhibitors such as blockers of EGFR (Tagrisso, Tarceva), MEK (Mekinist), Mutated BRAF (Zelboraf), and mTOR (Afinitor); and

3) Chemotherapy agents such as gemcitabine (Gemzar), 5FU, and Oxaliplatin.

In 2021, we expanded an existing research agreement, led by Menashe Bar-Eli, Ph.D., Professor, Department of Cancer Biology, at The University of Texas MD Anderson Cancer Center, to evaluate the potential efficacy of the combination of NT219 and immuno-oncology drugs, such as anti-CTLA4 or anti-PD1/PDL1 antibodies.

***Clinical Plan***

The clinical development strategy will parallel the preclinical studies, particularly with respect to the STAT3 and IRS/AKT pathway inhibition/s, which have been characterized as a putative *sine qua non* for the resistance phenotype. Moreover, the tumor types to be initially addressed also reflect the MEK/ERK pathway, and in particular, those tumors which functionally have shown dependence or driver mutations with respect to *erb-b* pathways. However, within the context of the preclinical studies that have been performed, there is also evidence of single agent activity noted with NT219, and this needs to be appreciated within the clinical development plan.

NT219 first in human studies consider primarily safety, particularly since the MOA relates to dual inhibition mechanisms. Within the context of single agent activity, it has been noted that in a variety of studies NT219 may have effect. As such, standard criteria in Phase 1 is used to assess the agent in this monotherapy context, primarily with respect to safety, and evidence for a signal of biologic relevance.

As a result, the first in human Phase 1 study, which we commenced in the second half of 2020, is evaluating single agent NT219 at a dose escalation, in patients with advanced cancer diseases. Patients for this component of the trial (deemed Part A) are being evaluated for safety as the primary endpoint, and efficacy as a secondary endpoint. The escalation takes the form of a 3+3 standard design, together with a "backfill" groups enrolling of up to 3 additional patients at doses which have already been deemed safe. Patients are being administered NT219 weekly until disease progression or study withdrawal for any other cause.

In December 2021, we initiated Part B of our ongoing Phase 1/2 clinical trial of NT219, as a dose escalation study of NT219, beginning with 6mg/kg, in combination with the standard dose of cetuximab (ERBITUX®), in patients with recurrent and/or metastatic squamous cell carcinoma of head and neck cancer (SCCHN) or colorectal adenocarcinoma (CRC). In this arm, patients with advanced cancer, who are eligible for cetuximab therapy (e.g., SCCHN and CRC), receive a combination of the drugs, with NT219 being administered first, followed by cetuximab, in a similar course of weekly administrations. The combination is being evaluated in a similar 3+3 design and backfill groups as described for single agent part of the study. These two parts of the study will provide information regarding the safety of NT219 as a single agent and in combination with cetuximab, including the determination of the maximal tolerated dose (MTD), as well as preliminary efficacy signal of NT219 as a single agent and in combination with cetuximab. It may also provide the impetus for the expansion of the study into a given indication, either as single agent or in combination. We reported data at the 2021 ASCO Annual Meeting from the first dose cohort of the single agent dose escalation, where a patient with gastro-esophageal cancer sustained a partial response to the treatment at 3mg/kg, manifested by a complete response at the target lesion, a complete response of one lymph node non-target lesion, and stable disease of another lymph node non-target lesion. In addition, initial results from the first dose level cohort revealed NT219 was well-tolerated with minimal adverse events. The trial is ongoing, and currently is enrolling in both the single agent dose escalation, and the double of cetuximab and NT219.

We reported data at the 2022 ASCO Annual Meeting from the first three dose levels of the single agent dose escalation, showing that NT219 at doses up to and including 12 mg/kg were well tolerated without DLTs in advanced cancer patients. Furthermore, in addition to the partial response noted above, we reported that stable disease was observed in three out of four patients with CRC while all were characterized with mutated KRAS.

We plan to commence the third portion (Part C) of the study subsequent to completion of Part B. Part C will include the administration of NT219 at its recommend Phase 2 dose in combination with standard dose cetuximab in patients with recurrent/metastatic squamous cell carcinoma of the head and neck (SCCHN). This part of the study will evaluate preliminary efficacy and safety in a larger cohort of patients. The planning of further Phase 2 studies will be a function of the data from first in human studies. Based on *erb-b* pathway relevance, as well as data on the relevant inhibition of the dual pathways being evaluated, besides SCCHN, NSCLC, pancreatic cancer, and melanoma are also candidates for which we may conduct future Phase 2 studies.

***Competitive Oncology Drugs in Development that Target IRS1/2 or STAT3***

We are not familiar with other therapeutic candidates acting as dual inhibitor of both IRS1/2 and STAT3. Similarly, we are not aware of any other inhibitor of IRS1/2 in active development. However, there are some clinical-stage STAT3 inhibitors, such as danvatirsen, an antisense nucleotide developed by AstraZeneca for pancreatic, NSCLC and mismatch repair deficient colorectal cancers. Although they are not direct competitors of NT219, inhibitors of Insulin Like Growth Factor 1 Receptor (IGF1R) acting upstream of IRS1/2, such as dalotuzumab, developed by Merck & Co for pancreatic cancer, or ganitumab, developed by Amgen in Ewing Sarcoma, are also closely monitored.

**IM1240**

***Background***

For decades, cancer research has been heavily focused on therapeutic modalities directly targeting cancer cells such as radio- or chemotherapy. Despite providing significant improvement of patient outcome, these treatments have significant limitations related to poor tolerability and acquired resistance mechanisms. More recently, further to a better understanding of tumor escape mechanisms, the rise of immuno-oncology approaches opened new horizons. Immune checkpoint inhibitors designed to release effector immune cells from inhibitory signals delivered by cancer cells and the tumor microenvironment have become the backbone therapy in numerous oncology indications and new strategies have been explored to redirect immune cells towards malignant cancer cells.

T cell engagers is an emerging therapeutic modality that consists in linking tumor infiltrating T cells to target tumor cells via antibody-derived products. By binding to a tumor associated antigen (TAA) with one arm and to the CD3 molecule associated with the T cell receptor (TCR) with the other arm, T cell engagers promote the formation of a cytolytic synapse between T cells and cancer cells leading to destruction of the tumor. Conceptually, any cytotoxic immune effector cell can be engaged by this modality including CD8+ T cells, gamma-delta T cells, NK and NKT cells. In this context, T-cell engagement is independent of the specific recognition of a peptide-MHC complex and in principle, every tumor infiltrating T cell with cytotoxic potential is expected to be activated by T cell engagers. The first success with this new approach came from blinatumomab, a CD19/CD3 bispecific that achieved 40% complete response in patients with acute lymphocytic leukemia (ALL) leading to accelerated approval by the FDA in 2018. Based on our knowledge, multiple T cell engagers are currently being explored in advanced clinical trials.

The increase in T cell engagers or more generally immuno-engagers that are in development is directly related to the progress in protein engineering technologies allowing to derive new antibody-based compounds with distinctive features. Compared to monospecific monoclonal antibodies, multi-specific constructs potentiate antibody-mediated effects, for example they can be used to "crosslink" immune cells and cancer cells expressing specific TAAs, they can bind two epitopes on the same target to avoid resistance or they can interact with several TAAs or several immune cells. Numerous formats of bispecific antibody-based therapeutic candidates are being investigated in clinical studies and the possibilities are further increasing with the emergence of tri- and multi-specific compounds some of which have already shown potential promising data and are entering clinical testing. The main field for all of these compounds is oncology, and in general, at least one of the specificities is intended to redirect T- or NK cells. Based on new research and clinical insights, the rationale for dual engagement of T and NK cells is attaining stronger recognition and this is one of the main features of IM1240.

***Product description***

IM1240 is a conditionally-activated tri-specific antibody that engages both T cells (through its anti-CD3 moiety) and NK cells (through its anti-NK cell inhibitor moiety) to mount a strong, localized immune response within the tumor microenvironment. The third arm of the molecule specifically targets 5T4, a well described TAA that is expressed on a variety of solid tumors and is correlated with advanced disease, increased invasiveness and poor clinical outcome. This compound is distinguished from other multi-specific therapies targeting 5T4<sup>+</sup> tumors by its cleavable capping technology that is applied to the anti-CD3 moiety, which confines the compound's therapeutic activity to the tumor microenvironment, and thereby is expected to increase the therapeutic index in patients.

![](image_003.jpg)

T cell engagement is achieved through binding CD3 using a commercially validated antibody fragment. CD3 is protein complex associated to the T cell receptor on the surface of both CD4<sup>+</sup> and CD8<sup>+</sup> T cells. Agonistic binding to CD3ε triggers T cell activation that is mediated by Lck/Zap70 and leads to downstream activation of multiple signaling pathways such as NK-kB or NF-AT. Anti-CD3 is the backbone of the vast majority of bispecific T cell engagers. Three were already approved by the US FDA (Blinatumomab, CD3×CD19 in 2014 for acute lymphoblastic leukemia, Tebentafusp, CD3×IMCgp100 in 2022 for Uveal Melanoma, teclistamab, CD3xBCMA in 2022 for Multiple Myeloma) and a large number other BiTE are currently in clinical development.

Activation of NK cells by IM1240 is achieved through the blockade of the interaction between an NK cell inhibitory receptor and its target on cancer cells. Disruption of this inhibitory interaction with an antibody, releases the effector function of NK cells in a similar way to immune checkpoint inhibitors targeting PD1 or PDL1.

The third modality of IM1240 is directed towards 5T4 (also known as trophoblast glycoprotein (TPBG)), using a proprietary set of complementarity-determining regions (CDRs). 5T4 is an oncofetal surface protein that is not found on adult healthy tissues but is abnormally expressed in several cancer types. This specific expression pattern as well as the correlation with poor prognosis in different cancer diseases such as colorectal, ovarian or gastric cancers makes it an ideal TAA for various therapeutic approaches.

In addition to its unique combination of 5T4, CD3 and NK cells binding arms, IM1240 is also differentiated from competing products with a cleavable cap. This cap is attached to the anti-CD3 moiety and blocks its interaction with circulating CD3 positive T cells thereby impeding potential off-tumor adverse reactions. The cap is designed to be cleaved-off by specific enzymes termed proteases that are commonly expressed at the tumor microenvironment. Upon removal of this cap, the anti-CD3 moiety of the molecule is freed to bind and activate T lymphocytes via CD3.

***Preclinical data***

IM1240 is the outcome of significant lead optimization work to maximize the compounds properties in terms of affinity, efficacy and safety. The different tribodies demonstrated high affinity for 5T4, CD3 and NK cell inhibitory receptor and efficient anti-tumor responses in in vitro killing assays.

The benefit of the dual T cell/ NK cell activation was demonstrated in cytotoxicity assays against various 5T4<sup>+</sup> cancer cells lines, where the 5T4xCD3xNK inhibitory receptor format was much more potent than the 5T4xCD3 variant.

The relevance and robustness of the cleavable capping system was investigated in xenograft models using immune-competent mice. As shown below, sustained tumor regression was achieved with the tribody harboring a cleavable cap. The effect was superior to a variant with no cap, illustrating the detrimental effect of peripheral engagement of tumor-irrelevant T cells. The efficacy was completely lost using a variant with non-cleavable cap in which the CD3 arm of IM1240 remained blocked.

![](image_004.jpg)

Additional preclinical investigations are ongoing to complete the functional characterization of the compound and, in parallel, CMC activities have been initiated to produce the first GMP-batch required to conduct IND-enabling studies.

**Consensi**

In May 2018, Consensi was approved by the FDA for patients suffering from hypertension and osteoarthritis for whom treatment with amlodipine for hypertension and celecoxib for the treatment of osteoarthritis is appropriate.

We had previously entered into a number of agreements in connection with the licensing, commercialization, manufacturing, marketing and distribution of Consensi in the United States and in several territories in Asia (subject to regulatory approval in such territories). We commenced commercial sales of Consensi in the United States in May 2020, but COVID-19 adversely impacted the launch of Consensi in the United States and the Company's distributor did not achieve significant sales in the U.S. In October 2021, the Company terminated the distribution agreement with the distributor for Consensi in the United States and engaged an advisor to assist with a search for an alternative distributor for Consensi in the U.S. market. However, despite our efforts to identify an alternative distributor for Consensi in the U.S., we concluded that our continued efforts to commercialize Consensi, both inside and outside the U.S. market, were not likely to generate significant revenue and achieve profitability in the near term and, in order to reduce the cost of maintaining the product, we decided to discontinue the manufacturing and distribution of Consensi in the year ended December 31, 2021, and allocate the funds initially designated to commercialize Consensi to our core oncology activities. Accordingly, during 2021, we also terminated the agreements for Consensi concerning the territories of South Korea and China.

Accordingly, we also ceased our operations related to our engagements with Dexcel, which had manufactured batches of Consensi for sale of the drug in the United States by our former U.S. distributor, and in September 2022, we signed a termination and mutual release agreement with Dexcel, according to which the parties agreed to terminate all agreements entered into between them. Under the agreement we assigned to Dexcel all intellectual property rights with respect to Consensi. In addition, the license that was granted to Dexcel to certain data to enable Dexcel to continue developing and/or commercializing Consensi became perpetual. We also assigned to Dexcel all of our rights in the joint intellectual property developed by Dexcel under our previous development services agreement with Dexcel, subject to royalty payments based on net sales of all Consensi sold by Dexcel or any third party on its behalf.

**Intellectual Property**

***Patents, trademarks and licenses and market exclusivity***

Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. We also rely on our trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position. We vigorously defend our intellectual property to preserve our rights and gain the benefit of our technological investments. Our business is not dependent, however, upon any single patent, trademark or contract. See "Item 3. Key Information – D. Risk Factors – Risks Related to Intellectual Property".

**<u>CM24</u>**

FameWave's patent and patent application portfolio, covering the entire CEACAM1 antibody termed CM24 and other antibodies and uses thereof, includes five patent families, covering anti CEACAM1 antibodies and their uses in the treatment of cancer and other diseases.

● *Patent Family 1* relates to anti-human CEACAM1 antibodies, hybridoma cells producing these antibodies and methods of using the antibodies. United States patents as well as European counterparts were granted, as well as patents in Brazil, Canada, China, Israel, Japan, Korea and Russia, all of which have a maximum term of April 28, 2030. The European patents were validated in France; Germany; Ireland; Italy; The Netherlands; Poland; Spain; Switzerland; and United Kingdom.

● *Patent Family 2* relates to method of diagnosing melanoma or monitoring progression of melanoma, the method comprising determining a level of human CEACAM1 on isolated lymphocytes of a human subject in need thereof, wherein an upregulation of said level of CEACAM1 above a predetermined threshold is indicative of melanoma or stage thereof in said subject. Patents were granted in Israel and Europe. The European patent was validated in United Kingdom, Ireland, The Netherlands, Germany, Spain, Italy, France and Switzerland. All granted patents have a maximum term of July 20, 2030.

● *Patent Family 3* relates to antibodies (in particular chimeric antibodies) as well as molecules having at least the antigen-binding portion of an antibody against the human protein CEACAM1. A United States patent as well as European counterparts were granted and divisional applications are pending. The European patents are validated in Germany, France, Spain, Italy, United Kingdom, Ireland, The Netherlands, Poland and Switzerland. Patents were also granted in Brazil, Canada, China, Hong Kong, India, Israel, Japan, Korea and Russia. The patents of this family have a maximum term of October 9, 2032, except for the U.S. patent that has a maximum term of May 22, 2030.

● *Patent Family 4* relates to compositions comprising anti-human CEACAM1 antibodies, compositions comprising antibodies capable of inhibiting or blocking the interaction between PD-1 and its ligands, and methods for their combined use in treating cancer. Patents have been granted in the United States, Europe, Canada, China, Japan, Korea, Mexico and Russia. The European patent was validated in United Kingdom, Ireland, The Netherlands, Germany, Spain, Italy, France, Switzerland and Poland. These patents have a maximum term of November 24, 2034. Patent applications are pending in Europe (divisional), Brazil and India.

● *Patent Family 5* relates to humanized antibodies, capable of specific binding to human CEACAM1 molecules containing human-to-murine back-mutations in non-CDR variable regions, and their encoding polynucleotide sequences. Patents have been granted in the United States, Europe, Canada, China, Eurasia (validated in Russia) Israel, Japan Korea and Mexico with a maximum term of April 26, 2035. The European patent was validated in United Kingdom, Ireland, The Netherlands, Germany, Spain, Italy, France, Switzerland and Poland. Divisional applications are pending in the United States and Mexico and national phase applications are pending in Brazil, Canada, India and Korea.

 

***License Agreement with Tel HaShomer***

On April 16, 2012, cCAM entered into a license agreement with THM and Ramot at Tel Aviv University Ltd. ("Ramot"), which was effective as of May 25, 2010, pursuant to which THM and Ramot granted cCAM a worldwide, royalty-bearing, exclusive license to develop, manufacture, produce, market and sell any biopharmaceutical product and/or diagnostic product using patents and inventions owned by THM and Ramot in connection with uses of the glycoprotein CEACAM1 (the "THM License Agreement"). The THM License Agreement was subsequently amended in 2013 and in 2015.

In conjunction with the closing of the reversion agreement amongst MSD, cCAM and FameWave, the parties executed an Assignment and Assumption Agreement by and between FameWave and cCAM (an MSD subsidiary), according to which cCAM assigned to FameWave all its rights, title and interest in, to and under the License Agreement, which Assignment and Assumption Agreement was countersigned by each of Ramot and THM, as a condition for closing of such reversion agreement (defined as the transfer of those certain assets from cCAM and MSD to FameWave).

Under the terms of the THM License Agreement, THM and Ramot retain ownership of the licensed information (defined as the patents and inventions licensed under the License Agreement). However, FameWave will own all rights to any data and information created and/or generated by cCAM and subsequently by FameWave, whether or not its development is based on the licensed information, including any proprietary intellectual or industrial property rights. FameWave and THM and/or Ramot will jointly own all rights to any data and information mutually created and/or generated by FameWave together with THS/Ramot/Sheba employees or agents, or TAU's students, employees or agents.

FameWave has the right to grant sub-licenses to third parties in accordance with the terms set forth in the THM License Agreement. THM and Ramot retain the right to use the licensed information solely for academic and/or scholarly purposes, provided that such use does not harm and/or expose FameWave's confidential information.

In consideration for the license grant, FameWave agreed to pay to THM an annual license fee, royalties based on a percentage of "Net Sales", a percentage of the sales-based sublicense fees, and a percentage of the sublicense fees. Additionally, FameWave has undertaken to pay certain milestone payments and a percentage of all consideration received by FameWave or its shareholders as a result of or in connection with an exit event (as defined). Finally, THM also received an assignable warrant to purchase, upon the closing of an IPO of FameWave, ordinary shares of FameWave, at a price equal to a certain percentage of the forecast initial market value of FameWave for each share as was determined, prior to the IPO, for the purpose of the IPO.

FameWave agreed to bear sole responsibility and payment obligations for any damage caused by or on behalf of FameWave or any sublicensee as a result of or in connection with the THM License Agreement and/or the exercise of the license. FameWave is also required to indemnify THM, Sheba, TAU and Ramot, and their respective employees, agents and representatives, from and against any and all loss, liability, claims, damages and expenses (including legal costs and attorneys' fees) of whatever kind or nature by a third-party that arise out of and/or result from the THM License Agreement and/or the exercise of the license, or to the extent that they are based on a claim that the licensed information, the products or other material produced by FameWave infringes any third-party's intellectual property rights including copyright, trade secret, patent, or trademark.

Pursuant to the THM License Agreement, FameWave undertook to develop, manufacture, sell and market products pursuant to the milestones and time schedule attached to the THM License Agreement. FameWave is required to bear all costs and fees incurred prior to and during the term of the THM License Agreement, in connection with the preparation, filing, maintenance, prosecution and the like of any patents deemed necessary to protect the licensed information, and in case of third-party infringement, FameWave is obligated, at its expense, to institute, prosecute and control any action or proceeding with respect to such infringement.

THM is entitled to appoint an observer to FameWave's board of directors who has all the rights of any other director of FameWave save for the right to vote. To date, THM has not acted on this right.

FameWave has agreed to purchase and maintain, at its own expense, insurance which covers its liability pursuant to the THM License Agreement, in its name and naming the indemnified parties as additional insured parties.

The term of the THM License Agreement continues on a product-by-product and country-by-country basis, until the later of (i) the date of expiry of the last of the licensed patents in such country; or (ii) the expiry of a period of 15 years from the first commercial sale in such country.

THM and Ramot may terminate the THM License Agreement and/or the license if (i) the first commercial sale of the product has not been made within two years from FDA or CE marketing approval; (ii) FameWave breaches any of its obligations under the THM License Agreement and such breach is not cured within 60-90 days, depending on the materiality of the breach; (iii) FameWave breaches any of FameWave's obligations under the THM License Agreement, and such breach remains uncured for 90 days after written notice; (iv) FameWave becomes insolvent, or petitions are filed against it under insolvency laws; (v) FameWave has ceased to carry on business as an ongoing concern; or (vi) FameWave has challenged, challenges, or causes any third-party to challenge, the intellectual property rights or other rights or THM or Ramot to the licensed information anywhere in the world.

Upon termination of the THM License Agreement, other than due to expiration of the THM License Agreement, all rights granted to FameWace revert to THM and Ramot and FameWave will not be entitled to make any further use in the licensed information. The THM License Agreement is governed by the laws of the State of Israel.

**<u>NT219</u>**

TyrNovo's patent and patent application portfolio, covering NT219 and other compounds, includes six patent families, covering compounds that modulate protein kinase signaling and their use in treatment of protein kinase related disorders, including cancer and neurodegenerative disorders.

● Patent Family 1 relates to compounds modulating the insulin-like growth factor receptor signaling and methods of using these compounds as chemotherapeutic agents for the treatment of protein kinase related disorders, in particular cancer. Patents were granted in Europe and the United States, and have a maximum term of December 4, 2027, April 2, 2028, respectively. The European patent was validated in France, Germany, Switzerland and the United Kingdom.

● Patent Family 2 also relates to compounds modulating the insulin-like growth factor receptor signaling and methods of using these compounds as chemotherapeutic agents for the treatment of protein kinase related disorders, in particular cancer, and specifically discloses and claims NT219. Patents were granted in Europe and Israel, and have a maximum term of June 7, 2029, and in the United States, with a maximum term of April 2, 2028. The European patent was validated in France, Germany, Italy, The Netherlands, Spain, Switzerland, and the United Kingdom.

● Patent Family 3 relates to compounds having a benzo[e][1,3]thiazin-7-one core and methods of using these compounds as chemotherapeutic agents for the treatment of protein kinase related disorders, in particular cancer. Patents were granted in Europe and the United States, with a maximum term of December 27, 2031, and April 9, 2032, respectively. The European patent was validated in France, Germany, Italy, The Netherlands, Spain, Switzerland, and the United Kingdom.

● Patent Family 4 relates to combinations of the compounds disclosed in Patent Families 1-3, acting as dual modulators of Insulin Receptor Substrate (IRS) and signal transducer and activator of transcription 3 (STAT3), with various targeted drug classes (inhibitors of Epidermal Growth Factor Receptor (EGFR), mTOR; mitogen-activated protein kinase (MEK) or mutated B-Raf), as well as chemotherapeutic agents (Gemcitabine, 5-FU, Irinotecan and Oxaliplatin), and use of such combinations for the treatment of cancer. Patents were granted in Australia, China, Europe and Israel, and have a maximum term of February 4, 2036, and in the United States, with a maximum term of August 12, 2036. Patent applications are pending in Brazil, Canada, China, Europe, Japan, Korea and the United States. The European patent was validated in Switzerland, Germany, Spain, France, Great Britain, Ireland, Italy and The Netherlands.

● Patent Family 5 relates to specific combinations of the compounds disclosed in Patent Families 1-3, with various antibodies against programmed cell death 1 (PD-1) protein and/or anti-programmed cell death protein 1 ligand (PD-L1). Patent applications are pending in Brazil, Canada, China, Europe, Israel, Japan, Korea, Mexico, Russia and the United States. Any patent issuing from these applications will have a maximum patent term of November 16, 2037.

● Patent Family 6 relates to an isolated substantially pure trans isomer of NT219, methods for its preparation and use thereof in treating cancer. An international PCT patent application is pending as well as a Chinese patent application. Any patent issued based on the PCT application will have a maximum patent term of October 3, 2042. Any patent issued based on the Chinese patent application will have a maximum patent term of February 17, 2042.

***Exclusive License Agreement with Yissum***

In August 2013, TyrNovo entered into a license agreement with Yissum, which was subsequently amended in April 2014 and March 2017, pursuant to which Yissum has granted TyrNovo an exclusive license (with the right to sublicense) for the development, use, manufacturing and commercialization of products using certain patents and know-how owned by Yissum and patent applications filed by Yissum in connection with unique inhibitors of the IGF-1R Pathway (the "Yissum License Agreement").

Under the terms of the Yissum License Agreement, Yissum shall retain the ownership of the Licensed Technology (as such term is defined therein). All rights in the results of the activities carried out by TyrNovo or third parties in the development of these products (and certain results obtained under material transfer agreements signed by TyrNovo and Yissum (the "TyrNovo MTAs")) shall be solely owned by TyrNovo (unless an employee of the Hebrew University of Jerusalem or each of its branches is an inventor of any of the patents claiming such results, in which case they shall be owned jointly by Yissum and TyrNovo). TyrNovo has the right to grant sub-licenses to third parties in accordance with the terms set forth in the Yissum License Agreement.

TyrNovo has agreed to pay Yissum a percentage of "net sales" as royalties and to pay Yissum a percentage of the income that it receives from granting sub-licenses to third parties. Additionally, in the event of an M&A prior to an IPO, TyrNovo will be required to pay Yissum a percentage of the proceeds received under such M&A. In the event of an IPO, then prior to the closing of such IPO, TyrNovo shall issue to Yissum such number of ordinary shares equal to a certain percentage of all TyrNovo shares. According to the settlement agreement with BIRAD and an amendment to the Yissum license agreement, BIRAD is entitled to receive a portion of Yissum's royalties on net sales.

TyrNovo is required to indemnify Yissum, the Hebrew University of Jerusalem, their directors, employees, executive officers, consultants or representatives and any other persons acting on their behalf under the license against any liability, including product liability, damages, losses, expenses, fees and reasonable legal expenses arising out of TyrNovo's actions or omissions or which derive from its use, development, manufacture, marketing, sale or sublicensing of any licensed product, licensed technology, and certain information obtained under the TyrNovo MTAs, or exercise of the Yissum License Agreement, and the TyrNovo MTAs.

TyrNovo has agreed to maintain, and to add Yissum as an additional insured party with respect to, clinical trials, comprehensive general liability and product liability insurance as well as an insurance policy with respect to the foregoing indemnification prior to the time when it commences clinical trials and concludes its first commercial sale.

The term of the Yissum License Agreement shall expire upon the later of (i) the date of expiration in such country of the last to expire licensed patent included in the licensed technology; or (ii) the end of a period of 15 year of the first commercial sale in such country, while the license granted under the Yissum License Agreement will terminate upon the later of (unless the license has been earlier terminated or expired) (i) the date of expiration in such country of the last to expire licensed patent included in the licensed technology; (ii) the date of expiration of any exclusivity on the product granted by a regulatory or government body in such country; or (iii) the end of a period of 15 year of the first commercial sale in such country.

TyrNovo has the right to terminate the Yissum License Agreement upon a prior written notice. Either party has the right to terminate the Yissum License Agreement if the other party is in material breach and has not cured such material breach within a certain number of days as of the receipt of a written notice notifying it of such breach. Additionally, Yissum has the right to terminate the Yissum License Agreement immediately in the event that TyrNovo does not comply with its obligation (following a certain amount of months cure period) to use commercially reasonable efforts to develop and commercialize the products; if an attachment is made over the majority of TyrNovo's assets or if execution proceedings are taken against TyrNovo and are not set aside within a certain amount of days; or if TyrNovo challenges in any forum the validity of one or more of the licensed patents. Upon termination of the Yissum License Agreement, TyrNovo shall assign to Yissum all the results obtained during the development of the product. If Yissum licenses to third parties such results, then TyrNovo shall be entitled to a percentage of the net proceeds actually received by Yissum from such third parties, up to an amount covering TyrNovo's expenses incurred during the development of such assigned results.

**<u>IM1240</u>**

● Patent Family 1 relates to conditionally activated tri-specific antibodies that engage T cells, NK cells, and tumor cells, including the antibody clone identified as IM1240, compositions thereof, and methods of use thereof for treating cancer in a subject in need. The tri-specific antibodies further include a cleavable capping technology for regulating the binding/activation of T cells to within a tumor microenvironment and for extending the half-life of the antibodies. National Phase applications have been entered and are pending in Australia, Brazil, Canada, China, Europe, Israel, India, Japan, the Republic of Korea, Mexico, and the United States. The expected term of any granted national phase application is May 4, 2041, not including patent term extension.

● In addition, we own four additional patent families related to conditionally activated tri-specific antibodies that engage T cells, NK cells and tumor cells including different TAAs with their respective CDRs and compositions thereof, and methods of use thereof for treating cancer as well as GvHD, viral or bacterial infections in a subject in need.

**Collaboration Agreement with Mor Research Applications**

In September 2022, we entered into a research collaboration agreement with Mor Research Applications ("Mor"), the technology transfer subsidiary of Clalit Healthcare Services, which is Israel's largest health maintenance organization (HMO), covering approximately half the population of Israel (52%) (approximately 4.8 million members) and operates 14 hospitals. Pursuant to the collaboration agreement, Mor agreed to provide us, during the term of the agreement, with first access to early-stage projects in the field of oncology, developed by Mor and available for licensing by Mor, that promote innovative technological ideas in the oncology field. We shall be entitled to select up to five projects per year out of such pool of projects (each, a "Selected Project"). We shall be granted an option for an exclusive worldwide license for the development, use and commercialization of a Selected Project (the "Option"). We agreed to provide funding in an amount to be agreed upon, per each Selected Project, not to exceed a certain stipulated amount, to conduct preliminary research, according to a research plan for such Selected Project. Following our receipt of the conclusions of the research, the parties shall have a pre-defined period to conclude the terms of a license agreement for the applicable Selected Project (however, neither party is obligated to enter into such a license agreement). During the term of the Option, Mor shall not offer, hold discussions or enter into a license agreement with any third party with respect to a Selected Project, unless otherwise agreed in writing by the parties.

**Other**

We recently purchased three patent families covering uses of a monoclonal antibody, which we are currently evaluating for their potential for further development, for the purpose of treating cancer and infectious diseases, based on these patents.

 ****

***Market exclusivity***

In the branded pharmaceutical industry, the majority of a branded drug's commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product's sales. The rate of this decline varies by country and by therapeutic category, and the number of generic competitor entrants to the market, among other factors; however, following patent expiration, branded products often continue to have market viability based upon the goodwill of the product name, which typically benefits from trademark protection.

A pharmaceutical brand product's market exclusivity is generally determined by two forms of intellectual property: patent rights held by the brand company and any regulatory forms of exclusivity to which the NDA-holder is entitled.

Patents are a key determinant of market exclusivity for most branded pharmaceuticals. Patents provide the brand company with the right to exclude others from practicing an invention related to the medicine. Patents may cover, among other things, the active ingredient(s), various uses of a drug product, pharmaceutical formulations, drug delivery mechanisms and processes for (or intermediates useful in) the manufacture of products, and polymorphs. Protection for individual products extends for varying periods in accordance with the expiration dates of patents in the various countries. The protection afforded, which may also vary from country to country, depends upon the type of patent, its scope of coverage and the availability of meaningful legal remedies in the country.

Market exclusivity is also sometimes influenced by regulatory exclusivity rights. Many developed countries provide certain non-patent incentives for the development of medicines. For example, the U.S., the European Union and Japan each provide for a minimum period of time after the approval of a new drug during which the regulatory agency may not rely upon the data of the original party who developed the drug to approve a competitor's generic copy. Regulatory exclusivity rights are also available in certain markets as incentives for research on new indications, on orphan drugs and on medicines useful in treating pediatric patients. Regulatory exclusivity rights are independent of any patent rights and can be particularly important when a drug lacks broad patent protection. Most regulatory forms of exclusivity, however, do not prevent a competitor from gaining regulatory approval prior to the expiration of regulatory data exclusivity on the basis of the competitor's own safety and efficacy data on its drug, even when that drug is identical to that marketed by the innovator.

It is not possible to predict the length of market exclusivity for any of our branded products with certainty because of the complex interaction between patent and regulatory forms of exclusivity, and inherent uncertainties concerning patent litigation. There can be no assurance that a particular product will enjoy market exclusivity for the full period of time that we currently estimate or that the exclusivity will be limited to the estimate.

**Government Regulations and Funding**

Pharmaceutical companies are subject to extensive regulation by foreign, federal, state and local agencies, such as the FDA in the U.S., the Ministry of Health in Israel, or the various European regulatory authorities. The manufacture, distribution, marketing and sale of pharmaceutical products are subject to government regulation in the U.S. and various foreign countries. Additionally, in the U.S., we must follow the rules and regulations established by the FDA requiring the presentation of data indicating that our products are safe and efficacious and are manufactured in accordance with cGMP regulations. If we do not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing applications or allow us to manufacture or market our products, our products may be subject to detention and/or seizure, shipments of our products could be refused entry into the United States, and we may be criminally prosecuted. We and our manufacturers and clinical research organizations may also be subject to regulations under other foreign, federal, state and local laws, including, but not limited to, the U.S. Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act and import, export and customs regulations as well as the laws and regulations of other countries. As a result, pharmaceutical companies must ensure their compliance with the Foreign Corrupt Practices Act and federal healthcare fraud and abuse laws, including the False Claims Act.

These regulatory requirements impact our operations and differ from one country to another, so that securing the applicable regulatory approvals of one country does not necessarily imply the approval of another country. The approval procedures involve high costs and are manpower intensive, usually extend over many years and require highly skilled and professional resources.

***U.S. Food and Drug Administration Approval Process***

The steps usually required to be taken before a new drug may be marketed in the U.S. generally include:

● completion of preclinical laboratory and animal testing;

● completion of required chemistry, manufacturing and controls testing;

● the submission to the FDA of an IND application, which must be evaluated and found acceptable by the FDA before human clinical trials may commence;

● performance of (or reference to) adequate and well-controlled human clinical trials and studies to establish the safety, pharmacokinetics and efficacy of the proposed drug for its intended use;

● submission and approval of an NDA; and

● agreement with FDA of the language on the package insert.

Clinical studies are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter the study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring safety, and the efficacy criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND process.

In all the countries that are signatories of the Helsinki Declaration (including Israel), the prerequisite for conducting clinical trials (on human subjects) is securing the preliminary approval of the competent authorities of that country to conduct medical experiments on human subjects in compliance with the other principles established by the Helsinki Declaration.

The clinical testing of a drug product candidate generally is conducted in three sequential phases prior to approval, but the phases may overlap or be combined. A fourth, or post approval, phase may include additional clinical studies. The phases are generally as follows:

● *Phase I.* The Phase I clinical trial is generally conducted on 8-20 healthy volunteers. Phase I clinical trials typically involve administering escalating doses of the therapeutic candidate in the healthy volunteers to assess safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, such as cancer, and especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients;

● *Phase II.* The Phase II clinical trial involves administering the therapeutic candidate to a small population of sick patients to identify possible adverse events, or safety risks, and preliminary indicia of efficacy for the targeted disease or medical condition;

● *Phase III.* The Phase III clinical trial usually comprises multi-center, double-blind controlled trials in hundreds or even thousands of subjects at various sites to assess as fully as possible both the safety and the effectiveness of a drug. Specifically, the Phase III clinical trial is intended to make a comparison between the therapeutic candidate and the standard therapy and/or placebo. These trials are intended to establish the overall benefit/risk profile of the product and to provide an adequate basis for product labeling; and

● *Phase IV*. In some cases, the FDA may condition approval of an NDA for a product candidate on the sponsor's agreement to conduct additional clinical trials after approval. In other cases, a sponsor may voluntarily conduct additional clinical trials after approval to gain more information about the drug. Such post-approval studies are typically referred to as Phase IV clinical trials.

Clinical trials must be conducted in accordance with the FDA's good clinical practices, or GCP, requirements. The FDA may order the temporary or permanent discontinuation of a clinical study at any time or impose other sanctions if it believes that the clinical study is not being conducted in accordance with FDA requirements or that the participants are being exposed to an unacceptable health risk. An institutional review board, or IRB, generally must approve the clinical trial design and patient informed consent at study sites that the IRB oversees and also may halt a study, either temporarily or permanently, for failure to comply with the IRB's requirements, or may impose other conditions. Additionally, some clinical studies, mostly in certain types of Phase III clinical trial studies where it is required under the applicable clinical trial protocol, are overseen by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board or committee. This group recommends whether or not a trial may move forward at designated check points based on access to certain data from the study. The clinical study sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

As a therapeutic candidate matures through the clinical testing phases, manufacturing processes are further defined, refined, controlled, and eventually validated around the time that the Phase III clinical trial is completed. The level of control and validation required by the FDA increases as clinical studies progress. We and the third-party manufacturers on which we rely for the manufacture of our therapeutic candidates and their respective components (including the APIs) are subject to requirements that drugs be manufactured, packaged and labeled in conformity with cGMP. To comply with cGMP requirements, manufacturers must continue to spend time, money and effort to meet requirements relating to personnel, facilities, equipment, production and process, labeling and packaging, quality control, recordkeeping and other requirements.

Assuming completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment of a user fee, unless waived. An NDA includes all relevant data available from pertinent nonclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information on the chemistry, manufacture, controls and proposed labeling, among other things. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the product candidate for its intended use to the satisfaction of the FDA.

If an NDA submission is accepted for filing, the FDA begins an in-depth review of the NDA. Under the Prescription Drug User Fee Act, or PDUFA, the FDA's goal is to complete its initial review and respond to the applicant within ten months of submission, unless the application relates to an unmet medical need, or is for a serious or life-threatening indication, in which case the goal may be within six months of NDA submission. However, PDUFA goal dates are not legal mandates and the FDA response often occurs several months beyond the original PDUFA goal date. Further, the review process and the target response date under PDUFA may be extended if the FDA requests or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the NDA. The NDA review process can, accordingly, be very lengthy. During its review of an NDA, the FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it typically follows such recommendations. Data from clinical studies are not always conclusive and the FDA and/or any advisory committee it appoints may interpret data differently than the applicant.

After the FDA evaluates the NDA and performs a pre-approval inspection, or "PAI", on manufacturing facilities where the drug product and/or its API will be produced, the FDA will either approve commercial marketing of the therapeutic candidate with prescribing information for specific indications or issue a complete response letter indicating that the application is not ready for approval and stating the conditions that must be met in order to secure approval of the NDA. If the complete response letter requires additional data and the applicant subsequently submits that data, the FDA nevertheless may ultimately decide that the NDA does not satisfy its criteria for approval. The FDA could also approve the NDA with a Risk Evaluation and Mitigation Strategies, or REMS, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-marketing testing. Such post-marketing testing may include Phase IV clinical trials and surveillance to further assess and monitor the product's safety and efficacy after approval. Regulatory approval of drug product candidates for serious or life-threatening indications may require that participants in clinical studies be followed for long periods to determine the overall survival benefit of the drug product candidate.

If the FDA approves one of our therapeutic candidates, we will be required to comply with a number of post-approval regulatory requirements. We would be required to report, among other things, certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling for any of our therapeutic candidates. Also, quality control and manufacturing procedures must conform to cGMP for approved drug products after our NDA is approved, if at all, and the FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes extensive procedural, substantive and recordkeeping requirements. If we seek to make certain changes to an approved product, such as certain manufacturing changes, we will need FDA review and approval before the change can be implemented. For example, if we change the manufacturer of a product or our API, the FDA may require stability or other data from the new manufacturer, and such data will take time and are costly to generate, and the delay associated with generating these data may cause interruptions in our ability to meet commercial demand, if any. While physicians may use products for indications that have not been approved by the FDA, we may not label or promote the product for an indication that has not been approved. Securing FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product's safety and efficacy in the new indication. Even if such studies are conducted, the FDA may not approve any change in a timely fashion, or at all.

***Section 505(b)(1) New Drug Applications***

A Section 505(b)(1) NDA or BLA, known as the "full NDA or BLA," is an application that contains full reports of investigations of safety and efficacy performed by the drug sponsor. CM24 and NT219 are not a combination therapeutic candidate or a therapeutic candidate that is comprised of an API that has already undergone some or all necessary human clinical trials in another therapeutic candidate. Therefore, if CM24 or NT219 are approved for human clinical trials by the FDA or any foreign regulatory agency and show adequate safety and efficacy data in human clinical trials, we anticipate that CM24 and NT219 will require a 505(b)(1) BLA or NDA.

***Special Protocol Assessment***

The special protocol assessment, or SPA, process is designed to facilitate the FDA's review and approval of drugs by allowing the FDA to evaluate the proposed design and size of Phase III clinical trials that are intended to form the primary basis for determining a drug product's efficacy. Upon specific request by a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor's questions regarding, among other things, primary efficacy endpoints, trial design and data analysis plans, within 45 days of receipt of the request.

The FDA ultimately assesses whether the protocol design and planned analysis of the trial are acceptable to support regulatory approval of the therapeutic candidate with respect to effectiveness of the indication studied. All agreements and disagreements between the FDA and the sponsor regarding an SPA must be clearly documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA.

Even if the FDA agrees to the design, execution and analyses proposed in protocols reviewed under the SPA process, the FDA may revoke or alter its agreement, such as under the following circumstances:

● public health concerns emerge that were unrecognized at the time of the protocol assessment, or the director of the review division determines that a substantial scientific issue essential to determining safety or efficacy has been identified after testing has begun;

● a sponsor fails to follow a protocol that was agreed upon with the FDA; or

● the relevant data, assumptions or information provided by the sponsor in a request for SPA change, are found to be false statements or misstatements, or are found to omit relevant facts.

In addition, a documented SPA may be modified, and such modification will be deemed binding on the FDA review division, except under the circumstances described above, if the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study.

***European Regulatory Authorities***

In the event that we wish to perform trials in Europe or market or sell our therapeutic candidates in Europe, we must apply to an applicable country's regulatory authorities with a request to approve our therapeutic candidates according to the Mutual Recognition Procedure (MRP), which is a procedure applied by European Directive No. 2001/83/EC that enables access to medicinal products (drugs) in 27 countries of the European Union. The MRP approval process requires the applicant to receive approval in one of the EU countries and then apply for recognition of the other member countries to acknowledge the approval within their territory. Our therapeutic candidates, such as NT219 or CM24, may be approved through either the MRP or through the Centralized Process in which a single application provides approval for all EU member states.

***The Israeli Ministry of Health***

Our operations are subject to permits from the Israeli Ministry of Health as follows:

First, pertaining to the import of drugs and/or raw materials, we are required to apply to the Israeli Ministry of Health ("IMOH") for approval from its medical devices and accessories unit (AMAR).

Second, pertaining to research and development, when we conduct trials in human in Israel, the trials will be subject to the approval of the Helsinki Committee, which acts by force of the Public Health Regulations (Trials in Human Beings), 1980 (Trials in Human Subjects Regulations), as amended, and according to the guidelines of the Helsinki declaration, or any other approval required by the Ministry of Health. According to the Trials in Human Beings Regulations, the Helsinki Committee must plan and approve every experimental process that involves human beings. The Helsinki Committee is an institutional committee that acts in the medical institution in Israel where the trial is performed and is the party that approves and supervises the entire trial process. In practice, the physician, who is the principal investigator in the trial, submits an application that includes, among other documents, the investigator brochure, clinical trial protocol and the informed consent form, on behalf of the requesting party. This committee may request changes and/or additional documents. Applications which are approved by the Helsinki Committee are forwarded to the "high committee" at the IMOH, which reviews all documents. The IMOH may request additional changes or documents (Investigational Medicinal Product Document, or, for short IMPD, which includes details regarding the manufacturing testing and quality of the drug to be tested) as part of its approval process. The IMOH sends its decision, along with that of the IMOH, to the manager of the medical institute for approval. According to the procedure for medical trials in human beings of the IMOH, the Helsinki Committee will not approve performance of a medical trial, unless it is absolutely convinced that the following conditions, among others, are fulfilled: (a) the expected benefits for the participant in the medical trial and to the requesting party justify the risk and the inconvenience involved in the medical trial to its participant; (b) the available medical and scientific information justifies the performance to the requested medical trial; (c) the medical trial is planned in a scientific manner that enables a solution to the tested question and is described in a clear, detailed and precise manner in the protocol of the medical trial, conforming with the Helsinki principles declaration; (d) the risk to the participant in the medical trial is as minimal as possible; (e) optimal monitoring and follow-up of the participant in the medical trial; (f) the initiator, the Principal Investigator and the medical institute are capable and undertake to allocate the resources required for adequate execution of the medical trial, including qualified personnel and required equipment; (g) the Principal Investigator, the sub-investigator(s) have the appropriate training in the conduct of clinical trials and have necessary professional experience in conducting such said clinical trials; the investigators will follow GCP guidelines, the IMOH and local SOPs; and (h) the nature of the commercial agreement with the Principal Investigator and the medical institute does not impair the adequate performance of the medical trial. The IMOH also licenses and regulates the marketing of pharmaceuticals in Israel, requiring the relevant pharmaceutical to meet internationally recognized cGMP standards.

Manufacturing of NT219 is conducted by service providers operating in Denmark and Italy and, as such, these service providers are periodically audited by the local medicine agencies, in accordance with the laws and regulations pertaining to cGMP of investigational products.

***Pervasive and continuing regulation in the U.S.***

After a drug is approved for marketing and enters the marketplace, numerous regulatory requirements continue to apply. These include, but are not limited to:

● cGMP regulations require manufacturers, including third-party manufacturers, to follow stringent requirements for the methods, facilities and controls used in manufacturing, processing and packing of a drug product;

● labeling, promotion, and advertising regulations and the FDA prohibitions against the promotion of drugs for unapproved uses (known as off-label uses), as well as requirements to provide adequate information on both risks and benefits during promotion of the drug;

● approval of product modifications or use of a drug for an indication other than approved in an NDA and/or BLA;

● adverse drug experience regulations, which require us to report information on adverse events;

● post-market testing and surveillance requirements, including Phase IV trials, when necessary for public health protection, or to provide additional safety and effectiveness data for the drug;

● additional FDA reviews and approvals after the initial approval, particularly for any modification in conditions of use, active ingredient(s), route of administration, dosage form, strength or bioavailability, which may require submission accompanied by additional clinical data (which may require additional clinical studies) necessary to demonstrate the safety and effectiveness of the product with the proposed changes; and

● the FDA's recall authority, whereby it can ask, or under certain conditions order, drug manufacturers to recall from the market a product that is in violation of governing laws and regulation.

***Other U.S. Healthcare Laws and Compliance Requirements***

For products distributed in the United States, we are also subject to additional healthcare regulation and enforcement by the federal government and the states in which we conduct our business. Potentially applicable federal and state healthcare laws and regulations that may affect our business include the following:

● The federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

● The federal Anti-Inducement Law (also known as the Civil Monetary Penalties Law), which prohibits a person from offering or transferring remuneration to a Medicare or State healthcare program beneficiary that the person knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State healthcare program;

● The Ethics in Patient Referrals Act, commonly referred to as the Stark Law, and its corresponding regulations, prohibit physicians from referring patients for designated health services (including outpatient prescription drugs) reimbursed under the Medicare program to entities with which the physicians or their immediate family members have a financial relationship, subject to narrow regulatory exceptions, and prohibits those entities from submitting claims to Medicare for payment of items or services provided to a referred beneficiary;

● The federal False Claims Act imposes criminal and civil penalties, as well as permitting civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

● The so-called federal "Sunshine Act" requires certain pharmaceutical and medical device companies to monitor and report certain payments and other transfers of value to physicians (as defined by such law), certain other healthcare providers, and teaching hospitals as well as ownership and investment interests held by physicians and their immediate family members to CMS for disclosure to the public;

● The Health Insurance Portability and Accountability Act of 1996, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services. This statute also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on certain covered entities (including healthcare providers, health plans, and healthcare clearinghouses), and their business associates that provide services to or on behalf of the covered entity that involve the use or disclosure of individually identifiable health information; and

● Analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws that require pharmaceutical companies to report or disclose pricing or other financial information and to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government.

 

***Reimbursement in the U.S.***

Sales of our oncology therapeutic candidates, if approved, in the United States may depend, in significant part, on the extent to which the approved products will be covered and reimbursed by third-party payers, such as government health programs, commercial insurance and managed health care organizations. Patients who are prescribed treatments for their conditions and providers prescribing treatments generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients and providers are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of therapies in which our products are used. There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. Decisions regarding the extent of coverage and amount of reimbursement to be provided for each of our product candidates will be made on a plan-by-plan basis. One payor's determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our approved product and therapeutic candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

The third-party payers are increasingly challenging the prices charged for medical products and services. Additionally, the containment of health care costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, discount and rebate requirements, and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. If these third-party payers do not consider our drug products to be cost-effective compared to other available therapies, they may not cover our therapeutic candidates, if approved, as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our drug products on a profitable basis.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (the MMA) imposed new requirements for the distribution and pricing of prescription drugs for Medicare beneficiaries and included a major expansion of the prescription drug benefit under Medicare Part D. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage of outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Parts A and B, Part D coverage is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government reimbursement for some of the costs of prescription drugs may increase demand for our Consensi drug product or our therapeutic candidates, if approved, if they are covered by a Part D prescription drug plan. However, any negotiated prices for our Consensi drug product or our therapeutic candidates, if approved, covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain. Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payers.

***The Patient Protection and Affordable Care Act***

On March 23, 2010, President Obama signed the "Patient Protection and Affordable Care Act" (P.L. 111-148) (the "ACA") and on March 30, 2010, he signed the "Health Care and Education Reconciliation Act" (P.L. 111-152), collectively commonly referred to as the "Healthcare Reform Law." The Healthcare Reform Law included a number of new rules regarding health insurance, the provision of healthcare, conditions to reimbursement for healthcare services provided to Medicare and Medicaid patients, and other healthcare policy reforms. Through the law-making process, substantial changes have been and continue to be made to the current system for paying for healthcare in the U.S., including changes made to extend medical benefits to certain Americans who lacked insurance coverage and to contain or reduce healthcare costs (such as by reducing or conditioning reimbursement amounts for healthcare services and drugs, and imposing additional taxes, fees, and rebate obligations on pharmaceutical and medical device companies). This legislation was one of the most comprehensive and significant reforms ever experienced by the U.S. in the healthcare industry and has significantly changed the way healthcare is financed by both governmental and private insurers. This legislation has impacted the scope of healthcare insurance and incentives for consumers and insurance companies, among others. Additionally, the Healthcare Reform Law's provisions were designed to encourage providers to find cost savings in their clinical operations. Pharmaceuticals represent a significant portion of the cost of providing care. This environment has caused changes in the purchasing habits of consumers and providers and resulted in specific attention to the pricing negotiation, product selection and utilization review surrounding pharmaceuticals. This attention may result in our current commercial products, products we may commercialize or promote in the future, and our therapeutic candidates, being chosen less frequently or the pricing being substantially lowered. At this stage, it is difficult to estimate the full extent of the direct or indirect impact of the Healthcare Reform Law on us.

These structural changes could entail further modifications to the existing system of private payors and government programs (such as Medicare, Medicaid, and the State Children's Health Insurance Program), creation of government-sponsored healthcare insurance sources, or some combination of both, as well as other changes. Restructuring the coverage of medical care in the U.S. could impact the reimbursement for prescribed drugs and pharmaceuticals, including our current commercial products, those we and our development or commercialization partners are currently developing or those that we may commercialize or promote in the future. If reimbursement for the products we currently commercialize or promote, any product we may commercialize or promote, or approved therapeutic candidates is substantially reduced or otherwise adversely affected in the future, or rebate obligations associated with them are substantially increased, it could have a material adverse effect on our reputation, business, financial condition or results of operations.

Extending medical benefits to those who currently lack coverage will likely result in substantial costs to the U.S. federal government, which may force significant additional changes to the healthcare system in the U.S. Much of the funding for expanded healthcare coverage may be sought through cost savings. While some of these savings may come from realizing greater efficiencies in delivering care, improving the effectiveness of preventive care and enhancing the overall quality of care, much of the cost savings may come from reducing the cost of care and increased enforcement activities. Cost of care could be reduced further by decreasing the level of reimbursement for medical services or products (including our current commercial products, our development or commercialization partners or any product we may commercialize or promote, or those therapeutic candidates currently being developed by us), or by restricting coverage (and, thereby, utilization) of medical services or products. In either case, a reduction in the utilization of, or reimbursement for our current commercial products, any product we may commercialize or promote, or any therapeutic candidate, or for which we receive marketing approval in the future, could have a material adverse effect on our reputation, business, financial condition or results of operations.

Several states and private entities initially mounted legal challenges to the Healthcare Reform Law, in particular, the ACA, and they continue to litigate various aspects of the legislation. On July 26, 2012, the U.S. Supreme Court generally upheld the provisions of the ACA at issue as constitutional. However, the U.S. Supreme Court held that the legislation improperly required the states to expand their Medicaid programs to cover more individuals. As a result, states have a choice as to whether they will expand the number of individuals covered by their respective state Medicaid programs. Some states have not expanded their Medicaid programs and have chosen to develop other cost-saving and coverage measures to provide care to currently uninsured individuals. Many of these efforts to date have included the institution of Medicaid-managed care programs. The manner in which these cost-saving and coverage measures are implemented could have a material adverse effect on our reputation, business, financial condition or results of operations.

Further, the healthcare regulatory environment has seen significant changes in recent years and is still in flux. Legislative initiatives to modify, limit, replace, or repeal the ACA and judicial challenges have continued. We cannot predict the impact on our business of future legislative and legal challenges to the ACA or other aspects of the Healthcare Reform Law or other changes to the current laws and regulations. The financial impact of U.S. healthcare reform legislation over the next few years will depend on a number of factors, including the policies reflected in implementing regulations and guidance and changes in sales volumes for therapeutics affected by the legislation. From time to time, legislation is drafted, introduced and passed in the U.S. Congress that could significantly change the statutory provisions governing coverage, reimbursement, and marketing of pharmaceutical products. In addition, third-party payor coverage and reimbursement policies are often revised or interpreted in ways that may significantly affect our business and our products.

During his time in office, former President Trump supported the repeal of all or portions of the ACA. President Trump also issued an executive order in which he stated that it is his administration's policy to seek the prompt repeal of the ACA and in which he directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the ACA to the maximum extent permitted by law. Congress has enacted legislation that repeals certain portions of the ACA, including but not limited to the Tax Cuts and Jobs Act, passed in December 2017, which included a provision that eliminates the penalty under the ACA's individual mandate, effective January 1, 2019, as well as the Bipartisan Budget Act of 2018, passed in February 2018, which, among other things, repealed the Independent Payment Advisory Board (which was established by the ACA and was intended to reduce the rate of growth in Medicare spending).

Additionally, in December 2018, a district court in Texas held that the individual mandate is unconstitutional and that the rest of the ACA is, therefore, invalid. On appeal, the Fifth Circuit Court of Appeals affirmed the holding on the individual mandate but remanded the case back to the lower court to reassess whether and how such holding affects the validity of the rest of the ACA. The Fifth Circuit's decision on the individual mandate was appealed to the U.S. Supreme Court. On June 17, 2021, the Supreme Court held that the plaintiffs (comprised of the state of Texas, as well as numerous other states and certain individuals) did not have standing to challenge the constitutionality of the ACA's individual mandate and, accordingly, vacated the Fifth Circuit's decision and instructed the district court to dismiss the case. As a result, the ACA will remain in-effect in its current form for the foreseeable future; however, we cannot predict what additional challenges may arise in the future, the outcome thereof, or the impact any such actions may have on our business.

The Biden administration also introduced various measures in 2021 focusing on healthcare and drug pricing, in particular. For example, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began on February 15, 2021, and remained open through August 15, 2021. 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 ACA. On the legislative front, the American Rescue Plan Act of 2021 was signed into law on March 11, 2021, which, in relevant part, eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug's average manufacturer price, for single source drugs and innovator multiple source drugs, beginning January 1, 2024. And, in July 2021, the Biden administration released an executive order entitled, "Promoting Competition in the American Economy," with multiple provisions aimed at prescription drugs. In response, 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. And, on August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA also authorizes HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. We cannot yet assess the impact that the IRA will have on the pharmaceutical industry, but it is expected to be significant.

There is uncertainty as to what healthcare programs and regulations may be implemented or changed at the federal and/or state level in the U.S. or the effect of any future legislation or regulation. Furthermore, we cannot predict what actions the Biden administration will implement in connection with the Health Reform Law. However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the U.S. in the future, if applicable.

***Grants from the Israel Innovation Authority, or the IIA (formerly known as the Office of the Chief Scientist or the OCS)*.**

Under Innovation Law and IIA's rules and guidelines, a qualifying research and development program may be eligible for grants of up to 50% of the program's approved research and development expenses. In general, the recipient of the grants is required to return the grants by the payment of royalties on the revenues generated from the sale of products (and related services) developed (in whole or in part) according to, or as a result of, a research and development program funded by the IIA (at rates which are determined under the IIA's rules and guidelines, generally of 3% or 5% of revenues, which rates may be increased under certain circumstances) up to the aggregate amount of the total grants received by the IIA (which may be increased under certain circumstances, as described below), plus annual interest (as determined in the IIA's rules and guidelines). Following the full payment of such royalties and interest, there is generally no further liability for royalty payment. Nonetheless, the restrictions under the Innovation Law (as generally specified below) will continue to apply even after repayment of the full amount of royalties payable pursuant to the grants.

The pertinent obligations under the Innovation Law and the IIA's rules and guidelines are as follows:

● Local manufacturing obligation. The terms of the grants under the Innovation Law and the IIA's rules and guidelines provide that a company that received IIA grants, or the Recipient Company, is prohibited from manufacturing products developed using these IIA grants outside of Israel (unless the IIA approved grant program includes a pre-determined portion of manufacturing that may be performed outside Israel) without receiving prior approval from the IIA (except for the transfer of less than 10% of the manufacturing capacity in the aggregate in excess of such pre-approved portion (if any), which requires only a notice). If the Recipient Company receives approval to manufacture products developed with IIA's grants outside of Israel in excess of such pre-approved portion (if any), it will be required to pay increased royalties to the IIA, up to 300% of the grant amount plus accrued interest, depending on the manufacturing volume that is performed outside of Israel in excess of any pre-approved portion. The Recipient Company may also be subject to accelerated royalty repayment rates;

● Certain reporting obligations. A recipient of IIA grant is required to notify the IIA of certain events enumerated in the IIA's rules and guidelines; and

● Know-how transfer limitation. Under the IIA's rules and guidelines, the transfer of IIA funded know-how outside of Israel requires prior IIA approval and in certain circumstances is subject to payment of a redemption fee to the IIA calculated according to formulas provided under the IIA's rules and guidelines, up to 600% of the grants amount plus accrued interest. Upon payment of such fee, the know-how and the manufacturing rights of the products supported by such IIA funding cease to be subject to the Innovation Law and to the IIA's rules and guidelines.

Approval of the transfer of IIA funded know-how to another Israeli company may be granted only if the recipient assumes all of our responsibilities towards the IIA, including the restrictions on the transfer of know-how and manufacturing rights outside of Israel (although such transfer will not be subject to the payment of a redemption fee, such transfer will include an obligation to pay royalties to the IIA from the income of such sale transaction as part of the royalty payment obligation).

TyrNovo received the IIA's approval for the production of NT219's API and final product by certain third-party manufacturers outside of Israel in consideration for (among other things) the future payment of increased royalties as stipulated under the IIA's rules and guidelines and described above.

The IIA's approval is not required for the export of any products resulting from the IIA research or development grants.

As of December 31, 2022, TyrNovo has received grants from the IIA in a total amount of approximately NIS 5.5 million (approximately $1.56 million), no royalties had been paid in respect to the grants received by the IIA and it had a contingent obligation to the IIA, excluding interest, in that amount. There is no guarantee that TyrNovo will receive any further grants from the IIA or that the grants will be in the scope received in the past.

The restrictions under the Innovation Law may impair our ability to enter into agreements to perform or outsource manufacturing outside of Israel, or otherwise transfer or sell TyrNovo's IIA funded know-how outside of Israel, without the approval of the IIA. Furthermore, in the event that we undertake a transaction involving the transfer to a non-Israeli entity of TyrNovo know-how developed with IIA funding pursuant to a merger or similar transaction, the consideration available to TyrNovo's and/or our shareholders may be reduced by the amounts it is required to pay to the IIA. Further, failure to comply with the requirements under the Innovation Law and the IIA's rules and guidelines may subject TyrNovo to financial sanctions, to mandatory repayment of grants received by it (together with interest and penalties). In addition, the Government of Israel may, from time to time, audit sales of products which it claims incorporate technology funded via IIA programs and this may lead to additional royalties being payable on additional products, and may subject such products to the restrictions and obligations specified hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Organizational Structure** 

Our corporate structure consists of Purple Biotech Ltd., incorporated under the laws of the State of Israel, our wholly-owned subsidiaries, FameWave, incorporated under the laws of the State of Israel, Kitov USA Inc. (currently inactive) incorporated under the laws of the state of Delaware, Purple Biotech GmbH, incorporated in 2021 under the laws of Switzerland, Immunorizon Ltd., incorporated under the laws of the State of Israel, and our majority owned subsidiary TyrNovo, incorporated under the laws of the State of Israel, of which we own approximately 98.47% of its shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Property, Plant and Equipment** 

All of our facilities are leased, and we do not own any real property. The principal executive offices for Purple Biotech, TyrNovo, FameWave and Immunorizon are in a commercial office building located in the Science Park in Rehovot, Israel. Our current office space of approximately 625 square meters is subject to a 63.5-month lease, which commenced on September 15, 2020 and expires on December 31, 2025, and we have an option to extend such lease for an additional 60 months beyond the current term. Of our office space, 200 square meters were subleased to a third-party until January 2023. We also lease laboratory space and office space of approximately 30 square meters, under a lease that commenced on December 21, 2021 and expires on July 31, 2023. We have no material tangible fixed assets apart from the property described above. We believe our facilities are adequate and suitable for our current needs.

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Annual Report on Form 20-F. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 20-F, particularly those in "Item 3. Key Information – D. Risk Factors." See also "Special Note Regarding Forward-Looking Statements."*

**Overview**

We are a clinical-stage company developing first-in-class therapies that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance. Our oncology pipeline includes NT219, CM24 and IM1240. CM24 is a humanized monoclonal antibody that blocks CEACAM1, an immune checkpoint protein that supports tumor immune evasion and survival through multiple pathways. We are advancing CM24 as a combination therapy with anti-PD-1 checkpoint inhibitors in a Phase 2 study for the treatment of pancreatic ductal adenocarcinoma (PDAC). We have entered into a clinical collaboration agreement with Bristol Myers Squibb for the Phase 2 clinical trials to evaluate the combination of CM24 with the PD-1 inhibitor nivolumab in addition to chemotherapy. NT219 is a dual inhibitor, novel small molecule that simultaneously targets IRS1/2 and STAT3. We are currently advancing NT219 in a Phase 1/2 study, as a monotherapy treatment of solid tumors, and in a dose escalation in combination with cetuximab for the treatment of recurrent and metastatic squamous cell carcinoma of the head and neck (SCCHN) or colorectal adenocarcinoma (CRC). These studies will be followed by an expansion phase of NT219 at its recommended Phase 2 level in combination with cetuximab in patients with recurrent and metastatic SCCHN. IM1240 is a preclinical, conditionally-activated tri-specific antibody that engages both T cells and NK cells to mount a strong, localized immune response within the tumor microenvironment. The third arm specifically targets the Tumor Associated Antigen (TAA) 5T4 that is expressed in a variety of solid tumors and is correlated with advanced disease, increased invasiveness and poor clinical outcomes. IM1240 has a cleavable capping technology that confines the compound's therapeutic activity to the local tumor microenvironment, and thereby potentially increases the anticipated therapeutic window in patients.

CM24 is a humanized monoclonal antibody directed against CEACAM1, an immune checkpoint protein belonging to the Human CEA (Carcino-Embryonic Antigen) protein family. Evidence has shown that CEACAM1 is expressed on tumor infiltrating lymphocytes and is up-regulated in several cancer types. Moreover, CEACAM1 has been shown to be associated with angiogenesis as well as immune evasion of cancer from the immune system. CEACAM1 is associated with mechanisms of trophism and metastases in cancer, manifest through mechanisms such as neutrophil extracellular traps. In a monotherapy phase 1 study, CM24 demonstrated safety and a stable disease rate of approximately 33% among the evaluable patients was noted.

NT219 is a therapeutic candidate that targets cancer pathways IRS1/2 and STAT3 that has shown activity in preclinical studies as monotherapy as well in combination with other cancer drugs, and would be developed as stand-alone and in combination with other cancer drugs or treatments. NT219 has been tested preclinically against and in combination with various classes of cancer drugs that have been recently developed as well as older standard chemotherapy.

IM1240 is a conditionally-activated tri-specific antibody that engages both T cells and NK cells to mount a strong anti-tumoral immune response. The third arm of the compound binds to 5T4, a TAA expressed in a variety of solid tumors and that correlates with advanced disease, increased invasiveness and poor clinical outcomes. The compound is distinguished from other products targeting 5T4+ tumors by its cleavable capping technology and we are conducting the preclinical studies required for IND-filing.

In addition, we consider the acquisition of oncology therapeutic candidates at various stages of development. We currently have no binding material agreements or commitments to complete any transaction for the possible acquisition of new therapeutic candidates or approved drug products.

Our goal is to become a significant player in the development of innovative drugs with a clinical and commercial added value, focusing on the oncology space.

Key elements of our strategy are to:

● focus on oncology therapeutic assets for treatment of unmet medical needs, representing a significant market opportunity;

● leverage our expertise in the clinical and regulatory processes in the United States, together with our research and development capabilities and network of professional advisors, to efficiently develop therapeutic candidates in pre-clinical and clinical stages of development and achieve marketing authorization;

● expand our line of therapeutic candidates through the acquisition or in-licensing of oncology technologies, products and drugs addressing significant clinical needs;

● develop new disruptive and innovative technologies in collaboration with third parties, as well as using our in-house capabilities; and

● cooperate with third parties to both develop and commercialize therapeutic candidates, in order to share costs and leverage the expertise of others.

**History of Losses**

Since commencement of our pharmaceutical research and development operations, we have generated significant losses mainly in connection with the research and development of our therapeutic candidates. Such research and development activities are expected to expand over time and will require further resources if we are to be successful. As a result, we expect to continue incurring operating losses, which may be substantial over the next several years, and will need to obtain additional funds to further develop our research and development programs. As of December 31, 2022, we had an accumulated deficit of approximately $117.6 million.

We plan to fund our future operations through commercialization and/or out-licensing of our therapeutic candidates and to raise additional capital in the future through either debt or equity financing.

**Components of Statement of Operations**

***Research and Development Expenses***

Our research and development costs are comprised of basic scientific research, preclinical studies, CMC development, clinical studies and medical research. Our research and development team combine clinical and regulatory development expertise mainly in the United States and Israel, and research and development capabilities of our scientific team in Israel. During the years 2014 through 2019, we focused on the clinical development, CMC development and regulatory activities related to Consensi (see also "Discontinued Operation" below). Since 2017 we have expanded into research and development of NT219, including preclinical development, mechanism of action research, CMC development and clinical development. In 2020, we acquired FameWave, and expanded our research and development activities to include CM24, including CMC, regulatory and clinical development. A significant portion of our research and development activities, including our preclinical and clinical studies, are performed through subcontractors such as clinical research organizations (CROs) and third-party manufacturers.

Our research and development expenses may fluctuate depending on the scope and timing of certain high-expense activities such as CMC activities and clinical trials. For example, in the second half of 2020 we commenced a phase 1/2 study of NT219 and prepared for the initiation of our phase 1/2 study of CM24, primarily by manufacturing of CM24, which increased our research and development expenses in 2020. In 2021 we initiated a phase 1b/2 study of CM24, which increased our research and developments expenses in 2021. In 2022 we conducted two clinical studies and expanded the clinical development upon completion of the dose escalation phases in CM24, in addition to CMC activity to support the studies, resulting in an increase of our research and development expenses.

Research and development expenses also include compensation for our employees and consultants for medical, regulatory and development work. As of December 31, 2022, our research and development staff consisted of 12 full-time employees, which we may expand with additional employees, as we expand our research and development activities, including clinical trials.

We charge all research and development expenses to operations as they are incurred. We expect our research and development expense to remain our primary expense in the near future, as we continue to develop our therapeutic candidates.

Set forth below is a summary of the research and development expenses for the years ended December 31, 2022, 2021 and 2020. Virtually all the costs in such periods were incurred in connection with the development of NT219 and CM24.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2020** | **Total** |
|  | (U.S. dollars in thousands) | (U.S. dollars in thousands) | (U.S. dollars in thousands) | (U.S. dollars in thousands) |
| Total research and development expenses | 16320 | 11827 | 7238 | 35385 |

---

In addition to the major cost of preclinical studies, clinical trials, and CMC development, research and development expenses include consulting expenses for regulatory and project management work required for the development of our therapeutic candidate portfolio. Set forth below is a summary of our research and development expenses based on the type of expenditure.

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2020** |
|  | (U.S. dollars in thousands) | (U.S. dollars in thousands) | (U.S. dollars in thousands) |
| Payroll expenses and related expenses | 2382 | 1721 | 1209 |
| Share-based payments | 768 | 557 | 756 |
| Service provider | 13170 | 9549 | 5273 |
|  | 16320 | 11827 | 7238 |

---

Due to the inherently unpredictable nature of clinical development processes, we are unable to estimate with any certainty the costs we will incur in the continued development of our therapeutic candidates for potential commercialization. Our future research and development expenses will depend on the success of the preclinical and clinical trials for our therapeutic candidates, as well as the availability of resources and based on ongoing assessments of the commercial potential of our products or therapeutic candidates and other therapeutic candidates we may acquire. In addition, we cannot forecast with any degree of certainty which products or therapeutic candidates may be subject to future commercialization arrangements, when such commercialization arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. See "Item 3. Key Information – D. Risk Factors – If we and/or our potential commercialization partners are unable to obtain FDA and/or other foreign regulatory authority approval for our therapeutic candidates, we and/or our potential commercialization partners will be unable to commercialize our therapeutic candidates."

As we obtain results from preclinical studies and/or clinical trials, we may elect to discontinue or delay development and preclinical studies and/or clinical trials for certain products or therapeutic candidates in order to focus our resources on more promising therapeutic candidates or projects. Alternatively, we may elect to allocate more resources towards our current products and therapeutic candidates than currently anticipated. Completion of preclinical studies and/or clinical trials by us or by our future licensees may last several years or more, although the exact duration generally varies based on the nature, complexity, novelty and intended use of a therapeutic candidate. See "Item 3. Key Information – D. Risk Factors – Risks Related to Our Business, Operations and Regulatory Matters."

The lengthy process of completing CMC and/or preclinical studies and/or clinical trials and seeking regulatory approvals for our therapeutic candidates requires substantial expenditures. Any failure or delay in completing preclinical and/or clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations.

***Selling, General and Administrative Expenses***

Selling, general and administrative expenses consist primarily of compensation for directors, employees and consultants in executive and operational functions. Other significant selling, general and administrative expenses include insurance premiums, professional fees of external auditors and legal services, travel costs and legal expenses, less reimbursement of legal expenses associated with class action claims.

***Expenses (income) on account of warrants***

 ****

Expenses (income) on account of warrants comprises mainly the fair value adjustments of warrants. As more fully described in Note 10, Note 16 and Note 19B to our audited financial statements, each of the warrants issued in connection with financing rounds on (i) May 8, 2020, (ii) April 19, 2020, (iii) January 2019 and (iv) June 2018 were considered a derivative instrument (due to a cashless exercise feature) and were recorded as a liability. Each of the warrants described in this paragraph were listed for trading, and as a result the cashless feature expired. The Company reclassified the warrants to receive equity according to such warrants' respective fair value on their respective listing date. The changes in the warrants' fair value were recorded as financial expenses.

 ****

***Finance Income and Finance Expense***

Finance expense comprises primarily changes in the fair value of financial liabilities as well as bank fees. Finance Income comprises primarily changes in the fair value of financial liabilities and assets and interest income from funds held in bank deposits.

***Discontinued Operation***

 ****

As previously discussed, COVID-19 adversely impacted the launch of Consensi in the United States, such as the strict measures which did not allow visits of relevant physicians by sales representatives, or by the limited attention by health professionals towards new drugs. In October 2021, the Company agreed, together with its then U.S. distributor for Consensi, Coeptis Pharmaceuticals Inc., to terminate the Distribution Agreement. Despite our efforts to identify an alternative distributor for Consensi in the U.S., we concluded that commercialization of Consensi, both in the U.S market and elsewhere, is not likely to generate significant revenue and achieve profitability in the near term. In order to reduce the expenses involved in maintaining the product, we decided to discontinue Consensi-related activities and to allocate the funds to our core oncology-related activities. Accordingly, during 2021, we also terminated the agreements for Consensi concerning the territories of South Korea and China. Consequently, the Company is reporting Consensi as a discontinued operation. Loss from discontinued operation in 2021 was $0.6 million compared to profit from discontinued operation of $0.6 million in 2020. The decrease in profit is mainly due to a decrease in revenues generated in 2021 as compared to 2020. The following table describes the financial results of the discontinued operation:

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
|  | **(U.S. dollars in thousands)** | **(U.S. dollars in thousands)** |
| **Results of discontinued operation** |  |  |
| Revenue |  | 1000 |
| Expenses | 642 | 373 |
| Loss (profit) for the year | 642 | (627) |
| **Loss (profit) for the year attributable to the owners of the Company:** |  |  |
| From discontinued operation | 642 | (627) |
| **Loss (profit) per share** |  |  |
| Basic & diluted loss (profit) per ADS – USD from Discontinued operation | 0.04 | (0.05) |
| **Cash flows from discontinued operation** |  |  |
| Net cash (used in) from operating activities | (374) | 1705 |
| Net cash (used in) from investing activities |  |  |
| Net cash (used in) from financing activities |  |  |
|  | (374) | 1705 |

---

***Adjusted Operating loss***

Adjusted operating loss is defined as operating loss, plus non-cash share-based compensation expenses and non-cash financial assets evaluation. Our management believes that excluding non-cash charges related to share-based compensation and financial assets evaluation provides useful information to investors because of its non-cash nature, varying available valuation methodologies among companies and the subjectivity of the assumptions and the variety of award types that a company can use under the relevant accounting guidance, which may obscure trends in our core operating performance. We present adjusted operating loss because we use this non-IFRS financial measures to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure is useful to investors because: (1) it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making; and (2) it excludes the impact of non-cash items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described above, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described above. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. Adjusted operating loss is not a recognized term under IFRS and does not purport to be an alternative to IFRS net operating loss as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of adjusted operating loss may not be comparable to other similarly titled measures of other companies.

**Critical Accounting Policies and Estimates**

The preparation of financial statements in conformity with IFRS as issued by the IASB, requires companies to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and judgments are subject to an inherent degree of uncertainty and actual results may differ. Our significant accounting policies are more fully described in Note 3 to our annual financial statements included elsewhere in this Annual Report on Form 20-F. Critical accounting estimates and judgments are evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are particularly important to the portrayal of our financial position and results of operations.

**Assessment of Probability of Contingent Liabilities**

The company makes assessments whether it is more likely than not that an outflow of economic resources will be required in respect of legal claims pending against the Company.

**Recoverability of Intangible Assets**

The Company performs an impairment test relating to its intangible assets with indefinite useful life, comparing its recoverable amount with its carrying amount.

*Restatement and Revision of Previously Issued Financial Statements*

As described in Note 4 to our audited financial statements contained elsewhere in this report, we restated our audited financial statements as of and for the year ended December 31, 2020 to reflect the discontinued operation described above. The impact of the restatement is reflected in Management's Discussion and Analysis of Financial Condition and Results of Operations below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Operating Results** 

**Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021**

*Research and Development Expenses*

Research and development expenses for the year ended December 31, 2022 were $16.3 million, an increase of $4.5 million, or 38.1%, compared to $11.8 million for the year ended December 31, 2021. The increase was mainly due to expenses related to the ongoing NT219 and CM24 clinical trials, including CMC supporting activity.

 

*Selling, General and Administrative Expenses*

Selling, general and administrative expenses, net of reimbursement from insurance for legal fees, for the year ended December 31, 2022 were $6.3 million, compared to $6.1 million for the year ended December 31, 2021, an increase of $0.2 million.

*Operating Loss*

Our operating loss for the year ended December 31, 2022 amounted to $22.6 million, an increase of $4.7 million, or 26.3%, compared to $17.9 million for the year ended December 31, 2021. The increase was mainly due to the increase in research and development expenses.

*Adjusted Operating Loss*

On a non-IFRS basis adjusted operating loss for the year ended December 31, 2022 was $20.2 million, an increase of $4.3 million, compared to $15.9 million for the year ended December 31, 2021, mainly due to the increase in research and development expenses (see reconciliation below).

*Finance Income, net*

Finance income, net for the year ended December 31, 2022 was $843 thousand in comparison to net finance income of $108 thousand for the year ended December 31, 2021. The increase was primarily due to $530 thousand interest from bank deposits.

 

*Loss for the Period*

Our net loss for the year ended December 31, 2022 amounted to $21.8 million, or $1.20 per basic and diluted ADS, compared to a net loss of $18.5 million, or $1.01 per basic and diluted ADS, in 2021. The increase in net loss was mainly due to $4.5 million in operating expenses, offset by a decrease of $0.6 million in loss from discontinued operation and an increase in finance income of $0.7 million.

**Comparison of the Year Ended December 31, 2021 to the Year Ended December 31, 2020**

*Research and Development Expenses*

Research and development expenses for the year ended December 31, 2021 were $11.8 million, an increase of $4.6 million, or 64%, compared to $7.2 million for the year ended December 31, 2020. The increase was primarily due to increased expenses related to the ongoing NT219 and CM24 clinical trials, including the manufacturing of drugs for the studies.

 

*Selling, General and Administrative Expenses*

Selling, general and administrative expenses, net of reimbursement from insurance for legal fees, for the year ended December 31, 2021 were $6.1 million, compared to $6.0 million for the year ended December 31, 2020, an increase of $0.1 million.

*Operating Loss*

Our operating loss for the year ended December 31, 2021 amounted to $17.9 million, an increase of $4.7 million, or 36%, compared to $13.2 million for the year ended December 31, 2020. The increase was mainly due to the increase in research and development expenses.

*Adjusted Operating Loss*

On a non-IFRS basis adjusted operating loss for the year ended December 31, 2021 was $15.9 million, an increase of $5.3 million, compared to $10.6 million for the year ended December 31, 2020, mainly due to the increased expenses for clinical studies and manufacturing of drugs for these studies (see reconciliation below).

*Finance Income, net*

Finance income, net for the year ended December 31, 2021 was $100 thousand in comparison to net finance expense of $15.5 million for the year ended December 31, 2020. The change was primarily due to a $15.7 million decrease in expenses on account of warrants, mainly from a change in the fair value of derivatives in 2020.

 

*Loss for the Period*

Our net loss for the year ended December 31, 2021 amounted to $18.5 million, or $1.01 per basic and diluted ADS, compared to a net loss of $28.1 million, or $2.5 per basic and diluted ADS, in 2020. The change in net loss was mainly due to $15.7 million in expenses related to a change in the fair value of derivatives, offset by an increase of $4.7 million in operating expenses.

**Reconciliation of Adjusted Operating Loss**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **(U.S. dollars in<br> thousands)** | **(U.S. dollars in<br> thousands)** | **(U.S. dollars in<br> thousands)** |
| Operating loss for the year | **22603** | 17934 | 13239 |
| Less ESOP expenses | **(2412)** | (2082) | (2645) |
|  |  | - |  |
|  | **20191** | 15852 | 10594 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Liquidity and Capital Resources** 

Our oncology therapeutic candidates are in the research and development stage and therefore, we do not generate revenues from those candidates. Since commencement of our operations as a pharmaceutical research and development company, our activities have primarily been financed by equity offerings, as well as private loans which were subsequently fully repaid. We have raised gross proceeds of approximately NIS 52 million (approximately $9.2 million based on the representative rates of exchange on the dates of the closings, March 3, 2014, September 3, 2014, and March 30, 2015) from our public offerings on the TASE, approximately $13.0 million from our initial public offering on NASDAQ in November 2015, approximately $12.0 million for our follow-on public offering on NASDAQ in July 2016, approximately $3.5 million from a registered direct offering in July 2017, approximately $8.1 million from a registered direct offering in June 2018 and approximately $6.0 million from a registered direct offering in January 2019.

In January 2020, we raised $3.5 million in a private placement as part as part of the acquisition of FameWave, approximately $6.0 million registered direct offering in March 2020, approximately $6.5 million registered direct offering in April 2020, approximately $10.0 million registered direct offering in May 2020 and approximately $35.0 million registered direct offering in June 2020.

On June 9, 2021, we entered into the Sales Agreement, with Jefferies, for the sale of ADSs, representing our ordinary shares offered by the prospectus supplement filed on June 9, 2021, and the accompanying prospectus. In accordance with the terms of the Sales Agreement, we may offer and sell ADSs having an aggregate offering price of up to $19,564,607 from time to time through Jefferies, acting as our agent.

During the twelve months ended December 31, 2022, we sold, under the Sales Agreement 543 thousand ADSs under the ATM program, at an average price of $2.65 per ADS. Net proceeds to the Company, were approximately $1.3 million, net of issuance expenses.

As of December 31, 2022, we had on hand approximately $31.7 million in cash and cash equivalents, and in short-term deposits. We believe that our current cash and cash equivalents are sufficient to satisfy liquidity requirements for the next 12 months. Since we do not know whether, if at all, we will generate significant revenues from our therapeutic candidate should we decide to continue the development of CM24 and NT219, and to develop any additional therapeutic candidates, we may need substantial additional funds to acquire, develop, and/or commercialize such therapeutic candidates. However, additional financing may not be available on acceptable terms, if at all. Our long-term capital requirements will depend on many factors, including:

● the regulatory path of our therapeutic candidates;

● our ability to successfully commercialize our CM24, NT219 and IM1240 therapeutic candidates, including securing commercialization agreements with third parties, favorable pricing and market share;

● the progress, success and cost of our preclinical studies and/or clinical trials, and research and development programs;

● the costs, timing and outcome of regulatory review, obtaining regulatory approval of our therapeutic candidates and addressing regulatory and other issues that may arise post-approval;

● the costs of obtaining and enforcing our issued patents and defending intellectual property-related claims; and

● our consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated.

***Cash Flow***

*Operating activities*

For the year ended December 31, 2022, net cash flow used in operating activities was approximately $16.7 million compared to approximately $14.9 million and $13.8 million for the years ended December 31, 2021 and 2020, respectively. The increase of $1.8 million in net cash flow used in operating activities in 2022 compared to 2021 was due to an increase in operating losses, net of adjustments, offset by net change in assets and liabilities. The increase of $1.1 million in net cash flow used in operating activities in 2021 compared to 2020 was due to an increase in operating losses, net of adjustments, offset by a decrease in net change in assets and liabilities. The cash used in operating activities consisted of expenses associated with expenses related to expenses for the development of NT219 and CM24 and to general and administrative expenses.

*Investment activities*

Net cash provided by investing activities from continuing operation was $19.9 million for the year ended December 31, 2022, compared to net cash provided by investing activities from continuing operation of $13.4 million for the year ended December 31, 2021. The change in 2022 compared to 2021 was mainly attributed to a decrease in short-term deposits of $19.8 million for the year ended December 31, 2022 compared to a decrease in short and long term deposits of $13.1 million for the year ended December 31, 2021.

*Financing activities*

Net cash provided by financing activities from continuing operation for the year ended December 31, 2022, consisted of $1.3 million net proceeds from our ATM program. For the year ended December 31, 2021, financing activities consisted of $1.2 million from exercise of warrants and $0.6 million net proceeds from our ATM program. For the year ended December 31, 2020, financing activities consisted of $3.5 million net proceeds received from the January 2020 private placement as part of the FameWave acquisition, $4.6 million net proceeds from the March 2020 public offering in the United States, $7.1 million net proceeds from the April 2020 warrant exercise transaction, $8.4 million net proceeds from the May 2020 registered direct offering, and $31.0 million net proceeds from the June 2020 registered direct offering. The net proceeds from the financing activities in 2022, 2021 and 2020 were used to finance the operating activities of the Company.

*Discontinued operation activities*

For the years ended December 31, 2021 and 2020, cash from (used in) in discontinued operation was $(0.4) million and $1.7 million, respectively. The decrease in cash used in the discontinued operation was due to decrease in research and development expenses and revenues received. We did not have any cash from (used in) discontinued operation for the year ended December 31, 2022.

As of December 31, 2022, we had no borrowings.

As of December 31, 2022, and as of the date of this Annual Report on Form 20-F, we had no commitments for capital expenditures.

*Contractual obligations and off-balance sheet balances*

Our long-term contractual obligations include mainly a lease agreement for our offices with remaining term of three years (see also item 3(D) Property, Plant and Equipment) with non-current lease liability of $321 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Research and Development, Patents and Licenses** 

See above under Item 5 - Operating and Financial Review and Prospects – A. Operating results – Components of Statement of Operations - Research and Development Expenses."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Trend Information** 

We are a pharmaceutical company which focuses its activities on the development of our therapeutic candidate. It is not possible for us to predict with any degree of accuracy the outcome of our research and development with regard to our therapeutic candidate. Our research and development expenditure is our primary expenditure, although we may incur substantial expenditures should we acquire any new therapeutic candidates. Increases or decreases in research and development expenditure are primarily attributable to the level and results of our CMC, preclinical studies and clinical trial activities and the amount of expenditure on those studies and trials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Critical Accounting Estimates** 

Not applicable.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Directors and Senior Management** 

The following table sets forth the name, age and position of each of our executive officers and directors, as of the date of this Annual Report on Form 20-F. The inclusion of any individual in this table does not necessarily imply that such individual is an officer or office holder as such terms are defined under applicable law.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Eric Rowinsky, M.D. | 66 | Independent Director and Chairman of the Board of Directors |
| Isaac Israel<sup>(4)</sup> | 44 | Director |
| Simcha Rock, CPA, MBA<sup>(1)(2)</sup> | 72 | Independent Director |
| Steven Steinberg<sup>(2)(3)</sup> | 62 | Independent Director |
| Ido Agmon, MBA<sup>(3)</sup> | 45 | Independent Director |
| Robert Gagnon<sup>(2)(4)</sup> | 48 | Independent Director |
| Suzana Nahum-Zilberberg<sup>(1)(3)(4)</sup> | 52 | Independent Director |
| Ori Hershkovitz<sup>(1)</sup> | 48 | Independent Director |
| Gil Efron, CPA, MA | 57 | Chief Executive Officer |
| Lior Fhima, CPA, MBA, BA | 46 | Chief Financial Officer |
| Hadas Reuveni, Ph.D. | 55 | Vice President of Research and Development |
| Michael Schickler, Ph.D. | 65 | Head of Regulatory and Clinical Operations |
| Fabien Sebille, Ph.D. | 49 | Chief Business Officer |
| Ido Morpurgo, BS.C, LL.M | 50 | Vice President of Operations |
| Nir Livneh, LL.M, BA | 44 | VP Legal Affairs |

---

(1) Member of Nominations Committee

&nbsp;&nbsp;&nbsp;&nbsp;(2) Member of Audit Committee

(3) Member of Compensation
 Committee

(4) Member of Pricing Committee
 for the ATM program

*Eric Rowinsky, M.D.* has served as the Chairman of Purple Biotech's Board since October 2019. Dr. Eric Rowinsky's principal expertise is in the development and registration of novel therapeutics to treat cancer. Since July 2021, Dr. Rowinsky has served as the Chief Medical Officer of Hummingbird Biotherapeutics, a life-science company. From 2015 to 2021, Dr. Rowinsky served as Executive Chairman of the Board of Directors and President of Inspira, Inc. (formerly Rgenix, Inc) and is currently serving as its President, Chairman of the Scientific Advisory Board, and Director. Dr. Rowinsky also served as the Chief Scientific Officer of Clearpath Development Inc., from 2015-2021, and has served as a consulting Chief Medical Officer of Oncotartis, Inc. since 2018 and as an advisor to Everest Medicines, Inc. since 2017. Additionally, Dr. Rowinsky has been an independent consultant since 2016 and works with many other life science companies in providing expertise in developing and registering a wide range of novel cancer therapeutics. Dr. Rowinsky served as Executive Vice President, Chief Medical Officer and Head of Research and Development of Stemline Therapeutics, Inc., a clinical-stage biopharmaceutical company, from November 2011 until October 2015. Prior to joining Stemline, Dr. Rowinsky was co-founder and Chief Executive Officer of Primrose Therapeutics, Inc., a start-up biotechnology company, from June 2010 until its acquisition in September 2011. Dr. Rowinsky also served as a drug development and regulatory strategy consultant to the ImClone-Lilly Oncology Business Unit and several other biopharmaceutical and life sciences companies from 2010 to 2011. From 2005 to 2009, Dr. Rowinsky was Executive Vice President and Chief Medical Officer of ImClone Systems Inc., where he led the FDA approval of Erbitux for head and neck and colorectal cancers and advanced eight other monoclonal antibodies through clinical development. From 1996 to 2004, Dr. Rowinsky held several positions at the Cancer Therapy and Research Center, including Director of the Institute of Drug Development, or IDD, and the SBC Endowed Chair for Early Drug Development at the IDD. From 1996 to 2006, Dr. Rowinsky was a Clinical Professor of Medicine at the University of Texas Health Science Center at San Antonio. From 1988 to 1996, Dr. Rowinsky was an Associate Professor of Oncology at The Johns Hopkins University School of Medicine. Dr. Rowinsky was a longstanding National Cancer Institute principal and co-principal investigator from 1990 to 2004, and was integrally involved in pivotal clinical and preclinical investigations that led to the development of numerous cancer therapeutics, including paclitaxel, docetaxel, topotecan, irinotecan, erlotinib, gefitinib, ramucirumab, tagraxofusp and temsirolimus among others. Dr. Rowinsky was also an Adjunct Professor of Medicine at New York University School of Medicine (2008-2018). Dr. Rowinsky presently serves on the boards of directors of the public companies Biogen Idec, Inc., Fortress Biosciences, Inc., and Verastem Inc. Dr. Rowinsky formerly served on the boards of directors of the public companies Navidea Biopharmaceuticals Inc. (2010-2018), BIND Therapeutics (2014-2016), and Biophytis S.A. (2018-2019), as well as at a number of privately held companies. Dr. Rowinsky received a B.A. degree from New York University (1977) and an M.D. degree from Vanderbilt University School of Medicine (1981). Dr. Rowinsky completed his residency in internal medicine at the University of California, San Diego (1984) and completed his fellowship in medical oncology at The Johns Hopkins Oncology Center (1987).

*Isaac Israel* has served as a member of Purple Biotech's Board since October 2012. Mr. Israel served as our chief executive officer from October 2012 until July 2022 and has served as an advisor to Purple Biotech since October 2022. Mr. Israel was the founding chief executive officer of BeeContact Ltd. (formerly TASE:BCNT), from 2001 until 2007. Since 2008, Mr. Israel has served as founding chief executive officer of Uneri Capital Ltd., a consulting firm in the capital markets field, owned by Mr. Israel, which specializes in the healthcare sector. 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., which is traded on the TASE.

*Simcha Rock, CPA, MBA*, has served a member of Purple Biotech's Board since July 2013. Mr. Rock served as our Chief Financial Officer from July 2013 until he retired from such position as of December 31, 2018 and subsequently served as a strategic consultant to us until December 31, 2019. Prior to joining us, Mr. Rock was a private equity manager at Edmond de Rothschild Private Equity Management, a firm specializing in the management of venture capital and other private equity investments funds, from February 2000 until January 2011, with responsibility for all financial, legal and administrative matters for several investment funds. Prior to 2000, Mr. Rock held financial management positions at Intel Electronics Ltd., The Jerusalem College of Technology, and JC Technologies Ltd. Mr. Rock holds a B.A. degree from Yeshiva University and an MBA degree from Cleveland State University.

*Steven Steinberg* has served as a member of Purple Biotech's Board since July 2016. Since April 2017, Mr. Steinberg has been an independent financial consultant. From January 2015 through March 2017, Mr. Steinberg served as the chief financial officer of Glide Talk Ltd., a technology company in the video messaging and wearable technology arenas. From September 2013 to October 2014, Mr. Steinberg served as vice president, finance at Client Connect Ltd., a subsidiary of Conduit Ltd., and subsequent to an acquisition, of Perion Network, Ltd. a NASADQ listed company. Between August 2011 and August 2013, Mr. Steinberg acted as an independent financial consultant. From December 2002 until July 2011, Mr. Steinberg was employed by Answers Corporation, a NASDAQ listed company, where he served as chief financial officer. Prior to 2002, Mr. Steinberg held a number of finance and chief financial officer roles, following a ten-year period of service as an audit manager at Coopers & Lybrand (currently PricewaterhouseCoopers, LLP) in New York City. Mr. Steinberg holds a Bachelor of Business Administration degree from Florida International University – School of Business Administration and was certified as a certified public account in New York State.

*Ido Agmon, MBA,* has served as a member of Purple Biotech's Board since June 2016. Since 2012, Mr. Agmon has been acting as an independent consultant and investment manager, providing start-ups, investment funds and technology-based ventures with advice in strategic and financial planning, fund-raising and related business development activities. Mr. Agmon serves as a member of the board of directors of two Israeli privately held start-up corporations. From 2014 until the end of 2016, Mr. Agmon was a manager of Aviv New-Tech (formerly Aviv Bio-Invest), a private investment fund which manages a portfolio of public Israeli and global biomed and technology companies, of which he was a co-founder, and where he was responsible for analysis and evaluation of investments in Israeli and global biomed companies. From 2009 until 2011, Mr. Agmon served as the chief executive officer of Meytav Technology Incubator, an Israeli-based accelerator for biotech, pharma & medtech ventures with over 20 portfolio companies. Mr. Agmon has served as a board member at several biomed ventures. From 2007 until 2009, Mr. Agmon served as the Director of Business Development at ATI incubator, a technology incubator specializing in biomed and cleantech projects, responsible for deal-flow and project evaluation. Mr. Agmon holds a BA degree in Business Administration and Life Sciences from Tel Aviv University, Tel Aviv, Israel, and an MBA degree from the Hebrew University of Jerusalem, Israel.

*Robert Gagnon*, *MBA* has served as a member of Purple Biotech's Board since March 2021. Mr. Gagnon currently serves as Chief Financial Officer and Operating Partner of Gurnet Point Capital, a private equity firm which invests in de-risked life sciences companies driving outsized returns through active ownership. Prior to joining Gurnet Point Capital in 2022, Mr. Gagnon served as the Chief Financial Officer of Verastem Oncology, a biopharmaceutical company focused on advancing cancer therapeutics. Before joining Verastem in 2018, Mr. Gagnon served as the Chief Financial Officer at Harvard Bioscience, Inc. Prior to this, Mr. Gagnon served as Executive Vice President, Chief Financial Officer and Treasurer at Clean Harbors, Inc., as well as Chief Accounting Officer and Controller at Biogen Idec, Inc. Earlier in his career, Mr. Gagnon worked in a variety of senior positions at Deloitte & Touche, LLP, and PricewaterhouseCoopers, LLP. Mr. Gagnon holds an M.B.A. degree from the MIT Sloan School of Management and a Bachelor of Arts degree in accounting from Bentley College.

*Suzana Nahum-Zilberberg* has served as a member of Purple Biotech's Board since May 2021. Ms. Nahum-Zilberberg currently serves as Vice Chairman of the Board of BioLight Life Science, which is traded on the Tel Aviv Stock Exchange, and from 2011 to 2020 served as the chief executive officer of BioLight. Ms. Nahum-Zilberberg also serves as a director at Human Xtention Ltd. and Nextferm Technologies Ltd., both of which are traded on the Tel Aviv Stock Exchange, and a number of private companies. Prior to joining BioLight, Ms. Nahum-Zilberberg held a number of leadership positions at Teva Pharmaceuticals Industries, including Vice President of Asia and Pacific and Director in the office of the President and chief executive officer. Ms. Nahum-Zilberberg holds a B.A. degree in accounting and economics and a M.B.A. degree, both from Tel Aviv University, a Certified Director degree from Tel Aviv University, and studied at the INSEAD Asian International Executive Program. She is a certified public accountant.

*Ori Hershkovitz* has served as a member of Purple Biotech's Board since December 2021. Mr. Hershkovitz has held various positions in life sciences investment funds over many years. Mr. Hershkovitz has served as a board member and a senior advisor to private and public biotechnology and healthcare companies since 2010. Mr. Hershkovitz currently serves on the Board of Directors of Matricelf Ltd. (TASE: MTLF), and from 2013 to 2016 was a member of the Board of Directors of MicroMedic Ltd. (TASE:MCTC) and Medigus Ltd. (Nasdaq: MDGS). From 2015 to 2019, Mr. Hershkovitz served as a Managing Partner and chief investment officer of Nexthera Fund, a healthcare hedge fund based in New York, managing over $400 million in assets. From 2006 to 2014, Mr. Hershkovitz was the Managing Partner and Head of Research at Sphera Fund in Tel Aviv, managing over $700 million in assets. From 2001 to 2006, Mr. Hershkovitz served as Senior Pharmaceutical Equity Analyst at Leader & Co. Investment House Ltd. in Tel Aviv, and from 1999 to 2001, he was a Pharmaceutical Equity Analyst at Ilanot Batucha Investment House Ltd. Mr. Hershkovitz holds a B.A degree in Business Administration and Finance from Tel Aviv University and is a licensed investment advisor.

*Gil Efron* has served as our Chief Executive Offer since July 2022. Prior to that, Mr. Efron served as our President and Chief Financial Officer since June 2021. Prior to that, Mr. Efron served as our Deputy Chief Executive Officer and Chief Financial Officer, from October 2018. Prior to joining us, Mr. Efron served as Deputy CEO and CFO of Kamada Ltd., a NASDAQ and TASE dual-listed plasma-derived protein therapeutics company, from September 2011 to November 2017. Prior to that, Mr. Efron served as the CFO of NASDAQ listed RRsat Global Communications Ltd. (Nasdaq: RRST), from September 2005 to March 2011. Prior to that, Mr. Efron served in various finance executive positions. Mr. Efron presently serves on the board of directors of Kanabo Group PLC (KNB:London). Mr. Efron holds a B.A. degree in Economics and Accounting and an M.A. degree in Business Administration from the Hebrew University of Jerusalem and was granted a certified public accountant's license (non-active) in Israel.

*Lior Fhima* has served as our Chief Financial Officer since November 2022. Before to joining us, Mr. Fhima served as the chief financial officer of Negev Ecology Ltd. from June 2021. Mr. Fhima served as the Director of Finance at Kamada Ltd., a plasma-derived protein therapeutics company from October 2015 to June 2021. Prior to that, Mr. Fhima served as Chief Accounting Officer of G City, Ltd. (formerly Gazit Globe Ltd) from April 2012 to October 2015. Mr. Fhima holds an MBA degree and graduated Magna Cum Laude with a BA degree in Accounting and Business Management, both from the College of Management Academic Studies in Rishon LeZion, Israel. Mr. Fhima was granted a certified public accountant's license in Israel.

*Dr. Hadas Reuveni, Ph.D.* has served as the Company's Vice President of Research and Development since 2017. Dr. Reuveni, a co-inventor of the TyrNovo technology, received her Ph.D., Summa Cum Laude, for anti-cancer drug discovery from the Hebrew University of Jerusalem. Dr. Reuveni managed the discovery and the preclinical development of scientific projects in TyrNovo's portfolio since 2005 and has more than two decades of research and development experience in biotechnology. From 2005 to 2012, Dr. Reuveni served as the Chief Executive Officer of NovoTyr Ltd., a biotech start-up company, a predecessor company to TyrNovo, developing small molecules for the treatment of cancer and neurodegenerative diseases, which was established by Dr. Reuveni and Prof. Levitzki in 2005. Dr. Reuveni also founded and served as a director and Chief Scientific Officer of AngioB Ltd., a start-up company that developed GPCR-based agents for multiple indications, between 2006-2010. Prior to these roles, Dr. Reuveni was the Director of Research & Development at Keryx Biopharmaceuticals (NASDAQ:KRX) between 2001-2004. Dr. Reuveni has served as a scientific consultant for Integra Holdings Ltd., Campus Bio Management Ltd. and BioLineRX (NASDAQ/TASE BLRX). Dr. Reuveni holds a B.Sc. degree in chemistry, an M.Sc. degree in biological chemistry and a Ph.D. in biological chemistry and drug discovery, all from the Hebrew University of Jerusalem, Israel.

*Michael Schickler, Ph.D.,* has served as the Company's Head of Regulatory and Clinical Operations since January 2020. Prior to assuming this role, Dr. Schickler served as the Chief Executive Officer of FameWave until the closing of the FameWave Acquisition. Dr. Schickler has also provided consulting services for medical device and healthcare companies since July 2018, advising on various matters pertaining to biopharmaceutical drug development, including as a consultant to the Company since March 2019. From May 2001 to July 2018, Dr. Schickler served as Chief Executive Officer of CureTech Ltd. ("CureTech"), a biotechnology company developing novel immunotherapies for the treatment and control of cancer. During his time at CureTech, Dr. Schickler led the company from the establishment of its operations through its development into a clinical-stage company with activities spanning basic research through GMP manufacturing and worldwide clinical operations. Dr. Schickler has served on the board of directors of CureTech since October 2018 and previously served on the board of directors of Accellta Ltd. Dr. Schickler received his Diploma in Business Administration from the University of Lincoln, Lincoln, United Kingdom, his Ph.D. in Biology from The Weizmann Institute of Science, Rehovot, Israel and his B.Sc. degree in Biology from The Faculty of Life Sciences, Tel Aviv University, Israel.

 *Fabien Sebille, Ph.D.*, has served as our Chief Business Officer since December 2021. Previously, Dr. Sebille served as Executive Director of Business Development and in different senior business development positions, at Debiopharm International SA, a Swiss-based privately-held biopharmaceutical company focused on drug development in oncology and infectious diseases. Earlier in his career, Dr. Sebille led business development activities at the competitiveness cluster Alsace Biovalley in Strasbourg, France, and was co-founder of TcLand Expression (which merged with OSE Immunotherapeutics (Euronext: OSE) in 2016), a biotech company that brought several therapeutics to different stages of clinical development. Prior to that, Dr. Sebille served as Technology Transfer Officer at the Technology Transfer Office of the Medical Research Council. Dr. Sebille holds a Ph.D. in Immunology from the University of Nantes in France and completed his academic training with a post-doctoral fellowship at Imperial College, London.

*Ido Morpurgo* has served as the Company's Vice President of Operations since August 2020. Most recently Mr. Morpurgo served as a Vice President Global Operations at Laline Israel from August 2019 until August 2020, and prior to that as Procurement Director at Kamada Ltd. from May 2015 until July 2019. Mr. Morpurgo holds a Bachelor of Science degree in Economics from the Hebrew University of Jerusalem, Israel, and an LLM degree from Bar Ilan University.

*Nir Livneh* has served as our Vice President Legal Affairs since June 2021. Prior to joining us, Mr. Livneh served as Legal Counsel at ICL Group Ltd. (NYSE and TASE: ICL), a global specialty minerals and chemicals company, from February 2019 to June 2021. Prior to that, Mr. Livneh served as the General Counsel of PolyPid Ltd. (NASDAQ: PYPD), a late-stage biopharma company, from April 2018 to February 2019. Prior to that, Mr. Livneh served as the General Counsel of Kamada Ltd. (NASDAQ and TASE: KMDA) a plasma-derived protein therapeutics company, from January 2010 to April 2018. Prior to that, Mr. Livneh worked as an associate at Raved Magriso Benkel & Co., from January 2007 to January 2010. Mr. Livneh holds an LL.B in Law and a B.A in Business Administration from the Interdisciplinary Center Herzliya, Israel and an LL.M degree from the Tel Aviv University, Israel. Mr. Livneh was admitted to the Israeli bar association in 2006.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Compensation** 

The aggregate compensation paid and in-kind benefits granted to or accrued on behalf of all our directors and officers for their services, in all capacities, to us during the year ended December 31, 2022, was approximately $5 million (including $2.2 million share-based compensation related costs). As of December 31, 2022, the total amount set aside as an actuarial estimate by us to provide pension, retirement or similar benefits to our officers (we do not provide any such benefits to our directors in such capacities) was in the aggregate amount of approximately $303 thousand.

Our directors and executive officers hold exemption and indemnification letters and are covered under our director's and officer's liability insurance policy. For information on exemption and indemnification letters granted to our officers and directors, see "Item 6 Directors, Senior Management and Employees—C. Board Practices—Exculpation, Insurance and Indemnification of Directors and Officers".

As of December 31, 2022, (i) options to purchase 15,651,128 of our ordinary shares granted to our officers and directors were outstanding, of which options to purchase 4,775,961 of our ordinary shares have vested; and (ii) 7,150,000 restricted stock units ("RSUs") awarded to our officers and directors were outstanding. For information regarding our 2016 Equity-Based Incentive Plan, see "Item 6. Directors, Senior Management and Employees—E. Share Ownership—2016 Equity-Based Incentive Plan." For information regarding the corporate approvals for officer and director compensation, see "Item 6. Directors, Senior Management and Employees—C. Board Practices—Compensation of Directors and Executive Officers."

**Director Compensation**

We currently pay our independent and non-executive directors (other than our chairman) an annual fee of $40,000 for services as a member of our Board of Directors, an additional $3,500 annual fee for service on each permanent Board committee, and an additional $7,000 annual fee for service on the Board of Directors of a subsidiary (if applicable); provided, however, that the maximum annual fee for services on our Board of Directors, on Board committees and/or on the board of directors of any subsidiaries shall not exceed $47,000. The above dollar denominated fees, and all other dollar denominated payments that we pay our directors based in Israel are paid in NIS based on the NIS/$ exchange rate at the beginning of the month in which such amounts are paid, but not lower than the exchange rate in effect on January 1, 2017. We pay Dr. Rowinsky, the chairman of our Board of Directors, an annual fee of $60,000 for services as a member of our Board of Directors, as Chairman of the Board, for service on any committee of the Board of Directors, and for service on the board of directors of a subsidiary. All such director annual fees shall be paid pro-rata for any service during part of a year. In addition, we pay Dr. Rowinsky a monthly fee of $10,000 for his service as the chairman of our medical and clinical committee established in March 31, 2022, for the period commencing on April 1, 2022 and until no later than March 31, 2023, as approved by our shareholders at our annual general meeting held on August 25, 2022.

Each of our Compensation Committee, Board of Directors and shareholders have also approved ancillary benefits such that we may subsidize ongoing corporate governance or other professional training for directors in amounts up to $5,000 per director per annum. We also reimburse the directors for any direct expenses incurred during the performance of their duties (e.g., travel, parking, telephone, meals, etc.).

There are no arrangements or understandings between us and any of our subsidiaries, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our company or any of our subsidiaries, other than with Mr. Gil Efron, our Chief Executive Officer, in connection with the termination of his service as our Chief Executive Officer, as described below.

To our knowledge, there are no agreements and arrangements between any director and any third-party relating to compensation or other payment in connection with their candidacy or service on our Board of Directors.

**Executive Compensation**

The table below sets forth the annual compensation paid to each of our five most highly compensated office holders (as defined in the Companies Law) for the year ended December 31, 2022, broken out by component and on an individual basis, as recorded in our financial statements for such year. For so long as we qualify as a foreign private issuer, we are not required to comply with the proxy rules applicable to U.S. domestic companies to disclose the compensation of our chief executive officer and other two most highly compensated executive officers on an individual, rather than an aggregate, basis, rather we are required under Israeli law to disclose in the proxy statement for our annual general meeting of our shareholders (or to include a reference therein to other previously furnished public disclosure) the annual compensation of our five most highly compensated office holders on an individual basis, rather than on an aggregate basis, as recorded in the Company's financial statements for such year.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position** | **Salary or<br> other<br> expenses<sup>1</sup>** | **Bonus<br> expenses<br> and accruals** | **Share-based**<br> **expenses<sup>2</sup>** | **Total<sup>3</sup>** |
| Gil Efron | Chief Executive Officer | 364526 | 90909 | 607970 | 1063404 |
| Fabien Sebille | Chief Business Officer | 340258 | 50305 | 300870 | 691433 |
| Dr. Michael Schickler | Head of Regulatory and Clinical Operation | 209960 | 55017 | 240916 | 505893 |
| Isaac Israel | Director and former Chief Executive Officer | 297032 | 43031 | 149560 | 489624 |
| Dr. Hadas Reuveni | Vice President of Research and Development | 219840 | 23374 | 238306 | 481520 |

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1 Includes social benefits, such as payments to the National Insurance Institute, advanced education funds, managers' insurance and pension funds; vacation pay; and recuperation pay as mandated by Israeli law, and car lease or vehicle use reimbursement related benefits.

2 The fair value of share-based payments was estimated using the Black and Scholes model.

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| | |
|:---|:---|
| 3 | The total compensation amounts do not include any amounts recorded for an increase in actuarial estimate calculations for post-employment benefit liabilities for the office holder, nor any accruals for unused vacation time. Compensation amounts which were paid or otherwise measured in NIS have been translated into US$ for purposes of this report at average representative exchange rates for the year. |

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**Agreements with Executive Officers**

We have entered into engagement 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 laws.

 

*Employment Agreement with Gil Efron, our Chief Executive Officer*

 

In July, 2022, we entered into an employment agreement with Mr. Gil Efron in his capacity as our chief executive officer, which may be terminated by either party upon 90 days' advance notice to the other party. Mr. Efron's terms of engagement as our chief executive officer were approved by our shareholders at our annual general meeting held on August 25, 2022, and include (among other things) the following compensation and benefits:

*Monthly Salary*: A base monthly gross salary of approximately $24,600 ("Monthly Salary").

*Annual Bonus*: An annual bonus that shall not exceed six times the Monthly Salary, subject to the achievement of measurable criteria determined by the Compensation Committee and Board of Directors on an annual basis, in accordance with our compensation policy, as in effect from time to time.

*Special bonus(es) for an M&A Transaction or Commercial Transaction*. A special bonus for each M&A Transaction and Commercial Transaction consummated during each calendar year in an amount equal to, in the aggregate in any calendar year, the lesser of (1) an amount equal to six times the Monthly Salary and (2) 1.5% of (y) in the case of an M&A Transaction signed during the term of employment, the Company valuation determined in such M&A Transaction, and (z) in the case of a Commercial Transaction consummated during the term of employment, the estimated revenues to the Company in such Commercial Transaction, and subject to the restrictions set forth in our Compensation Policy. "*M&A Transaction*" means one or more related transactions of either: (A) a sale (including an exchange), lease, license or any other transfer or disposition of all or substantially all of the Company's shares or assets; or (B) any merger (including, a reverse merger and a reverse triangular merger), reorganization, amalgamation, consolidation or like transaction of the Company with or into another entity in which the holders of the Company's voting power immediately prior to the consummation of such transaction hold less than 50% of the Company's voting power or the voting power of the resulting or surviving entity or acquiring company immediately following the consummation of such transaction. "*Commercial Transaction*" means any commercial agreement entered into by the Company or any of its subsidiaries with estimated revenues to the Company and/or the applicable subsidiary of at least $5,000,000.

*Retirement Grant*. A retirement grant of six times the Monthly Salary upon termination of Mr. Efron's engagement with us, provided that the termination is not due to circumstances that do not entitle an employee to severance payments under any applicable law and/or under any judicial decision of a competent tribunal.

 

*Leased Car*. A leased car with a monthly operational lease cost to the Company that shall not exceed NIS 6,000 (approximately $1.7 thousand), grossed up for tax purposes, not including reimbursement of petrol expenses and other car expenses.

 

*Change of Control Provision*. Any equity-based awards approved for grant to Mr. Efron (including the options granted to him on May 23, 2022 in his former role as President and Chief Financial Officer), shall include a provision according to which the vesting of any such outstanding equity awards shall accelerate in full upon a change of control, as defined by our compensation committee and board of directors, subject to shareholder approval of any such awards to the extent required in accordance with applicable law.

*Equity Award*. A one-time grant to Mr. Efron of an equity-based award comprised of options to purchase up to 3,750,000 ordinary shares (equivalent to 375,000 ADSs) and 150,000 RSUs for ordinary shares (equivalent to 15,000 ADSs). The options will have an exercise price of US$0.245. The options and RSUs will vest over a period of three years, with one-third of each of the awards vesting on the first anniversary of the date of the approval of the awards by our board of directors on July 11, 2022, and an additional 8.33% of each of the awards vesting at the end of each subsequent three-month period thereafter, subject to Mr. Efron's continued engagement by the Company on each applicable vesting date. Any outstanding unexercised options shall expire five years following the date of the approval of the equity awards by our board of directors. The vesting of any such equity awards that are outstanding shall accelerate in full upon a change of control, as defined by our compensation committee and board of directors. The equity award is subject to our 2016 Plan and the applicable award agreement entered into with Mr. Efron. The equity award was granted pursuant to the capital gains track of Section 102 of the Israel Income Tax Ordinance [New Version] 5721-1961.

For the approval of compensation arrangements with directors and executive officers, see "Item 6. Directors, Senior Management and Employees—C. Board Practices—Compensation of Directors and Executive Officers."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Board Practices** 

**Board of Directors**

Our board of directors presently consists of eight directors. All of our directors also serve as directors of our subsidiaries TyrNovo, FameWave and Immunorizon, and Mr. Israel and Mr. Efron serve as directors of Purple Biotech GmbH. Each of Dr. Rowinsky, Mr. Rock, Mr. Steinberg, Mr. Gagnon, Mr. Agmon, Ms. Nahum-Zilberberg and Mr. Hershkovitz qualifies as an independent director under the corporate governance standards of the NASDAQ Listing Rules and the independence requirements of Rule 10A-3 of the Exchange Act. Accordingly, a majority of our Board members are independent as required by the NASDAQ Listing Rules. Furthermore, our Audit Committee consists of at least three independent directors, and our Compensation Committee consists of at least two independent directors.

Our directors are divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the members of our board of directors (the "Board") (who are not external directors, if any were appointed), referred to as the "first class"; the "second class"; and the "third class". If the number of directors is not equally divisible by three, each of the first class and the second class will be comprised of a different number, the closest and lowest to one-third, while the third class will be comprised of the remaining directors (who are not external directors, if any were appointed). If the number of directors changes, the number of directors in each class will change in accordance with the foregoing rule. The term of one class of directors expires at each annual general meeting, at which the election (or re-election) of directors of the class whose term expired at such annual general meeting shall be for a term that expires on the date of the third annual general meeting following such election (or re-election) and until his or her respective successor has been elected and qualified. At our 2023 annual general meeting of shareholders, the appointment of the directors included in the second class (Messrs. Rock and Steinberg) shall end. At our 2024 annual general meeting of shareholders, the appointment of the directors included in the third class (Mr. Israel, Ms. Nahum-Zilberberg and Mr. Hershkovitz) shall end. At our 2025 annual general meeting of shareholders, the appointment of the directors included in the first class (Dr. Rowinsky, Mr. Agmon and Mr. Gagnon) shall end.

Our Board may appoint a director at any time to fill any vacancies until the annual meeting of our shareholders set to take place at the end of the three-year-term for the class of directors to which such director is so appointed by the Board, provided that the total number of the members of the Board serving at such time will not exceed the maximum number of directors that may serve on the Board. The shareholders may at all times replace or dismiss a director (in the case of replacement, only if the appointed director is not a corporation) by a majority of (a) 75% of the voting rights participating and voting on the matter in the applicable general meeting of our shareholders and (b) more than 47.9% of all of our voting rights as of the record date established for the applicable general meeting of our shareholders (the "Special Majority"). A director to be replaced shall be given a reasonable opportunity to address the shareholders at their meeting. The tenure of a director expires pursuant to the provisions of our amended and restated articles of association and the Companies Law, upon death or if he/she becomes incompetent, unless removed from office earlier as described above.

Under our amended and restated articles of association, the number of directors on our Board will be no less than four and no more than nine (including any external directors, to the extent that we may be required to appoint external directors in accordance with the Companies Law and any Regulations enacted thereunder). The majority of the members of the Board shall be residents of Israel and our center of management shall be in Israel, unless, in each case, our center of management shall have been transferred to another country in accordance with a resolution of our Board by a majority of three quarters (75%) of the participating director votes. The number of directors that may serve on our Board of Directors under our amended and restated articles of association may be changed, at any time and from time to time, by the Special Majority of our shareholders. The provisions in our amended and restated articles of association regarding the maximum number of directors and composition of our Board and the appointment and removal of directors, may be amended only by our shareholders by the Special Majority.

Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have financial and accounting expertise (as defined in regulations promulgated under the Companies Law). Our board of directors has determined that we require at least one director with the requisite financial and accounting expertise and that Mr. Rock, Mr. Steinberg, Ms. Nahum-Zilberberg, Mr. Hershkovitz and Mr. Gagnon are each deemed to have such expertise.

***External Directors***

Under the Companies Law, companies incorporated under the laws of the State of Israel that are "public companies," including companies with shares listed on NASDAQ, are required to appoint at least two external directors. However, pursuant to regulations promulgated under the Companies Law, companies with shares traded on a U.S. stock exchange, including NASDAQ, may, subject to certain conditions, "opt out" from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors. In accordance with these regulations, in July 2016, we elected to "opt out" from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors. Under these regulations, the exemptions from such Companies Law requirements will continue to be available to us so long as: (i) we do not have a "controlling shareholder" (as such term is defined under Section 1 of the Companies Law), (ii) our shares are traded on a U.S. stock exchange, including NASDAQ, and (iii) we comply with the director independence requirements, the audit committee and the compensation committee composition requirements, under U.S. laws (including applicable NASDAQ Rules) applicable to U.S. domestic issuers. If a company has elected to avail itself from the requirement to appoint external directors and at the time a director is appointed all members of the board of directors are of the same gender, a director of the other gender must be appointed.

Should any person or entity in the future be deemed to be a controlling shareholder (as defined in Section 1 of the Companies Law), we will be required to convene a special general meeting of the shareholders at the earliest possible date, the agenda of which shall include the appointment of at least two external directors. Following such appointment, all of the external directors shall be appointed to each of our audit committee and compensation committee, and at least one external director shall be appointed to each committee of the Board of Directors authorized to exercise any of the powers of the board of directors.

**Audit Committee**

Under the Companies Law, the board of directors of any public company must appoint an audit committee. Companies listed on foreign stock exchanges, including NASDAQ, which have elected to "opt out" of the Companies Law requirements relating to external directors and related rules concerning the composition of the audit committee and compensation committee, such as our company (as described above), are exempt from the audit committee composition requirements under the Companies Law, but must comply with the audit committee composition requirements of the applicable foreign exchange.

Under the NASDAQ Listing Rules, we are required to maintain an audit committee consisting of at least three independent directors, within the meaning of the Exchange Act and Nasdaq Listing Rules, all of whom are financially literate and one of whom has accounting or related financial management expertise.

*Audit Committee Role*

Under the Companies Law, the roles of the audit committee are, among others, as follows:

● recommend to the board of directors to recommend to our shareholders to appoint and approve the compensation of the independent registered public accounting firm engaged to audit our financial statements;

● monitor deficiencies in the management of the Company, among other things, in consultation with the independent registered public accounting firm and internal auditor, and advises the board of directors on how to correct such deficiencies;

● decide whether to approve engagements or transactions that require the audit committee's approval under the Companies Law relating generally to certain related party transactions and whether such transaction is "extraordinary" or "material" under the Companies Law. The audit committee must pre-determine procedures for a competitive process, or other procedures, before approving related party transactions with controlling shareholders, even if such transactions are deemed by the audit committee not to be extraordinary transactions. This process is to be supervised by the audit committee, or by any person authorized for such supervision, or via any other method approved by the audit committee;

● determine the approval process for transactions that are not negligible, as well as determine which types of non-negligible transactions would require the approval of the audit committee. Non-negligible transactions are defined as related party transactions with a controlling shareholder, or in which the controlling shareholder has a personal interest, even if they are deemed by the audit committee not to be extraordinary transactions but which have been classified by the audit committee as non-negligible transactions;

● meet and receive reports from both the internal auditors and the independent registered public accounting firm dealing with matters that arise in connection with their audits; and

● regulate the Company's rules on employee complaints, and implement a whistleblower protection plan with respect to employee complaints of business irregularities.

In accordance with the Sarbanes-Oxley Act of 2002 and the NASDAQ Listing Rules, the audit committee is also directly responsible for the appointment, compensation and performance of our independent auditors, and pre-approves audit and non-audit services to be provided by the independent auditors. In addition, the audit committee is responsible for assisting the board of directors in reviewing our annual financial statements, the adequacy of our internal controls and our compliance with legal and regulatory requirements. The audit committee also oversees our major financial risk exposures and policies for managing such potential risks, discusses with management and our independent auditor significant risks or exposure and assesses the steps management has taken to minimize such risk. Our audit committee also oversees the management and investment of our cash and cash equivalents and makes investment decisions with respect to our financial assets.

Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the provisions of the Companies Law, rules and regulations of the SEC and the NASDAQ Listing Rules.

Our audit committee currently consists of Mr. Steven Steinberg, Mr. Rob Gagnon and Mr. Simcha Rock. Mr. Steinberg serves as the Chairman of the audit committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NASDAQ Listing Rules. Our board of directors has determined that each of Steven Steinberg, Robert Gagnon and Simcha Rock are audit committee financial experts as defined by the SEC rules and all of the audit committee members have the requisite financial experience required by the NASDAQ Listing Rules.

**Compensation Committee**

Under the Companies Law, the board of directors of an Israeli public company is required to appoint a compensation committee in accordance with the requirements set forth in the Companies Law. Companies listed on foreign stock exchanges, including NASDAQ, which have elected to "opt out" of the Companies Law requirements relating to external directors and related rules concerning the composition of the audit committee and compensation committee, such as our company (as described above), are exempt from the compensation committee composition requirements under the Companies Law, but must comply with the compensation committee composition requirements of the applicable foreign exchange.

In accordance with the Companies Law, the roles of the compensation committee are, among others, as follows:

● to recommend to the board of directors (i) the compensation policy for directors and officers, (ii) once every three years, whether the compensation policy that had been approved should be extended for a period of more than three years; and (iii) updates to the compensation policy, from time to time. In addition, the compensation committee is required to periodically examine the implementation of the compensation policy; and

● to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee and determining whether to exempt, under certain circumstances, a transaction with our chief executive officer from the approval of the general meeting of our shareholders .

In addition to the roles mentioned above, our compensation committee also makes recommendations to our board of directors regarding the award of equity-based grants to our employees.

Our board of directors has adopted a compensation committee charter setting forth the responsibilities of the compensation committee, which are consistent with the provisions of the Companies Law, rules and regulations of the SEC and the NASDAQ Listing Rules.

Our compensation committee currently consists of Mr. Steven Steinberg, Ms. Nahum-Zilberberg and Mr. Ido Agmon, who serves as the Chairman of the compensation committee.

*Compensation Policy*

Under the Companies Law, Israeli public companies must adopt a compensation policy with respect to the terms of service and employment of their directors and officers. The compensation policy must be approved by the board of directors (after considering the recommendations of the compensation committee) and subject to limited exceptions, by the shareholders by a simple majority of shareholder votes provided that either: (i) such majority includes at least a majority of the shares voted by those shareholders who are non-controlling shareholders and do not have a personal interest in the approval of the compensation policy, who are present at the meeting and vote on the matter (excluding abstentions) or (ii) the total number of votes voted against the proposal among the shareholders mentioned in paragraph (i) does exceed two percent (2%) of the voting rights in the company, referred to as the "Special Majority for Compensation." Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed arguments and after discussing again the compensation policy, that approval of the compensation policy, despite the objection of the meeting of shareholders, is for the benefit of the company.

Pursuant to the Israeli Companies Law, the compensation policy must generally be re-approved once every three years by the board of directors, after considering the recommendations of the compensation committee, and by the shareholders by the Special Majority for Compensation. Any amendment to the compensation policy is subject to the same approval requirements.

On August 6, 2020, our shareholders approved our current compensation policy for executive officers and directors (the "Compensation Policy"). The Compensation Policy does not, on its own, grant any rights to our directors or officers. The Compensation Policy includes both long-term and short-term compensation elements.

In general, compensation for officers will be examined while taking into consideration the following parameters, including, among others (i) education, qualifications, expertise, tenure (with us in particular, and in the officer's profession in general), professional experience and achievements of the officer; (ii) the fulfilment by the officer of the targets set for him/her, if relevant; (iii) the officer's position, the scope of his/her responsibility and previous wage agreements that were signed with the officer; and (iv) the ratio between the total cost of the proposed engagement terms of an officer and the total cost of the wages for all of our other employees, officers and contractors, and in particular compared to the average or median wage of such employees, officers and contractors and the effect of this ratio and difference, if any, on labor relations.

In adopting our initial Compensation Policy, we considered feedback we received from shareholders regarding corporate governance "best practices" for companies of a similar size, scope of business, and life-cycle. Subsequently, we adopted the Compensation Policy to better align and to further improve the link between the long-term interests of the participants of the compensation system with those of the shareholder. We expect that we will continue to monitor the regulatory environment and if required, to solicit feedback from our shareholders in the future to ensure that this link is maintained and continuously strengthened.

In adopting our initial Compensation Policy and its subsequent amendment and renewal, our Compensation Committee and Board of Directors considered numerous factors, including the relevant matters and provisions set forth in the Companies Law, and reviewed various data and other information they deemed relevant, with the advice and assistance of legal and other advisors. Our Compensation Committee and Board of Directors also considered benchmark studies of peer companies prepared for us by outside consultants to determine that the various compensation elements in the Compensation Policy are in line with market practice. The benchmark group comprised a selection of companies chosen to reflect the competitive environment in which we operate. These companies were selected according to criteria such as revenues, market capitalization, business type, geographic location, and size.

Our Compensation Policy is intended to strike a balance between short and long-term performance incentives for the executives in a way that links pay to performance of our executive officers' interests with those of the Company and our shareholders. We believe that it allows us to provide meaningful incentives that reflect both our short- and long-term goals and performance, as well as our executive officers' individual performance and impact on shareholder value, while providing compensation that is competitive in the global marketplace in which we recruit talent and designed to reduce incentives to take excessive risks.

The brief overview above is qualified in its entirety by reference to the full text of our Compensation Policy, which is attached as an exhibit to this Annual Report on Form 20-F.

**Nominations Committee**

In September 2020, our Board of Directors established a nominations committee, whose role is (among other things) to identify, review and evaluate candidates to serve as members of the Board, consistent with criteria approved by the Board, recommend to the Board of Directors nominees for election as directors of the Company, and review and evaluate incumbent members of the Board. While our Board of Directors elected to rely on the "foreign private issuer exemption" with respect to the composition of our nominations committee and nominations of our directors, and determined that our nominations committee need not be composed solely of independent directors (within the meaning of Nasdaq Listing Rules), our nominations committee currently consists of Ms. Suzana Nahum-Zilberberg, Mr. Ori Hershkowitz and Mr. Simcha Rock, all of whom are independent directors.

**Pricing Committee**

In April 2021, our Board of Directors established a non-independent pricing committee in connection with the establishment of our ATM program, whose role is to approve sales to be conducted pursuant to the Sales Agreement entered into in connection with the ATM program. Our pricing committee currently consists of Robert Gagnon, Isaac Israel and Suzana Nahum Zilberberg. Isaac Israel serves as the Chairman of the pricing committee.

**Internal Auditor**

Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor is, among other things, to examine whether a company's actions comply with applicable law and orderly business procedure. Under the Companies Law, the internal auditor may not be a related party or an office holder or a relative of a related party or of an office holder, nor may the internal auditor be the company's independent auditor or the representative of the same. A "related party" is defined in the Companies Law as (i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate one or more directors or to designate the chief executive officer of the company, or (iii) any person who serves as a director or as a chief executive officer of the company. In July 2016, our Board of Directors, following the recommendation of our Audit Committee, resolved to appoint as the Company's internal auditor Mr. Yisrael Gewirtz, a partner at Fahn Kanne Control Management Ltd., a member firm of Grant Thornton International.

**Fiduciary Duties and Approval of Certain Related Party Transactions and Compensation under Israeli Law**

**Fiduciary Duties of Office Holders**

The Companies Law imposes a duty of care and a fiduciary duty on all office holders of a company. The duty of care of an office holder is based on the definition of negligence under the Israeli Torts Ordinance (New Version) 5728-1968. This duty of care requires an office holder to act with the degree of proficiency with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of care includes, among other things, a duty to use reasonable means, in light of the circumstances, to obtain:

● information on the business advisability of a given action brought for his or her approval or performed by virtue of his or her position; and

● all other important information pertaining to such action.

The fiduciary duty incumbent on an office holder requires him or her to act in good faith and for the benefit of the company, and includes, among other things, the duty to:

● refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;

● refrain from any activity that is competitive with the business of the company;

● refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself or others; and

● disclose to the company any information or documents relating to the company's affairs which the office holder received as a result of his or her position as an office holder.

We may approve an act specified above which would otherwise constitute a breach of the office holder's fiduciary duty, provided that the office holder acted in good faith, the act or its approval does not harm the company, and the office holder discloses his or her personal interest a sufficient time before the approval of such act. Any such approval is subject to the terms of the Companies Law, setting forth, among other things, the appropriate corporate bodies of the company entitled to provide such approval, and the methods of obtaining such approval.

**Disclosure of Personal Interests of an Office Holder and Approval of Transactions**

The Companies Law requires that an office holder promptly disclose to the company any personal interest (within the meaning of the Companies Law, as described below) that he or she may have and all related material information or documents relating to any existing or proposed transaction by the company. An interested office holder's disclosure must be made promptly and, in any event, no later than the first meeting of the board of directors at which the transaction is considered. An office holder is not obliged to disclose such information if the personal interest of the office holder derives solely from a personal interest of a relative (as defined in the Companies Law) in a transaction that is not considered an extraordinary transaction (as defined in the Companies Law, as described below).

Under the Companies Law, once an office holder has complied with the above disclosure requirement, a company may approve a transaction between the company and the office holder or a third-party in which the office holder has a personal interest, subject to the approval requirements set forth in the Companies Law, provided the transaction is to the company's benefit.

Under the Companies Law, a transaction with an office holder or with a third-party in which the office holder has a personal interest, which is not an extraordinary transaction, requires approval by the board of directors, unless provided otherwise in the company's articles of association. Our amended and restated articles of association provide that transactions in which officers have a personal interest that are not extraordinary transactions can be approved by the joint approval of our chief executive officer and chief financial officer, or, in the event either of them has a personal interest in such transaction, by one of our directors who does not have a personal interest in such transaction appointed by our board of directors for such purpose instead of such interested officer. In the event that both our chief executive officer and chief financial officer have personal interests in such transaction, the approval of two directors appointed by the Board of Directors for such purpose and who do not have personal interests in the approval of such transaction, will be required. If the transaction considered is an extraordinary transaction with either an office holder or with a third-party in which the office holder has a personal interest, then, pursuant to the Companies Law, audit committee approval is required prior to approval by the board of directors. For the approval of compensation arrangements with directors and executive officers, see below "Compensation of Directors and Executive Officers."

Any persons who have a personal interest in the approval of a transaction (except for a transaction with an office holder or with a third-party in which the office holder has a personal interest that is not an extraordinary transaction) that is brought before a meeting of the board of directors, or the audit committee, may not be present at the meeting or vote on the matter. However, if the chairman of the board of directors or the chairman of the audit committee has determined that the presence of an office holder with a personal interest is required for the purpose of presenting the matter, such office holder may be present at the meeting. Notwithstanding the foregoing, a director who has a personal interest may be present at the meeting and vote on the matter if a majority of the directors or members of the audit committee have a personal interest in the approval of such transaction. If a majority of the directors at a board of directors meeting have a personal interest in the transaction, such transaction also requires approval of the shareholders of the company.

A "personal interest" is defined under the Companies Law as the personal interest of a person in an action or in a transaction of the company, including the personal interest of such person's relative or the interest of any other corporate body in which the person or such person's relative is a director or general manager, a 5% shareholder or holds 5% or more of the voting rights, or has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from the fact of holding shares in the company. A personal interest also includes (1) a personal interest of a person who votes according to a proxy of another person, including in the event that the other person has no personal interest, and (2) a personal interest of a person who gave a proxy to another person to vote on his or her behalf regardless of whether the discretion of how to vote lies with the person voting or not.

An "extraordinary transaction" is defined under the Companies Law as any of the following:

● a transaction other than in the ordinary course of business;

● a transaction that is not on market terms; or

● a transaction that may have a material impact on the company's profitability, assets or liabilities.

**Disclosure of Personal Interests of a Controlling Shareholder and Approval of Transactions**

The Companies Law also requires that a controlling shareholder promptly disclose to the company any personal interest that he or she may have and all related material information or documents relating to any existing or proposed transaction by the company. A controlling shareholder's disclosure must be made promptly and, in any event, no later than the first meeting of the board of directors at which the transaction is considered. 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, and the terms of engagement of the company, directly or indirectly, with a controlling shareholder or a controlling shareholder's relative (including through a corporation controlled by a controlling shareholder), regarding the company's receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder of the company, regarding his or her terms of employment, require the approval of each of (i) the audit committee or the compensation committee with respect to the terms of the engagement of the company, (ii) the board of directors and (iii), unless exempted under the regulations promulgated under the Companies Law, the shareholders, in that order. In addition, the shareholder approval must fulfill one of the following requirements:

● 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 or in which such has a personal interest, 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. For more information regarding exemptions from shareholder approval for extraordinary transactions with a controlling shareholder, see "Item 10 – Additional Information – B. Memorandum and Articles of Association – Board of Directors."

**Compensation of Directors and Executive Officers**

*Directors*. Under the Companies Law, the compensation of our directors with respect to their service as a director, as well as their engagement in other roles (if the director is so engaged) 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 shareholders at a general meeting. The approval of the compensation committee and board of directors must be in accordance with the compensation policy. In special circumstances, the compensation committee and board of directors may approve compensation of a director that is inconsistent with the compensation policy (or approve compensation prior to the approval of a new compensation policy upon expiration of the term of the previous compensation policy), provided that those provisions that must be included in and considered when determining the compensation policy according to the Companies Law have been considered by the compensation committee and board of directors and shareholder approval is required by the Special Majority for Compensation, as described above.

*Executive Officers Other Than the Chief Executive Officer*. The Companies Law requires the compensation of a public company's executive officers (other than the chief executive officer) who are not directors to be approved by, first, the compensation committee, second, by the company's board of directors and third, if such compensation arrangement is inconsistent with the company's duly approved compensation policy(or if compensation is approved prior to the approval of a new compensation policy upon expiration of the term of the previous compensation policy), also by the company's shareholders by the Special Majority for Compensation provided that the provisions that must be included in, and must be considered while determining the compensation policy according to the Companies Law, have been considered by the compensation committee and the board of directors. If the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company's compensation policy, the compensation committee and board of directors may, in special circumstances, override the shareholders' decision provided each of the compensation committee and board of directors discuss the arrangement again and consider (among other things) the shareholders' objections and provide detailed reasons for their decision. An amendment to an existing compensation arrangement with an office holder who is not a director (other than the chief executive officer) requires only the approval of the compensation committee if the compensation committee determines that the amendment is not material relative to the existing arrangement. However, pursuant to the relief regulations promulgated under the Companies Law, non-material amendments to the compensation of executive officers (who are subordinate to the chief executive officer) shall not require the approval of the compensation committee and may be approved by the chief executive officer of the company provided that: (i) the company's compensation policy provides that such amendments within the parameters established in the compensation policy may be approved by the chief executive officer, and (ii) the compensation is consistent with the company's compensation policy. Our Compensation Policy provides that non-material amendments to the compensation of executive officers who are subordinate to the chief executive officer may be approved solely by the chief executive officer.

*Chief Executive Officer*. The compensation paid to a public company's chief executive officer is required to be approved by, first, the company's compensation committee; second, the company's board of directors, and, unless exempted under the regulations promulgated under the Companies Law, by the company's shareholders by the Special Majority for Compensation as discussed above. However, if the shareholders of the company do not approve the compensation arrangement with a chief executive officer who is not a director, the compensation committee and board of directors may, in special circumstances, override the shareholders' decision if each of the compensation committee and the board of directors discuss the arrangement again and consider (among other things) the shareholders' objection and provide detailed reasons for their decision. The renewal or extension of the engagement with a public company's chief executive officer need not be approved by the shareholders of the company if the terms and conditions of such renewal or extension are no more beneficial than the previous engagement or there is no substantial difference in the terms and conditions and other relevant circumstances, and the terms and conditions of such renewal or extension are in accordance with the company's compensation policy.

Approval of the chief executive officers' compensation by the compensation committee and board of directors should be in accordance with the company's compensation policy; however, in special circumstances, compensation terms of a chief executive officer that are inconsistent with such policy may be approved by the compensation committee and board of directors provided that they each have considered the provisions that must be considered and included in the compensation policy according to the Companies Law, and that shareholder approval was obtained by the Special Majority for Compensation. The compensation committee may waive the shareholder approval requirement for the initial engagement terms of a candidate for the chief executive officer position, provided that: (i) the compensation arrangement is consistent with the company's compensation policy, (ii) the chief executive officer candidate did not have a business or employment relationship in the previous two years with the company or a controlling shareholder of the company (and in a company without a controlling officer, a business or employment relationship with the chairman of the board of directors, a substantial shareholder, or the most senior office holder in the company), and (iii) the compensation committee determines that subjecting the approval of the engagement to a shareholder vote would impede the engagement.

The engagement with a public company's chief executive officer or a director need not be approved by the shareholders of the company with respect to the period from the commencement of the engagement until the next shareholder meeting convened by the company, if the terms and conditions of such engagement were approved by the compensation committee and the board of directors of the company, the terms and conditions of such engagement are in accordance with the company's compensation policy approved in accordance with the Companies Law, and if the terms and conditions of such engagement are no more beneficial than the terms and conditions of the person previously serving in such role or there is no substantial difference in the terms and conditions of the previous engagement versus the new one under the circumstances, including the scope of engagement.

**Duties of Shareholders**

Under the Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations to the company and other shareholders, including, among other things, when voting at meetings of shareholders on the following matters:

● an amendment to the articles of association;

● an increase in the company's authorized share capital;

● a merger; and

● the approval of related party transactions and actions that require shareholder approval.

A shareholder also has a general duty to refrain from discriminating against other shareholders.

The remedies generally available upon a breach of contract will also apply to a breach of the shareholder duties mentioned above, and in the event of discrimination against 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 any other 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, considering the shareholder's position in the company.

**Exculpation, Insurance and Indemnification of Directors and Officers**

Under the Companies Law, a company may not exculpate an office holder from liability for a breach of a fiduciary duty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our amended and restated articles of association include such a provision. The company may not exculpate in advance a director from liability arising out of breach of duty of care with respect to a prohibited dividend or distribution to shareholders.

Under the Companies Law and the Israeli Securities Law, 5738–1968 ("Securities Law") a company may indemnify an office holder in respect of the following liabilities, payments and expenses incurred for acts performed by him or her as an office holder, either in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:

● a monetary liability incurred by or imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator's award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company's activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria;

● reasonable litigation expenses, including reasonable attorneys' fees, incurred 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, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability was imposed upon him or her as a substitute for the criminal proceeding 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 in connection with a monetary sanction;

● a monetary liability imposed on him or her in favor of a payment for a breach offended at an Administrative Procedure (as defined below) as set forth in Section 52(54)(a)(1)(a) to the Securities Law;

● expenses associated with an Administrative Procedure conducted regarding an office holder, including reasonable litigation expenses and reasonable attorneys' fees; and

● reasonable litigation expenses, including attorneys' fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third-party, or in connection with criminal proceedings in which the office holder was acquitted, or as a result of a conviction for an offense that does not require proof of criminal intent.

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.

Under the Companies Law and the Securities Law, a company may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder if and to the extent provided in the company's articles of association:

● a breach of a fiduciary duty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;

● a breach of duty of care to the company or to a third-party, to the extent such a breach arises out of the negligent conduct of the office holder;

● a monetary liability imposed on the office holder in favor of a third-party;

● a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure pursuant to Section 52(54)(a)(1)(a) of the Securities Law; and

● expenses incurred by an office holder in connection with an Administrative Procedure, including reasonable litigation expenses and reasonable attorneys' fees.

Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:

● a breach of fiduciary duty, except for indemnification and insurance for a breach of the fiduciary duty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

● a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;

● an act or omission committed with intent to derive illegal personal benefit; or

● a fine, monetary sanction or forfeit levied against the office holder.

Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to directors or controlling shareholders, their relatives and third parties in which such controlling shareholders have a personal interest, also by the shareholders.

The compensation committee may approve the procurement of directors' and officers' liability insurance policy without the need for shareholder approval, if it determines that, pursuant to the relief regulations promulgated under the Companies Law, the provision of such insurance coverage to the office holders under our directors and officers liabilities insurance policy is on market terms, is not likely to have a material adverse effect on our profits, assets or obligations, and is consistent with our Compensation Policy which was approved by our shareholders in accordance with the Companies Law.

Our amended and restated articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent permitted or to be permitted by law. Our office holders are currently covered by a directors' and officers' liability insurance policy within the parameters set forth in our Compensation Policy.

We have issued letters of indemnity (the "Indemnity Letters") to each of our current office holders pursuant to which we undertook to indemnify such office holders to the fullest extent permitted by applicable law, to the extent that these liabilities are not covered by insurance. This indemnification is limited to events determined as foreseeable by our Board of Directors based on our activities, as set forth in the Indemnity Letters. According to the Indemnity Letters, the total accumulative sum of indemnification that may be paid by us to all office holders will not exceed a sum equal to 25% of our shareholders' equity according to our latest audited or reviewed consolidated financial statements, as of the date of indemnification. The payment of indemnity amounts will not prejudice the right of office holders to receive insurance coverage benefits. Once we have paid to our office holders the aggregate maximum indemnity amount that we may pay to all our office holders, we will not pay additional indemnity amounts unless the payment of these additional amounts is approved by the authorized corporate bodies according to the applicable law at the time of payment of the additional indemnity sums, and subject to an amendment to our articles of association if required by applicable law at such time.

In addition, we have issued letters of exemption to each of our current office holders exculpating them from a breach of their duty of care to us to the fullest extent permitted by law.

We expect to indemnify our officers and directors for obligations, including the deductibles for our directors' and officers' liability insurance policy, and we may be required to pay costs and expenses they may incur related to the 2015 Motion and the 2017 Motions described in "Item 8. Financial Information – A. Financial Statements and Other Financial Information – Legal Proceedings", pursuant to the Indemnity Letters issued to our directors and officers. In addition, we expect to indemnify Isaac Israel for obligations, including the deductibles for our directors' and officers' liability insurance policy, and we may be required to pay costs and expenses he may incur related to the Atzmon Claim described in "Item 8. Financial Information – A. Financial Statements and Other Financial Information – Legal Proceedings", pursuant to the Indemnity Letter issued to her. To our knowledge, other than with respect to the foregoing proceedings, there is no previous or pending litigation or proceedings against any of our office holders as to which indemnification is being, or may be sought, nor are we aware of any other pending or threatened litigation or proceeding that may result in claims for indemnification by any office holder.

Insofar as indemnifications for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**D.** **Employees** 

As of December 31, 2022, the Company had employees as follows: (i) eight in business development, general and administrative roles; and (ii) twelve in research and development roles. All of such employees were located in Israel other than one employee in business development located in Switzerland.

As of December 31, 2021, the Company had employees (including consultants on a full-time basis) as follows: (i) eight in business development, general and administrative roles; and (ii) eleven in research and development roles. All of such employees were located in Israel other than one employee in research and development, who was located in the United States and one employee in business development who was located in Switzerland.

As of December 31, 2020, the Company had employees (including consultants on a full-time basis) as follows: (i) six in business development, general and administrative roles; and (ii) seven in research and development roles. All of such employees were located in Israel.

While none of our employees is party to a collective bargaining agreement, in Israel we are subject to certain labor statutes and national labor court precedent rulings, as well as to certain provisions of the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations, including the Industrialists' Associations. These provisions of collective bargaining agreements are applicable to our Israeli employees by virtue of extension orders issued in accordance with relevant labor laws and regulations of the Israeli Ministry of Labor and Welfare, and which apply such agreement provisions to our employees even though they are not directly part of a union that has signed a collective bargaining agreement. The laws and labor court rulings that apply to our employees principally concern the minimum wage laws, procedures for dismissing employees, determination of severance pay, leaves of absence (such as annual vacation or maternity leave), sick pay and other conditions for employment. The extension orders which apply to our employees principally concern the requirement for length of the workday and workweek, mandatory contributions to a pension fund, annual recreation allowance, travel expenses payment and other conditions of employment. We generally provide our employees with benefits and working conditions beyond the legally required minimums.

Israeli law generally requires severance pay, which may be funded by managers' insurance and/or a pension fund, upon the retirement or death of an employee or termination of employment without cause (as defined in the Severance Pay Law, 5723-1963). Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute, which is similar to the United States Social Security Administration. Such amounts also include payments for the national health insurance. We also contribute funds on behalf of most of our employees either to a fund known as managers' insurance, to a pension fund or to a combination of both, as required by Israeli law.

We have never experienced labor-related work stoppages or strikes and believe that our relations with our employees are satisfactory.

**E.** **Share Ownership** 

As of March 3, 2023, no officer or director beneficially owned 1% or more of our outstanding ordinary shares and all officers and directors as a group (15 persons) beneficially owned less than 5% of our ordinary shares.

**2016 Equity-Based Incentive Plan**

On April 18, 2016, we adopted the Purple Biotech Ltd. 2016 Equity-Based Incentive Plan, or the 2016 Equity Incentive Plan. The 2016 Equity Incentive Plan provides for the grant to our directors, officers, employees and consultants and to the directors, officers, employees and consultants of our subsidiaries and affiliates, of equity-based incentive awards, including, amongst others, options, RSUs, restricted shares, with either our ordinary shares or ADSs underlying the applicable award. The 2016 Equity Incentive Plan provides for awards to be granted at the determination of our board of directors (who is entitled to delegate its powers under the 2016 Equity Incentive Plan to the compensation committee or audit committee of our board of directors) in accordance with applicable laws. The exercise price and vesting period of awards are determined by our board of directors. The number of ordinary shares currently reserved for the grant of awards under the 2016 Equity Incentive Plan is 4,877,384 ordinary shares. Our board of directors may, subject to any other approvals required under any applicable law, increase or decrease the number of ordinary shares reserved under the 2016 Equity Incentive Plan. As of December 31, 2022, non-tradable options to purchase 18,468,235 ordinary shares and 7,857,917 RSUs were outstanding under the 2016 Equity Incentive Plan.

The 2016 Equity Incentive Plan will be effective until the earliest of (a) its cancellation by our board of directors and (b) April 18, 2026. Nevertheless, awards granted prior to the 2016 Equity Incentive Plan's expiration date, whether vested or not vested up to that date, will remain effective and will not expire prior to their expiration date as set forth in the notice of grant of award (but in any event not in excess of 10 years from the grant date).

Upon termination of engagement with the Company for any reason, other than in the event of death or for cause, all unvested options will expire and all vested options at time of termination will generally be exercisable within up 12 months after the date of such termination, unless otherwise determined by the board of directors (or the committee, as applicable), subject to the terms of the 2016 Equity Incentive Plan and the governing award agreement. If we terminate a grantee for cause (as defined in the 2016 Equity Incentive Plan) the grantee's right to exercise all vested and unvested options granted to him will expire immediately, unless otherwise determined by the board of directors (or the committee, as applicable). Upon termination of engagement with the Company due to death, all the vested options at the time of termination will be exercisable by the grantee's heirs or estate, for one year from the date of death, unless otherwise determined by the board of directors (or the committee, as applicable), subject to the terms of the 2016 Equity Incentive Plan and the governing award agreement.

The 2016 Equity Incentive Plan enables us to grant awards through one of the following Israeli tax programs, at our discretion and subject to the applicable legal limitations: (a) according to section 102 of the Israeli Income Tax Ordinance [New Version], 5721-1961 (the "Israeli Income Tax Ordinance"), through a program with a trustee that is appointed by us, (b) according to section 102 of the Israeli Income Tax Ordinance, without a trustee, or (c) according to the provisions of section 3(9) in the Israeli Income Tax Ordinance. The 2016 Equity Incentive Plan also enables us to grant options as Incentive Stock Options for U.S. tax purposes.

The 2016 Equity Incentive Plan includes directives for protecting the option holders during the exercise period with respect to distribution of bonus stock, issue of rights, splitting or consolidating our share capital and dividend distribution. We are entitled at our sole discretion, to change the terms of the 2016 Equity Incentive Plan and/or replace it and/or terminate it regarding future grants at any time, as we deem appropriate. The Board of Directors may, at any time and from time to time, suspend, terminate, modify or amend the 2016 Equity Incentive Plan, whether retroactively or prospectively; provided, however, that, unless otherwise determined by the Board of Directors, an amendment which requires shareholder approval in order for the plan to continue to comply with any applicable law shall not be effective unless approved by the requisite vote of shareholders, and provided further, that except as provided by the 2016 Equity Incentive Plan, no suspension, termination, modification or amendment may adversely affect any award previously granted, without the written consent of grantees holding a majority in interest of the awards so affected, and in the event that such consent is obtained, all awards so affected shall be deemed amended, and the holders thereof shall be bound, as set forth in such consent. Our board of directors will determine, at its sole discretion, if a certain change may materially impair the rights of the grantee.

The 2016 Equity Incentive Plan is administered by our board of directors, regarding the granting of awards and the terms of award grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of such plan. Awards granted under the 2016 Equity Incentive Plan to eligible Israeli employees, officers and directors are granted under Section 102 of the Israel Income Tax Ordinance, pursuant to which the awards or the ordinary shares (or ADSs in accordance with a ruling from the Israel Tax Authority dated June 19, 2016, or Tax Ruling) issued upon their exercise must be allocated or issued to a trustee and be held in trust for two years from the date upon which such awards were granted in order to benefit from the provisions of Section 102. Under Section 102, any tax payable by a grantee from the grant or exercise of the awards is deferred until the transfer of the awards or ordinary shares (or ADSs, in accordance with the Tax Ruling) by the trustee to the grantee or upon the sale of the awards or ordinary shares (or ADSs, in accordance with the Tax Ruling), and gains may qualify to be taxed as capital gains at a rate equal to 25%, subject to compliance with specified conditions.

**ITEM** **7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A.** **Major Shareholders** 

As of March 3, 2023, no person or entity known to us beneficially owned 5% or more of our outstanding ordinary shares.

The beneficial ownership of our ordinary shares is determined in accordance with the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security. We deem ordinary shares issuable pursuant to options or warrants that are currently exercisable or exercisable within 60 days of March 3, 2023 and ordinary shares underlying RSUs that vest within 60 days of March 3, 2023, if any, to be outstanding and to be beneficially owned by the person holding the options warrants or RSUs for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. The calculation of beneficial ownership is based on 207,873,862 ordinary shares (not including 1 share held in treasury) outstanding as of March 3, 2023. Each one (1) ADS held represents ten (10) ordinary shares. The data presented is based on information disclosed in public regulatory filings in the U.S. or Israel, in accordance with applicable law.

None of our shareholders has different voting rights from other shareholders. To the best of our knowledge, we are not owned or controlled, directly or indirectly, by another corporation or by any foreign government. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

***Changes in Percentage Ownership by Major Shareholders***

To our knowledge, the only significant changes in the percentage ownership held by our more than 5% shareholders as reported in our Annual Reports on Form 20-F during the past three years are as follows: (i) the ownership percentage of Empery Asset Management, LP decreased from 8.9% in January 2019 to under 5% in 2020, (ii) the ownership percentage of Sabby Volatility Warrant Master Fund, Ltd. decreased from 8.8% in January 2019 to under 5% in 2020, (iii) the ownership percentage of M. Arkin Ltd. increased to 11.0% in January 2020 and decreased to under 5% in 2020, (iv) the ownership percentage of OrbiMed Israel Partners Limited Partnership increased to 9.9% in January 2020 and decreased to under 5% in 2020, (v) the ownership percentage of Pontifax Group increased to 9.9% in January 2020 and decreased to under 5% in 2020, (vi) the ownership percentage of Armistice Capital Master Fund LLC increased to 5% in March 2020 and decreased to under 5% in May 2020, (vii) the ownership percentage of CVI Investments Inc. increased to 5% in March 2020 and decreased to under 5% in 2020, and (viii) the ownership percentage of Morgan Stanley increased to 5% in February 2021 and decreased to under 5% in April 2021.

***Record Holders***

The Bank of New York Mellon, or BNY, is the holder of record for our ADR program, pursuant to which each ADS represents ten ordinary shares. As of March 3, 2023, BNY held 193,643,950 ordinary shares in custody representing 93.15% of the outstanding ordinary shares at that date. Certain of these ordinary shares were held by brokers or other nominees. As a result, the number of holders of record or registered holders in the United States is not representative of the number of beneficial holders or of the residence of beneficial holders.

***Immunorizon Acquisition – Shareholders Proxy***

 ****

In connection with our acquisition of Immunorizon in February 2023, each of the selling shareholders that received ADSs as part of the consideration in the transaction, referred to as the "Major Selling Shareholders," executed an Irrevocable Proxy and Undertaking to vote such ADSs and any additional ADSs issued to such Major Selling Shareholders in connection with a Dilutive Event (as defined below) (if any), at any and all Company shareholder meetings in accordance with the voting recommendations of the Company's board of directors. In addition, each Major Shareholder undertook that to the extent that the Proxy is not able to instruct the depositary for our ADSs to exercise the voting rights of the Major Selling Shareholder with respect to its ADSs, it shall, upon the written instructions of the Proxy, promptly deliver instructions to the depositary as to the exercise of the voting rights pertaining to its ADSs in accordance with the voting recommendations of our board of directors. For additional information regarding the Immunorizon transaction and the Irrevocable Proxy and Undertaking, see "Item 10 – Additional Information – C. Material Contracts – Immunorizon Acquisition."

 ****

 ****

**B.** **Related Party Transactions** 

*FameWave*

Purple Biotech provides services to FameWave (including research and development services, corporate management, business development services, accounting services, legal services and others) and FameWave reimburses Purple Biotech at the rate of cost plus 3% for these services.

*TyrNovo*

Purple Biotech provides services to TyrNovo (including research and development services, corporate management, business development services, accounting services, legal services and others) and TyrNovo reimburses Purple Biotech at the rate of cost plus 3% for these services.

*Purple Biotech GmbH*

Purple Biotech provides services to Purple Biotech GmbH (including research and development services, corporate management, business development services, accounting services, legal services and others) and Purple Biotech GmbH reimburses Purple Biotech at the rate of cost plus 3% for these services.

*Immunorizon*

Purple Biotech provides services to Immunorizon (including research and development services, corporate management, business development services, accounting services, legal services and others) and Immunorizon reimburses Purple Biotech at the rate of cost plus 3% for these service*.*

 

*Agreements with Officers*

We have entered into employment agreements with each of our executive officers. See "Item 6. Directors, Senior Management and Employees – B. Compensation".

 

*Directors' and officers' exculpation, indemnification and insurance*

We have granted exemption and indemnification letters to our officers and directors, and our officers and directors are currently covered by a directors and officers' liability insurance. See "Item 6. Directors, Senior Management and Employees - C. Board Practices - Exculpation, Insurance and Indemnification of Directors and Officers."

*Consulting Agreement with Mr. Isaac Israel*

We engage Mr. Israel to serve as an advisor to the Company in a 50% capacity, commencing on October 10, 2022. Mr. Isaac Israel has served as a director since October 2012 and served as our chief executive officer from October 2012 until July 10, 2022, and his former services agreement with the Company formally terminated on October 10, 2022. As an advisor to the Company, Mr. Israel will actively seek to identify and shall take an active role in the execution of new strategic business initiatives and shall support the Company in its fund-raising activities. The advisory services will be provided for an initial period of 12 months, effective as of October 10, 2022, and will automatically be extended for successive 12-month periods, under the same conditions, as detailed below, unless terminated by either party upon 90 days' advance notice to the other party ("Engagement Period"). At our annual general meeting held on August 25, 2022, our shareholders approved the payment of the following compensation to Mr. Israel, in consideration for his service as an advisor:

*Monthly Fee*. A monthly advisory fee in the amount of $6,700 (plus VAT) (excluding out-of-pocket expenses as approved by the Company) ("Monthly Fee"), payable commencing as of January 10, 2023.

*Transaction Bonus(es)*. Commencing as of October 10, 2022, Mr. Israel will be entitled to the following transaction bonuses: (1) For contribution to the achievement of a Strategic Transaction signed during the Engagement Period: (i) in the event of a transaction under clause (A) or (B) below - 1% of the Company value determined for the transaction; or (ii) in the event of a commercial agreement under clause (C) below - 1% of the cash actually received by the Company or the applicable subsidiary, and subject to the restrictions set forth in our Compensation Policy. "Strategic Transaction" means one or more related transactions of either: (A) sale (including an exchange), lease, license or any transfer or disposition of all or substantially all of the Company's shares or assets; (B) any merger (including, a reverse merger and a reverse triangular merger), reorganization, amalgamation, consolidation or like transaction of the Company with or into another entity in which the holders of the Company's voting power immediately prior to the consummation of such transaction hold less than 50% of the Company's voting power or the voting power of the resulting or surviving entity or acquiring company immediately following the consummation of such transaction; or (C) any commercial agreement entered into by the Company or any of its subsidiaries with estimated revenues to the Company or the applicable subsidiary of at least $5 million. (2) For contribution to the achievement of a financing transaction (excluding a financing under the Company's existing ATM program) closed during the Engagement Period – 1% of the cash actually received by the Company in the applicable financing transaction. In the event of the signing of a Strategic Transaction during the Engagement Period or the closing of a financing transaction (excluding a financing under the Company's existing ATM program) during the Engagement Period, which does not qualify for the above monetary bonus – Mr. Israel shall be entitled to a transaction bonus equal to four times the Monthly Fee. The total transaction bonus(es) will not exceed an annual amount (during any consecutive 12-month period) of $2,000,000.

*Other*. The above dollar denominated fees, and all other dollar denominated payments will be paid in NIS based on the NIS/$ exchange rate at the beginning of the month in which such amounts are paid, but not lower than the exchange rate in effect on January 1, 2017. The Monthly Fee is subject to adjustment in the event that a general salary increase ("*tosefet yoker*") is implemented in Israel due to the increase in the Israel consumer price index, under certain circumstances.

*Medical and Clinical Committee Chairman*

Dr. Rowinsky, the chairman of our board of directors, serves as the chairman of our medical and clinical committee established in March 2022, for the period commencing on April 1, 2022 and until no later than March 31, 2023, for a monthly fee of $10,000, as approved by our shareholders at our annual general meeting held on August 25, 2022. The medical and clinical committee's primary responsibilities are to: (i) assist our clinical team in the design, planning and supervision of clinical trials; (ii) support our Head of Clinical and Regulatory Affairs in the medical aspects of clinical trials; (iii) support the Company's Chief Medical Officer; and (iv) assist in the medical and clinical review of potential new business opportunities.

**C.** **Interests of Experts and Counsel** 

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A.** **Consolidated Statements and Other Financial Information** 

See Item 18.

**Legal Proceedings**

From time to time, we may become party to legal proceedings and claims in the ordinary course of business or otherwise.

*2015 Motion to Approve a Class Action in Israel*

On December 3, 2015, we announced that we received a lawsuit and motion to approve the lawsuit as a class action lawsuit pursuant to the Class Action Lawsuits Law 5766-2006 (the "2015 Motion") which was filed against us and our directors at the Tel Aviv District Court (Economic Division). The 2015 Motion is with respect to asserted claims for damages to the holders of our securities listed on the Tel Aviv Stock Exchange, arising due to the public offering of our initial public offering of our securities in the U.S. during November 2015. In the 2015 Motion it was claimed that the class the petitioners are seeking to represent includes anyone holding our shares at the start of trading on November 22, 2015 exclusive of the respondents and/or anyone acting on their behalf and/or any affiliates thereof and excluding anyone whose rights to our shares derive from ADS certificates issued in the U.S to such extent as derived therefrom; and any holders of our Series 2 TASE listed warrants as of the start of trading on November 22, 2015, exclusive of the respondents and/or anyone acting on their behalf and/or any affiliates thereof (the "Purported Class"). The total amount claimed from all defendants, if the 2015 Motion is certified as a class action, as set forth in the motion is approximately NIS 16.4 million (approximately $4.6 million). In addition to this amount, the petitioners in the motion are seeking remedies in order to redress discrimination against the Purported Class owing to the dilution caused by the public offering, including the possibility that the Purported Class should be awarded from us amounts reflecting the losses of the Purported Class from a possible price increase in our shares following the announcement of the Phase III clinical trial results.

We announced that we reject the claims asserted in the 2015 Motion and delivered our response to the court, and a preliminary hearing was held by the court on September 12, 2016. At such hearing the court determined that certain claims of the petitioners in connection with alleged personal interests by affiliates of ours in connection with the public offering of our initial public offering of our securities in the U.S. during November 2015 are not part of the grounds for the 2015 Motion and no remedies shall be sought by the petitioners in connection therewith. The parties subsequently filed various motions in connection with discovery. On October 24, 2017, the court issued a ruling to stay proceedings in this matter until January 15, 2018 due to the then-ongoing formal investigation by the Israeli Securities Authority (respectively, the "ISA Investigation" and the "ISA"). This stay was subsequently extended by the court, which ruled that the stay of proceedings shall remain in place pending delivery of a notice to the court by the ISA with respect to an update on the ISA Investigation. At the request of the ISA, this stay was subsequently extended several times by the court. Following approval of an enforcement arrangement in connection with the ISA Investigation, the stay was lifted. On January 7, 2020, a pre-trial proceeding, prior to evidentiary hearing, took place. On April 27, 2022 the evidentiary hearing took place. On October 10, 2022, the petitioners furnished their summaries, on January 9, 2023, we furnished our summaries and on January 25, 2023, the petitioners furnished their response summaries. Court decision in the 2015 Motion is expected to be given in the near future.

On November 8, 2016, a shareholder of ours submitted a request to the court in connection with the 2015 Motion to be excluded from the Purported Class and claiming to have independent causes of action and claims of approximately NIS 1 million ($284 thousand) (the "Petition to Exclude"). We responded to the court, and, amongst other arguments, we noted that pursuant to the Class Action Lawsuits Law 5766-2006 and the Regulations enacted thereunder, at the current stage of the court proceedings with respect to the 2015 Motion such shareholder cannot petition to be excluded from the Purported Class. The court ordered the shareholder to respond to our response and he has done so. In May 2018, the shareholder filed an independent lawsuit against us in the Haifa Magistrates Court seeking damages of approximately NIS 1.1 million (approximately $313 thousand) and for the purposes of the court fees, the amount claimed was reduced to NIS 750,000 ($213 thousand) (the "Separate Lawsuit"). In August 2018, the Haifa Magistrates Court transferred the Separate Lawsuit to the Tel Aviv Magistrates Court. We are of the view that such shareholder's claims are identical to the asserted claims for damages in the 2015 Motion, and we notified the court of such and sought a stay of proceedings pending the outcome of the 2015 Motion. A preliminary hearing on our motion to dismiss the Separate Lawsuit and/or stay the proceedings was held in May 2019, at which the court dismissed the claim without prejudice. This shareholder subsequently filed a new separate claim against the Company in the Haifa District Court – Economic Division, which was transferred to the Tel Aviv District Court – Economic Division. In January 2020, the Tel Aviv District Court – Economic Division accepted the Company's position that the shareholder's claims are identical to the asserted claims for damages in the 2015 Motion, and entered a stay of proceedings pending the outcome of the 2015 Motion.

We have been advised by our attorneys that the likelihood of us not incurring any financial obligation as a result of the 2015 Motion and the Separate Lawsuit exceeds the likelihood that we will incur a financial obligation. At this stage however, we are unable, with any degree of certainty, to make any other evaluations or any other assessments with respect to the 2015 Motion's and/or the Separate Lawsuit's probability of success or the scope of potential exposure, if any.

 

 

*2017 Motions to Approve a Class Action in Israel*

On February 16, 2017, we announced that four lawsuits and motions to approve the lawsuits as a class action lawsuit were filed against us and certain of our office holders in the Tel Aviv District Court (Economic Division), and served on us, with each such motion relating to the ISA Investigation into our public disclosures around certain aspects of the studies related to our lead drug candidate, Consensi (the "2017 Motions"). One of these motions was subsequently withdrawn.

The petitioners in one of the motions petitioned the court to dismiss the other 2017 Motions ("Petition for Dismissal"). On December 19, 2017, the court granted the Petition for Dismissal and dismissed the other outstanding 2017 Motions.

The remaining motion from the 2017 Motions (the "Surviving Motion") was filed against us, our executive directors and certain of our present and former directors, by certain shareholders who are requesting to act as representatives of all shareholders of record from December 10, 2015 until February 6, 2017. The plaintiffs allege, among other things, that we included misleading information in our public filings which caused the class for which the plaintiffs are seeking recognition, an aggregate loss of approximately NIS 29 million (approximately $8.2 million). The court ordered a stay of proceedings due to the then-ongoing ISA Investigation. Following approval of an enforcement arrangement in connection with the ISA Investigation, the stay was lifted. On May 29, 2020 the petitioners in the Surviving Motion filed an amended lawsuit and motion to approve the lawsuit as a class action. On November 15, 2020, the respondents filed their responses to the amended motion to approve the lawsuit as a class action. Following the submission of these responses, and as suggested by the court, the parties attended mediation, but without success. The plaintiffs then filed a motion to submit a new expert opinion as a response to the respondents' claims. The court approved the motion on January 3, 2022. On April 7, 2022 the plaintiffs provided their answer to the respondents' responses, which included a new opinion. Evidentiary hearings took place on November 13, 2022, November 20, 2022 and November 22, 2022. The plaintiffs must furnish their summaries no later than April 17, 2023, and the respondents must furnish their summaries 90 days thereafter.

The company rejects the claims in the Surviving Motion. At this preliminary stage we are unable, with any degree of certainty, to make any evaluations or any assessments with respect to the Surviving Motion as to the probability of success or the scope of potential exposure, if any.

*BIRAD Lawsuit* 

On December 21, 2020, the University and BIRAD filed a statement of claim in the Tel Aviv District Court against TyrNovo, one of its officers and others. In the claim, the petitioners alleged that the University is the rightful owner of one of the patents owned by TyrNovo. The invention underlying the patent application is based on experiments which were performed under a services agreement between BIRAD and TyrNovo. The main remedy sought by the petitioners was a declaratory relief under which the University would be declared the owner of such patent. On May 16, 2022, the Tel Aviv District Court fully dismissed the lawsuit with prejudice, based on a mediation arrangement entered into among TyrNovo, all other defendants in the BIRAD Lawsuit, the University and BIRAD. Under the terms of such mediation arrangement, TyrNovo retains ownership of its patent and other intellectual property rights as stipulated in the services agreement between BIRAD and TyrNovo.

Atzmon Claim

On November 17, 2022, Fidelity Venture Capital Ltd., a private Israeli company ("Fidelity VC") and Mr. Dror Atzmon, an Israeli resident and citizen believed to be the sole shareholder of Fidelity VC (Mr. Atzmon, together with Fidelity VC, the "Atzmon Plaintiffs"), filed a statement of claim in the Economic Division of the Tel Aviv District Court (the "Atzmon Claim") against the Company and a number of other defendants, including our former chief executive officer. The Atzmon Plaintiffs are seeking damages for approximately NIS 9 million (approximately $2.56 million) in connection with various claims relating to alleged contractual breaches and torts arising from an alleged contractual undertaking for the Company to engage the Atzmon Plaintiffs to provide advisory services to the Company following our initial public offering in the United States and listing on NASDAQ in November 2015. We were served with the statement of claim on January 22, 2023, and may serve our statement of defense within 60 days thereafter. We reject all the claims presented in the Atzmon Claim. At this preliminary stage we are unable, with any degree of certainty, to make any evaluations or any assessments with respect to the probability of success or the scope of potential exposure, if any, of the Atzmon Claim.

Other than as described above, we are not currently a party to any significant legal or arbitration proceedings involving any third-party, including governmental proceedings, pending or known to be contemplated, which may have, or have had in the recent past, significant effects on the Company's financial position or profitability.

**Dividend Policy**

We anticipate that, for the foreseeable future, we will retain any future earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends for at least the next several years. We did not declare dividends during the three most recent fiscal years.

The distribution of dividends may also be limited by the Companies Law, which permits the distribution of dividends only out of retained earnings or earnings derived over the two most recent fiscal years, whichever is higher, provided that there is no reasonable concern that payment of a dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. Our amended and restated articles of association provide that dividends will be paid at the discretion of, and upon resolution by, our board of directors, subject to the provision of the Companies Law.

**B.** **Significant Changes** 

Except as otherwise disclosed in this Annual Report on Form 20-F, no significant change has occurred since December 31, 2022.

**ITEM 9. THE OFFER AND LISTING**

**A.** **Offer and Listing Details** 

Our ordinary shares are currently traded on the TASE under the symbol "PPBT". Our ADSs are currently traded on NASDAQ under the symbol "PPBT".

**B.** **Plan of Distribution** 

Not applicable.

**C.** **Markets** 

See "—Offer and Listing Details" above.

**D.** **Selling Shareholders** 

Not applicable.

**E.** **Dilution** 

Not applicable.

**F.** **Expenses of the Issue** 

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION**

**A.** **Share Capital** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Memorandum and Articles of Association** 

A copy of our memorandum of association and amended and restated articles of association are attached as Exhibit 1.1 and Exhibit 1.2 to this Annual Report, respectively. Other than as set forth below, the information called for by this Item is set forth in Exhibit 2.1 to this Annual Report and is incorporated by reference into this Annual Report.

**Securities Registers**

Our registration company for our shares is the Registration Company of United Mizrahi Bank Ltd., and its address is 7 Jabotinsky St., Ramat Gan, Israel.

Our transfer agent and registrar for our ADSs is the depositary for our ADRs, The Bank of New York Mellon, and its address is 101 Barclay Street, New York, NY.

**Objects and Purposes**

According to our memorandum of association and our amended and restated articles of association, we are permitted to engage in any legal business. Our registration number with the Israeli Registrar of Companies is public company number 520031238.

**Shareholder Meetings**

Under regulations promulgated under the Companies Law, we are required to publish notices at least 21 days prior to a shareholders' meeting. However, we are required to publish notices at least 35 calendar days prior to any shareholders' meeting in which the agenda includes matters which may be voted on by voting instruments. Regulations under the Companies Law exempt companies whose shares are listed for trading both on a stock exchange in and outside of Israel, from some provisions of the Companies Law. These regulations exempt us from some of the requirements of the Israeli proxy regulations, under certain circumstances.

According to the Companies Law and the regulations promulgated thereunder, as applicable to Purple Biotech, for purposes of determining the shareholders entitled to notice and to vote at such meeting, the board of directors may fix the record date no more than 40, but no less than four calendar days prior to the date of the meeting, provided that an announcement regarding the general meeting shall be given prior to the record date.

Holders of ordinary shares are entitled to one vote for each ordinary share held on all matters submitted to a vote of shareholders. Pursuant to our articles of association, the quorum required for an ordinary meeting of shareholders consists of at least two shareholders present, in person or by proxy, or who has sent us a voting instrument indicating the way in which he or she is voting, who hold or represent, in the aggregate, at least 25% of the voting rights of our outstanding share capital. A meeting adjourned for lack of a quorum is adjourned to the same day in the following week at the same time and place or any time and place as prescribed by the board of directors in notice to the shareholders. At the reconvened meeting one shareholder at least, present in person or by proxy constitutes a quorum except where such meeting was called at the demand of shareholders. With the agreement of a meeting at which a quorum is present, the chairman may, and on the demand of the meeting he must, adjourn the meeting from time to time and from place to place, as the meeting resolves.

Under Israeli law, annual general meetings of our shareholders are to be held once every year within a period of not more than 15 months after the last preceding annual general shareholders' meeting. Our board of directors may call special general meetings of shareholders. The Companies Law provides that a special general meeting of shareholders may be called by the board of directors or by a request of two directors or 25% of the directors in office, whichever is the lower, or by shareholders holding at least 5% of our issued share capital and at least 1% of the voting rights, or of shareholders holding at least 5% of our voting rights, subject to the provisions set forth in our amended and restated articles of association.

Our ADS holders may instruct the depositary how to vote the number of deposited ordinary shares their ADSs represent. If we request the depositary to solicit your voting instructions (and we are not required to do so), the depositary will notify you of a shareholders' meeting and send or make voting materials available to you. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. The depositary will try, as far as practical, subject to the laws of Israel and the provisions of our amended and restated articles of association or similar documents, to vote or to have its agents vote the shares or other deposited securities as instructed by ADS holders. If we do not request the depositary to solicit your voting instructions, you can still send voting instructions, and, in that case, the depositary may try to vote as you instruct, but it is not required to do so.

*Except by instructing the depositary as described above, you will not be able to exercise voting rights unless you surrender your ADSs and withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares.* In any event, the depositary will not exercise any discretion in voting deposited securities and it will only vote or attempt to vote as instructed by the holder of the ADSs or as described in the following sentence. If we asked the depositary to solicit your instructions at least 30 days before the meeting date but the depositary does not receive voting instructions from you by the specified date, it will consider you to have authorized and directed it to give a discretionary proxy to a person designated by us to vote the number of deposited securities represented by your ADSs. The depositary will give a discretionary proxy in those circumstances to vote on all matters to be voted upon, unless we notify the depositary that:

● we do not wish to receive a discretionary proxy;

● there is substantial shareholder opposition to the particular matter; or

● the particular matter materially and adversely affects the rights of our shareholders.

We are required to notify the depositary if one of the conditions specified above exists.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. *This means that you may not be able to exercise voting rights and there may be nothing you can do if your shares are not voted as you requested.*

 

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the depositary to act, we undertook to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date.

***Borrowing powers***

Pursuant to the Companies Law and our amended and restated articles of association, our board of directors may exercise all powers and take all actions that are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.

For information regarding the approval of director compensation and interested party transactions and the rights of directors to vote on transactions in which they have a personal interest under Israeli law, see "Item 6. Directors, Senior Management and Employees – C. Board Practices – "Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law."

 ****

 ****

***Exclusive Forum for Shareholder Litigation***

Our amended and restated articles of association provide that, unless we consent in writing to the selection of an alternative forum, the Tel Aviv District Court (Economic Division in the State of Israel (or, if the Tel Aviv District Court does not have jurisdiction, and no other Israeli court has jurisdiction, the federal district court for the District of New York) shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, and (3) any action asserting a claim arising pursuant to any provision of the Companies Law or the Securities Law, in all cases subject to the court's having personal jurisdiction over the indispensable parties named as defendants. In addition, unless we consent in writing to the selection of an alternative forum, and other than with respect to plaintiffs or a class of plaintiffs which may be entitled to assert claims in the courts of the State of Israel with respect to any causes of action arising under the Securities Act of 1933, the federal district courts of the United States for the District of New York shall be the exclusive forum for any complaint asserting a cause of action arising under the Securities Act of 1933. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to these provisions. This forum selection provision will limit shareholders' choice in selecting a judicial forum for disputes with us that it finds favorable or convenient and may have the effect of discouraging lawsuits against us or our directors and officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Material Contracts** 

**FameWave Acquisition**

*The following is a summary of the material terms of the FameWave Stock Purchase Agreement dated March 14, 2019 (the "Acquisition Agreement"). A copy of the Acquisition Agreement, including ancillary agreements which were entered into in connection with the transactions contemplated by the Acquisition Agreement, are attached as exhibits to this Annual Report on Form 20-F. The summary of the material terms of the Acquisition Agreement (including any of its ancillary agreements) below and elsewhere in this Annual Report on Form 20-F is qualified in its entirety by reference to the Acquisition Agreement and/or the applicable ancillary agreement. This summary may not contain all of the information about the Acquisition Agreement and/or any applicable ancillary that is important to you. We urge you to read carefully the Acquisition Agreement (including any of its ancillary agreements) in its entirety as these are the legal documents governing the transactions.*

***Acquisition Agreement***

Upon the terms and subject to the conditions of the Acquisition Agreement, in January 2020, we acquired 100% of the issued and outstanding shareholdings from the shareholders of FameWave, in exchange for the issuance of our ADSs and Kitov Warrants, and FameWave became a wholly-owned subsidiary of the Company. In addition, we provided a loan to FameWave to pay cCAM, a wholly owned subsidiary of MSD for the return of the intellectual property rights to CM24 to FameWave and to repay certain loans provided by FameWave's shareholders to FameWave to conduct business pursuant to the approved business budget. As part of the Acquisition Agreement, three leading life science focused investment funds, Orbimed Israel Partners, Pontifax, and Arkin Holdings, who collectively held approximately 90% of FameWave, concurrently invested $3.5 million in us at closing in exchange for additional newly issued ADSs of the Company, priced at $12.30 per ADS, in a private placement.

In consideration of the transfer of the FameWave shares to us and the other obligations set forth in the Acquisition Agreement, the aggregate purchase price paid by us for 100% of FameWave shares consisted of the issuance by us to the FameWave Shareholders, and, on behalf of FameWave, to (i) THM, and (ii) the lenders with outstanding balances under the certain Convertible Loan Agreement dated February 13, 2018, their respective share, as set forth in the allocation table provided to us prior to closing of the transaction, of (a) 807,561 of our ADSs (equal to $9,933,000 divided by $12.30), and such ADSs with aggregate value of $9,933,000 served as the total consideration for 100% of the fully diluted share capital of FameWave, and was allocated among all selling FameWave shareholders, lenders under the Convertible Loan Agreement, THM, and any other persons with equity based rights in FameWave and/or rights to receive consideration from an exit transaction of FameWave or any other type of FameWave reorganization, and (b) Warrants to purchase 403,781 additional ADSs, with an exercise price equal to $19.80 per ADS of Purple Biotech, and with a term of exercise of four years beginning on the date of issuance, and subject to other terms and conditions as set forth herein and in the warrant agreements, the form of which is attached to the Acquisition Agreement.

Each party has agreed to indemnify and hold harmless the other party, such party's respective affiliates, and their respective equity holders, officers, directors, managers, employees, attorneys, accountants, consultants, financial advisors and other agents for penalties, fines, costs, liabilities, obligations, losses, expenses and fees, including court costs and reasonable attorneys' fees and expenses arising out of or resulting from a breach of any representation or warranty or the failure to duly perform or observe any covenant or agreement in the Acquisition Agreement required to be performed or observed before or after the closing date under the Acquisition Agreement.

**Immunorizon Acquisition**

*The following is a summary of the material terms of the Immunorizon Share Purchase Agreement dated February 1, 2023 (the "Share Purchase Agreement"). A copy of the Share Purchase Agreement, including certain ancillary agreements which were entered into in connection with the transactions contemplated by the Share Purchase Agreement, are attached as exhibits to this Annual Report on Form 20-F. The summary of the material terms of the Share Purchase Agreement (including any of its ancillary agreements) below and elsewhere in this Annual Report on Form 20-F is qualified in its entirety by reference to the Share Purchase Agreement and/or the applicable ancillary agreement. This summary may not contain all of the information about the Share Purchase Agreement and/or any applicable ancillary that is important to you. We urge you to read carefully the Share Purchase Agreement (including any of its ancillary agreements) in its entirety as these are the legal documents governing the transactions.*

 

*Share Purchase Agreement*

On February 1, 2023, we entered into the Share Purchase Agreement, pursuant to which we acquired 100% of the issued and outstanding shareholdings from the shareholders of Immunorizon Ltd. and Immunorizon became a wholly-owned subsidiary of the Company.

In consideration for the transfer of 100% of Immunorizon's shares to us and the other obligations set forth in the Share Purchase Agreement, we paid an aggregate purchase price consisting of an aggregate upfront payment of $3.5 million in cash and an aggregate $3.5 million in ADSs, at a price per ADS equal to the NASDAQ volume-weighted average price of our ADSs for the 60-day period preceding the execution date of the agreement the ("PPS"). Additional long-term milestones are set at an aggregate amount of $94 million, with royalties out of net sales. Those long-term milestones include (i) development milestones consisting of pre-clinical and clinical milestones, (ii) regulatory milestones and (iii) sales milestones. The accumulated transaction payments, excluding the upfront payment, will not exceed $100 million.

The ADSs were issued to certain major shareholders of Immunorizon (the "Major Selling Shareholders") and are subject to a three-month lock-up period, and we undertook to file a resale registration statement with the SEC to register the ADSs for resale following the lock-up period, as further described below (see "Lock-Up and Registration Rights Agreement").

In the event that during one year following the closing of the Share Purchase Agreement, the Company enters into an agreement or makes a filing pursuant to which it issues ADSs or other equity securities in a financing transaction (other than under its ATM program used for an accumulated amount of up to $2,000,000 worth of ADSs sold during any 90 days period following the closing of the Share Purchase Agreement, a non-cash transaction or a strategic transaction such as strategic joint venture, pre-clinical or clinical collaboration), at a price per ADS lower than the PPS (such new price, the "New PPS") (a "Dilutive Event"), and at such time a Major Selling Shareholder still holds any ADSs issued to it under the Share Purchase Agreement, the Company shall issue such Major Selling Shareholder additional ADSs ("Additional ADSs") equal to: (i) (A) the number of such ADSs held by such Major Selling Shareholder at such time, multiplied by (B) the PPS divided by (C) the New PPS, minus (ii) the number of such ADSs held by such Major Selling Shareholder at such time. Such protection shall only be provided once.

*Lock-Up and Registration Rights Agreement*

At the closing of the transactions contemplated by the Share Purchase Agreement, we entered into a Lock-Up and Registration Rights Agreement (the "Lock-Up and Registration Rights Agreement") with the Major Selling Shareholders under which we undertook to file, by no later than 45 days following the closing of the Share Purchase Agreement, a registration statement on Form F-3 with the SEC (the "Registration Statement") registering the resale of the ADSs issued to the Major Selling Shareholders upon the closing of the Share Purchase Agreement and any Additional ADSs issued thereafter (if any). We undertook to use commercially reasonable efforts to keep the resale Registration Statement effective for at least 24 months from the date of the Lock-Up and Registration Rights Agreement (or such shorter period as will terminate when the Major Selling Shareholders cease to hold the ADSs or all of our securities covered by the Registration Statement have been sold or withdrawn).

In addition, the Major Selling Shareholders agreed not to, directly or indirectly, in any single transaction or series of related transactions, transfer any of the ADSs issued at the closing of the Share Purchase Agreement during the three-month period following the closing of the Share Purchase Agreement without the prior written consent of the Company (subject to limited exceptions).

*Irrevocable Proxy and Undertaking*

 

At the closing of the transaction, each of the Major Selling Shareholders executed an Irrevocable Proxy and Undertaking appointing any member of our board of director (the "Proxy") to vote the ADSs issued to it at the closing of the Share Purchase Agreement and any Additional ADSs issued to it in connection with a Dilutive Event (if any), at any and all Company shareholder meetings in accordance with the voting recommendations of our board of directors. In addition, each Major Shareholder undertook that to the extent that the Proxy is not able to instruct the depositary for our ADSs to exercise the voting rights of the Major Selling Shareholder with respect to its ADSs, it shall, upon the written instructions of the Proxy, promptly deliver instructions to the depositary as to the exercise of the voting rights pertaining to its ADSs in accordance with the voting recommendations of our board of directors. Each Irrevocable Proxy and Undertaking shall terminate, with respect to a Major Selling Shareholder, upon the transfer or sale for consideration of all ADSs held by such Major Selling Shareholder to any person or entity that is not an affiliate thereof.

*Distribution Agreement with Coeptis*

In early January 2019, we entered into an exclusive marketing and distribution agreement with Coeptis for the commercialization of Consensi in the U.S. market. The agreement provided for total milestone payments from Coeptis of $3.5 million, of which we received the initial $1 million milestone concurrent with finalization of the agreement, a $1.5 reimbursement payment upon completion of an agreed CMC plan. In addition, the agreement entitled us to 60% of Coeptis' net profit on Consensi sales until such time as we have received $13 million in such profit distributions, following which we would then be entitled to 40% of Coeptis' net profit on all subsequent Consensi sales. In October 2019, we amended the agreement with Coeptis. Under the terms of the amended agreement, we were entitled to receive 20% in royalties on net sales of Consensi with minimum royalties of $4.5M over three years. In addition, we were entitled to receive up to $99.5 million in milestone and reimbursement payments, of which $3.5 million was already received and $96 million was subject to certain pre-defined commercial milestones. The agreement was for a term of 15 years and could be extended for additional two-year terms, and included customary provisions, as well as certain residual rights and obligations of the parties, following termination.

In October 2021, we and Coeptis agreed to terminate the distribution agreement and entered into a settlement agreement (the "Settlement Agreement"). In accordance with the Settlement Agreement, Coeptis transferred its remaining inventory of Consensi to the Company and in settlement of Coeptis' outstanding obligations under the distribution agreement, issued to the Company a convertible note (the "Note") in the amount of $1.5 million payable on or before March 2023 (the "Maturity Date"), bearing interest of 5% per annum, which may be converted in whole or in part at any time by the Company into Coeptis shares. The conversion price was set at $5 per share, subject to certain adjustments, under such terms and conditions as agreed between the parties and set forth in the Note, however, the conversion price was reduced to $3 Under the Addendum referred to below. Coeptis may prepay the principal amount of the Note plus accrued and unpaid interest at any time prior to the Maturity Date. Coeptis also granted to the Company a warrant, exercisable for a period of three years, to purchase a number of Coeptis shares as set forth therein, with an exercise price that is the same as the conversion price as determined under the Note.

In October 2022, Coeptis announced the completion of its business combination with Bull Horn Holdings Corp., a special purpose acquisition company ("Bull Horn" and the "Merger"). The combined company has been renamed "Coeptis Therapeutics Holdings, Inc." and its public shares began trading on the Nasdaq Global Market. In October 2022, in connection with the consummation of the Merger, we and Coeptis signed an addendum to the Note (the "Addendum") according to which, the Note will remain outstanding following the Merger and shall become an obligation of Bull Horn in accordance with its terms, so that (i) it will automatically become convertible into shares of common stock of Bull Horn instead of shares of common stock of Coeptis, (ii) the number of shares of common stock issuable upon conversion of the Note and the related exercise price will reflect adjustments based on the same exchange ratio of the Coeptis shareholders in connection with the exchange of their shares of Coeptis common stock for shares of common stock in Bull Horn in connection with the Merger, and (iii) section 13(b) of the Note ('Registration Rights') will be read to apply to any future public offering of Bull Horn's common stock. Under the Addendum, Coeptis acknowledged that it consummated a Qualified Offering and that the price per share in such Qualified Offering is $3 per common stock, which led to reduction of the conversion price under the Note to $3.

*Rentschler Biopharma Manufacturing Agreement*

In March 2020, we have entered into a master development services agreement with Rentschler in Germany, pursuant to which Rentschler shall manufacture CM24 batches for clinical studies for a total amount of $6.4 million over a period of two years. Rentschler has manufactured and provided two initial batches, and it is expected to manufacture additional batches future for our ongoing clinical trial. The manufacturing agreement contains various customary representations, warranties, indemnity, and intellectual property provisions.

**Other Agreements**

For a description of other agreements, please see "Item 3. Key Information – D. Risk Factors – Risks Related to Our Business, Operations and Regulatory Matters", "Item 4. Information on the Company – B. Business Overview – Intellectual Property", "Item 4. Information on the Company- B. Business Overview - Intellectual Property –License Agreement with Tel HaShomer", "Item 4. Information on the Company- B. Business Overview - Intellectual Property –Exclusive License Agreement with Yissum."

For information on exemption and indemnification letters granted to our officers and directors, please see "Item 6. Directors, Senior Management and Employees – C. Board Practices – Exemption, Insurance and Indemnification of Directors and Officers."

*The above summary of certain terms and provisions of our material and other agreements is not necessarily complete and is subject to, and is qualified in its entirety by the provisions of any copies of any agreements which are filed as an exhibit to this Annual Report on Form 20-F. You should carefully review the terms and provisions set forth in the agreements attached as exhibits. Any of our representations, warrants, covenants, disclosures or other matters set forth in such agreements are for the benefit of the counterparties of such agreements only, and not for the benefit of any third parties, including any of our securities holders.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Exchange Controls** 

There are currently no material Israeli currency control restrictions on payments of dividends or other distributions with respect to our securities or the proceeds from the sale of our securities, except under certain circumstances, for shareholders who are subjects of countries that are, or have been, in a state of war with Israel. However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time. Israeli residents have an obligation to file reports with the Bank of Israel regarding certain transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Taxation** 

The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our ordinary shares and ADSs. 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 or other taxing jurisdiction.

**Israeli Tax Considerations and Government Programs**

The following is a summary of the material Israeli tax laws applicable to us, and some Israeli Government programs benefiting us. This section also contains a discussion of some Israeli tax consequences to persons owning our ordinary shares and ADSs. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of this kind of investor include traders in securities or persons that own, directly or indirectly, 10% or more of our outstanding voting capital, all of whom are subject to special tax regimes not covered in this discussion. Some parts of this discussion are based on a new tax legislation which has not been subject to judicial or administrative interpretation. The discussion below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax consequences described below. The discussion should not be construed as legal or professional tax advice and does not cover all possible tax considerations.

Shareholders are urged to consult their own tax advisors as to the Israeli or other tax consequences of the purchase, ownership and disposition of our Ordinary Shares and ADSs, including, in particular, the effect of any foreign, state or local taxes.

***General Corporate Tax Structure in Israel***

Israeli companies are generally subject to company tax on their taxable income. The Israeli corporate tax rate is 23% since 2018.

***Taxation of Shareholders***

*Capital Gains*

Israeli law generally imposes a capital gains tax on the sale of any capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of capital assets by a non-resident of Israel if those assets (i) are located in Israel, (ii) are shares or a right to shares in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located in Israel, or (iv) a right in a foreign resident corporation, which in its essence is the owner of a direct or indirect right to property located in Israel (with respect to the portion of the gain attributed to the property located in Israel), unless a specific exemption is available or unless a tax treaty between Israel and the shareholder's country of residence provides otherwise. The law distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain, which is equivalent to the increase of the relevant asset's purchase price, which is attributable to the increase in the Israeli consumer price index between the date of purchase and the date of sale. The real gain is the excess of the total capital gain over the inflationary surplus.

The tax rate applicable to capital gains derived from the sale of the ordinary shares or ADSs, whether listed on a stock market or not, is marginal tax rate according to section 121 of the Israeli Income Tax Ordinance but up to 25% for Israeli individuals, unless such shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain will generally be taxed at a rate of 30%. Additionally, if such shareholder is considered a "significant shareholder" at any time during the 12-month period preceding such sale (i.e., such shareholder holds directly or indirectly, including jointly with others, at least 10% of any means of control in the company) the tax rate will be 30%. However, different tax rates may apply to dealers in securities and shareholders who acquired their shares prior to an initial public offering. Israeli companies are subject to the corporate tax rate as specified in section 126 of the Ordinance on capital gains derived from the sale of shares.

Corporate and individual shareholders dealing in securities in Israel are taxed at the tax rates applicable to business income which is 23% for corporations, and a marginal tax rate of up to 47% for individuals.

Notwithstanding the foregoing, real capital gains generated from the sale of our Ordinary Shares or ADSs by a non-Israeli shareholder may be exempt from Israeli tax under the Israeli Income Tax Ordinance provided that the following cumulative conditions are met: (i) the Ordinary Shares or ADSs were purchased upon or after the registration of the Ordinary Shares or ADSs on a non-Israeli stock exchange (NASDAQ); and (ii) the seller does not have a permanent establishment in Israel to which the generated capital gain is attributed. However, non-Israeli resident corporations will not be entitled to the foregoing exemption if Israeli residents: (i) hold more than 25% or more means of control in such non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the income or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption would not be available to a person whose gains from selling or otherwise disposing of the Ordinary Shares or ADSs are deemed to be business income.

In addition, the sale of the Ordinary Shares or ADSs may be exempt from Israeli capital gain tax under the provisions of an applicable double tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for such an exemption). For example, the Convention between the Government of the U.S. and the Government of the State of Israel with respect to Taxes on Income (the "U.S.- Israel Double Tax Treaty") exempts a U.S. resident (for purposes of the treaty) from Israeli capital gains tax in connection with the sale of the Ordinary Shares or ADSs, provided that: (i) the U.S. resident owned, directly or indirectly, less than 10% of the voting power of the company at any time within the 12 month period preceding such sale; (ii) the U.S. resident, being an individual, is present in Israel for a period or periods of less than 183 days in the aggregate during the taxable year; (iii) the capital gain from the sale, exchange or disposition was not derived through a permanent establishment of the U.S. resident; and (iv) the capital gains arising from such sale, exchange or disposition is not attributed to real estate located in Israel or a resident in Israel; however, under the U.S-Israel Double Tax Treaty, the taxpayer would be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations under U.S. law applicable to foreign tax credits. The U.S-Israel Double Tax Treaty does not relate to U.S. state or local taxes.

Payers of consideration for the Ordinary Shares or ADSs, including the purchaser, the Israeli stockbroker or the financial institution through which the Ordinary Shares or ADSs are held, are obligated, subject to certain exemptions, to withhold tax upon sale of Ordinary Shares or ADSs from the amount of consideration paid upon the sale of the securities (or on the Real Capital Gain realized on the sale, if known), at a rate of 25% for an individual or at a rate of corporate tax for a corporation (23% in 2018 and thereafter).

Upon the sale of traded securities, a detailed return, including a computation of the tax due, must be filed and an advanced payment must be paid to the Israel Tax Authority on January 31 and July 31 of every tax year in respect of sales of traded securities made within the previous six months. However, if all tax due was withheld at source according to applicable provisions of the Israeli Income Tax Ordinance and regulations promulgated thereunder, such return need not be filed and no advance payment must be paid. Capital gains are also reportable on annual income tax returns.

*Dividends*

 

Dividends distributed by a company from income, which is not attributed to an Approved Enterprise, a Benefited Enterprise or a Preferred Enterprise as defined in the Israel's Encouragement of Capital Investment Law, 1959, to a shareholder who is an Israeli resident individual will be generally subject to income tax at a rate of 25%. However, a 30% tax rate will generally apply if the dividend recipient is a Controlling Shareholder, as defined above, at the time of distribution or at any time during the preceding 12-month period. If the recipient of the dividend is an Israeli resident corporation, such dividend will generally not be subject to tax provided that the income from which such dividend is distributed, derived or accrued within Israel.

Non-Israeli residents (either an individual or a corporation) are generally subject to Israeli tax on the receipt of dividends at the rate of 25% (30% if the dividend recipient is a Controlling Shareholder at the time of distribution or at any time during the preceding 12-month period). Dividends distributed by an Israeli resident company from income, which is attributed to a Preferred Enterprise, to a non-Israeli resident (either an individual or a corporation) are generally subject to withholding tax at a rate of 20%. These rates may be reduced under the provisions of an applicable double tax treaty. For example, under the U.S.-Israel Double Tax Treaty, the following tax rates will apply in respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding shares of the voting stock of the Israeli resident paying corporation and not more than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain types of interest or dividends the tax rate is 12.5%; (ii) if both the conditions mentioned in clause (i) above are met and the dividend is paid from an Israeli resident company's income which was entitled to a reduced tax rate under The Law for the Encouragement of Capital Investments, 1959, the tax rate is 15%; and (iii) in all other cases, the tax rate is 25%. The aforementioned rates under the U.S.-Israel Double Tax Treaty will not apply if the dividend income is attributed to a permanent establishment of the U.S. resident in Israel and is subject to certain exemptions under such treaty.

Payers of dividends on our shares, including the Israeli stockbroker effectuating the transaction, or the financial institution through which the securities are held, are required, subject to any of the foregoing exemptions, reduced tax rates and the demonstration of a shareholder of his, her or its foreign residency, to withhold taxes upon the distribution of dividends at a rate of 25%, provided that the shares are registered with a nominee company (for corporations and individuals).

***Excess Tax***

Individual holders who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) and who have taxable income that exceeds a certain threshold in a tax year (NIS 647,640 for 2021, NIS 663,240 for 2022 and NIS 698,280 for 2023), linked to the Israeli Consumer Price Index), will be subject to an additional tax at the rate of 3% on his or her taxable income for such tax year that is in excess of such amount. For this purpose, taxable income includes taxable capital gains from the sale of securities and taxable income from interest and dividends, subject to the provisions of an applicable double tax treaty.

***Estate and Gift Tax***

Israeli law presently does not impose estate or gift taxes.

**U.S. Federal Income Tax Considerations**

The following is a description of certain U.S. federal income tax consequences relating to the acquisition, ownership and disposition of our ADSs by a holder. This description addresses only the U.S. federal income tax consequences to holders that are initial purchasers of our ADSs and that hold such ADSs as capital assets. This description does not address tax considerations applicable to holders that may be subject to special tax rules, including, without limitation:

● banks, financial institutions or insurance companies;

● real estate investment trusts, regulated investment companies or grantor trusts;

● dealers or traders in securities, commodities or currencies;

● tax exempt entities or organizations;

● certain former citizens or residents of the United States;

● persons that received our ADSs as compensation for the performance of services;

● persons that will hold our ADSs as part of a "hedging," "integrated" or "conversion" transaction or as a position in a "straddle" for U.S. federal income tax purposes;

● partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass- through entities, or holders that will hold our ADSs through such an entity;

● U.S. Holders (as defined below) whose "functional currency" is not the U.S. dollar; or

● holders that own directly, indirectly or through attribution 10% or more of the voting power or value of our shares.

Moreover, this description does not address the U.S. federal estate, gift, or alternative minimum tax consequences, or any U.S. state, local or non-U.S. tax consequences of the acquisition, ownership and disposition of our ADSs.

This description is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, existing, proposed and temporary U.S. Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, in each case as in effect and available on the date hereof. All the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below. There can be no assurances that the U.S. Internal Revenue Service, or IRS, will not take a different position concerning the tax consequences of the acquisition, ownership and disposition of our ADSs or that such a position would not be sustained. Holders should consult their own tax advisers concerning the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of our ADSs in their particular circumstances.

For purposes of this description, the term "U.S. Holder" means a beneficial owner of our ADSs that, for U.S. federal income tax purposes, is (i) a citizen or resident of the United States, (ii) a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source or (iv) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or (y) that has elected to be treated as a domestic trust for U.S. federal income tax purposes.

A "Non-U.S. Holder" is a beneficial owner of our ADSs that is neither a U.S. Holder nor a partnership (or other entity treated as a partnership for U.S. federal income tax purposes).

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds our ADSs, the U.S. federal income tax consequences relating to an investment in our ADSs will depend in part upon the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor regarding the U.S. federal income tax consequences of acquiring, owning and disposing of our ADSs in its particular circumstances.

Persons considering an investment in our ADSs should consult their own tax advisors as to the particular tax consequences applicable to them relating to the acquisition, ownership and disposition of our ADSs, including the applicability of U.S. federal, state and local tax laws and non-U.S. tax laws.

***Exchange of ADSs for Ordinary Shares***

In general, if you hold ADSs, you will be treated as the holder of the underlying ordinary shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, gain or loss generally will not be recognized if you exchange ADSs for the underlying ordinary shares represented by those ADSs. In addition, you will receive a basis in your ordinary shares equal to the basis of your ADSs exchanged for such shares.

***Taxation of Dividends and Other Distributions on Our ADSs***

Subject to the discussion below under "Passive Foreign Investment Company Consequences," if you are a U.S. Holder, the gross amount of any distribution made to you with respect to our ADSs before reduction for any Israeli taxes withheld therefrom, generally will be includible in your income as dividend income to the extent such distribution is paid out of our current or accumulated earnings and profits as determined under U.S. federal income tax principles. Non-corporate U.S. Holders may qualify for the lower rates of taxation with respect to dividends on ADSs applicable to "qualified dividends," provided that certain conditions are met, including certain holding period requirements and the absence of certain risk reduction transactions. Such lower rate of taxation shall not apply if we are a PFIC for the taxable year in which we pay a dividend. Moreover, such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders irrespective of PFIC status. To the extent that the amount of any distribution by us exceeds our current and accumulated earnings and profits as determined under U.S. federal income tax principles, it will be treated first as a tax-free return of your adjusted tax basis in our ADSs and thereafter as either long-term or short-term capital gain depending upon whether the U.S. Holder has held our ADSs for more than one year as of the time such distribution is received.

If you are a U.S. Holder, dividends paid to you with respect to our ADSs will be foreign source income for foreign tax credit purposes. Subject to certain conditions and limitations, Israeli tax withheld on dividends may be deducted from your taxable income or credited against your U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends generally constitute "passive category income." A foreign tax credit for foreign taxes imposed on distributions may be denied if you do not satisfy certain minimum holding period requirements. The rules relating to the determination of the foreign tax credit are complex, and you should consult your tax advisor to determine whether and to what extent you will be entitled to this credit.

The amount of a distribution paid to a U.S. Holder in a foreign currency will be the dollar value of the foreign currency calculated by reference to the spot exchange rate on the day the U.S. Holder receives the distribution, regardless of whether the foreign currency is converted into U.S. dollars at that time. Any foreign currency gain or loss a U.S. Holder realizes on a subsequent conversion of foreign currency into U.S. dollars will be U.S. source ordinary income or loss. If dividends received in foreign currency are converted into U.S. dollars on the day they are received, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend.

Subject to the discussion below under "Backup Withholding Tax and Information Reporting Requirements," if you are a Non-U.S. Holder, you generally will not be subject to U.S. federal income (or withholding) tax on dividends received by you on your ADSs, unless:

● you conduct a trade or business in the U.S. and such income is effectively connected with that trade or business (and, if required by an applicable income tax treaty, the dividends are attributable to a permanent establishment or fixed base that such holder maintains in the U.S.); or

● you are an individual and have been present in the U.S. for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.

***Sale, Exchange or Other Disposition of Our ADSs***

Subject to the discussion below under "Passive Foreign Investment Company Consequences," if you are a U.S. Holder, you generally will recognize gain or loss on the sale, exchange or other disposition of our ADSs equal to the difference between the amount realized on such sale, exchange or other disposition and your adjusted tax basis in our ADSs and such gain or loss will be capital gain or loss. The adjusted tax basis in an ADS generally will be initially determined as described above in "Tax Basis of each ADS." If you are a non-corporate U.S. Holder, capital gain from the sale, exchange or other disposition of an ADS is generally eligible for a preferential rate of taxation applicable to capital gains, if your holding period determined at the time of such sale, exchange or other disposition for such ADS exceeds one year (i.e., such gain is long-term capital gain). The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes. A foreign tax credit for foreign taxes imposed on capital gains may be denied if you do not satisfy certain minimum holding period requirements. The rules relating to the determination of the foreign tax credit are complex, and it is possible that the ability of a U.S. Holder to claim a foreign tax credit for any such Israeli tax will be limited. You should consult your tax advisor to determine whether, and to what extent, you will be entitled to this credit.

Subject to the discussion below under "Backup Withholding Tax and Information Reporting Requirements," if you are a Non-U.S. Holder, you generally will not be subject to U.S. federal income or withholding tax on any gain realized on the sale or exchange of such ADSs unless:

● such gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment or fixed base that you maintain in the United States); or

● you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.

***Passive Foreign Investment Company Consequences***

We likely were classified as a Passive Foreign Investment Company (PFIC) for the 2022 tax year and we may be classified as a PFIC for the 2023 tax year. If we are indeed so classified for 2022 or in any other taxable year, a U.S. Holder would be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that a U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.

A non-U.S. corporation will be classified as a PFIC for federal income tax purposes in any taxable year in which, after applying certain look-through rules with respect to the income and assets of subsidiaries, either:

● at least 75% of its gross income is "passive income"; or

● at least 50% of the average quarterly value of its total gross assets (which may be determined in part by the market value of our ADSs, which is subject to change) is attributable to assets that produce "passive income" or are held for the production of passive income.

Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions, the excess of gains over losses from the disposition of assets which produce passive income, and includes amounts derived by reason of the temporary investment of funds raised in offerings of our ADSs. If a non-U.S. corporation owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation's income. If we are classified as a PFIC in any year with respect to which a U.S. Holder owns our ADSs, we will generally continue to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns our ADSs, regardless of whether we continue to meet the tests described above.

If we are indeed properly classified as a PFIC, and you are a U.S. Holder, then unless you make one of the elections described below, a special tax regime will apply to both (a) any "excess distribution" by us to you (generally, your ratable portion of distributions in any year which are greater than 125% of the average annual distribution received by you in the shorter of the three preceding years or your holding period for our ADSs) and (b) any gain realized on the sale or other disposition of the ADSs. Under this regime, any excess distribution and realized gain will be treated as ordinary income and will be subject to tax as if (i) the excess distribution or gain had been realized ratably over your holding period, (ii) the amount deemed realized in each year had been subject to tax in each year of that holding period at the highest marginal rate for such year (other than income allocated to the current period or any taxable period before we became a PFIC, which would be subject to tax, at the U.S. Holder's regular ordinary income rate for the current year and would not be subject to the interest charge discussed below), and (iii) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in those years. In addition, dividend distributions made to you will not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under "Distributions." Certain elections may be available that would result in an alternative treatment (such as mark-to-market treatment) of our ADSs.

If a U.S. Holder makes the mark-to-market election, then, in lieu of being subject to the tax and interest charge rules discussed above, the U.S. Holder generally will recognize as ordinary income any excess of the fair market value of the ADSs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the ADSs over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the U.S. Holder's tax basis in its ADSs will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election).

The mark-to-market election is available only if we are a PFIC and our ADSs are "regularly traded" on a "qualified exchange." Our ADSs will be treated as "regularly traded" in any calendar year in which more than a de minimis quantity of our ADSs are traded on a qualified exchange on at least 15 days during each calendar quarter. NASDAQ is a qualified exchange for this purpose. Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the tax and interest charge rules discussed above with respect to such holder's indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes, including stock in any of our subsidiaries that are treated as PFICs. If a U.S. Holder makes a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless our ADSs are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election.

If we are determined to be a PFIC, the general tax treatment for U.S. Holders described in this section would apply to indirect distributions and gains deemed to be realized by U.S. Holders in respect of any of our subsidiaries that also may be determined to be PFICs.

If we are a PFIC and a U.S. Holder makes a Qualified Electing Fund Election under Section 1295 of the Code ("QEF Election") for the first tax year in which its holding period of its ADSs begins, such U.S. Holder generally will not be subject to the PFIC rules discussed above with respect to its ADSs. However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital gain, and "ordinary earnings" are the excess of (a) "earnings and profits" over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, a U.S. Holder that makes a QEF Election may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as "personal interest," which is not deductible.

A U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents "earnings and profits" of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder's tax basis in the ADSs to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of ADSs.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as timely if it is made for the first year in the U.S. Holder's holding period for the ADSs in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year.

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

U.S. Holders should be aware that, for each tax year that the Company is a PFIC, the Company can provide no assurances that it will satisfy the record-keeping requirements or make available to U.S. Holders a PFIC Annual Information Statement or any other information such U.S. Holders require to make a QEF Election with respect to the Company or any subsidiary that also is classified as a PFIC.

We do not intend to provide the information necessary for U.S. Holders to make qualified electing fund elections if we are classified as a PFIC. U.S. Holders should consult their tax advisors to determine whether any of these elections would be available and if so, what the consequences of the alternative treatments would be in their particular circumstances.

A U.S. Holder who owns ADSs during any year in which we are a PFIC, will be required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with respect to us, generally with the U.S. Holder's federal income tax return for that year.

U.S. Holders should consult their tax advisors regarding application of the PFIC rules.

***Medicare Tax***

Certain U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their "net investment income," which may apply to all or a portion of the following items with respect to ADSs: dividend or other distributions, gains from dispositions and "excess distributions" and income from "mark-to-market" elections under the PFIC rules, if applicable. Each U.S. Holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of the Medicare tax to its income and gains in respect of its investment in our ADSs.

***Backup Withholding Tax and Information Reporting Requirements***

U.S. backup withholding tax and information reporting requirements may apply to certain payments to certain holders of our ADSs. Information reporting generally will apply to payments of dividends on our ADSs, and to proceeds from the sale or redemption of our ADSs made within the United States, or by a U.S. payer or U.S. middleman, to a holder of our ADSs, other than an exempt recipient (including a payee that is not a U.S. person that provides an appropriate certification and certain other persons). A payer may be required to withhold backup withholding tax from any payments of dividends on our ADSs, or the proceeds from the sale or redemption of our ADSs within the United States, or by a U.S. payer or U.S. middleman, to a holder, other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. Any amounts withheld under the backup withholding rules will be allowed as a credit against the beneficial owner's U.S. federal income tax liability, if any, and any excess amounts withheld under the backup withholding rules may be refunded, provided that the required information is timely furnished to the IRS.

***Foreign Asset Reporting***

Certain U.S. Holders who are individuals are required to report information relating to an interest in our ADSs, subject to certain exceptions (including an exception for shares held in accounts maintained by financial institutions) by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. U.S. Holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ADSs.

**THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A HOLDER OF OUR SECURITIES. EACH HOLDER OF OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES IN LIGHT OF THE HOLDER'S OWN CIRCUMSTANCES.**

**F.** **Dividends and Paying Agents** 

Not applicable.

**G.** **Statement by Experts** 

Not applicable.

**H.** **Documents on Display** 

We are required to file reports and other information with the SEC under the Exchange Act, and the regulations thereunder applicable to foreign private issuers. We also furnish to the SEC under cover of Form 6-K material information required to be made public in Israel, filed with and made public by any stock exchange or distributed by us to our shareholders. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are available to the public through this web site at http://www.sec.gov. These SEC filings are also generally available to the public on (i) the Israel Securities Authority's Magna website at www.magna.isa.gov.il, (ii) the Tel Aviv Stock Exchange website at http://www.maya.tase.co.il, and (iii) from commercial document retrieval services.

As a foreign private issuer, we are exempt from the rules under the Exchange Act relating 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 periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC, within 120 days after the end of each fiscal year ending December 31, an annual report on Form 20-F containing financial statements which are examined and reported on, with an opinion expressed, by an independent registered public accounting firm. We also furnish to the SEC under cover of Form 6-K material information required to be made public in Israel, filed with and made public by any stock exchange or distributed by us to our shareholders. In addition, in accordance with the NASDAQ Listing Rules, as a foreign private issuer we are required to submit on a Form 6-K an interim balance sheet and income statement as of the end of the second quarter of each fiscal year. We have also undertaken under the Sales Agreement for our ATM program to submit to the SEC, on Form 6-K, an interim balance sheet and income statement as of the end of the first and/or third quarters of each fiscal year if we shall desire to sell ADSs pursuant to the Sales Agreement during certain time periods.

We maintain a corporate website at www.purple-biotech.com. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report. We have included our website address in this annual report solely as an inactive textual reference. We will post on our website any materials required to be posted on such website under applicable corporate or securities laws and regulations, including posting any notices of general meetings of our shareholders.

Any statements in this Annual Report on Form 20-F about any of our agreements, contracts or other documents is not necessarily complete. If the agreement, contract or document is filed as an exhibit to this Annual Report on Form 20-F, the agreement, contract or document is deemed to modify the description contained in this annual report. We urge you to review the exhibits themselves for a complete description of the contract or document.

**I.** **Subsidiary Information** 

Not applicable.

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| | |
|:---|:---|
| **ITEM 11.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |

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Market risk is the risk of loss related to changes in market prices, including interest rates and foreign exchange rates, of financial instruments that may adversely impact our financial position, results of operations or cash flows. Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.

**Risk of Interest Rate Fluctuation and Credit Exposure Risk**

We do not anticipate undertaking any significant long-term borrowings. At present, our credit and interest risk arise from cash and cash equivalents, deposits with banks as well as accounts receivable. A substantial portion of our liquid instruments is invested in short-term deposits with Bank Leumi le-Israel Ltd. and Bank Mizrachi-Tefachot, major Israeli banking institutions, as well as with Valley Bank, NY, USA.

We estimate that because the liquid instruments are invested mainly for the short-term in bank deposits, the credit and interest risk associated with these balances is immaterial. The primary objective of our investment activities is to preserve principal while maximizing the income we receive from our investments without significantly increasing risk and loss. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and the fair market value of our investments. We manage this exposure by performing ongoing evaluations of our investments.

**Equity Price Risk**

We are not exposed to equity securities price risk because we have never invested in equity securities.

**Foreign Currency Exchange Risk**

Our foreign currency exposures give rise to market risk associated with exchange rate movements of the U.S. dollar, our functional and reporting currency, mainly against the NIS and other currencies. Although the U.S. dollar is our functional currency and reporting currency, a portion of our expenses are denominated in NIS. Our NIS expenses consist principally of payments to employees or service providers, rent and short-term investments in NIS. We anticipate that a sizable portion of our expenses will continue to be denominated in currencies other than the U.S. dollar. If the U.S. dollar fluctuates significantly against the NIS, it may have a negative impact on our results of operations. We manage our foreign exchange risk by aligning the currencies for holding short term investments with the currencies of expected expenses, based on our expected cash flows. Furthermore, we manage this risk by hedging our monthly salary expenses denominated in NIS.

Portfolio diversification is performed based on risk level limits that we set. To date, we have not engaged in hedging transactions. In the future, we may enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us from the material adverse effects of such fluctuations.

Set forth below is a sensitivity test to possible changes in U.S. dollars/NIS exchange rate as of December 31, 2022:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Sensitive instrument** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Value<br> (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** |
|  | **Down 2%** | **Down 5%** | | **Up 5%** | **Up 2%** |
| Cash and cash equivalents and deposits | 19 | 48 | 960 | (48) | (19) |
| Other current assets | 17 | 42 | 841 | (42) | (17) |
| Accounts payable | (4) | (10) | (205) | 10 | 4 |
| Other payables | (33) | (83) | (1668) | 83 | 33 |
| Post employment benefit liabilities | (3) | (7) | (145) | 7 | 3 |
| Total income (loss) | (4) | (10) |  | 10 | 4 |

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**Set forth below is a sensitivity test to possible changes in U.S. dollars/Euro exchange rate as of December 31, 2022:**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Sensitive instrument** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Value<br> (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars in<br> thousands)** |
|  | **Down 2%** | **Down 5%** | | **Up 5%** | **Up 2%** |
| Cash and cash equivalents and deposits | 45 | 112 | 2246 | (112) | (45) |
| Accounts payable | (20) | (49) | (979) | 49 | 20 |
| Other payables | (4) | (10) | (207) | 10 | 4 |
| Total income (loss) | 21 | 53 |  | (53) | (21) |

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**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A.** **Debt Securities** 

Not applicable.

**B.** **Warrants and Rights** 

Not applicable.

**C.** **Other Securities** 

Not applicable.

**D.** **American Depositary Shares** 

Each of the American Depositary Shares, or ADSs, represents ten ordinary shares (or a right to receive ten ordinary shares). The ADSs trade on the NASDAQ Capital Market.

The form of the deposit agreement for the ADSs and the form of American Depositary Receipt (ADR) that represents an ADS have been incorporated by reference as exhibits to this Annual Report on Form 20-F. Copies of the deposit agreement are available for inspection at the principal office of The Bank of New York Mellon, located at 101 Barclay Street, New York, New York 10286.

**Fees and Expenses**

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| | |
|:---|:---|
| ***Persons depositing or withdrawing shares or ADS holders must pay:*** | ***For:*** |
| $5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property<br>Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
| $.05 (or less) per ADS | Any cash distribution to ADS holders |
| A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders |
| $.05 (or less) per ADS per calendar year | Depositary services |
| Registration or transfer fees | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares |
| Expenses of the depositary | Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) converting foreign currency to U.S. dollars |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |

---

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

Not applicable

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

Not applicable.

**ITEM 15. CONTROLS AND PROCEDURES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a) Disclosure Controls and Procedures**

We have performed an evaluation of the effectiveness of our disclosure controls and procedures that are designed to ensure that the material financial and non-financial information required to be disclosed to the SEC is recorded, processed, summarized and reported timely. Based on our evaluation, our management, including the chief executive officer and chief financial officer, has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report, were effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management, including the chief executive officer and chief financial officer, conducted an evaluation, pursuant to Rule 13a-15(c) promulgated under the Exchange Act, of the effectiveness, as of the end of the period covered by this Annual Report, of its internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on the results of this evaluation, management concluded that as of December 31, 2022 our internal control over financial reporting was effective.

Notwithstanding the foregoing, there can be no assurance that our controls and procedures will detect or uncover all failures in our controls over measurement and disclosure in our financial statements or detect instances of fraud, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Changes in Internal Controls over Financial Reporting**

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [RESERVED]**

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors has determined that each of Mr. Steinberg, Mr. Gagnon and Mr. Rock are audit committee financial experts as defined by the SEC rules and have the requisite financial experience as defined by the NASDAQ Listing Rules. Our board of directors has also determined that Dr. Rowinsky, Mr. Rock, Mr. Agmon, Mr. Steinberg, Ms. Nahum-Zilberberg, Mr. Gagnon and Mr. Hershkovitz qualify as independent directors under the corporate governance standards of the NASDAQ Listing Rules and the independence requirements of Rule 10A-3 of the Exchange Act.

**ITEM 16B. CODE OF ETHICS**

Our Board of Directors adopted a Code of Business Conduct and Ethics (the "Code") that applies to all our employees, including without limitation our chief executive officer, chief financial officer and controller. A copy of the Code may be viewed on our website at www.purple-biotech.com. It is our intention for the code of ethics to remain accessible on our website for as long as we remain subject to the requirements of this Item and choose to comply with this Item by posting the Code on our website. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report on Form 20-F and is not incorporated by reference herein. There have been no material changes to our code of ethics since our most recent Annual Report Form 20-F.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES** 

Our independent registered public accounting firm is Somekh Chaikin, a member firm of KPMG International (the "Auditor"). Our Auditor's location is Tel Aviv, Israel, and the auditor Firm ID is 1057.

The following table sets forth the approximate total compensation that was expensed by the Company and its subsidiaries to the Auditor, for each of the years ended December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  | **(in thousands of U.S. dollars)** | **(in thousands of U.S. dollars)** |
| Audit fees <sup>(1)</sup> | 145 | 154 |
| Audit-Related fees <sup>(2)</sup> |  |  |
| Tax fees <sup>(3)</sup> | 10 | 13 |
| Other fees <sup>(4)</sup> | - | - |
| Total | 155 | 167 |

---

(1) "Audit
 fees" include fees for services performed in connection with the Company's annual audit, certain procedures regarding
 the Company's interim financial results, fees related to our public offerings and registration statements, and consultation
 concerning financial accounting and reporting standards.

(2) Fees
 for services provided in each of the last two fiscal years for assurance and related services by the principal accountant that are
 reasonably related to the performance of the audit or review of the registrant's financial statements and are not reported
 under "Audit Fees".

(3) Tax
 fees relate to services provided regarding tax compliance.

(4) Other
 fees are for services provided in each of the last two fiscal years for products and services provided by the principal accountant
 other than as disclosed above.

All of the audit services and tax services described in the table above were approved in advance by the audit committee in accordance with paragraph (c)(7)(i)(B) of Rule 2-01 of Regulation S-X.

***Audit committee's pre-approval policies and procedures***

Under the Companies Law and our amended and restated articles of association, our shareholders are authorized to appoint our independent auditors. Under the Companies Law and our amended and restated articles of association, the shareholders may appoint our independent auditors to hold office for a longer period of time that will not extend beyond the end of the third annual meeting following that at which the auditor was appointed. At our 2020 annual general meeting of the shareholders, our shareholders appointed Somekh Chaikin, a member of KPMG International, as our independent registered public accounting firm, for such longer period of time not to extend beyond the 2023 annual general meeting at which time the appointment of an auditor will be presented to the shareholders once again.

Under the Companies Law and our amended and restated articles of association, the board of directors is authorized to determine the independent auditor's remuneration. In addition, SEC rules require that a listed company's audit committee pre-approve the appointment and remuneration of the independent auditor. Our amended and restated articles of association include a provision which states that for so long as our securities are listed for trading on an exchange in the United States, such authority of the board of directors to set the remuneration of the auditor for audit activity and/or for additional services to us not being audit-related, will be deemed to have been delegated by the board of directors to the audit committee of the board of directors.

The advance approval of the Audit Committee is required for all audit and non-audit services provided by our auditors. All services provided by our auditors are approved in advance by the Audit Committee.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.**

Not applicable.

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.**

Not applicable.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.**

Not applicable.

**ITEM 16G. CORPORATE GOVERNANCE**

As a foreign private issuer, we are permitted to follow Israeli corporate governance practices instead of certain NASDAQ Listing Rules, provided that we disclose which requirements we are not following and the equivalent Israeli requirement. We currently rely on this "foreign private issuer exemption" with respect to the following items:

● *Distribution of annual and quarterly reports to shareholders*. Under Israeli law, as a public company whose shares are traded on the TASE, we are not required to distribute annual and quarterly reports directly to shareholders and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports publicly available through the website of the Israeli Securities Authority and the TASE. In addition, we make our audited financial statements available to our shareholders at our offices.

● *Compensation of Officers.* We comply with the requirements set forth under the Companies Law with respect to the approval of officer compensation. For a discussion regarding the approvals required under the Companies Law and the regulations promulgated thereunder for the approval of compensation of the chief executive officer, all other executive officers and directors, see "Item 6.C – Board Practices – Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law".

● *Shareholder Approval.* We seek shareholder approval for all corporate actions requiring such approval in accordance with the requirements of the Companies Law, which are different from the shareholder approval requirements under the NASDAQ Listing Rules, including NASDAQ Listing Rule 5635. The NASDAQ Listing Rules require that we obtain shareholder approval for certain dilutive events, such as (i) for the establishment or amendment of certain equity-based compensation plans and arrangements, (ii) issuances that will result in a change of control of a company, (iii) certain transactions other than a public offering involving issuances of 20% or more of the shares or voting power in a company, and (iv) certain acquisitions of the stock or assets of another company involving issuances of 20% or more of the shares or voting power in a company or if any director, officer or holder of 5% or more of the shares or voting power of the company has a 5% or greater interest in the company or assets to be acquired or consideration to be paid and the transaction could result in an increase in the outstanding common shares or voting power by 5% or more.

Under the Companies Law, shareholder approval is required for any transaction, including any grant of equity-based compensation, to a director or a controlling shareholder, but is not generally required to establish or amend an equity-based compensation plan. We will attempt to seek shareholder approval for our stock option or equity-based compensation plans (and the relevant annexes thereto) to the extent required in order to ensure they are tax qualified for any employees in the U.S. or who are U.S. citizens. However, even if such approval is not received, then the stock option or equity-based compensation plans will continue to be in effect, but we will be unable to grant to our U.S. resident and/or citizen employees options that qualify as Incentive Stock Options for U.S. federal tax purpose. Our stock option or other equity-based compensation plans are also available to our non-U.S. employees, and provide features necessary to comply with applicable non-U.S. tax laws. Similarly, shareholder approval is required under Israeli law for a private placement that is deemed a "extraordinary private placement" or that involves a director or controlling shareholder. A "extraordinary private placement" is a private placement in which a company issues securities representing 20% or more of its voting rights prior to the issuance and the consideration received pursuant to such issuance is not comprised, in whole or in part, solely of cash or securities registered for trade on an exchange or which is not made pursuant to market conditions, and as a result of which the shareholdings of a 5% holder of the shares or voting rights of the company increases or as a result of which a person will become a holder of 5% of the shares or voting rights of the company or a controlling shareholder after the issuance.

● *Approval of Related Party Transactions*. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transactions, set forth in sections 268 to 275 of the Companies Law, and the regulations promulgated thereunder, which require the approval of the audit committee, the compensation committee, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our Board of Directors as required under the NASDAQ Listing Rules.

● *Quorum of Shareholder Meetings.* Under the NASDAQ Listing rules, the minimum quorum required for an ordinary meeting of shareholders consists of 33 1/3% of the issued share capital. As permitted under the Companies Law, pursuant to our amended and restated articles of association, the quorum required for a meeting of our shareholders consists of at least two shareholders present in person or by proxy who hold or represent at least 25% of the voting rights of our shares (and in an adjourned meeting, with some exceptions, any number of shareholders), instead of 33 1/3% of the issued share capital required under the NASDAQ Listing Rules.

● *Nominations Committee and Nominations of our Directors.* Under Israeli law and our amended articles of association, our directors are not required to be selected, or recommended for board of director selection, by independent directors constituting a majority of the board's independent directors or by a nominations committee comprised solely of independent directors, as required by the NASDAQ Listing Rules. With the exception of directors elected by our Board of Directors due to vacancy, our directors are elected by an annual general meeting of our shareholders to hold office until the next annual meeting following three years from his or her election. The nominations for directors, which are presented to our shareholders, are generally made by our directors, but nominations may be made by one or more of our shareholders as provided in our amended and restated articles of association and under the Companies Law. However, in September 2020, we established a non-independent nominations committee whose role is (among other things) to identify and recommend to our board of directors for selection, director nominees, consistent with criteria approved by the board of directors. While our Board of Directors elected to rely on the "foreign private issuer exemption" with respect to the composition of our nominations committee and the nominations of directors, and determined that our nominations committee need not be composed solely of independent directors (within the meaning of Nasdaq Listing Rules), our nominations committee currently consists solely of independent directors.

Except as stated above, we currently comply with the rules generally applicable to U.S. domestic companies listed on NASDAQ. We may in the future decide to use the foreign private issuer exemption with respect to some or all of the other NASDAQ Listing Rules related to corporate governance.

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

The Registrant has responded to Item 18 in lieu of responding to this Item.

**ITEM 18. FINANCIAL STATEMENTS**

See our consolidated financial statements as of December 31, 2022 and 2021 and for the three-year period ended December 31, 2022, beginning on page F-1.

**ITEM 19. EXHIBITS**

The exhibits filed with or incorporated into this Annual Report on Form 20-F are listed in the index of exhibits below:

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 1.1 | [Memorandum of Association of the Registrant (originally filed as Exhibit 99.3 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on December 10, 2020 and incorporated herein by reference thereto)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020041930/ea131388ex99-3_purplebiotech.htm) |
| 1.2 | [Amended and Restated Articles of Association of the Registrant (originally filed as Exhibit 99.2 to the Registrant's Form 6-K furnished to with the Securities and Exchange Commission on December 10, 2020 and incorporated herein by reference thereto)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020041930/ea131388ex99-2_purplebiotech.htm) |
| 2.1 | [Description of Share Capital (incorporated by reference to Exhibit 2.1 to our Annual Report on Form 20-F as filed with the Securities and Exchange Commission on March 9, 2022).](http://www.sec.gov/Archives/edgar/data/1614744/000121390022011191/f20f2021ex2-1_purplebiotech.htm) |
| 2.2 | [Form of Deposit Agreement among the Registrant, the Bank of New York Mellon, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued hereunder (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on September 24, 2015)](http://www.sec.gov/Archives/edgar/data/1614744/000114420415056393/v420652_ex4-1.htm) |
| 2.3 | [Form of American Depositary Receipt (incorporated by reference to prospectus filed with the Securities and Exchange Commission on August 14, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000101915519000005/kitov424receipt.htm) |
| 2.4 | [Stock Purchase Agreement, dated January 12, 2017, by and between the Registrant and Goldman Hirsh Partners Ltd. (incorporated by reference to Exhibit 2.8 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on May 1, 2017)](http://www.sec.gov/Archives/edgar/data/1614744/000121390017004462/f20f2016ex2viii_kitovpharma.htm) |
| 2.5 | [Stock Purchase Agreement, dated October 3, 2017, by and among the Registrant, Certain Stockholders of TyrNovo Ltd. and the Stockholders' Representative (incorporated by reference to Exhibit 2.13 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on March 5, 2018)](http://www.sec.gov/Archives/edgar/data/1614744/000121390018002558/f20f2017ex2-13_kitovpharma.htm) |
| 2.6 | [Form of Warrant issued to purchasers in the June 2018 offering (incorporated by reference to Exhibit 4.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 5, 2018)](http://www.sec.gov/Archives/edgar/data/1614744/000121390018007250/f6k060518ex4-1_kitovpharma.htm) |
| 2.7 | [Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 5, 2018)](http://www.sec.gov/Archives/edgar/data/1614744/000121390018007250/f6k060518ex4-2_kitovpharma.htm) |
| 2.8 | [Form of Warrant issued to purchasers in the January 2019 offering (incorporated by reference to Exhibit 4.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on January 18, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019000927/f6k011819aex4-1_kitovpharma.htm) |
| 2.9 | [Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on January 18, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019000927/f6k011819aex4-2_kitovpharma.htm) |
| 2.10 | [Form of Warrant, dated January 7, 2020, between Purple Biotech Ltd. issued to former FameWave shareholders (incorporated by reference to Exhibit 4.18 to the Registrant's Registration Statement on Form F-1/A filed with the Securities and Exchange Commission on March 10, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020005814/ff12019a1ex4-18_kitovpharma.htm) |
| 2.11 | [Form of Ordinary Warrant issued to purchasers in the March 2020 public offering (incorporated by reference to Exhibit 4.19 to the Registrant's Registration Statement on Form F-1/A filed with the Securities and Exchange Commission on March 10, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020005814/ff12019a1ex4-19_kitovpharma.htm) |
| 2.12 | [Form of Pre-funded Warrant issued to purchasers in the March 2020 public offering (incorporated by reference to Exhibit 4.20 to the Registrant's Registration Statement on Form F-1/A filed with the Securities and Exchange Commission on March 10, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020005814/ff12019a1ex4-20_kitovpharma.htm) |
| 2.13 | [Form of Placement Agent Warrant issued to Placement Agent in the March 2020 public offering (incorporated by reference to Exhibit 4.21 to the Registrant's Registration Statement on Form F-1/A filed with the Securities and Exchange Commission on March 10, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020005814/ff12019a1ex4-21_kitovpharma.htm) |
| 2.14 | [Form of Warrant issued to investors in the April 2020 private placement (incorporated by reference to Exhibit 99.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on April 20, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020009562/ea120836ex99-1_kitovpharma.htm) |
| 2.15 | [Form of Placement Agent Warrant issued to Placement Agent in the April 2020 private placement (incorporated by reference to Exhibit 99.2 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on April 20, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020009562/ea120836ex99-2_kitovpharma.htm) |
| 2.16 | [Form of Warrant issued to investors in the May 2020 private placement (incorporated by reference to Exhibit 4.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on May 8, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020011385/ea121534ex4-1_kitov.htm) |
| 2.17 | [Form of Placement Agent Warrant issued to Placement Agent in the May 2020 public offering (incorporated by reference to Exhibit 4.2 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on May 8, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020011385/ea121534ex4-2_kitov.htm) |
| 2.18 | [Form of Warrant issued to purchasers in the June 2020 offering (incorporated by reference to Exhibit 4.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 25, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020015790/ea123437aex4-1_kitov.htm) |
| 2.19 | [Form of Placement Agent Warrant issued to Placement Agent in the June 2020 public offering (incorporated by reference to Exhibit 4.2 to the Registrant's Form 6-K/A furnished to the Securities and Exchange Commission on June 29, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020016163/ea123580ex4-2_kitovpharma.htm) |

---

---

| | |
|:---|:---|
| 4.1 | [Form of Letter of Exemption adopted on July 2013 (unofficial English translation from Hebrew) (incorporated by reference to Exhibit 10.5 to our Registration Statement on Form F-1 filed with the Securities and Exchange Commission on September 24, 2015)](http://www.sec.gov/Archives/edgar/data/1614744/000114420415056393/v420652_ex10-5.htm) |
| 4.2 | [Form of Letter of Indemnity adopted on July 2013 (unofficial English translation from Hebrew) (incorporated by reference to Exhibit 10.6 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on September 24, 2015)](http://www.sec.gov/Archives/edgar/data/1614744/000114420415056393/v420652_ex10-6.htm) |
| 4.3 | [Purple Biotech Ltd. 2016 Equity-Based Incentive Plan, as amended (incorporated by reference to Exhibit 4.3 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on March 9, 2022)](https://www.sec.gov/Archives/edgar/data/1614744/000121390022011191/f20f2021ex4-3_purplebiotech.htm) |
| 4.4 | [Form of Share Purchase Agreement between Purple Biotech and the purchasers (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 29, 2016)](http://www.sec.gov/Archives/edgar/data/1614744/000114420416110421/v443237_ex1-1.htm) |
| 4.5\* | [License Agreement, dated as of August 15, 2013, by and between Yissum Research Development Company of The Hebrew University of Jerusalem, Ltd. and TyrNovo Ltd. (incorporated by reference to Exhibit 4.14 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on May 1, 2017)](http://www.sec.gov/Archives/edgar/data/1614744/000121390017004462/f20f2016ex4xiv_kitovpharma.htm) |
| 4.6\* | [First Amendment to License Agreement, dated as of April 8, 2014, by and between Yissum Research Development Company of The Hebrew University of Jerusalem, Ltd. and TyrNovo Ltd. (incorporated by reference to Exhibit 4.15 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on May 1, 2017)](http://www.sec.gov/Archives/edgar/data/1614744/000121390017004462/f20f2016ex4xv_kitovpharma.htm) |
| 4.7\* | [Second Amendment to License Agreement, dated as of March 16, 2017, by and between Yissum Research Development Company of The Hebrew University of Jerusalem, Ltd. and TyrNovo Ltd. (incorporated by reference to Exhibit 4.16 to the Registrant's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on May 1, 2017)](http://www.sec.gov/Archives/edgar/data/1614744/000121390017004462/f20f2016ex4xvi_kitovpharma.htm) |
| 4.8 | [Form of Securities Purchase Agreement dated as of July 11, 2017 by and between the Registrant and the purchasers in the offering (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on July 14, 2017)](http://www.sec.gov/Archives/edgar/data/1614744/000121390017007579/f6k071417ex1i_kitovpharma.htm) |
| 4.9 | [Purple Biotech Ltd. Office Holder Compensation Policy approved the shareholders on August 6, 2020 (incorporated by reference to Exhibit A to the Proxy Statement included as Exhibit 99.1 to the Registrant's Form 6-k furnished to the Securities and Exchange Commission on July 2, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020016572/ea123765ex99-1_kitovpharma.htm) |
| 4.10 | [Form of Securities Purchase Agreement dated as of June 1, 2018 by and between the Registrant and the purchasers in the offering (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 5, 2018)](http://www.sec.gov/Archives/edgar/data/1614744/000121390018007250/f6k060518ex1-1_kitovpharma.htm) |
| 4.11 | [Form of Securities Purchase Agreement dated as of January 16, 2019 by and between the Registrant and the purchasers in the offering (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on January 18, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019000927/f6k011819aex1-1_kitovpharma.htm) |
| 4.12\*\* | [Stock Purchase Agreement by and among Purple Biotech Ltd., The Stockholders of FameWave Ltd. and M. Arkin (1999) Ltd. dated as of March 14, 2019 (incorporated by reference to Exhibit 4.17 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on April 3, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019005687/f20f2018a1ex4-17_kitov.htm) |
| 4.13 | [English Translation of Enforcement Arrangement entered into by and amongst the Israel Securities Authority, Purple Biotech Ltd., Isaac Israel, Paul Waymack, and Simcha Rock (incorporated by reference to Exhibit 99.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on August 13, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019015556/f6k081319bex99-1_kitov.htm) |
| 4.14 | [Amendment dated August 16, 2019 to the Stock Purchase Agreement by and among Purple Biotech Ltd., The Stockholders of FameWave Ltd. and M. Arkin (1999) Ltd. dated as of March 14, 2019 (incorporated by reference to Exhibit 10.19 to the Registrant's Registration Statement on Form F-1 filed with the Securities and Exchange Commission on September 16, 2019)](http://www.sec.gov/Archives/edgar/data/1614744/000121390019018142/ff12019ex10-19_kitov.htm) |
| 4.15 | [Form of Securities Purchase Agreement dated as of March 12, 2020 by and between the Registrant and the purchasers in the March 2020 public offering (incorporated by reference to Exhibit 10.21 to the Registrant's Registration Statement on Form F-1/A filed with the Securities and Exchange Commission on March 10, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020005814/ff12019a1ex10-21_kitovpharma.htm) |
| 4.16\*\* | [Amended and Restated License effective as of the 25th day of May, 2010 by and between: Tel Hashomer - Medical Research, Infrastructure and Services LTD and Ramot at Tel Aviv University Ltd. and cCAM Biotherapeutics Ltd. (incorporated by reference to Exhibit 4.23 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on March 31, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020008240/f20f2019a1ex4-23_kitov.htm) |
| 4.17\*\* | [First Amendment to Amended and Restated License Agreement, by and between Tel Hashomer – Medical Research, Infrastructure and Services Ltd., Ramot at Tel Aviv University Ltd. and cCAM Biotherapeutics Ltd. (incorporated by reference to Exhibit 4.24 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on March 31, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020008240/f20f2019a1ex4-24_kitov.htm) |

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| | |
|:---|:---|
| 4.18 | [Second Amendment to Amended and Restated License Agreement, by and between Tel Hashomer – Medical Research, Infrastructure and Services Ltd., Ramot at Tel Aviv University Ltd. and cCAM Biotherapeutics Ltd. (incorporated by reference to Exhibit 4.25 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on March 31, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020008240/f20f2019a1ex4-25_kitov.htm) |
| 4.19 | [Assignment and Assumption Agreement effective as of March 21, 2019, between Tel Hashomer – Medical Research, Infrastructure and Services Ltd., Ramot at Tel Aviv University Ltd., FameWave Ltd. and cCAM Biotherapeutics Ltd. (incorporated by reference to Exhibit 4.26 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on March 31, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020008240/f20f2019a1ex4-26_kitov.htm) |
| 4.20\*\* | [Master Development Services Agreement between FameWave Ltd., and Rentschler Biopharma SE executed on March 17, 2020 (incorporated by reference to Exhibit 4.27 to the Registrant's Annual Report on Form 20-F/A as filed with the Securities and Exchange Commission on March 31, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020008240/f20f2019a1ex4-27_kitov.htm) |
| 4.21 | [Form of Warrant Exercise Agreement, dated as of April 19, 2020, entered into between the Registrant and the warrant holders in the April 2020 private placement (incorporated by reference to Exhibit 99.4 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on April 20, 2020)](http://www.sec.gov/Archives/edgar/data/1614744/000121390020009562/ea120836ex99-4_kitovpharma.htm) |
| 4.22 | [Form of Securities Purchase Agreement dated as of May 6, 2020 by and between the Registrant and the purchasers in the May 2020 offering (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on May 8, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020011385/ea121534ex1-1_kitov.htm) |
| 4.23 | [Form of Securities Purchase Agreement dated as of June 23, 2020 by and between the Registrant and the purchasers in the June 2020 offering (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 25, 2020)](https://www.sec.gov/Archives/edgar/data/1614744/000121390020015790/ea123437aex1-1_kitov.htm) |
| 4.24 | [Open Market Sale AgreementSM, dated as of June 9, 2021, by and between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Registrant's Form 6-K furnished to the Securities and Exchange Commission on June 9, 2021)](http://www.sec.gov/Archives/edgar/data/1614744/000121390021031718/ea142416ex1-1_purplebiotech.htm) |
| 4.25\*\* | [Share Purchase Agreement by and among Purple Biotech Ltd., the Shareholders of Immunorizon Ltd. and M. Arkin (1999) Ltd. dated as of February 1, 2023](f20f2022ex4-25_purple.htm) |
| 8.1 | [List of subsidiaries of the Registrant](f20f2022ex8-1_purple.htm) |
| 12.1 | [Certification by Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002](f20f2022ex12-1_purple.htm) |
| 12.2 | [Certification by Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002](f20f2022ex12-2_purple.htm) |
| 13.1 | [Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](f20f2022ex13-1_purple.htm) |
| 13.2 | [Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](f20f2022ex13-2_purple.htm) |
| 15.1 | [Consent of Somekh Chaikin, independent registered public accounting firm, a Member Firm of KPMG International](f20f2022ex15-1_purple.htm) |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\* Confidential treatment granted with respect to portions of this Exhibit.

\*\* Portions of this exhibit has been redacted because it is both not material and is the type that the registrant treats as private or confidential.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.

---

| | | | |
|:---|:---|:---|:---|
|  | **PURPLE BIOTECH LTD.** | **PURPLE BIOTECH LTD.** | **PURPLE BIOTECH LTD.** |
|  | By: | /s/ Gil Efron | /s/ Gil Efron |
|  |  | Name: | Gil Efron |
|  |  | Title: | Chief Executive Officer |
|  | By: | /s/ Lior Fhima | /s/ Lior Fhima |
|  |  | Name: | Lior Fhima |
|  |  | Title: | Chief Financial Officer |
| Date: March 3, 2023 |  |  |  |

---

**Purple Biotech Ltd.**

**Consolidated Financial Statements as at December 31, 2022**

**Purple Biotech Ltd.**

**Consolidated Financial Statements**

**As of December 31, 2022**

**In U.S. Dollars**

**Index**

---

| | |
|:---|:---|
|  | **Page** |
| [**Report of Independent Registered Public Accounting Firm**](#f_001) | **F-2** |
| [**Consolidated Statements of Financial Position**](#f_002) | **F-3** |
| [**Consolidated Statements of Operations and Other Comprehensive Loss**](#f_003) | **F-4** |
| [**Consolidated Statements of Changes in Equity**](#f_004) | **F-5** |
| [**Consolidated Statements of Cash Flows**](#f_005) | **F-8** |
| [**Notes to the Consolidated Financial Statements**](#f_006) | **F-10 - F-42** |

---

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Directors

Purple Biotech Ltd.:

*Opinion on the Consolidated Financial Statements*

We have audited the accompanying consolidated statements of financial position of Purple Biotech Ltd. and its subsidiaries (hereinafter – "the Company") as of December 31, 2022 and 2021, the related consolidated statements of operations and other comprehensive loss, changes in equity, and cash flows for each of the years in the three year period ended December 31, 2022, and the related notes (collectively, "the consolidated financial statements").

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.

 

*Critical Audit Matter* 

 

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Fair value of intangible assets*

 

As discussed in Notes 3D and 5 to the consolidated financial statements, intangible assets, consisting of in-process research and development (IPR&D), were USD 20,684 thousand as of December 31, 2022. IPR&D is related to the TyrNovo and FameWave acquisitions completed in prior years. The Company tests its intangible assets for impairment on an annual basis, or more frequently if there are indications of impairment.

We identified the evaluation of the estimated fair value of the intangible assets determined by the Company as part of the annual impairment test as a critical audit matter. Specifically, the evaluation of certain key assumptions into the fair value determination, including future expenses for completing development of the intangible assets, successes rate, future revenues, and discount rate, involved a high degree of subjective auditor judgment. Changes in these assumptions could have had a significant effect on the Company's fair value determination.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's determination of fair value of the intangible assets, including controls related to the key assumptions described above. We assessed the Company's estimate of future expenses by comparing it to budgeted expenses approved by the board of directors and to industry data reports, and inquiring of operations and finance personnel regarding the status of IPR&D efforts. We compared actual expenses for developing the TyrNovo and FameWave IPR&D incurred in the current year to the amounts originally forecasted in order to assess the Company's ability to accurately forecast. We compared the successes rate and future revenues estimated by the Company to industry data reports. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company's discount rate assumption by assessing the methodology and parameters used in the determination. We performed a sensitivity analysis over the estimated successes rate, future revenues, and discount rate assumptions by considering the effect of a range of potential outcomes.

Somekh Chaikin

Member Firm of KPMG International

We have served as the Company's auditor since 2011.

Tel-Aviv, Israel

March 2, 2023

**Purple Biotech Ltd.**

**Consolidated Statements of Financial Position as of December 31,**

---

| | | | |
|:---|:---|:---|:---|
|  | | **2022** | **2021** |
|  |<br>**Note** | **USD<br> thousands** | **USD<br> thousands** |
| **Assets** |  |  |  |
| Cash and cash equivalents | 6, 19A | **15030** | 10890 |
| Short term deposits | 19A | **16652** | 36310 |
| Other investments | 19B | **431** |  |
| Other current assets | 8 | **1143** | 1273 |
| **Total current assets** |  | **33256** | 48473 |
| **Non-current assets** |  |  |  |
| Other investment | 19B | **-** | 187 |
| Right to use assets | 7 | **467** | 619 |
| Fixed assets, net |  | **215** | 277 |
| Long term deposits |  | **-** | 160 |
| Intangible assets | 5 | **20684** | 20482 |
| **Total non - current assets** |  | **21366** | 21725 |
| **Total assets** |  | **54622** | 70198 |
| **Liabilities** |  |  |  |
| Current maturity of lease liabilities | 7 | **194** | 199 |
| Trade payable |  | **2132** | 1473 |
| Other payables | 9 | **4732** | 2578 |
| **Total current liabilities** |  | **7058** | 4250 |
| **Non-current liabilities** |  |  |  |
| Lease liability | 7 | **321** | 550 |
| Post-employment benefit liabilities | 18 | **145** | 292 |
| **Total non - current liabilities** |  | **466** | 842 |
| **Equity** |  |  |  |
| Share capital, no par value |  |  |  |
| Share premium | 10 | **126407** | 123951 |
| Receipts on account of warrants | 10 | **28017** | 28017 |
| Capital reserve for share-based payments | 11 | **10164** | 8862 |
| Capital reserve from transactions with related parties |  | **761** | 761 |
| Capital reserve from hedging |  | **(6)** |  |
| Capital reserve from transactions with non- controlling interest |  | **(859)** | (859) |
| Accumulated deficit |  | **(117573)** | (95905) |
| Equity attributable to owners of the Company |  | **46911** | 64827 |
| Non-controlling interests |  | **187** | 279 |
| **Total equity** |  | **47098** | 65106 |
| **Total liabilities and equity** |  | **54622** | 70198 |

---

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

**Consolidated Statements of Operations and Other Comprehensive Loss**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | | **2022** | **2021** | **2020** |
|  |<br>**Note** | **USD<br> thousands** | **USD<br> thousands** | **USD<br> thousands** |
| Research and development expenses | 14 | **16320** | 11827 | 7238 |
| Sales, general and administrative expenses | 15 | **6283** | 6107 | 6001 |
| **Operating Loss** |  | **22603** | 17934 | 13239 |
| Expenses on account of warrants | 16A | **-** |  | 15655 |
| Finance expenses | 16B | **67** | 212 | 61 |
| Finance income | 16B | **(910)** | (320) | (254) |
| **Finance expenses (income), net** |  | **(843)** | (108) | 15462 |
| **Loss for the year from continuing operations** |  | **21760** | 17826 | 28701 |
| Loss (profit) from discontinued operation | 4 | **-** | 642 | (627) |
| **Loss for the year** |  | **21760** | 18468 | 28074 |
| **Other Comprehensive Loss:** |  |  |  |  |
| **Items that will be transferred to profit or loss:** |  |  |  |  |
| Loss from cash flow hedges |  | 6 | - | - |
| **Total comprehensive loss for the year** |  | 21766 | 18468 | 28074 |
| **Loss attributable to:** |  |  |  |  |
| Owners of the Company |  | **21668** | 18384 | 27999 |
| Non-controlling interests |  | **92** | 84 | 75 |
|  |  | **21760** | 18468 | 28074 |
| **Total comprehensive loss attributable to** |  |  |  |  |
| Owners of the Company |  | **21674** | 18384 | 27999 |
| Non-controlling interests |  | **92** | 84 | 75 |
|  |  | **21766** | 18468 | 28074 |
| **Loss per share data** |  |  |  |  |
| **Continuing operations** |  |  |  |  |
| Basic & diluted loss per ADS - USD |  | **1.20** | 1.01 | 2.50 |
| Number of ADSs used in calculating basic & diluted loss per ADS |  | **18081087** | 17568036 | 11500113 |
| **Discontinued operation** |  |  |  |  |
| Basic & diluted loss (profit) per ADS – USD |  | **-** | 0.04 | (0.05) |
| Number of ADSs used in calculation |  | **-** | 17568036 | 11500113 |

---

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

**Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br> Capital** | **Share<br> premium** | **Receipts<br> on<br> account of<br> warrants** | **Capital<br> reserve<br> for<br> share-<br> based<br> payments** | **Capital reserve from hedging** | **Capital<br> reserve<br> from<br> transactions<br> with<br> related<br> parties** | **Capital<br> reserve<br> from<br> transactions<br> with<br> Non-<br> controlling<br> interest** | **Accumulated<br> loss** | **Total** | **Non-<br> controlling<br> interests** | **Total<br> equity** |
| **Balance as of January 1, 2022** |  | **123951** | **28017** | **8862** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | **761** | **(859)** | **(95905)** | **64827** | **279** | **65106** |
| **Transactions with owners of the Company:** |  |  |  |  |  |  |  |  |  |  |  |
| Issuance of American Depository Shares (ADSs) on the NASDAQ, net of issuance costs |  | **1346** | **-** | **-** | **-** | **-** |  | **-** | **1346** |  | **1346** |
| Share-based payments |  | **1110** | **-** | **1302** | **-** | **-** | **-** | **-** | **2412** | **-** | **2412** |
| Total transactions with owners of the Company |  | **2456** | **-** | **1302** |  |  |  |  | **3758** |  | **3758** |
| Loss for the year |  | **-** | **-** | **-** | **-** | **-** | **-** | **(21668)** | **(21668)** | **(92)** | **(21760)** |
| Other comprehensive loss for the period |  |  |  |  | (6) |  |  |  | (6) |  | (6) |
| **Balance as of December 31, 2022** |  | **126407** | **28017** | **10164** | (6) | **761** | **(859)** | **(117573)** | **46911** | **187** | **47098** |

---

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

**Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br> Capital** | **Share<br> premium** | **Receipts<br> on<br> account of<br> warrants** | **Capital<br> reserve <br> for<br> share-<br> based<br> payments** | **Capital<br> reserve<br> from<br> transactions<br> with <br> related<br> parties** | **Capital <br> reserve <br> from<br> transactions<br> with<br> Non-<br> controlling<br> interest** | **Accumulated<br> loss** | **Total** | **Non-<br> controlling<br> interests** | **Total<br> equity** |
|  | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** |
| **Balance as of January 1, 2021** |  | **118909** | **29984** | **8115** | **761** | **(859)** | **(77521)** | **79389** | **363** | **79752** |
| **Transactions with owners of the Company:** |  |  |  |  |  |  |  |  |  |  |
| Issuance of American Depository Shares (ADSs) on the NASDAQ, net of issuance costs |  | **540** | **-** | **-** | **-** |  | **-** | **540** |  | **540** |
| Exercise of warrants |  | **3167** | **(1967)** | **-** | **-** | **-** | **-** | **1200** | **-** | **1200** |
| Share-based payments |  | **1335** | **-** | **747** | **-** | **-** | **-** | **2082** | **-** | **2082** |
| Total transactions with owners of the Company |  | **5042** | **(1967)** | **747** |  |  |  | **3822** |  | **3822** |
| Loss for the year |  | **-** | **-** | **-** | **-** | **-** | **(18384)** | **(18384)** | **(84)** | **(18468)** |
| **Balance as of December 31, 2021** |  | **123951** | **28017** | **8862** | **761** | **(859)** | **(95905)** | **64827** | **279** | **65106** |

---

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

**Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br> Capital** | **Share<br> premium** | **Receipts<br> on<br> account of<br> warrants** | **Capital<br> reserve<br> for<br> share-<br> based<br> payments** | **Capital<br> reserve<br> from<br> transactions<br> with <br> related<br> parties** | **Capital reserve<br> from<br> transactions<br> with Non-<br> controlling<br> interest** | **Accumulated loss** | **Total** | **Non-<br> controlling<br> interests** | **Total<br> equity** |
|  | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** |
| **Balance as of January 1, 2020** |  | **46986** | **9874** | **3181** | **761** | **(859)** | **(49522)** | **10421** | **438** | **10859** |
| **Transactions with owners of the Company:** |  |  |  |  |  |  |  |  |  |  |
| Issuance of American Depository Shares (ADSs) on the NASDAQ, net of issuance costs |  | **21200** | **14825** | **2723** | **-** |  | **-** | **38748** |  | **38748** |
| Exercise of warrants |  | **38013** | **(23780)** | **455** | **-** | **-** | **-** | **14688** | **-** | **14688** |
| Share-based payments |  | **889** | **-** | **1756** | **-** | **-** | **-** | **2645** | **-** | **2645** |
| Transfer of derivative instrument from liability to equity (see Note 10D) |  | **-** | **27386** | **-** | **-** | **-** | **-** | **27386** | **-** | **27386** |
| ADS and warrants issued in connection with the purchase of a subsidiary (see Note 5B) |  | **11821** | **1679** | **-** | **-** | **-** | **-** | **13500** | **-** | **13500** |
| Total transactions with owners of the Company |  | **71923** | **20110** | **4934** |  |  |  | **96967** |  | **96967** |
| Loss for the year |  | **-** | **-** | **-** | **-** | **-** | **(27999)** | **(27999)** | **(75)** | **(28074)** |
| **Balance as of December 31, 2020** |  | **118909** | **29984** | **8115** | **761** | **(859)** | **(77521)** | **79389** | **363** | **79752** |

---

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

**Consolidated Statements of Cash Flows for the year ended December 31,**

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| **Cash flows from operating activities from continuing operation:** |  |  |  |
| Loss for the year from continuing operation | **(21760)** | (17826) | (28701) |
| <u>Adjustments:</u> |  |  |  |
| Depreciation | **201** | 231 | 235 |
| Finance expenses (income), net | **(843)** | (108) | 15462 |
| Share-based payments | **2412** | 2082 | 2645 |
|  | **(19990)** | (15621) | (10359) |
| **Changes in assets and liabilities:** |  |  |  |
| Changes in trade receivables and other current assets | **313** | (316) | (492) |
| Changes in accounts payable | **799** | 399 | (2355) |
| Changes in other payables | **2132** | 634 | (571) |
| Changes in post-employment benefit liabilities | **11** | 27 | (20) |
|  | **3255** | 744 | (3438) |
| **Net cash used in operating activities from continuing operation** | **(16735)** | (14877) | (13797) |
| **Cash flows from investing activities from continuing operation:** |  |  |  |
| Cash assumed as part of acquisition of FameWave | **-** |  | 69 |
| Acquisition of intangible asset | **(202)** |  |  |
| Decrease (increase) in short term deposits | **19658** | 10248 | (46548) |
| Decrease (increase) in long term deposits | **160** | 2914 | (3071) |
| Interest received | **324** | 359 | 110 |
| Acquisition of fixed assets | **(26)** | (115) | (156) |
| **Net cash provided by (used in) investing activities from continuing operation** | **19914** | 13406 | (49595) |
| **Cash flows from financing activities from continuing operation:** |  |  |  |
| Proceeds from issuance of ADSs | **1498** | 564 | 27925 |
| ADS issuance expenses paid | **(152)** | (24) | (2074) |
| Proceeds from issuance of warrants | **-** |  | 26574 |
| Warrants issuance expenses paid | **-** |  | (3281) |
| Proceeds from exercise of warrant | **-** | 1200 | 19547 |
| Repayment of lease liability | **(165)** | (153) | (179) |
| Interest paid | **(67)** | (75) | (24) |
| **Net cash provided by financing activities from continuing operation** | **1114** | 1512 | 68488 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| **Cash flows in respect of discontinued operation as follows:** |  |  |  |
| Net cash from operating activities | **-** | (374) | 1705 |
| Net cash from investing activities |  |  |  |
| Net cash from financing activities | **-** | - | - |
| Net cash provided by (used in) discontinued operation | **-** | (374) | 1705 |
| **Net increase (decrease) in cash and cash equivalents** | **4293** | (333) | 6801 |
| **Cash and cash equivalents at the beginning of the year** | **10890** | 11247 | 4385 |
| **Effect of translation adjustments on cash and cash equivalents** | **(153)** | (24) | 61 |
| **Cash and cash equivalents at end of the year** | **15030** | 10890 | 11247 |
| **Non- Cash activities:** |  |  |  |
| Reclassification of non-tradable derivatives until registered for trading | **-** | - | 27386 |

---

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

**Notes to the Consolidated Financial Statements**

**Note 1 - General**

**Reporting entity**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Purple Biotech Ltd. (hereinafter:
 the "**Company**" or "**Purple**") is a clinical-stage company developing first-in-class, effective
 and durable therapies by overcoming tumor immune evasion and drug resistance. The Company focused on Oncology, which includes NT219,
 a therapeutic candidate which is a small molecule targeting the novel cancer drug resistance pathways IRS1/2 and STAT3 and CM24 a
 monoclonal antibody blocking CEACAM1, a novel immune checkpoint that supports tumor immune evasion and survival through multiple
 pathways.

The Company was incorporated in Israel as a private company in August 1968, and has been listed for trading on the Tel Aviv Stock Exchange since September 1978. In October 2012, the Company disposed of all of its previous operations, and in July 2013, the Company acquired shares of Kitov Pharma Ltd. from its shareholders, in exchange for the Company's shares. In December 2020 the Company changed its name from Kitov Pharma Ltd. to Purple Biotech Ltd..

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Company's securities (American Depository Shares ("ADS")) were listed for trading on the NASDAQ in November 2015 (including a Series A warrant that expired in November 2020). Each ADS represents 10 ordinary shares with no par value following a reverse split in effect from August 23, 2020 (see Note 10A). Each 10 warrants enable the purchase of 1 ADS.

The Company's address is 4 Oppenheimer St., Science Park Rehovot 7670104 Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. In January 2017, the Company
 acquired the majority of shares of TyrNovo Ltd. (hereinafter: "**TyrNovo** "). During 2018, the Company acquired additional
 shares of TyrNovo from various minority shareholders, see also Note 5A.

In January 2020, the Company acquired 100% of FameWave Ltd. (hereinafter "FameWave"), see also Note 5B.

In October 28, 2021, the Company established a fully owned subsidiary Purple Biotech GmbH (hereinafter "**Purple GmbH**").

The Company together with TyrNovo, FameWave and Purple GmbH are referred to, in these consolidated financial statements, as "**the Group**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Since incorporation through December 31, 2022, the Group has incurred losses and negative cash flows from operations mainly attributed to its development efforts and has an accumulated deficit of USD 117.6 million. The Group has financed its operations mainly through private and public financing rounds. Through December 31, 2022, the Company raised a total of USD 95.8 million net of issuance expenses (excluding exercise of warrants), see also Note 10.

E. In February 2023, the Company acquired Immunorizon Ltd. a privately held company and its portfolio of Tri-Specific antibodies for the treatment of cancer, see also note 20.

**Notes to the Consolidated Financial Statements**

**Note 2 - Basis of Preparation of the Consolidated Financial Statements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Statement of compliance with International Financial Reporting Standards** 

The Group has prepared the consolidated financial statements in accordance with International Financial Reporting Standards (hereinafter: "IFRS"), as issued by the International Accounting Standard Board ("IASB").

These consolidated financial statements were approved by the board of directors on March 3, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Functional and presentation currency** 

These consolidated financial statements are presented in US dollars (USD), which is the Group's functional currency, rounded to the nearest one thousand, unless otherwise noted. The USD is the currency that represents the principal economic environment in which the Group operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Basis of measurement** 

The consolidated financial statements have been prepared on the historical cost basis except for the following assets and liabilities:

● Financial instruments and derivatives measured at fair value through profit or loss;

● Provisions;

● Liabilities for employee benefits

For further information regarding the measurement of these assets and liabilities see Note 3 regarding significant accounting policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Use of estimates and judgment** 

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Management prepares the estimates on the basis of past experience, various facts, external circumstances, and reasonable assumptions according to the pertinent circumstances of each estimate. The preparation of accounting estimates used in the preparation of the Group's consolidated financial statements requires management of the Group to make assumptions regarding circumstances and events that involve considerable uncertainty. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

**Notes to the Consolidated Financial Statements**

**Note 2 - Basis of Preparation of the Consolidated Financial Statements (Cont'd)**

Information about assumptions made by the Group with respect to the future and other reasons for uncertainty with respect to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in the following notes:

---

| | | | |
|:---|:---|:---|:---|
| **Estimate** | **Principal assumptions** | **Possible effects** | **Reference** |
| Assessment of probability<br> of contingent liabilities | Whether it is more likely than not that an outflow of economic resources will be required in respect of legal claims pending against the Company and its investees | Reversal or creation of a provision for a claim | For information on the Company's exposure to claims see Note 13B regarding contingent liabilities |
| Recoverability of intangible assets | The discounted cash flows method includes assumptions such as future expenses, future revenues, success rates (in respect of transition between phases of the R&D of the clinical trials until reaching regulatory approval and marketing) and discount rate. | Impairment of the in-process research and development in profit or loss | See Note 5 regarding Intangible assets |

---

**Determination of fair value** 

Preparation of the financial statements requires the Group to determine the fair value of certain assets and liabilities. The Group's management regularly reviews significant unobservable inputs and valuation adjustments, including obtaining valuations prepared by third parties and assessing the evidence to support the conclusion that these valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which the valuations should be classified.

When determining the fair value of an asset or liability, the Group uses market data as much as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on the data used in the measurement, as follows:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.

- Level 3: inputs that are not based on observable market data (unobservable inputs).

Further information about the assumptions made in measuring fair value of share-based payments, intangible assets and financial instruments are included in Note 11, Note 5 and Note 19, respectively.

**Notes to the Consolidated Financial Statements**

**Note 2 - Basis of Preparation of the Consolidated Financial Statements (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Exchange rates and linkage bases** 

Balances in foreign currency (mainly the New Israeli Shekel, or NIS) or linked thereto are included in the consolidated financial statements at the representative exchange rates, as published by the Bank of Israel, which were prevailing as of the statement of financial position date.

Data on exchange rates are as follows:

---

| | | |
|:---|:---|:---|
|  | **Representative** | **Representative** |
|  | **exchange rate of USD** | **exchange rate of USD** |
|  | **(NIS/USD 1)** | **(NIS/USD 1)** |
| **Date of consolidated financial statements:** | | |
| December 31, 2022 |  | 3.519 |
| December 31, 2021 |  | 3.110 |
| December 31, 2020 |  | 3.215 |

---

---

| | |
|:---|:---|
|  | **%** |
| **Changes in exchange rates for the year ended:** |  |
| December 31, 2022 | 13 |
| December 31, 2021 | (3) |
| December 31, 2020 | (7) |

---

**Note 3 - Significant Accounting Policies**

The accounting policies set out below have been consistently applied for all periods presented in these consolidated financial statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Basis of consolidation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Acquisition of Subsidiaries** 

Upon acquisition of subsidiaries, the Company evaluates whether the acquisition is considered a business acquisition or an acquisition of an asset (or group of assets). If the Company reaches the conclusion that the subsidiary acquired is a considered a business, it accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. If the acquired subsidiary is not considered a business, the Company accounts for the acquisition as a purchase of assets. As of December 31, 2022, the two acquisitions made by the Company were determined to be an acquisition of assets, see Note 5.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Subsidiaries** 

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Non-controlling interests** 

Non-controlling interests that are instruments that give rise to a present ownership interest and entitle the holder to a share of net assets in the event of liquidation (for example: ordinary shares), are measured at the date of the business combination at either fair value, or at their proportionate interest in the identifiable assets and liabilities of the acquire, on a transaction-by-transaction basis.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Transactions eliminated on consolidation** 

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Foreign currency transactions** 

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between its cost in the functional currency on date of translation, and the monetary cost in foreign currency translated at the exchange rate at the end of the year. The foreign currency gain or loss on amortized items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Financial instruments** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Non-derivative financial assets** 

***Initial recognition and measurement of financial assets***

The Group initially recognizes debt instruments issued on the date that they are created. All other financial assets are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. A financial asset is initially measured at fair value plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. Receivables originating from contract assets are initially measured at the carrying amount of the contract assets on the date classification was changed from contract asset to receivables.

***Derecognition of financial assets***

Financial assets are derecognized when the contractual rights of the Group to the cash flows from the asset expire, or the Group transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. When the Group retains substantially all of the risks and rewards of ownership of the financial asset, it continues to recognize the financial asset.

***Classification of financial assets into categories and the accounting treatment of each category***

Financial assets are classified at initial recognition to one of the following measurement categories: assets at amortized cost; assets at fair value through other comprehensive income – investments in debt instruments; assets at fair value through other comprehensive income – investments in equity instruments; or assets at fair value through profit or loss.

Financial assets are not reclassified in subsequent periods unless, and only if, the Group changes its business model for the management of financial debt assets, in which case the affected financial debt assets are reclassified at the beginning of the period following the change in the business model.

***Subsequent measurement and gains and losses***

*Financial assets at fair value through profit or loss*

 

These assets are subsequently measured at fair value. Net gains and losses, including any interest income, are recognized in profit or loss.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Non-derivative financial liabilities** 

Non-derivative financial liabilities include: finance lease liabilities, accounts payables and other payables.

***Initial recognition of financial liabilities***

The Group initially recognizes debt securities issued on the date that they originated. All other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

***Subsequent measurement of financial liabilities***

Financial liabilities (other than financial liabilities at fair value through profit or loss) are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities are designated at fair value through profit or loss if the Group manages such liabilities and their performance is assessed based on their fair value in accordance with the Group's documented risk management strategy, providing that the designation is intended to prevent an accounting mismatch, or the liability is a combined instrument including an embedded derivative.

***Derecognition of financial liabilities***

Financial liabilities are derecognized when the obligation of the Group, as specified in the agreement, expires or when it is discharged, cancelled or transferred to equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Derivative financial instruments including hedge accounting** 

The Group holds derivative financial instruments to hedge its foreign currency.

***Hedge accounting***

 ****

The Group designates certain derivatives as hedging instruments in order to hedge changes in cash flows that relate to highly probable forecasted transactions, and which derive from changes in foreign currency exchange rates.

At the inception of the hedging relationship the Group documents its risk management objective and its hedging strategy. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and the hedging instrument are expected to offset each other.

***Measurement of derivative financial instruments***

 ****

Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

***Cash flow hedges***

 ****

When a derivative instrument is designated as a cash flow hedge, the effective portion of the changes in fair value of the derivative is recognized in other comprehensive income, directly within a hedging reserve. The effective portion of changes in fair value of a derivative, recognized in other comprehensive income, is limited to the cumulative change in fair value of the hedged item (based on present value), from inception of the hedge. The change in fair value in respect of the ineffective portion is recognized immediately in profit or loss.

The amounts accumulated in the hedging reserve are reclassified to profit or loss in the same period, or periods, in which the hedged forecasted future cash flows affect profit or loss.

If the hedge no longer qualifies as an accounting hedge, or the hedging instrument is sold, expires, is terminated or exercised, hedge accounting is discontinued on a prospective basis. When hedge accounting is discontinued, the amounts accumulated in the past in the hedging reserve remain in the reserve, until such time as they are reclassified to profit or loss in the period, or periods, in which the hedged forecasted future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, the amounts accumulated in the past in the hedging reserve are immediately reclassified to profit or loss.

***Derivatives that do not serve hedging purposes***

The changes in fair value of these derivatives are recognized in profit or loss, as financing income or expense. The fair value of these derivatives is based on an evaluation and classified as level 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Share capital** 

*Ordinary shares*

 

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

Incremental costs directly attributable to an expected issuance of an instrument that will be classified as an equity instrument are recognized as an asset in deferred expenses in the statement of financial position. The costs are deducted from equity upon the initial recognition of the equity instruments, or are amortized as financing expenses in the statement of income when the issuance is no longer expected to take place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Issuance of parcel of securities** 

The consideration received from the issuance of parcel of securities is attributed initially to financial liabilities that are measured each period at fair value through profit or loss, and then to financial liabilities that are measured only upon initial recognition at fair value. The remaining amount is allocated to equity.

Direct issuance costs are attributed to the specific securities in respect of which they were incurred, whereas joint issuance costs are attributed to the securities on a proportionate basis according to the allocation of the consideration from the issuance of the units, as described above.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Intangible assets** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Research and development** 

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss when incurred.

Development activities involves research for new or substantially improved drug candidates and processes, the manufacturing of such candidates and the pre-clinical and clinical studies for these candidates. Development expenditure are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group has the intention and sufficient resources to complete development and to use or sell the asset. Currently all development costs are recognized in profit and loss as expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Other intangible assets** 

Other intangible assets, including in-process research and development in respect of the Company's acquisition of TyrNovo and Famewave, and asset purchased by Purple GmbH (see also Note 5), which have infinite useful lives, are measured at cost less accumulated impairment losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Amortization** 

The Group examines the useful life of an intangible asset that is not periodically amortized at least once a year in order to determine whether events and circumstances continue to support the decision that the intangible asset has an indefinite useful life and if any impairment may be needed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Impairment** 

***Timing of impairment testing***

 ****

The carrying amounts of the Group's non-financial assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

Once a year and on the same date, or more frequently if there are indications of impairment, the Group estimates the recoverable amount of each cash generating unit that contains goodwill, or intangible assets that have indefinite useful lives or are unavailable for use.

***Measurement of recoverable amount***

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the assessments of market participants regarding the time value of money and the risks specific to the asset or cash-generating unit, for which the estimated future cash flows from the asset or cash-generating unit were not adjusted.

***Recognition of impairment loss***

An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Loss per share** 

The Group presents basic and diluted loss per share data for its ordinary share capital. Basic loss per share is calculated by dividing the loss attributable to holders of ordinary shares, by the weighted average number of ordinary shares outstanding during the year. The loss per share data is presented in the profit and loss statement as loss per ADS giving effect to the number of 10 shares per 1 ADS.

Diluted loss per share is determined by adjusting the profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, after adjustment for treasury shares, for the effects of all dilutive potential ordinary shares, which comprise convertible debentures, share options and share options granted to employees. The Company's options were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Employee benefits** 

The Group has a number of post-employment benefit plans. The plans are usually financed by deposits with insurance and pension companies, and they are classified as defined contribution plans and as defined benefit plans.

*Defined contribution plans*

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an expense in profit or loss in the periods during which related services are rendered by employees.

*Short-term benefits*

 

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Share-based payment transactions** 

The grant date fair value of share-based payment awards granted to employees is recognized as a salary expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense in respect of share-based payment awards that are conditional upon meeting service and non-market performance conditions, is adjusted to reflect the number of awards that are expected to vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Provisions** 

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

A provision for legal claims is recognized if, as a result of a past event, the Company has a present legal or constructive obligation and it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of obligation can be estimated reliably.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J.** **Revenue** 

The Group recognizes revenue from upfront and milestone payments at the point in time the milestone criteria are met and collectability is probable. The revenue is measured according to the amount of the consideration to which the Group expects to be entitled.

**Identifying the contract**

The Group accounts for a contract with a customer only when the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The parties to the contract have approved the contract
 (in writing, orally or according to other customary business practices) and they are committed to satisfying the obligations attributable
 to them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Group can identify the
 rights of each party in relation to the goods or services that will be transferred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Group can identify the payment terms for the goods
 or services that will be transferred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The contract has a commercial substance (i.e. the risk,
 timing and amount of the entity's future cash flows are expected to change as a result of the contract); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) It is probable that the consideration, to which the
 Group is entitled to in exchange for the goods or services transferred to the customer, will be collected.

**Identifying performance obligations**

On the contract's inception date, the Group assesses the goods or services promised in the contract with the customer and identifies as a performance obligation any promise to transfer to the customer one of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Goods or services (or a bundle
 of goods or services) that are distinct; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A series of distinct goods or services that are substantially
 the same and have the same pattern of transfer to the customer.

**Determining the transaction price**

The transaction price is the amount of the consideration to which the Group expects to be entitled in exchange for the license and commercialization agreement. The Group considers the effects of all the following elements when determining the transaction price: variable consideration, the existence of a significant financing component, non-cash consideration, and consideration payable to the customer.

**Right to use and right to access**

To determine whether the Group's promise to grant a license provides a customer with either a right to access the Group's IP or a right-to-use the Group's IP, the Group considers whether a customer can direct the use of, and obtain substantially all of the remaining benefits from, a license at the point in time at which the license is granted.

A license is considered a "right-to-use" license when the customer maintains control of the IP upon its transfer. However, if the grantor of the license maintains involvement with the IP after its transfer, and the customer cannot direct the use of, and obtain substantially all of the remaining benefits from the license, then the license is considered a right-to-access license. The license granted by the Company, which relates to its product is granted to a third party which can obtain direct use of, and substantially all of the remaining benefits from the license at the point in time at which the license is granted. The Group will not continue to be involved in any activities that significantly affect the IP at the specific territory. Therefore the Company recognized the license granted as right-to-use license.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**K.** **Financing income and expense** 

Finance income comprises changes in the fair value of the financial liability through profit and loss, gains on changes in the fair value of financial assets at fair value through profit or loss and income from short- term and long-term deposits, foreign currency gains, and the reclassification of net gains and losses previously recognized in other comprehensive income on cash flow hedges of foreign currency.

Finance expenses include loss from exchange rate differences and interest fee.

Interest income or expense is recognized, using the effective interest method.

In the statements of cash flows, interest received is presented as part of cash flows from investing activities and interest paid is presented as part of cash flows from financing activities.

**L.** **Income tax expense** 

Income tax comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to a business combination, or are recognized directly in equity or in other comprehensive income to the extent they relate to items recognized directly in equity or in other comprehensive income.

***Deferred taxes***

Deferred tax asset is recognized for unused tax losses, tax benefits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets that were not recognized are reevaluated at each reporting date and recognized if it has become probable that future taxable profits will be available against which they can be utilized. The Company has not recognized deferred tax assets as no future taxable profits are expected in the foreseeable future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**M.** **Leases** 

**Determining whether an arrangement contains a lease**

On the inception date of the lease, the Group determines whether the arrangement is a lease or contains a lease, while examining if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In its assessment of whether an arrangement conveys the right to control the use of an identified asset, the Group assesses whether it has the following two rights throughout the lease term:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The right to obtain substantially
 all the economic benefits from use of the identified asset; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The right to direct the identified
 asset's use.

For lease contracts that contain non-lease components, such as services or maintenance, that are related to a lease component, the Group elected to account for the contract as a single lease component without separating the components.

**Leased assets and lease liabilities**

Contracts that award the Group control over the use of a leased asset for a period of time in exchange for consideration, are accounted for as leases. Upon initial recognition, the Group recognizes a liability at the present value of the balance of future lease payments (these payments do not include certain variable lease payments), and concurrently recognizes a right-to-use asset at the same amount of the lease liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease.

**Notes to the Consolidated Financial Statements**

**Note 3 - Significant Accounting Policies (Cont'd)**

Since the interest rate implicit in the Group's leases is not readily determinable, the incremental borrowing rate of the lessee is used. Subsequent to initial recognition, the right-to-use asset is accounted for using the cost model, and depreciated over the shorter of the lease term or useful life of the asset.

**The lease term**

The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it is reasonably certain that the lessee will or will not exercise the option, respectively.

**Depreciation of right-to-use asset**

After lease commencement, a right-to-use asset is measured on a cost basis less accumulated depreciation and accumulated impairment losses and is adjusted for re-measurements of the lease liability. Depreciation is calculated on a straight-line basis over the useful life or contractual lease period, whichever earlier, as follows: office lease 5 years.

&nbsp;&nbsp;&nbsp;&nbsp;**N.** **Discontinued operations** 

A discontinued operation is a component of the Group's business that represents a separate major line of business that has been disposed of or is held for sale or distribution. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of operation is restated as if the operation had been discontinued from the start of the earliest comparative period.

**Note 4 - Discontinued operation**

In October 2021, the Company agreed, together with its then U.S distributor for Consensi (an FDA approved fixed-dose combination drug treatment intended for the treatment of osteoarthritis pain and for hypertension, hereinafter "Consensi"), Coeptis Pharmaceuticals Inc., to terminate the distribution agreement. Despite the Company's efforts to identify an alternative distributor for Consensi in the United States., the Company concluded that commercialization of Consensi, both in the U.S market and elsewhere, is not likely to generate significant revenue and achieve profitability in the near term. In order to reduce the expenses involved in maintaining the product, it was concluded to discontinue Consensi activities and to allocate the funds to the Company's core oncology activities. In parallel, the agreements with Kuhnil Pharmaceuticals Inc.'s for the territory of South Korea and Hebei Changshan Biochemical Pharmaceutical Co., Ltd. for the territory of China were terminated. Consensi represented a separate major line of business. Discontinuation also included inventory write off. Consequently, the Company reported Consensi as a discontinued operation and as of December 31, 2021 has one operating segment- oncology.

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** |
| **Results of discontinued operation** |  |  |
| Revenue |  | 1000 |
| Expenses | 642 | 373 |
| Loss (profit) for the year | 642 | (627) |
| **Loss (profit) for the year attributable to the owners of the Company:** |  |  |
| From continuing operations | 17826 | 28701 |
| From discontinued operation | 642 | (627) |
| **Loss (profit) per share – Discontinued operation** |  |  |
| Basic & diluted loss (profit) per ADS – USD | 0.04 | (0.05) |
| **Cash flows from discontinued operation** |  |  |
| Net cash (used in) provide by operating activities | (374) | 1705 |

---

**Notes to the Consolidated Financial Statements**

**Note 5 - Intangible Assets** 

**As of December 31, 2022, and 2021:**

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  | **USD thousands** | **USD thousands** |
| IPR&D related to TyrNovo (see 5A below) | 6172 | 6172 |
| IPR&D related to Famewave (see 5B below) | 14310 | 14310 |
| IPR&D related to Purple GmbH | 202 | - |
| Total intangible assets | 20684 | 20482 |

---

---

| | |
|:---|:---|
| **A** | **Acquisition of Tyrnovo** |

---

During the years 2017 to 2019 the Company acquired shares in Tyrnovo, a company developing NT219.

Since 2019 the Company owns 98.47% of Tyrnovo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Acquisition of Famewave** 

On March 14, 2019, the Company signed an agreement to acquire 100% of FameWave Ltd, a privately held biopharmaceutical Company developing CM24, ("FameWave") from its shareholders in exchange for USD 10 million worth of its newly issued ADSs with a long-term lock-up period, priced at USD 12.3 per ADS, plus 50% warrant coverage based on an exercise price of USD 19.8 per ADS with a 4-year term. In addition, the Company provided a loan to FameWave of up to approximately USD 2 million to finance its operation until the closing of the acquisition. The acquisition closed on January 7, 2020.

In consideration of the transfer of the FameWave shares to the Company and completion of the other condition set forth in the acquisition agreement, the aggregate purchase price paid by the Company for 100% of shareholders, and other stake holders (a) 807,561 of the Company's ADSs, (b) warrants to purchase 403,781 additional ADSs with a term of exercise of 4 years beginning on the date of issuance, and subject to other terms and conditions as set forth herein and in the 'warrant agreements of the Company (c) 54,472 RSUs and 27,236 options to purchase 27,236 shares of the Company.

The consideration was recorded based on the fair value of the assets purchased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Purple GmbH** 

During 2022 the company acquired an intangible asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D**. As of December 31, 2022, the recoverable amount of the in-process research and development assets (hereinafter – "intangible assets") was based on their value in use and was determined by discounting the future cash flows to be generated from them by using the discounted cash flows method, on the annual year test. The recoverable amount of the intangible assets exceeds their carrying amount, thus no impairment loss was recognized. The discounted cash flows model considered the risks associated with the clinical/preclinical phase of the intangible assets and the probability of success for each development phase. Certain estimations were determined using industry data reports. The discount rate used for calculating intangible assets recoverable amount was 19.4%. The company performed sensitivity analysis for estimations such as discount rate and royalty rate and concluded that the recoverable amount of the intangible assets exceeds their carrying amount.

**Notes to the Consolidated Financial Statements**

**Note 6 - Cash and Cash Equivalents**

---

| | | |
|:---|:---|:---|
|  | **As of December, 31** | **As of December, 31** |
|  | **2022** | **2021** |
|  | **USD thousands** | **USD thousands** |
| Balance in USD | **11902** | 9174 |
| Balance in other currencies | **3128** | 1716 |
| Total cash and cash equivalents | **15030** | 10890 |

---

**Note 7 – Leases**

The Group has lease agreements with respect to offices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Information regarding material lease agreements** 

The Company entered into an agreement for the lease of offices in Rehovot as from September 15, 2020 for a period of 5 years. Accordingly, the Company initially recognized in the statement of financial position a right-to-use asset in the amount of USD 817 thousand concurrently with the recognition of a lease liability in the same amount. The agreement has an option to extend the lease, for additional 5 years. This additional period is not included in the lease payments used-in the calculation of the liability as the Company does not expect it is reasonably certain it will exercise the option. The Company has an option to extend the lease agreements for an additional 5 years at the terms as those of the existing agreement with addition of 5% to the current terms and CPI linked.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Right-to-use assets** 

Carrying amounts of right-to-use assets and change during the period:

---

| | |
|:---|:---|
|  | **Office Lease** |
|  | **USD thousands** |
| Balance as at January 1, 2022 | 619 |
| Depreciation on right-to-use assets | (152) |
| Balance as at December 31, 2022 | 467 |
| Balance as at January 1, 2021 | 790 |
| Depreciation on right-to-use assets | (171) |
| Balance as at December 31, 2021 | 619 |

---

**Notes to the Consolidated Financial Statements**

**Note 7 - Leases (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Lease liability** 

**Maturity analysis of the Company's lease liabilities**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
|  | **USD<br> thousands** | **USD<br> thousands** |
| Less than one year | **204** | 219 |
| One to two years | **388** | 658 |
| Total | **592** | 877 |
| Current maturities of lease liability | **194** | 199 |
| Long-term lease liability | **321** | 550 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Additional information on leases** 

**Amounts recognized in profit or loss**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **USD<br> thousands** | **USD<br> thousands** | **USD<br> thousands** | **USD<br> thousands** |
| Interest expenses on lease liability | | **49** | | 65 |

---

**Note 8 - Other Current Assets**

---

| | | |
|:---|:---|:---|
|  | **As of December, 31** | **As of December, 31** |
|  | **2022** | **2021** |
|  | **USD thousands** | **USD thousands** |
| Government authorities | **146** | 268 |
| Prepaid expenses and other receivables | **997** | 1005 |
| Total other current assets | **1143** | 1273 |

---

**Notes to the Consolidated Financial Statements**

**Note 9 - Other Payables**

---

| | | |
|:---|:---|:---|
|  | **As of December 31** | **As of December 31** |
|  | **2022** | **2021** |
|  | **USD thousands** | **USD thousands** |
| Due to related parties - payroll related | **607** | 527 |
| Accrued expenses | **3597** | 1527 |
| Government authorities | **81** | 66 |
| Payroll related | **437** | 440 |
| Other payables | **10** | 18 |
|  | **4732** | 2578 |

---

**Note 10 - Equity**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** The Company's authorized share capital is 1,000,000,000 ordinary shares, with no par value, and 50,000,000 non-voting senior preferred shares, with no par value, divided into 5 classes of 10,000,000 preferred shares in each class. On August 21, 2020 the ratio between ADSs and shares was changed from 1:1 to 1:10 (each 1 ADS equal 10 shares).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **The Company's share capital** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31,<br> 2022** | **As of December 31,<br> 2022** | **As of December, 31,<br> 2021** | **As of December, 31,<br> 2021** |
|  | **Number of shares in thousands** | **Number of shares in thousands** | **Number of shares in thousands** | **Number of shares in thousands** |
|  | **Authorized** | **Issued and<br> paid-in** | **Authorized** | **Issued and<br> paid-in** |
| Shares, no par value | **1000000** | **184815** | 1000000 | 178001 |
| Class A preferred shares, no par value | **10000** | - | 10000 | - |
| Class B preferred shares, no par value | **10000** | - | 10000 | - |
| Class C preferred shares, no par value | **10000** | - | 10000 | - |
| Class D preferred shares, no par value | **10000** | - | 10000 | - |
| Class E preferred shares, no par value | **10000** | - | 10000 | - |

---

**Notes to the Consolidated Financial Statements**

**Note 10 - Equity (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Changes in share capital during the year** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **Number of ADSs in thousands** | **Number of ADSs in thousands** | **Number of ADSs in thousands** |
| Issued as at January 1 | **17800** | 17211 | 1956 |
| Issuance of ADSs (See D below) | **544** | 126 | 8573 |
| Vesting of RSUs | **138** | 163 | 7 |
| Exercise of warrants | **-** | 300 | 6675 |
| Issued as at December 31 | **18482** | 17800 | 17211 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Financing rounds** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. On June 9, 2021, the Company entered into sales agreement with Jefferies LLC, for the sale of ADSs. In accordance with the terms of the sales agreement, the company may offer and sell ADSs having an aggregate offering price of up to $50,000,000 from time to time through Jefferies, acting as the company's agent. During November and December 2021 the Company sold, under the sales agreement 126,160 ADSs under an "at-the-market" equity offering program ("ATM program") at an average price of $4.46 per ADS. The Company raised USD 0.56 million gross (approximately USD 0.54 million net of placement agent fees). During 2022 the Company sold, under the sales agreement 543,400 ADSs at an average price of $2.65 per ADS. The Company raised USD 1.49 million gross (approximately USD 1.44 million net of placement agent fees).

On June 25, 2020, in a registered direct offering on the NASDAQ, the Company raised USD 35 million gross (approximately USD 30.7 million net of placement agent fees including non- cash fees and other offering related expenses). In this registered direct offering, the Company issued an aggregate of 3,888,889 ADSs at a purchase price of USD 9 per ADS that were recorded in equity in the amount of USD 19,201 thousand net of issuance expenses. The Company also agreed to issue to the investors registered warrants to purchase up to an aggregate of 1,944,444 ADSs (hereinafter the "June 2020 warrants") that were recorded in receipts on account of warrants at a value of USD 11,472 thousand net of issuance expenses. The registered June 2020 warrants have a term of 5 years and are exercisable immediately and have an exercise price of USD 9 per ADS. During 2021, 300 thousand warrants were exercised.

In addition, the Company issued to the placement agent (or its designees) registered compensation warrants to purchase up to 194,443 ADSs at a value of USD 1,199 thousand which is included in the net amount raised above, at an exercise price of USD 11.25 per ADS. The registered placement agent warrants are immediately exercisable and have a term of 5 years from the date of the effective date of the offering.

On May 8, 2020, in a registered direct offering on the NASDAQ, the Company raised USD 10 million gross (approximately USD 8.4 million net of placement agent fees including non- cash fees and other offering related expenses). In this registered direct offering, the Company issued an aggregate of 2,500,000 ADSs at a purchase price of USD 4 per ADS that were recorded in equity in the amount of USD 709 thousand net of issuance expenses. The Company issued to the investors unregistered warrants to purchase up to an aggregate of 2,500,000 ADSs (hereinafter the "May 2020 warrants"). These May 2020 warrants have a term of 5.5 years, are exercisable immediately and have an exercise price of USD 4 per ADS.

**Notes to the Consolidated Financial Statements**

**Note 10 - Equity (Cont'd)**

The warrants were considered a derivative instrument (due to a cashless exercise feature), and were recorded as a liability in the amount of USD 9,157 thousand. On July 17, 2020 the warrants were listed for trading, and, as a result the cashless feature expired. Therefore, the Company reclassified the warrants to equity according to the warrants fair value on the listing date. The changes in the warrants fair value was recorded as financial expenses. The warrants fair value on the listing date was USD 16,403 thousand.

In addition, the Company issued to the placement agent (or its designees) compensation warrants to purchase up to 175,000 ADSs at a value of USD 559 thousand which is included in the net amount raised above, at an exercise price of USD 5 per ADS. The placement agent warrants are immediately exercisable and have a term of 5 years from the date of the effective date of the offering.

On April 19, 2020, the Company entered into warrant exercise letters, with certain institutional investors holding the March 2020 warrants (as detailed below) to purchase an aggregate of up to 2 million of the Company's ADSs, at an exercise price of USD 3.25 per ADS. The holders agreed to exercise their March 2020 warrants in full, for gross proceeds of approximately USD 6.5 million (approximately USD 5.4 million net of placement agent fees including non- cash fees and other offering related expenses). In exchange for exercising the warrants the Company issued an aggregate of 2 million ADS, that were recorded in equity in the amount of USD 3,170 thousand.

Under the exercise agreement, the Company also issued to the holders, in a private placement, new unregistered warrants to purchase up to an aggregate of 2.2 million ADSs at an exercise price of USD 3.25 per ADS (hereinafter the "new April 2020 warrants"). The new April 2020 warrants were exercisable immediately and had an exercise period of 5.5 years from the date of the issuance.

The warrants were considered a derivative instrument (due to a cashless exercise feature) and were recorded as a liability in the amount of USD 5,283 thousand. On May 20, 2020 the warrants were listed for trading, and, as a result the cashless feature expired. Therefore, the Company reclassified the warrants to equity according to the warrants fair value on the listing date. The changes in the warrants fair value was recorded as financial expenses. The warrants fair value on the listing date was USD 10,982 thousand.

In addition, the Company issued to the placement agent (or its designees) warrants to purchase up to 140,000 ADSs at a value of USD 315 thousand which is included in the net amount raised above, which have the same terms as the new April 2020 warrants except for an exercise price of USD 4.0625 per ADS.

On March 16, 2020, in a public offering on the NASDAQ, the Company raised USD 6 million gross (approximately USD 4.6 million net of placement agent fees including non- cash fees and other offering related expenses). In this public offering, the Company issued an aggregate of 962,000 ADS that were recorded in equity in the amount of USD 1,674 thousand gross and 1,038,000 pre-funded warrants which were immediately exercised (an exercise price of USD 0.001 per each ADS) and which were recorded in receipts on account of warrants in the amount of USD 1,806 thousand gross, and warrants to purchase an aggregate of up to 2,000,000 ADSs (hereinafter the "March 2020 warrants") that were recorded in receipts on account of warrants in the amount of USD 2,520 thousand gross. The March 2020 warrants were exercisable at an exercise price of USD 3.25 per ADS and had a term of exercise period of 5 years from the date of the issuance.

In addition, the Company issued to the placement agent (or its designees) warrants to purchase up to 140,000 ADSs at a value of USD 241 thousand which is included in the net amount raised above. The placement agent warrants are exercisable at an exercise price of USD 3.75 per ADS and will terminate on March 12, 2025.

129,861 ADSs were issued in connection with the 2020 transactions to a former placement agent and its cost is included in the net amounts raised above.

**Notes to the Consolidated Financial Statements**

**Note 10 - Equity (Cont'd)**

**E.** **Other equity transactions**

1. During 2022, the Company issued 1,380 thousand ordinary shares on account of vested RSUs granted in 2020 and 2021 to officers, board members and employees.

2. During 2021, the Company issued 1,634 thousand ordinary shares on account of vested RSUs granted in 2020 to officers, board members and employees.

3. During 2020, the Company issued 11 thousand ordinary shares on account of vested RSUs granted in 2017 and 2018 and 54 thousand fully vested RSUs were granted to an officer, See also Note 11A.

4. During 2020, 6,675 thousand warrants, issued in March- June 2020, were exercised into 56,366 thousand ordinary shares. Subsequently, an amount of USD 23,780 thousand was recorded to share premium against receipts on accounts of warrants.

5. During 2020 the Company acquired 100% of FameWave Ltd for equity, See Note 5B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Non-controlling interests** 

The following table summarizes the information relating to Tyrnovo that has non-controlling interests of 1.53%, before any intra-group eliminations:

---

| | | |
|:---|:---|:---|
| | **December 31<br> 2022** | **December 31 <br> 2021** |
| <br>**TyrNovo Ltd.** | **in USD thousands** | **in USD thousands** |
| Non-current assets | **10** | 11 |
| Current assets | **428** | 976 |
| Current liabilities | **(17240)** | (11806) |
| **Net assets** | **(16802)** | (10819) |
| Net assets attributable to non-controlling interests | **(258)** | (166) |
| Loss for the year | **5983** | 5467 |
| Loss allocated to non-controlling interests | **92** | 84 |

---

**Note 11 - Share-based Payment Arrangements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** On October 31, 2022, the board of directors of the Company granted 750 thousand options and 750 thousand RSUs to an employee. The options have an exercise price of USD 0.208 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 267 thousand. On July 11, 2022, the board of directors of the Company granted 3,750 thousand options and 150 thousand RSUs to the new CEO, subject to approval in the annual general meeting. The options have an exercise price of USD 0.245 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 591 thousand. This grant was approved by the shareholders on August 25, 2022.

On May 23, 2022, the board of directors of the Company granted 6,635 thousand options and 5,885 thousand RSUs to officers and employees. The options have an exercise price of USD 0.304 per one ordinary share, and for certain employee and consultant USD 0.276 per one ordinary share eligible as from June 23, 2022. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 3,237 thousand.

**Notes to the Consolidated Financial Statements**

**Note 11 - Share-based Payment Arrangements (Cont'd)**

On November 7, 2021, the board of directors of the Company granted 112 thousand options and 112 thousand RSUs to new director, subject to his election in the annual general meeting. The options have an exercise price of USD 0.470 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 73 thousand.

On August 31, 2021, the board of directors of the Company granted 420 thousand options and 420 thousand RSUs to new officer and employee. The options have an exercise price of USD 0.492 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 268 thousand

On June 7, 2021, the board of directors of the Company granted 638 thousand options and 488 thousand RSUs to directors, officers and employees. The options have an exercise price of USD 0.470 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 406 thousand. This grant to directors was approved by the shareholders in December 29, 2021 and the vesting period begun accordingly.

On October 12, 2020, the board of directors of the Company granted 232 thousand options and 232 thousand RSUs to new officer and employees. The options have an exercise price of USD 0.432 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 171 thousand.

On May 18, 2020, the board of directors of the Company granted 1,853 thousand options and 1,853 thousand RSUs to officers and employees. The options have an exercise price of USD 0.421 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 1,845 thousand.

In addition, the board of directors of the Company granted a total of 1,463 thousand options and 1,463 thousand RSUs to the Chief Executive Officer, Chairman of the Board of Directors and the other directors.

This grant was approved by the shareholders in August 2020. The options have an exercise price of USD 0.421 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 2,342 thousand.

On April 2, 2020, the Company granted 178 thousand options to an officer. 151 thousand options have an exercise price of USD 0.347 per one ordinary share, and will vest over 3 years from the grant date. The options are exercisable for 7 years from grant date. The fair value of these options as of the grant date was measured at USD 40 thousand. An additional 27 thousand options were granted that have an exercise price of USD 1.98 per one ordinary share, and will vest over 3 years from the grant date. The options are exercisable for 4 years from grant date. The fair value of these options as of the grant date was measured at USD 3 thousand. In addition, 54,472 RSUs were granted which are fully vested, See Note 5B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **The number and weighted average exercise prices (in USD) of share options are as follows:** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted average exercise price** | **Weighted average exercise price** | **Weighted average exercise price** | **Number of options** | **Number of options** | **Number of options** |
|  | **2022** | **2021** | **2020** | **2022** | **2021** | **2020** |
| Outstanding on January 1 | **0.97** | 1.02 | 1.71 | **7751303** | 6994377 | 4754676 |
| Expired and forfeited during the year | **0.82** | 1.52 | 0.23 | **(418068)** | (413074) | (1486125) |
| Granted during the year | **0.28** | 0.47 | 0.43 | **11135000** | 1170000 | 3725826 |
| Outstanding on December 31 | **0.52** | 0.97 | 1.02 | **18468235** | 7751303 | 6994377 |
| Exercisable on December 31 | **0.97** | 1.48 | 1.54 | **6144318** | 4451430 | 1753632 |

---

The exercise price is denominated in NIS and are re-measured using historic exchange rates. Options are exercisable to shares, each ADS represent 10 shares.

**Notes to the Consolidated Financial Statements**

**Note 11 - Share-based Payment Arrangements (Cont'd)**

The options outstanding at December 31, 2022 had an exercise price of USD 0.208- USD 6 (2021 - USD 0.346- USD 6, 2020 -USD 0.346 - USD 6), and weighted average contractual life of 3.87 years (2021 – 3.9 years, 2020 - 5.89 years).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **The number of RSUs are as follows:** 

---

| | | |
|:---|:---|:---|
|  | **Number of RSUs** | **Number of RSUs** |
|  | **2022** | **2021** |
| Outstanding at January 1 | **2610000** | 3390000 |
| Granted during the year | **6785000** | 1020000 |
| Forfeited during the year | **(157083)** | (166250) |
| Vested during the year | **(1380000)** | (1633750) |
| Outstanding at December 31 | **7857917** | 2610000 |

---

Each RSU is convertible to one share, each ADS represent 10 shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** The fair value of the Company's
 share options granted to employees, directors and consultants, where fair value of service was not measurable, was measured using
 the binominal model, using the fair value of the traded warrants with similar terms, making certain adjustments to reflect the specific
 terms of the options based on the expected duration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E**. The following assumptions
 were used **:** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2021** | **2020** |
| Share Price - USD | **0.213 - 0.316** | 0.380-0.517 | 0.32-0.898 |
| Exercise price - USD | **0.208-0.304** | 0.470-0.492 | 0.346-0.432 |
| Expected volatility (%) | **91.64-96.26** | 95.07-96.1 | 95.68-107 |
| Expected duration (years) | **2-5** | 2-5 | 4-7 |
| Dividend yield (%) |  | **-** |  |
| Risk free rate interest rate (%) | **2.90%-4.28%** | 0.87%-1.166% | 0.298%-0.5% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Expenses recognized in the consolidated financial statements:** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended <br> December 31** | **For the year ended <br> December 31** | **For the year ended <br> December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| Research and development expenses | **768** | 557 | 756 |
| General and administrative expenses | **1644** | 1525 | 1889 |
| Total share-based expense recognized | **2412** | 2082 | 2645 |

---

**Note 12 - Transactions and Balances with Related Parties** 

In addition to their salaries or fees, the Group also provides share option programs to directors and officers and contributes to a post-employment defined contribution plan on behalf of employees, see Note 9 for the balances and Note 11 regarding share based payments.

Certain officers are entitled to termination benefits of up to 6 monthly salaries or fees, See Note 18.

**Notes to the Consolidated Financial Statements**

**Note 12 - Transactions and Balances with Related Parties (Cont'd)**

**<u>Expenses of key management personnel:</u>**

The Company recorded expenses to executive officers:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| Short - term employee benefits | **2623** | 2402 | 1982 |
| Post-employment benefits | **11** | 27 | 19 |
| Share based payments | **1930** | 1446 | 1667 |
|  | **4564** | 3875 | 3668 |

---

The Company recorded expenses to directors:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| Short - term benefits | **448** | 323 | 306 |
| Share based payments | **311** | 478 | 742 |
|  | **759** | 801 | 1048 |

---

**Note 13 - Commitments and contingent liabilities** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Commitments** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** TyrNovo, has obligations to the Israel Innovation Authority
 (hereinafter: "IIA") with respect to grants it received from the IIA in connection with TyrNovo's technology. The
 requirements and restrictions for such grants are found in the Encouragement of Research, Development and Technological Innovation
 in Industry Law 5744-1984 and in the IIA's rules and guidelines and the terms of these grants.

In general, a recipient company is obligated to pay the IIA royalties from the revenues generated from the sale of products and related services developed as a result of, a research and development program funded , in whole or in part, by the IIA (currently a yearly rate of 3% to 6%), up to the aggregate amount of the total grants received by the IIA, plus annual interest. The recipient company is also obligated to manufacture its drug in Israel unless it receives the approval of the IIA in which case it will be required to pay the higher rate mentioned above. A recipient company is required to repay the grants if it does not generate revenue.

TyrNovo's technologies were developed, in part, with funds from IIA grants, and accordingly is obligated to pay royalties on sales of any of its IIA funded products and related services. As of December 31, 2022, the maximum royalty amount that would be payable by TyrNovo, excluding interest, is approximately NIS 5.5 million (USD 1.56 million), and as of such date, TyrNovo had not paid any royalties to the IIA.

The Group does not recognize a liability for royalties because there is no reasonable assurance, as of the reporting period, that the underlying sales will occur in the future. Therefore, the financial statements do not include a liability for these royalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** TyrNovo has entered into a license agreement (the "License
 Agreement") with Yissum Research Development company of the Hebrew University of Jerusalem Ltd. (hereafter "Yissum")
 dated August 15, 2013, as amended. In accordance with the License Agreement, Yissum granted the Company an exclusive license to commercialize,
 exploit, develop, manufacture, market, import, export, distribute, offer to sell, or sell products, that are derived from Yissum's
 licensed technology.

**Notes to the Consolidated Financial Statements**

**Note 13 - Commitments and contingent liabilities (Cont'd)**

In consideration for the grant of the license, the Company shall pay Yissum the following consideration during the term of the license:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Royalties at a rate of up
 to three percent (3%) of net sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Sublicense fees at a rate
 of twelve percent (12%) of sublicense consideration.

In addition, Yissum is entitled to receive an exit fee of 12% of the transaction proceeds in the event of certain pre - defined transactions set forth in the License Agreement.

BIRAD Research & Development Company Ltd. (BIRAD) is entitled to receive a portion of Yissum's royalties on net sales according to an amendment to the License Agreement signed between TyrNovo and Yissum.

The consolidated financial statements do not include a liability for royalties or sublicense fees for this license agreement as there is no minimum payments and thus obligation will be recognized when the related sales will occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** cCAM
 Biotherapeutics Ltd. (cCam), a subsidiary of Merck Sharp and Dohme Corp. (MSD), has entered into a license agreement with Tel
 Hashomer – Medical Research Infrastructure and Services Ltd. ("THM") and Ramot at Tel Aviv University Ltd.
 ("Ramot") dated April 16, 2012, which was effective as of May 25, 2010, as subsequently amended (the "THM License
 Agreement"). In
 conjunction with the closing of the reversion agreement amongst (MSD), cCAM and FameWave, the parties executed an Assignment
 and Assumption Agreement by and between FameWave and cCAM, according to which cCAM assigned to FameWave all its rights, title
 and interest in, to and under the THM License Agreement. Pursuant to the THM License Agreement, THM and Ramot granted FameWave
 a worldwide, royalty-bearing, exclusive license to develop, manufacture, produce, market and sell any biopharmaceutical product
 and/or diagnostic product using patents and inventions owned by THM and Ramot in connection with uses of the glycoprotein CEACAM1.

In consideration for the license grant, FameWave shall pay to THM the following during the term of the license:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) An
 annual license fee of $10,000 which is credited towards any royalties to be paid during such
 year.

ii) Royalties of three- and one-half percent (3.5%) of net sales with respect to Biopharmaceutical Products, and royalties of six- and one-half percent (6.5%) of net sales with respect to Diagnostic Products.

iii) Sublicense fees at a rate of twenty percent (20%) of sublicense consideration with respect to Biopharmaceutical Products, and sublicense fees at a rate of twelve percent (12%) of sublicense consideration with respect to Diagnostic Products.

FameWave has undertaken to pay certain milestone payments upon the completion of certain pre-defined clinical and sales milestones.

In addition, THM (on behalf of the licensors) are entitled to receive an exit fee of up to three- and one-half percent (3.5%) of all consideration received because of or in connection with an exit event (as defined in the THM License Agreement).

Finally, THM also received an assignable warrant to purchase, upon the closing of any IPO of FameWave, ordinary shares of FameWave, at a price equal to a certain percentage of the forecast initial market value of FameWave for each share as determined, prior to the IPO, for the purpose of the IPO.

**Notes to the Consolidated Financial Statements**

**Note 13 - Commitments and contingent liabilities (Cont'd)**

In accordance with the THM License Agreement, THM is entitled to appoint an observer to FameWave's board of directors who has all the rights of any other director of FameWave expect for the right to vote. To date, THM has not acted on this right.

The consolidated financial statements do not include a liability for royalties or sublicense fees for this license agreement as there is no minimum payments and thus obligation will be recognized when the related sales will occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Claims** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. In December 2015, a lawsuit and a motion to approve such lawsuit as a class action was filed in the Tel Aviv District Court (Economic Division) against the Company and its directors, by shareholders who were holders of the Company's Tel Aviv Stock Exchange listed securities before the Company's initial public offering in the United States (the "U.S. IPO") that took place in November 2015, claiming damages for the purported class in the motion totaling NIS 16.4 million (USD 4.6 million) due to the U.S. IPO (the "Motion"). In addition to this amount, the petitioners in the motion are seeking remedies in order to redress discrimination against the purported class owing to the dilution caused by the public offering, including the possibility that the purported class should be awarded from the Company amounts reflecting the losses of the purported class from a possible price increase in our shares following the announcement of the Phase III clinical trial results. The Company delivered its response to the court. Preliminary hearings initiated by the court in September 2016 and continued during 2017. On October 24, 2017 the court issued a ruling to stay proceedings in this matter until January 15, 2018 due to the ongoing ISA Investigation (See Note 13B(3) below). At the request of the ISA, this stay was subsequently extended several times by the court. Following approval of an enforcement arrangement in connection with the ISA investigation, the stay was lifted. On April 27, 2022 the evidentiary hearing took place and thereafter, the parties furnished their summaries and response summaries. The parties are now expecting to receive the court's decision in the 2015 Motion. In consultation with its legal advisors, the Company believes that the likelihood of the Company not incurring any financial obligation as a result of this class action exceeds the likelihood that the Company will incur a financial obligation. Therefore, no provision for this matter was recorded in these financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. On November 8, 2016, a shareholder of the Company submitted a request to the court in connection with the Motion to be excluded from the purported class, claiming to have independent causes of action and damages of approximately NIS 1 million (USD 284 thousand) (the "Petition to Exclude"). The Company responded to the court and, amongst other arguments, the Company noted that pursuant to the Class Action Lawsuits Law 5766-2006 and the Regulations enacted thereunder, at the current stage of the court proceedings with respect to the 2015 Motion such shareholder cannot petition to be excluded from the purported class. The court ordered the shareholder to respond and he has done so. In May 2018, the shareholder filed an independent lawsuit against the Company in the Haifa Magistrates Court seeking damages of approximately NIS 1.1 million (USD 354 thousand) and for the purposes of the court fees, the amount claimed was reduced to 750,000 NIS (USD 213 thousand) (the "Separate Lawsuit"). In August 2018, the Haifa Magistrates Court transferred the Separate Lawsuit to the Tel Aviv Magistrates Court. The Company is of the view that such shareholder's claims are identical to the asserted claims for damages in the Motion, and has notified the court of such and has sought a stay of proceedings pending the outcome of the Motion. A preliminary hearing on the Company's motion to dismiss the Separate Lawsuit and/or stay the proceedings was held in May, 2019, at which the court dismissed the claim without prejudice. This shareholder subsequently filed a new separate claim against the Company in the Haifa District Court – Economic Division, which has since been transferred to the Tel Aviv District Court – Economic Division. In January 2020, the Tel Aviv District Court – Economic Division accepted the Company's position that the shareholder's claims are identical to the asserted claims for damages in the Motion, and entered a stay of proceedings pending the outcome of the Motion. The Company rejects the claims asserted in the Motion as well as in the Petition to Exclude and the Separate Lawsuit, and, in consultation with its legal advisors, believes that the likelihood of the Company not incurring any financial obligation as a result of this class action exceeds the likelihood that the Company will incur a financial obligation. Therefore, no provision for this matter was recorded in these financial statements.

**Notes to the Consolidated Financial Statements**

**Note 13 - Commitments and contingent liabilities (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. In February 2017 the Company announced that the Israeli
 Securities Authority (the "ISA") has begun a formal investigation into, amongst other matters, the Company's public
 disclosures around certain aspects of the studies related to its therapeutic candidate, Consensi.

In February 2017, four lawsuits and motions to approve the lawsuits as a class action lawsuit (each, a "Motion"), were filed against the Company and certain of its office holders at the Tel Aviv District Court (Economic Division), with each Motion relating to the ISA Investigation (the "2017 Motions"). One of these motions was subsequently withdrawn. The petitioners in one of the motions petitioned the court to dismiss the other two of the 2017 Motions ("Petition for Dismissal"). On December 19, 2017 the court granted the Petition for Dismissal and dismissed the other remaining 2017 Motions. The remaining motion (the "Surviving Motion") was filed against the Company, the Company's executive directors and certain of its present and former directors, by certain shareholders who are requesting to act as representatives of all shareholders of record from December 10, 2015 until February 6, 2017. The plaintiffs allege, among other things, that the Company included misleading information in its public filings which caused the class for which the plaintiffs are seeking recognition an aggregate loss of approximately NIS 29 million (approximately USD 8.2 million). The court ordered a stay of proceedings due to the then-ongoing ISA Investigation. Following approval of an enforcement arrangement in connection with the ISA investigation, the stay was lifted. The claim is still pending court proceeding.

The Company rejects the claims in the Surviving Motion. At this preliminary stage the Company unable, with any degree of certainty, to make any evaluations or any assessments with respect to the Surviving Motion as to the probability of success or the scope of potential exposure, if any. Therefore, no provision for this matter was recorded in these financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. On December 21, 2020, the Bar Ilan University and BIRAD Research & Development Company Ltd. (the "University" and "BIRAD", respectively) filed a statement of claim to the court against TyrNovo, its officer and others. In the claim, the petitioners allege that the University is the rightful owner of a patent owned by TyrNovo. On May 16, 2022, the Tel Aviv District Court fully dismissed the lawsuit with prejudice, based on a mediation arrangement in which TyrNovo retains ownership of its patent and other intellectual property rights, and BIRAD is entitled to receive a portion of Yissum's royalties on net sales according to an amendment to the License Agreement signed between TyrNovo and Yissum.

5. On November 17, 2022, Fidelity Venture Capital Ltd., a private Israeli company ("Fidelity VC") and Mr. Dror Atzmon, an Israeli resident and citizen believed to be the sole shareholder of Fidelity VC (Mr. Atzmon, together with Fidelity VC, the "Atzmon Plaintiffs"), filed a statement of claim in the Economic Division of the Tel Aviv District Court (the "Atzmon Claim") against the Company and a number of other defendants, including our former chief executive officer. The Atzmon Plaintiffs are seeking damages for approximately NIS 9 million (approximately USD 2.5 million) in connection with various claims relating to alleged contractual breaches and torts arising from an alleged contractual undertaking for the Company to engage the Atzmon Plaintiffs to provide advisory services to the Company following the initial public offering in the United States and listing on NASDAQ in November 2015. The Company rejects all the claims presented in the Atzmon Claim. At this preliminary stage the Company is unable, with any degree of certainty, to make any evaluations or any assessments with respect to the probability of success or the scope of potential exposure, if any, of the Atzmon Claim.

**Notes to the Consolidated Financial Statements**

**Note 14 - Research and Development Expenses**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| Salaries, wages and related expenses | **2382** | 1721 | 1209 |
| Share-based payments (see also Note 11) | **768** | 557 | 756 |
| Service providers | **13170** | 9549 | 5273 |
|  | **16320** | 11827 | 7238 |

---

**Note 15 - Sales, General and Administrative Expenses**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| Salaries, wages and related expenses | **1845** | 1762 | 1332 |
| Share-based payments (see also Note 11) | **1333** | 1047 | 1147 |
| Legal fees in connection with ISA investigation and class action lawsuits (see also Note 13B) | **135** | 12 | 43 |
| Reimbursement of legal fees | **(63)** | (66) | (182) |
| Other professional fees | **750** | 1222 | 1215 |
| Board member remuneration and insurance | **1152** | 1033 | 962 |
| Board member share-based payments | **311** | 478 | 742 |
| Maintenance expenses | **120** | 55 | 58 |
| Travel and car expenses | **144** | 133 | 76 |
| Depreciation | **201** | 231 | 235 |
| Other | **355** | 200 | 373 |
|  | **6283** | 6107 | 6001 |

---

**Notes to the Consolidated Financial Statements**

**Note 16 - Finance Expense (Income), net**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Expenses on account of warrants** These
 expenses are related mainly to the fair value adjustments of warrants. The 2020 and 2019 warrants included a cashless exercise feature,
 which expired on July 17, 2020, May 20, 2020, September 12, 2019, respectively, when the Company filed a registration statement with
 the SEC, registering the shares that will derive from future exercise of these warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Finance expenses and income** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| **Finance expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;Fees and interest expense | **67** | 79 | 56 |
| &nbsp;&nbsp;&nbsp;Loss from exchange rate differences, net | **-** | 133 | 5 |
|  | **67** | 212 | 61 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD thousands** | **USD thousands** | **USD thousands** |
| **Finance income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income from deposits | **(532)** | (320) | (254) |
| &nbsp;&nbsp;&nbsp;Income from exchange rate differences, net | **(62)** |  |  |
| &nbsp;&nbsp;&nbsp;Changes in fair value of finance instruments | **(245)** |  |  |
| &nbsp;&nbsp;&nbsp;Other | **(71)** | - |  |
|  | **(910)** | (320) | (254) |

---

**Note 17 - Taxes on Income**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Corporate tax rate** 

The tax rate applicable to the Group for 2020 - 2022 is 23%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Carry-forward losses** The Company
 and its subsidiaries incurred losses through 2022, which are not expected to be utilized in the foreseeable future. Therefore, the
 Group did not record current taxes or deferred tax assets.

In 2022, the main reconciling item from the statutory tax rate of the Company (23%, representing theoretical tax benefit of approximately USD 5 million) to the effective tax rate (0%) is mainly due to the fact that deferred taxes were not created in respect of current year tax losses and benefits.

The carry-forward loss for tax purposes of the Company and its subsidiaries, and the unrecognized research and development expenses, amounts to USD 82 million as of December 31, 2022 (2021 – USD 59 million, 2020 – USD 41 million).

**Notes to the Consolidated Financial Statements**

**Note 17 - Taxes on Income (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Tax assessments** The Company's
 tax assessments are deemed finalized through the end of 2017, pursuant to section 145 of the Israeli Income Tax Ordinance. Tyrnovo's
 tax assessment is deemed finalized through the end of 2017 and Famewave's tax assessment is open (incorporated on July 2, 2017),
 pursuant to section 145 of the Israeli Income Tax Ordinance.

**Note 18 - Employee benefits**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** Employee benefits include
 post-employment benefits and short-term benefits.

Balances include:

---

| | | |
|:---|:---|:---|
|  | **For the Year ended<br> December 31** | **For the Year ended<br> December 31** |
|  | **2022** | **2021** |
|  | **USD<br> thousands** | **USD<br> thousands** |
| Short-term benefits | **463** | 432 |
| Post-employment benefit liabilities | **145** | 292 |
| Post-employment benefit liabilities included in other payables | **158** | - |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Post-employment benefit plans – defined contribution plan** 

The Company has a defined contribution plan in respect of the Company's liability in respect of its employees who are subject to Section 14 of the Severance Pay Law – 1963.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year ended December 31** | **For the Year ended December 31** | **For the Year ended December 31** |
|  | **2022** | **2021** | **2020** |
|  | **USD<br> thousands** | **USD<br> thousands** | **USD<br> thousands** |
| Amount recognized as expense in respect of defined contribution plan | **390** | 291 | 197 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** Certain of the Company's executives are entitled to annual and special bonuses under the terms of their employment and consulting agreements. These bonuses will become due upon the achievement of certain goals or agreements for the commercialization of the Company's products. These consolidated financial statements include bonuses expenses in the amount of USD 406 thousand for the year ended December 31, 2022, USD 580 thousand for the year ended December 31, 2021, and USD 481 thousand for the year ended December 31, 2020.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** Certain of the Company's executives are entitled to benefits upon termination of employment under the terms of their employment and consulting agreements, see Note 12 on related parties. These benefits are measured based on the time of service and their monthly pay and the expected term of their employment. These consolidated financial statements include a liability due to these grants of USD 303 thousand and USD 292 thousand, as of December 31, 2022 and 2021, respectively.

**Notes to the Consolidated Financial Statements**

**Note 19 - Financial Instruments**

**Framework for risk management**

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management practice was formulated to identify and analyze the risks that the Group faces, to set appropriate limits for the risks and controls, and to monitor the risks and their compliance with the limits. The risk policy and risk management methods are reviewed regularly to reflect changes in market conditions and in the Group's operations. The Group acts to develop an effective control environment in which all employees understand their roles and commitment.

The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Risk management** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1**. **Credit risk** 

Credit risk is the risk of financial loss to the Group if a debtor or counterparty to a financial instrument fails to meet its contractual obligations, and arises mainly from the Company's receivables. The Group restricts exposure to credit risk by investing only in bank deposits.

The Group held cash and cash equivalents and short-term and long-term deposits of USD 31,682 thousand at December 31, 2022 (2021 – USD 47,360 thousand). These are held with banks, which are rated A2, based on Moody's Rating Agency ratings. The short-term deposits, mainly in USD, bear fixed interest ranging between 0.8% - 5.2%.

The carrying amount of cash and cash equivalents and short-term deposits approximate their fair value.

As of December 31, 2022 the group has an amount of USD 152 thousand in short term deposits guaranteed for the Group's leases and credit and am amount of USD 700 thousand in short term deposits guaranteed for hedging transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Market risk** 

Market risk is the risk that changes in market prices, such as foreign currency exchange rates, the CPI, interest rates and the prices of equity instruments, will influence the Group's results or the value of its holdings in financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing returns.

The Group hedges the foreign currency risk exposure that derives from salary expenses by means of foreign currency derivatives.

In the framework of assessing whether the aforesaid hedging relationships qualify for hedge accounting, the Group applies the mandatory reliefs set forth in the amendments to IFRS 9 *Financial Instruments* and IFRS 7 *Financial Instruments: Disclosures, Interest Rate Benchmark Reform*.

Therefore, as at December 31, 2022 the Group is of the opinion that these hedging relationships continue to qualify for hedge accounting.

**Notes to the Consolidated Financial Statements**

**Note 19 - Financial Instruments (Cont'd)**

**Currency risk**

The Group is exposed to currency risk mainly for cash and purchases for research and development expenses that are denominated in NIS and EURO. Therefore, the Group is exposed to exchange rate fluctuations in these currencies against the dollar and takes steps to reduce the currency risk by maintaining its liquid resources in accordance with its future needs.

Set forth below is a sensitivity test to possible changes in USD/NIS exchange rate as of December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Sensitive instrument** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Value<br> (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** |
|  | **Down 2%** | **Down 5%** | | **Up 5%** | **Up 2%** |
| Cash and cash equivalents and deposits | 19 | 48 | 960 | (48) | (19) |
| Other current assets | 17 | 42 | 841 | (42) | (17) |
| Accounts payable | (4) | (10) | (205) | 10 | 4 |
| Other payables | (33) | (83) | (1668) | 83 | 33 |
| Post-employment benefit liabilities | (3) | (7) | (145) | 7 | 3 |
| Total income (loss) | (4) | (10) |  | 10 | 4 |

---

Set forth below is a sensitivity test to possible changes in USD/ EURO exchange rate as of December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Sensitive instrument** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Value<br> (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** | **Income (loss) from<br> change in exchange<br> rate (U.S. dollars<br> in thousands)** |
|  | **Down 2%** | **Down 5%** | | **Up 5%** | **Up 2%** |
| Cash and cash equivalents and deposits | 45 | 112 | 2246 | (112) | (45) |
| Accounts payable | (20) | (49) | (979) | 49 | 20 |
| Other payables | (4) | (10) | (207) | 10 | 4 |
| Total income (loss) | 21 | 53 |  | (53) | (21) |

---

**Notes to the Consolidated Financial Statements**

**Note 19 - Financial Instruments (Cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** Financial instruments measured
 at fair value:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. In October 2021, the Company received a convertible note in the amount of $1.5 million and a warrant for 300 thousand Coeptis shares as part of Coeptis termination at an exercise price of $5 per warrant. The warrants are exercisable until September 21, 2024.

This convertible debt instrument does not meet the solely payments of principal and **i**nterest (SPPI) criterion and therefore measure at fair value through profit or loss.

The fair value of these financial instrument as of December 31, 2022 was measured at USD 431 thousand (2021- USD 187 thousand).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Fair
 value hierarchy of financial instruments measured at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** |
| **Financial asset** | | | | |
| Convertible debt instrument and warrant (see Note 19B (1)) |  |  | 431 | 431 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **USD thousands** | **USD thousands** | **USD thousands** | **USD thousands** |
| **Financial asset** | | | | |
| Convertible debt instrument and warrant (see Note 19B (1)) |  |  | 187 | 187 |

---

Details regarding fair value measurement at Level 3:

---

| | | | |
|:---|:---|:---|:---|
| **Financial instrument** | **Valuation<br> method for<br> determining <br> fair value** | **Significant<br> unobservable<br> inputs** |  |
| **For the year ended December 31, 2022** |  |  |  |
| Warrant | Black - Scholes | expected term | 1.72 years |
|  |  | expected volatility | 117.42% |
|  |  | annual risk free interest | 4.47% |
|  |  | dividend yield | 0% |
| Convertible debt instrument | DLOM | expected term | 0.66 years |
|  |  | DLOM | 37.6% |
| **For the year ended December 31, 2021** |  |  |  |
| Warrant | Black - Scholes | expected term | 2.75 years |
|  |  | expected volatility | 125% |
|  |  | annual risk free interest | 0.97% |
|  |  | dividend yield | 0% |

---

**Notes to the Consolidated Financial Statements**

**Note 20 - Subsequent Events**

On February 2, 2023 the Company signed an agreement to acquire 100% of Immunorizon Ltd. (hereinafter: "Immunorizon"), a privately held company and its portfolio of Tri-Specific antibodies for the treatment of cancer, in exchange for an aggregate upfront payment of $3.5 million in cash and an aggregate $3.5 million in American Depository Shares (ADSs), at a price per ADS equal to the NASDAQ volume-weighted average price of the Company's ADSs for the 60-day period preceding the execution date of the agreement.

Additional long term development, regulatory and sales milestones are set at an aggregate amount of $94 million, with royalties of low single digit out of net sales. The accumulated transaction payments, excluding the upfront payment, will not exceed $100 million.

The ADSs will be issued to certain of the Immunorizon selling shareholders and will be subject to a three – month lock-up period, and the Company has agreed to file a resale registration statement with the U.S. Securities and Exchange Commission to register the ADSs for resale following the lock-up period.

The selling shareholders of Immunorizon that shall receive ADSs as partial consideration in the transaction will be entitled to an ADS price adjustment during the 12-month period following the closing of the transaction, for the remaining ADSs held by them at such time (if any), in the event of an issuance by us of additional ADSs or other securities in certain types of financing transactions, at a price per ADS lower than the price per ADS under the agreement; provided that such price adjustment shall only be provided once.

The transaction closing date was February 15, 2023.

The Company is yet to examine whether the acquisition accounts for an asset acquisition or meets the definition of a business combination in accordance with IFRS 3.

## Exhibit 4.25

**Exhibit 4.25**

**CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT<br> BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.**

[\*\*\*\*\*] indicates the redacted confidential portions of this exhibit.

**SHARE PURCHASE AGREEMENT**

by and among

 **PURPLE BIOTECH LTD.**

*as the Buyer*

and

**THE SHAREHOLDERS OF IMMUNORIZON LTD.**

*as the Sellers*

and

**M. ARKIN (1999) LTD.**

*as the Stockholders Representative*

 

 

Dated as of February 1, 2023

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this "***Agreement***") is entered into as of February 1, 2023 (the "**Effective Date**"), by and among Purple Biotech Ltd, an Israeli publicly traded corporation ("***Buyer***"), and the shareholders of Immunorizon Ltd., an Israeli private corporation (the "***Company***"), who are identified on <u>Exhibit A</u> attached hereto (collectively "***Sellers***" and individually a "***Seller***"), and M. Arkin (1999) Ltd. of 6 Ha'Choshlim St. Herzelia, Israel (the "***Stockholder Representative***"). Buyer, each of the Sellers and the Stockholder Representative are sometimes referred to individually herein as a "***Party***" and collectively as the "***Parties***."

RECITALS

&nbsp;&nbsp;&nbsp;&nbsp;A. The Sellers who have executed this agreement as of the Effective Date own beneficially and of record in the aggregate the issued and outstanding shares of the Company as set forth on <u>Exhibit A</u> attached hereto (the "  ***Shares*** ").

&nbsp;&nbsp;&nbsp;&nbsp;B. This Agreement contemplates a series of transactions in which Buyer will purchase from Sellers, and Sellers will sell to Buyer, the Shares, in return for the consideration and other obligations set forth below and in the agreements and undertakings annexed hereto.

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the agreements, representations, warranties and covenants herein contained, the Parties agree as follows.

ARTICLE 1

<u>DEFINITIONS</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 For purposes of this Agreement, the following terms have the meanings specified:

"**Affiliate**" means any Person that directly or indirectly controls, is controlled by, or is in common control with, any other Person. For purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise.

"**Annual Net Sales**" means the aggregate Net Sales of Products in any calendar year.

"**Bring Along**" means the provisions of Article 28 of the Company Articles.

"**Business Day**" means a day which is neither a Saturday or Sunday, nor any other day on which banking institutions in Israel are authorized or obligated by Law to close.

**"Buyer Material Adverse Effect"** means any change, event, effect, claim, circumstance or matter (each, an **"Effect")** that (considered together with all other Effects) is, or could reasonably be expected to be or to become, materially adverse to: (a) the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations or financial performance of the Buyer taken as a whole; (b) Sellers' right to own, or to receive dividends or other distributions with respect to, the shares of the Buyer; or (c) the ability of the Buyer to perform any of their material covenants or obligations under this Agreement or under any other contract or instrument executed, delivered or entered into in connection with any of the transactions contemplated by this Agreement such that any such inability to perform would impair the ability of Buyer to consummate the transactions contemplated hereby.

"**Company Articles**" means the Articles of Association of the Company in effect as of the Effective Date.

"**Company Intellectual Property**" means all Intellectual Property of the Company covering the Technology, existing as of the date hereof and any and all Intellectual Property hereinafter derived from or prepared using the Technology.

"**Company Material Adverse Effect**" means any Effect that (considered together with all other Effects) is, or could reasonably be expected to be or to become, materially adverse to: (a) the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations or financial performance of the Company taken as a whole; (b) Buyer's right to own, or to receive dividends or other distributions with respect to, the shares of the Company; or (c) the ability of the Company or any of the Sellers to perform any of their material covenants or obligations under this Agreement or under any other contract or instrument executed, delivered or entered into in connection with any of the transactions contemplated by this Agreement such that any such inability to perform would impair the ability of Sellers to consummate the transactions contemplated hereby.

"**Confidential Information**" means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as "confidential"), in any form or medium, of the Company, Buyer or their respective customers, suppliers, distributors or other business relations, including all information concerning finances, customer information, supplier information, products, services, prices, organizational structure and internal practices, forecasts, sales and other financial results, records and budgets, and business, marketing, development, sales and other commercial strategies, unpatented inventions, ideas, methods and discoveries, trade secrets, know- how, unpublished patent applications and other confidential intellectual property, designs, specifications, documentation, components, source code, object code, schematics, drawings, protocols and processes. Confidential Information shall not include information that the recipient can document via dated written records (a) is already or becomes in the public domain through no fault of recipient; (b) was, as between the Parties, lawfully in recipient's possession prior to receipt from discloser; or (c) is received by recipient independently from a third party free to lawfully disclose such information to recipient. Confidential Information shall not be deemed to be in the public domain merely because any part of the Confidential Information is embodied in general disclosure or because individual features, components or combinations thereof are now or become known to the public.

"**Damages**" means all penalties, fines, costs, Liabilities, obligations, losses, expenses and fees, including court costs and reasonable attorneys' fees and expenses.

**"Exchange Act"** means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

**"FDA"** means the US Food and Drug Administration.

**"First Commercial Sale"** shall mean the first sale of a Product by an Invoicing Entity to an unaffiliated third party after approval of Governmental Authority for the sale of the Product in any country has been obtained.

**"GAAP"** means either U.S. generally accepted accounting principles, or International Financial Reporting Standards, consistently applied.

**"Governing Documents"** means, as to any Person, the articles of incorporation or certificate of incorporation and code of regulations and/or bylaws (if such Person is a corporation); the partnership agreement and partnership certificate (if such Person is a partnership); or the articles of organization and operating agreement (if such Person is a limited liability company); and other documents relating to and establishing or governing the existence and legal operation of such Person, of any type or nature, each as amended to date.

**"Governmental Authority"** means any court, tribunal, arbitrator, authority, agency, commission, bureau, board, department, official, body or other instrumentality of the United States, Israel, or any foreign country, or any domestic or foreign state, province, county, city, other political subdivision or any other similar body or organization exercising governmental or quasi-governmental power or authority, including the FDA.

"**Government Grant**" means any grant, incentive, exemption and subsidy from the government of the State of Israel or any agency thereof, or from any other U.S. or foreign Governmental Authority, granted to the Company, including grants from the Israeli Innovation Authority and the Israeli Ministry of Economy.

**"Indebtedness"** means without duplication: (a) all obligations (including the principal amount thereof or, if applicable, the accreted amount thereof and the amount of accrued and unpaid interest thereon) of the Company, whether or not represented by bonds, debentures, notes or other securities (whether or not convertible into any other security), for the repayment of money borrowed, whether owing to banks or other financial institutions, on equipment leases or otherwise; (b) all deferred indebtedness of the Company for the payment of the purchase price of property or assets purchased (other than accounts payable incurred in the Ordinary Course of Business); (c) all obligations of the Company to pay rent or other amounts under a lease which is required to be classified as a capital lease on the face of a balance sheet prepared in accordance with GAAP (applied on a basis consistent with the basis on which the Financial Statements were prepared and in accordance with the Company's historic past practice); (d) all outstanding reimbursement obligations of the Company with respect to letters of credit, bankers, acceptances or similar facilities issued for the account of the Company; (e) all obligations of the Company under any interest rate swap agreement, forward rate agreement, interest rate cap or collar agreement or other financial agreement or an-arrangement entered into for the purpose of limiting or managing interest rate risks; (f) all obligations secured by any Security Interest existing on property owned by the Company, whether or not indebtedness secured thereby will have been assumed; (g) all guaranties, endorsements, assumptions and other contingent obligations of the Company in respect of, or to purchase or to otherwise acquire, indebtedness of others; (h) all premiums, penalties, fees, expenses, breakage costs and change of control payments required to be paid or offered in respect of any of the foregoing on prepayment, as a result of the consummation of the transactions contemplated by the Agreement or in connection with any lender consent; and (i) all obligations of the Company, whether interest bearing or otherwise, owed to any security holder of the Company and/or any Affiliate of any security holder of the Company.

**"Intellectual Property"** means, collectively, in the United States, Israel and all other countries or jurisdictions, all intellectual property and other proprietary rights of any kind or nature whether registered or unregistered, whether protected, created or arising under any Law, including the following: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all Patents, design rights and industrial designs (b) all Trademarks, all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all moral rights, copyrights and other rights in any work of authorship, compilation, derivative work or mask work and all applications, registrations, and renewals in connection therewith, (d) all trade secrets and Confidential Information (including confidential ideas, research and development, know-how, discoveries, knowledge, technology, techniques, designs, drawings, correspondence (including pharmacological, toxicological, non-clinical, pre-clinical and clinical data, analytical and quality control data, manufacturing data and descriptions, market data, financial data or descriptions), databases, aggregations of data, compilations of data, data collections, data sets, organized, structured or curated data content, and data layers, devices, assays, specifications, physical, chemical and biological materials and compounds, compound libraries, methods, formulas, compositions, materials, manufacturing and production processes and techniques, technical and other data, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals, and the like, in written, electronic, oral or other tangible or intangible form, now known or hereafter developed, whether or not patentable), (e) works of authorship (whether or not copyrightable), copyrights and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof, including website content, product artwork, promotion and marketing materials, (f) and all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

**"Israeli Securities Laws"** means the Israeli Securities Law, 5728-1968, the rules and regulations promulgated under thereunder, and any listing rules and regulations of the TASE.

**"ITA"** means the Israeli Tax Authority.

**"Knowledge"** means, when referring to the "knowledge" of a Seller or Buyer and/or any similar phrase or qualification based on knowledge of the Seller or Buyer, as applicable, the actual knowledge of the Seller or Buyer, as applicable, and any employee, officer or person serving on the ultimate governing body (i.e., director of a corporation, manager of a limited liability company or other equivalent role) of the Seller or Buyer, as applicable, in each case, after a reasonably diligent investigation with the directors and officers of the Company (to the extent relevant).

**"Law"** means the common law of any state or other jurisdiction, or any provision of any foreign, federal, state or local law, statute, code, rule, regulation, Order, certification standard, accreditation standard, Permit, judgment, regulatory code of practice, statutory guidance, injunction, decree or other decision of any court or other tribunal or Governmental Authority, including any Information Privacy and Security Law.

**"Liabilities"** means any Indebtedness, liabilities (including severance pay and accrued vacation days due to the Employees which are not fully funded in the Financial Statements), demands, commitments or obligations of any nature whatsoever, whether accrued or unaccrued, absolute or contingent, direct or indirect, asserted or unasserted, fixed or unfixed, known or unknown, choate or inchoate, perfected or unperfected, liquidated or unliquidated, secured or unsecured, or otherwise, whether due or to become due, whether arising out of any contract (whether written or oral), Law or tort and whether or not the same would be required by GAAP to be stated in financial statements or disclosed in the notes thereto.

**"Liens"** means all liens, security interests, claims, mortgages, deeds of trust, preemptive rights, leases, charges, options, rights of first refusal, easements, proxies, voting trusts or agreements, transfer restrictions, pledges, assessments, covenants, warrants, rights, calls, commitments or other contract rights, burdens and other encumbrances of every kind, including restrictions on voting or use.

**"Losses"** means any and all Liabilities, losses, damages, judgments, awards, settlements, royalties, diminution in value, interest, penalties, fines, demands, Proceedings, claims, deficiencies, costs and expenses of any kind (including reasonable fees and expenses of attorneys, accountants and other experts paid in connection with the investigation or defense of any of the foregoing or any Proceeding relating to any of the foregoing).

"**Net Sales**" means: (A) the gross amount invoiced on sales of Products by Company, its Affiliates, licensees or any third party that licenses or sells Products on behalf of Buyer or its Affiliates or based on a license granted to such third party by Buyer or its Affiliates (each, an "**Invoicing Entity**"), less the following: (i) all trade, cash and quantity credits, discounts, refunds or rebates and any other adjustments, including those granted on account of price adjustments or billing errors to the extent actually allowed and taken; (ii) returns, retroactive price reductions, bad debts, or chargebacks; (iii) price reductions, rebates and chargeback payments granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), national, state/provincial, local, and other governments, their agencies and purchasers and reimbursers, or to trade customers; (iv) costs of freight, insurance, and other transportation charges; as well as any reasonable fees for services provided by wholesalers, distributors, warehousing chains and other third parties related to the distribution of such Products; (v) sales taxes, duties and other governmental charges (including value added tax) to the extent separately stated on the invoice; (vi) the costs of any delivery system that is packaged and sold as a unitary product with any Product; and (vii) any other similar and customary deductions that are consistent with GAAP. In any transfers of Products between an Invoicing Entity and an Affiliate of such Invoicing Entity not for the purpose of resale by such Affiliate, Net Sales shall be equal to the fair market value of the Products so transferred, assuming an arm's length transaction made in the ordinary course of business. In the event that an Invoicing Entity receives non-monetary consideration for any Products or in the case of transactions not at arm's length, Net Sales shall be calculated based on the fair market value of such consideration or transaction, assuming an arm's length transaction made in the ordinary course of business. Sales of Products by an Invoicing Entity to an Affiliate of such Invoicing Entity for resale by such Affiliate shall not be deemed Net Sales and Net Sales shall be determined based on the total amount invoiced by such Affiliate on resale, and (B) any amount or consideration received by the Company or its Affiliates from third party in connection with any right granted, license given or agreement entered into by Company, under or with respect to or permitting any use of any of the Company Intellectual Property or otherwise permitting the development, manufacture, marketing, distribution, use and/or sale of Products (other than if such amount or consideration which have been received by the Company or its Affiliates from such third party are designated in good faith, under Buyer's and/or the Company's contractual obligation, for covering the actual or expected and reasonable costs and expenses necessary to further develop the Product by the Buyer and/or the Company after the date of signature of the relevant Sublicense; provided, however, that the Buyer provides the Stockholders' Representative, within thirty (30) days of the receipt of such amounts, with a written report certified as being correct by an officer of the Buyer, specifying the actual or expected costs and expenses of the development for which such amounts were received and certifying that such costs and expenses have been, or are being, or designated to be incurred by the Buyer or the Company), to the extent such right, license or agreement do not constitute an Exit Transaction.

**"Ordinary Course of Business"** means the ordinary course of business consistent with past custom and practice of the Company, as applicable.

**"Order"** means any order, judgment, ruling, injunction, award, stipulation, assessment, decree or writ, whether preliminary or final, of any Governmental Authority.

**"Patents"** means all patent disclosures, patent applications and patents and all registrations, continuations, continuations-in-part, divisionals, re-examinations, renewals, extensions and reissues and counterparts thereof of the United States and all countries and jurisdictions foreign thereto and all reissues, reexamined patents, divisions, continuations, continuations-in-part, revisions, and extensions thereof.

"**Paying Agent**" means Altshuler Shaham Trusts Ltd. or another independent third party paying agent mutually acceptable to the Buyer and the Stockholders Representative.

"**Paying Agent Agreement**" means a paying agent agreement by and among the Buyer, the Sellers, the Stockholder Representative and the Paying Agent, dated as of the Closing Date.

**"Person"** means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated association, corporation, firm or other entity or any Governmental Authority.

"**Phase I Study**" shall mean a clinical trial in which a Product is administered to human subjects at multiple dose levels with the primary purpose of determining safety, metabolism, and pharmacokinetic and pharmacodynamic properties of such Product.

"**Phase III/Pivotal Study**" shall mean a human clinical trial of a Product, which trial is designed to demonstrate the safety and efficacy in a manner sufficient to file for marketing authorization.

**"Proceeding"** means any suit, action, cause of action, litigation, hearing, inquiry, examination, demand, proceeding, controversy, complaint, appeal, notice of violation, citation, summons, subpoena, arbitration, mediation, dispute, claim, investigation or audit of any nature whether civil, criminal, administrative, regulatory or otherwise and whether at Law or in equity.

"**Product**" means a product, service or process that: (i) comprises, contains or incorporates Company Intellectual Property (in whole or in part) or (ii) which has been developed, manufactured or performed using or based on Company Intellectual Property (in whole or in part), or (iii) the making, using or selling of which falls within the scope of the Company Intellectual Property (in whole or in part), or (iv) any other use, commercialization and/or exploitation of Company Intellectual Property in any manner whatsoever and for any purpose or indication whatsoever, with respect to all of the foregoing.

**"Related Party"** means each officer or director of the Company and its Affiliates, each family member of any director or officer of the Company and its Affiliates, each trust for the benefit of any of the foregoing, and each Affiliate of any of the foregoing.

**"SAFEs"** means the Convertible Security Agreement dated January 20, 2020, the Convertible Security Agreement dated February 22, 2022 and the Convertible Security Agreement dated May 22, 2022.

**"Security Interest"** means any mortgage, pledge, lien, encumbrance, charge or other security interest, other than (a) mechanic's and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the taxpayer is contesting in good faith through appropriate proceedings, (c) purchase money liens and liens securing rental payments under capital lease arrangements, and (d) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

**"Securities Act"** means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

**"Securities Laws"** means the Securities Act, the Exchange Act and the Israeli Securities Laws.

**"Service Provider"** means each director, officer, employee, manager, independent contractor, consultant, leased employee, or other Service Provider of the Company.

**"TASE"** means the Tel Aviv Stock Exchange.

**"TASE Approval"** means the TASE's approval for the listing of the Ordinary Shares underlying the Upfront Shares for trade on TASE.

**"Tax"** and collectively **"Taxes"** means any and all multi-national, U.S. Israeli, federal, state, local, or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, entertainment, amusement, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, ad valorem, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, composite, healthcare (whether or not considered a tax under applicable Law), escheat or unclaimed property (whether or not considered a tax under applicable Law) or other tax, of any kind whatsoever, including any interest inflation indexation, linkage differentials, penalties or additions to Tax, any penalties resulting from any failure to file or timely file a Tax Return, or additional amounts in respect of the foregoing; the foregoing will include any transferee or secondary liability for a Tax and any liability assumed by agreement or arising as a result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto).

**"Tax Returns''** means returns, declarations, reports, notices, forms, claims for refund, information returns or other documents (including any related or supporting schedules, statements or information) filed or required to be filed with any Governmental Authority, or maintained by any Person, or required to be maintained by any Person, in connection with the determination, assessment or collection of any Tax of any Party or the administration of any Laws, regulations or administrative requirements relating to any Tax.

**"Tax Withholding Certification(s)"** means a valid certification or ruling or any other written instructions regarding Tax withholding issued by the ITA that is applicable to the payments to be made to any person pursuant to this Agreement, in form and substance reasonably acceptable to the Paying Agent and Buyer, in accordance with applicable Law and practice (which, for the avoidance of doubt, with respect to any Seller, includes, the Buyer's opportunity to review, comment and approve the application to the ITA for the issuance of such certificate, to the extent such application is so filed in connection with this Agreement) (which approval will not be unreasonably withheld or delayed and in any event will be provided within three (3) Business Days), issued specifically in connection with the payments and deliverables to be received by such person pursuant to this Agreement: (i) exempting the Buyer and/or Paying Agent from the duty to withhold Israeli Tax with respect to a payment made under this Agreement, (ii) determining the applicable rate of Israeli Tax to be withheld from such payment, or (iii) providing any other instructions regarding the payment or withholding with respect to such payment.

"**Technology**" means Company's proprietary technology covered by the Patents listed in <u>Schedule 4.13A</u> or otherwise described as part of the proprietary know how of the Company in <u>Schedule 4.13B</u>.

"**Technology Transfer**" means all activities taken and assistance to be provided pursuant to the Technology Transfer Plan in an effort to provide the Buyer with the data and information concerning the research and development of the Technology including any previous actions taken in connection thereof and any future plans recommended in an effort to meet the milestones set forth in <u>Section 2.3</u> below.

"**Technology Transfer Plan**" means the work plan attached hereto as <u>Schedule 2.3(i)(A)</u>.

"**Trademarks**" means, in the United States and all countries and jurisdictions foreign thereto, registered trademarks, registered service marks, trademark and service mark applications, unregistered trademarks and service marks, registered trade names and unregistered trade names, corporate names, fictitious names, registered trade dress and unregistered trade dress, logos, slogans, Internet domain names, rights in telephone numbers, and other indicia of source, origin, endorsement, sponsorship or certification, together with all translations, adaptations, derivations, combinations and renewals thereof.

"**Transaction Documents**" means this Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements ("**Ancillary Agreements**") executed in connection with the transactions contemplated hereunder.

"**U.S.**" or "**United States**" means the United States of America.

ARTICLE 2

<u>PURCHASE AND SALE OF SHARES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Transactions</u>. Subject to the terms and conditions of this Agreement, at the Closing, Buyer agrees to purchase from each Seller, and each Seller agrees to sell, assign, transfer and deliver to Buyer, all of such Seller's Shares for the consideration specified in this <u>Article 2</u>, free and clear of any and all Security Interests, it being clarified that to the extent that a Company shareholder has not signed this Agreement (a "**Non-Party Company Shareholder**"), such Non-Party Company Shareholder shall sell all of its Company Shares at Closing pursuant to the terms hereof, by signing a joinder agreement hereto and becoming a Seller as defined herein or pursuant to the application of the Bring Along by the Company at or prior to the Closing, all on the terms and subject to the conditions more fully set forth in this Agreement.

The issued and outstanding Shares of the Company to be sold, assigned and transferred pursuant to this <u>Article 2</u> total in the aggregate 6,821,682 Shares, and represent, as of the date hereof, all of the issued and outstanding share capital, as well as any other equity instruments, of the Company on a fully diluted basis (i.e., including conversion of outstanding options and SAFEs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Purchase Price for Shares</u>.

In consideration of the sale, transfer, assignment, and delivery of the Shares, according to this Agreement, the Buyer shall pay the following consideration to the Sellers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.1 <u>Closing Consideration</u>. At the Closing, upon the terms and subject to the conditions set forth herein and subject to <u>Section 2.6</u> below, Buyer shall: (i) pay to the Paying Agent, for distribution to the Sellers as set forth in the Spreadsheet and the Paying Agent Agreement, the aggregate amount of Three Million Five Hundred Thousand Dollars ($3,500,000) out of which, the Transaction Expenses shall be deducted (the "**Upfront Payment**"); (ii) deposit with the Paying Agent certificates (whether physical or digital) or other formal approval from The Bank of New York Mellon ("**BNYM**"), which is the registered holder of the shares represented by the ADSs (as defined below) issued under the Deposit Agreement, dated as of November 20, 2015, by and among the Buyer, BNYM, as depositary (the "**Depositary**") and the owners and holders of ADSs issued thereunder (the "**Deposit Agreement**") governing Buyer's ADR program, evidencing the Upfront Shares registered in the name of the certain Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, reflecting such number of Buyer's American Depositary Shares ("**ADS**", each ADS representing ten (10) ordinary shares of the Buyer of no par value) representing aggregate value of Three Million Five Hundred Thousand Dollars ($3,500,000), at a price per Buyer ADSs equal to $1.58 (calculated based on the NASDAQ volume-weighted average price of Buyer ADSs for the 60-day period preceding the date of this Agreement) (the "**Upfront Shares**"); and (iii) wire the amount of the Transaction Expenses to the Paying Agent, for payment of the Transaction Expenses in accordance with the Spreadsheet to the applicable third parties listed on <u>Schedule 4.8(ii)</u>. In the event that during one year following the Closing, the Buyer enters into a Dilutive Event, as defined in the Registration Rights Agreement (as defined below), and at such time a Seller who received Upfront Shares holds any such shares, a price protection mechanism, as indicated in the Registration Rights Agreement will be effected with respect to such Upfront Shares, under the terms and conditions set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.2 Upon the Effective Date, the Stockholders' Representative shall deliver to the Buyer and the Paying Agent a spreadsheet attached hereto as <u>Exhibit B</u> ("**Spreadsheet**") specifying (i) the allocation of the Upfront Payment out, the Upfront Shares and any Contingent Payment among the Sellers, and (ii) the Transaction Expenses. The parties hereto acknowledge that the Buyer and the Paying Agent shall be entitled to rely on the Spreadsheet, and any payments made pursuant to this Agreement by Buyer or the Paying Agent in accordance with the Spreadsheet will be deemed to have been made in accordance with this Agreement, and Buyer's obligation to make payments under this Agreement shall be deemed to have been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.3 <u>Treatment of Company Options</u>. No options or warrants to purchase share capital of the Company that are issued and outstanding as of immediately prior to the Closing ("**Options**") shall be assumed by the Buyer and shall be either exercised prior to the Closing (with the holder thereof, participating as a Seller) or terminated or cancelled. Each Option shall be cancelled and extinguished as of the Closing for no consideration prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.4 Immediately prior to the Closing, the SAFEs shall be converted into Preferred A shares of the Company, which such shares shall be part of the Shares and as of the Closing, the SAFEs shall be terminated and such Shares purchased hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Post-Closing Payments</u>.

Following the Closing, and subject to <u>Section 2.6</u>, the Sellers shall be entitled to one or more of the contingent payments set forth in <u>Section 2.3</u> if the applicable conditions of this <u>Section 2.3</u> are met (any and all payments pursuant to this <u>Section 2.3</u>, "**Contingent Payment**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Development Milestones</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Upon and subject to the achievement of successful completion of [\*\*\*\*\*] (which shall be
clearly defined in such study protocol) with the first lead drug candidate and successful completion of the Technology Transfer in accordance
with the Technology Transfer Plan attached hereto as <u>Schedule 2.3(i)(A)</u>, Buyer shall pay to the Paying Agent, for distribution
to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, an amount equal to [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Upon initiation of [\*\*\*\*\*], Buyer shall pay to the Paying Agent, for distribution
to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, an amount equal to [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Regulatory Milestones</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Upon obtaining FDA approval for the commercial distribution of a first Product in the USA, Buyer shall
pay to the Paying Agent, for distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, an amount equal
to [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Upon obtaining the first approval of the European Agency for the Evaluation of Medicinal Products (EMEA)
or any successor agency thereto for the commercial distribution of a Product in Europe, Buyer shall pay to the Paying Agent, for distribution
to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, an amount equal to [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Sales Milestones</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) When Annual Net Sales first reach [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), Buyer shall pay to the Paying Agent, for
distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a one-time payment of [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) When Annual Net Sales first reach [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), Buyer shall pay to the Paying Agent, for
distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a one-time payment of [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) When Annual Net Sales first reach [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), Buyer shall pay to the Paying Agent, for
distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a one-time payment of [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) When Annual Net Sales first reach [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), Buyer shall pay to the Paying Agent, for
distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a one-time payment of [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]);
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) When Annual Net Sales first reach [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), Buyer shall pay to the Paying Agent, for
distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a one-time payment of [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]).

The foregoing sales milestones shall be calculated on an annual basis and are not cumulative, except that in the event that more than one sales milestone is achieved during any calendar year, the applicable sales milestone payments in respect of each of such milestones shall be cumulatively payable.

Subject to <u>Section 2.6</u> below, payment of Contingent Payments will be made by Buyer to the Paying Agent, for distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, within forty five (45) days following the achievement by the Company of the applicable milestone. For the avoidance of doubt, the foregoing sales milestone payments are payable in addition to the running royalty due on Net Sales pursuant to <u>Section 2.3(iv)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Royalties</u>. Subject to <u>Section 2.6</u> below, Buyer shall pay to the Paying Agent, for distribution
to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, a running royalty of [\*\*\*\*\*] percent ([\*\*\*\*\*]%) of Net
Sales of Products. The royalties set forth in this <u>Section 2.3(iv)</u> shall be payable during a period that shall continue on a Product-by-Product
and country-by-country basis, until the expiration of the last to expire of any Patents covering the applicable Product, in such country
(the "**Royalty Period** "). Royalty payment shall be made annually following First Commercial Sale during the Royalty Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Sublicense and Exit Fee</u>. In the event of: (a) Buyer's and/or Company's execution of
an exclusive irrevocable license for the sale of the Products in the US and/or entire Europe and/or worldwide (other than if the proceeds
received from the licensee in connection with such exclusive license are designated in good faith, under Buyer's and/or the Company's
contractual obligation, for covering the actual or expected and reasonable costs and expenses necessary to further develop the Product
by the Buyer and/or the Company after the date of signature of the relevant sublicense; provided, however, that the Buyer provides the
Stockholders' Representative, within thirty (30) days of the receipt of such amounts, with a written report certified as being correct
by an officer of the Buyer, specifying the actual or expected costs and expenses of the development for which such amounts were received
and certifying that such costs and expenses have been, or are being, or designated to be incurred by the Buyer or the Company), or (b)
sale of all or substantially all the Company Intellectual Property, or any part thereof, the sale of all or substantially all of the assets
of the Company, or the sale of all or substantially all of the shares of the Company, including by way of a merger to any third party
(i.e. not the Buyer or an Affiliate thereof); or (c) any third party (i.e. not the Buyer or an Affiliate thereof) is or becomes the owner
of voting securities of the Company representing more than 50% of Company's outstanding voting securities or rights to acquire such
securities, other than if such third party is or becomes the owner of voting securities of the Company representing more than 50% of Company's
outstanding voting securities or rights to acquire such securities in connection with a bona fide financing transaction of the Company
(each such transaction an "**Exit Transaction** "), Buyer shall pay to the Paying Agent, for distribution to the Sellers,
as set forth in the Spreadsheet and the Paying Agent Agreement, the following portion of any consideration actually received by Buyer
or its shareholders in connection with the Exit Transaction, which such fixed consideration actually received by the Buyer or its shareholders
is not received in connection with, or conditional upon, sale of the Product (in which case the royalties described on Section 2.3(iv)
will be paid), net of the value of the R&D costs actually expended by Buyer in connection with the Company Intellectual Property as
of the date of the Exit Transaction (as identified in Buyer's audited financial statements).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [\*\*\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [\*\*\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [\*\*\*\*\*]

Subject to <u>Section 2.6</u> below, payment pursuant to this <u>Section 2.3(v)</u> will be made by Buyer to the Paying Agent, for distribution to the Sellers, as set forth in the Spreadsheet and the Paying Agent Agreement, within thirty (30) days following the receipt of the funds from the Exit Transaction by Buyer or its shareholders. Any third party that is a party to an Exit Transaction shall remain subject to the abovementioned Contingent Payment obligations (including royalties and milestone payments) to be paid in a manner to be agreed between such third party and the Stockholders Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Consideration Cap</u>. Notwithstanding anything to the contrary set out herein, in no event shall the
aggregate consideration paid by Buyer, its shareholders or third party to an Exit Transaction to Sellers under subsections (i), (ii),
(iii), (iv) and (v) of this <u>Section 2.3</u> exceed One Hundred Million Dollars ($100,000,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Allocation to Sellers</u>. Any payment to be made to the Sellers pursuant to this <u>Section 2.3</u> shall be allocated as set forth in the Spreadsheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Buyer shall notify Sellers in writing within up to fourteen (14) days upon: (A) the achievement of any
of the milestones set forth in <u>Section 2.3</u>, (B) the date of First Commercial Sale of any Product; and (C) the execution of an agreement
in connection with an Exit Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <u>Royalty Reports and Royalty Payments</u>. Commencing with the first calendar quarter in which Net Sales
are generated, and subject to Buyer's receipt of the relevant information from its sub-distributors or Invoicing Entity (provided
that Buyer makes reasonable commercial efforts to obtain such information), within 45 days following the end of each calendar quarter
during the Royalty Period, Buyer shall deliver to Stockholders Representative reports on Net Sales and the total royalty payable to Sellers,
together with the exchange rates used for conversion (if applicable), for the applicable calendar quarter. The report shall be certified
and signed by Buyer's chief financial officer, treasurer or controller. Buyer shall make reasonable efforts to ensure that each
Invoicing Entity provides Buyer with information and reports sufficient to enable Buyer to comply with the provisions of this <u>Section 2.3(ix)</u>. Within 45 days of the end of each calendar quarter during the Royalty Period, Buyer shall remit to the Paying Agent all royalties
due pursuant to <u>Section 2.3(iv)</u> for the applicable period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Audit</u>. Buyer shall maintain, and shall cause its Affiliates to maintain, true and complete records
in accordance with GAAP, to enable the Sellers to confirm the accuracy of any reports or notifications delivered hereunder and to determine
any payment due to Sellers hereunder. The relevant party shall retain such records relating to a given calendar quarter for at least two
(2) years after the conclusion of that calendar quarter, during which time Sellers (as a group) shall have the right, through the Stockholder
Representative, at their expense, to cause an independent, certified public accountant to inspect and audit such records (but not copy)
during normal business hours for the sole purpose of verifying any reports and payments delivered under this Agreement. Such accountant
shall not disclose to Seller any information other than information relating to the accuracy of any reports and payments delivered under
this Agreement. The Parties shall reconcile any underpayment or overpayment within thirty (30) days after the accountant delivers the
results of the audit. In the event that any audit reveals an underpayment in excess of five percent (5%) in any calendar year, Buyer shall
bear the full cost of such audit. Sellers (collectively), may exercise their audit right hereunder only once every year and only with
reasonable prior notice to the audited party and only once with respect to any given period. Any and all records examined by such accountant
shall be deemed Buyer's Confidential Information, which may not be disclosed by such accountant to any third party, and Buyer may
require such accountant to enter into a reasonable written agreement obligating it to be bound by obligations of confidentiality and restrictions
on use of such Confidential Information. Buyer shall cause its Affiliates to fully comply with the terms of this <u>Section 2.3(x),</u> and
shall use reasonable commercial efforts to include similar rights in their agreements with an Invoicing Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) <u>Late Payments</u>. Any payments to be made under this Agreement that are not paid to the Paying Agent
on or before the date such payments are due under this Agreement shall bear interest at a rate of the lesser of 1.5% per month or the
maximum non-usurious rate under applicable Law, assessed from the day payment was initially due until the date of payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) All the amounts referenced in <u>Section 2.3</u> shall be treated by the Buyer, each Seller and their
respective Affiliates, as an adjustment to the purchase price paid for the Shares for income Tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>The Closing</u>. The closing of the transactions contemplated under <u>Section 2.1</u> (the "**Closing**") shall take place remotely through the electronic exchange of closing documents on at the earliest, following the delivery of this Agreement (the "**Closing Date**").

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Deliveries at the Closing</u>. At the Closing, in addition to the fulfillment of any of the conditions required of any Party as set forth in ‎<u>Article 6</u> and ‎<u>Article 7</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Stockholder Representative will deliver to Buyer or an Affiliate thereof: (i) validly executed share transfer deeds in the form attached hereto as <u>Schedule 2.5(A)(i)</u> signed by each of the Sellers and a share certificate covering the Shares issued in the name of the Buyer and the share certificates covering the Shares transferred from the Sellers to the Buyer (or a lost certificate affidavit in form reasonably accepted to the Buyer), and the registration of the Buyer as the shareholder owning the Shares in the shareholder register of the Company, and deliver to the Buyer such shareholder register, signed by a duly authorized Company officer; (ii) validly executed copy of a unanimous written resolution of the Company's Board of Directors approving the sale and transfer of the Shares as set forth in this Agreement, authorizing and approving the execution and delivery of this Agreement by the Company and the performance by the Company of its obligations hereunder and the cancellation of all outstanding options and warrants; (iii) resignation and release letter by the directors nominated by the Sellers effective at Closing; (iv) a unanimous written resolution of the Company's shareholders approving the transactions contemplated hereunder and waiving any rights in connection therewith, including preemptive rights, right of first refusal, co-sale right or other similar rights, and approving the cancellation of all outstanding options and warrants; (v) a certificate duly executed by each Seller and an officer of the Company nominated by the Stockholder's Representative in a form attached herein as <u>Schedule 2.5(A)(v)</u> ("**Seller's Certificate**" and "**Officer's Certificate**", respectively); (vi) a release and waiver, duly executed by each holder of Options in the form attached hereto as <u>Schedule 2.5(A)(vi)</u>; (vii) Registration Rights Agreement (as defined below) executed by each Seller receiving the Upfront Shares hereunder; (viii) an undertaking and proxy executed by each of the Sellers receiving Upfront Shares hereunder in the form attached herein as <u>Schedule 2.5(A)(viii)</u> (the "**Sellers' Undertakings**") to vote the Upfront Shares at any and all Buyer shareholders' meetings in accordance with the voting recommendations of Buyer's board of directors (subject to customary exceptions), and certain other corporate governance matters, as well as proxy vote instructions; (ix) joinder letters to this Agreement executed by Non-Party Company Shareholders who executed such joinders and/or an updated share registry of the Company and applicable documents evidencing the implementation by the Company of the Bring Along; and (x) the Registration Rights Agreement executed by each Seller joining the Registration Rights Agreement; (xi) a Consulting and Non-Compete Agreement in the form attached herein as <u>Schedule 2.5(A)(xi)</u> (the "**Consulting and Non-Compete Agreement**") executed by Mr. [\*\*\*\*\*]; (xii) evidence satisfactory to the Buyer of exercise of or cancellation of all outstanding options and warrants of the Company and the conversion of the SAFEs, (xiii) the Paying Agent Agreement, duly executed by the Sellers and the Stockholder Representative and (xiv) an executed termination agreement of the Shareholders Rights Agreement dated February 23, 2018, substantially in the form attached hereto as Schedule 2.5(A)(xv).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Buyer will deliver to Company and Sellers: (i) true and correct copies of the resolutions of the board of directors of Buyer, authorizing and approving the execution and delivery of this Agreement and any ancillary documents and/or exhibits, the consummation of the transactions contemplated hereby and thereby and the performance of Buyer obligations hereunder and thereunder; (ii) the Consulting and Non-Compete Agreement executed by Buyer or any Buyer Affiliate designated by Buyer; (iii) a certificate duly executed by the Buyer containing the representation and warranty of Buyer that the conditions set forth in Sections 7.1 through 7.8 have been duly satisfied; (iv) confirmation from the Buyer that the Upfront Payment was transferred to the Paying Agent and that certificates (whether physical or digital) or other formal approval from BNYM, which, is the registered holder of the shares represented by the ADSs issued under the Deposit Agreement by and among the Buyer, BNYM, as Depositary, and the owners and holders of ADSs issued thereunder governing Buyer's ADR program, evidencing the Upfront Shares registered in the name of the certain Sellers, in accordance with the Spreadsheet, have been deposited with the Paying Agent; (v) the Registration Rights Agreement executed by the Buyer; and (vi) the Paying Agent Agreement, duly executed by the Buyer and the Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Withholding Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of paragraph (b) below, notwithstanding anything to the contrary in this Agreement, each of the Buyer or the Paying Agent and anyone acting on their behalf (each, a "**Payor**") shall be entitled to deduct and withhold, or cause to be deducted and withheld, from any amounts otherwise payable pursuant to this Agreement such amounts as it determines are required to be deducted and withheld therefrom, whether in connection with the Upfront Payment or the Upfront Shares, under any provision of federal, state, local or foreign Tax Law. Without derogating from the above, the Payor shall be entitled to withhold the applicable Tax amounts either from the cash payment or the Upfront Shares or any combination thereof, as the Payor shall decide according to applicable law. To the extent that amounts are so withheld by a Payor and paid over to the ITA, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any consideration payable pursuant to this Agreement to any Seller or to the applicable third parties listed on Schedule 4.8(ii) (each "**Payee**"), shall be issued and delivered to the Paying Agent, and shall be retained by the Paying Agent for the benefit of each such Payee for a period of one-hundred eighty (180) days from the Closing Date or date of the applicable Contingent Payment or an earlier date required in writing by such Payee or by the ITA (the "**Withholding Drop Date**") (during which time and unless otherwise instructed by the ITA, each such Payee may obtain a Tax Withholding Certification. If a Payee delivers, no later than three (3) Business Days prior to the Withholding Drop Date, a Tax Withholding Certification to the Paying Agent, then the Paying Agent is hereby authorized to release the applicable portion of the consideration to such Payee according to the instructions set by the Tax Withholding Certification and may (1) require such Payee to provide the Paying Agent with cash amounts sufficient to cover the respective Tax amount (if any), or (2) sell any portion of such Seller's Upfront Shares otherwise deliverable to such Seller that is required to enable the Paying Agent to comply with any Israeli withholding Tax requirements as reasonably determined by the Paying Agent. If any Payee (A) does not provide the Paying Agent with a Tax Withholding Certification on or before three (3) Business Days prior to the Withholding Drop Date, or (B) submits a written request to the Paying Agent to release such Payee's portion of such consideration prior to ‎the Withholding Drop Date and fails to submit a Tax Withholding Certification, then the Paying Agent shall be entitled to withhold the applicable amounts to the maximum extent required by Law and may (1) require such Payee to provide the Paying Agent with cash amounts sufficient to cover the respective Tax amount or (2) sell any portion of such Seller's Upfront Shares otherwise deliverable to such Seller that is required to enable the Paying Agent to comply with any Israeli withholding Tax requirements as reasonably determined by the Paying Agent.

ARTICLE 3

<u>REPRESENTATIONS AND WARRANTIES OF SELLERS AND BUYER</u>

<u>CONCERNING THE TRANSACTION</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Representations and Warranties of Sellers</u>. Each of the Sellers, represents and warrants to Buyer, with respect to himself, herself or itself, that except as set forth on the Disclosure Schedule attached as <u>Schedule 3</u> to this Agreement (the "**Sellers Disclosure Schedule**"), which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true, correct and complete as of the date hereof and on and as of the Closing (as if made on such Closing). The Sellers Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this <u>Article 3</u>, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this <u>Article 3</u> only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Capacity and Authorization of Sellers</u>. The Seller is duly organized (to the extent Seller is not a natural person), validly existing (to the extent Seller is not a natural person) and in good standing under the Laws of the jurisdiction of its formation, and has all requisite power and authority to own, lease and operate its assets, properties and business and to carry on its business as now being conducted. To the extent Seller is not a natural person, the Seller is not in violation of any of the provisions of its charter documents, bylaws, articles of association or similar organizational documents. The Seller has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Agreements to which the Seller is party, the performance by the Seller of its obligations hereunder and thereunder and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized. This Agreement has been, and the Ancillary Agreements to which the Seller is party will be, duly executed and delivered by the Seller and constitute the legal, valid and binding obligation of the Seller, enforceable against it in accordance with their respective terms. The Seller has not granted to any Person any power of attorney in respect of it or relating to the conduct of its business. The Seller has never approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of the Seller or the winding up or cessation of its business. In the event the Seller is a natural person, it has the legal capacity to execute and deliver this Agreement, and the other Ancillary Agreements contemplated herein, and to perform his obligations hereunder and thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Noncontravention</u>. Neither the execution and the delivery of this Agreement, and the other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby and thereby, will (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency or court to which a Seller is subject or, in the case of a Seller that is not a natural person, its Governing Documents, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license or instrument to which any Seller is a party or by which any Seller is bound or to which any of Seller's assets is subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Brokers' Fees</u>. The Sellers do not have any Liability or obligation to pay any finder's fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer or the Company are or could become liable or obligated. Seller hereby represents and warrants, that it is not a party to any undertaking pursuant to which Buyer is obligated to pay any fee to any third party in connection with the transaction contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Absence of Litigation</u>. No Seller is a party to any, and there are no pending or, to the Knowledge of Sellers, threatened proceedings, against any Seller challenging the validity of the transactions contemplated by this Agreement which, if determined adversely, would prevent 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;(f) <u>Investment Representations</u>. Without derogating from the Registration Rights Agreement, each Seller hereby acknowledges that the Upfront Shares have not been registered under the Securities Laws and that they are being offered and sold pursuant to exemptions from registration contained in the Securities Laws based in part upon their representations and warranties contained in this Agreement. Accordingly, each hereby represents and warrants 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) <u>Economic Risk</u>*.* It is capable of evaluating the merits and risks of its investment in Buyer and has the capacity to protect its own interests. Any interest in the Upfront Shares may not be sold, pledged or otherwise transferred or hypothecated unless the Upfront Shares are registered pursuant to the Securities Laws, or an exemption from such registration is available under the Securities Laws, and in the absence of such registration or exemption, the holder must bear the economic risk of this investment indefinitely. It understands that there is no assurance that any exemption from registration under the Securities Laws will be available and that, even if available, such exemption may not allow the transfer of all or any portion of the Upfront Shares under the circumstances, in the amounts or at the times the holder might propose.

&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) <u>Acquisition for Own Account</u>. The recipient of the Upfront Shares is acquiring them for its own account for investment only, and not with a view towards their distribution or resale, without prejudice, however, to its right, at all times, to sell or otherwise dispose of all or any part of such securities pursuant to an effective registration statement under the Securities Laws or under an exemption from such registration and in compliance with applicable securities 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;(iii) <u>Protecting Its Interest</u>. By reason of its, or of its management's (if any), business or financial experience, it has the capacity to protect its own interests in connection with the transactions contemplated 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;(iv) <u>General Solicitation</u>. The Upfront Shares are not being purchased as a result of any advertisement, article, notice or other communication regarding the Upfront Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

&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) <u>Buyer's Information</u>. No offering memorandum or similar disclosure document has been prepared in connection with the offer of the Upfront Shares, and it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the Buyer's reports filed publicly with the SEC and/or TASE and has been afforded access to publicly disclosed information about the Buyer and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment and that is necessary to make an informed investment decision with respect to the investment in the Buyer. The only representations and warranties being given by the Buyer are contained in this Agreement. No broker or agent of the Buyer has provided any information or advice with respect to the Upfront Shares nor is such information or advice necessary or desired.

&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) <u>Rule 144</u>. Each Seller acknowledges that it is aware that Rule 144 under the Securities Act which allows for the public resale of restricted and control securities, as the case may be, if a number of conditions are met, may not necessarily be available with respect to the Upfront Shares and, in any event, is available only if certain conditions are satisfied, and that any sale of the Upfront Shares that might be made in reliance upon Rule 144 may only be made in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to a Seller upon 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) <u>Regulation S Exemption</u>. Such Seller understands that the Upfront Shares are being offered and sold to Seller in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S promulgated under the Securities Act and that the Buyer is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Seller set forth herein in order to determine the applicability of such exemptions and the suitability of the Seller to acquire the Upfront Shares. In this regard, each Seller represents, warrants and agrees 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;(a) Such Seller is not a U.S. Person (as defined in Regulation S) and is not an affiliate (as defined in Rule 501(b) under the 1933 Act) of the Buyer and is not acquiring the Upfront Shares for the account or benefit of a U.S. Person.

&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 the origination of contact concerning the issuance of the Upfront Shares and the date of the execution and delivery of this Agreement, Seller was outside of the United States.

&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) Seller will not, during any 'distribution compliance period' under Regulation S, if applicable (the **"Restricted Period"**), offer, sell, pledge or otherwise transfer the Upfront Shares in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S.

&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) Seller will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Upfront Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities 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;(e) Neither Seller nor any person acting on Seller's behalf has engaged, nor will engage, in any directed selling efforts to a U.S. Person with respect to the Upfront Shares and Seller and any person acting on Seller's behalf have complied and will comply with any applicable "offering restrict ions" requirements of Regulation S 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;(f) The issuance of the Upfront Shares contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements 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;(g) Neither Seller nor any person acting on Seller's behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Upfront Shares. Seller agrees not to cause any advertisement of the Upfront Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Upfront 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;(viii) <u>Compliance with Laws</u>. Any resale of the Upfront Shares during a 'distribution compliance period', if applicable, as defined in Rule 902(t) to Regulation S shall only be made in compliance with exemptions from registration afforded by Regulation S. Further, any such sale of the Upfront Shares in any jurisdiction outside of the United States will be made in compliance with the securities laws of such jurisdiction. Seller will not offer to sell or sell the Upfront Shares in any jurisdiction unless Seller obtains all required consents, 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;(ix) <u>Israeli Securities Law</u>. With respect to each Seller (that receives a portion of the Upfront Shares), such Seller affirms that it is a "Qualified Investor" listed under the First Schedule of the Israeli Securities Law, purchasing for itself, and undertakes that it will provide the Buyer with appropriate documentation to such effect, as required under applicable Israeli law and regulation. Seller further acknowledges that no action will be taken in Israel that would permit the offering of the Upfront Shares or the distribution of any prospectus or other offering document to the public in Israel, and that the Upfront Shares were and are issued by way of a private placement and that the Upfront Shares are subject to the resale restrictions under Section 15C of the Israel Securities Law and Section 5 of the Israeli Securities Regulations (Details Regarding Sections 15A-15C of the Securities Law) - 2000.

&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) <u>Seller Holdings in Buyer; No Voting Agreements</u>. Other than the Seller's Undertaking executed pursuant to this Agreement and the Registration Rights Agreements to be entered into at Closing at the time the Upfront Shares are offered, and as of the date hereof, and at the Closing, Seller is not, a party to any agreement or arrangement, whether written or oral, with Buyer, any of the Buyer's officers or shareholders or a corporation in which the Buyer's officers or shareholders are an Interested Party (as defined in the Israeli Companies Law, 5759-1999), regulating the management of the Buyer, the shareholders' rights in the Buyer, the transfer of shares in the Buyer, including any voting agreements, shareholder agreements or any other similar agreement even if its title is different or has any other relations or agreements with any of the Buyer's shareholders, directors or officers.

&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) <u>No Governmental Review</u>. It understands that no Israeli or United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Upfront Shares or the fairness or suitability of the investment in the Upfront Shares nor have such authorities passed upon or endorsed the merits of the offering of the Upfront 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) <u>Restricted Securities</u>. It understands that the Upfront Shares, are characterized as "restricted securities" under the U.S. federal securities laws inasmuch as they are being issued by the Buyer in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration in the United States of America under the Securities Act only, and in Israel under Israeli Securities Laws only in certain limited circumstances. It understands and acknowledges that: (i) the Upfront Shares are being offered and sold without registration under the Securities Laws in a private placement that is exempt from the registration provisions of the Securities Laws and (ii) the availability of such exemption depends in part on, and the Buyer will rely upon the accuracy and truthfulness of, the foregoing representations and it hereby consents to such reliance.

&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) <u>Independent Advice</u>. It understands that nothing in this Agreement or any other materials presented to it by or on behalf of the Buyer in connection with the purchase of the Upfront Shares constitutes legal, tax or investment advice.

&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 Seller further acknowledges and understands that the certificate evidencing the Upfront Shares may be imprinted with the following legend (in addition to any legend required under applicable state or foreign securities laws):

"THE ORDINARY SHARES (THE "SHARES") REPRESENTED BY THE AMREICAN DEPOSITARY SHARES (THE "ADSs") EVIDENCED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ACQUIRED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE ADSs AND THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT, OR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS. THE ISSUER OF THE SHARES AND THE DEPOSITARY AND TRANSFER AGENT FOR THE ADSs MAY REQUIRE A WRITTEN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THEMTO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS EITHER IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS. IN ADDITION, NO HEDGING TRANSACTION MAY BE CONDUCTED WITH RESPECT TO THESHARES OR THE ADSs REPRESENTING THE SHARES EVIDENCED HEREBY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE ACT."

"THE SHARES AND THE SECURITIES REPRESENTING THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A THREE-MONTH PERIOD PURSUANT TO A LOCK-UP AND REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER NAMED THEREIN. TRANSFER OF SUCH SECURITIES WILL NOT BE REGISTERED ON THE RECORD BOOKS OF THE COMPANY OR THE DEPOSITARY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE LOCK-UP AND REGISTRATION RIGHTS AGREEMENT."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Seller Information</u>. The information relating to Seller that is provided by Seller, or any director, officer, employee, agent or representative thereof, for inclusion in any document filed with or furnished to the SEC, or otherwise submitted to any other Regulatory Agency, in connection with the transactions contemplated by the Transaction Documents, will not at the time that such information is provided by any such Person as aforesaid contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Waiver</u>. Each Seller waives all pre-emption rights and any other participation right it may have in connection with the transactions contemplated hereby, including, with respect to sale and transfer of the Shares and any rights of first refusal, tag-along or other similar rights it may have in connection with the sale and transfer of the Shares are duly authorized and validly executed by the signatory thereto. No other waiver, consent or process is required to be taken by the Seller in order for the transactions contemplated hereby to be in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Certain Business Relationships with Company</u>. Except as described in <u>Schedule 3.1(i)</u>, neither such Seller nor its Affiliates nor any Related Party thereof, (a) owns any material asset, tangible or intangible, which is used in the business of Company, (b) is owed money by or owes money to the Company, (c) has entered into, or has had any direct or indirect financial interest in, any contract, transaction or business dealing involving the Company, (d) is competing, directly or indirectly, with the Company, (e) is a member, manager, director, officer or employee of, or consultant to, or owns, directly or indirectly, any interest in, any vendor, supplier or customer of the Company, or is in any way associated with or involved in the business of the Company (except in his or her official capacity as a director, officer or employee of the Company, as the case may be), (f) has any interest in or has filed any application with respect to any Intellectual Property, which arises out of or relates to the Company or its businesses, (g) has any claim or right against the Company (other than rights to receive compensation for, or expense reimbursement in connection with, services performed as an employee or director) or (h) is party to any transactions, contracts or understandings with Company that would be considered a "transaction" under Item 404 of Regulation S-K under the Securities Act if Company were to be subject to such regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Exculpation Among Sellers</u>. Each Seller acknowledges that it is not relying upon any person, firm or corporation (including without limitation any other Seller), in making its investment or decision to consummate the transactions contemplated hereunder. Each Seller agrees that no other Seller (acting in such capacity) nor the respective controlling persons, officers, directors, partners, agents or employees of any such other Seller shall be liable to any other Seller in connection with transactions contemplated hereunder for any action taken or omitted to be taken by any of them prior to the date hereof in connection with the transactions contemplated hereunder. Each Seller acknowledges that it has been independently afforded the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Buyer concerning the Buyer and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate the transactions contemplated hereunder, and that it is not relying upon any examination or inquiry performed by another Seller. Neither such inquiries nor any other investigation conducted by or on behalf of a Seller or its representatives or counsel shall modify, amend or affect such Seller's right to rely on the truth, accuracy and completeness of the Buyer's representations and warranties contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Full Disclosure</u>. This Agreement (including the Schedules and any closing deliverables and any other Ancillary Agreements) does not as of the date hereof, and will not as of the Closing: (i) contain any representation, warranty or information of the Seller that is false or misleading with respect to any material fact; or (ii) omit to state any material fact necessary in order to make the representations, warranties and information of the Seller contained and to be contained herein, and to the extent any of such are also contained therein, and therein (in the light of the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading. The Sellers have no Knowledge of any information or other fact that is or may become materially adverse to the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations, financial performance or prospects of the Company that has not been set forth in this Agreement or in the Schedules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Representations and Warranties of Buyer</u>. Buyer represents and warrants to Sellers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization of Buyer</u>. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Israel. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Authorization; Enforcement</u>. Subject to receipt of the TASE Approval, the Buyer has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of this Agreement and the other Transaction Documents by the Buyer and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Buyer and no further action is required by the Company, the Board of Directors of the Buyer or the Buyer's shareholders in connection herewith or therewith. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Buyer and, when delivered in accordance with the terms hereof and thereof including the receipt of the TASE Approval and the fulfillment of the conditions set forth in <u>Section ‎2.4</u> above, will constitute the valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Noncontravention</u>. Neither the execution and delivery of this Agreement, and the other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby and thereby, will materially (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency or court to which Buyer is subject or any provision of its Governing Documents, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any material agreement, contract, lease, license or instrument to which Buyer is a party or by which it is bound or to which any of its assets is subject. Except for the TASE Approval, the Buyer is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Authority in order for the Parties to consummate 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;(d) <u>Investment Representations</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;(i) Buyer acknowledges that the Shares have not been registered for offer or sale under any Securities Laws, and are not listed for trading on any stock exchange, stock quotation service or other stock market. Buyer understands that the Shares are being sold to Buyer in reliance on exemptions from the registration requirements of any applicable Securities Laws, and may not be sold, transferred or otherwise disposed of unless subsequently registered under applicable Securities Laws or unless an exemption from registration is available.

&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) Without derogating from the representations made by the Sellers hereunder, Buyer has such knowledge and experience in financial and business matters in general and with respect to businesses of a nature similar to the business of the Company so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, the acquisition 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;(iii) Buyer is acquiring the Shares solely for its own account and not with a view to or for resale in connection with any distribution or public offering thereof, within the meaning of applicable securities laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Issuance of the Upfront Shares</u>. Subject to receipt of the TASE Approval, the Upfront Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Security Interests imposed by the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>SEC Reports; Financial Statements</u>. The Buyer has filed all reports, schedules, forms, statements and other documents required to be filed by the Buyer under the Securities Act and the Exchange Act, including pursuant to Section 13(a) thereof, for the two years preceding the date hereof (or such shorter period as the Buyer was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "**SEC Reports**") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Buyer included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with IFRS, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by IFRS, and fairly present in all material respects the financial position of the Buyer as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Material Changes; Undisclosed Events, Liabilities or Developments</u>. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Buyer Material Adverse Effect, (ii) the Buyer has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice (B) liabilities not required to be reflected in the Buyer's financial statements pursuant to IFRS or disclosed in filings made with the United States Securities and Exchange Commission (the "**Commission**") or other public filings of the Buyer and (C) non-cash accounting measures that have effect of reducing shareholder equity, (iii) the Buyer has not altered its method of accounting, and (iv) the Buyer has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock. The Buyer does not have pending before the Commission any request for confidential treatment of information. Except for the disclosures of the transactions contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Buyer or its businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Buyer under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one business day prior to the date that this representation is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Compliance</u>. The Buyer is not: (i) in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Buyer), nor has the Buyer received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) nor has Buyer been in material violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws, relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Buyer Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Tax Status</u>. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Buyer Material Adverse Effect, the Buyer (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the tax authority of any jurisdiction, and the Buyer knows of no basis for any such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Litigation</u>. Except as set forth in the SEC Reports (i) there is no legal action, suit, arbitration, investigation, claim, proceeding or other similar dispute pending ("**Action**"), at Law or in equity, or before or by any Governmental Authority, or, to Buyer's knowledge, threatened in writing against Buyer or any of its subsidiaries or their respective properties, assets or business, that would reasonably be expected to have a Buyer Material Adverse Effect and as of the date hereof, neither Buyer nor any of its subsidiaries is subject to any order that would have a Buyer Material Adverse Effect; (ii) neither the Buyer nor any of its subsidiaries, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty with respect to Buyer; (iii) there has not been, and to the knowledge of the Buyer, there is not pending or contemplated, any investigation by the Commission or other Governmental Authority involving the Buyer or any current or former director or officer of the Buyer; and (iv) the Commission or other Governmental Authority has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Buyer or any subsidiary of the Buyer under the Exchange Act or the Securities Act, or any equivalent Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Filings, Consents and Approvals</u>. The Buyer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Buyer of the Transaction Documents, other than (i) the TASE Approval (ii) as required pursuant to the Registration Rights Agreement, and (iii) as required according to the Securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Regulatory Permits</u>. The Buyer possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Buyer Material Adverse Effect ("**Material Permits**"), and the Buyer has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Full Disclosure</u>. This Agreement (including the Schedules and any closing deliverables and any other Ancillary Agreements) does not as of the date hereof, and will not as of the Closing: (i) contain any representation, warranty or information that is false or misleading with respect to any material fact; or (ii) omit to state any material fact necessary in order to make the representations, warranties and information contained and to be contained herein and, to the extent any of such are also contained therein, therein (in the light of the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading. The Buyer has no Knowledge of any information or other fact that is or may become materially adverse to the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations, financial performance or prospects of the Buyer that has not been set forth in this Agreement or in the Schedules.

ARTICLE 4

<u>REPRESENTATIONS AND WARRANTIES<br> CONCERNING THE COMPANY</u>

Each Seller represents and warrants to Buyer as that, except as set forth on the Disclosure Schedule attached as <u>Schedule 4</u> to this Agreement (the "**Disclosure Schedule**"), which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true, correct and complete as of the date hereof and on and as of the Closing (as if made on such Closing). The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this <u>Article 4</u>, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this <u>Article 4</u> only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Organization and Corporate Power.</u> The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Israel. The Company has the requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use its properties as they are now owned and used, and perform its obligations under all contracts and agreements to which it is party or by which it is bound. <u>Schedule 4.1</u> accurately sets forth the names of the members of the board of directors (or similar body) of the Company and its corporate officers. The Company has provided to Buyer or its Affiliate acting on its behalf true and correct copies of the Governing Documents of the Company. The Company is not in violation of any of the provisions of its Governing Documents. The minute books and resolutions of the Company previously made available to the Buyer or an Affiliate thereof contain true, complete and accurate records of all meetings and accurately reflect in all material respects all corporate action of the equity holders and board of directors (including committees thereof) of the Company. The execution and delivery of this Agreement and the Ancillary Agreements to which the Seller is party, the performance by the Seller of its obligations hereunder and thereunder and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized. The Company has not granted to any Person any power of attorney in respect of it or relating to the conduct of its business with the exception of its patent attorneys as customary for the ordinary operation of the Company. The Company has never approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of the Company or the winding up or cessation of its business in a manner that affects its corporate power or its ability to execute, deliver and perform the transactions contemplated hreunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Subsidiaries</u>. The Company does not have and, did not at any time previously have, any subsidiary (defined as an entity of which the Company owns directly or indirectly more than 50% of the outstanding securities entitled generally to vote for the election of directors or equivalent managing persons) and does not hold and, did not at any time previously hold, any material direct or indirect beneficial interest in any other corporation, partnership, joint venture or other entity or enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Noncontravention</u>. Except as set forth in <u>Schedule 4.4</u>, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency or court to which the Company is subject or any provision of the Governing Documents of the Company, or (b) conflict with, result in a breach of, or constitute a default under any Material Contract. Except as set forth in <u>Schedule 4.4</u>, the Company is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Authority in order for the Parties to consummate 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;4.5 <u>Governing Documents; Records.</u> All actions taken and all transactions entered into by the Company which required the approval or consent of its board of directors or shareholders have been duly approved by all necessary action of the board of directors and shareholders of the Company. There has been no violation of any of the provisions of the Governing Documents, and the Company has not taken any action that is inconsistent in any material respect with any resolution adopted by the Company's shareholders or board of directors (or similar body).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Brokers' Fees</u>. The Company has no Liability or obligation to pay any finder's fees or commissions to any broker, finder or agent with respect to 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;4.7 <u>Financial Statements.</u> Attached hereto as <u>Schedule *‎*4.7</u> are (i) the audited balance sheets and statements of income, shareholders' equity and cash flows of the Company as of and for the calendar years ended December 31, 2021 (the "**Audited Financial Statements**"), (ii) the unaudited consolidated financial statements prepared by the Company consisting of the consolidated balance sheet of the Company as of September 30, 2022 and the related consolidated statements of income, shareholders' equity Year To Date period then ended which have not been reviewed by the Company's auditor (the "**Interim Financial Statements**" and together with the Audited Financial Statements, the "**Financial Statements**"). Except as mentioned in the Audited Financial Statements, the Financial Statements, including the notes thereto, have been prepared based upon the Company's books and records and are in accordance with GAAP, and fairly present the financial condition of the Company in all material respects as of the dates stated and the results of operations of the Company for such 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;4.8 <u>No Liabilities</u>. The Company does not have any accrued, contingent or other Liabilities of any nature, either matured or unmatured (whether or not required to be reflected in financial statements in accordance with GAAP, and whether due or to become due), except for (i) the Liabilities identified in <u>Schedule 4.8(i)</u>, which are correct as of the date hereof, and (ii) any and all fees and/or other costs which are or may become due and payable to any third party under any agreement of the Company and/or any Seller as a result of the completion of the transactions contemplated hereunder or in support of the transactions contemplated hereunder, and which are reflected in <u>Schedule 4.8(ii)</u> ("**Transaction Expenses**").

&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) <u>No Guarantee of Indebtedness</u>. The Company does not have any outstanding guarantees for debt or other obligations of any other Person.

&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) <u>Insider Receivables</u>. There is no indebtedness owed to the Company by any Service Provider, employee, officer, director or shareholder, other than expense reimbursements in the Ordinary Course of Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Subsequent Events</u>. Since October 1, 2022:

&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 has operated in the Ordinary Course of Business, and as of the date hereof, there have been no events, series of events or the lack of occurrence thereof which, singularly or in the aggregate, could reasonably be expected to have a Company Material Adverse Effect; 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;(b) there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the Company's material assets (whether or not covered by insurance).

&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 Company has not taken any action that, if taken subsequent to the execution of this Agreement and/or prior to the Closing, would constitute a breach of any of the covenants set forth in <u>Section 5.2.</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;4.10 <u>Legal Compliance.</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;(a) The Company has all material governmental permits, licenses, registrations, certificates and other governmental authorizations (the "**Permits**") necessary for the Company to conduct is businesses as presently conducted.

&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 is in compliance in all material respects with all Laws applicable to 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;(c) No event has occurred and no circumstances exist that (with or without the passage of time or the giving of notice or both) does or could reasonably be expected to, or as a result of the consummation of the transactions contemplated by this Agreement will or could reasonably be expected to, result in (i) a material violation of, a material conflict with or a material failure on the part of the Company (A) to conduct its business in compliance with all applicable Laws or (B) to comply with the terms of any Permit or (ii) a revocation, cancellation, suspension or other impairment or modification of, any Permit. The Company has not received written notice regarding any (1) violation of, conflict with, or failure to conduct its business in compliance with, any applicable Law or Permit or (2) any termination, revocation, cancellation, suspension or other impairment or modification of, any Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 <u>Tax Matters.</u> Except as set forth on <u>Schedule *‎*4.11</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;(a) The Company has filed or caused to be filed all Tax Returns required to be filed with respect to the Company with respect to all past years through calendar year 2021. All such Tax Returns at the time of filing complied with all applicable Tax laws in all material respects. All Taxes owed by the Company shown on any Tax Return have been timely and properly paid or, to the extent not yet due for payment, have been adequately accrued on the books and records of the Company. All Taxes required to be withheld by the Company have been properly and timely withheld and remitted. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. There are no Security Interests on the assets of the Company that arose in connection with any failure or alleged failure to pay any Tax.

&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) There is no dispute or claim concerning any Tax Liability of the Company (i) claimed or raised by any tax authority in writing, or (ii) as to which Seller has Knowledge based upon personal contact with any agent of such authority.

&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 Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

&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) No Tax Return of the Company is currently being audited and the Company has not received notice of any pending audit.

&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 Company did not receive any tax benefit, credit or other incentive.

&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 has made available to Buyer all documents and Returns regarding Taxes and subsidies, for all Tax periods ending on or after January 1, 2022, including but not limited to any ruling, agreement or decision or compromise with any tax authority, Tax opinions, memoranda and similar documents (including related documentation) addressing Tax or subsidies matters or positions of any the Company relating to the taxable periods with respect to which the applicable statute of limitation has not already expired.

&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) The Company is in compliance in all material respects with all transfer pricing requirements in all jurisdictions in which it does business.

&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 Company (i) is duly registered for the purposes of value added Tax and has complied in all material respects with all requirements concerning value added Taxes or good and services Tax.

&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 is not subject to any restrictions or limitations pursuant to Part E2 of the ITO or pursuant to any Tax ruling made with reference to the provisions of Part E2.

&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) The Company has never made any election to be treated or claimed any benefits as "Beneficial Enterprise" (Mifaal Mutav) or otherwise nor did it take any position of being a "Preferred Enterprise" (Mifaal Muadaf) or "Preferred Technological Enterprise" (Mifaal Technology Muadaf) or otherwise under the Israeli Law for Encouragement of Capital Investments, 1959.

&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) The Company, has never participated in, engages or has ever engaged in any transaction listed in Section 131(g) of the ITO and the Income Tax Regulations (Reportable Tax Planning), 5767-2006 promulgated thereunder (or any comparable provision of state, local or foreign law) or is subject to reporting obligations under Sections 131D and 131E of the ITO or similar provisions under the Israel Value Added Tax Law of 1975.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 <u>Assets.</u> The Company does not own nor lease any real property or tangible assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 <u>Intellectual Property.</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;(a) <u>Section 4.13(a) of the Disclosure Schedule</u> sets forth a true, accurate, and complete list of (i) all Company Intellectual Property that has been the subject of an application, registration, or similar filing by the Company with any government or quasi-government entity ("**Registered IP**"). The Company has made available to Buyer accurate and complete copies of all Registered IP, including all amendments thereto. All Registered IP is in good standing. <u>Section 4.13(a) of the Disclosure Schedule</u> also identifies all payment and document filing deadlines relating to the Registered IP falling due within the six (6) months following the date of this Agreement. The Company has made available to Buyer accurate and complete copies of all material Company Intellectual Property.

&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) Except as set forth on <u>Schedule 4.13</u>, the Company owns or possesses all rights to use all Intellectual Property necessary to the operation of its businesses as presently conducted and such present use does not, to the Knowledge of the Sellers, conflict with the lawful rights of others in any material respect. The Company has not received written or oral notice of any claim against it involving any conflict or claim of conflict relating to the Intellectual Property of the Company and, to the Knowledge of Seller, there is no basis for any such claim or conflict. The Company has taken all reasonably necessary action to maintain and protect each item of Intellectual Property that it owns or uses.

&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 Company has never assigned or otherwise transferred ownership of, or agreed to assign or otherwise transfer ownership of, any Intellectual Property necessary to the operation of its businesses as presently conducted to any other Person.

&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) Each Person who is or was an employee or other Service Provider of the Company and/or who is or was involved in the creation or development of any Intellectual Property for the Company, following the incorporation thereof, has signed a valid and enforceable agreement containing an irrevocable assignment of all Intellectual Property Rights and Intellectual Property created or developed in the course of that Person's work with the relevant entity such that any and all rights in connection with such Intellectual Property reside solely with the Company, as well as confidentiality provisions protecting the Intellectual Property Rights and Intellectual Property of the Company, 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;(e) No funding, facilities or personnel of any Governmental Authority or any public or private university, college, or other educational or research institution, was used, directly or indirectly, to create or develop, in whole or in part, any of the Company Intellectual Property. The Company did not receive and/or apply to receive any Government Grant.

&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 is not currently nor has it ever been a member or promoter of, or a contributor to, any industry standards body or similar organization that could require or obligate the Company to grant or offer to any other Person any license or right to any of the Intellectual Property 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;(g) Except as set forth on <u>Schedule 4.12,</u> the Company is not bound by, and none of the Intellectual Property owned by the Company is subject to, any contract or agreement containing any covenant or other provision (other than any restrictions that may be imposed by applicable Law) that in any way limits or restricts the ability of the Company to use, exploit, assert, or enforce any of the Intellectual Property owned by the Company anywhere in the world.

&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) To the Knowledge of the Seller, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any of the Intellectual Property of the Company in any material respect.

&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) To the Knowledge of the Seller, the Company has never infringed (directly, contributorily, by inducement or otherwise), misappropriated or otherwise violated any intellectual property right of any other Person; (ii) no infringement, misappropriation or similar claim or legal proceeding is pending or has been threatened against the Company or against any other Person who may be entitled to be indemnified, defended, held harmless or reimbursed by the Company with respect to such claim or legal proceeding; and (iii) the Company has never received any notice or other communication (in writing or otherwise) relating to any actual, alleged or suspected infringement, misappropriation or violation of any intellectual property right of another Person.

&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) The transactions contemplated by this Agreement shall not create any obligation, that would require the Company to license Company Intellectual Property to any third 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;(k) The Company is under no obligation to pay royalties or other fees for the use by the Company of Intellectual Property of other third party, other than any commercially available, off-the-shelf software subject to a shrink-wrapped or similar type of non-negotiable license.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 <u>Contracts. Schedule *‎*4.14</u> lists the following contracts and other agreements which are in full force and effect as of the date hereof (other than those of a type disclosed in another Schedule) to which the Company is a 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;(a) &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) each contract, agreement or commitment in respect of the sale of products or the performance of services, or for the purchase or lease of inventories, equipment, raw materials, supplies, services or utilities which (i) involves payments or receipts by the Company of $25,000 or more and is not terminable by the Company at any time upon notice of 90 days or less, or (ii) is not to be fully performed within six months from the date 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any material agreement for the lease of personal property to or from any Person providing for lease payments in excess of $25,000 per annum;

&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) each partnership, joint venture or similar 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;(iv) indebtedness for or related to borrowed money, or any capitalized lease obligation, in excess of $50,000 or under which it has imposed a Security Interest on any of its assets, tangible or intangible;

&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;(v) any agreement with the Seller or any other shareholder 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any deferred compensation, severance, indemnification, or other plan or arrangement for the benefit of its Service Providers;

&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;(vii) any collective bargaining 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;(viii) any agreement under which the Company has advanced or loaned money to Service Providers outside the Ordinary Course of Business;

&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;(ix) any agreement pursuant to which the Company has been appointed an exclusive partner, reseller or distributor, or pursuant to which either entity has appointed another Person as an exclusive partner, reseller, or distributor;

&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;(x) any supply agreement that is with the Company's top 3 suppliers by spending calculated on an annual basis for the year of 2022;

&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;(xi) any agreement (A) imposing any restriction on the right or ability of the Company to (1) compete with any other Person; or (2) develop or distribute any technology or Products; or (B) imposing exclusive arrangements on the Company to acquire any product or other asset or any services from a single source;

&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;(xii) any agreement relating to the acquisition, transfer, use, development, sharing or license of any Intellectual Property of the Company y and licenses for any non-customized software that is not: (1) so licensed solely in executable or object code form pursuant to a nonexclusive, internal use software license; and (2) generally available on standard terms for less than $1,000 per copy, seat or user, 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;(xiii) any agreement constituting or relating to any (A) prime contract, subcontract, letter contract, purchase order or delivery order executed or submitted to or on behalf of any Governmental Authority or any prime contractor or higher-tier subcontractor, or under which any Governmental Authority or any such prime contractor or subcontractor otherwise has or may acquire any right or interest, or (B) quotation, bid or proposal submitted to any Governmental Authority or any proposed prime contractor or higher-tier subcontractor of any Governmental Authority;

&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;(xiv) contracts with any Governmental 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) contracts with any Person under which the Company has provided, is or will be providing prior to Closing, or is required to provide, any products or services, whether hosted or otherwise, subject to a "most favored nations" provision or similar such favorable pricing or commercial terms;

&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;(xvi) contracts under which a change of control (as defined therein) of the Company would result in a violation, breach or default, the creation of any additional rights (including rights of amendment, impairment, modification, suspension, revocation, acceleration, termination or cancellation) or the imposition of additional obligations or a loss of any rights under such contract, or require a consent or the delivery of notice under such contract; 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;(xvii) any other agreement that was entered into outside the Ordinary Course of Business or was inconsistent with the past practices of the Company, since December 31, 2021.

The contracts and agreements in the respective categories described in clauses (i) through (xiv) above are referred to in this Agreement as "**Material Contracts**."

&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 has made available to Buyer accurate and complete copies of all Material Contracts, including all amendments thereto. Each Material Contract is valid and in full force and effect and is enforceable by the Company, in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

&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) Neither the Company, nor the Seller nor, to the Knowledge of Seller, any other Person which is a party thereto has violated or breached in any material respect, or committed any material default under, any Material Contract. To the Knowledge of the Seller, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to: (A) result in a material violation or breach of any of the provisions of any such Material Contract; (B) give any Person the right to declare a default or exercise any remedy under any such Material Contract; (C) give any Person the right to accelerate the maturity or performance of any such Material Contract; or (D) give any Person the right to cancel, terminate or modify any Material Contract.

&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 Company has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Material Contract, nor has it waived any of its material rights under any Material Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 <u>Insurance</u>. <u>Schedule *‎*4.15</u> sets forth the following information with respect to each insurance policy to which the Company is a party, a named insured, or otherwise the beneficiary of coverage:

&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 name of the insurer, the name of the policyholder and the name (or group designation) of each covered insured; 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;(b) the policy number and the period of coverage.

With respect to each such insurance policy, no claim for coverage by the Company has been denied. The Company has not received any written notice of cancellation or termination with respect to any insurance policy. All premiums due and payable with respect to the insurance policies of the Company set forth in <u>Schedule ‎4.15</u> have been fully paid and all such insurance policies are valid and enforceable policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16 <u>Litigation</u>. There is no claim, litigation, action, arbitration, suit, or judicial proceeding pending or, to the Knowledge of Seller, threatened in writing, against the Company, at law or equity, before any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17 <u>Labor and Employment Matters.</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;(a) The Company is in compliance in all respects with all applicable Laws respecting employment and employment practices and terms and conditions of employment. Neither the Company or, to the Knowledge of the Seller, any of its respective Service Providers, representatives or employees has committed any unfair labor practices in connection with the operation of the businesses of the Company, and there is no pending or, to the Knowledge of the Seller, threatened in writing charge or complaint against the Company by any Governmental Authority.

&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 Sellers delivered to the Buyer a complete and accurate list of all Company employees (the "**Employees**") and Service Providers (with respect to Service Providers who are not Employees), which list shall include name, department, position and job title, date of hire or contract, hourly pay rate for hourly employees, annual salary for salaried employees, target bonus or incentive compensation for the current year, current status (full-time, part-time, temporary, seasonal, or other) (the "**Employee Information List**").

&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) all Employees are employed on an at-will basis by the Company and may be terminated by providing a prior notice of termination which does not exceed 30 days at any time with or without cause and without any severance (except for statutory severance pay payable to Employees of the Company who work in Israel).

&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 severance pay and accrued vacation days due to the Employees (if and to extent applicable) are fully funded or accrued on the Financials Statements and there are no circumstances whereby any Employee might be entitled to compensation on termination of employment beyond the statutory severance pay to which such Employee is entitled (if at all).

&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 Service Providers who are not Employees have in their engagement agreements customary provisions regarding their non-employee status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.18 <u>Compliance with Laws and Permits; Clinical and Regulatory Matters</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;(a) The Company holds and has at all times held and complied with all Permits necessary for the conduct, ownership, use, occupancy or operation of the businesses of the Company. Such Permits are valid and in full force and effect in all material respects and the Closing hereunder is not expected to result in the revocation or breach of the Company of any such Permits. As of the date hereof, the Company has not received any written notice from any Governmental Entity (a) alleging any actual or possible violation of or failure to comply with any term or requirement of any such Permit, or (b) regarding any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any such Permit, nor, to the Knowledge of the Sellers, is there a basis for such allegation of violation or revocation, withdrawal, suspension, cancellation, termination or modification.

&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) All of the Products have been and are being designed, researched, developed, investigated, manufactured, tested, packaged, labeled, stored, distributed, promoted, marketed, imported, exported and sold in compliance in all material respects with all applicable Laws, including those relating to clinical research, good clinical practices, good laboratory practices, investigational use, premarket clearance or approval, CE marking, quality systems, international standards for quality management systems as adopted by the International Organization for Standardization (ISO), record keeping, labeling, advertising, device importation and exportation, adverse event reporting, recalls, and reporting of corrections and removals.

&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 Company has not received any written notice from any Governmental Authority alleging or asserting a material noncompliance with any 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;4.19 <u>Certain Business Relationships with Company</u>. Except as described in <u>Schedule 4.19</u>, no Seller or its Affiliates or any Related Party thereof, (a) owns any material asset, tangible or intangible, which is used in the business of Company, (b) is owed money by or owes money to the Company, (c) has entered into, or has had any direct or indirect financial interest in, any contract, transaction or business dealing involving the Company, (d) is competing, directly or indirectly, with the Company, (e) is a member, manager, director, officer or employee of, or consultant to, or owns, directly or indirectly, any interest in, any vendor, supplier or customer of the Company, or is in any way associated with or involved in the business of the Company (except in his or her official capacity as a Service Provider, director, officer or employee of the Company, as the case may be), (f) has any interest in or has filed any application with respect to any Intellectual Property, which arises out of or relates to the Company or its businesses, (g) has any claim or right against the Company (other than rights to receive compensation for, or expense reimbursement in connection with, services performed as an Service Provider, employee or director) or (h) is party to any transactions, contracts or understandings with Company that would be considered a "transaction" under Item 404 of Regulation S-K under the Securities Act if Company were to be subject to such regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.20 <u>Product Liability</u>. The Company did not develop or commercialize any products since its incorporation, and accordingly has not given or made any warranties to third Persons with respect to any products developed by it, except for the warranties imposed by the provisions of the Material Contracts as listed on <u>Schedule *‎*4.14</u> and applicable Laws. The Seller has no Knowledge of any present claim against the Company not fully covered by insurance for clinical trial liability or product liability on account of any express or implied warranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.21 <u>Anti-Corruption Compliance.</u> The Company has not (and none of the Company's officers or directors, agents, Service Providers or any other Person acting on behalf of the Company has), directly or indirectly: (a) taken any action which would cause it to be in violation of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder, or any similar anti-corruption or anti-bribery legal requirements applicable to the Company in any jurisdiction; (b) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (c) made, offered or authorized any unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly; or (d) made, offered or authorized any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly. No Service Provider, officer or director of Company has bribed another Person intending to obtain or retain business or an advantage in the conduct of business for 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;4.22 <u>Export Control Legal Requirements.</u> The Company has never made any exports of product, knowledge, or otherwise, from Israel or any other country. The Company has complied with all applicable export and re-export control Laws, has not released or disclosed controlled technical data, technology, biological or chemical materials to any foreign national whether in the United States, Israel, or abroad, and the Seller has no Knowledge of any fact or circumstance that could result in any Liability of the Company for violation of export control and import restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.23 <u>Full Disclosure</u>

This Agreement (including the Schedules and any closing deliverables) does not as of the date hereof, and will not as of the Closing: (i) contain any representation, warranty or information that is false or misleading with respect to any material fact; or (ii) omit to state any material fact necessary in order to make the representations, warranties and information contained and to be contained herein and therein (in the light of the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading. The Seller has no Knowledge of any information or other fact that is or may become materially adverse to the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations, financial performance or prospects of the Company, that has not been set forth in this Agreement or in the Schedules.

ARTICLE 5

<u>COVENANTS</u>

ARTICLE 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Access and Investigation</u>. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to <u>Article 8</u> or the Closing (the "**Pre-Closing Period**"), the Company shall: (a) provide Buyer or an Affiliate acting on its behalf and Buyer's representatives with reasonable access during normal business hours to the Company's personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Company; and (b) provide Buyer or an Affiliate acting on its behalf and Buyer's representatives with copies of such existing books, records, Tax Returns, work papers and other documents and information relating to the Company, and with such additional financial, operating and other data and information regarding the Company, as Buyer or an Affiliate acting on its behalf may reasonably request. During the Pre-Closing Period, Buyer or an Affiliate acting on its behalf may make inquiries of Persons having business relationships with the Company, and the Company and its representatives shall help facilitate (and shall cooperate fully with Buyer or an Affiliate acting on its behalf in connection with) such inquiries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Operation of the Business of the Company</u>. During the Pre-Closing Period, the Company and the Sellers shall: (i) use its reasonable best efforts to maintain the Company's business and assets; (ii) not issue or agree to issue any additional shares or any other voting security or any rights to acquire any such additional shares or voting security in the Company; (iii) in respect of the Company, not engage in any additional borrowings, loans or capital leases; (iv) not change the terms of compensation of Service Providers of the Company; (v) in respect of the Company, not authorize or consummate any dividends or distributions or sale of assets or payment of management fees to Seller or others, or any consolidation, merger, sale of any of its assets or purchase of capital assets or purchase of all or substantially all of the assets other entity, or any other extraordinary corporate transaction; and (vi) not change any of the Company's methods of accounting or accounting practices in any material respect or in respect of Taxes, nor, in respect of the Company, make or change any Tax election or enter into a Tax related agreement, nor commence or settle any legal action, nor enter into any material transaction or take any other material action outside the Ordinary Course of Business or inconsistent with its past practices. Notwithstanding the foregoing, the Company may take any action described in clauses (i) through (vi) above if: (A) Buyer or an Affiliate acting on its behalf gives its prior written consent to the taking of such action by the Company; or (B) such action is expressly 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;5.3 <u>Notification</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;(a) <u>Notification by Sellers</u>. During the Pre-Closing Period, each Seller and the Company shall promptly notify Buyer and the Stockholder Representative in writing of: (i) the discovery by such Seller and/or the Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a breach of or an inaccuracy in any representation or warranty made by such Seller or the Company, as applicable, in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a breach of or an inaccuracy in any representation or warranty made by such Seller or the Company, as applicable, in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any breach of any covenant or obligation of such Seller and/or the Company, as applicable; and (iv) any event, condition, fact or circumstance with respect to such Seller and/or the Company, as applicable, that would make the timely satisfaction of any of the conditions set forth in <u>Article 6</u> impossible or unlikely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notification by Buyer</u>. During the Pre-Closing Period, Buyer shall promptly notify the Stockholder Representative in writing of: (i) the discovery by Buyer of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a breach of or an inaccuracy *in* any representation or warranty made by Buyer in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a breach of or an inaccuracy in any representation or warranty made by Buyer in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any breach of any covenant or obligation of the Buyer; and (iv) any event, condition, fact or circumstance with respect to Buyer that would make the timely satisfaction of any of the conditions set forth in <u>Article 7</u> impossible or unlikely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Updates</u>. If any event, condition, fact or circumstance that is required to be disclosed pursuant to <u>Section 5.1(a)</u> requires any material change in any Schedule attached hereto either by itself or together with other events, conditions, facts or circumstances, or if any such event, condition, fact or circumstance either by itself or together with other events, conditions, facts or circumstances, would require such a material change assuming the Schedule were dated as of the date of the occurrence, existence of discovery of such event, condition, fact or circumstance, then the Stockholder Representative shall promptly inform the Buyer in writing of such update and shall use its reasonable best efforts to deliver to Buyer an updated Schedule specifying such change. Any such update, if agreed to in writing by the Buyer, shall be deemed to supplement or amend the relevant Schedule for the purpose of: (i) determining the accuracy of any of the representations and warranties made by the Sellers in this Agreement; and (ii) determining whether any of the conditions set forth in <u>Article 6</u> have been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>No Negotiation</u>. During the Pre-Closing Period, each Seller shall not and shall use its best efforts to cause the Company, its directors, officers, employees and other agents not to, directly or indirectly: (a) solicit or encourage the initiation or submission of any expression of interest, inquiry, proposal or offer from any Person (other than Buyer) relating to a possible sale or transfer of Seller's Shares; (b) participate in any discussions or negotiations or enter into any agreement, understanding or arrangement with, or provide any non-public information to, any Person (other than Buyer or its Representatives) relating to or in connection with a possible sale or transfer of Seller's Shares; or (c) entertain or accept any proposal or offer from any Person (other than Buyer), relating to a possible sale or transfer of Seller's Shares. Each Seller shall promptly notify Buyer of any inquiry, indication of interest, proposal or offer relating to a possible sale or transfer of such Seller's Shares that is received by such Seller during the Pre-Closing Period (including the identity of the Person making or submitting such inquiry, indication of interest, proposal or offer, and the terms thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Filings and Consents</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;a) <u>Filings</u>. Subject to the provisions of <u>Section 5.15(a)</u> below, each party shall use commercially reasonable efforts to file, as soon as practicable after the date of this Agreement, all notices, reports and other documents required to be filed by such party with any Governmental Authority with respect to the transactions contemplated by this Agreement, and to submit promptly any additional information requested by any such Governmental Authority.

&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) <u>Efforts</u>. Subject to <u>Section 5.5(c)</u>, each party hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions necessary to consummate and make effective the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, but subject to <u>Section 5.5(c)</u>, each party to this Agreement: (i) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the transactions contemplated by this Agreement; and (ii) shall use commercially reasonable efforts to obtain each consent (if any) required to be obtained (pursuant to any applicable Law or contract, or otherwise) by such party in connection with 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;c) <u>Limitations</u>. Notwithstanding anything to the contrary contained in <u>Section 5.5(b)</u> or elsewhere in this Agreement, Buyer shall not have any obligation under this Agreement: (i) to divest or agree to divest (or cause any of its Affiliates or the Company to divest or agree to divest) any of its respective businesses, product lines or assets, or to take or agree to take (or cause any of its Affiliates or the Company to take or agree to take) any other action or to agree (or cause any of its Affiliates or the Company to agree) to any limitation or restriction on any of its respective businesses, product lines or assets; or (ii) to contest any legal proceeding relating to 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;5.6 <u>Ancillary Agreements</u>. As soon as possible following the date hereof and in any event prior to the Closing, each Seller shall execute and deliver to Buyer, as applicable, all agreements and documents set forth in <u>Article 6</u> to be executed by such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Resignation of Directors</u>. The Sellers shall (and shall cause the Company to) use commercially reasonable efforts to obtain and deliver to Buyer at or prior to the Closing the resignation of the directors of the Company listed on <u>Schedule 4.1</u> hereto, effective as of the later of the Closing and the date Buyer causes such director to be replaced (it being understood that such resignations shall not constitute a termination of employment by such director). In addition, at the Closing, the Company's Articles of Association shall be amended such that a majority of the holders of Company's shares shall be entitled to appoint members of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Reasonable Efforts</u>. Prior to the Closing: (a) the Sellers shall use all reasonable efforts to cause the conditions set forth in <u>Article 6</u> to be satisfied on a timely basis; and (b) Buyer shall use all reasonable efforts to cause the conditions set forth in <u>Article 7</u> to be satisfied on a timely basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 <u>Closing Balance Sheet</u>. No later than ten (10) days prior to the Closing, the Company shall deliver to Buyer a certificate setting forth the consolidated balance sheet of the Company as of the Closing Date, and prepared in accordance with GAAP based upon the Company's books and records in accordance with the Company's accounting policies and procedures consistently applied, in accordance with the Company's historic past practice, and which fairly presents the consolidated financial condition of the Company in all material respects as of the date stated, and setting forth the aggregate amount of the Company's assets (excluding cash and cash equivalents) as of immediately prior to the Closing Date <u>less</u> the aggregate amount of Liabilities and Transaction Expenses (the "**Closing Balance Sheet**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <u>Litigation Support</u>. If and for so long as any Party is actively contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with (a) any transaction contemplated under this Agreement, or (b) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction on or prior to the Closing Date involving the Seller, including, but not limited to any such matters arising out of a Party's defense of any matter subject to indemnification under <u>Article 9</u> as permitted pursuant to such <u>Article 9</u>, each of the other Parties shall cooperate with such Party and such Party's counsel in the defense or contest, make available their personnel, and provide such testimony and access to their books and records as shall be necessary in connection with the defense or contest, all at the sole cost and expense of the contesting or defending Party (unless the contesting or defending Party is entitled to indemnification therefor under <u>Article 9</u>). Notwithstanding the foregoing, each Seller shall only be required to provide such support, only to the extent the events described in 5.10(a) and 5.10(b) pertain directly to such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 <u>Financial Information Assistance</u>. The Sellers shall, and shall use their best efforts to cause the Company to, provide Buyer all such information as is reasonably necessary to enable Buyer to prepare and file with the SEC any pro forma financial statements of the Buyer consolidated with the Company which may be required to be filed by Buyer pursuant to the Exchange Act and/or the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>5.12 Allocation of Taxes</u>. In the case of any Taxes relating to a Tax period that includes (but does not end on) the Closing Date (the "**Straddle Period**"), the portion of such Tax which relates to the Pre-Closing Tax Period shall (i) in the case of any Taxes other than Taxes based upon or related to income, gains, payroll, receipts, withholdings or value added tax be deemed to be the amount of such Tax for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in the Pre-Closing Tax Period and the denominator of which is the number of days in the entire Straddle Period, and (ii) in the case of any Tax based upon or related to income, gains, receipts, withholdings or value added tax be deemed equal to the amount which would be payable if the relevant Straddle Period ended on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13 Preparation and submission of Tax Returns & Tax Contest<u>.</u> Buyer shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company for the Pre-Closing Tax Period and Straddle Period that are required to be filed after the Closing Date. All Returns filed by Buyer after the Closing Date will be prepared in a manner consistent with the past practice and custom of the Company to the extent consistent with applicable Law. After the Closing Date, Buyer shall have the exclusive right to represent the interests of the Company in any and all Tax contests (**"Tax Contest"**); provided, however, that the Stockholders Representative shall have the right to participate in any such Tax Contest and to employ counsel at the Sellers expense of its choice for purposes of such participation to the extent that any such Tax Contest would reasonably be expected to result in a Tax indemnification liability of the Sellers pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14 <u>Listing of Upfront Shares; Removal of Legends</u>. Buyer shall use commercially reasonable efforts to cause the Upfront Shares to be approved for listing on the Tel Aviv Stock Exchange prior to the Closing. In addition, at Closing the Buyer and the Sellers receiving Upfront Shares will execute the Lock-Up and Registration Rights Agreement in the form attached as <u>Schedule 5.14</u> (the "**Registration Rights Agreement**"), providing, i*nter alia*, for the registration for resale of the Upfront Shares. Following the lapse of the Lock-Up Period (as defined in the Registration Rights Agreement), certificates evidencing the Upfront Shares shall not contain any legend: (i) while a registration statement covering the resale of such security is effective under the Securities Act (provided that if the holder is selling pursuant to the effective registration statement registering the securities for resale, the holder agrees to only sell such securities during such time that such registration statement is effective and such holder is not aware or has not been notified by the Buyer that such registration statement has been withdrawn or suspended, and only as permitted by such registration statement), or (ii) following any sale of such Upfront Shares pursuant to Rule 144, or (iii) if such Upfront Shares are eligible for sale under Rule 144 without any volume or manner of sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Buyer shall cause its counsel to issue a legal opinion to the relevant transfer agent promptly if required by the transfer agent to effect the removal of the legend hereunder. The Buyer and/or the Buyer's transfer agent, may require an opinion of counsel in form and substance satisfactory to the Buyer and/or the Buyer's transfer agent to the effect that any proposed legend removal, transfer or resale is in compliance with the Securities Act and any applicable state securities laws and the securities laws of other jurisdictions. If there is an effective registration statement to cover the resale of the Upfront Shares, or if such Upfront Shares may be sold under Rule 144 without any volume or manner of sale restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission), Israeli Securities Laws or directives of the TASE, then such Upfront Shares shall be issued free of all legends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15 <u>Restrictive Covenants</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;(a) <u>Public Announcements; Confidentiality</u>. From and after the date 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;(i) each Seller and the Company hereby covenants and undertakes to Buyer, as to itself, that such Seller and the Company shall not (and such Seller shall ensure that its representatives do not) issue any press release or make any public statement regarding (or otherwise disclose to any Person the existence or terms of) this Agreement or any of the other transactions or documents contemplated by this Agreement, without Buyer's prior written consent.

&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) each of the Sellers and the Company agrees, as to itself, that at all times after the date of this Agreement the Sellers shall (and the Sellers shall ensure that their respective representatives including the Stockholder Representative) keep strictly confidential all Confidential Information relating to the Company and the Buyer, including the Intellectual Property 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;(iii) Notwithstanding anything to the contrary in this Agreement, in case any Confidential Information or other information concerning the Parties hereto or the transactions contemplated hereunder is information that may be considered "material non-public information" pursuant to the securities laws and regulations governing Buyer and the securities exchanges on which its shares are traded – each of the Sellers and the Company hereby undertakes, as to itself, not to make any unlawful use of such information, including by way of effecting a transaction in a security of Buyer while the information or any part thereof is in the Seller's or the Company's possession. Each of the Sellers and the Company represents, as to itself, that it is aware, and will advise its respective representatives directors, officers, employees, consultants and agents who are informed of the matters that are the subject of this Agreement, of the restrictions imposed by the applicable securities laws on the purchase or sale of securities by any person who has received material, non-public information regarding a company with publicly traded securities, as well as the restrictions making it unlawful to communicate such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell securities in reliance upon such information.

&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) Notwithstanding that which is stated elsewhere in this Agreement, to the extent that Buyer is required under any applicable securities law, or by the applicable rules of any stock exchange on which Buyer lists its securities, to deliver any notice to a stock exchange or relevant securities regulatory authority and/or issue any press release or public announcement with respect to the commercial relationship between the Parties hereto and/or this Agreement, including the filing of a copy of this Agreement or any schedules, exhibits or annexes thereof, as may be required by law, it shall be permitted to issue such release, make such announcement, or file such filing, provided Buyer has afforded the Stockholder Representative a reasonable time to review such release and has considered, in good faith, the Stockholder Representative's comments on such release. Notwithstanding the foregoing, the form of the first Report of Private Issuer on Form 6-k which is required to be submitted by the Buyer to the Commission in connection with this Agreement is attached hereto as <u>Schedule 5.15</u>. Without prejudice to the foregoing, with respect to any subsequent public disclosure of the terms of this Agreement which has not been previously made public, including the filing of the form of this Agreement, Buyer shall give advance notice to Stockholder Representative of such impending disclosure which shall be coordinated with the Stockholders Representative, and Buyer shall endeavor in good faith to assist the Stockholder Representative to secure and enable confidential treatment of confidential parts of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Non Solicitation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Non-Solicitation of Mr. [\*\*\*\*\*]</u>. Each Seller covenants and agrees that it will not, knowingly solicit, induce, employ or engage Mr. [\*\*\*\*\*] in activities competitive with the Company's Field as defined in the Consulting and Non-Compete Agreement at any time during a 12-month period following the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(ii)</u>. Nothing contained herein shall be deemed to derogate from the terms and conditions of the Consulting and Non-Compete Agreement entered between the Buyer and Mr. [\*\*\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The parties recognize and affirm that, in the event of a breach by a Seller and/or Mr. [\*\*\*\*\*], as applicable, of any of the provisions of this <u>Section 5.15(b)</u>, money damages would be inadequate and Buyer would not have any adequate remedy at Law. Accordingly, the parties agree that Buyer shall have the right, in addition to any other rights and remedies existing in their favor, to enforce their rights and each Seller's and/or Mr. [\*\*\*\*\*]'s, as applicable, obligations under this <u>Section 5.15(b)</u> by an action or actions for specific performance, injunction and/or other equitable relief against a Seller and/or Mr. [\*\*\*\*\*], as applicable, without posting any bond or security to enforce or prevent any violations, whether anticipatory, continuing or future, of the provisions of this <u>Section 5.15(b)</u>, including the extension of the relevant period for such covenant, as applicable, by a period equal to (i) the length of the violation of this <u>Section 5.15(b) *plus*</u> (ii) the length of any court actions necessary to stop such violation. Each Seller and/or Mr. [\*\*\*\*\*], as applicable, agrees that the restrictions contained in this Section are reasonable in all respects and are necessary to protect the goodwill of the Company and each Seller and/or Mr. [\*\*\*\*\*], as applicable, shall not assert any claim regarding the appropriateness of the injunctive and/or equitable relief afforded to Buyer pursuant to this Section. Each Seller and/or Mr. [\*\*\*\*\*], as applicable, acknowledges that in the event that any covenant contained in this <u>Section 5.15(b)</u> should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The covenants contained in this <u>Section 5.15(b)</u> and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Acknowledgements; Remedies</u>. Without derogating the provisions of <u>Section 5.15(b)</u>, each Seller and/or Mr. [\*\*\*\*\*] acknowledges and agrees that (i) the covenants and agreements set forth in this <u>Section 5.15</u> were a material inducement to the Buyer to enter into this Agreement and to perform its obligations hereunder, (ii) the Buyer and its stakeholders would not obtain the benefit of the bargain set forth in this Agreement as specifically negotiated by the Parties if the Seller or any of its Affiliates breached any provision of this <u>Section 5.15,</u> (iii) any breach of any provision of this <u>Section 5.15</u> by the Seller, Mr. [\*\*\*\*\*] or the Stockholder Representative or any of their respective Affiliates, as applicable, would result in a significant loss of goodwill by the Buyer and the Company, (iv) the Upfront Payment and the Upfront Shares is sufficient consideration to make the covenants and agreements set forth herein enforceable, (v) the length of time, scope and geographic coverage of the covenants set forth in this <u>Section 5.15</u> is reasonable given the benefits each Seller and/or Mr. [\*\*\*\*\*] will directly or indirectly receive hereunder, and (vi) Seller and/or Mr. [\*\*\*\*\*], as applicable, shall not challenge the reasonableness of the time, scope, geographic coverage or other provisions of this <u>Section 5.15</u> in any Proceeding, regardless of who initiates such Proceeding. Each Seller and/or Mr. [\*\*\*\*\*] agrees that in the event of any actual or threatened breach by the Seller and/or Mr. [\*\*\*\*\*] or any of their respective Affiliates, as applicable, of any of the provisions contained in this <u>Section 5.15,</u> the Buyer will be entitled to injunctive and other equitable relief without (A) posting any bond or other security, (B) proving actual damages and (C) showing that monetary damages are an inadequate remedy. Nothing contained herein will be construed as prohibiting the Buyer from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove. Each Seller and/or Mr. [\*\*\*\*\*], as applicable, will cause each of its Affiliates to comply with this <u>Section 5.15,</u> and will be liable for any breach by any of its Affiliates of this <u>Section 5.15</u>. In the event of a breach or violation by a Seller and/or Mr. [\*\*\*\*\*] or any of their respective Affiliates, as applicable, of this <u>Section 5.15,</u> the relevant period for such covenant with respect to the Seller and/or Mr. [\*\*\*\*\*], as applicable, will be extended by a period of time equal to the period of time during which such Person violates the terms of this <u>Section 5.15</u>.

Each Seller and/or Mr. [\*\*\*\*\*], as applicable, acknowledges and agrees that (i) it has had an opportunity to review with its, his or her own tax advisors the tax consequences of the sale of the Shares and the transactions contemplated by this Agreement. Each Seller understands that it, he or she must rely solely on its, his or her advisors and not on any statements or representations made by Buyer, the Company or any of their lawyers, advisors, agents or representatives. Each Seller shall be responsible for such Seller's tax liability for Seller that may arise as a result of the acquisition of the Shares, or the transactions contemplated by this Agreement, and (ii) All information provided, or to be provided, to Buyer, the Paying Agent or to any Governmental Entity, by or on behalf of such Seller for purposes of enabling Buyer, the applicable Paying Agent or the Governmental Entity to determine the amount of Tax to be deducted and withheld, if any, from the consideration payable to such Seller pursuant to this Agreement and for the ITA to issue a Withholding Tax Certification is and will be accurate and complete when provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.16* <u>Bring Along</u>. Immediately following the Effective Date, the Company shall deliver any required notices to any Remaining Holders (as defined in the Company Articles), and the Company shall take all further action as necessary to carry out the Bring Along with respect to any Remaining Holders which have not executed this Agreement as Sellers up to and including the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17 <u>Release of Claims.</u> Effective as of the Closing, each of the Sellers does hereby for itself and Persons it represents, controlled Affiliates, partners, heirs, beneficiaries, successors and assigns, if any, release and forever discharge the Company and its officers, directors, managers, members, shareholders, Affiliates, employees, agents successors and assigns from and against any and all claims, demands, damages, debts, liabilities, obligations, costs, expenses (including attorneys' and accountants' fees and expenses), actions and causes of action of any nature whatsoever, whether now known or unknown, suspected or unsuspected, in each case that existed or occurred on or before the Closing Date ("**Released Matters**") that such Seller, in its his or her capacity as a shareholder, investor, officer, director, contractor, consultant or employee of the Company has or may have; <u>provided</u> that this release shall not extend to any right of the Sellers under this Agreement. It is the intention of the Sellers in executing this release that this release contained in this <u>Section 5.17</u> shall be effective as a full and final accord and satisfaction and general release of and from all Released Matters and the final resolution by the Sellers of all Released Matters. Each of the Sellers hereby represents to Buyer that such party has not voluntarily or involuntarily assigned or transferred or purported to assign or transfer to any Person any Released Matters and that no Person other than such party has any interest in any Released Matter by Law or contract or by virtue of any action or inaction by such party. The invalidity or unenforceability of any part of this <u>Section 5.17</u> shall not affect the validity or enforceability of the remainder of this <u>Section 5.17</u>, which shall remain in full force and effect. Effective as of the Closing, each of the Sellers does hereby for itself and Persons it represents, controlled Affiliates, partners, heirs, beneficiaries, successors and assigns, if any, release and forever discharge the Buyer, the Company and their respective officers, directors, managers, members, shareholders, Affiliates, employees, agents successors and assigns from and against any and all claims, demands, damages, debts, liabilities, obligations, costs, expenses (including attorneys' and accountants' fees and expenses), actions and causes of action of any nature whatsoever, whether now known or unknown, suspected or unsuspected, that arise from any action taken or omitted to be taken by the Company under this Agreement or actions taken in connection with the preparation and delivery of any document by the Company hereunder (including the Spreadsheet), and each Seller agrees that he, she or it will not seek to recover any amounts solely in connection therewith or thereunder from the Company, the Buyer or any of their respective Affiliates or representatives or any of the successors or assigns of any of the foregoing. Nothing contained herein shall not derogate from any right of the Sellers under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18 <u>Insurance</u>. Prior to the Closing, the Company may purchase, for the benefit of all officers and directors of the Company, policies of directors' and officers' and fiduciary liability "tail" or "run-off" insurance providing for such coverage as the Company and Buyer may determine in its sole discretion prior to the Closing; *provided*, *however*, that any costs and expenses related thereto shall be considered part of the Transaction Expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.19 <u>Post-Closing Product Development</u>. From and after the Closing, the Buyer and/or the Company shall use commercially reasonable efforts, at its expense, to develop, commercialize and market Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.20 <u>Information Rights</u>. Without derogating from the generality of <u>Section 5.19</u> and the reports to be provided pursuant to <u>Section 2.3(ix)</u> above, from and after the Closing, the Stockholder Representative, on behalf of the Sellers, shall be entitled to request Buyer (and/or Company's CEO) to provide, subject to customary confidentiality undertakings, and Buyer shall not unreasonably withhold, certain information with respect to Buyer's and/or Company's development and commercialization efforts of the Products, provided, however, that such requests will be made on a reasonable basis with an effort to limit such requests to up to once a year. Such information will be kept confidential by the Stockholder Representative may be considered material non-public information and restrict the Stockholder Representative and anyone on his behalf from trading the Buyer's shares according to any applicable securities law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.21 <u>Technology Return Option</u>. If, at any time during the period between the Closing and the date on which the last of the milestones set forth in Sections 2.3(i) and (ii) was attained, the Buyer decides to cease all further research, development or commercialization of the Technology in all jurisdictions worldwide, then the Buyer shall deliver to the Stockholder Representative a written notice of such cessation (the *"***Termination Notice**"). Within thirty (30) days of the Stockholder Representative's receipt of the Termination Notice, the Stockholder Representative, on behalf of the Sellers, may notify Buyer on its intention to acquire the Company Intellectual Property in consideration for (i) [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]), [\*\*\*\*\*] if the Termination Notice was provided prior to the successful completion of [\*\*\*\*\*] (as shall be clearly defined in such study protocol) with the [\*\*\*\*\*] and successful completion of the Technology Transfer in accordance with the Technology Transfer Plan, or (ii) [\*\*\*\*\*] Dollars ($[\*\*\*\*\*]) if the Termination Notice was provided after the aforesaid milestone, [\*\*\*\*\*] in each case plus [\*\*\*\*\*], by delivering a written notice (an "**Exercise Notice**") to the Buyer. If the Stockholder Representative does not deliver an Exercise Notice to the Buyer on or prior to the end of such thirty (30) day period, the Buyer shall have no further obligations to the Sellers pursuant to this <u>Section 5.21</u>. In the event the Buyer receives an Exercise Notice, the Buyer and the Stockholder Representative shall negotiate a purchase agreement based on the commercial terms indicated for the transfer and assignment of any and all rights held by the Buyer and its Affiliates related to the Company Intellectual Property to the Sellers, including (i) all documents and other materials filed by or on behalf of Buyer and its Affiliates in furtherance of applications for regulatory approval in the relevant territory with respect to Products; and (ii) all intellectual property, Know-how, inventions, conceptions, compositions, materials, methods, processes, data, information, records, results, studies and analyses, discovered or acquired by, or on behalf of the Buyer and its Affiliates, which relate directly to the Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.21 <u>General</u>. If at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request.

ARTICLE 6

<u>CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER</u>

The obligations of Buyer to cause the transactions contemplated by this Agreement to be consummated are subject to the satisfaction (or waiver by Buyer), at or prior to the Closing, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Accuracy of Representations</u>.

Each of the representations and warranties of each Seller which is a party to a Transaction Document containing such representations and warranties (whether as original party, transferee or by joinder agreement) contained in a Transaction Document or any schedule, certificate or other document delivered pursuant thereto or in connection with the transactions contemplated thereby that are subject to materiality or similar qualifications or exceptions will be true and correct in all respects on and as of the date of this Agreement and as of the Closing as if made at and as of the Closing (other than such representations and warranties that are made as of a specified date, which representations and warranties will be true and correct in all respects as of such date), and each of the representations and warranties of each Seller which is a party to a Transaction Document containing such representations and warranties (whether as original party, transferee or by joinder agreement) contained in a Transaction Document or any schedule, certificate or other document delivered pursuant thereto or in connection with the transactions contemplated thereby that are not subject to materiality or similar qualifications or exceptions, all as may be updated in the Disclosure Schedule by the Stockholder Representative to reflect changes between signing and Closing, will be true and correct in all material respects on and as of the date hereof and as of the Closing as if made at and as of the Closing (other than such representations and warranties that are made as of a specified date, which representations and warranties will be true and correct in all material respects as of such date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Performance of Covenants</u>. Each of the covenants and obligations that the Company, and/or Sellers, are required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects. Specifically, Shares constituting all of the issued and outstanding share capital of the Company shall be purchased by the Buyer pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Governmental and Other Consents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a) Governmental Consents</u>. All filings with, notices to, and other consents of any Governmental Authority required to be made or obtained on or prior to the Closing Date in connection with the transactions contemplated by this Agreement shall have been made or obtained and shall be in full force and effect and any waiting period under any applicable antitrust or competition law, regulation or other applicable Law shall have expired or been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) TASE Approval. The TASE Approval has been received by the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>No Material Adverse Effect</u>. Since the date of this Agreement, there shall not have occurred any Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Deliverables</u>. The Seller shall have delivered to Buyer each of the deliverables detailed in <u>Section 2.5</u> above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>No Restraints</u>. No temporary restraining order, preliminary or permanent injunction or cease and desist or other order preventing the consummation of the transactions contemplated by this Agreement, or imposing fines, assessments, costs, liabilities or penalties in respect thereof, shall have been issued by any court of competent jurisdiction or Governmental Authority and remain in effect, and there shall not be any legal requirement enacted or deemed applicable to the transactions contemplated by this Agreement that makes consummation of such transactions illegal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 <u>No Legal Proceedings</u>. No Governmental Authority and no other Person shall have commenced or threatened (or made any determination) to commence any legal proceeding: (a) challenging any of the transactions contemplated by this Agreement or seeking the recovery of damages in connection with any of the transactions contemplated by this Agreement; (b) seeking to prohibit or limit the exercise by Buyer of any material right pertaining to its ownership of the Shares; (c) seeking to materially restrict or condition, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the transactions contemplated by this Agreement; or (d) seeking to compel any of the Company, Buyer or any Affiliate of Buyer to dispose of or hold separate any material assets as a result of the transactions contemplated by this Agreement.

ARTICLE 7

<u>CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS</u>

The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or waiver by the Stockholder Representative), at or prior to the Closing, of the following conditions, as determined by the Stockholder Representative:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Accuracy of Representations</u>.

Each of the representations and warranties of the Buyer contained in the Transaction Documents or any schedule, certificate or other document delivered pursuant thereto or in connection with the transactions contemplated thereby that are subject to materiality or similar qualifications or exceptions will be true and correct in all respects on and as of the date of this Agreement and as of the Closing as if made at and as of the Closing (other than such representations and warranties that are made as of a specified date, which representations and warranties will be true and correct in all respects as of such date), and each of the representations and warranties of the Buyer contained in the Transaction Documents or any schedule, certificate or other document delivered pursuant thereto or in connection with the transactions contemplated thereby that are not subject to materiality or similar qualifications or exceptions will be true and correct in all material respects on and as of the date hereof and as of the Closing as if made at and as of the Closing (other than such representations and warranties that are made as of a specified date, which representations and warranties will be true and correct in all material respects as of such date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Performance of Covenants</u>. Each of the covenants and obligations that Buyer is required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>The Consideration</u>. The Upfront Payment was delivered to the Paying Agent and certificates (whether physical or digital) evidencing the Upfront Shares, were deposited with the Paying Agent, or a formal approval from BNYM indicating that the Upfront Shares have been registered in the name of the Sellers as set forth in the Spreadsheet, have been provided to the Paying Agent, all in accordance with the Paying Agent Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>No Restraints</u>. No temporary restraining order, preliminary or permanent injunction or cease and desist or other order preventing the consummation of the transactions contemplated by this Agreement, or imposing fines, assessments, costs, liabilities or penalties in respect thereof, shall have been issued by any court of competent jurisdiction or Governmental Authority and remain in effect, and there shall not be any legal requirement enacted or deemed applicable to the transactions contemplated by this Agreement that makes consummation of such transactions illegal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>No Legal Proceedings</u>. No Governmental Authority and no other Person shall have commenced or threatened (or made any determination) to commence any legal proceeding: (a) challenging any of the transactions contemplated by this Agreement or seeking the recovery of damages in connection with any of the transactions contemplated by this Agreement; (b) seeking to prohibit or limit the exercise by Seller of any material right pertaining to its ownership of the Upfront Shares; or (c) seeking to materially restrict or condition, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>No Material Adverse Effect</u>. Since the date of this Agreement, there shall not have occurred any Buyer Material Adverse Effect.

ARTICLE 8

<u>TERMINATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Termination Events</u>. This Agreement may be terminated prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by the mutual written consent of Buyer and Stockholder Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Buyer or the Stockholder Representative if: (i) a court of competent jurisdiction or other Governmental Authority shall have issued a final and non-appealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or (ii) there shall be any legal requirement enacted, promulgated, issued or deemed applicable to the transactions contemplated by this Agreement by any Governmental Authority that would make consummation of such transactions illegal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by Buyer if: (i) any of the representations and warranties of the Sellers contained in this Agreement shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set forth in <u>Section 6.1</u> would not be satisfied; (ii) any of the covenants and obligations which the Sellers is required to comply with or to perform as set forth in this Agreement shall have been breached such that the condition set forth in <u>Section 6.2</u> would not be satisfied; or (iii) a Company Material Adverse Effect shall have occurred and the change or effect resulting therefrom continues in effect such that the condition set forth in <u>Section 6.4</u> would not be satisfied; *provided, however,* that, for purposes of clauses "(i)" and "(ii)" only, if an inaccuracy in any of the representations and warranties of the Sellers as of a date subsequent to the date of this Agreement or a breach of a covenant or obligations by the Sellers is curable by the Stockholder Representative or the Sellers through the use of reasonable efforts before 19:00 p.m. (Israel time) on the 14<sup>th</sup> day after Buyer notifies the Stockholder Representative in writing of the existence of such inaccuracy or breach (the **"Sellers Cure Period'')*,*** then Buyer may not terminate this Agreement under this <u>Section 8.l(d)</u> as a result of such inaccuracy or breach prior to the expiration of the Sellers Cure Period, provided that the Stockholder Representative or the Sellers, as applicable, during the Sellers Cure Period, continue to exercise reasonable efforts to cure such inaccuracy or breach (it being understood that Buyer may not terminate this Agreement pursuant to this <u>Section 8.l(d)</u> with respect to such inaccuracy or breach if such inaccuracy or breach is cured prior to the expiration of the Sellers Cure Period); or (iv) any of the other conditions to Closing set forth in <u>Section 6</u> have not been satisfied by within ten (10) business days following execution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) by the Sellers if: (i) any of Buyer's representations and warranties contained in this Agreement shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set forth in <u>Section 7.1</u> would not be satisfied; or (ii) if any of Buyer's covenants contained in this Agreement shall have been breached such that the condition set forth in <u>Section 7.2</u> would not be satisfied; or (iii) a Buyer Material Adverse Effect shall have occurred and the change or effect resulting therefrom continues in effect such that the condition set forth in <u>Section 7.4</u> would not be satisfied; *provided, however,* that if an inaccuracy in any of Buyer's representations and warranties as of a date subsequent to the date of this Agreement or a breach of a covenant by Buyer is curable by Buyer through the use of reasonable efforts before 19:00 p.m. (Israel time) on the 14<sup>th</sup> day after the Stockholder Representative notifies Buyer in writing of the existence of such inaccuracy or breach (the **"Buyer Cure Period"**), then the Stockholders Representative may not terminate this Agreement under this <u>Section 8.l(e)</u> as a result of such inaccuracy or breach prior to the expiration of the Buyer Cure Period, provided Buyer, during the Buyer Cure Period, continues to exercise reasonable efforts to cure such inaccuracy or breach (it being understood that the Stockholder Representative may not terminate this Agreement pursuant to this <u>Section 8.1(e)</u> with respect to such inaccuracy or breach if such inaccuracy or breach is cured prior to the expiration of the Buyer Cure Period); or (iv) any of the other conditions to Closing set forth in <u>Section 7</u> have not been satisfied within ten (10) working business following execution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Termination Procedures</u>. If Buyer wishes to terminate this Agreement pursuant to <u>Section 8.1</u>, Buyer shall deliver to the Stockholder Representative a written notice stating that Buyer is terminating this Agreement and setting forth a brief description of the basis on which Buyer is terminating this Agreement. If the Stockholder Representative wishes to terminate this Agreement pursuant to <u>Section 8.1</u>, the Stockholder Representative shall deliver to Buyer a written notice stating that the Stockholders Representative is terminating this Agreement and setting forth a brief description of the basis on which the Stockholders Representative (acting for the Sellers) is terminating this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Effect of Termination</u>. If this Agreement is terminated pursuant to <u>Section 8.1</u>, all further obligations of the Parties shall terminate, other than those obligations which by their terms would be deemed to survive termination of the Agreement. Nothing in the foregoing shall be construed as restricting any Party from terminating this Agreement for breach by the other Party as provided by applicable Law or impair the right of any Party to obtain such remedies as may be available to it in law or equity with respect to such a breach by any other Party.

ARTICLE 9

<u>STOCKHOLDER REPRESENTATIVE</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Authorization of the Stockholder Representative</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Stockholder Representative (and each successor appointed in accordance with this <u>Section 9.1</u>) hereby is appointed, authorized and empowered to act, until the earlier of (i) the Closing, or (ii) the termination of this Agreement, on behalf of each Seller, as such Seller's true and lawful agent and attorney-in-fact, in connection with, and to facilitate the consummation of the transactions contemplated by this Agreement, and in connection with the activities to be performed on the Sellers' behalf under this Agreement, for the purposes and with the powers and authority set forth in this <u>Section 9.1</u>, which will include the power and authority:

&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) to execute and deliver such amendments, waivers and consents in connection with this Agreement and the transactions contemplated by this Agreement as the Stockholder Representative, in its reasonable discretion, may deem necessary or desirable to give effect to the intentions 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;(ii) as the Stockholder Representative of the Sellers, to enforce and protect the Sellers' rights and interests and to enforce and protect the Sellers' rights and interests arising out of or under or in any manner relating to this Agreement (including in connection with any claims related thereto) and, in connection therewith, to (i) assert any claim or institute any action, (ii) investigate, defend, contest or litigate any action, initiated by Buyer, or any other Person, against the Sellers, and receive process on behalf of each Seller in any such action and compromise or settle on such terms as the Stockholder Representative will determine to be appropriate, give receipts, releases and discharges on behalf of all or any Sellers with respect to any such action, (iii) file any proofs, debts, claims and petitions as the Stockholder Representative may deem advisable or necessary, (iv) settle or compromise any claims related to the transactions contemplated by this Agreement, (v) assume, on each Seller's behalf; the defense of any claims related to such transactions, and (vi) file and prosecute appeals from any decision, judgment or award rendered in any of the foregoing actions, it being understood that the Stockholder Representative will not have any obligation to take any such actions, and will not have Liability for any failure to take any such action;

&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) to refrain from enforcing any right of any Seller and/or of the Stockholder Representative arising out of or under or in any manner relating to this Agreement; 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) to make, execute, acknowledge and deliver all such other contracts , guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, stock powers, letters and other writings, and, in general, to do any and all things and to take any and all action that the Stockholder Representative, in its sole and absolute discretion, may consider necessary or proper or convenient in connection with or to carry out the activities described in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The grant of authority provided for in this <u>Section 9.1</u>: (i) is coupled with an interest and is being granted, in part, as an inducement to all of the Sellers and Buyer to enter into this Agreement and will be irrevocable and survive the death, incompetency, bankruptcy or liquidation of any Seller and will be binding on any successor thereto; and (ii) may be exercised by the Stockholder Representative acting by signing as Stockholder Representative of any Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Until the earlier of (i) the Closing, or (ii) the termination of this Agreement, the Buyer shall be entitled to deal exclusively with the Stockholder Representative on all matters relating to this Agreement and any other agreement, document or instrument referred to in or contemplated by this Agreement and any transaction contemplated under this Agreement or any such other agreement, document or instrument (including all matters relating to any notice to, or any consent to be given or action to be taken by, any Seller). Until (i) the Closing, or (ii) the termination of this Agreement the Buyer shall be entitled to rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported to be executed on behalf of any Seller by the Stockholder Representative, and on any other action taken or purported to be taken on behalf of any Seller by the Stockholder Representative, as fully binding upon such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Exculpation; Indemnity</u>.

The Sellers shall solely bear the reasonable fees, commissions and expenses of the Stockholder Representative, if any, including any of its out-of-pocket expenses incurred as Stockholder Representative, each Seller to bear its pro rata share in accordance with the portion of the payments such Seller shall receive pursuant to Sections 2.2 and 2.3 hereof, as set forth in the Spreadsheet.

In dealing with this Agreement and any instruments, agreements or documents relating thereto, and in exercising or failing to exercise all or any of the powers conferred upon the Stockholder Representative hereunder or thereunder, (i) the Stockholder Representative will not assume any, and will incur no, Liability whatsoever to any Party because of any error in judgment or other act or omission performed or omitted hereunder or in connection with this Agreement INCLUDING BECAUSE OF THE STOCKHOLDER REPRESENTATIVE'S OWN NEGLIGENCE; (ii) the Stockholder Representative will be entitled to rely on the advice of counsel, public accountants or other independent experts experienced in the matter at issue, and any error in judgment or other act or omission of the Stockholder Representative pursuant to such advice will not subject the Stockholder Representative to Liability to any Party and (iii) each Seller hereby indemnifies and holds harmless the Stockholder Representative from any Damages or expenses arising from its performance of its duties as the Seller's representative hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Removal and Replacement of Stockholder Representative; Successor Stockholder Representative</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Stockholder Representative or his heir or personal representative, as the case may be, advise the Sellers that the Stockholder Representative is unavailable to perform its duties hereunder, within two business days of notice of such advice, a Stockholder Representative, will be appointed by the Sellers who held, immediately prior to the Closing, a majority of the voting power held in aggregate by the Sellers with respect to the Company's voting securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Stockholder Representative may be removed at any time by a written notice delivered by the Sellers, who held, immediately prior to the Closing, a majority of the voting power with respect to the Company's voting securities held in aggregate by the Sellers, to the Stockholder Representative, the other Sellers, and the Buyer. No Stockholder Representative may be removed until Sellers who held a majority of the voting power with respect to the Company's voting securities held in aggregate by the Sellers, immediately prior to the Closing, have replaced such Stockholder Representative by written notice delivered to the Sellers and Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If any successor Stockholder Representative is appointed under <u>Section 9.1</u> or this <u>Section 9.3</u>, such appointment will be effective upon delivery of written notice thereof executed by the Sellers who hold (or held, as applicable) a majority of the voting power with respect to the Company's voting securities held in aggregate by the Sellers, immediately prior to the Closing, to each of the Stockholder Representative, the other Sellers and Buyer. Any successor Stockholder Representative will have all of the authority and responsibilities conferred upon or delegated to a Stockholder Representative pursuant to this <u>Article 9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Stockholder Representative may resign from its role as Stockholder Representative at any time, at its sole and absolute discretion, and upon such resignations the Sellers shall act to appoint a new Stockholder Representative in accordance with the provisions of this <u>Section 9.3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If for any reason there is no Stockholder Representative at any time, all references herein to the Stockholder Representative shall be deemed to refer to the Sellers.

ARTICLE 10

<u>INDEMNIFICATION</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Survival of Representations, Etc.</u> Subject to the limitations in this <u>Article 10</u>, all covenants, agreements, representations and warranties made by Sellers and Buyer pursuant to this Agreement shall be deemed to have survived the Closing and shall remain effective, subject to the provisions of <u>Section 10.6</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Indemnification Provisions for Benefit of Buyer.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the limitations in this <u>Article 10</u>, following the Closing, each Seller shall, severally but not jointly, indemnify and save and hold Buyer and its Affiliates and their respective equity holders, officers, directors, managers, employees, attorneys, accountants, consultants, financial advisors and other agents ("**Buyer Indemnified Parties**") harmless from and against any Damages suffered or incurred by any Buyer Indemnified Party (provided that each Seller shall be limited in his or its respective obligations hereunder by the other limitations set forth in this <u>Article 10</u>) arising out of or resulting from (a) a breach of any representation or warranty made by such Seller pursuant to <u>Section 3.1</u> (for purposes of determining breach, default, inaccuracy, non-fulfilment or failure and the amount of Damages resulting therefrom, "materiality", "Material Adverse Change" or similar qualifications and exceptions contained therein shall be disregarded), or (b) a breach by such Seller of any covenant or agreement in this Agreement or the failure of such Seller duly to perform or observe any covenant or agreement in this Agreement; or (c) any claim by ITA with respect to the miscalculation of withholding Tax amount paid for the benefit of such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to the limitations in this <u>Article 10</u>, following the Closing, the Sellers, jointly and severally shall indemnify and save and hold Buyer Indemnified Parties harmless from and against any Damages suffered or incurred by any Buyer Indemnified Party arising out of or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a breach of any representation or warranty made pursuant to <u>Section 4</u> in this Agreement (for purposes of determining breach, default, inaccuracy, non-fulfilment or failure and the amount of Damages resulting therefrom, "materiality", "Material Adverse Change" or similar qualifications and exceptions contained therein shall be disregarded); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a breach by the Company of any covenant or agreement in this Agreement or the failure by the Company to duly perform or observe any covenant or agreement in this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all Taxes (or the non-payment thereof) of (i) the Company for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period ("**Pre-Closing Tax Period**") provided, however, that the Sellers shall be liable only to the extent that such Taxes exceed the amount, if any, reserved for such Taxes on the Financial Statements, and (ii) any Tax liability of the Sellers in connection with any payment made or deemed made to the Sellers pursuant to this Agreement not reduced by the amount required to be withheld under applicable Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) claims made by any third party related to the Company's share capital including with respect to the cancellation of the Options or any claims made in connection with the inaccuracy of the Spreadsheet; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any inaccuracy of the Closing Balance Sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 <u>Indemnification Provisions for Benefit of Sellers</u>. Subject to the limitations in this <u>Article 10</u>, following the Closing, Buyer shall indemnify, and save and hold harmless each of Sellers and such Seller's Affiliates and their respective equity holders, officers, directors, managers, employees, attorneys, accountants, consultants, financial advisors and other agents ("**Seller Indemnified Parties**") from and against any Damages suffered or incurred by any one or more of them arising out of or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a breach of any representation or warranty made by Buyer in this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the failure of Buyer duly to perform or observe any covenant or agreement in this Agreement required on the part of Buyer to be performed or observed before or after the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 <u>Exclusive Remedy</u>. This <u>Article 10</u> constitutes the Buyer's and each Seller's sole and exclusive remedy for any and all Damages or other claims (excluding any actions for specific performance) relating to or arising from this Agreement, any of the agreements, documents and instruments executed and delivered in connection herewith or the transactions contemplated by any of the foregoing. Neither of Buyer nor Seller may avoid such limitation on Liability by seeking damages for breach of contract, tort, cost recovery or contribution pursuant to any other theory of Liability, other than claims based on fraud or intentional misrepresentation or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 <u>Damage to Buyer</u>. The Parties acknowledge and agree that, if the Company suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, by a Seller, then (in lieu of any of the rights of Company as an indemnitee), Buyer shall be deemed, by virtue of its ownership of the Shares, to have incurred Damages as a result of and in connection with such inaccuracy or breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 <u>Term</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any rights of a Buyer Indemnified Party to indemnification under this Agreement (including under <u>Section 10.2</u>) shall apply only to those claims written notice of which shall have been delivered by Buyer to the relevant Sellers on or before 20 months from the Closing Date (the "**Survival Period**"). Notwithstanding the foregoing, the rights of Buyer Indemnified Party to indemnification pursuant to: (i) Sections 4.1 (organization and corporate power), 4.2 (capitalization), 4.11 (tax matters), and 4.21 (anti-corruption compliance) (collectively, "**Fundamental Reps**"), and (ii) <u>Section 10.2(i)(a) through Section 10.2(i)(c)</u> and <u>Section 10.2(ii)(b) through Section 10.2(ii)(e)</u> shall apply until sixty (60) days following the expiration of any applicable statute of limitations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any rights of any Seller Indemnified Party to indemnification under this Agreement (including under <u>Section 10.3</u>) shall apply only to those claims written notice of which shall have been delivered by Sellers to Buyer on or before the end of the Survival Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Survival Period shall not apply in the case of fraud, intentional misconduct or misrepresentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 <u>Indemnification Limitations</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except in case of (A) fraud, intentional misconduct or misrepresentation, (B) indemnification pursuant to a breach of Fundamental Reps or indemnification pursuant to <u>Section 10.2(i)(a) through Section 10.2(i)(c)</u>, or <u>Section 10.2(ii)(b) through Section 10.2(ii)(e)</u>, any right of an Indemnified Party to indemnification under this Agreement shall not apply to any claim until the aggregate of all such claims which have become final totals at least $[**\*\*\*\*\***] (the "**Indemnity Basket**"), in which event such indemnity shall apply to all such claims which become final, but only to the extent of the amount in excess of the Indemnity Basket.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary herein, the maximum liability of the Sellers for indemnification (A) pursuant to <u>Section 10.2(ii)(a)</u> (other than with respect to Fundamental Reps), shall not exceed US$[**\*\*\*\*\***], (B) pursuant to Fundamental Reps or <u>Section 10.2(ii)(b) through Section 10.2(ii)(e)</u>, or in the case of fraud, intentional misconduct or misrepresentation, shall not exceed the Upfront Payment, the value of the Upfront Shares (at the Closing Date) and any Contingent Payment, collectively. Notwithstanding anything to the contrary herein, the maximum liability of each Seller for indemnification pursuant to <u>Section 10.2(i)(a) through Section 10.2(i)(c)</u>, shall not exceed such Seller's portion in the Upfront Payment, the value of the Upfront Shares (at the Closing Date), as applicable and any Contingent Payment, collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary herein, to the fullest extent permitted by applicable law, except in instances of fraud or intentional misrepresentation, in connection with Buyer's breach of its representations under Section 3.2(f), (g), (h), (i), (j) and (l), Buyer's aggregate liability arising out of this Agreement whether based upon warranty, contract, tort or otherwise, will be limited to $[**\*\*\*\*\***].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the fullest extent permitted by applicable law, and except in the case of a party's indemnification obligations hereunder, as well as its intentional misconduct or fraud, in no event will a Party hereto party be liable for special, incidental, consequential or punitive damages or losses, including, but not limited to, any lost profits or opportunities, arising out of, relating to, or in connection with this Agreement, even if such Party has been advised of the possibility of such damages or losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 <u>Indemnification Procedure</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event that any Person entitled to indemnification under this Agreement (an **"Indemnified Party")** receives notice of the assertion of any claim or of the commencement of any Proceeding by any Person who is not a Party or an Affiliate of a Party (a **"Third Party Claim")** against such Indemnified Party, with respect to which a Party is or may be required to provide indemnification under this Agreement (an **"Indemnifying Party"),** the Indemnified Party will give written notice regarding such Third Party Claim to the Indemnifying Party within 30 days after learning of such Third Party Claim, <u>provided</u> that the failure to so notify an Indemnifying Party will not relieve the Indemnifying Party of its obligations under this <u>Article 10</u>, except to the extent (and only to the extent) that the Indemnifying is materially prejudiced by reason of such failure, and will not relieve such Indemnifying Party from any other obligation that it may have to an Indemnified Party other than under this <u>Article 10</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Indemnifying Party will be entitled to participate in the defense of such Third Party Claim at such Indemnifying Party's expense (which expenses will not be applied against any indemnity limitation herein). The Indemnifying Party at its option will be entitled to assume the defense thereof (subject to the limitations set forth below) by (i) delivering written notice to the Indemnified Party of its election to assume the defense of such Third Party Claim within 15 days of receipt of notice from the Indemnified Party, (ii) appointing a nationally recognized and reputable counsel reasonably acceptable to the Indemnified Party to be the lead counsel in connection with such defense and (iii) entering into a written agreement with the Indemnified Party that the Indemnifying Party is unconditionally obligated to pay and satisfy any Losses which may arise with respect to such Third Party Claim and provides evidence of its ability to satisfy such obligation, in each case, in form and substance reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not expressly elect to assume the defense of such Third Party Claim within the time period and otherwise in accordance with the preceding sentence, the Indemnified Party will have the sole right to assume the defense of and to settle such Third Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Indemnifying Party has assumed the defense of a Third Party Claim in accordance with the terms hereof, the Indemnified Party will be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose, and the fees and expenses of such separate counsel will be borne by the Indemnified Party other than any fees and expenses of such separate counsel (i) that are incurred prior to the date the Indemnifying Party assumes control of such defense, (ii) if the Indemnified Party reasonably will have concluded (upon advice of its counsel) that there may be one or more legal defenses available to such Indemnified Party that are not available to the Indemnifying Party, or (iii) if the Indemnifying Party may have different, conflicting, or adverse legal positions or interests from the Indemnified Party with respect to such Third Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary contained herein, the Indemnifying Party will not be entitled to assume the defense of a Third Party Claim (and the Indemnified Party will be entitled to maintain or assume control of the defense of such Third Party Claim) if (i) the Third Party Claim relates to or involves any criminal or quasi criminal Proceeding, (ii) the Indemnified Party reasonably believes an adverse determination with respect to the Third Party Claim would be detrimental to or injure the Indemnified Party's reputation or future business prospects, (iii) the Third Party Claim seeks an injunction or other equitable relief against the Indemnified Party, (iv) the Indemnified Party reasonably believes that the Losses relating to the claim could exceed the maximum amount that such Indemnified Party would then be entitled to recover under this <u>Article 10</u>, (v) the Third Party Claim invokes Taxes, (vi) there exists or would, or could reasonably be expected to, exist a conflict of interest that would make it inappropriate in the judgment of the Indemnified Party for the same counsel to represent both the Indemnified Party and the Indemnifying Party, (vii) the Indemnified Party elects to pursue one or more defenses or counterclaims available to it that are inconsistent with one or more of those that are being pursued by the Indemnifying Party in respect of such Third-Party Claim or any litigation relating thereto, (viii) the Third Party Claim involves a material customer or material supplier of the Indemnified Party, or (ix) the Indemnifying Party fails to vigorously defend the Third Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the Indemnifying Party will assume the defense of any Third Party Claim, the Indemnifying Party will obtain the prior written consent of the Indemnified Party before entering into any settlement of, consenting to the entry of any judgment with respect to or ceasing to defend such Third Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Indemnification by the Indemnifying Party, in respect of a Third Party Claim will be made by prompt payment by the Indemnifying Party of the amount of actual Losses in connection therewith, as and when bills are received by the Indemnifying Party or within 10 days following the Indemnifying Party's receipt of notice that Losses have been incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding the provisions of <u>Section 11.13</u>, each Indemnifying Party hereby consents to the nonexclusive jurisdiction of any court in which a Proceeding in respect of a Third Party Claim is brought against any Indemnified Party for purposes of any claim that an Indemnified Party may have under this Agreement with respect to such Proceeding or the matters alleged therein and agrees that process may be served on each Indemnifying Party with respect to such claim anywhere.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Indemnifying Party will not be entitled to require that any Proceeding be made or brought against any other Person before a Proceeding is brought or claim is made against it hereunder by the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event any Indemnified Party has a claim against any Indemnifying Party hereunder that does not involve a Third Party Claim being asserted against or sought *to* be collected from such Indemnified Party, the Indemnified Party will deliver a written notice of such claim with reasonable promptness to the Indemnifying Party, <u>provided</u> that the failure to so notify an Indemnifying Party will not relieve the Indemnifying Party of its obligations under this <u>Article 10</u> except to the extent (and only to the extent) that the Indemnifying Party is materially prejudiced by reason of such failure, and will not relieve such Indemnifying Party from any other obligation that it may have to an Indemnified Party other than under this <u>Article 10</u>. If the Indemnifying Party does not notify the Indemnified Party within 20 days following its receipt of such notice that the Indemnifying Party disputes its Liability to the Indemnified Party hereunder, such claim specified by the Indemnified Party in such notice will be conclusively deemed a Liability of the Indemnifying Party hereunder and the Indemnifying Party will pay the amount of such Liability to the Indemnified Party on demand subject to the limitations set forth in this <u>Article 10</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) If the Indemnifying Party agrees that it has an indemnification obligation under this <u>Article 10</u> but asserts that it is obligated to pay a lesser amount than that claimed by the Indemnified Party, the Indemnifying Party will pay such lesser amount promptly to the Indemnified Party, subject to the limitations set forth in this <u>Article 10,</u> without prejudice to or waiver of the Indemnified Party's claim for the difference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) If the Indemnifying Party objects in writing to any claim or claims by Indemnified Party within such twenty (20) days, Indemnifying Party and Indemnified Party shall attempt in good faith for twenty-five (25) days thereafter to resolve such objection. If Indemnifying Party and Indemnified Party shall so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. If no such agreement can be reached during the twenty-five (25) days period for good faith negotiation, but in any event upon the expiration of such twenty-five (25) days period, Indemnified Party may bring a claim in accordance with <u>Section 11.13</u> to resolve the matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9 <u>Investigation</u>. Notwithstanding anything to the contrary contained herein, if the transactions contemplated hereby are consummated, the Indemnified Parties expressly reserve the right to seek indemnity or other remedy for any Losses arising out of or relating to any breach of any representation, warranty or covenant contained herein, notwithstanding (a) any investigation by, disclosure to or knowledge of the Indemnified Parties or any of their respective Affiliates or the directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of the Indemnified Parties or any of their respective Affiliates in respect of any fact or circumstances that reveals the occurrence of any such breach, whether before or after the execution and delivery hereof, or (b) the Sellers' waiver of any condition to the Closing or participation in the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10 <u>Tax Treatment of Payments</u>. All indemnification payments made pursuant to this Agreement will be treated by the Buyer, each Seller and their respective Affiliates, to the extent permitted by Law, as an adjustment to the purchase price paid for the Shares for income Tax purposes.

ARTICLE 11<br> <u>MISCELLANEOUS</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Entire Agreement</u>. This Agreement and all schedules, exhibits, annexes or other attachments hereto or thereto, and the certificates, documents, instruments and writings that are delivered pursuant hereto or thereto, constitutes the entire agreement and understanding of the Parties in respect of the subject matter hereof and supersedes all prior understandings, agreements, undertakings or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>No Third Party Beneficiaries</u>. Other than as otherwise explicitly set forth herein, there are no third party beneficiaries having rights under or with respect to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 <u>Notices.</u> All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered, given and received (a) if delivered by hand, when delivered; (b) if sent via email on any Business Day, when receipt is confirmed; (c) if sent via email on a day other than a Business Day and receipt is confirmed, on the Business Day following the date on which receipt is confirmed, in each case to the address or emails set forth beneath the name of such party below:

If to Sellers:

At each Seller's respective address as stated in <u>Exhibit A</u> hereto.

With a copy (which shall not constitute notice) to:

Horn & Co. Law Offices

Amot Investments Tower, 2 Weizmann St., 24<sup>th</sup> Floor

Tel-Aviv 6423902, Israel

[Attn: Adv. [**\*\*\*\*\***]

Email: [**\*\*\*\*\***]

---

| | |
|:---|:---|
| If to Buyer: | Purple Biotech Ltd. |
|  | Address: 4 Oppenheimer St., Science Park, Rehovot, 7670104, Israel |
|  | Attn: [**\*\*\*\*\***] |
|  | Email: [**\*\*\*\*\***] |

---

With a copy (which shall not constitute notice) to:

Fischer (FBC&Co.)

Azrieli Town, 146 Menachem Begin St.

Tel-Aviv, Israel

Attn: [\*\*\*\*\*]

Email: [\*\*\*\*\*]

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited or air courier, messenger service, telecopy, ordinary mail, or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 <u>Headings.</u> The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 <u>Governing Law</u>. This Agreement will be governed by and construed in accordance with the laws of the State of Israel, without giving effect to any choice of law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 <u>Amendment; Extensions: Waivers</u>. No amendment, modification, waiver, replacement, termination or cancellation of any provision of this Agreement will be valid, unless the same is in writing and signed by Buyer and the Stockholder Representative (and if for any reason there is no Stockholder Representative at such time, by Sellers holding at least a majority of the capital stock of the Company held in aggregate by the Sellers on the Closing Date); and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. Neither the failure nor any delay on the part of any Party to exercise any power, right, privilege or remedy under this Agreement will operate as a waiver thereof; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 <u>Severability</u>. The provisions of this Agreement will be deemed severable and the invalidity, unlawfulness or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof, and the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 <u>Fees and Expenses</u>. Except as otherwise expressly provided in this Agreement, including as set forth in <u>Article 10</u>, each Party will bear its own costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated by this Agreement, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants. Seller hereby represents, that it is not a party to any undertaking pursuant to which Buyer is obligated to pay any fee to any broker or agent in connection with the transaction contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10 <u>Counterparts: Effectiveness</u>. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. This Agreement may be executed by exchange of signatures by facsimile or electronic scan. This Agreement will become effective when one or more counterparts have been signed by each Party and delivered to the other Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11 <u>Construction</u>. This Agreement has been freely and fairly negotiated among the Parties. If an ambiguity or question of intent or interpretation arises , this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of the authorship of any provision of this Agreement, and the parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement. Any reference to any law will be deemed also to refer to such law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. Any reference to dollars or $ shall mean United States dollars. The words "include," "includes," and "including" and variations thereof, shall not be deemed to be terms of limitation, but rather will be deemed to be followed by "without limitation." The use of the word "or" shall I not be exclusive. Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words "this Agreement," "herein," "hereof," "hereby," "hereunder," and words of similar import refer to this Agreement as a whole (including any Exhibits, Annexes, Appendices and Schedules which are deemed part of this Agreement, and included in any references to such term), and not to any particular subdivision unless expressly so limited. References to Sections, Exhibits, Annexes, Appendices and Schedules refer respectively, unless otherwise noted to Sections of this Agreement and the Exhibits, Annexes, Appendices and Schedules attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12 <u>Schedules</u>. The Parties will be deemed to have knowledge of the contents of the Schedules to this Agreement, and any matter that is disclosed in a Schedule to this Agreement shall be deemed to have been included in such other Schedule if the applicability of such disclosure to any other applicable representation, warranty or covenant would be reasonably apparent on its face to a Person reviewing the Schedules, notwithstanding the omission of an appropriate cross reference thereto. The Parties acknowledge and agree that the disclosure by Sellers of any matter in the Schedules shall not be deemed to constitute an acknowledgment by Sellers that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13 <u>Dispute Resolution</u>. Should there be a dispute between the Parties relating to or arising from this Agreement or any of the agreements , documents and instruments executed and delivered in connection herewith or the transactions contemplated by any of the foregoing, and if the dispute cannot be settled through direct discussions, the Parties agree that any unresolved controversy or claim arising out of or in any way relating to this Agreement and the transactions contemplated hereby shall be submitted to the exclusive jurisdiction of the applicable courts of the State of Israel in the Tel Aviv District. The Parties hereby agree not to assert, by way of motion, as a defense, or otherwise in any such suit, action or proceeding that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter thereof may not be enforced by such courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14 <u>Independent Nature of Seller' Obligations and Rights</u>. The obligations of each Seller under any Transaction Document are several and not joint with the obligations of any other Seller, and no Seller shall be responsible in any way for the performance or non-performance of the obligations of any other Seller under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Seller pursuant hereto or thereto, shall be deemed to constitute the Sellers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Sellers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Seller shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Seller to be joined as an additional party in any Proceeding for such purpose. Each Seller has been afforded the opportunity to be represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Buyer has elected to provide all Sellers with the same terms and Transaction Documents for the convenience of the Buyer and not because it was required or requested to do so by any of the Sellers. It is expressly understood and agreed that, unless stated otherwise, each provision contained in this Agreement and in each other Transaction Document is between the Buyer and a Seller, solely, and not between the Buyer and the Sellers collectively and not between and among the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15 <u>Certain Adjustments</u>. Each of the variables in this Agreement is connection with any price per Ordinary Share of the Buyer or ADS of the Buyer shall be appropriately and proportionately adjusted to reflect any (i) subdivision of outstanding ordinary shares or ADSs of the Buyer into a larger number of ordinary shares or ADSs, as applicable, (ii) combination (including by way of reverse share split) of outstanding ordinary shares or ADSs of the Buyer into a smaller number of ordinary shares or ADSs, as applicable, (iii) stock dividend or (iv) other change in the ordinary shares of ADSs of the Buyer which may be made by the Buyer after the date of this Agreement. Any adjustment made pursuant to this sub-section shall become effective immediately after the record date for the determination of shareholders entitled to receive such stock dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination or other change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.16 <u>Payment Currency</u>. All payments made pursuant to this Agreement shall be made in U.S. Dollars, by wire transfer of immediately available funds, to an account to be designated by each Seller.

**[SIGNATURE PAGE FOLLOWS]**

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above written.

---

| |
|:---|
| BUYER: |
| PURPLE BIOTECH LTD. |
| By: |
| Name: |
| Title: |

---

SELLERS: <br>*[Seller signatures on <u>Exhibit A</u>]*

**<u>Purple Biotech Ltd. - Immunorizon Ltd.</u>**

**<u> </u>**

**<u>Exhibit A</u>**

[\*\*\*\*\*]

**<u>Exhibit B</u>**

**[Attached]**

**<u> </u>**

**<u>Schedule 2.5(A)(i)</u>**

**<u>Share Transfer Deed</u>**

Pursuant to the Share Purchase Agreement (the "**Agreement**"), by and between Purple Biotech Ltd. as set forth therein (the "**Buyer**"), and ____________________ (the "**Seller**"), the Seller hereby sells, assigns and transfers to the Buyer all of their right, title and interest in and to ____________________ shares, of Immunorizon Ltd., an Israeli private corporation (the "**Company**"), NIS 0.01 par value per share, standing in the Seller name on the books of the Company, and does hereby irrevocably appoint the Secretary of the Company as attorney-in-fact, with full power of substitution, to transfer said stock on the books of the Company.

Dated: _________, 2023 By:   <br> [SELLER]

---

| | | |
|:---|:---|:---|
| I hereby accept the transfer |  |  |
|  | By: |  |
|  |  | Purple Biotech Ltd. |

---

**<u>Schedule 2.5(A)(v)</u>**

**<u>Seller Certificate</u>**

## Exhibit 8.1

**Exhibit 8.1**

**Purple Biotech Ltd.**

The following table sets forth the name and jurisdiction of incorporation of our subsidiaries as of the date hereof.

---

| | |
|:---|:---|
| **Name of Subsidiary** | **Jurisdiction of Incorporation** |
| Tyrnovo Ltd.<sup>(1)</sup> | Israel |
| Kitov USA Inc.<sup>(2)</sup> | Delaware |
| FameWave Ltd. | Israel |
| Purple Biotech GmbH<sup>(3)</sup> | Switzerland |
| Immunorizon Ltd.<sup>(4)</sup> | Israel |

---

Notes:

1) We own approximately 98.47% of the shares of Tyrnovo Ltd.

2) Kitov USA Inc., established in 2019, is currently inactive.

3) Purple Biotech GmbH was incorporated in 2021 under the laws of Switzerland to support certain employment and commercial activities in the EU.

4) The shares of Immunorizon Ltd. were acquired by Purple Biotech Ltd. in 2023.

## Exhibit 12.1

**Exhibit 12.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER UNDER SECTION 302<br> OF THE SARBANES-OXLEY ACT OF 2002**

I, Gil Efron, certify that:

1. I have reviewed this annual report on Form 20-F of Purple Biotech Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| |
|:---|
| Date: March 3, 2023 |
| /s/ Gil Efron |
| Gil Efron |
| Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER UNDER SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Lior Fhima, certify that:

1. I have reviewed this annual report on Form 20-F of Purple Biotech Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| |
|:---|
| Date: March 3, 2023 |
| /s/ Lior Fhima |
| Lior Fhima |
| Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER UNDER SECTION 906 OF THE<br> SARBANES-OXLEY ACT OF 2002**

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Annual Report on Form 20-F for the year ended December 31, 2022, to which this statement is furnished as an exhibit (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 3, 2023

---

| |
|:---|
| /s/ Gil Efron |
| Gil Efron |
| Chief Executive Officer |

---

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference to any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

## Exhibit 13.2

**Exhibit 13.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER UNDER SECTION 906 OF THE<br> SARBANES-OXLEY ACT OF 2002**

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Annual Report on Form 20-F for the year ended December 31, 2022, to which this statement is furnished as an exhibit (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 3, 2023

---

| |
|:---|
| /s/ Lior Fhima |
| Lior Fhima |
| Chief Financial Officer |

---

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference to any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

## Exhibit 15.1

**Exhibit 15.1**

**Consent of Independent Registered Public Accounting Firm**

We consent to the incorporation by reference in registration statements No. 333-226195, No. 333-233795, No. 333-235327, No. 333-238229, and No. 333-239807 on Form F-3, registration statements No. 333-233793 and No. 333-235729 on Form F-1, and registration statements No. 333-211478, No. 333-218538, No. 333-230584, No. 333-238481, and No. 333-264107 on Form S-8 of our report dated March 2, 2023, with respect to the consolidated financial statements of Purple Biotech Ltd. and its subsidiaries.

Somekh Chaikin

Member Firm of KPMG International

Tel Aviv, Israel

March 2, 2023