20-F - NRSN - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ SHELL COMPANY REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

001-41084

(Commission file number)

NeuroSense Therapeutics 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)

NeuroSense Therapeutics Ltd.11 HaMenofim Street, Building BHerzliya 4672562 Israel+972-9-7996183

(Address of principal executive offices)

NeuroSense Therapeutics Ltd.Or Eisenberg, Chief Financial Officer11 HaMenofim Street, Building BHerzliya 4672562 Israel+972-9-7996183

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

| Ordinary Shares, no par value per share | NRSN | Nasdaq Capital Market |

| Warrants, exercisable for one ordinary share | NRSNW | Nasdaq Capital Market |

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

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(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: 23,228,941 ordinary shares, no par value

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

Yes ☐ No ☒

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

Yes ☐ No ☒

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

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 and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ 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 the definitions 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 Financial Reporting Standards as issued by the <br><br>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. N/A

Item 17 ☐ Item 18 ☐

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

Yes ☐ No ☒

TABLE OF CONTENTS

PART I
Item 1. Identity of Directors, Senior Management and Advisers	1
Item 2. Offer Statistics and Expected Timetable	1
Item 3. Key Information	1
Item 4. Information on the Company	46
Item 4A. Unresolved Staff Comments	73
Item 5. Operating and Financial Review and Prospects	73
Item 6. Directors, Senior Management and Employees	82
Item 7. Major Shareholders and Related Party Transactions	105
Item 8. Financial Information	108
Item 9. The Offer and Listing	108
Item 10. Additional Information	109
Item 11. Quantitative and Qualitative Disclosures About Market Risk	127
Item 12. Description of Securities Other than Equity Securities	128
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies	129
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	130
Item 15. Controls and Procedures	130
Item 16. [Reserved]	131
Item 16A. Audit Committee Financial Expert	131
Item 16B. Code of Ethics	131
Item 16C. Principal Accountant Fees and Services	131
Item 16D. Exemptions from the Listing Standards for Audit Committees	132
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	132
Item 16F. Change in Registrant’s Certifying Accountant	132
Item 16G. Corporate Governance	132
Item 16H. Mine Safety Disclosure	133
Item 16I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	133
Item 16J. Insider Trading Policies	133
Item 16K. Cybersecurity	133
PART III
Item 17. Financial Statements	134
Item 18. Financial Statements	134
Item 19. Exhibits	134
Signatures	136
Index to Consolidated Financial Statements	F-1

References

to NeuroSense

Unless otherwise indicated or the context otherwise requires, all references in this annual report to the terms “NeuroSense,” “NeuroSense Therapeutics,” the “Company,” “we,” “us” and “our” refer to NeuroSense Therapeutics Ltd. In this annual report, any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

PRESENTATION

OF FINANCIAL INFORMATION

The term “NIS” refers to New Israeli Shekels, the lawful currency of the State of Israel, and the terms “dollar” or “$” refer to U.S. dollars, the lawful currency of the United States. Unless derived from our financial statements or otherwise indicated, U.S. dollar translations of NIS amounts presented in this annual report are translated using the rate of NIS 3.6470 to $1.00, based on the representative exchange rate reported by the Bank of Israel on December 31, 2024. On June 17, 2024, we changed our accounting method from International Financial Reporting Standards, as issued by the International Accounting Standards Board, to generally accepted accounting principles in the United States of America, or U.S. GAAP, as of January 1, 2024.

TRADEMARKS, SERVICE

MARKS AND TRADENAMES

The NeuroSense Therapeutics logo and other trademarks and service marks of NeuroSense Therapeutics appearing in this annual report are the property of the Company. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this annual report are presented without the ^®^ and ^™^ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names. This annual report contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this annual report are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

MARKET AND INDUSTRY DATA

This annual report contains industry, market and competitive position data that are based on industry publications and studies conducted by third parties as well as our own internal estimates and research. These industry publications and third-party studies generally state that the information that they contain has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these publications and third-party studies is reliable, we have not independently verified the market and industry data obtained from these third-party sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this annual report. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in our forecasts or estimates or those of independent third parties. While we believe our internal research is reliable and the definition of our market and industry are appropriate, neither such research nor these definitions have been verified by any independent source.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements concerning among other things, our ongoing and planned product development and clinical trials; the timing of, and our ability to make, regulatory filings and obtain and maintain regulatory approvals for our product candidates; our ability to enter into and maintain strategic collaborations, our intellectual property position; our results of operations, cash needs; financial condition, liquidity, prospects, growth and strategies; the industry in which we operate; and the trends that may affect the industry or us. Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “should,” “target,” “would” and other similar expressions that are predictions of or indicate future events and future trends, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to substantial risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including, but not limited to, those identified under the section titled “Risk Factors” in this annual report. These risks and uncertainties include factors relating to:

●	the<br>going concern reference in our financial statements and our need for substantial additional financing to achieve our goals;
●	our<br>limited operating history and history of incurring significant losses and negative cash flows since our inception, which we anticipate<br>will continue for the foreseeable future;
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●	our<br>dependence on the success of our lead product candidate, PrimeC, including our obtaining of regulatory approval to market PrimeC in the<br>United States;
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●	our<br>limited experience in conducting clinical trials and reliance on clinical research organizations and others to conduct them;
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●	our<br>ability to advance our preclinical product candidates into clinical development and through regulatory approval;
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●	the<br>results of our clinical trials, which may fail to adequately demonstrate the safety and efficacy of our product candidates;
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iii

●	our<br>ability to achieve the broad degree of physician adoption and use and market acceptance necessary for commercial success;
●	our<br>reliance on third parties in marketing, producing or distributing products and research materials for certain raw materials, compounds<br>and components necessary to produce PrimeC for clinical trials and to support commercial scale production of PrimeC, if approved;
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●	our<br>receipt of regulatory clarity and approvals for our therapeutic candidates and the timing of other regulatory filings and approvals;
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●	estimates<br>of our expenses, revenues, capital requirements and our needs for additional financing;
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●	our<br>efforts to obtain, protect or enforce our patents and other intellectual property rights related to our product candidates and technologies;
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●	the<br>impact of the public health, political and security situation in Israel, the U.S. and other countries in which we may obtain approvals<br>for our products or our business;
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●	our ability to maintain the listing of our ordinary shares on Nasdaq;
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●	the<br>impacts on our ongoing and planned trials and manufacturing as a result of the war in Israel; and
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●	those<br>factors referred to in “Item 3.D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating<br>and Financial Review and Prospects”, as well as in this annual report on Form 20-F generally.
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The preceding list is not intended to be an exhaustive list of all of our risks and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this annual report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

The forward-looking statements and opinions contained in this annual report are based upon information available to us as of the date of this annual report and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. The forward-looking statements contained in this annual report speak only as of the date of this annual report, and unless otherwise required by law, we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

You should read this annual report, the documents that we reference herein and the documents that we have filed as exhibits hereto, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENTAND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

Reserved.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use ofProceeds

Not applicable.

D. Risk Factors

Investing in oursecurities, involves a high degree of risk. You should carefully consider the risks and uncertainties described below, in additionto the other information set forth in this annual report, including the financial statements and the related notes beginning on pageF-1 of this annual report, before purchasing our securities. If any of the following risks actually occurs, our business, financialcondition, results of operations and prospects could be materially and adversely affected and, as a result, the market price of ourordinary shares and our publicly traded warrants, or Warrants, could decline and you could lose all or part of your investment.Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materiallyadversely affect our business, financial condition and results of operations.

Summary of Risk Factors

The following is a summary of certain important factors that may make an investment in our Company speculative or risky. You should carefully consider the full risk factor disclosure set forth below, in addition to the other information herein, including the section of this report titled “Operating and Financial Review and Prospects” and our financial statements and related notes.

●	Our<br>financial statements include a going concern reference. We will require substantial additional financing to achieve our goals, and a<br>failure to obtain this capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our<br>product development, commercialization efforts or other operations.
●	We have a limited operating history and have incurred significant losses and negative cash flows since our inception, and we anticipate that we will continue to incur significant losses and negative cash flows for the foreseeable future, which makes it difficult to assess our future viability.
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●	Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
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●	We are dependent on the success of our lead product candidate, PrimeC, including obtaining regulatory approval to market PrimeC in the United States.
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●	We may be unable to obtain regulatory approval for our product candidates.
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●	To date, we have only generated limited clinical data for our product candidates.
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●	We have limited experience in conducting clinical trials and have never obtained approval for any product candidates, and may be unable to do so successfully.
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●	We have not applied for regulatory approvals to market any of our other product candidates, and we may be delayed in obtaining or failing to obtain such regulatory approvals and to commercialize our product candidates.
●	We may not be able to advance our preclinical product candidates into clinical development and through regulatory approval and commercialization.
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●	Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier studies and trials may not be predictive of future trial results, and our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates.
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●	PrimeC or any of our other product candidates may produce undesirable side effects that we may not have detected in our previous preclinical studies and clinical trials. This could prevent us from gaining marketing approval or market acceptance for these product candidates, or from maintaining such approval and acceptance, and could substantially increase commercialization costs and even force us to cease operations.
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●	Our product candidates, if approved, will face significant competition with competing technologies and our failure to compete effectively may prevent us from achieving significant market penetration.
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●	We may enter into collaborations with third parties for the development or commercialization of our product candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.
●	If we fail to manage our growth effectively, our business could be disrupted.
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●	If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop our product candidates, conduct our clinical trials and commercialize any of the products we develop.
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●	If our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our product candidates and technologies are not adequate, we may not be able to compete effectively in our market and we otherwise may be harmed.
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●	We may be subject to claims that we infringe, misappropriate or otherwise violate the intellectual property rights of third parties.
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●	We may receive only limited protection, or no protection, from our issued patents and patent applications.
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●	If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
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●	We may not be able to protect our intellectual property rights throughout the world.
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●	We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive and time consuming, delay or prevent the development and commercialization of our products and product candidates or put our patents and other proprietary rights at risk.
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●	An active, liquid and orderly trading market for our ordinary shares or Warrants may not develop, which may inhibit the ability of our shareholders to sell ordinary shares and Warrants.
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●	The market price of our ordinary shares and Warrants may be subject to fluctuation and you could lose all or part of your investment.
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●	If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares and Warrants, the price of our ordinary shares and Warrants could decline.
●	Future sales of our ordinary shares could reduce the market price of our ordinary shares and Warrants.
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●	The significant share ownership position of our officers, directors and entities affiliated with certain of our directors may limit your ability to influence corporate matters.
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●	We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the foreseeable future.
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●	Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, us, even when the terms of such a transaction are favorable to us and our shareholders.
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●	Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.
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Risks Related to Our Limited Operating History,Financial Condition and Capital Requirements

Our financial statements include a goingconcern reference. We will require substantial additional financing to achieve our goals, and a failure to obtain this capital when neededand on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization effortsor other operations.

Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business, and our financial status creates a doubt whether we will continue as a going concern. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.

We will require additional capital to complete clinical trials and to obtain regulatory approval for, and commercialize, our product candidates. In addition, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity, convertible debt or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches. In any event, we will require additional capital to pursue preclinical and clinical activities, and pursue regulatory approval for, and to commercialize, our pipeline product candidates.

Any additional fundraising efforts may divert the attention of our management from day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may negatively impact the holdings or the rights of our shareholders, and the issuance of additional securities, whether equity or debt, by us or the possibility of such issuance may cause the market price of our ordinary shares and Warrants to decline. The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than would be desirable and we may be required to relinquish rights to some of our technologies, intellectual property or product candidates or otherwise agree to terms unfavorable to us, any of which may harm our business, financial condition, operating results and prospects.

If adequate funds are not available to us on a timely basis, we may be required or choose to:

●	delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for our product candidates or any of our future product candidates or otherwise terminate our operations;
●	delay, limit, reduce or terminate our other research and development activities; or
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●	delay, limit, reduce or terminate our establishment or expansion of manufacturing, sales and marketing or distribution capabilities or other activities that may be necessary to commercialize PrimeC or any of our other product candidates.
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We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business, financial condition and results of operations.

We have a limited operating history andhave incurred significant losses and negative cash flows since our inception, and we anticipate that we will continue to incur significantlosses and negative cash flows for the foreseeable future, which makes it difficult to assess our future viability.

We are a clinical-stage drug development company with a limited operating history upon which you can evaluate our business and prospects. We are not profitable and have incurred net losses in each period since we commenced operations in February 2017, including net losses of $10.2 million and $10.1 million for the years ended December 31, 2024 and 2023, respectively. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Our ability to ultimately achieve recurring revenues and profitability is dependent upon our ability to successfully complete the development of our product candidates, obtain necessary regulatory approvals for and successfully manufacture, market and commercialize our products.

We believe that we will continue to expend substantial resources in the foreseeable future for the clinical development of our current product candidates or any additional product candidates and indications that we may choose to pursue in the future. These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, and payments for third-party manufacturing and supply, as well as sales and marketing of any of our product candidates that are approved for sale by regulatory agencies. Because the outcome of any clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our clinical stage and preclinical drug candidates and any other drug candidates that we may develop in the future. Other unanticipated costs may also arise.

Our future capital requirements depend on many factors, including:

●	the timing of, and the costs involved in, clinical development and obtaining regulatory approvals for our product candidates;
●	changes in regulatory requirements during the development phase that can delay or force us to stop our activities related to any of our product candidates;
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●	the cost of commercialization activities if our products are approved for sale, including marketing, sales and distribution costs;
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●	the cost of third-party manufacturing of our products;
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●	the number and characteristics of any other product candidates we develop or acquire;
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●	our ability to establish and maintain strategic collaborations, licensing or other commercialization arrangements, and the terms and timing of such arrangements;
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●	the extent and rate of market acceptance of any approved products;
●	the expenses needed to attract and retain skilled personnel;
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●	the costs associated with being a public company;
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●	the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including potential litigation costs and the outcome of such litigation;
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●	the timing, receipt and amount of sales of, or royalties on, future approved products, if any;
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●	any product liability or other lawsuits related to our products;
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●	scientific breakthroughs in the field of treatment for neurodegenerative diseases that could significantly diminish the need for our product candidates or make them obsolete; and
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●	changes in reimbursement policies that could have a negative impact on our future revenue stream.
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In addition, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry. Drug development is a highly speculative undertaking and involves a substantial degree of risk. To date, we have not obtained any regulatory approvals for any of our product candidates, commercialized any of our product candidates or generated any material revenue.

Raising additional capital may cause dilutionto our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity, convertible debt or debt financings, as well as selectively continuing to enter into collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as an ordinary shareholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring and distributing dividends, and may be secured by all or a portion of our assets.

If we raise funds by entering into collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish additional valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity, convertible debt or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. If we are unable to raise additional funds through collaborations, strategic alliances or licensing arrangements, we may be required to terminate product development or future commercialization efforts or to cease operations altogether.

Risks Related to Our Business and Strategy

We are dependent on the success of our leadproduct candidate, PrimeC, including obtaining regulatory approval to market PrimeC in the United States.

We have invested almost all of our efforts and financial resources in the research and development of our lead product candidate, PrimeC. Our future success depends on our ability to develop, commercialize, market and sell PrimeC and our other product candidates. However, our product candidates are in various stages of preclinical and clinical development and each of them has yet to receive marketing approval from the U.S. Food and Drug Administration, or the FDA, or any other regulatory agency. Our product candidates’ marketability is subject to significant risks associated with successfully completing current and future clinical trials, including:

●	the FDA’s timely acceptance of our IND filing for our product candidates other than PrimeC for which we plan to file an IND. Without such IND acceptances, we will be unable to commence clinical trials in the United States;
●	the FDA’s acceptance of our parameters for regulatory approval relating to PrimeC and our other product candidates, including our proposed indications, primary and secondary endpoint assessments and measurements, safety evaluations, chemistry, manufacturing, and controls, or CMC, activities and regulatory pathways;
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●	the FDA’s acceptance of the number, design, size, conduct and implementation of our clinical trials, our trial protocols and the interpretation of data from preclinical studies and clinical trials;
●	our ability to successfully complete the clinical trials of our product candidates, including timely patient enrollment and acceptable safety and efficacy data and our ability to demonstrate the safety and efficacy of the product candidates undergoing such clinical trials;
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●	our ability to complete in a timely fashion the PrimeC pivotal trial, and that the single pivotal trial, even if successfully completed, will be sufficient to support a New Drug Application, or NDA, submission;
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●	the FDA’s acceptance of the sufficiency of the data we collected from our preclinical studies and Phase 2a NST002 clinical trial and will collect ahead of potentially initiating a pivotal clinical trial, and our ability to commence a pivotal clinical trial in the United States for PrimeC following an IND submission, if accepted;
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●	the FDA’s willingness to schedule an advisory committee meeting in a timely manner to evaluate and decide on the approval of our potential future NDA for PrimeC;
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●	the recommendation of the FDA’s advisory committee to approve our applications to market PrimeC and our other product candidates in the United States, without limiting the approved labeling, specifications, distribution or use of the products, or imposing other restrictions;
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●	the FDA’s satisfaction with the safety, quality and efficacy of our product candidates;
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●	the prevalence and severity of adverse events associated with our product candidates;
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●	the timely and satisfactory performance by third-party contractors of their obligations in relation to our clinical trials;
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●	our success in educating physicians and patients about the benefits, administration and use of our product candidates, if approved, particularly in light of the fact that there is a limited number of currently available and approved treatment options for Amyotrophic Lateral Sclerosis (ALS);
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●	the availability, perceived advantages, relative cost, safety and efficacy of alternative and competing treatments for the indications addressed by our product candidates;
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●	the effectiveness of our marketing, sales and distribution strategy, and operations, as well as that of any current and future licensees; and
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●	our ability to obtain, protect and enforce our intellectual property rights with respect to our product candidates.
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Many of these clinical, regulatory and commercial risks are beyond our control. Accordingly, we cannot assure you that we will be able to advance any of our product candidates through clinical development, or to obtain regulatory approval of or commercialize any of our product candidates. If we fail to achieve these objectives or overcome the challenges presented above, we could experience significant delays or an inability to successfully commercialize our product candidates. Accordingly, we may not be able to generate sufficient revenues through the sale of our product candidates to enable us to continue our business.

We may be unable to obtain regulatory approvalfor our product candidates.

The research, development, testing, manufacturing, labeling, packaging, approval, promotion, advertising, storage, recordkeeping, marketing, distribution, post-approval monitoring and reporting, and export and import of drug products are subject to extensive regulation by the FDA, and by foreign regulatory authorities in other countries. These regulations differ from country to country. To gain approval to market our product candidates, we must provide clinical data that adequately demonstrate the safety and efficacy of the product for the intended indication. We have not yet obtained regulatory approval to market any of our product candidates in the United States or any other country.

Our business depends upon obtaining these regulatory approvals. There are currently a limited number of alternative drugs approved by the FDA for the treatment of ALS. The FDA can delay, limit or deny approval of our product candidates for many reasons, including:

●	our inability to satisfactorily demonstrate that the product candidates are safe and effective for the target indication;
●	the FDA’s disagreement with our trial protocol, the interpretation of data from preclinical studies or clinical trials, or adequate conduct and control of clinical trials;
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●	the population studied in the clinical trial may not be sufficiently broad or representative to assess safety in the patient population for which we seek approval;
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●	our inability to demonstrate that clinical or other benefits of our product candidates outweigh any safety or other perceived risks;
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●	the FDA’s determination that the 505(b)(2) regulatory pathway is not available for our product candidates;
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●	the FDA’s determination that additional preclinical studies or clinical trials are required;
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●	the FDA’s non-approval of the formulation, labeling or the specifications of our product candidates;
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●	the FDA’s non-acceptance of the manufacturing processes or facilities of third-party manufacturers with which we contract;
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●	the potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval; or
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●	resistance to approval from the FDA’s advisory committee for any reason including safety or efficacy concerns.
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Even if we eventually complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDA may grant approval contingent on the performance of costly and potentially time-consuming additional post-approval clinical trials or subject to restrictive Risk Evaluation and Mitigation Strategies. The FDA may also approve our product candidates for a more limited indication or a narrower patient population than we originally requested, and the FDA may not approve the labeling that we believe is necessary or desirable for the successful commercialization of our product candidates. To the extent we seek regulatory approval in foreign countries, we may face challenges similar to those described above with regulatory authorities in applicable jurisdictions. Any delay in obtaining, or inability to obtain, applicable regulatory approval for any of our product candidates would delay or prevent commercialization of our product candidates and would thus negatively impact our business, results of operations and prospects.

To date, we have only generated limitedclinical data for our product candidates.

Positive results in preclinical testing and early clinical trials do not ensure that later clinical trials will be successful. A number of pharmaceutical companies have suffered significant setbacks in clinical trials, including in clinical trials, after promising results in preclinical testing and early clinical trials. These setbacks have included negative safety and efficacy observations in later clinical trials, including previously unreported adverse effects. If our clinical trials do not ultimately indicate that our product candidates are safe or efficacious for their intended application, the FDA may not approve any NDA that we may file to market such product candidates, and our business would not be able to generate revenue from the sale of such product candidates.

We have limited experience in conductingclinical trials and have never obtained approval for any product candidates, and may be unable to do so successfully.

As a company, we have limited experience in conducting clinical trials and have never progressed a product candidate through to regulatory approval. In part because of this lack of experience, our clinical trials may require more time and incur greater costs than we anticipate. We cannot be certain that our planned clinical trials will begin or conclude on time, if at all. Large-scale trials will require significant additional financial and management resources. Third-party clinical investigators do not operate under our control. Any performance failure on the part of such third parties could delay the clinical development of our product candidates or delay or prevent us from obtaining regulatory approval or commercializing our current or future product candidates, depriving us of potential product revenue and resulting in additional losses.

We have not applied for regulatory approvalsto market any of our other product candidates, and we may be delayed in obtaining or failing to obtain such regulatory approvals and tocommercialize our product candidates.

The process of developing, obtaining regulatory approval for and commercializing our product candidates is long, complex, costly and uncertain, and delays or failure can occur at any stage. The research, testing, manufacturing, labeling, marketing, sale and distribution of drugs are subject to extensive and rigorous regulation by the FDA and foreign regulatory agencies, as applicable. These regulations are agency-specific and differ by jurisdiction. We are not permitted to market any product candidate in the United States until we receive approval of an NDA from the FDA, or in any foreign countries until we receive the requisite approval from the respective regulatory agencies in such countries. To gain approval of an NDA or other equivalent regulatory approval, we must provide the FDA or relevant foreign regulatory authority with preclinical and clinical data that adequately demonstrates the safety and efficacy of the product for the intended indication. For example, we plan to file for early commercialization approval for PrimeC under Health Canada’s Notice of Compliance with Conditions (NOC/c) policy. Although this decision follows the recommendations of Canadian regulatory experts and recent clinical findings, there can be no assurance that Health Canada will approve our application for early commercialization.

Before we can submit an NDA to the FDA or similar applications to foreign regulatory authorities, generally speaking, we must conduct at least one pivotal clinical trial for each product candidate. Based on the results of our clinical trials and our discussions with the FDA on potential pivotal trial design, we intend to initiate a pivotal clinical trial to further evaluate PrimeC. We have completed three additional studies to further support our future regulatory submissions. First, in September 2022 we announced positive results from our Good Laboratory Practices (GLP) toxicity study in rats to confirm the safety of PrimeC in high doses, in accordance with the FDA’s expectations. We also announced in September 2022 positive results of our pharmacokinetic (PK) study assessing the exposure levels of PrimeC’s extended release, or ER, formulation, where we observed the safety and improved PK profile of PrimeC in this formulation, in comparison to co-administration of the two marketed products that are a part of PrimeC’s composition. We have also completed a Phase 2b trial with PrimeC’s ER formulation that increased our understanding of the changes in the pathological pathways of ALS, demonstrated a clear safety profile of PrimeC and showed efficacy signals - all informed the final trial design for our potential pivotal clinical trial. Following an agreement with FDA on the pivotal trial design, the results of the PARADIGM trial and results of additional trials, we believe we could be in a position to initiate a pivotal clinical trial of PrimeC for the treatment of ALS in the second half of 2025.

Before commencing a clinical trial for PrimeC in the United States, we filed an IND, which was accepted by the FDA. We cannot assure you that the FDA will not decide to materially alter certain parameters, including among others, potentially requiring a pivotal study with several control arms, during the trial or require us to conduct more than one pivotal trial before submitting an NDA.

Phase 3 clinical trials often produce unsatisfactory results even though prior clinical trials were successful. Moreover, the results of clinical trials may be unsatisfactory to the FDA or foreign regulatory authorities even if we believe those clinical trials to be successful. The FDA or applicable foreign regulatory agencies may suspend one or all of our clinical trials or require that we conduct additional clinical, preclinical, manufacturing, validation or drug product quality studies and submit that data before considering or reconsidering any NDA or comparable foreign regulatory application that we may submit. Depending on the extent of these additional studies, approval of any applications that we submit may be significantly delayed or may cause the termination of such programs, or may require us to expend more resources than we have available.

If any of these outcomes occur, we may not receive regulatory approval for the corresponding product candidates, and our business would not be able to generate revenue from the sale of any such product candidates.

We may not be able to advance our preclinicalproduct candidates into clinical development and through regulatory approval and commercialization.

Certain of our product candidates are currently in preclinical development and are therefore currently subject to the risks associated with preclinical development, including the risks associated with:

●	generating adequate and sufficient preclinical safety and efficacy data in a timely fashion to support the initiation of clinical trials;
●	obtaining regulatory approval to commence clinical trials in any jurisdiction, including the filing and acceptance of INDs;
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●	contracting with the necessary parties to conduct a clinical trial;
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●	enrolling sufficient numbers of patients in clinical trials; and
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●	timely manufacture of sufficient quantities of the product candidate for use in clinical trials.
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If we are unsuccessful in advancing our preclinical product candidates into clinical trials in a timely fashion, our business may be harmed. Even if we are successful in advancing our preclinical product candidates into clinical development, their success will be subject to all of the clinical, regulatory and commercial risks described elsewhere in “Risk Factors.” Accordingly, we cannot assure you that we will be able to develop, obtain regulatory approval for, commercialize or generate significant revenue from our product candidates.

Clinical drug development involves a lengthyand expensive process with an uncertain outcome, results of earlier studies and trials may not be predictive of future trial results,and our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. A failure of one or more of our clinical trials can occur at any time during the clinical trial process. We do not know whether future clinical trials, if any, will begin on time, need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all. Clinical trials can be delayed, suspended or terminated for a variety of reasons, including failure to:

●	generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;
●	obtain regulatory approval, or feedback on trial design, in order to commence a trial;
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●	identify, recruit and train suitable clinical investigators;
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●	reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, and have such CROs and sites effect the proper and timely conduct of our clinical trials;
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●	obtain and maintain institutional review board (IRB) or Ethic Committee (EC), approval at each clinical trial site;
●	identify, recruit and enroll suitable patients to participate in a trial;
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●	have a sufficient number of patients complete a trial or return for post-treatment follow-up;
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●	ensure clinical investigators and clinical trial sites observe trial protocol or continue to participate in a trial;
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●	address any patient safety concerns that arise during the course of a trial;
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●	address any conflicts with new or existing laws or regulations;
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●	add a sufficient number of clinical trial sites;
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●	manufacture sufficient quantities at the required quality of product candidate for use in clinical trials; or
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●	raise sufficient capital to fund a trial.
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Patient enrollment is a significant factor in the timing and success of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ or caregivers’ perceptions as to the potential advantages of the drug candidate being studied in relation to other available therapies, including any new drugs or treatments that may be developed or approved for the indications we are investigating.

We may also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or ECs of the institutions in which such trials are being conducted, by the trial’s data safety monitoring board, by the FDA or by the applicable foreign regulatory authorities. Such authorities may suspend or terminate one or more of our clinical trials due to a number of factors, including our failure to conduct the clinical trial in accordance with relevant regulatory requirements or clinical protocols, inspection of the clinical trial operations or trial site by the FDA or foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

In addition, disruptions caused by a resurgence of the COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing preclinical studies and clinical trials, as applicable. For example, on March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities in response to the COVID-19 pandemic. If global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions. In addition, in 2023, after the enrollment rate of the trial was slowed down due to regulatory approval delays, resulting from a back-log post-COVID, we changed our estimate of the expected timing of top-line results from our Phase 2b trial from the second quarter of 2023 to the second half of 2023, which we reported in December 2023. If we experience any other delays in the initiation, enrollment or completion of any preclinical study or clinical trial of our product candidates, or if any preclinical studies or clinical trials of our product candidates are cancelled, the commercial prospects of our product candidates may be materially adversely affected, and our ability to generate product revenues from any of these product candidates will be delayed or not realized at all. In addition, any delays in completing our clinical trials may increase our costs and slow down our product candidate development and approval process.

If we experience delays in carrying out or completing any clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business and financial condition. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

PrimeC or any of our other product candidatesmay produce undesirable side effects that we may not have detected in our previous preclinical studies and clinical trials. This couldprevent us from gaining marketing approval or market acceptance for these product candidates, or from maintaining such approval and acceptance,and could substantially increase commercialization costs and even force us to cease operations.

As with most pharmaceutical products, use of PrimeC or our other product candidates may be associated with side effects or adverse events that can vary in severity and frequency. Side effects or adverse events associated with the use of PrimeC may be observed at any time, including in clinical trials or once a product is commercialized, and any such side effects or adverse events may negatively affect our ability to obtain regulatory approval or market our product candidates. We cannot assure you that we will not observe drug-related serious adverse events in the future or that the FDA will not determine them as such. Side effects such as toxicity or other safety issues associated with the use of our product candidates could require us to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits, which will harm our business.

Furthermore, commencing the planned pivotal clinical trial for PrimeC will involve a larger patient base than that previously studied, and the commercial marketing of PrimeC, if approved, will further expand the clinical exposure of the drug to a wider and more diverse group of patients than those participating in the clinical trials, which may identify undesirable side effects caused by these products that were not previously observed or reported.

The FDA and foreign regulatory agency regulations require that we report certain information about adverse medical events if our products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the date upon which we become aware of the adverse event as well as the nature and severity of the event. We may fail to report adverse events of which we become aware within the prescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA or a foreign regulatory agency could take action including enforcing a hold on or cessation of clinical trials, withdrawal of approved drugs from the market, criminal prosecution, the imposition of civil monetary penalties or seizure of our products.

Additionally, in the event we discover the existence of adverse medical events or side effects caused by one of our product candidates, a number of other potentially significant negative consequences could result, including:

●	our inability to file an NDA or similar application for our product candidates because of insufficient risk-benefit, or the denial of such application by the FDA or foreign regulatory authorities;
●	the FDA or foreign regulatory authorities suspending or withdrawing their approval of the product;
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●	the FDA or foreign regulatory authorities requiring the addition of labeling statements, such as warnings or contraindications or distribution and use restrictions;
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●	the FDA or foreign regulatory authorities requiring us to issue specific communications to healthcare professionals, such as letters alerting them to new safety information about our product, changes in dosage or other important information;
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●	the FDA or foreign regulatory authorities issuing negative publicity regarding the affected product, including safety communications;
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●	our being limited with respect to the safety-related claims that we can make in our marketing or promotional materials;
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●	our being required to change the way the product is administered, conduct additional preclinical studies or clinical trials or restrict or cease the distribution or use of the product; and
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●	our being sued and held liable for harm caused to patients.
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Any of these events could prevent us from achieving approval or market acceptance of the affected product candidate and could substantially increase commercialization costs or even force us to cease operations. We cannot assure you that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any regulatory agency in a timely manner or ever, which could harm our business, prospects and financial condition.

Even if our product candidates receive marketingapproval, we may continue to face future developmental and regulatory difficulties. In addition, we are subject to government regulationsand we may experience delays in obtaining required regulatory approvals to market our proposed product candidates.

Even if we complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDA or applicable foreign regulatory agency may grant approval contingent on the performance of additional costly post-approval clinical trials, risk mitigation requirements and surveillance requirements to monitor the safety or efficacy of the product, which could negatively impact us by reducing revenues or increasing expenses, and cause the approved product candidate not to be commercially viable. Absence of long-term safety data may further limit the approved uses of our products, if any.

The FDA or applicable foreign regulatory agency also may approve our product candidates for a more limited indication or a narrower patient population than we originally requested, or may not approve the labeling that we believe is necessary or desirable for the successful commercialization of our product candidates. Furthermore, any such approved product will remain subject to extensive regulatory requirements, including requirements relating to manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and recordkeeping.

If we fail to comply with the regulatory requirements of the FDA or other applicable foreign regulatory authorities, or previously unknown problems with any approved commercial products, manufacturers or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions or other setbacks, including the following:

●	suspension or imposition of restrictions on operations, including costly new manufacturing requirements;
●	regulatory agency refusal to approve pending applications or supplements to applications;
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●	suspension of any ongoing clinical trials;
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●	suspension or withdrawal of marketing approval;
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●	an injunction or imposition of civil or criminal penalties or monetary fines;
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●	seizure or detention of products;
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●	bans or restrictions on imports and exports;
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●	issuance of warning letters or untitled letters;
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●	suspension or imposition of restrictions on operations, including costly new manufacturing requirements; or
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●	refusal of regulatory authorities to approve pending applications or supplements to applications.
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In addition, various aspects of our operations are subject to federal, state or local laws, rules and regulations, any of which may change from time to time. Costs arising out of any regulatory developments could be time-consuming and expensive and could divert management resources and attention and, consequently, could adversely affect our business, financial condition and results of operations.

Even if our product candidates receive regulatoryapproval, they may fail to achieve the broad degree of physician adoption and use and market acceptance necessary for commercial success.

Even if we obtain FDA or foreign regulatory approvals for our product candidates, the commercial success of such products will depend significantly on their broad adoption and use by physicians, for approved indications. The degree and rate of physician and patient adoption of our product candidates, if approved, will depend on a number of factors, including:

●	the clinical indications for which the product is approved;
●	the prevalence and severity of adverse side effects;
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●	physicians’ satisfaction with the results shown in clinical trials
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●	patient satisfaction with the results and administration of our product and overall treatment experience, including relative convenience, ease of use and avoidance of, or reduction in, adverse side effects;
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●	the extent to which physicians recommend our products to patients;
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●	physicians’ and patients’ willingness to adopt new therapies in lieu of other products or treatments;
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●	the cost of treatment, safety and efficacy in relation to alternative treatments;
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●	the extent to which the costs of our product candidates are reimbursed by third-party payors, and patients’ willingness to pay for our products;
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●	the extent to which physicians adopt and prescribe PrimeC, rather than the two alternative FDA-approved drugs, ciprofloxacin and celecoxib, that we formulated to create PrimeC;
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●	the revenues and profitability that our products will offer physicians as compared to alternative therapies; and
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●	the effectiveness of our sales and marketing efforts.
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If PrimeC or any of our other product candidates is approved for use, but fails to achieve the broad degree of physician adoption and market acceptance necessary for commercial success, our operating results and financial condition would be adversely affected.

Our product candidates, if approved, mayface significant competition with competing technologies and our failure to compete effectively may prevent us from achieving significantmarket penetration.

The biopharmaceutical industry is intensely competitive and subject to rapid and significant technological change. Our potential competitors include large and experienced companies that enjoy significant competitive advantages over us, such as greater financial, research and development, manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory authorities. These companies may develop new drugs to treat the indications that we target, or seek to have existing drugs approved for use for the treatment of the indications that we target.

We are aware that potentially disease modifying therapeutics for Amyotrophic Lateral Sclerosis, or ALS are being developed by several large and specialty pharmaceutical and biotechnology companies and academic institutions, including Biogen, Amylyx Pharmaceuticals, Novartis, MT-Pharma, Sanofi, AB Science, Prilenia Therapeutics, Brainstorm Cell Therapeutics, Clene, Corcept Therapeutics, Cytokinetics, Denali Therapeutics, Seelos, Eledon, QurAlis, and Apellis Pharmaceuticals, among others, in various stages of clinical trials. In addition, we are aware of several large and specialty pharmaceutical companies, such as Eli Lilly and Roche (including Genentech Inc., its wholly owned subsidiary), that are developing potentially disease modifying therapeutics for Alzheimer’s disease, or ADS, and Parkinson’s Disease, or PD. We do not know whether these potential competitors are already developing, or plan to develop, the same treatments or treatments for other indications that we are pursuing, and we may be unable to ascertain whether such activities are underway in the future.

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in this industry. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis products that are more effective or less costly than our product candidates.

We have no experience in marketing or distributingproducts and no internal capability to do so, and are therefore subject to certain risks in relation to the commercialization of our productcandidates once approved.

We have not yet established a commercial organization for the marketing, sale and distribution of our product candidates. Therefore, even if we receive approval to market our product candidates in the United States or other markets, in order to successfully commercialize our product candidates, we will need to either build marketing, sales, distribution, managerial and other non-technical capabilities or contract with third parties to obtain these capabilities. This involves many challenges, such as recruiting and retaining talented personnel, training employees, setting the appropriate system of incentives, managing additional headcount and integrating new business units into an existing corporate infrastructure. The development of our own sales infrastructure or contracting with third parties will involve substantial expense, much of which we will incur well in advance of any marketing or sales. Moreover, we do not have experience as a company in establishing a significant sales infrastructure, and we cannot be certain that we will successfully develop this capability or contract successfully with third parties for the necessary services. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain personnel for medical affairs, marketing and sales. If we fail to establish an effective sales and marketing infrastructure or contract with third parties to do so, we will be unable to successfully commercialize our product candidates, which in turn would have an adverse effect on our business, financial condition and results of operations.

We may enter into collaborations with thirdparties for the development or commercialization of our product candidates. If our collaborations are not successful, we may not be ableto capitalize on the market potential of these product candidates.

We may utilize a variety of types of collaboration, distribution and other marketing arrangements with third parties to develop our product candidates and commercialize our approved product candidates, if any. We are not currently party to any such arrangement. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.

Any future collaborations that we enter into may pose a number of risks, including the following:

●	collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations;
●	collaborators may not perform their obligations as expected;
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●	product candidates developed by collaborators may not perform sufficiently in clinical trials to be determined to be safe and effective, thereby delaying or terminating the drug approval process and reducing or eliminating milestone payments to which we would otherwise be entitled if the product candidates had successfully met their endpoints and/or received FDA approval;
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●	collaborators may not pursue development and commercialization of our product candidates that receive marketing approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
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●	collaborators 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;
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●	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
●	product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
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●	a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;
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●	disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would divert management attention and resources, be time-consuming and expensive;
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●	collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
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●	collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and
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●	collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
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Collaboration agreements may not lead to the development or commercialization of product candidates in the most efficient manner, or at all. If any future collaborations that we enter into do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates. All of the risks relating to product development, regulatory approval and commercialization described in this Annual Report on Form 20-F also apply to the activities of our collaborators.

Additionally, subject to its contractual obligations to us, if a collaborator of ours were to be involved in a business combination, it might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be harmed.

If in the future we acquire or in-licensetechnologies or product candidates, we may incur various costs, may have integration difficulties and may experience other risks thatcould harm our business and results of operations.

In the future, we may acquire or in-license additional product candidates and technologies. Any product candidate or technologies we in-license or acquire will likely require additional development efforts prior to commercial sale, including extensive preclinical or clinical testing, or both, and approval by the FDA and applicable foreign regulatory authorities, if any. All product candidates are prone to risks of failure inherent in pharmaceutical product development, including the possibility that the product candidate, or product developed based on in-licensed technology, will not be shown to be sufficiently safe and effective for approval by regulatory authorities. If intellectual property related to product candidates or technologies we in-license is not adequate, we may not be able to commercialize the affected products even after expending resources on their development. In addition, we may not be able to manufacture economically or successfully commercialize any product candidate that we develop based on acquired or in-licensed technology that is granted regulatory approval, and such products may not gain wide acceptance or be competitive in the marketplace. Moreover, integrating any newly acquired or in-licensed product candidates could be expensive and time-consuming. If we cannot effectively manage these aspects of our business strategy, our business may be materially harmed.

We currently contract with third-party contractorsfor certain raw materials, compounds and components necessary to produce PrimeC for clinical trials, and expect to continue to do so tosupport commercial scale production of PrimeC, if approved. There are significant risks associated with contracting with third-party suppliers.Furthermore, our existing suppliers may not be able to meet the increased need for certain raw materials, compounds and components thatmay result from our potential commercialization efforts. This increases the risk that we will not have sufficient quantities of PrimeCor be able to obtain such quantities at an acceptable cost, which could delay, prevent or impair our development or commercializationefforts.

We currently rely on third-party contract manufacturers and suppliers for all of our required raw materials, active ingredients and finished products for our preclinical studies and clinical trials. Because there are a limited number of suppliers for the raw materials that we use to manufacture our product candidates, we may need to engage alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, ultimately for commercial sale. We do not have any control over the availability of raw materials. If we or our manufacturers are unable to purchase these raw materials on acceptable terms, at sufficient quality levels, or in adequate quantities, if at all, the development and commercialization of our product candidates or any future product candidates, would be delayed or there would be a shortage in supply, which would impair our ability to meet our development objectives for our product candidates or generate revenues from the sale of any approved products.

We expect to continue to rely on these or other subcontractors and suppliers to support our commercial requirements if PrimeC or any of our other product candidates is approved for marketing by the FDA or foreign regulatory authorities. We plan to continue to rely on third parties for the raw materials, compounds and components necessary to produce our product candidates and for preclinical studies and clinical trials.

Our continuing reliance on third-party contract manufacturers and suppliers entails a number of risks, including reliance on the third party for regulatory compliance and quality assurance, the possible breach of the manufacturing or supply agreement by the third party, and the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. In addition, third-party contract manufacturers and suppliers may not be able to comply with cGMP or quality system regulation, or similar regulatory requirements outside the United States. If any of these risks transpire, we may be unable to timely retain alternate subcontractors or suppliers on acceptable terms and with sufficient quality standards and production capacity, which may disrupt and delay our clinical trials or the manufacture and commercial sale of our product candidates, if approved.

Our failure or the failure of our third-party contract manufacturers and suppliers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of PrimeC or any of our other product candidates that we may develop. Any failure or refusal to supply or any interruption in supply of the components for PrimeC or any other product candidates or products that we may develop could delay, prevent or impair our clinical development or commercialization efforts.

The manufacture of pharmaceutical productsis complex and manufacturers often encounter difficulties in production. If we or any of our third-party manufacturers encounter any difficulties,our ability to provide product candidates for clinical trials or our product candidates to patients, if approved, and the developmentor commercialization of our product candidates could be delayed or stopped.

The manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. We and our contract manufacturers must comply with cGMP requirements. Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling up and validating initial production and contamination controls. These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

We cannot assure you that any stability or other issues relating to the manufacture of any of our product candidates will not occur in the future. Additionally, we and our third-party manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If we or our third-party manufacturers were to encounter any of these difficulties, our ability to provide any product candidates to patients in clinical trials and products to patients, once approved, would be jeopardized. Any delay or interruption in the supply of clinical trial supplies could delay the initiation or completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely. Any adverse developments affecting clinical or commercial manufacturing of our product candidates may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our product candidates. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the development and commercialization of any of our product candidates and could have a material adverse effect on our business, prospects, financial condition and results of operations.

Failure to obtain marketing approval ininternational jurisdictions would prevent our product candidates from being marketed abroad.

In order to market and sell our products in the European Union and other jurisdictions, we or our third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. Regulatory approval processes outside the United States generally include all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be able to file for marketing approvals and may not receive the necessary approvals to commercialize our product candidates in any particular market.

We intend to rely on third parties and consultantsto assist us in conducting our single pivotal clinical trial for PrimeC and certain preclinical and clinical trials for our other productcandidates. If these third parties or consultants do not successfully carry out their contractual duties or meet expected deadlines, wemay be unable to obtain regulatory approval for or commercialize PrimeC or any of our other product candidates.

We do not have the ability to independently conduct many of our preclinical studies or our clinical trials. We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs to conduct clinical trials on our product candidates. Third parties play a significant role in the conduct of our clinical trials and the subsequent collection and analysis of data. These third parties are not our employees, and except for remedies available to us under our agreements, we have limited ability to control the amount or timing of resources that any such third party will devote to our clinical trials. If our CROs or any other third parties upon which we rely for administration and conduct of our clinical trials do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, or for other reasons, or if they otherwise perform in a substandard manner, our clinical trials may be extended, delayed, suspended or terminated, and we may not be able to complete development of, obtain regulatory approval for, or successfully commercialize our product candidates.

We and the third parties upon whom we rely are required to comply with Good Clinical Practice, or GCP, regulations, which are regulations and guidelines enforced by regulatory authorities around the world for products in clinical development. Regulatory authorities enforce these GCP regulations through periodic inspections of clinical trial sponsors, principal investigators and clinical trial sites. If we or our third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and our submission of marketing applications may be delayed or the regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, a regulatory authority will determine that any of our clinical trials comply or complied with applicable GCP regulations. In addition, our clinical trials must be conducted with material produced under current cGMP regulations, which are enforced by regulatory authorities. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be impacted if our CROs, clinical investigators or other third parties violate federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

In order for our clinical trials to be carried out effectively and efficiently, it is imperative that our CROs and other third parties communicate and coordinate with one another. Moreover, our CROs and other third parties may also have relationships with other commercial entities, some of which may compete with us. Our CROs and other third parties may terminate their agreements with us upon as few as 30 days’ notice under certain circumstances. If our CROs or other third parties conducting our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical trial protocols or GCPs, or for any other reason, we may need to conduct additional clinical trials or enter into new arrangements with alternative CROs, clinical investigators or other third parties. We may be unable to enter into arrangements with alternative CROs on commercially reasonable terms, or at all. Switching or adding CROs, clinical investigators or other third parties can involve substantial cost and require extensive management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays may occur, which can impact our ability to meet our desired clinical development timelines. Although we carefully manage our relationship with our CROs, clinical investigators and other third parties, there can be no assurance that we will not encounter such challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, prospects, financial condition or results of operations.

If our product candidates are approved formarketing, and we are found to have improperly promoted off-label uses, or if physicians misuse our products, we may become subject toprohibitions on the sale or marketing of our products, significant sanctions, and product liability claims, and our image and reputationwithin the industry and marketplace could be harmed.

The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about drug products. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. For example, if we receive marketing approval for PrimeC for treatment of ALS, the first indication we are pursuing, we cannot promote the use of our product in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may receive warning letters and become subject to significant liability, which would harm our business. The federal government has levied large administrative, civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would harm our business. In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we are deemed by the FDA to have engaged in the promotion of our products for off-label use, we could be subject to prohibitions on the sale or marketing of our products or significant fines and penalties, and the imposition of these sanctions could also affect our reputation with physicians, patients and caregivers, and our position within the industry.

Physicians may also misuse our products or use improper techniques, potentially leading to adverse results, side effects or injury, which may lead to product liability claims. If our products are misused or used with improper technique, we may become subject to costly litigation. Product liability claims could divert management’s attention from our core business, be expensive to defend, and result in sizable damage awards against us that may not be covered by insurance. We currently carry product liability insurance covering our clinical trials with policy limits that we believe are customary for similarly situated companies and adequate to provide us with coverage for foreseeable risks. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Furthermore, the use of our products for conditions other than those approved by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

If we fail to manage our growth effectively,our business could be disrupted.

As of December 31, 2024, we had seventeen full and part time employees and several part-time consultants, most of whom are based at our headquarters in Herzliya, Israel and the rest of whom work in Switzerland and the United States. We will need to continue to expand our development, quality, sales, managerial, operational, finance, marketing and other resources to manage our operations and clinical trials, continue our development activities and commercialize our product candidates, if approved. Our management, personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our expansion strategy requires that we:

●	manage our clinical trials effectively;
●	identify, recruit, retain, incentivize and integrate additional employees;
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●	manage our internal development efforts effectively while carrying out our contractual obligations to third parties; and
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●	continue to improve our operational, financial and management controls, reporting systems and procedures.
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Due to our limited financial resources and our limited experience in managing a larger company, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage expansion could delay the execution of our development and strategic objectives, or disrupt our operations; and if we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our revenues will suffer and we would incur significant additional losses.

If product liability lawsuits are broughtagainst us, we may incur substantial liabilities and may be required to limit commercialization of any of our other products we develop.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

●	decreased demand for our product candidates or products we develop;
●	injury to our reputation and significant negative media attention;
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●	withdrawal of clinical trial participants or cancellation of clinical trials;
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●	costs to defend the related litigation, which may be only partially recoverable even in the event of successful defenses;
●	a diversion of management’s time and our resources;
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●	substantial monetary awards to trial participants or patients;
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●	regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
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●	loss of revenues;
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●	exhaustion of any available insurance and our capital resources; and
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●	the inability to commercialize any product we develop.
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Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of products we may develop. We currently carry general clinical trial product liability insurance in an amount that we believe is adequate to cover the scope of our ongoing clinical programs. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses. If and when we obtain approval for marketing PrimeC or any other product candidate, we intend to expand our insurance coverage to include the commercialization of PrimeC or any other approved product that we may have; however, we may be unable to obtain this liability insurance on commercially reasonable terms.

If we fail to attract and keep senior managementand key scientific personnel, we may be unable to successfully develop our product candidates, conduct our clinical trials and commercializeany of the products we develop.

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. We believe that our future success is highly dependent upon the contributions of members of our senior management, as well as our senior scientists and other members of our management team. The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, completion of our planned clinical trials or the commercialization of our product candidates. Although we have employment agreements with some of our employees, these agreements do not prevent them from terminating their employment with us after providing the appropriate notice as described in the agreements.

Although we have not historically experienced unique difficulties in attracting and retaining qualified employees, we could experience such problems in the future. For example, competition for qualified personnel in the pharmaceutical field is intense due to the limited number of individuals who possess the skills and experience required by our industry. We will need to hire additional personnel as we expand our clinical development and commercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output. Moreover, we are domiciled in Israel and are predominantly based in Israel, which may make it difficult to hire necessary U.S.-based personnel.

Our internal computer systems, or thoseof our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a disruption of our drugdevelopment programs.

Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage from cyber-security threats, including computer viruses, harmful code and unauthorized access, natural disasters, fire, terrorism, war and telecommunication and electrical failures. If a disruption event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss of clinical trial data from completed, 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, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed. See “Item 16.K—Cybersecurity” for further information.

Under applicable employment laws, we maynot be able to enforce covenants not to compete.

We generally enter into non-competition agreements as part of our employment agreements with our employees. These agreements generally prohibit our employees, if they cease working for us, from competing directly with us or working for our competitors for a limited period. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us.

For example, Israeli labor courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts as justification for the enforcement of non-compete undertakings, such as the protection of a company’s trade secrets or other intellectual property.

Our employees, independent contractors,clinical investigators, CROs, consultants and vendors may engage in misconduct or other improper activities, including noncompliance withregulatory standards and requirements and insider trading.

We are exposed to the risk that our employees, independent contractors, clinical investigators, CROs, consultants and vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct, breach of contract or disclosure of unauthorized activities to us that violates: FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA; manufacturing standards; federal, state and foreign healthcare fraud and abuse laws; or laws that require the reporting of financial information or data accurately.

Specifically, research, sales, marketing, education and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws may restrict or prohibit a wide range of pricing, discounting, education, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, even if we are successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business. Violations of such laws subject us to numerous penalties, including, but not limited to, the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Exchange rate fluctuations between the U.S.Dollar and the NIS may negatively affect our earnings.

The U.S. dollar is our functional and reporting currency. However, a significant portion of our operating expenses are incurred in NIS, which is the lawful currency of the State of Israel. As a result, we are exposed to the risks that the NIS may appreciate relative to the dollar, or, if the NIS instead devalues relative to the dollar, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or that the timing of such devaluation may lag behind inflation in Israel. In any such event, the dollar cost of our operations in Israel would increase and our dollar-denominated results of operations would be adversely affected. We cannot predict any future trends in the rate of inflation in Israel or the rate of devaluation (if any) of the NIS against the dollar. For example, the dollar strengthened against the NIS in 2022, 2023 and 2024 by 12.5%, 3.0% and 0.55%, respectively. If the dollar cost of our operations in Israel increases, our dollar-measured results of operations will be adversely affected.

Our business, operating results and growthrates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respectto financial institutions and associated liquidity risk.

Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, the current war between Israel and Hamas, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates, limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, which could result in an inability to satisfy demand for our products and a loss of market share.

In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.

There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.

Risks Related to Our Intellectual Property

If our efforts to obtain, protect or enforceour patents and other intellectual property rights related to our product candidates and technologies are not adequate, we may not beable to compete effectively in our market and we otherwise may be harmed.

Our commercial success depends in significant part upon our ability to obtain, maintain, enforce and defend patent protection and utilize trade secret protection with respect to our proprietary technologies, our products and their uses, and to operate our business without infringing, misappropriating, or otherwise violating the intellectual property rights of others. We rely upon a combination of patents, trade secret protection, confidentiality agreements, assignment of invention agreements and other contractual arrangements to protect the intellectual property related to PrimeC’s fixed dose combination of ciprofloxacin and celecoxib and our other product candidates. If we are unable to obtain and maintain sufficient intellectual property protection for our technologies and product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize technologies and product candidates similar or identical to ours, and our ability to successfully commercialize the technologies and product candidates that we may pursue may be impaired.

Although we enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions.

While we seek patent protection for all of our product candidates, our patent coverage is limited, and we can provide no assurance that any of our current or future patent applications will result in issued patents or that any issued patents will provide us with any competitive advantage. Our patent portfolio includes U.S. Patent 10,980,780, which relates to methods for treatment of ALS using ciprofloxacin and celecoxib, and which expires in 2038. This patent also been issued in the European Patent Office, Japan, Canada, Australia and Israel. In addition, U.S. patent application 16/623,467, which relates to methods of treatment of neurodegenerative disease using combinations of ciprofloxacin and celecoxib, is currently pending. This patent application is expected to expire on June 20, 2038.

In addition, we have developed a pharmaceutical composition comprising, as active ingredients, ciprofloxacin and celecoxib, and have been granted US Patent 12,097,185 and have filed international PCT application PCT/IL2022/051096 relating to the compositions. These applications relate to pharmaceutical formulations. The US patent will expire in December 2042 and the national patent applications based on the PCT application are expected to expire on October 19, 2042.

Limitations on the scope of our intellectual property rights may limit our ability to prevent third parties from designing around such rights and competing against us. For example, some of our patent applications and patents do not claim a new compound. Rather, the active pharmaceutical ingredients of PrimeC are existing compounds and some of our pending patent applications are directed to, among other things, novel formulations of these existing compounds. Accordingly, other parties may compete with us, for example, by independently developing or obtaining competing formulations that design around our patent claims, but which may contain the same active ingredients, or by seeking to invalidate our patents. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, eroding our competitive position in the market.

The patent applications that we own may fail to result in granted patents in the United States or foreign jurisdictions, or if granted may fail to prevent a potential infringer from marketing its product or be deemed invalid and unenforceable by a court. Our ability to obtain and maintain valid and enforceable patents depends on various factors, including interpretation of our technology and the prior art and whether the differences between them allow our technology to be patentable. Patent applications and patents granted from them are complex, lengthy and highly technical documents that are often prepared under very limited time constraints and may not be free from errors that make their interpretation uncertain. The existence of errors in a patent may have an adverse effect on the patent, its scope and its enforceability. Even if our pending and future patent applications issue as patents in relevant jurisdictions, they may not issue in a form that will provide us with any meaningful protection for our technology or product candidates, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Additionally, our competitors may be able to circumvent our patents by developing similar or alternative technologies or product candidates in a non-infringing manner.

Also, our granted patents may be subject to challenges. We may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or the USPTO, or become involved in opposition, derivation, revocation, ex parte reexamination, inter partes review, post grant review, derivation, or interference proceedings challenging our patent rights or the patent rights of others, or other proceedings in the USPTO or applicable foreign offices that challenge priority of invention or other features of patentability. For example, patents granted by the European Patent Office may be opposed by any person within nine months from the publication of their grant.

An adverse determination in any such submission, proceeding or litigation could result in loss of exclusivity, patent claims being narrowed, invalidated or held unenforceable, in whole or in part, or limits of the scope or duration of the patent protection of our technologies or product candidates, all of which could limit our ability to stop others from using or commercializing similar or identical product candidates or technology to compete directly with us, without payment to us.

We may be subject to claims that we infringe,misappropriate or otherwise violate the intellectual property rights of third parties.

Even if our patents do successfully issue, third parties may own rights to third party patents which relate to various aspects of the PrimeC product and any of our other product candidates. To meet such challenges, which are part of the risks and uncertainties of developing and marketing product candidates, we may need to evaluate third party intellectual property rights and, if appropriate, to seek licenses for such third party intellectual property or to challenge such third party intellectual property, which may be costly and may or may not be successful, which could also have an adverse effect on the commercial potential for PrimeC and any of our other product candidates.

We may receive only limited protection,or no protection, from our issued patents and patent applications.

If we encounter delays in our clinical trials or regulatory approval of our product candidates, the period of time during which we could market any of our product candidates under patent protection could be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either (i) file any patent application related to the treatment of ALS using ciprofloxacin and celecoxib or (ii) conceive and invent any of the compositions or methods claimed in our patents or patent applications, including patents or patent applications related to PrimeC and our other product candidates.

The patent application process, also known as patent prosecution, is expensive and time consuming, and we or any future licensors and licensees may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we or any future licensors or licensees will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, these and any of our patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, etc., although we are unaware of any such defects that we believe are of material import. If we or any future licensors or licensees fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and unenforceable. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

The strength of patents in the pharmaceutical field involves complex legal and scientific questions and can be uncertain. This uncertainty includes changes to the patent laws through either legislative action to change statutory patent law or court action that may reinterpret existing law in ways affecting the scope or validity of issued patents. The patent applications that we own or in-license may fail to result in issued patents in the United States or foreign countries with claims that cover our product candidates. Even if patents do successfully issue from the patent applications that we own or in-license, third parties may challenge the validity, enforceability or scope of such patents, which may result in such patents being narrowed, invalidated or held unenforceable. For example, patents granted by the European Patent Office may be challenged, also known as opposed, by any person within nine months from the publication of their grant. In addition, post grant review in the USPTO begins with a third party filing a petition on or prior to the date that is 9 months after the grant of the patent or issuance of a reissue patent. Third parties can also challenge a patent in the USPTO by way of inter partes review, ex parte reexamination, derivation, or interference proceedings. Any successful challenge to our patents could deprive us of exclusive rights necessary for the successful commercialization of our product candidates. Furthermore, even if they are unchallenged, our patents may not adequately protect our product candidates, provide exclusivity for our product candidates, or prevent others from designing around our claims. If the breadth or strength of protection provided by the patents we hold or pursue with respect to our product candidates is challenged, it could dissuade companies from collaborating with us to develop, or threaten our ability to commercialize our product candidates.

Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however the life of a patent, and the protection it affords, is limited. Without patent protection for our product candidates, we may be open to competition from generic versions of our product candidates. Further, if we encounter delays in our development efforts, including our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.

If we are unable to protect the confidentialityof our trade secrets, our business and competitive position would be harmed.

In addition to the protection afforded by patents, we also rely on trade secret protection to protect proprietary know-how, technology and other proprietary information that may not be patentable or that we elect not to patent, processes for which patents may be difficult to obtain or enforce, and any other elements of our product candidates, and our product development processes (such as manufacturing and formulation technologies) that involve proprietary know-how, information or technology that is not covered by patents.

Trade secrets and know-how can be difficult to protect. We seek to protect these trade secrets and other proprietary technology, in part, by requiring all of our employees, consultants, advisors, and any other third parties that have access to our proprietary know-how, information or technology to execute confidentiality agreements upon the commencement of their relationships with us.^^We cannot be certain that we have or will obtain these agreements in all circumstances and we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary information. If the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secrets.

Despite our efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets. Adequate remedies may not exist in the event of unauthorized use or disclosure of our trade secrets. In addition, in some situations, these confidentiality agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants, or advisors have previous employment or consulting relationships. To the extent that our employees, consultants or contractors use any intellectual property owned by third parties in their work for us, disputes may arise as to the rights in any related or resulting know-how and inventions. Any misappropriation or unauthorized disclosure of our trade secrets could have an adverse effect on our business, impact our ability to establish or maintain a competitive advantage in our market, or otherwise harm our business, operating results and financial condition.

Furthermore, trade secret protection does not prevent competitors from independently developing substantially equivalent information and techniques and we cannot guarantee that our competitors will not independently develop substantially equivalent information and techniques. The FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.

Changes in U.S. patent law could diminishthe value of patents in general, thereby impairing our ability to protect our products.

As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly on obtaining and enforcing patents. Obtaining and enforcing patents in the pharmaceutical industry involves both technological and legal complexity, and therefore, is costly, time-consuming and inherently uncertain. In addition, the Leahy-Smith America Invents Act, or the AIA, which was passed on September 16, 2011, resulted in significant changes to the U.S. patent system. Further, U.S. Supreme Court rulings in recent years have either narrowed the scope of patent protection available in certain circumstances or weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

The significant changes to U.S. patent law under the AIA include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. For our U.S. patent applications that contain or contained at any time a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law. The USPTO has developed and continues to develop regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent law associated with the AIA. The AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business and financial condition. It is not clear what other, if any, impact the AIA will have on the operation of our business.

An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application, but circumstances could prevent us from promptly filing patent applications on our inventions. Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow our technology to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications.

Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.

Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

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

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent prosecution process.

Periodic maintenance fees and various other governmental fees on any issued patent and/or pending patent applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent or patent application. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees. While an inadvertent lapse may sometimes be cured by payment of a late fee or by other means in accordance with the applicable rules, there are many situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications directed to our product candidates, our competitors might be able to enter the market earlier than should otherwise have been the case, which could harm our business, financial condition, results of operations, and prospects.

We may not be able to protect our intellectualproperty rights throughout the world.

Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive and our intellectual property rights in some countries outside of the United States, Europe, and Israel. The requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement on infringing activities is inadequate. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

In addition, some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

If we are unable to protect our trademarksfrom infringement, our business prospects may be harmed.

We plan to register trademarks that identify PrimeC in the United States and Israel. Although we take steps to monitor the possible infringement or misuse of our trademarks, it is possible that third parties may infringe, dilute or otherwise violate our trademark rights. Any unauthorized use of our trademarks could harm our reputation or commercial interests. In addition, our enforcement against third-party infringers or violators may be unduly expensive and time-consuming, and the outcome may be an inadequate remedy. Over the long term, if we are unable to successfully register our trademarks and trade names and establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition or results of operations.

We may become involved in lawsuits to protector enforce our patents or other intellectual property, which could be expensive and time consuming, delay or prevent the development andcommercialization of our products and product candidates or put our patents and other proprietary rights at risk.

Third parties may infringe or misappropriate our intellectual property, including our existing patents, patents that may issue to us in the future. As a result, we may be required to file infringement claims to stop third-party infringement or unauthorized use. Further, we may not be able to prevent misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.

Generic drug manufacturers may develop, seek approval for, and launch generic versions of our products. If we file an infringement action against such a generic drug manufacturer, that company may challenge the scope, validity or enforceability of our patents, requiring us to engage in complex, lengthy and costly litigation or other proceedings.

For example, if we initiated legal proceedings against a third party to enforce a patent covering our product candidates, the defendant could counterclaim that the patent covering our product candidates is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent.

In addition, within and outside of the United States, there has been a substantial amount of litigation and administrative proceedings, including inter partes review, post grant review, interference or derivation proceedings, and ex parte reexamination proceedings before the USPTO or other comparable proceedings in various foreign jurisdictions, regarding patent and other intellectual property rights in the pharmaceutical industry. These proceedings bring uncertainty to the possibility of challenges to our patents in the future, including challenges by competitors who perceive our patents as blocking entry into the market for their products, and the outcome of such challenges.

Such litigation and administrative proceedings could result in revocation of our patents or amendment of our patents such that they do not cover our product candidates. They may also put our pending patent applications at risk of not issuing, or issuing with limited and potentially inadequate scope to cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. Additionally, it is also possible that prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, may, nonetheless, ultimately be found by a court of law or an administration panel to affect the validity or enforceability of a claim. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a negative impact on our business.

Enforcing our intellectual property rights through litigation would be very expensive, particularly for a company of our size, time-consuming, and inherently uncertain. Some of our competitors may be able to sustain the costs of litigation more effectively than we can because of greater financial resources. Patent litigation and other proceedings may also divert technical and management personnel from their normal responsibilities.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could harm our business, financial condition or results of operations.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure. In addition, during the course of litigation or administrative proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our ordinary shares and Warrants could be significantly harmed.

We may become subject to claims for remunerationor royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property has been developed by our employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee during the scope of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent an agreement between the employee and employer providing otherwise. The Patents Law also provides that if there is no agreement between an employer and an employee determining whether the employee is entitled to receive consideration for service inventions and on what terms, this will be determined by the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patents Law. Case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although we generally enter into agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created during and as a result of their employment with us, we may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be forced to litigate such monetary claims (which will not affect our proprietary rights), which could negatively affect our business.

Third party claims alleging intellectualproperty infringement may adversely affect our business.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties, for example, the intellectual property rights of competitors. Our research, development and commercialization activities may be subject to claims that we infringe or otherwise violate patents owned or controlled by third parties. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our activities related to our product candidates may give rise to claims of infringement of the patent rights of others. We cannot assure you that our product candidates will not infringe existing or future patents. We may not be aware of patents that have already issued that a third party might assert are infringed by our product candidates. It is also possible that patents of which we are aware, but which we do not believe are relevant to our product candidates, could nevertheless be found to be infringed by our product candidates. Nevertheless, we are not aware of any issued patents that we believe would prevent us from marketing our product candidates, if approved. There may also be patent applications that have been filed but not published that, when issued as patents, could be asserted against us. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that we may be subject to claims of infringement of the intellectual property rights of third parties.

Third parties making claims against us for infringement or misappropriation of their intellectual property rights may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. Defense of these claims, regardless of their merit, would cause us to incur substantial expenses and, and would be a substantial diversion of management time and employee resources from our business. In the event of a successful claim of infringement against us by a third party, we may have to (i) pay substantial damages, including treble damages and attorneys’ fees if we are found to have willfully infringed the third party’s patents; (ii) obtain one or more licenses from the third party; (iii) pay royalties to the third party; and/or (iv) redesign any infringing products. Redesigning any infringing products may be impossible or require substantial time and monetary expenditure. Further, we cannot predict whether any required license would be available at all or whether it would be available on commercially reasonable terms. In the event that we could not obtain a license, we may be unable to further develop and commercialize our product candidates, which could harm our business significantly. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

Defending ourselves in litigation is very expensive, particularly for a company of our size, and time-consuming. Some of our competitors may be able to sustain the costs of litigation or administrative proceedings more effectively than we can because of greater financial resources. Patent litigation and other proceedings may also absorb significant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could harm our business, financial condition or results of operations.

We may be subject to claims that our employees,consultants or independent contractors have wrongfully used or disclosed confidential information or alleged trade secrets of third partiesor competitors or are in breach of non-competition or non-solicitation agreements with our competitors.

We employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information or trade secrets of these third parties or our employees’ former employers. Further, we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. We may also be subject to claims that former employees, consultants, independent contractors, collaborators or other third parties have an ownership interest in our patents or other intellectual property. Litigation may be necessary to defend against these and other claims challenging our right to and use of confidential and proprietary information. If we fail in defending any such claims, in addition to paying monetary damages, we may lose our rights therein. Such an outcome could have a negative impact on our business. Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. Any litigation or the threat thereof may adversely affect our ability to hire employees. A loss of key personnel or their work product could hamper or prevent our ability to commercialize product candidates, which could have an adverse effect on our business, results of operations and financial condition. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of litigation proceedings could adversely affect our ability to compete in the marketplace.

Risks Related to Government Regulation

If the FDA does not conclude that PrimeC,or our other product candidates satisfy the requirements under Section 505(b)(2) of the Federal Food Drug and Cosmetic Act, or Section505(b)(2), or if the requirements for such product candidates are not as we expect, the approval pathway for these product candidateswill likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated,and in either case may not be successful.

We intend to commence a pivotal clinical trial for PrimeC under the FDA’s Section 505(b)(2) regulatory pathway. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the Federal Food, Drug and Cosmetic Act. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant, and for which the applicant has not received a right of reference, which could expedite the development program for PrimeC and our other product candidates by potentially decreasing the amount of preclinical and clinical data that we would need to generate in order to obtain FDA approval. Although PrimeC is a formulation of two FDA-approved drugs, ciprofloxacin and celecoxib, which will not be treated as new chemical entities, or NCEs, the submission of an NDA under the Section 505(b)(2) or similar regulatory pathway does not preclude the FDA from determining that the product candidate that is the subject of such submission is an NCE and therefore not eligible for review under such regulatory pathway.

Though we have received initial agreement from the FDA for our development to continue under the 505(b)(2) pathway, the FDA may reverse that decision and not allow us to pursue the Section 505(b)(2) or similar regulatory pathway as anticipated. In that case, we may need to conduct additional preclinical experiments and clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for these product candidates, and complications and risks associated with these product candidates, would likely increase significantly. Moreover, inability to pursue the Section 505(b)(2) or similar regulatory pathway could result in new competitive products reaching the market more quickly than our product candidates, which would likely harm our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) or similar regulatory pathway, our product candidates may not receive the requisite approvals for commercialization.

In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain competitors and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may be required to change its 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in the approval to market of our potential future NDAs for up to 30 months depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delays in the approval to market approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway for our product candidates, there is no guarantee this would ultimately lead to faster product development or earlier approval.

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

We expect current and future legislationaffecting the healthcare industry, including healthcare reform, to impact our business generally and to increase limitations on reimbursement,rebates and other payments, which could adversely affect third-party coverage of our products, our operations, and/or how much or underwhat circumstances healthcare providers will prescribe or administer our products, if approved.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

For example, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010, or collectively, the ACA, a law intended, among other things, to broaden access to health insurance, improve quality of care, and reduce or constrain the growth of healthcare spending.

Provisions of the ACA relevant to the pharmaceutical industry include the following:

●	an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, not including orphan drug sales;
●	an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively;
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●	a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts on negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
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●	extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
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●	expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
●	expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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●	new requirements to report annually certain financial arrangements with physicians and teaching hospitals; as defined in the ACA and its implementing regulations, including reporting any payment or “transfer of value” provided to physicians and teaching hospitals and any ownership and investment interests held by physicians and their immediate family members during the preceding calendar year;
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●	expansion of healthcare fraud and abuse laws, including the federal civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance; and
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●	a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research.
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There have been judicial and Congressional challenges to certain aspects of the ACA. As a result, there have been delays in the implementation of, and action taken to repeal or replace, certain aspects of the ACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Further, in January 2017, Congress adopted a budget resolution for fiscal year 2017, or the Budget Resolution, that authorizes the implementation of legislation that would repeal portions of the ACA. Following the passage of the Budget Resolution, in March 2017, the U.S. House of Representatives introduced legislation known as the American Health Care Act, which, if enacted, would amend or repeal significant portions of the ACA.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of an amount greater than $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which started in 2013 and, following passage of the Bipartisan Budget Act of 2015, will stay in effect through 2025 unless additional Congressional action is taken. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several categories of healthcare providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. On August 16, 2022, President Biden signed into law the Inflation Reduction Act that is intended to lower certain prescription drug costs under Medicare. The law permits the Medicare program to negotiate Medicare payments for a limited number of drugs. Beginning in 2026, there will be 10 drugs; 2027-2029 there will be 15 drugs for each of those years; and 20 drugs for each of the following years. In addition, the law set a cap of $2,000 in 2025 on out-of-pocket drug costs for Medicare eligible individuals. Additionally, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. Further, the U.S. House of Representatives recently formed an Affordable Drug Pricing Task Force to advance legislation intended to control pharmaceutical drug costs and investigate pharmaceutical drug pricing, and the U.S. Senate has requested information from certain pharmaceutical companies in connection with an investigation into pharmaceutical drug pricing practices. If healthcare policies or reforms intended to curb healthcare costs are adopted, or if we experience negative publicity with respect to the pricing of our products or the pricing of pharmaceutical drugs generally, the prices that we charge for any approved products may be limited, our commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted.

If we obtain regulatory approval and commercialization of PrimeC or any of our other product candidates, these laws may result in additional reductions in healthcare funding, which could have an adverse effect on our customers and accordingly, our financial operations. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of PrimeC or our other product candidates may be.

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

Orphan Drug Designation may not ensure thatwe will enjoy market exclusivity in a particular market, and if we fail to obtain or maintain orphan drug exclusivity for our productcandidates, we may be subject to earlier competition and our potential revenue will be reduced.

Orphan Drug Designation entitles a party to financial incentives, such as opportunities for grant funding towards clinical trial costs, tax advantages, user-fee waivers and market exclusivity for certain periods of time.

The FDA and the EMA have both granted PrimeC orphan drug designation for the treatment of ALS. Even if we obtain Orphan Drug Designation for our other product candidates, we may not be the first to obtain regulatory approval for any particular orphan indication due to the uncertainties associated with developing biopharmaceutical products. Further, even if we obtain Orphan Drug Designation for a product candidate, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition. In addition, if a competitor obtains approval and marketing exclusivity for a drug product with an active moiety that is the same as that in a product candidate we are pursuing for the same indication, approval of our product candidate would be blocked during the period of marketing exclusivity unless we could demonstrate that our product candidate is clinically superior to the approved product. In addition, if a competitor obtains approval and marketing exclusivity for a drug product with an active moiety that is the same as that in a product candidate we are pursuing for a different orphan indication, this may negatively impact the market opportunity for our product candidate. There have been legal challenges to aspects of the FDA’s regulations and policies concerning the exclusivity provisions of the Orphan Drug Act, and future challenges could lead to changes that affect the protections afforded our product candidates in ways that are difficult to predict.

Even if we receive regulatory approval forour product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significantadditional expenses, limit or withdraw regulatory approval and subject us to penalties if we fail to comply with applicable regulatoryrequirements.

If and when regulatory approval has been granted, our product candidates or any approved product will be subject to continual regulatory review by the FDA and/or non-U.S. regulatory authorities. Additionally, any product candidates, if approved, will be subject to extensive and ongoing regulatory requirements, including labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indications for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product. In addition, if the applicable regulatory agency approves our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval.

Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or problems with our third-party manufacturers’ processes, or failure to comply with regulatory requirements, may result in, among other things:

●	restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
●	fines, warnings letters or holds on clinical trials;
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●	refusal by the FDA to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product license approvals; and
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●	product seizure or detention, or refusal to permit the import or export of products; and injunctions or the imposition of civil or criminal penalties.
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Our ongoing regulatory requirements may also change from time to time, potentially harming or making costlier our commercialization efforts. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or other countries. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.

Our relationships with healthcare professionals,independent contractors, clinical investigators, CROs, consultants and vendors in connection with our current and future business activitiesmay be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws, government price reporting,and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could facepenalties.

We may currently be or may become subject to various U.S. federal and state health care laws, including those intended to prevent health care fraud and abuse.

The federal Anti-Kickback Statute prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid Remuneration has been broadly defined to include anything of value, including, but not limited to, cash, improper discounts, and free or reduced price items and services.

Federal false claims laws, including the federal False Claims Act, or FCA, and civil monetary penalties law impose penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false or fraudulent or making a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government. The FCA has been used to, among other things, prosecute persons and entities submitting claims for payment that are inaccurate or fraudulent, that are for services not provided as claimed, or for services that are not medically necessary. The FCA includes a whistleblower provision that allows individuals to bring actions on behalf of the federal government and share a portion of the recovery of successful claims.

Many States have similar fraud and abuse statutes and regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. State and federal authorities have aggressively targeted medical technology companies for, among other things, alleged violations of these anti-fraud statutes, based on improper research or consulting contracts with doctors, certain marketing arrangements that rely on volume-based pricing, off-label marketing schemes, and other improper promotional practices.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, among other things, imposes criminal liability for knowingly and willfully executing, or attempting to execute, 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.

Additionally, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and their implementing regulations, also impose certain obligations, including mandatory contractual terms, on certain types of individuals and entities with respect to safeguarding the privacy, security and transmission of individually identifiable health information without proper written authorization.

Our operations will also be subject to the federal transparency requirements under the ACA, which require certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to annually report to the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS, information related to payments and other transfers of value provided to physicians and teaching hospitals and certain ownership and investment interests held by physicians and their immediate family members. We may also be subject to state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and/or state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidelines promulgated by the federal government.

If any of our business activities, including but not limited to our relationships with healthcare providers, violate any of the aforementioned laws, we may be subject to administrative, civil and/or criminal penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations.

Also, the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We cannot assure you that our internal control policies and procedures will protect us from reckless or negligent acts committed by our employees, future distributors, partners, collaborators or agents. Violations of these laws, or allegations of such violations, could result in fines, penalties or prosecution and have a negative impact on our business, results of operations and reputation.

It may be difficult for us to profitablysell our product candidates if coverage and reimbursement for these products is limited by government authorities and/or third-party payorpolicies.

In addition to any healthcare reform measures which may affect reimbursement, market acceptance and sales of PrimeC and our other product candidates, if approved, will depend on the coverage and reimbursement policies of government authorities and third-party payors. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will cover and establish reimbursement levels.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third party payors decide which drugs they will pay for and establish reimbursement and co-payment levels. Government and other third-party payors are increasingly challenging the prices charged for health care products, examining the cost effectiveness of drugs in addition to their safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement for prescription drugs. We cannot be sure that coverage will be available for PrimeC or our other product candidates, if approved, or, if coverage is available, the level of reimbursement.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principal decisions about reimbursement for new medicines are typically made by CMS, an agency within the U.S. Department of HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors often follow CMS. It is difficult to predict what CMS as well as other payors will decide with respect to reimbursement.

Reimbursement may impact the demand for, and/or the price of, any product for which we obtain marketing approval. Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.

Reimbursement by a third-party payor may depend upon a number of factors including the third-party payor’s determination that use of a product is:

●	a covered benefit under its health plan;
●	safe, effective and medically necessary;
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●	appropriate for the specific patient;
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●	cost-effective; and
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●	neither experimental nor investigational.
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Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor. Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payors in the United States. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination process may require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. We may not be able to provide data sufficient to gain acceptance with respect to coverage and/or sufficient reimbursement levels. We cannot be sure that coverage or adequate reimbursement will be available for PrimeC or any of our other product candidates, if approved. Also, we cannot be sure that reimbursement amounts will not reduce the demand for, or the price of, our future products. If reimbursement is not available, or is available only to limited levels, we may not be able to commercialize PrimeC or our other product candidates, or achieve profitably at all, even if approved.

Legislative or regulatory healthcare reformsin the United States or abroad may make it more difficult and costly for us to obtain regulatory clearance or approval of PrimeC or anyof our other product candidates now or in the future and to produce, market, and distribute our products after clearance or approval isobtained.

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

●	changes to manufacturing methods;
●	change in protocol design;
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●	additional treatment arm (control);
●	recall, replacement, or discontinuance of one or more of our products; and
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●	additional recordkeeping.
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Each of these would likely entail substantial time and cost and could harm our business and our financial results. In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products would harm our business, financial condition, and results of operations.

Risks Related to an Investment in Our OrdinaryShares and Warrants

If we fail to maintaincompliance with Nasdaq’s continued listing requirements, our shares may be delisted from the Nasdaq Capital Market

To continue to be listed on the Nasdaq, we need to comply with the continued listing requirement, including a minimum closing bid price per share of $1.00 for 30 consecutive business days (the “Minimum Bid Price Rule”) and shareholders’ equity of at least $2.5 million (the “Minimum Equity Rule”). On December 21, 2023, we received a notice from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC indicating that we failed to comply with the continued listing requirement that we maintain either a minimum of $2,500,000 in shareholders’ equity or $35,000,000 market value of listed securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years, as set forth in Nasdaq Listing Rule 5550(b)(1) . On February 5, 2024, we submitted to the Staff a plan to regain compliance with the Minimum Equity Rule. After submitting a plan to regain compliance, Nasdaq granted us an extension to regain compliance. On January 6, 2025, we announced that we had regained compliance with the Minimum Equity Rule. Previously on September 5, 2023, we received notice from the Staff that we did not meet the Minimum Bid Price Rule; however during February 2024, we regained compliance with the Minimum Bid Price Rule.

No assurance can be given that we will be able to maintain compliance with the Minimum Equity Rule or the Minimum Bid Price Rule or comply with the other standards that we are required to meet in order to maintain a listing on such exchange. Our failure to meet these requirements may result in our securities being delisted from Nasdaq.

If our ordinary shares are delisted from Nasdaq, we may seek to list them on other markets or exchanges or the ordinary shares may trade on the pink sheets. In the event of such delisting, our shareholders’ ability to trade, or obtain quotations of the market value of, our ordinary shares would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices for our securities. In addition, the substantially decreased trading in the ordinary shares and decreased market liquidity of the ordinary shares as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, which could materially adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of the ordinary shares may decline further and shareholders may lose some or all of their investment. There can be no assurance that the ordinary shares, if delisted from the Nasdaq in the future, would be listed on another national or international securities exchange or on a national quotation service, the Over-The-Counter Markets or the pink sheets.

The market price of our ordinary sharesand Warrants may be subject to fluctuation and you could lose all or part of your investment.

The stock market in general has been, and the market price of our ordinary shares and Warrants in particular will likely be, subject to fluctuation, whether due to, or irrespective of, our operating results and financial condition. The market price of our ordinary shares and Warrants on the Nasdaq Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to:

●	our inability to continue as a going concern;
●	success, delay or failure of our research and development projects or those of our competitors;
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●	actual or anticipated variations in our and our competitors’ results of operations and financial condition;
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●	physician and market acceptance of our products;
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●	the mix of products that we sell;
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●	our success or failure to obtain approval for and commercialize our product candidates;
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●	changes in earnings estimates or recommendations by securities analysts, if our ordinary shares and Warrants are covered by analysts;
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●	development of technological innovations or new competitive products by others;
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●	announcements of technological innovations or new products by us;
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●	publication of the results of preclinical or clinical trials for PrimeC or our other product candidates;
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●	failure by us to achieve a publicly announced milestone;
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●	delays between our expenditures to develop and market new or enhanced product candidates and the generation of sales from those products;
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●	developments concerning intellectual property rights, including our involvement in litigation brought by or against us;
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●	regulatory developments and the decisions of regulatory authorities as to the approval or rejection of new or modified products;
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●	changes in the amounts that we spend to develop, acquire or license new products, technologies or businesses;
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●	changes in our expenditures to promote our products;
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●	our sale or proposed sale, or the sale by our significant shareholders, of our ordinary shares, Warrants or other securities in the future;
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●	changes in key personnel;
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●	the trading volume of our ordinary shares and Warrants; and
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●	general economic and market conditions and other factors, including factors unrelated to our operating performance.
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These factors and any corresponding price fluctuations may negatively impact the market price of our ordinary shares and Warrants and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could impose a substantial cost upon us and divert the resources and attention of our management from our business.

If equity research analysts do not publishresearch or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares and Warrants, the priceof our ordinary shares and Warrants could decline.

The trading market for our ordinary shares and Warrants will rely in part on the research and reports that equity research analysts publish about us and our business, if at all. We do not have control over these analysts and we do not have commitments from them to write research reports about us. The price of our ordinary shares and Warrants could decline if no research reports are published about us or our business, or if one or more equity research analysts downgrade our ordinary shares and Warrants or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.

Future sales of our ordinary shares couldreduce the market price of our ordinary shares and Warrants.

If our existing shareholders, particularly our directors, their affiliates, or our executive officers, sell a substantial number of our ordinary shares and Warrants in the public market, the market price of our ordinary shares and Warrants could decrease significantly. The perception in the public market that our shareholders might sell our ordinary shares and Warrants could also depress the market price of our ordinary shares and Warrants and could impair our future ability to obtain capital, especially through an offering of equity securities.

The market price of our ordinary shares and Warrants may drop significantly at such time as we sell additional ordinary shares or similar securities in order to raise capital. A decline in the price of our ordinary shares and Warrants might impede our ability to raise capital through the issuance of additional ordinary shares, Warrants or other equity securities, and may cause you to lose part or all of your investment in our ordinary shares.

The significant share ownership positionof our officers, directors and entities affiliated with certain of our directors may limit your ability to influence corporate matters.

As of March 31, 2025, our officers, directors and entities affiliated with certain of our directors beneficially own or control, directly or indirectly, approximately 21% of our outstanding ordinary shares. Accordingly, these persons will be able to significantly influence, though not independently determine, the outcome of matters required to be submitted to our shareholders for approval, including decisions relating to the election of our board of directors, and the outcome of any proposed merger or consolidation of our company. These interests may not be consistent with those of our other shareholders. In addition, these persons’ significant interest in us may discourage third parties from seeking to acquire control of us, which may adversely affect the market price of our ordinary shares and Warrants.

We have never paid cash dividends on ourshare capital, and we do not anticipate paying any cash dividends in the foreseeable future.

We have never declared or paid cash dividends on our share capital, nor do we anticipate paying any cash dividends on our share capital in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our ordinary shares and Warrants will be investors’ sole source of gain for the foreseeable future. In addition, Israeli law limits our ability to declare and pay dividends, and may subject our dividends to Israeli withholding taxes.

We incur significant increased costs asa result of operating as a public company in the United States, and our management is required to devote substantial time to new complianceinitiatives.

As a public company whose ordinary shares and Warrants are listed in the United States, we are subject to an extensive regulatory regime, requiring us, among other things, to maintain various internal controls and facilities and to prepare and file periodic and current reports and statements, including reports on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. Complying with these requirements is costly and time consuming. We may need to retain additional employees to supplement our current finance staff, and we may not be able to do so in a timely manner, or at all. In the event that we are unable to demonstrate compliance with our obligations as a public company in a timely manner, or are unable to produce timely or accurate financial statements, we may be subject to sanctions or investigations by regulatory authorities, such as the Securities and Exchange Commission, or the SEC, or the Nasdaq Capital Market, and investors may lose confidence in our operating results and the price of our ordinary shares and Warrants could decline.

Our independent registered public accounting firm has not been engaged to perform an audit of our internal control over financial reporting, and as long as we remain an emerging growth company, as such term is defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we are exempt from the requirement to have an independent registered public accounting firm perform such audit. Accordingly, no such opinion was expressed or will be expressed any during any such period. Once we cease to qualify as an emerging growth company our independent registered public accounting firm will be required to attest to our management’s annual assessment of the effectiveness of our internal controls over financial reporting, which will entail additional costs and expenses.

The Warrants may not have anyvalue.

The Warrants are exercisable for five years from the date of initial issuance at an initial exercise price equal to $6.00. There can be no assurance that the market price of our ordinary shares will ever equal or exceed the exercise price of the Warrants. In the event that our ordinary share price does not exceed the exercise price of the Warrants during the period when the Warrants are exercisable, the Warrants may not have any value.

A Warrant does not entitle the holder toany rights as a holder of our ordinary shares until the holder exercises the Warrant for an ordinary shares.

Until you acquire an ordinary share upon exercise of your Warrants, your Warrants will not provide you any rights as a holder of ordinary shares. Upon exercise of your Warrants, you will be entitled to exercise the rights of a holder of ordinary shares only as to matters for which the record date occurs after the exercise date.

We expect to be classified as a “passiveforeign investment company” for U.S. federal income tax purposes, in the current taxable year as well as in future taxable yearswhich could cause adverse U.S. federal income tax consequences to U.S. investors.

We expect to be classified as a passive foreign investment company, or PFIC, for the taxable year ending December 31, 2024, and we expect to be treated as a PFIC in the current taxable year as well as in future taxable years. The determination of our PFIC status is made based on the factual tests described below. Consequently, we cannot provide any assurances regarding our PFIC status for the current or future taxable years or that the United States Internal Revenue Service, or IRS will agree with our conclusion regarding our PFIC status. Generally, if, for any taxable year, at least 75 percent of our gross income is “passive income” or at least 50 percent of our gross assets during the taxable year (based on the average of the fair market values of the assets determined at the end of each quarterly period) are assets that produce or are held for the production of passive income, we would be characterized as a PFIC for U.S. federal income tax purposes. Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties, gains from commodities and securities transactions, and gains from assets that produce passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. However, rents and royalties received from unrelated parties in connection with the active conduct of a trade or business are not considered passive income for purposes of the PFIC test. If we are a PFIC for any taxable year in which a U.S. Holder (as defined in “Taxation—Certain Material United States Federal Income Tax Considerations”) holds our ordinary shares or Warrants, certain adverse United States federal income tax consequences could apply to such U.S. Holder. Such adverse consequences of PFIC status may be alleviated if a U.S. Holder makes a “mark to market” election or an election to treat us as a “qualified electing fund”, or QEF. These elections would result in an alternative treatment (such as mark-to-market treatment) of our ordinary shares. While we intend to provide to U.S. Holders the information required to make a valid QEF election upon request, we cannot provide any assurances that we will have timely knowledge of our status as a PFIC, or that the information that we provide will be adequate to allow U.S. Holders to make a QEF election.

Whether we are a PFIC for any taxable year will depend on the composition of our income and the composition and value of our assets (which may be determined in large part by reference to the market value of our ordinary shares, which may be volatile) from time to time, therefore there can be no assurance regarding our PFIC status for the current or future taxable years. Each U.S. Holder is strongly urged to consult its tax advisor regarding the possible application of the PFIC rules and any available elections to mitigate such tax consequences. For more information, see “Taxation—Certain Material United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”

If a United States person is treated asowning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

If a United States person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to each controlled foreign corporation, or CFC, in our group (if any). Because our group includes a U.S. subsidiary, certain of our non-U.S. subsidiaries will be treated as CFCs (regardless of whether or not we are treated as a CFC). A United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by CFCs, regardless of whether we make any distributions. An individual that is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether we are treated as CFC or whether any investor is treated as a United States shareholder with respect to any such CFC or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The IRS has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and tax paying obligations with respect to foreign-controlled CFCs. Each U.S. Holder should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares or Warrants.

As a foreign private issuer, we are permitted,and intend, to follow certain home country corporate governance practices instead of otherwise applicable Nasdaq requirements, and arenot be subject to certain U.S. securities laws including, but not limited to, U.S. proxy rules and the filing of certain ExchangeAct reports.

As a foreign private issuer, we are permitted, and intend, to follow certain home country corporate governance practices instead of those otherwise required by the Nasdaq Stock Market for domestic U.S. issuers. Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq Capital Market may provide less protection to you than what is accorded to investors under the Nasdaq Rules applicable to domestic U.S. issuers. See “Item 16G – Corporate Governance” for additional information.

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, including disclosures with respect to executive compensation. Nevertheless, pursuant to regulations promulgated under the Israeli Companies Law, 5759-1999, or the Israeli Companies Law, we are required to disclose the annual compensation of our five most highly compensated office holders on an individual basis. Such disclosure will not be as extensive as that required of a U.S. domestic issuer. Our officers, directors and principal shareholders will also be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are required under the Exchange Act to file reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and are exempt from filing quarterly reports with the SEC under the Exchange Act. Moreover, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information, although we have voluntarily adopted a corporate disclosure policy substantially similar to Regulation FD. These exemptions and leniencies will reduce the frequency and scope of information and protections to which you may otherwise have been eligible in relation to a U.S. domestic issuer.

We would lose our foreign private issuer status if a majority of our shares are owned by U.S. residents and 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. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. We may also be required to modify certain of our policies to comply with accepted governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers.

We are an emerging growth company and thereduced disclosure requirements applicable to emerging growth companies may make our ordinary shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements that are applicable to other public companies that are not emerging growth companies.

For as long as we remain an emerging growth company we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not “emerging growth companies.” These exemptions include:

●	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
●	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
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●	reduced disclosure obligations regarding executive compensation;
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●	exemption from the requirement for auditors to include critical audit matters in their audit reports; and
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●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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We will remain an emerging growth company until the earliest of: (i) the last day of our fiscal year during which we have total annual gross revenues of at least $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the closing of our initial public offering; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. We have opted out of the extended transition period made available to emerging growth companies to comply with newly adopted public company accounting requirements.

When we are no longer deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. We cannot predict if investors will find our ordinary shares or Warrants less attractive as a result of our reliance on exemptions under the JOBS Act. If some investors find our ordinary shares or Warrants less attractive as a result, there may be a less active trading market for our ordinary shares or Warrants and our share price may be more volatile.

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

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

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

If we do not adapt to or comply with new regulations, including the SEC’s recently adopted new rules that require companies to provide 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, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.

Risks Related to our Operations in Israel

We conduct some of our operations in Israel.Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s waragainst them, may affect our operations.

Our corporate headquarters is located in Herzliya, Israel. Because we are incorporated under the laws of the State of Israel, and most of our officers and fourteen out of sixteen of our employees are residents of Israel, our business and operations are directly affected by economic, political, geopolitical and military conditions in Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region. These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. In parallel, border clashes between Israel and the Hezbollah terrorist group on Israel’s northern border with Lebanon intensified and may escalate into a greater regional conflict.

In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. In October 2024, Israel began limited ground operations against Hezbollah in Lebanon, and in November 2024, a ceasefire was brokered between Israel and Hezbollah. In addition, in April 2024 and October 2024, Iran (in concert with other regional actors) launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel and is widely believed to be developing nuclear weapons. Such attacks may continue due to continuing tensions in the region. In addition, the collapse of the Assad regime in Syria in December 2024 has led to increased instability in the region. Additionally, Yemeni rebel group, the Houthis, launched series of attacks on global shipping routes in the Red Sea, causing disruptions of supply chain. Any or all of these conflicts may potentially escalate in the future to more violent events which may affect Israel and us and adversely affect our ability to continue carrying out various administrative, research, operational and commercial functions and activities both in Israel and globally.

Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could directly or indirectly adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital and could adversely affect the market price of our ordinary share. An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may 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.

The Israel Defense Force, or IDF, the national military of Israel, is a conscripted military service, subject to certain exceptions. Since October 7, 2023, the IDF has called up several hundred thousand of its reserve forces to serve. Sixteen out of our current 18 employees are resident in Israel. Three of our five executive officers and the 13 other non-management employees of the Company reside in Israel. Currently none of our executive officers nor non-management employees have been called up to perform reserve military service; however, some employees may be called for service in the current or future wars or other armed conflicts with Hamas, Hezbollah or other regional threat actors, and such persons may be absent for an extended period of time. As a result, our operations in Israel may be disrupted by such absences, which disruption may materially and adversely affect our business, prospects, financial condition and results of operations.

Since the war broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced disruptions to our clinical studies. As such, our clinical and business development activities remain on track. However, the intensity and duration of Israel’s current war against Hamas and Hezbollah is difficult to predict at this stage, as are such war’s economic implications on our business and operations and on Israel’s economy in general. If the ceasefire declared collapses or a new war commences or hostilities expand to other fronts, our operations may be adversely affected.

Our clinical and pre-clinical research and development is currently being conducted in Israel, including Phase 2 trial with PrimeC for AD which has not been affected by the war, although the quality of the study may be adversely affected if as a result of the war patients are unable to visit the study center or the study coordinator is not able to conduct home visits and monitor the patients. We do not believe the AD trial will be materially affected by the war and do not anticipate any delays as a result of the war would have a material impact on us. We may also elect to set up a site in Israel for a Phase 3 pivotal ALS trial of PrimeC, but this would be in addition to numerous other sites in United States and Europe, and as a result we do not expect the timeline or quality of this trial to be adversely affected by the war. Our manufacturing is conducted in India. We do not currently anticipate any disruption to the supply chain relevant to our ongoing clinical trials and believe there are alternative sources of supply from whom we could obtain the necessary finished drug product to conduct our clinical trials.

Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, there can be no assurance that this government coverage will be maintained, or if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business, financial condition and results of operations.

Finally, political conditions within Israel may affect our operations. Israel has held five general elections between 2019 and 2022, and prior to October 2023 and more recently, the Israeli government has pursued extensive changes to Israel’s judicial system, which has sparked extensive political debate and unrest. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.

Provisions of Israeli law and our amendedand restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, us, even when the termsof such a transaction are favorable to us and our shareholders.

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. For example, a tender offer for all of a company’s issued and outstanding shares can only be completed if shareholders not accepting the tender offer hold less than 5% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless shareholders not accepting the tender offer hold less than 2% of the company’s outstanding shares. Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, petition an Israeli court to alter the consideration for the acquisition, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the 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 swap 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. These provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.

It may be difficult to enforce a judgmentof a U.S. court against us or our officers and directors in Israel or the United States, to assert U.S. securities laws claims in Israelor to serve process on our officers and directors and these experts.

We are incorporated in Israel. A number of our directors and all of our executive officers reside outside of the United States, and most of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It may also be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court.

Your rights and responsibilities as a shareholderwill be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S.companies.

The rights and responsibilities of the holders of our ordinary shares are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in U.S. companies. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders, and to refrain from abusing its power in the company, including, among other things, in voting at a 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, as well as a general duty to refrain from discriminating against other shareholders. In addition, a shareholder who is aware that it possesses the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company.

There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. companies.

Our amended and restated articles of associationprovide that, unless we consent otherwise, the District Court (Economic Division), located in Tel Aviv, Israel shall be the sole and exclusiveforum for substantially all disputes between us and our shareholders under the Companies Law and the Israeli Securities Law, which couldlimit our shareholders’ ability to bring claims and proceedings against, as well as obtain favorable judicial forum for disputeswith, us, our directors, officers and other employees.

The District Court (Economic Division), located in Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of ours to us or our shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law. This exclusive forum provision is intended to apply to claims arising under Israeli law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which U.S. federal courts would have exclusive jurisdiction. Such exclusive forum provision in our amended and restated articles of association will not relieve us of our duties to comply with federal securities laws and the rules and regulations thereunder, and our shareholders will not be deemed to have waived our compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us, our directors, officers and other employees.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of theCompany

Our legal and commercial name is NeuroSense Therapeutics Ltd. Our company was incorporated on February 13, 2017 and was registered as a private company limited by shares under the laws of the State of Israel. Our principal executive offices are located at 11 Hamenofim, Herzliya, Israel. Our telephone number is +972-9-7996183.

Our website address is https://www.neurosense-tx.com. We use our website as a channel of distribution of Company information. The information we post on our website may be deemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. However, the information contained on our website, or that can be accessed therefrom, 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. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, New York 10168.

In December 2021 we completed our initial public offering on The Nasdaq Capital Market, pursuant to which we received net proceeds of approximately $9.9 million, after deducting underwriting discounts and commissions and offering expenses.

Our Ordinary Shares and Warrants are traded on The Nasdaq Capital Market under the symbols “NRSN” and “NRSNW,” respectively.

Our capital expenditures for the years ended December 31, 2024 and 2023 were approximately $3 thousand and $29 thousand, respectively. Our current capital expenditures involve the purchase of equipment.

B. Business Overview

We are a clinical-stage biotechnology company focused on discovering and developing treatments for people living with neurodegenerative diseases, including ALS AD and PD. We believe these diseases represent some of the most significant unmet medical needs of our time, with limited effective therapeutic options available. The burden of these diseases on both patients and society is substantial. For example, the average annual cost of ALS alone is $180,000 per patient, and its estimated annual burden on the U.S. healthcare system is greater than $1 billion. Due to the complexity of neurodegenerative diseases, our strategy is utilizing a combined therapeutic approach to target multiple disease-related pathways.

Our lead therapeutic candidate, PrimeC, is a novel extended-release oral formulation, fixed-dose combination of two FDA-approved drugs, ciprofloxacin and celecoxib. PrimeC is designed to treat ALS by modulating microRNA synthesis, iron accumulation, and neuroinflammation, all of which are hallmarks of ALS pathology. The U.S. Food and Drug Administration, or the FDA and the European Medicines Agency, or the EMA have granted PrimeC orphan drug designation for the treatment of ALS. In addition, the EMA has granted PrimeC the Small and Medium-Sized Enterprise, or SME, status, which offers significant potential benefits leading up to and following drug regulatory approval. We believe PrimeC’s multifunctional mechanism of action has the potential to significantly prolong lifespan and improve ALS patients’ quality of life, thereby reducing the burden of this debilitating disease on both patients and healthcare systems.

PrimeC was evaluated in PARADIGM, a Phase 2b randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, to evaluate safety, tolerability, and efficacy of PrimeC in 68 people living with ALS. Participants were being administered PrimeC or placebo at a 2:1 ratio, respectively, for the six-month double-blind part. Study participants were allowed to continue standard of care treatment of approved products. The primary endpoints of the study are an evaluation of ALS-biomarkers as well as safety and tolerability assessment. Secondary and exploratory endpoints are the evaluation of clinical efficacy (ALS Functional Rating Scale — Revised, or ALSFRS-R, and slow vital capacity), survival, and improvement in quality of life. All subjects who completed the six-month double-blind, placebo-controlled dosing period had the opportunity to be transferred to the PrimeC active arm for a 12-month open label extension. The study completed enrollment in May 2023, enrolling 69 participants, in which 68 are living with ALS and one participant who was misdiagnosed for ALS and was excluded from the evaluations. Four ALS clinical centers participated in the study in three territories: Israel, Italy, and Canada. In December 2023, we reported that we met the primary safety and tolerability endpoints and achieved secondary clinical efficacy endpoints in the top-line results of our 6-month double-blind phase of PARADIGM. In May 2024, we announced new positive data analysis from PARADIGM clinical trial demonstrating statistically significant slowing of disease progression in high-risk ALS patients. In July 2024, we announced results from the 12-month analysis of the PARADIGM clinical trial which showed a significant improvement in the rate of decline of ALS Functional Rating Scale-Revised (ALSFRS-R) scores and survival rates for subjects who received PrimeC from the start of the trial compared to those who started on placebo. In August 2024, we announced positive 12-month biomarker data from the PARADIGM clinical trial, which showed a significant decrease in ferritin levels and a corresponding increase in transferrin levels, both indicating alleviation of the pathology. In October 2024, we completed the full 18-month dosing in PARADIGM, and in December 2024, we announced results from the 18-month analysis of the PARADIGM clinical trial which showed statistically significant positive results from the 18-month data analysis of the PARADIGM study, evaluating the efficacy of PrimeC in the treatment of ALS. In February 2025, we announced additional findings from an 18-month analysis of the PARADIGM clinical trial showing improvements in two additional endpoints, complication-free survival (analysis which includes death from any cause or respiratory insufficiency or hospitalization due to ALS-related complications) and Slow Vital Capacity (SVC), measuring respiratory function.

Following the FDA’s recommendation for additional non-clinical data to support long term use of Ciprofloxacin (as PrimeC is intended for long-term administration in treating ALS) a long-term tox study was initiated.

In September 2024, we announced the successful completion of the in-life phase of the study, as we move towards the initiation of a Phase 3 study in the U.S.

In December 2024, we concluded a productive Type C meeting with the FDA. The purpose of the meeting was to discuss the design of a proposed Phase 3 clinical study and the plan for submission of an eventual 505(b)(2) marketing application. In light of the FDA’s feedback, we plan to submit a final protocol to the FDA during the first half of 2025 and approach the EMA, with the aim of commencing enrollment of the pivotal Phase 3 study in the second half of 2025, which would include approximately 300 patients divided by a ratio of 2:1, PrimeC to placebo. The Phase 3 study is expected to be a randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, with an open label extension (OLE), to evaluate the efficacy and safety of PrimeC in people living with ALS. Following 12 months of treatment, it is expected that all participants will transition to PrimeC for a 12-month open label extension.

In December 2024, we entered into a binding term sheet with a leading global pharmaceutical company to advance the development and commercialization of PrimeC, in certain key territories. We retain full rights to PrimeC in other key territories. The binding term sheet outlines substantial financial terms from the pharmaceutical company, including: (i) a substantial upfront payment upon signing a definitive agreement, (ii) funding for the Phase 3 clinical trial, (iii) regulatory and net sales milestone payments, and (iv) a tiered royalty structure reaching double-digit percentage on annual net sales. The pharmaceutical company would have an exclusive license to distribute, market, promote, sell and develop PrimeC for ALS in certain key markets, and non-exclusive rights for research and manufacturing for PrimeC for ALS, subject to terms and conditions in the definitive agreement. The pharmaceutical company would have an exclusive license to distribute, market, promote, sell and develop PrimeC for ALS in certain key markets, and non-exclusive rights for research and manufacturing for PrimeC for ALS, subject to terms and conditions in the definitive agreement. The closing of this transaction is subject to finalization of a definitive agreement. While both parties are communicating to find solutions to the remaining open matters, there can be no assurance as to the timing of, or whether, such an agreement will ultimately be executed, and if executed, what would be the final terms of such an agreement.

PrimeC was previously evaluated in a Phase 2a clinical trial, or NST002, in 15 people living with ALS, conducted at the Tel Aviv Sourasky Medical Center, Israel. The primary endpoint of the NST002 trial, which was safety and tolerability, was met. In this trial, the safety profile observed was consistent with known safety profiles of ciprofloxacin and celecoxib. Side effects were mild and transient in nature. There were no new or unexpected safety signals detected during the trial.

Additionally, we observed positive clinical signals in comparison to virtual controls, and a serum biomarker analysis showed significant changes following treatment, indicating biological activity of the drug in comparison to untreated matched ALS patients. All 12 patients who completed the NST002 trial elected to continue into an extension study with PrimeC, that was conducted as an Investigator Initiated Study. To date, we are still supporting the drug supply for a few of the participants in this study, which is over than 40 months since NST002 was initiated.

We completed three additional studies in 2022 as part of our drug development program to further support our future regulatory submissions. In April 2022, we initiated a pharmacokinetic, or PK, study, or NCT05232461, of PrimeC. The PK open-label, randomized, single-dose, three-treatment, three-period crossover study evaluated the effect of food on the bioavailability of PrimeC as compared to the bioavailability of co-administered ciprofloxacin tablets and celecoxib capsules in adult subjects in the U.S. under an FDA cleared IND protocol.

In August 2022, we completed enrollment and dosing of all subjects in a multi-dose PK study, or NCT05436678. On September 28, 2022, we released the results of the NCT05436678 study. Based on results, we believe the PK profile of PrimeC supports the formulation’s extended-release properties, as the concentrations of the active components have been synchronized, aiming to potentially maximize the synergism between the two compounds. In June 2022, we reported the successful completion of the “in-life” phase of its 90-day GLP toxicology study. In this study, the components of PrimeC, celecoxib and ciprofloxacin, were administered to rodents at doses 4x the maximal clinical dose. All animals appeared normal, with no significant findings observed. We intend to present the data from these studies to the FDA as part of PrimeC’s drug development plan.

We believe we have a strong patent estate, including patents on method of use, combination, and formulation. We have secured U.S. Patent 10,980,780 relating to methods for treatment of ALS using ciprofloxacin and celecoxib, the components of PrimeC, which expires in 2038. Equivalent patents also have been issued in the European Patent Office, Canada, Australia, Israel and Japan. The patent estate also includes US Patent 12,097,185, which relates to Prime C formulations. This patent will expire in December 2042. Equivalent applications are pending in many jurisdictions worldwide. We also expect to take advantage of orphan drug exclusivity for PrimeC, if approved, for seven years in the United States and ten years in the European Union. In addition, U.S. patent application 16/623,467, which relates to methods of treatment of neurodegenerative disease using combinations of ciprofloxacin and celecoxib, is currently pending. This patent application, once granted, is expected to expire on June 20, 2038.

Our organization is built around a management team with extensive experience in the pharmaceutical industry, with a particular focus on ALS research and clinical trials. We believe that our leadership team is well-positioned to lead us through clinical development, regulatory approval and commercialization of our product candidates. Furthermore, we maintain steadfast and extensive communication and collaboration with patient advocacy groups and associations, underscoring the importance of patient perspectives in advancing therapeutic strategies.

In addition to PrimeC, we extended our pipeline and conducted research and development efforts for AD and PD, with a similar strategy of combined products. The following chart represents our current product development pipeline:

Overview of ALS

ALS, which is also commonly referred to as Lou Gehrig’s disease, is a rapidly progressing neurological disease with the onset typically occurring between 40 to 70 years of age, and patient mortality occurring in most patients within two to five years of diagnosis. ALS causes the death of motor neurons, which are responsible for controlling muscles, resulting in weakness and paralysis of limbs, and impacts speaking, chewing, swallowing and breathing, leading to progressive disability and eventually death, typically from respiratory failure and aspiration pneumonia. In addition, up to 50% of patients with ALS develop cognitive impairment associated with frontotemporal dementia. The underlying cause of damage to the motor neurons is unknown, but many pathologies can be observed, including dysregulation of miRNA, iron accumulation, neuroinflammation, glutamate excitotoxicity, protein misfolding and oxidative stress.

About 10% of ALS cases are inherited, commonly referred to as “familial ALS,” and are associated with pathogenic mutations, while the remaining 90% of cases present with sporadic onset. Over the last decade, sequencing of patients’ genomes has helped pinpoint the genetic mutations that are most commonly correlated with ALS, including TDP-43, SOD1, FUS and C9ORF72.

Despite being classified as a rare disease, ALS is considered one of the more common neuromuscular diseases worldwide. The Centers for Disease Control and Prevention estimates that there are approximately 20,000 cases of ALS in the United States and that approximately 5,000 new cases are diagnosed each year. The number of total cases for the largest five markets in Europe (Germany, France, Italy, Spain and the United Kingdom) is estimated to be slightly higher and for the broader European geography the estimate is approximately 30,000 cases. Overall, it is estimated that our planned target market is currently over 80,000 patients, and that the patient population in the United States and Europe will grow by 24% by 2040.

ALS also imposes a significant burden on the healthcare system, with an estimated $180,000 patient cost per year and an estimated annual burden greater than $1 billion on the U.S. healthcare system.

Current ALS Treatment Options and Drugs inDevelopment

There are currently a limited number of available treatments for ALS and these treatments only impart a modest effect, extending a patient’s life expectancy by only a few months on average.

Until recently, the only approved drug used for slowing disease progression in ALS was Rilutek (riluzole). It was the first drug to be approved by the FDA for the treatment of ALS over 25 years ago. In May 2017, the FDA approved Radicava (edaravone), which is administered through chronic cycles of ten days of intravenous infusions followed by a two-week treatment-free period. In recent years, the FDA has also approved two new formulations of riluzole that address the need for an improved route of administration in patients who suffer from swallowing complications. In September 2018, the FDA approved Tiglutik, the oral suspension of riluzole administered via syringe, and in November 2019, the FDA approved Exservan, a new soluble oral formulation of riluzole which dissolves on the tongue. In Europe, edaravone is not approved, and therefore the only approved drug for ALS is riluzole.

In April 2023, the FDA approved Qalsody (tofersen) to treat patients with ALS associated with a mutation in the superoxide dismutase 1 (SOD1) gene (SOD1-ALS). Qalsody is an antisense oligonucleotide that targets SOD1 mRNA to reduce the synthesis of SOD1 protein. The approval was based on a correlation between clinical outcome and reduction in plasma neurofilament light chain (NfL), a blood-based biomarker of axonal (nerve) injury and neurodegeneration.

As both currently approved drugs, riluzole and edaravone, have been shown to have minimal effect on prolonging patient lifespans or improving their quality of life and independence, and Qalsody is aimed for patients with SOD1 mutation, which represents approximately 2% of the overall ALS population, we believe there is still a significant need for new treatments for patients with ALS in order to improve the disease course and to further extend survival.

Other treatments for ALS that we are aware are under development include:

●	Novartis is developing VHB937, an anti-human TREM2 mAb, currently being tested in a Phase 2 clinical trial.
●	Brainstorm Cell Therapeutics is developing NurOwn, an adult stem cell therapy, which has completed a pivotal Phase 3 trial and did not achieve the primary endpoint. NurOwn is expected to be reevaluated in a Phase 3b trial.
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●	Clene is developing CNM-Au8^®^, an investigational gold nanocrystal suspension, completed a Phase 3 clinical trial. CNM-Au8 did not meet its primary endpoint of change in ALSFRSR, However, it showed that the drug was able to reduce the risk of death in patients with ALS.
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●	Prilenia, is developing Pridopidine, which was originally developed for Huntington’s disease. The drug did not reach statistical significance in Phase 2 primary and key secondary endpoints; nevertheless, based on additional analysis, the drug is currently in preparations for a Phase 3 trial for ALS.
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●	Eledon is developing Tegoprubart, an anti-CD40L antibody, which completed a Phase 2a open-label study, and is now seeking non-equity dilutive financing to move into a Phase 3 study.
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●	QurAlis is developing a pipeline of RNA-based therapies for ALS, now in Phase 1 clinical trials.
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Our Solution — PrimeC for ALS

Our lead product candidate, PrimeC, is designed to treat ALS by targeting multiple pathways involved in ALS, including: regulating miRNA synthesis, influencing iron accumulation, and reducing neuroinflammation.

miRNA are small non-coding RNAs which play a critical role in regulating gene expression. Studies show that miRNA are dysregulated in motor neurons of autopsy tissues from patients with ALS, and that reduction in miRNA is sufficient to cause spinal motor neuron degeneration in-vivo. Consequently, dysregulation of miRNA levels due to inefficient activity of Dicer enzyme which plays a key role in their generation, is common in multiple forms of ALS. Dysregulated miRNAs are found in multiple ALS models and patient-based microglia cells, motor neurons and skeletal muscles controlling multiple targets, such as neuroinflammation, synaptic formation, neuronal activity and differentiation.

Iron accumulation has been shown to be present in many neurodegenerative diseases including ALS. As such, iron chelation therapies have been shown to have a positive effect in pre-clinical models of neurodegeneration.

Finally, chronic neuroinflammation is increasingly recognized as a major factor that promotes ALS disease progression and amplifies the motor neuron death-inducing processes. Neuroinflammation is characterized by extensive astrogliosis, microglial activation, and infiltration of peripheral immune cells at sites of neurodegeneration.

PrimeC is a novel formulation of a fixed dose combination of two generic FDA-approved drugs, ciprofloxacin and celecoxib, combined at a specific ratio, aiming to target multiple ALS-related pathways simultaneously.

Ciprofloxacin is a fluoroquinolone antibiotic often used to treat bacterial infections, which has been safely used for many years in large and diverse patient populations. Ciprofloxacin is approved for use in gram-negative bacterial infections such as lower respiratory tract infections, chronic sinusitis, genital tract infections and infections of the skin and soft tissues. Additionally, ciprofloxacin is approved for chronic ear infections, urinary tract infections, gastro-intestinal and intra-abdominal infections, malignant external otitis, infections of the bones and joints, prophylaxis of invasive infections due to Neisseria meningitidis, inhalation anthrax, and broncho-pulmonary infections in cystic fibrosis caused by Pseudomonas aeruginosa. Ciprofloxacin may also be used to treat severe infections in children and adolescents when this is considered to be necessary.

Studies have shown that besides its antibiotic mechanisms, ciprofloxacin is also able to upregulate the expression of miRNAs by inducing dicer activity and is a moderate iron chelator.

Celecoxib is a prescription nonsteroidal anti-inflammatory drug, or NSAID, used to treat pain through the inhibition of cyclooxygenase-2, or COX-2, and the reduction of inflammatory processes, thereby affecting glutamate excitotoxicity and oxidative stress, among others. Celecoxib is approved for use for the management of the signs and symptoms of osteoarthritis, rheumatoid arthritis, juvenile rheumatoid arthritis in patients two years and older, and ankylosing spondylitis. Additionally, celecoxib is approved for the management of acute pain in adults, and for the management of primary dysmenorrhea. Although not shown to be beneficial in ALS when given at high doses as a single agent, low doses of celecoxib were shown to be effective in pain management and played a synergistic role with ciprofloxacin in pre-clinical models of ALS zebrafish (SOD1 and TDP-43).

Through analysis of blood samples from healthy subjects and patients with ALS, we observed the relevance of PrimeC’s mechanism of action using a novel method involving neuron-derived exosomes. In the recently competed interim analysis of NST-003 Phase 2b study conducted in ALS patients with PrimeC, the primary endpoint of safety and tolerability was successfully met. Furthermore, the clinical parameters measured and the quality of life questionnaires demonstrated a clinically significant benefit to ALS patients treated with PrimeC compared to placebo. Additionally, the primary endpoint of safety and tolerability was met in our NST002 trial in ALS patients, which was completed in February 2021. Through analysis of blood samples from this study using the same exosomal method, we observed significant changes in ALS-related biomarkers, indicating biological activity of PrimeC.

Our Product Candidates

PrimeC

Our lead product candidate, PrimeC, is a novel ER oral formulation composed of a novel fixed dose combination of two generic FDA-approved drugs, ciprofloxacin and celecoxib, combined in a specific ratio. PrimeC is designed to treat ALS by regulating miRNA synthesis, influencing iron accumulation and reducing neuroinflammation.

PrimeC was evaluated in PARADIGM, a Phase 2b randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, with an open label extension, to evaluate safety, tolerability, and efficacy of PrimeC in 69 people living with ALS in a 2:1 ratio to receive PrimeC or placebo, respectively, which we refer to as NST003. Study participants were allowed to continue standard of care (SOC) treatment of approved products. Primary endpoints of the study included an evaluation of ALS-biomarkers as well as safety and tolerability assessment. Secondary and exploratory endpoints are the evaluation of clinical efficacy (ALSFRS-R, SVC), survival, and improvement in quality of life. All subjects who complete the six-month double-blind, placebo-controlled dosing period switched to the PrimeC active arm for a 12-month open label extension. The study commenced recruitment of patients in Israel in May 2022 and in Italy and Canada in March 2023.

In May 2023, we completed enrollment for the PARADIGM trial. In November 2023, we concluded a successful Type D meeting with the FDA for PrimeC in the treatment of ALS where we discussed PrimeC’s CMC development plans in advance of an expected Phase 3 pivotal study and potential subsequent marketing approval. The FDA agreed with our proposed CMC development plan.

In December 2023, we reported that we met the primary safety and tolerability endpoints and achieved secondary clinical efficacy endpoints in the top-line results of our Phase 2b trial.

In May 2024, we announced new positive data analysis from PARADIGM clinical trial demonstrating statistically significant slowing of disease progression in high-risk ALS patients. In July 2024, we announced results from the 12-month analysis of the PARADIGM clinical trial which showed a significant improvement in the rate of decline of ALS Functional Rating Scale-Revised (ALSFRS-R) scores and survival rates for subjects who received PrimeC from the start of the trial compared to those who started on placebo. In August 2024, we announced positive 12-month biomarker data from the PARADIGM clinical trial, which showed a significant decrease in ferritin levels and a corresponding increase in transferrin levels, both indicating alleviation of the pathology. In February 2025, we announced additional findings from an 18-month analysis of the PARADIGM clinical trial showing improvements in two additional endpoints, complication-free survival and Slow Vital Capacity (SVC).

In October 2024, we provided a further update on our plans to file for early commercialization approval for PrimeC under Health Canada’s Notice of Compliance with Conditions (NOC/c) policy. This decision follows the recommendations of Canadian regulatory experts and recent clinical findings.

In December 2024, we concluded a Type C meeting with the FDA. The purpose of the meeting was to discuss the design of a proposed Phase 3 clinical study and the plan for submission of an eventual 505(b)(2) marketing application. We had a productive discussion with the FDA regarding the design of the planned Phase 3 pivotal study with PrimeC, including efficacy and safety measurements. In light of the FDA’s feedback, we plan to submit a final protocol to the FDA during the first half of 2025 with the aim of commencing enrollment of the pivotal Phase 3 study in mid-2025, which would include approximately 300 patients divided by a ratio of 2:1, PrimeC to placebo. The Phase 3 study is expected to be a randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, with an open label extension (OLE), to evaluate the efficacy and safety of PrimeC in people living with ALS. Following 12 months of treatment, it is expected that all participants will transition to PrimeC for a 12-month open label extension.

Clinical Results

NST003 Phase 2b Trial in ALS

In December 2023, we announced topline clinical efficacy results in our Phase 2b PARADIGM (NST003) trial of PrimeC for the treatment of ALS, reporting that we met the primary safety and tolerability endpoints and achieved secondary clinical efficacy endpoints.

The PARADIGM study was a randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, to evaluate safety, tolerability, and efficacy of PrimeC in 68 people living with ALS. Participants were administered PrimeC or placebo at a 2:1 ratio, respectively. After completion of the 6-month double-blind segment, participants had the option to enroll in a 12-month OLE, during which they all received treatment with PrimeC. Study participants were allowed to continue standard of care treatment of approved products.

The primary endpoints of the study included an evaluation of ALS-biomarkers as well as safety and tolerability assessment. Secondary and exploratory endpoints included the evaluation of clinical efficacy (ALSFRS-R and slow vital capacity), survival, and improvement in quality of life. The study completed enrollment in May 2023, enrolling 68 participants living with ALS in Israel, Italy, and Canada.

A primary endpoint of the PARADIGM study pertained to the evaluation of PrimeC’s safety and tolerability profile in ALS. Noteworthy findings indicate that the incidence of adverse events under PrimeC treatment were similar to that observed in the placebo arm, thereby underscoring the favorable safety profile of PrimeC. Additionally, assessments of electrocardiographic parameters and laboratory indices, encompassing QTc interval, hepatic enzymes, and renal function, revealed no significant aberrations attributable to PrimeC.

Summary of Adverse Events

Summary of All Adverse Events
Adverse Events (AE)	68.9	%	65.2	%
Treatment-Emergent AEs (TEAE)	68.9	%	65.2	%
Study Drug Related Treatment-Emergent AEs (TEAE)	20.0	%	4.3	%
Serious Treatment-Emergent AEs (TEAE)	8.9	%	8.6	%
Subject death	4.4	%	4.3	%
TEAE leading to Study Drug Discontinuation	6.7	%	4.3	%
TEAE leading to Study Drug Reduction	0.0	%	0.0	%
TEAE leading to Study Drug Interruption	15.6	%	8.6	%

Top-line results in the PARADIGM trial revealed a statistically significant slowing of disease progression in ALS patients, compared to the placebo. The study demonstrated a 37.4% (p=0.03) difference in the FDA-approved ALSFRS-R compared to placebo, and a 17% difference in favor of PrimeC in slow vital capacity (p=0.39) in the Per Protocol population, and a strong safety profile. Over the course of 6 months, patients treated with PrimeC experienced a slowing of disease progression, including preserved daily function. The clinical efficacy results showed a 29% difference in favor of PrimeC in ALSFRS-R (p=0.12), and a 13% difference in favor of PrimeC in slow vital capacity (p=0.5) in the Intent To Treat (ITT) population based on data from 68 out of 69 participants, due to one misdiagnosed participant. These data include 45 patients randomized to the PrimeC arm and 23 patients randomized to the placebo arm, from the 6-month double-blind segment. The safety and tolerability profile of PrimeC was well comparable to the placebo. Nearly all participants, 96%, who completed the 6-month double-blind portion of the trial chose to receive treatment with PrimeC through the 12-month open label extension.

In tandem with objective clinical assessments, PrimeC exerted favorable influences on diverse dimensions of patients’ quality of life. Comprehensive evaluations encompassing mental health domains, as exemplified by the mental health subscale of the PROMIS-10 questionnaire, showed improvements attributable to active treatment (PrimeC). Moreover, analyses pertaining to survival outcomes underscored the implications of PrimeC intervention in mitigating disease progression. Across diverse analytical frameworks, including hazard ratios derived from ALS complication free survival, MiTOS and King’s Advanced Staging system, PrimeC consistently exhibited numerical advantage over placebo, signaling tangible gains in extending survival and delaying disease progression milestones. MiTOS and King’s Advanced Stage-free Survival in ALS are two prognostic staging systems for ALS, assessing progression and complication free survival. ALS complication free survival is defined as time to death from any cause or respiratory insufficiency (defined as tracheostomy or the use of non-invasive ventilation for at least 22 hours per day for at least 10 consecutive days) or hospitalization due to ALS.

These data highlight a novel approach to treating ALS, with potential implications in other neurodegenerative conditions. PrimeC is a unique fixed-dose combination of ciprofloxacin and celecoxib, which may utilize complementary and synergistic mechanisms to preserve motor neuron health in ALS.

Additionally, in a preliminary analysis conducted following six months of double-blind, placebo-controlled treatment in the PARADIGM Phase 2b study, patients who received PrimeC demonstrated a trend towards decreased Neurofilaments-light chain (NfL) levels compared to placebo, with this trend being more pronounced in an earlier stage of the disease. The analysis was conducted by ALS biostatistician experts. We are now preparing for a follow-up analysis of NfL levels after a 12-month dosing period.

In May 2024, we announced new positive data analysis from PARADIGM clinical trial demonstrating statistically significant slowing of disease progression in high-risk ALS patients. In July 2024, we announced results from the 12-month analysis of the PARADIGM clinical trial which showed a significant improvement in the rate of decline of ALS Functional Rating Scale-Revised (ALSFRS-R) scores and survival rates for subjects who received PrimeC from the start of the trial compared to those who started on placebo. In August 2024, we announced positive 12-month biomarker data from the PARADIGM clinical trial, which showed a significant decrease in ferritin levels and a corresponding increase in transferrin levels, both indicating alleviation of the pathology. In December 2024, we announced positive 18-month clinical data from the PARADIGM clinical trial, which showed a significant difference in ALSFRS-R when comparing participants that were treated with PrimeC for 18 months versus those initially on placebo, indicating a disease-modifying effect. In February 2025, we announced additional findings from an 18-month analysis of the PARADIGM clinical trial showing improvements in two additional endpoints, complication-free survival and Slow Vital Capacity (SVC).

NST002 Phase 2a Trial in ALS

In February 2021, we completed our Phase 2a NST002 trial of PrimeC for the treatment of ALS. NST002 was an open label study that was designed to assess the safety and tolerability of an intermediate immediate-release formulation of PrimeC (PrimeC-IR), as well as routine disease progression measures. Fifteen patients with familial or sporadic ALS received a fixed dose of PrimeC-IR three times per day for 12 months. Patients were then evaluated by phone every 1.5 months and at a clinical site visit every three months.

The primary endpoint of the trial was PrimeC-IR’s safety and tolerability, which was measured by the number of patients with one or more treatment-emergent adverse events, the number of patients who discontinued treatment prematurely, the number of patients who discontinued treatment prematurely due to adverse events and the number of patients with significant abnormal laboratory values. The primary endpoint was met, with PrimeC-IR showing a safety profile that was consistent with known safety profiles of ciprofloxacin and celecoxib, and was mild and transient in nature. There were no new or unexpected safety signals detected during the trial.

Specifically, of the 15 patients in the safety population, ten patients (67%) experienced at least one treatment emergent adverse event, or TEAE. While most of the TEAEs were assessed by the investigator as unrelated to study drug, four patients (27%) experienced a TEAE that was assessed by the investigator as related to the study drug. Of TEAEs that were assessed as related to study drug, 11 were gastrointestinal disorders (flatulence was reported four times, nausea three times, dyspepsia twice, and abdominal pain and constipation once each), as well as dizziness and insomnia being reported once each. None of the TEAEs related to the study drug were serious.

The TEAEs in descending order of frequency were gastrointestinal disorders (38.4%), infections (15.4%), injury (12.8%), general disorders, psychiatric disorders, and nervous system disorders (7.7% each), and investigative, musculoskeletal, skin, and surgical procedures (2.6% each).

Most of the TEAEs (67%) were mild or moderate in intensity. Six patients (40%) experienced at least one severe TEAE. No clinically meaningful treatment-emergent changes were noted for any patient in the laboratory safety parameters, vital signs, or electrocardiograms. Two male patients died at home during the trial, and these events were considered by the investigator to be unrelated to the study drug.

All 12 patients who completed the NST002 trial elected to continue into an extension study with PrimeC-IR. The primary endpoint of the extension study is safety, and we may use this additional data in communications with the FDA when presenting on long-term safety of the combined use of ciprofloxacin and celecoxib.

Investigators also measured PrimeC-IR’s potential efficacy using two accepted ALS clinical endpoints: the ALSFRS-R and forced vital capacity, or FVC. The ALSFRS-R is a validated rating scale for monitoring the progression of disability in patients with ALS. Patients are scored within the range of 0-48 points (with 48 indicating full function and zero indicating no function). ALSFRS-R scores correlate significantly with quality of life as measured by the Sickness Impact Profile, a behaviorally-based measure of health status, indicating that the quality of function is a strong determinant of quality of life in ALS patients. Historical data indicates that the average deterioration of ALS patients is one point per month in the ALFRS-R. FVC is a standard measure of pulmonary function that measures the amount of air that can be exhaled forcefully and quickly after a deep inhalation.

To better understand the ALSFRS-R and FVC data, we compared the open-label results to two prediction models and virtual patient arms. The first was a virtual placebo generated by Origent Data Sciences, which projected an individual patient’s deterioration and survival for 12 months. This comparison indicated another aspect of safety, as it showed that the PrimeC-IR treated patients exceeded their projected survival and did not deteriorate more than predicted. This was strengthened by the use of the ENCALS survival prediction model, which also indicated that treated patients exceeded their projected survival.

Additionally, PrimeC-IR treated patients were compared to a historical placebo by matching patients in the trial with similar patients in the PRO-ACT database, one of the largest publicly available repositories of merged ALS clinical trials data. Patients were matched using a propensity score matching method, which is a statistical method that seeks to approximate a random experiment by matching each patient in the trial with a patient from the PRO-ACT database.

At 12 months, the average ALSFRS-R total score declined only by -0.84 points per month for patients treated with PrimeC, whereas the ALSFRS-R total score deteriorated -1.02 for the PRO-ACT group, a difference of 18%. Additionally, when breaking down the ALSFRS-R into the sub-domains of the four categories (bulbar, fine motor, gross motor and respiratory functions), PRO-ACT patients showed higher deterioration in gross motor functions and respiratory functions compared to the PrimeC cohort.

Respiratory function was further assessed by FVC. The FVC of PRO-ACT patients deteriorated by 2.99% of the predicted value, and PrimeC patients deteriorated by 2.09% of the predicted value, or a difference of 30%, matching the results from the ALSFRS-R respiratory function section.

Despite the p-values not showing statistical significance (i.e., p-value < 0.05), we believe the study results indicate a clinical trend of slowing disease progression, achieved with an intermediate formulation of PrimeC. Based on the trend we observed, we believe that in a study with a larger sample size and with the optimal PrimeC dosage and formulation, there is much higher potential to achieve statistically significant clinical benefit with PrimeC.

Mechanism of Action Evaluation — Healthyvs ALS blood sample analysis

Neuronal derived exosomes (NDEs) have been shown to cross the blood-brain-barrier and enter blood circulation, enabling their isolation from patients’ blood using minimally invasive procedures. NDEs carry neuronal molecular signatures echoing the content of the cells from which they originated, providing potentially valuable information of disease pathogenesis. As a result, we believe neuron-derived exosomes can serve as sources of potential biomarkers in neurodegenerative disorders, including ALS.

In parallel to our NST002 trial, we explored the relevance of PrimeC’s mechanism of action in ALS by examination of the changes in expression or activation of several disease biomarkers and key drug target biomarkers. The measurements were performed in neuronal extracellular vesicles, extracted from the blood serum of patients diagnosed with ALS and then compared to corresponding healthy volunteers, in collaboration with Mass General Hospital (MGH) in Boston.

We examined and further validated key enzymes known the be affected in ALS in the same manner. It is well established that TDP-43 levels are increased in ALS patients, leading to a toxic accumulation. Additionally, a growing body of evidence shows decreased expression of LC3, a marker for autophagy in a number of ALS models, suggesting reduced basal levels and a decreased overall capacity for autophagy. Lastly, Cathepsin D (CatD) is a regularly expressed lysosomal protease that is involved in proteolytic degradation, cell invasion, and apoptosis. Growing evidence suggests that endolysosomal and autophagic defects are key pathogenic processes in various neurodegenerative disorders such as ALS. In examining these three biomarkers, we observed a significant difference between ALS and healthy subjects (TDP-43 p-value = 0.002, LC3 p-value < 0.001, CatD p-value < 0.001).

Furthermore, since PrimeC aims to target miRNA dysregulation, iron accumulation, and neuroinflammation, the target engagement markers we explored were EIF2C2 (Ago2), a component of the Dicer complex, which is essential to the regulation of miRNA and is affected in ALS, as well as Ferroportin-1, an iron pump serving as a marker of iron accumulation, and PGJ2, an endogenous product of inflammation, which induces neuronal death and the accumulation of proteins into aggregates. It has been previously demonstrated that PGJ2 was accumulated in the spinal cord of sporadic ALS patients. In this evaluation we observed clear differences between ALS and healthy subjects in these three key PrimeC targets (EIF2C2 p-value = 0.007, PGJ2 p-value > 0.05, Ferroportin p-value = 0.005).

We believe these biomarker evaluation results support the potential relevance of PrimeC’s mechanism of action for the treatment of ALS.

NST002 Biomarker Analysis — Assessingthe Effect of PrimeC on Key Biomarkers

In order to assess the natural course of the observed ALS-related markers over time, longitudinal matched samples were tested over 12 months. This study was performed to obtain an indirect placebo control. Results showed no significant changes over time in most of the tested markers. Interestingly, a significant decrease was detected in LC3, a marker for autophagy, suggesting down regulation of the process.

Based on the parameters validated in the comparison of healthy vs ALS patient samples and the indirect placebo group, generated from non-PrimeC samples, we examined the effect of PrimeC on these biomarkers. To that end, we used our previously established NDE paradigm to examine the levels of the biomarkers in NDEs extracted from longitudinal blood samples obtained from the participants in our NST002 clinical trial. These samples were collected at three time points throughout the study, namely, prior to initiation of PrimeC treatment, during their interim visit between the 3-6 month point and at the 12-month end of study visit.

Statistically significant changes were observed in the levels of TDP-43, following PrimeC treatment. TDP-43 is a protein highly associated with ALS pathology, and in a recent publication neuron-derived exosomal TDP-43 was shown to increase in longitudinal serum samples of patients with ALS. TDP-43 in PrimeC treated patients were observed to have a statistically significant decrease throughout the study (p-value = 0.002), indicating positive biological signs of the treatment. Analysis of additional ALS-associated pathological markers also showed significant positive changes, including LC3, a central protein in the autophagy pathway. Among PrimeC treated patients, LC3 levels were observed to elevate and stabilize (p-value = 0.054), suggesting that such treatment has positive effects on autophagy. Another ALS biomarker we examined was CatD, which remained in a stable state before showing a decrease (p-value = 0.015), indicating a potential benefit for lysosomal activity. Lastly, we assessed the change in PGJ2, downstream of COX-2, representing neuroinflammation. Levels of PGJ2 were observed to significantly decrease during PrimeC treatment (p-value<0.001), indicating a reduction in neuroinflammatory processes.

We believe these results indicate positive biological activity of PrimeC, in a manner that attenuates disease-related pathologies, as well as indicating target engagement.

Clinical Results — NST001 Phase 1 Trialin ALS

We have completed our Phase 1 NST001 trial of PrimeC for the treatment of ALS. NST001 was an open label, IND-exempt study designed to assess the safety and tolerability of an intermediate immediate-release formulation of PrimeC, at slightly different doses than NST002. The study was conducted at the Barrow Neurological Institute (BNI) in Phoenix, Arizona. Six patients with familial or sporadic ALS received a fixed dose of PrimeC-IR twice daily for 12 months. Patients were evaluated by phone every three months.

The primary endpoint of the trial was PrimeC-IR’s safety and tolerability, measured in the same manner as in NST002: number of patients with one or more treatment-emergent adverse events, number of patients who discontinued treatment prematurely, number of patients who discontinued treatment prematurely due to adverse events and number of patients with significant abnormal laboratory values.

NST001 and NST002 began simultaneously since both these studies were designed with the goal of assessing the safety and tolerability of two different doses and regimens of PrimeC-IR and were therefore considered independent of each other. Since no safety issues were expected due to the well-understood nature of both generic drugs comprising PrimeC, we determined that there was not a need to wait for the completion of NST001 in order to begin NST002. Moreover, while NST001 was an IND-exempt clinical trial, NST002 was conducted in Israel, according to Israeli regulations, and did not require FDA input. Nonetheless, in January 2021, we participated in a pre-IND meeting with the FDA to discuss our past and future development plans.

Pre-clinical Results

In pre-clinical studies of two models of ALS zebrafish, SOD1 and TDP-43, PrimeC was observed to improve locomotor and cellular deficits, indicating a potential neuroprotective effect. In the SOD1 studies, treatment with PrimeC was observed to improve motor performance of the mutant larvae by 84%, and elicited recovery of motor neuron morphology and neuromuscular junction structure (NMJ), as well as preserving ramified morphology of microglia cells.

mSOD1 larvae exhibited a substantial recovery of motor neuron morphology and NMJ structure, suggesting a potential neuroprotective role for PrimeC treatment. As shown in the graphic titled “Neuromuscular Junction Structures” below, following treatment with PrimeC, we observed a higher number of intact organized synapses (yellow), with reduced proportion of orphaned pre-(red) and post-synaptic (green) puncta, resembling WT zebrafish. A second study, conducted in TDP-43 mutant zebrafish, substantiated these results and showed a significant improvement in their swimming abilities with an increase of 110% in distance and 43.8% in maximum swim velocity.

Elucidating The Synergistic Effect of PrimeC Combination for ALS utilizing in-vivo and in-vitro models

PrimeC novel formulation composed of unique doses of ciprofloxacin and celecoxib is aimed to synergistically inhibit the progression of ALS by addressing key elements of its pathophysiology. As described below, the effectiveness of PrimeC was compared to each of the individual active substances comprising it, celecoxib and ciprofloxacin, and PrimeC’s ability to improve drug pharmacokinetics and mode of action were assessed.

Pharmacokinetic (PK) studies in rodents showed that the combination of celecoxib and ciprofloxacin had a synergistic effect, as the addition of celecoxib increased the concentration of ciprofloxacin in the brain tissue and serum of rodents. These findings were confirmed by assessing the efficacy of PrimeC combination in an induced pluripotent stem cell (iPSC) model. Results showed that neurons treated with PrimeC combination had higher survival rates than those treated with individual compounds. The efficacy of PrimeC was also demonstrated in a Synaptoneurosome (SN) model, showing a beneficial effect on PrimeC related mechanisms.

In summary, data from the PK studies suggests that PrimeC’s combination therapy can be a beneficial approach for treating ALS.

The toxicology studies that we performed with celecoxib and ciprofloxacin combination included a 90-day oral repeat-dose combination toxicity and toxicokinetic study in rats, 21-day oral dose range-finding (DRF) repeat-dose combination toxicity and toxicokinetic study in rats, a 56 day non-GLP DRF oral repeat-dose toxicity and toxicokinetic study of ciprofloxacin in beagle dogs and a 270 day GLP repeat-dose oral Ciprofloxacin toxicity and toxicokinetics study in beagle dogs with a 28-day recovery period.

●	In the 90-day oral repeat-dose combination toxicity and toxicokinetic study in rats, no effects were observed at combination doses up to 50 mg/kg/day celecoxib and 600 mg/kg/day ciprofloxacin (NOAEL). These doses convert to human equivalent doses of 483 mg/day for celecoxib and 5806 mg/day for ciprofloxacin, respectively (based on body surface area conversion for a 60 kg individual), which are 3.6 times greater and 4.3 times greater, respectively, than the maximal celecoxib and ciprofloxacin proposed daily doses in the PrimeC extended-release formulation (1360 mg ciprofloxacin and 136 mg celecoxib).
●	In the 21-day oral DRF repeat-dose combination toxicity and toxicokinetic study in rats, no adverse or combination-related effects were observed at combination doses up to 50 mg/kg/day celecoxib and 400 mg/kg/day ciprofloxacin.
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●	In the 56 day non-GLP DRF oral repeat-dose toxicity and toxicokinetic study of ciprofloxacin in beagle dogs, dogs aged 8-10 months old were dosed twice daily 8 hours apart for a period of 56 consecutive days with ciprofloxacin at 150 mg/kg/day or 300 mg/kg/day (3/sex/group) or with the vehicle (2/sex/group). No adverse effects were observed at ciprofloxacin doses up to 300 mg/kg/day, and this dose was determined as the NOAEL.
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●	The 270 day GLP repeat-dose oral Ciprofloxacin toxicity and toxicokinetics study in beagle dogs with a 28-day recovery period was completed. The NOAEL was set to 200 mg/kg/day.
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In addition, the Phase 2a and Phase 2b clinical studies results, in which a total 57 ALS subjects (15 subjects from Phase 2a and 45 subjects from Phase 2b) were treated with PrimeC, demonstrated that PrimeC is safe and well-tolerated, with the safety profile that is consistent with the known safety profile of celecoxib and ciprofloxacin. No new or unexpected safety signals were detected. PrimeC did not result in any drug-related fatal SAEs. See “--Our Product Candidates - Clinical Results”. This safety profile has also been demonstrated in 32 healthy volunteers in PK studies conducted by us. See “Item 3.D. Risk Factors - Risks Related to Our Business and Strategy - We have not applied for regulatory approvals to market any of our other product candidates, and we may be delayed in obtaining or failing to obtain such regulatory approvals and to commercialize our product candidates.”

Collaboration Agreement with Biogen

In May 2023, we entered into a Collaborative Evaluation Agreement with Biogen under which Biogen agreed to evaluate the impact of PrimeC on neurofilament levels in the plasma of participants in PARADIGM. Biogen agreed to fund the neurofilament biomarker study and conduct the analysis. Biogen also received a right of first refusal for a definitive licensing agreement to co-develop and/or commercialize PrimeC for the treatment of ALS. In March 2024, Biogen and NeuroSense agreed not to continue the Collaborative Evaluation Agreement.

Collaboration Agreement with Lonza

In April 2024, we announced a collaboration with Lonza to evaluate biological changes occurring in people with neurodegenerative diseases, including ALS. This agreement provides us with access to Lonza’s unparalleled, state-of-the-art extracellular vesicles expertise and capabilities quickly and on an ‘on-demand’ basis, without further commitments. We will leverage Lonza’s extensive experience in biomarker utilization in neurodegenerative diseases. Lonza will provide the development, optimization, and qualification of a method measuring biomarkers from NDEs, which will be integrated into the development of PrimeC.

Additional Studies

In May 2023, we announced positive preliminary results from a novel biomarker study conducted to evaluate the potential of PrimeC for the treatment of PD.

In October 2023, we announced the results of a non-sponsored in vitro study of PrimeC in ALS, which demonstrated that PrimeC has a positive effect ion ALS survival in an innovative induced pluripotent stem cell model.

AD Program

In the fourth quarter of 2023, we initiated a randomized, prospective double-blind, single-center, placebo-controlled Phase 2 study to assess the safety, tolerability, target engagement, and efficacy of PrimeC (an intermediate formulation of CogniC) in patients with mild to moderate Alzheimer’s Disease (AD). The study is being conducted at the Rambam Medical Center site in Israel and aims to enroll 20 patients (10 participants per study arm). The study incorporates a comprehensive panel of biomarkers utilizing both cerebrospinal fluid (CSF) and blood to evaluate PrimeC’s biological activity and target engagement. Additionally, blood samples collected from each participant will be used to generate induced pluripotent stem cells (iPSCs), allowing for the study of disease mechanisms and drug response at the cellular level. This approach enables a deeper understanding of individual variability and may aid in predicting patient response to PrimeC.

The current study builds upon a proof-of-concept biomarker-driven cross-sectional study conducted in plasma samples from individuals with Alzheimer’s disease. This study aimed to assess the relevance of PrimeC’s proposed mode of action for addressing AD pathology. To this extent, a discovery biomarkers study was conducted utilizing neuronal-derived exosomes (NDEs) extracted from the plasma of 31 people living with AD vs. 19 neurologically healthy controls. To reinforce the study findings, the study was conducted in two cohorts to assure the robustness of the results. The obtained results from the discovery biomarkers study, as expected, showed higher levels of known proteins implicated in AD, i.e., Aβ42 (p<0.05) and pTau (p<0.01) (Figure 4A). Moreover, we found higher levels of TDP-43 (p<0.05) in AD samples (Figure 5B). Other markers related to the recycling process, such as cathepsin D (CatD), and inflammatory response, such as prostaglandin J2 (PgJ2), is altered in AD samples in comparison to control (Figure 2C). Specifically, CatD levels were lower (p<0.0001) in NDEs isolated from AD samples compared to control, and PgJ2 levels were higher (p<0.001) in AD samples. TDP-43 has been known to colocalize with senile plaques and neurofibrillary tangles, suggesting a direct interaction between TDP-43 and amyloid-β (Aβ) or tau, which are known to be hallmark biomarkers in AD. TDP-43 has been found in up to 57% of AD cases and aggregates of TDP-43 have been shown to be cytotoxic both in vitro and in vivo. Neuroinflammation plays a key role in the pathophysiology of the disease.

In view of the shared pathophysiology of these two neurodegenerative diseases, as well as the preliminary biomarker data, we believe that there is a reasonable basis to hypothesize that ciprofloxacin and celecoxib combination can be an effective treatment for people living with AD.

Pre-clinical Pipeline

Our preclinical pipeline includes one additional product candidate, StabiliC, for the treatment of PD. We are currently conducting pre-clinical studies related to PD. It is likely that we will choose to consult with the FDA with regards to our findings prior to the initiation of an advanced clinical studies, if and once relevant, and in order to obtain their advice and consent for the study design and clinical plan forward for each of the indications.

Many pathological pathways involve neuroinflammation, protein aggregation, mitophagy, excitotoxicity, oxidative stress, iron accumulation, and dysregulation of miRNAs between neurodegenerative diseases, leading to the hypothesis that an effective drug for one neurodegenerative disease can lay the foundations for other diseases-modifying drugs. Therefore, we aimed to evaluate the putative neuroprotective effects of celecoxib and ciprofloxacin in a zebrafish pharmacological neurotoxin 1-methyl-4-phenyl-1,2,3,6-tetrahydropyridine-induced, or “MPTP”-induced, PD model. The objective of this study was to determine if celecoxib and ciprofloxacin were able to prevent and/or rescue MPTP-induced altered behavior. Locomotor activity was assessed through a “tapping” assay.

Results indicated that the symptomatic MPTP model is not relevant for StabiliC, suggesting that a different model with underlying PD pathologies may be required. We therefore plan to further explore StabiliC’s mode of action and to assess its ability to effect or alter key PD-related hallmarks by utilizing both the in-vitro patients’ derived cells method and the in-vivo rodent adeno-associated-virus alpha synuclein, or AAV-SYN, model. StabiliC is planned to be a combination of ciprofloxacin and celecoxib, and/or another molecule to be determined during ongoing pre-clinical development. These assays will focus on the ability of StabiliC to reduce AAV-SYN aggregation and to improve morphological and functional markers.

Manufacturing

We do not own or operate manufacturing facilities to produce our product candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely on third-party contract manufacturers for all of our required raw materials, active ingredients and finished products for our preclinical research and clinical trials. We have commenced negotiating commercial supply agreements with our primary third-party vendors and anticipate that these agreements will be executed in advance of the completion of a pivotal trial. We also intend to negotiate back-up supply agreements with other third-party manufacturers for the commercial production of those products.

Development and commercial quantities of any products that we successfully develop will need to be manufactured in facilities, and by processes, that comply with the requirements of the FDA and the regulatory agencies of other jurisdictions in which we are seeking approval. We currently employ internal resources to manage our manufacturing contractors. The relevant manufacturers of our drug products for our current pre-clinical and clinical trials have advised us that they are compliant with both current good laboratory practice, or cGLP, and current good manufacturing practices, or cGMP.

Our product candidates, if approved, are expected to be producible in sufficient commercial quantities, in compliance with regulatory requirements or at an acceptable cost. We and our contract manufacturers are, and will be, subject to extensive governmental regulation in connection with the manufacture of any pharmaceutical products. We and our contract manufacturers must ensure that all of the processes, methods and equipment are compliant with cGMP and cGLP for drugs on an ongoing basis, as mandated by the FDA and foreign regulatory authorities, and conduct extensive audits of vendors, contract laboratories and suppliers.

Competition

We compete in an industry characterized by rapidly advancing technologies, significant competition and a complex intellectual property landscape. We face substantial competition from many different sources, including large pharmaceutical, specialty pharmaceutical, and biotechnology companies. Recently we have also seen that academic research institutions and governmental agencies can and will continue to compete in this rapidly evolving environment with support from public and private research institutions. Below is a description of competition surrounding each of our disease targets and other technologies in development in the neurodegenerative field:

●	ALS. Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies and academic institutions, including Biogen, Novartis, AB Science, Prilenia Therapeutics, Brainstorm Cell Therapeutics, Clene, QurAlis, Eledon, among others, in various stages of clinical trials.
●	Alzheimer’s Disease. Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Biogen, Eli Lilly, Eisai, Roche (including Genentech, its wholly owned subsidiary) and Alector in various stages of clinical trials.
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●	Parkinson’s Disease. Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Prothena, Roche (including Genentech, its wholly owned subsidiary), Prevail/Eli Lilly, AstraZeneca, and Takeda in various stages of clinical trials.
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Many of our competitors, either alone or through their collaborations, have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete, or will compete, with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient enrollment in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. As a result, our competitors may discover, develop, license, commercialize and market products before or more successfully than we do.

Intellectual Property

Our commercial success depends, in part, on obtaining and maintaining patent, trade secret and other intellectual property and proprietary protection of our technology, current product candidates, future product candidates and methods used to develop and manufacture them. We cannot be sure that a patent will be granted with respect to any of our currently pending patent applications or with respect to any patent applications that we may file in the future, nor can we be sure that our existing patent or any patents that may be granted to us in the future will be sufficient to protect our technology or will not be challenged, invalidated or circumvented. Our success also depends on our ability to operate our business without infringing, misappropriating or otherwise violating any patents and other intellectual property or proprietary rights of third parties.

Patents

Our patent portfolio includes U.S. Patent 10,980,780, which relates to methods for treatment of ALS using ciprofloxacin and celecoxib, and which expires in 2038. This patent also been issued in the European Patent Office, Japan, Canada, Australia and Israel. In addition, U.S. patent application 16/623,467, which relates to methods of treatment of neurodegenerative disease using combinations of ciprofloxacin and celecoxib, is currently pending. The patent based on this application is expected to expire on June 20, 2038.

In addition, we have developed a pharmaceutical composition comprising, as active ingredients, ciprofloxacin and celecoxib, and have been granted US Patent 12,097,185 and have filed international PCT application PCT/IL2022/051096 relating to the compositions. This patent and patent applications relate to pharmaceutical formulations. The US patent will expire in December 2042 and the national patent applications based on the PCT application are expected to expire in October 2042.

Government Regulation

Product Approval Process in the United States

Review and approval of drugs

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug and Cosmetic Act, or FDCA, and other federal and state statutes and implementing regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions and enforcement actions brought by the FDA, the U.S. Department of Justice, or DOJ, or other governmental entities. Possible sanctions may include the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil or criminal penalties.

FDA approval of a new drug application is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the United States. Section 505 of the FDCA describes three types of new drug applications: (1) an application that contains full reports of investigations of safety and effectiveness (section 505(b)(1)); (2) an application that contains full reports of investigations of safety and effectiveness but where at least some of the information required for approval comes from studies or investigations that were not conducted by or for the applicant and by which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted (section 505(b)(2)); and (3) an application that contains information to show that the proposed product is identical in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics, and intended use, among other things, to a previously approved product (section 505(j)). Section 505(b)(1) and 505(b)(2) new drug applications are referred to as NDAs, and section 505(j) applications are referred to as ANDAs. We believe that the applications for PrimeC will be a section 505(b)(2) NDA.

In general, the process required by the FDA prior to marketing and distributing a new drug, as opposed to a generic drug subject to section 505(j), in the United States usually involves the following:

●	completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practices, or GLP, requirements or other applicable regulations;
●	submission to the FDA of an IND, which must become effective before human clinical trials in the United States may begin;
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●	approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;
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●	performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for its intended use;
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●	preparation and submission to the FDA of an NDA;
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●	satisfactory completion of an FDA advisory committee review, if applicable;
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●	satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product or components thereof are produced, to assess compliance with cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
●	satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
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●	payment of user fees and FDA review and approval of the NDA; and
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●	compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
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Preclinical studies

Preclinical studies include laboratory evaluation or product chemistry, formulation and toxicity, as well as animal studies to assess the potential safety and efficacy of the product candidate. Preclinical safety tests must be conducted in compliance with the FDA regulations. The results of the preclinical studies, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND which must become effective before clinical trials may commence. Long-term preclinical studies, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND application is submitted.

Clinical trials

Clinical trials involve the administration of an investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written trial protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

An IND automatically becomes effective 30 days after receipt by the FDA unless the FDA, within the 30-day time period, raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. In addition, information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on the NIH-maintained website, www.clinicaltrials.gov.

An IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review at least annually. The IRB must review and approve, among other things, the trial protocol information to be provided to trial subjects. An IRB must operate in compliance with FDA regulations. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on the NIH-maintained website, www.clinicaltrials.gov. The FDA, the IRB, or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP requirements, including the requirements for informed consent.

Clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

●	Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
●	Phase 2: The drug is administered to a limited patient population to identify possible short-term adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
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●	Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
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Submission of an NDA to the FDA

The results of the preclinical studies and clinical trials, together with other detailed information, including information on the manufacture, control and composition of the product, are submitted to the FDA as part of an NDA requesting approval to market the product candidate for a proposed indication. Under the Prescription Drug User Fee Act, as amended, applicants are required to pay fees to the FDA for reviewing an NDA. These user fees, as well as the annual fees required for commercial manufacturing establishments and for approved products, can be substantial. The NDA review fee alone can exceed $2 million, subject to certain limited deferrals, waivers and reductions that may be available. The FDA reviews an NDA to determine, among other things, whether a drug is safe and effective for its intended use.

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information and is subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. If found complete, the FDA will accept the NDA for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

Under the Prescription Drug User Fee Act, the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system, Standard Review and Priority Review. Priority Review designation is given to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists. The FDA endeavors to review applications subject to Standard Review within approximately 10 to 12 months of receipt, whereas the FDA’s goal is to review Priority Review applications within approximately six to eight months of receipt, depending on whether the drug is a new molecular entity. The FDA, however, may not approve a drug within these established goals, and its review goals are subject to change from time to time.

Before approving a NDA, the FDA will inspect the facility or facilities at which the product is manufactured or facilities that are significantly involved in the product development and distribution process, and will not approve the product unless compliance is satisfactory with cGMP. Additionally, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements. The FDA may also refer applications for novel drug products or drug products which present difficult questions of safety or efficacy to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee.

After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter to indicate that the review cycle for an application is complete and that the application is not ready for approval. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A complete response letter indicates that the review cycle of the application is complete, and that the NDA will not be approved in its present form. If a complete response letter is issued, the sponsor must resubmit the NDA and address all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.

A complete response letter generally outlines the deficiencies in the NDA submission and may require substantial additional testing and/or clinical data and/or other requirements related to clinical trials, nonclinical studies or manufacturing, in order for the FDA to reconsider the application. For example, as a condition of NDA approval, the FDA may require a REMS to ensure that the benefits of the drug outweigh the potential risks. For example, as a condition of NDA approval, the FDA may require a REMS to ensure that the benefits of the drug outweigh the potential risks. If the FDA determines a REMS is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval. A REMS may be required to include various elements, such as a medication guide or patient package insert, a communication plan to educate healthcare providers of the drug’s risks, limitations on who may prescribe or dispense the drug, or other elements to assure safe use, such as special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. In addition, the REMS must include a timetable to periodically assess the strategy. The requirement for a REMS can materially affect the potential market and profitability of a drug.

Even with submission of additional information, the approval may be for fewer or more limited indications than requested, indicated uses for which the product may be marketed, may require that warning statements be included in the product labeling, may require that additional studies or trials be conducted following approval as a condition of the approval, may impose restrictions and conditions on product distribution. If, or when, the deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.

Post-Approval Requirements

Any drug products for which we may receive FDA approval will be subject to continuing regulation by the FDA. Certain requirements include, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements. These promotion and advertising requirements include standards for direct-to-consumer advertising, prohibitions against promoting drugs for uses or patient populations that are not described in the drug’s approved labeling, known as “off-label use,” and other promotional activities, such as those considered to be false or misleading. Failure to comply with FDA requirements can have negative consequences, including the immediate discontinuation of noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. Such enforcement may also lead to scrutiny and enforcement by other government and regulatory bodies.

The manufacturing of any of our product candidates will be required to comply with applicable FDA manufacturing requirements contained in the FDA’s cGMP regulations. The FDA’s cGMP regulations require, among other things, quality control and quality assurance, as well as the corresponding maintenance of comprehensive records and documentation. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are also required to register their establishments and list any products they make with the FDA and to comply with related requirements in certain states. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. These entities are further subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Discovery of problems with a product after approval may result in serious and extensive restrictions on a product, manufacturer or holder of an approved NDA, as well as lead to potential market disruptions. These restrictions may include recalls, suspension of a product until the FDA is assured that quality standards can be met, and continuing oversight of manufacturing by the FDA under a “consent decree,” which frequently includes the imposition of costs and continuing inspections over a period of many years, as well as possible withdrawal of the product from the market. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented. Other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

The FDA also may require post-marketing testing, or Phase 4 testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of our product candidates.

Once approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

●	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
●	fines, warning letters or holds on post-approval clinical trials;
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●	refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;
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●	product seizure or detention, or refusal to permit the import or export of products; or
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●	injunctions or the imposition of civil or criminal penalties.
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The Hatch-Waxman Amendments

505(b)(2) NDAs

Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendment, and permits the filing of an NDA where at least some of the information required for approval comes from studies or trials not conducted by or for the applicant and for which the applicant has not obtained a right of reference. As an alternative path to FDA approval for modifications to formulations or uses of products previously approved by the FDA, an applicant may submit an NDA under Section 505(b)(2) of the FDCA. If the 505(b)(2) applicant can establish that reliance on the FDA’s previous findings of safety and effectiveness is scientifically appropriate, it may eliminate the need to conduct certain pre-clinical studies or clinical trials for the new product. The FDA may also require companies to perform additional studies or measurements, including clinical trials, to support the change from the approved branded reference drug. The FDA may then approve the new product candidate for all, or some, of the labeled indications for which the branded reference drug has been approved, as well as for any new indication sought by the 505(b)(2) applicant.

Orange Book Listing

In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the FDA’s Publication of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book.” Any applicant who submits a Section 505(b)(2) NDA referencing a drug listed in the Orange Book must certify to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use, or sale of the drug product for which the application is submitted. This last certification is known as a Paragraph IV certification. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent.

If the applicant does not challenge one or more listed patents through a Paragraph IV certification, the FDA will not approve the Section 505(b)(2) NDA until all the listed patents claiming the referenced product have expired. Further, the FDA will also not approve a Section 505(b)(2) NDA until any non-patent exclusivity, as described in greater detail below, has expired.

If the Section 505(b)(2) NDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the owner of the referenced NDA for the previously approved product and relevant patent holders within 20 days after the Section 505(b)(2) NDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement suit against the Section 505(b)(2) applicant. Under the FDCA, the filing of a patent infringement lawsuit within 45 days of receipt of the notification regarding a Paragraph IV certification automatically prevents the FDA from approving the Section 505(b)(2) NDA until the earliest to occur of 30 months beginning on the date the patent holder receives notice, expiration of the patent, settlement of the lawsuit, or until a court deems the patent unenforceable, invalid or not infringed. Even if a patent infringement claim is not brought within the 45-day period, a patent infringement claim may be brought under traditional patent law, but it does not invoke the 30-month stay.

Moreover, in cases where a Section 505(b)(2) application containing a Paragraph IV certification is submitted after the fourth year of a previously approved drug’s five-year NCE exclusivity period, as described more fully below, and the patent holder brings suit within 45 days of notice of the Paragraph IV certification, the 30-month period is automatically extended to prevent approval of the Section 505(b)(2) application until the date that is seven and one-half years after approval of the previously approved reference product that has the five-year NCE exclusivity. The court also has the ability to shorten or lengthen either the 30-month or the seven and one-half year period if either party is found not to be reasonably cooperating in expediting the litigation.

Notwithstanding the approval of many products by the FDA pursuant to Section 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA changes its interpretation of Section 505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit.

Non-Patent Exclusivity

In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent exclusivity, during which the FDA cannot approve a 505(b)(2) application that relies on the listed drug. For example, a pharmaceutical manufacturer may obtain five years of non-patent exclusivity upon NDA approval of a new chemical entity, or NCE, which is a drug that contains an active moiety that has not been approved by FDA in any other NDA. An “active moiety” is defined as the molecule or ion responsible for the drug substance’s physiological or pharmacologic action. During the five year exclusivity period, the FDA cannot accept for filing any ANDA seeking approval of a generic version of that drug or any 505(b)(2) NDA for the same active moiety and that relies on the FDA’s findings regarding that drug, except that FDA may accept an application for filing after four years if the follow-on applicant makes a paragraph IV certification.

Another form of non-patent exclusivity is clinical investigation exclusivity. A drug, including one approved under Section 505(b)(2), may obtain a three-year period of exclusivity for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical trials (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted/ sponsored by the applicant. Should this occur, the FDA would be precluded from approving any ANDA or 505(b)(2) application for the protected modification until after that three-year exclusivity period has run. However, unlike NCE exclusivity, the FDA can accept an application and begin the review process during the exclusivity period.

Patent Term Restoration and Extension

Depending upon the timing, duration and specifics of our product candidates, some of our U.S. patents claiming a new drug product may be eligible for limited patent term extension under the Hatch-Waxman Amendments, which permit a patent term restoration of up to five years for the patent term lost during product development and the FDA regulatory review process. However, a patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. The patent term restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the approval date of that NDA. Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent. A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The U.S. Patent and Trademark Office reviews and approves the PTE application in consultation with the FDA.

Review and Approval of Drug Products Outsidethe United States

In addition to regulations in the United States, if we target non-U.S. markets, we will be subject to a variety of foreign regulations governing manufacturing, clinical trials, commercial sales and distribution of our product candidates. Whether or not we obtain FDA approval for a product candidate, we must obtain approval of the product by the comparable regulatory authorities of foreign countries before commencing clinical trials or marketing in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

European Union

Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized, national, decentralized, -or mutual recognition procedure. The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European Union member states. The national procedure is only available for products intended to be authorized in a single EU member state. The decentralized procedure includes selecting one “reference member state,” or RMS, and submitting to more than one member state at the same time. The RSM will lead the review of an application in a mutual recognition and a decentralized procedure. The RMS National Competent Authority conducts a detailed review and prepares a draft assessment report, a draft assessment report, a draft summary of product characteristics and a draft of the labelling and package leaflet and shall send these documents to the concerned member states and to the applicant, which the concerned member states provide comment. The mutual recognition procedure provides for mutual recognition of national approval decisions. Under this procedure, , the marketing authorization holder shall request the RMS either to prepare an assessment report on the product or, if necessary, to update any existing assessment report. In a mutual recognition or decentralized procedure, the member states concerned shall approve the relevant document(s) within 90 days of receipt and shall inform the reference member state accordingly. The reference member state shall record the agreement of all parties, close the procedure and inform the applicant thereof. Each member state in which an application has been submitted under a mutual recognition or decentralized procedure shall adopt a decision in conformity with the approved document(s), within 30 days after acknowledgement of the agreement.

Israel

Regulations regarding clinical trials

The conduct of clinical studies in Israel is subject to the study sponsor’s receipt of specific authorization from the ethics committee (the equivalent of an Institutional Review Board) and general manager of the institution in which the sponsor intends to conduct its study, as required under the Guidelines for Clinical Trials in Human Subjects implemented pursuant to the Israeli Public Health Regulations (Clinical Trials in Human Subjects), as amended from time to time, and other applicable legislation, including applicable guidelines issued by the Israeli Ministry of Health, or the MOH. These regulations also require authorization from the MOH, except in certain circumstances, and in the case of genetic trials, special fertility trials and certain other trials, an additional authorization of the overseeing institutional ethics committee.

Regulations regarding new drugs approvals

The registration of medicinal and biological products is regulated by the Pharmacists Regulations promulgated under the Pharmacists Ordinance [New Version], 5741-1981, or the Pharmacists Ordinance, and by guidelines issued by the MOH. According to the Pharmacists Ordinance, a person may not manufacture, market, import or order the use of any drug, defined as any form of substance or combination of substances that complies with one of the following, but excluding blood or blood component that have been collected from a person and it intended to fill its physiological function and has not undergone a significant processing process: (i) has or is presented to have curing, or prevention characteristics or is designated to treat a disease; (ii) causes or is intended to cause reproduction, replacement, correction or change of a physiological action in the body through a pharmacological or immunological or metabolic action; (iii) is given or can be given for a medical diagnosis; or a Pharmaceutical, and in accordance with its registration terms (subject to certain listed exceptions). The application to register a Pharmaceutical in the Pharmaceutical Registry should be submitted in person, during a meeting at the MOH. For an imported Pharmaceutical, the application shall also include CPP (Certificate of Pharmaceutical Product) approval, and GMP Approval from a competent authority of a Pharmaceutical Recognized Country (as defined in the regulations) that in the site mentioned therein complies with GMP.

A first Pharmaceutical registration approval shall be granted for a period of no longer than five years. A renewal of a Pharmaceutical approval may be granted for consecutive periods no longer than ten years each. The first batch of a Pharmaceutical marketed in Israel must be approved by the MOH as a pre-condition to its marketing. The MOH shall approve such batch only after it has confirmed that the Pharmaceutical batch conforms to the registration certificate, the requirements mentioned in the registration files and after the packaging, labeling and leaflets for both physicians and consumers have been approved. In addition, the following Pharmaceuticals need to receive MOH approval before the marketing of each batch: (i) a Pharmaceutical derived from human blood or plasma prepared by a method involving an industrial process, excluding whole blood or blood cells; (ii) human vaccines; (iii) a registered Pharmaceutical imported pursuant to an import and marketing approval of a Compatible Pharmaceutical (as defined in the regulations); and (iv) other Pharmaceuticals that the MOH determines should be examined to ensure public safety.

Other Healthcare Laws and Regulations and LegislativeReform in the United States

U.S. Healthcare Laws and Regulations

Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our operations, including any arrangements with healthcare providers, physicians, third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products. Our current and future operations are subject to regulation by various federal, state, and local authorities in addition to the FDA, including but not limited to the Centers for Medicare & Medicaid Services, or CMS, the Department of Health and Human Services, or HHS, (including the Office of Inspector General, Office for Civil Rights and the Health Resources and Services Administration), the DOJ and individual U.S. Attorney offices within the DOJ, and state and local governments. The healthcare laws that may affect our ability to operate include, but are not limited to:

●	The federal Anti-Kickback Statute, which prohibits any person or entity from, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value. The federal Anti-Kickback Statute has also been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection. Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
●	Federal civil and criminal false claims laws, such as the False Claims Act, which can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment of federal funds, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the U.S. government. Drug manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. For example, pharmaceutical companies have been prosecuted under the False Claims Act in connection with their alleged off-label promotion of drugs, purportedly concealing price concessions in the pricing information submitted to the government for government price reporting purposes, and allegedly providing free product to customers with the expectation that the customers would bill federal healthcare programs for the product. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
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●

The federal Anti-Kickback Statute, which prohibits any person or entity from, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value. The federal Anti-Kickback Statute has also been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection. Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

●

Federal civil and criminal false claims laws, such as the False Claims Act, which can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment of federal funds, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the U.S. government. Drug manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. For example, pharmaceutical companies have been prosecuted under the False Claims Act in connection with their alleged off-label promotion of drugs, purportedly concealing price concessions in the pricing information submitted to the government for government price reporting purposes, and allegedly providing free product to customers with the expectation that the customers would bill federal healthcare programs for the product. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

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●	The Health Insurance Portability and Accountability Act, or HIPAA, among other things, imposes criminal liability for executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and creates federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
●	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, which impose privacy, security and breach reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates that perform services for them that involve individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
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●	Federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
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●	The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, or ACA, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments and other transfers of value provided to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made during the previous year to certain non-physician providers, including physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified nurse midwives;
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●	Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; such as Medicaid reimbursement requires the best price and the 340B program that requires discounts for certain providers;
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●	State and foreign laws that are analogous to each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by non-governmental third-party payors, including private insurers, and state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and
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●	State and foreign laws that require pharmaceutical companies to implement compliance programs, comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physicians and other healthcare providers; state laws that require the reporting of marketing expenditures or drug pricing, including information pertaining to and justifying price increases; state and local laws that require the registration of pharmaceutical sales representatives; state laws that prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals; state laws that require the posting of information relating to clinical trials and their outcomes; and other federal, state and foreign laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus requiring additional compliance efforts.
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If our operations are found to be in violation of any of these laws or any other current or future healthcare laws that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could substantially disrupt our operations. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. 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. In addition, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Legislative Reform

We operate in a highly regulated industry, and new laws, regulations and judicial decisions, or new interpretations of existing laws, regulations and decisions, related to healthcare availability, the method of delivery and payment for healthcare products and services could negatively affect our business, financial condition and prospects. There is significant interest in promoting healthcare reforms, and it is likely that federal and state legislatures within the United States and the governments of other countries will continue to consider changes to existing healthcare legislation.

For example, the United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In 2010, the U.S. Congress enacted the ACA, which included changes to the coverage and reimbursement of drug products under government healthcare programs such as:

●	increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program;
●	established a branded prescription drug fee that pharmaceutical manufacturers of certain branded prescription drugs must pay to the federal government;
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●	expanded the list of covered entities eligible to participate in the 340B drug pricing program by adding new entities to the program;
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●	established a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70%, effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
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●	extended manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
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●	expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
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●	created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted or injected;
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●	established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
●	established the Center for Medicare & Medicaid Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; and
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●	created a licensure framework for follow-on biologic products.
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There have been executive, judicial and congressional challenges to certain aspects of the ACA. For example, in 2017, the U.S. Congress enacted a law informally known as the Tax Cuts and Jobs Act, or TCIA, which eliminated the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, the U.S. District Court for the Northern District of Texas held that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed by the TCIA, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. The U.S. Supreme Court recently decided this case; oral arguments were heard on November 10, 2020 and the Supreme Court’s decision was published on June 17, 2021. The U.S. Supreme Court refused to hear the plaintiff’s claims on the merits because they held the plaintiff had no standing to bring the lawsuit. Consequently, the U.S. Supreme Court reversed the lower courts and ordered the case be dismissed. On January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructs 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. Further, on February 10, 2021, the Biden Administration withdrew the federal government’s support for overturning the ACA. It is unclear how the Supreme Court ruling, other such litigation and the healthcare reform measures of the Biden administration will impact the ACA. It is difficult to predict the future legislative landscape in healthcare and the effect on our business, results of operations, financial condition and prospects.

In addition, there have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs. In 2011, the U.S. Congress enacted the Budget Control Act, or BCA, which included provisions intended to reduce the federal deficit. The BCA resulted in the imposition of 2% reductions in Medicare payments to providers beginning in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021 absent additional congressional action. Legislation is currently pending to extend the suspension through December 31, 2021. In addition, in 2012, the U.S. Congress enacted the American Taxpayer Relief Act, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. If government spending is further reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA, to continue to function at current levels, which may impact the ability of relevant agencies to timely review and approve research and development, manufacturing and marketing activities, which may delay our ability to develop, market and sell any product candidates we may develop. Moreover, any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented, or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the BCA, could have an adverse impact on our anticipated product revenues.

Furthermore, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several congressional inquiries and proposed legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products. At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals. The FDA also released a final rule on September 24, 2020 providing guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare 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 by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed until January 1, 2023. Further, in November 2020, CMS issued an interim final rule implementing the Most Favored Nation, or MFN, Model under which Medicare Part B reimbursement rates will be calculated for certain drugs and biologicals based on the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per capita. The MFN Model regulations mandate participation by identified Medicare Part B providers and will apply in all U.S. states and territories for a seven-year period beginning January 1, 2021, and ending December 31, 2027. The Interim Final Rule has not been finalized and is subject to revision and challenge. For example, on December 28, 2020, the United States District Court for the Northern District of California issued a nationwide preliminary injunction against the implementation of this interim final rule.

Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration.

Facilities

Our corporate headquarters is located in Herzliya, Israel, where we lease and occupy approximately 2,300 square feet of office space. The current term of our Herzliya lease commenced January 2022 and expires on December 31, 2025 (following the exercise of the first option to extend the lease term) and the monthly lease payments, including utilities, amount to approximately $7 thousand and are indexed to the Israeli consumer price index. We have an option to extend the term of the lease for an additional two years. In September 2021, we entered into an agreement which provides us access to co-working spaces, including office space in Cambridge, Massachusetts. The lease pursuant to which we can access the co-working spaces is terminable at will by either us or the licensor for any reason upon 30 days’ written notice.

We believe our existing facility is sufficient for our needs for the foreseeable future. To meet the future needs of our business, we may lease additional or alternate space, and we believe suitable additional or alternative space will be available in the future on commercially reasonable terms.

Legal Proceedings

We may be subject from time to time to various legal proceedings lawsuits, disputes or claims in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of the date of this annual report, we do not believe we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Scientific Advisory Board

We maintain a Scientific Advisory Board. The current chair of our Scientific Advisory Board is Professor Jeremy Shefner. The other members of our Scientific Advisory Board are Professor Orla Hardiman, Professor Merit Cudkowicz, Dr. Jinsy Andrews and Dr. Jeffery Rosenfeld.

C. Organizational Structure

Not applicable.

D. Property, Plant and Equipment

See “Item 4. Information on the Company—B. Business Overview—Facilities”.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW ANDPROSPECTS

You should read the followingdiscussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the notesthereto included elsewhere in this annual report. 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. Factorsthat could cause or contribute to these differences include those discussed below and elsewhere in this annual report, particularly thosein “Item 3. Key Information – D. Risk Factors.” Our discussion and analysis for the year endedDecember 31, 2023 can be found in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on April4, 2024.

Overview

We have incurred operating losses in each year since our inception. We incurred net losses of $10.21 million and $10.10 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $36.66 million. We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates from formulation development through preclinical development and clinical trials, seek regulatory approval and pursue commercialization of any approved product candidate. In addition, we expect that our expenses will increase substantially in connection with our ongoing activities as we:

●	continue the clinical development of PrimeC ;
●	continue the preclinical development of our other product candidates;
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●	file an NDA seeking regulatory approval for any product candidates;
●	establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we obtain manufacturing approval;
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●	maintain, expand and protect our intellectual property portfolio;
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●	add equipment and physical infrastructure to support our research and development;
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●	hire additional clinical development, quality control and manufacturing personnel;
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●	incur additional expenses associated with operating as a U.S. public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company; and
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●	add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization.
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A. Operating Results

Revenue

We have not recognized any revenue to date and we do not expect to generate revenue from the sale of products in the near future.

Operating Expenses

Our current operating expenses consist primarily of research and development as well as general and administrative expenses.

Research and Development Expenses

Research and development expenses consist primarily of:

●	salaries for research and development staff and related expenses, including employee benefits and share-based compensation expenses;
●	expenses for production of our product candidates by contract manufacturers;
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●	expenses paid to contract research organizations and other third parties in connection with the performance of preclinical studies, clinical trials and related expenses;
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●	expenses incurred under agreements with other third parties, including subcontractors, suppliers and consultants that conduct formulation development, regulatory activities and preclinical studies;
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●	expenses incurred to acquire, develop and manufacture preclinical study and clinical trial materials.
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Expenses on research activities is recognized in profit or loss when incurred. Development expenditures, including patent registration costs, 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 we intend to and have sufficient resources to complete development and to use or sell the asset. As of December 31, 2024, no development expenditures have met the recognition criteria and thus we have expensed all of our development expenditures as incurred.

We are currently focused on advancing our product candidates, and our future research and development expenses will depend on their clinical success. Research and development expenses will continue to be significant and will increase over at least the next several years as we continue to develop our product candidates and conduct preclinical studies and clinical trials of our product candidates.

We do not believe that it is possible at this time to accurately project total expenses required for us to reach commercialization of our product candidates. Due to the inherently unpredictable nature of preclinical and clinical development, we are unable to estimate with certainty the costs we will incur and the timelines that will be required in the continued development and approval of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. See “Risk Factors—Risks Related to Our Business and Strategy.” In addition, we cannot forecast which product candidates may be subject to future collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including share-based compensation, related to directors, executive, finance, and human resource functions, insurance costs, facility costs and external professional service costs, including legal, accounting, marketing and audit services and other consulting fees.

We anticipate that our general and administrative expenses will increase in the future as we increase our administrative headcount and infrastructure to support our continued research and development programs and the potential approval and commercialization of our product candidates. We also anticipate that we will incur increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance premiums, director compensation, and other costs associated with being a public company.

In addition, if any of our product candidates receives regulatory approval and if we determine to invest in building a commercial infrastructure to support the marketing of our products, we expect to incur greater expenses.

Financing income (Expenses), net

Our net financing expenses (income), net consist primarily of fair value revaluation of warrants, issuance costs, interest income on deposits, interest expenses on lease liability and differences in the exchange rate between NIS and the U.S. Dollar.

Income Taxes

We have yet to generate taxable income in Israel, as we have historically incurred operating losses resulting in carry forward tax losses totaling approximately $24.7 million as of December 31, 2024. We anticipate that we will continue to generate tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future taxable years. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of our carry forward tax losses.

Results of Operations

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

Our results of operations for the years ended December 31, 2024 and 2023 were as follows:

	For the Years Ended<br> December 31,
(U.S. dollars in thousands except share and per share data)	2024			2023
Statement of Operations:
Research and Development Expenses		(5,698	)		(7,274	)
General and Administrative Expenses		(4,204	)		(4,775	)
Operating Loss		(9,902	)		(12,049	)
Financing Income (expense), net		(308	)		1,942
Net Loss and Comprehensive Loss		(10,210	)		(10,107	)
Basic and Diluted Net Loss per Share		(0.54	)		(0.74	)
Weighted average number of shares outstanding used in computing basic and diluted net loss per share		18,602,082			13,640,168

Research and Development Expenses

The following table describes the breakdown of our research and development expenses for the indicated periods:

	For the Years Ended<br> December 31,
(U.S. dollars in thousands except share and per share data)	2024		2023
Subcontractors and consultants	$	3,530		4,794
Share-based compensation		193		575
Salaries and social benefits		1,975		1,905
Total research and development expenses	$	5,698		7,274

Our research and development expenses for the years ended December 31, 2024 and 2023 were $5,698 thousand and $7,274 thousand, respectively. The decrease of $1,576 thousand, or 21.6%, was mainly attributed to (i) a decrease of $1,264 thousand, or 26.3%, in subcontractor and consulting expenses relating to clinical programs and (ii) a decrease of $382 thousand, or 66.4%, in share-based compensation expenses to our employees and service providers.

General and Administrative Expenses

The following table describes the breakdown of our general and administrative expenses for the indicated periods:

	For the year ended<br> December 31,
	2024		2023
	U.S. dollars in thousands
Professional services	$	1,998		1,486
Share-based compensation		364		962
Salaries and social benefits		865		1,011
Insurance		309		511
Traveling abroad		134		164
Others		534		641
	$	4,204		4,775

Our general and administrative expenses for the years ended December 31, 2024 and 2023 were $4,204 thousand and $4,775 thousand, respectively. The decrease of $571 thousand, or 11.9%, was primarily attributable to (i) a $598 thousand, or 62.1%, decrease in share-based compensation expenses due to fewer grants of options and restricted share units (“RSUs”) to our employees, directors and service providers, (ii) a decrease of $202 thousand, or 39.5%, in insurance costs as a public company and (iii) a decrease of $146 thousand, or 14.4%, in salaries and social benefits, mainly due to decrease in the number of employees which were offset by a $512 thousand, or 34.4%, increase in professional services expenses.

Financing Expenses

Our financing expenses, net for the year ended December 31, 2024 were $308 thousand compared to finance income, net of $1,942 thousand for the year ended December 31, 2023. The decrease of $2,250 thousand in finance expense was primary attributable to a $2,145 thousand decrease in revaluation of financial instruments.

B. Liquidity and Capital Resources

Overview

Since our inception, we have incurred losses and negative cash flows from our operations. For the year ended December 31, 2024, we incurred a net loss of approximately $10.21 million, while net cash of approximately $10.13 million was used in our operating activities. As of December 31, 2024, we had accumulated deficit of approximately $36.66 million. As of December 31, 2024, our cash and cash equivalents totaled approximately $3.37 million.

Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business, and our financial status creates a substantial doubt whether we will continue as a going concern. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.

Through December 31, 2024, we have financed our operations primarily through our initial public offering, public and private offerings of our equity securities, proceeds from the exercise of warrants and options, and crowd funding of equity securities. Total gross invested capital as of December 31, 2024 was approximately $35.9 million, which included issuances of ordinary shares, SAFE agreements, options and warrants to purchase ordinary shares.

In May, June and July 2021, we received $0.80 million from SAFE agreements, in September 2021, we received an additional $1.23 million from previous investors as a result of their exercise of outstanding warrants, in December 2021, we received gross proceeds of approximately $12.0 million from our initial public offering, and during 2022 we received approximately $3.87 million following exercise of warrants.

In April 2023, we entered into a sales agreement, or A.G.P./Alliance ATM, with A.G.P./Alliance Global Partners, or AGP, pursuant to which we were able to offer and sell, at our option, up to $5,743,677 of our ordinary shares through an at-the-market equity program under which AGP agreed to act as sales agent. In June 2023, we and AGP reduced the maximum aggregate offering amount under the A.G.P./Alliance ATM program to $502.30, and in October 2023, we terminated the A.G.P./Alliance ATM program with having sold 3,600 ordinary shares for aggregate gross proceeds of $7.2 thousands.

In June 2023, we received gross proceeds of approximately $4.5 million before deducting placement agent fee and related offering expenses million from a registered direct offering. Total issuance expenses in connection with the offering were $0.45 million.

In April 2024, we received gross proceeds of approximately $4.47 million before deducting placement agent fee and related offering expenses million from a registered direct offering. As part of the agreement, the Company also issued 70,964 ordinary shares valued at $0.1 million as issuance expenses to the placement agent. Total issuance expenses in cash in connection with the offering were $0.153 million.

In August 2024, we entered into a Capital on Demand Sales Agreement, or the 2024 Sales Agreement, with JonesTrading Institutional Services LLC, or JonesTrading. Pursuant to the 2024 Sales Agreement, we may offer and sell our ordinary shares having an aggregate offering price of up to $2,524,437, from time to time through JonesTrading. As of April 4, 2025, we have sold 1,549,725 of our ordinary shares pursuant to the 2024 Sales Agreement for aggregate gross proceeds of approximately $1.74 million.

In August 2024 and December 2024, we received gross proceeds of approximately $0.6 million and $5.0 million, respectively, before deducting offering expenses from private placements. Total issuance expenses in connection with the August 2024 and December 2024 offerings were $0.01 million and $0.06 million, respectively.

In October 2024, we entered into a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, LTD., a Cayman Islands exempt limited partnership, or YA. Pursuant to the SEPA, we have the right, but not the obligation, to sell to YA from time to time, each such occurrence, an Advance, up to $30.0 million, or the Commitment Amount, of our ordinary shares, during the 36 months following the execution of the SEPA, subject to the restrictions and satisfaction of the conditions in the SEPA. As of the date of this annual report, we have issued 224,697 ordinary shares to YA as consideration for YA’s irrevocable commitment to purchase our ordinary shares up to the Commitment Amount and we have not sold any ordinary shares to YA as Advance Shares.

On December 2, 2024, we entered into a securities purchase agreement with an institutional investor and our chief executive officer pursuant to which we sold an aggregate of (i) 2,343,729 of our ordinary shares (ii) pre-funded warrants to purchase up to an aggregate of 1,656,271 ordinary shares and (iii) 8,000,000 ordinary warrants, each representing the right to acquire one ordinary share, in a private placement at a combined offering price of $1.25 per ordinary share and ordinary warrant and $1.2499 per pre-funded warrant and ordinary warrant. Each pre-funded warrant represented the right to purchase one ordinary shares at an exercise price of $0.0001 per share. The pre-funded warrants were exercisable immediately and at any time until the pre-funded warrants were exercised in full (subject to a beneficial ownership limitation set forth therein). The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.25 per share and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from the private placement were approximately $5.0 million, before deducting offering expenses. The offering closed on December 17, 2024.

Cash flows

The following table summarizes our statement of cash flows for the years ended December 31, 2024 and 2023:

	For the Years Ended<br> December 31,
(U.S. dollars in thousands except share and per share data)	2024			2023
Net cash used in operating activities	$	(10,135	)		(8,354	)
Net cash provided by (used in) investing activities		1			3,468
Net cash provided by financing activities		10,913			3,975
Effects of exchange rate changes on cash and cash equivalents		(41	)		8
Increase (decrease) in cash and cash equivalents	$	738			(903	)

Net cash used in operating activities

Net cash used in operating activities was $10,135 thousand and $8,354 thousand for the years ended December 31, 2024 and 2023, respectively. The $1,781 thousand increase was attributable primarily to higher payments to service providers and subcontractors following higher proceeds from finance activity in 2024.

Net cash provided by (used in) investing activities

Net cash provided by (used in) investing activities was $1 thousand and $3,468 thousand for the years ended December 31, 2024 and 2023, respectively. The $3,467 thousand decrease was attributable primarily to changes in the investment in short-term and restricted deposits.

Net cash provided by financing activities

Net cash provided by financing activities was $10,913 thousand and $3,975 thousand for the years ended December 31, 2024 and 2023, respectively. The increase was primarily due to the higher proceeds from issuance of shares, warrants and pre-funded warrants in 2024 compared to 2023.

Funding Requirements

Since our inception, almost all of our resources have been dedicated to the preclinical and clinical development of our lead product candidate, PrimeC. As of December 31, 2024, we had cash and cash equivalents of $3.37 million. We believe that our existing cash and cash equivalents will not be sufficient to fund the Company’s operations for a period of at least 12 months from the date of approval of our consolidated financial statements.

Our present and future funding requirements will depend on many factors, including, among other things:

●	the progress, timing and completion of clinical trials for PrimeC;
●	preclinical studies and clinical trials for our other product candidates;
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●	the costs related to obtaining regulatory approval for PrimeC and any of our other product candidates, and any delays we may encounter as a result of regulatory requirements or adverse clinical trial results with respect to any of these product candidates;
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●	selling, marketing and patent-related activities undertaken in connection with the commercialization of PrimeC and any of our other product candidates, and costs involved in the development of an effective sales and marketing organization;
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●	the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties or other amounts we may be required to pay to obtain rights to third party intellectual property rights;
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●	potential new product candidates we identify and attempt to develop; and
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●	revenues we may derive either directly or in the form of royalty payments from future sales of PrimeC and any other product candidates.
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For more information as to the risks associated with our future funding needs, see “Risk Factors — We will require substantial additional financing to achieve our goals, and a failure to obtain this capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization efforts or other operations.”

Contractual Obligations and Commitments

As of December 31, 2024, we did not have any material contractual obligation and commitments, except for lease agreements with respect to offices. In December 2021, we entered into an office space lease agreement in Herzilya, Israel (which commenced on January 1, 2022). Monthly rent payments including utilities amount to approximately $7 thousand and indexed to CPI. The lease period was for 24 months with an option to extend the lease period for additional two periods of 24 months each. We exercised the first period option, and we expect to exercise the second option for an additional lease period.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recent Offerings

On June 22, 2023, we sold to health-care focused institutional purchaser an aggregate of (i) 1,330,000 of our ordinary shares at an offering price of $1.50 per share and (ii) pre-funded warrants to purchase up to an aggregate of 1,670,000 ordinary shares at an offering price of $1.499 per pre-funded warrant, in a registered direct offering. Each pre-funded warrant represented the right to purchase one ordinary shares at an exercise price of $0.0001 per share. The pre-funded warrants were exercisable immediately and at any time until the pre-funded warrants were exercised in full (subject to a beneficial ownership limitation set forth therein). In a concurrent private placement, we also issued an aggregate of 3,000,000 ordinary warrants, each representing the right to acquire one ordinary share, at the same purchase price in the registered direct offering. The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.50 per share, and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from the registered direct offering and concurrent private placement were approximately $4.5 million, before deducting the placement agent fee and related offering expenses. The offerings closed on June 26, 2023. In June 2024, we and a certain institutional investor from the June 2023 concurrent private placement amended the ordinary warrant to purchase up to 3,000,000 ordinary shares to make certain adjustments to the “Redemption Right” provision in the ordinary warrant and extend the termination date of ordinary warrant to October 12, 2029. As of the date of this annual report, the pre-funded warrants have been exercised in full.

On April 10, 2024, we entered into a securities purchase agreement with an institutional investor pursuant to which we sold an aggregate of (i) 1,732,000 of our ordinary shares at an offering price of $1.50 per share and (ii) pre-funded warrants to purchase up to an aggregate of 1,248,000 ordinary shares at an offering price of $1.499 per pre-funded warrant, in a registered direct offering. Each pre-funded warrant represented the right to purchase one ordinary shares at an exercise price of $0.0001 per share. The pre-funded warrants were exercisable immediately and at any time until the pre-funded warrants were exercised in full (subject to a beneficial ownership limitation set forth therein). In a concurrent private placement, we also issued an aggregate of 2,980,000 ordinary warrants, each representing the right to acquire one ordinary share, at the same purchase price in the registered direct offering. The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.50 per share, and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from the registered direct offering and concurrent private placement were approximately $4.47 million, before deducting the placement agent fee and related offering expenses. The offerings closed on April 15, 2024. In June 2024, we and a certain institutional investor from the April 2024 concurrent private placement amended the ordinary warrant to purchase up to 2,980,000 ordinary shares to extend the termination date of the warrant to October 12, 2029.

On August 6, 2024, we entered into a securities purchase agreement with certain investors, including members of our senior management and existing investors, pursuant to which we sold (i) an aggregate of 800,000 of our ordinary shares and (ii) 800,000 ordinary warrants, each representing the right to acquire one ordinary share, in a private placement at a combined offering price of $0.75 per ordinary share and ordinary warrant. The ordinary warrants are exercisable immediately upon issuance at an exercise price of $0.75 per share, and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from private placement were approximately $0.6 million, before deducting offering expenses. The offering closed in September 2024.

On August 16, 2024, we entered into the 2024 Sales Agreement with JonesTrading. Pursuant to the 2024 Sales Agreement, we may offer and sell our ordinary shares having an aggregate offering price of up to $2,524,437, from time to time through JonesTrading. JonesTrading will receive a commission equal to 3.0% of the gross proceeds from the sale of the ordinary shares and will be reimbursed for certain specified expenses in connection with entering into the Sales Agreement. As of April 4, 2025, we have sold 1,549,725 of our ordinary shares pursuant to the 2024 Sales Agreement for aggregate gross proceeds of approximately $1.74 million.

On October 31, 2024, we entered into the SEPA with YA. Pursuant to the SEPA, we have the right, but not the obligation, to sell to YA from time to time up to $30.0 million of our ordinary shares, during the 36 months following the execution of the SEPA, subject to the restrictions and satisfaction of the conditions in the SEPA. At our option, the ordinary shares would be purchased by YA from time to time at a price equal to 97% of the lowest of the three daily VWAPs (as hereinafter defined) during a three consecutive trading day period commencing on the date that we, subject to certain limitations, deliver a notice to YA that we are committing YA to purchase such ordinary shares, or the Advance Shares. We may also specify a certain minimum acceptable price per share in each Advance. “VWAP” means, for any trading day, the daily volume weighted average price of our ordinary shares for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P. As consideration for YA irrevocable commitment to purchase our ordinary shares up to the Commitment Amount, we agreed to issue 224,697 ordinary shares to YA and also paid a $25,000 structuring fee to an affiliate of YA. As of the date of this annual report, we have issued 224,697 ordinary shares to YA as consideration for YA’s irrevocable commitment to purchase our ordinary shares up to the Commitment Amount and we have not sold any ordinary shares to YA as Advance Shares.

On December 2, 2024, we entered into a securities purchase agreement with an institutional investor and our chief executive officer pursuant to which we sold an aggregate of (i) 2,343,729 of our ordinary shares (ii) pre-funded warrants to purchase up to an aggregate of 1,656,271 ordinary shares and (iii) 8,000,000 ordinary warrants, each representing the right to acquire one ordinary share, in a private placement at a combined offering price of $1.25 per ordinary share and ordinary warrant and $1.2499 per pre-funded warrant and ordinary warrant. Each pre-funded warrant represented the right to purchase one ordinary shares at an exercise price of $0.0001 per share. The pre-funded warrants were exercisable immediately and at any time until the pre-funded warrants were exercised in full (subject to a beneficial ownership limitation set forth therein). The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.25 per share, and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from the private placement were approximately $5.0 million, before deducting offering expenses. The offering closed on December 17, 2024.

C. Research and Development, Patents and Licenses

For a description of our research and development programs and the amounts that we have incurred over the last three years pursuant to those programs, please see “Item 5. Operating and Financial Review and Prospects — A. Operating Results — Research and Development Expenses.”

D. Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material adverse effect on our revenue, income, profitability, liquidity or capital resources, or that caused that disclosed financial information to be not necessarily indicative of future operating results or financial condition.

E. Critical Accounting Policies and Use ofEstimates

We describe our material accounting policies and estimates in Note 3 to our annual consolidated financial statements contained elsewhere in this annual report. We believe that these accounting policies and estimates are critical in order to fully understand and evaluate our financial condition and results of operations.

We prepare our consolidated financial statements in accordance with U.S. GAAP.

In preparing these consolidated financial statements, management has made judgments, estimates and assumptions that affect the application of our accounting policies and the reported amounts recognized in the financial statements. On a periodic basis, we evaluate our estimates, including those related to share-based compensation. We base our estimates on historical experience, authoritative pronouncements and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. For more information, please see Note 2 to our annual consolidated financial statements contained elsewhere in this annual report.

Emerging Growth Company Status

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

●	to the extent that we no longer qualify as a foreign private issuer, (i) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (ii) exemptions from the requirement to hold a non-binding advisory vote on executive compensation, including golden parachute compensation;
●	an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and
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●	an exemption from compliance with the requirement that the Public Company Accounting Oversight Board has adopted regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements.
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We may take advantage of these exemptions for up to five years or until such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; (iii) the date on which we are deemed to be a large accelerated filer under the rules of the SEC; or (iv) the last day of the fiscal year following the fifth anniversary of our initial public offering. We may choose to take advantage of some but not all of these exemptions. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth information concerning our directors and senior management, including their ages, as of the date of this annual report:

Name	Position	Age
Executive Management
Alon Ben-Noon	Chief Executive Officer, Director	45
Or Eisenberg	Chief Financial Officer	43
Dr. Ferenc Tracik	Chief Medical Officer	61
Dr. Niva Russek-Blum	Chief Technology Officer	49
Hagit Binder	Chief Operating Officer	46
Non-Executive Directors
Mark Leuchtenberger ^*^	Chair of the Board of Directors	68
Cary Claiborne ^(1) (2) *^	External Director	64
Christine Pellizzari ^(1) (2) *^	External Director	57
Roy Golan ^(1) *^	Director	51
Dr. Revital Mandil-Levin ^(2)^	Director	50
(1)	Member of audit committee
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(2)	Member of compensation committee
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*	Independent director under Nasdaq rules
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Executive Officers

Alon Ben-Noon, Chief Executive Officer, Director.

Alon Ben-Noon is our founder and has served as our chief executive officer and director since February 2017. Mr. Ben-Noon served as Chair of our board of director since our founding until October 1, 2021. From 2014 until 2017, Mr. Ben-Noon served as the founder and owner of MediCan Consulting, a pharmaceutical consulting firm that advised a number of successful pharmaceutical companies, including MediWound Ltd., Chiasma Inc., Teva Pharmaceutical Industries Limited, Sol-Gel Technologies Ltd., FutuRx Ltd., NeuroDerm Ltd. and others. Mr. Ben-Noon holds a B.S. in Industrial Engineering and an MBA from Ben-Gurion University.

Or Eisenberg, Chief Financial Officer.

Or Eisenberg has served as our chief financial officer since June 2021. Prior to joining the Company, Mr. Eisenberg served in various finance and executive leadership roles with Mawson Infrastructure Group Inc. (formerly Wize Pharma Inc.). From March 2015 until November 2017, Mr. Eisenberg served as the chief financial officer and acting chief executive officer of Wize Pharma Ltd. From November 2017 until August 2021, Mr. Eisenberg served as the chief financial officer, treasurer and secretary of Mawson. Since August 2021, Mr. Eisenberg has served as a consultant to Mawson. Mr. Eisenberg was previously the controller at the Katzir Fund Group and has served as the external chief financial officer for a number of companies with securities listed on the Tel Aviv Stock Exchange. Mr. Eisenberg began his career as an accountant with Ernst & Young. Mr. Eisenberg holds a B.A. in Economics and Accounting from Haifa University, and is a Certified Public Accountant registered in the State of Israel.

Dr. Ferenc Tracik, Chief Medical Officer.

Dr. Ferenc Tracik has served as our chief medical officer since December 1, 2021. Dr. Tracik has twenty years of experience in general management, medical affairs, clinical development and commercialization in the biotech industry. Before joining the Company, he served as the Global Head Medical of Orphazyme A/S. From May 2017 until November 2020, Dr. Tracik served as VP Medical Europe, Canada and Partner Markets of Biogen Inc. From November 2013 until April 2017, Dr. Tracik served in various positions at Teva Pharmaceutical Industries Limited, including Managing Director Specialty Medicines Germany. Dr. Tracik’s experience and expertise in therapy is extensive, and includes different disease areas such as CNS, respiratory, oncology, ophthalmology, infectious diseases, and transplantation, with a specific focus on neurodegenerative and neuro-autoimmune diseases. Before joining the pharmaceutical industry, Dr. Tracik worked at the university clinics of neurology at Charité Berlin and the university clinic of Innsbruck as well as the university clinic of psychiatry of Regensburg. Dr. Tracik holds a doctoral degree in human medicine from University of Regensburg.

Dr. Niva Russek-Blum, Chief Technology Officer.

Dr. Niva Russek-Blum has served as our chief technology officer since May 2023. Dr. Russek-Blum previously served as our Vice President of Discovery since 2021 and from 2018 to 2022 served as one of our scientific consultants. From 2012 until 2022, Dr. Russek-Blum served as a Principal Investigator in the ADSSC Institute (under the auspices of Ben- Gurion University). Dr. Russek-Blum holds a Ph.D. in Neuroscience and a M.Sc. in Molecular Biology from The Weizmann Institute of Science as well as a B.Med.Sc from The Hebrew University of Jerusalem.

Hagit Binder, Chief Operating Officer.

Ms. Hagit Binder has served as our Chief Operating Officer since May 2023, overseeing all operational aspects of the company, including clinical and non-clinical activities. Prior to this role, she served as Vice President of Operations since 2022. From 2018 to 2022, Ms. Binder held the position of VP, Project and Marketing at Nextar Chempharma Solutions. Ms. Binder has been appointed as the general manager in Israel commencing May 1, 2025. She holds an M.Sc.in Biotechnology, a B.Sc. in Molecular Biology, and an MBA from Bar-Ilan University.

Non-Executive Directors

The following is a brief summary of the business experience of the members of our board of directors who are not our executive officers.

Mark Leuchtenberger, Chair of the Board ofDirectors.

Mr. Leuchtenberger has served as the chair of our Board of Directors since October 1, 2021. He is currently CEO of next generation vaccine developer Spy Biotech Ltd and recently served as Executive Chairman for Aleta Biotherapeutics and previously as CEO of Brooklyn ImmunoTherapeutics and Chairman, President and CEO of IRX Therapeutics. He has over 20 years of experience as a CEO in the biopharmaceutical industry and has led companies through private financings and initial public offerings, taken products from research to IND and through to commercialization, and achieved M&A exits. Leuchtenberger was President and Chief Executive Officer and a member of the Board of Directors at Chiasma (NASDAQ: CHMA), Acusphere, Inc., Rib-X Pharmaceuticals, Inc. (now Melinta Therapeutics, Inc.), Targanta Therapeutics Corporation and Therion Biologics Corporation. Prior to Therion, he was a senior officer at Biogen Inc., where he led the late-stage development of the company’s flagship product Avonex and its commercialization in North America and internationally in 65 countries. He is a past director and chairman of the Massachusetts Biotechnology Council Board of Directors, was a cofounder of Albor Biologics, Inc. and Alvos Therapeutics, Inc. He received his MBA from the Yale School of Management and his BA from Wake Forest University.

Cary Claiborne, Director.

Mr. Claiborne became a member of our board of directors immediately prior to the closing of our initial public offering and serves as an external director under the Companies Law. Mr. Claiborne has served as the Chief Executive Officer since August 2022, Chief Operating Officer from December 2021 to August 2022 and a director since November 2021 for Adial Pharmaceuticals Inc. a public biopharmaceutical company. In July 2022, Mr. Claiborne was appointed to the board of directors of LadRx Corporation (fka CytRx Corporation), a biopharmaceutical company focused on discovering and developing new cancer therapeutics, where he also serves as Chairman of the compensation committee and member of the audit committee. Prior to joining Adial, Mr. Claiborne served as the CEO of Prosperity Capital Management, LLC, a US based Private Investment and Advisory firm that he founded. From 2014 until 2017, Mr. Claiborne served as the Chief Financial Officer and board member of Indivior PLC, a public global commercial stage pharmaceutical company. Mr. Claiborne was also on the Board of Directors of New Generation Biofuels Inc. and MedicAlert Foundation, where he also served as the chair of the audit and finance committees. From 2011 to 2014, Mr. Claiborne was the Chief Financial Officer of Sucampo Pharmaceuticals Inc., a public global biopharmaceutical company focused on drug discovery, development, and commercialization. Mr. Claiborne graduated from Rutgers University with a B.A. in Business Administration. He also holds an M.B.A from Villanova University and was previously a NACD Governance Fellow.

Christine Pellizzari, Director.

Ms. Pellizzari became a member of our board of directors immediately prior to the closing of our initial public offering and serves as an external director under the Companies Law. Ms. Pellizzari has served as the Chief Legal Officer of Science 37 since July 2021. Prior to joining Science 37, Ms. Pellizzari served as the General Counsel and Corporate Secretary of Insmed, Inc., a public biotech company focused on serious and rare diseases, from 2013 to 2018 and as Chief Legal Officer from 2018 to 2021. She also currently serves on the board of directors of Tempest Therapeutics, a public clinical-stage oncology company, and Celsion Corporation, a public a clinical-stage development company focused on DNA mediated immunotherapy and next-generation nucleic vaccines. Prior to Insmed, Christine held various legal positions of increasing responsibility at Aegerion Pharmaceuticals, Inc., most recently as Executive Senior Vice President, General Counsel and Secretary. Prior to Aegerion, she served as Senior Vice President, General Counsel and Secretary of Dendrite International, Inc. Christine joined Dendrite from the law firm of Wilentz, Goldman & Spitzer, where she specialized in health care transactions and related regulatory matters. She has nearly three decades of relevant experience, including having served for over 25 years as CLO and General Counsel of publicly traded companies in biopharmaceutical and related industries. Christine earned her B.A. in Legal Studies from the University of Massachusetts, Amherst and J.D. from the University of Colorado School of Law.

Roy Golan, Director.

Mr. Roy Golan has served as a member of our board of directors since July 2024. He has acted as an independent financial advisor since July 2024 and currently serves as a director of My Size, Inc. (NASDAQ: MYSZ), a Nasdaq listed company and omnichannel e-commerce platform and provider of AI-driven software as service measurement solutions for fashion ecommerce companies. Mr. Golan previously served as the Chief Financial Officer of Ayala Pharmaceuticals, Inc. (OTCQX: ADXS), a clinical-stage oncology company, from its merger with BioSight Ltd., a private pharmaceutical company developing innovative therapeutics for hematological malignancies and disorders, in October 2023 until June 2024. From 2019 to 2023, Mr. Golan served as Executive VP and Chief Financial Officer of BioSight Ltd. From 2018 to 2019, Mr. Golan served as President and Chief Financial Officer of Exalenz Bioscience Ltd. (TASE: EXEN), a Tel Aviv Stock Exchange listed global, commercial-stage diagnostics company which developed its BreathID® technology platform to improve patient care by providing breath-based tests in the fields of gastroenterology and hepatology and was later acquired by Meridian Bioscience, Inc. (NASDAQ: VIVO). From 2015 to 2018, Mr. Golan served as the Chief Financial Officer of NeuroDerm (NASDAQ: NDRM), a Nasdaq listed clinical-stage pharmaceutical company developing next-generation drug-device combinations for central nervous system disorders, through its initial public offering until its acquisition by Mitsubishi Tanabe Pharma Group Company, and prior thereto he served as their VP Finance. Mr. Golan holds an LLM from Bar Ilan University as well as a BA from The College of Management in Rishon LeZion and is also a licensed CPA.

Dr. Revital Mandil-Levin, Director.

Dr. Mandil-Levin became a member of our board of directors in January 2022. Dr. Mandil-Levin has more than 15 years’ experience in biotech startups and product development in the pharmaceutical industry. She is currently the CEO and founder of Nanocarry Therapeutics Ltd., a private company developing a proprietary platform technology for the delivery of biologics across the blood-brain barrier for CNS indications. From September 2019 to November 2020, she served as VP Corporate Development of Anima Biotech, a private company with a novel approach for the discovery of small molecules involved in mRNA translation, and from April 2018 to February 2019, she served as Chief Business Development Officer of CollPlant Ltd. (Nasdaq: CLGN), a public regenerative and aesthetic medicine company. From January 2014 to February 2018, Dr. Mandil-Levin served as Vice President Business Development at NeuroDerm Ltd (Nasdaq: NDRM), a clinical-stage pharmaceutical company developing next-generation treatments for CNS disorders, where she had a major role in the acquisition of NeuroDerm by Mitsubishi Tanabe Pharma Corporation for $1.1 billion. From 2004 to 2013, Dr. Mandil-Levin served as Vice President Business Development at HealOr Ltd, a clinical-stage biopharmaceutical company that developed novel drugs for skin regeneration in hard to heal wounds and dermatological diseases. Prior to that she served as Business Development Manager at Proteologics Ltd. Dr. Mandil-Levin holds a PhD in Biochemistry from Bar-Ilan University, Israel and an MBA from the Israeli College of Management School of Business.

B. Compensation

The aggregate compensation, including share-based compensation, paid by us to our executive officers and directors for the year ended December 31, 2024 was approximately $2,723 thousand. This amount includes accruals to provide pension, severance, retirement or similar benefits or expenses, bonuses based on goals achieved as of December 31, 2024 but does not include business travel, relocation, professional and business association dues and expenses reimbursed to officers, and other benefits commonly reimbursed or paid by companies in Israel.

Below is an outline of compensation granted or paid to our executive officers during the year ended December 31, 2024. The value of equity compensation is determined based on accounting rules that involve certain assumptions and key variables, as discussed in Note 10 of our consolidated financial statements. Additionally, as each of our executives received an inaugural equity award in connection with our IPO, the accounting valuation of equity compensation for 2024 is not necessarily representative of our compensation practices for the future. Social benefits provided to management consist of payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds, vacation pay, and recuperation pay as mandated by Israeli law.

During the year ended December 31, 2024, we paid a base salary or other payments including social benefits of $366 thousand to Mr. Ben-Noon and equity compensation valued at $22 thousand, for a total of $388 thousand. Mr. Ben-Noon does not receive extra compensation for his service as a member of the board of directors. In addition, on June 27, 2024, at our annual general meeting of shareholders, following approval by our board of directors and compensation committee, our shareholders approved an annual bonus plan for Mr. Ben-Noon equal to an amount of twelve months’ salary, or the Target Bonus, based on a monthly salary of NIS 104,865 (approximately $28,753, based on the NIS/USD exchange rate in effect on December 31, 2024, with the Target Bonus being calculated based on the NIS monthly salary) payable under Mr. Ben-Noon’s employment agreement. In addition, we accrued expenses at the amount of $262 thousand to a bonus accrual, which was waived in December 2024.

During the year ended December 31, 2024, we paid a base salary including social benefits of $279 thousand to Mr. Eisenberg and equity compensation valued at $22 thousand, for a total of $301 thousand. From the commencement of his employment until our IPO, Mr. Eisenberg agreed to the minimum monthly salary allowed by Israeli law. In addition, we accrued expenses at the amount of $92 thousand to a bonus accrual, which was waived in December 2024.

During the year ended December 31, 2024, we paid a base salary and other costs related to employment with the Company of $412 thousand to Dr. Tracik and an equity compensation valued at $20 thousand for a total of $432 thousand. In addition, we accrued expenses at the amount of $117 thousand to a bonus accrual, which was waived in December 2024.

From January 1, 2024 through December 31, 2024, we paid a base salary and other costs related to employment with the Company of $188 thousand to Dr. Russek-Blum and an equity compensation valued at $29 thousand for a total of $217 thousand. In addition, we accrued expenses at the amount of $33 thousand to a bonus accrual, which was waived in December 2024.

From January 1, 2024 through December 31, 2024, we paid a base salary and other costs related to employment with the Company of $218 thousand to Ms. Binder and an equity compensation valued at $8 thousand for a total of $226 thousand. In addition, we accrued expenses at the amount of $37 thousand to a bonus accrual, which was waived in December 2024.

As of December 31, 2024, (i) 200,000 RSUs and (ii) 681,000 options to purchase 681,000 ordinary shares at a weighted average exercise price of $2.59, granted to our executive officers and directors were outstanding under our 2018 Share Incentive Plan, or the 2018 Plan. Each option will expire ten years from the date of the grant thereof.

We pay each of our non-employee directors an annual retainer of $40,000 plus applicable VAT, with an additional annual payment for service on board committees as follows: $15,000 plus applicable VAT for the chairperson of any board committee (such additional payment for only one committee chair) and an additional amount of $10,000 plus VAT for membership on any board committee (such additional payment for up to two committees, provided that if a director is serving as chair of one committee and member of one or more other committees, such director would receive one payment as committee chair and one payment as committee member). In addition, each non-employee director was granted options to acquire 72,000 ordinary shares, one-third of which will vest one year from the grant date and the remainder to vest quarterly and become fully vested three years from the grant date at an exercise price equal to the closing price per share on Nasdaq on the closing date of our initial public offering (and in the case of external directors, at the closing price per share on the date of the shareholder meeting at which their appointment as external directors was ratified), subject to such director’s continued service through such date.

Equity Compensation. Since January 1, 2018, we have granted options to purchase our ordinary shares to our officers and certain of our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our 2018 Plan under “Management—2018 Share Incentive Plan.” If our relationship with an executive officer or a director is terminated, except for cause (as defined in the various option plan agreements), all options that are vested will remain exercisable for 90 days after such termination. If the relationship is terminated due to the death of the executive officer or a director, the participant may exercise any portion of the options which have vested within 60 days of the death of the executive officer or a director, at any time but no later than the one year anniversary of the executive officer or a director’s death or the end of the term, whichever is earlier. If our relationship with an executive officer or a director is terminated by reason of retirement or disability the participant may exercise any portion of the options which have vested within 90 days of the executive officer or a director’s retirement or disability, at any time but no later than the one year anniversary of the executive officer or a director’s retirement or disability or the end of the term, whichever is earlier.

On May 30, 2023, at our annual general meeting of shareholders, our shareholders approved the grant of 24,000 RSUs to each of Mr. Pellizzari, Mr. Claiborne, Ms. Caren Deardorf (former member of the board of directors in June 2024) and Ms. Mandil-Levin and the grant of 64,000 RSUs to Mr. Leuchtenberger. The RSUs vest on the one year anniversary of the approval of our board of directors of the grant, which was May 20, 2023.

On June 27, 2024, at our annual general meeting of shareholders, our shareholders approved the grant of 24,000 RSUs to each of Mr. Pellizzari, Mr. Claiborne, Mr. Golan and Ms. Mandil-Levin and the grant of 64,000 RSUs to Mr. Leuchtenberger. The RSUs vest on the one year anniversary of the approval of the date of the annual general meeting of shareholders, which will be June 27, 2025. In addition, our shareholders approved the acceleration of 18,000 unvested options that were previously granted to Ms. Deardorf in December 2021.

Exculpation, Indemnificationand Insurance. Our amended and restated articles of association permit us to exculpate, indemnify and insure certain of our office holders to the fullest extent permitted by the Companies Law. We have entered into agreements with our office holders, exculpating them from a breach of their duty of care to us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions, to the extent that these liabilities are not covered by insurance. See “Management—Exculpation, Insurance and Indemnification of Directors and Officers.”

Compensation Policy

Our compensation policy is designed to promote retention and motivation of directors and executive officers, incentivize superior individual excellence, align the interests of our directors and executive officers with our long-term performance and provide a risk management tool. To that end, a portion of an executive officer compensation package is targeted to reflect our short and long-term goals, as well as the executive officer’s individual performance. On the other hand, our compensation policy includes measures designed to reduce executive officers’ incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation.

The compensation policy provides that compensation will be determined based on our executive officers’ respective positions, education, scope of responsibilities and contributions, and that we will consider the ratio between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements, such as outstanding personal achievement, outstanding personal effort or outstanding company performance), equity-based compensation, benefits and retirement and termination of service arrangements. All cash bonuses are limited to a maximum amount linked to the executive officer’s base salary. In addition, the total variable compensation components (cash bonuses and equity-based compensation) may not exceed 90% of each executive officer’s total compensation package with respect to any given calendar year.

An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to our executive officers other than our chief executive officer will be based on performance objectives and a discretionary evaluation of the executive officer’s overall performance by the chief executive officer. Performance objectives may be recommended by our chief executive officer and will be approved by the compensation committee (and, if required by law, by our board of directors). We may also grant annual cash bonuses to our executive officers on a discretionary basis.

The performance objectives and targets of our chief executive officer will be determined by our compensation committee and board of directors. Up to 30% of the chief executive officer’s annual cash bonus may be based on a discretionary evaluation of his overall performance by the compensation committee and the board of directors based on quantitative and qualitative criteria.

The equity-based compensation for our executive officers under the compensation policy is designed in a manner consistent with the underlying objectives for determining the base salary and the annual cash bonus. Primary objectives include enhancing the alignment between the executive officers’ interests and our long-term interests and those of our shareholders and strengthening the retention and the motivation of executive officers in the long term. Equity-based compensation may be granted in the form of options or other equity-based awards, such as restricted shares and restricted share units, in accordance with a share incentive plan. All equity-based incentive awards granted to executive officers will be subject to vesting periods in order to promote long-term retention of the grantee. Equity-based compensation will be granted from time to time and be awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.

In addition, the compensation policy contains compensation recovery provisions that apply in the event of an accounting restatement enables our chief executive officer to approve immaterial changes in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance with our compensation policy) and allows us to exculpate, indemnify and insure our executive officers and directors subject to certain limitations as set forth therein.

The compensation policy also provides for compensation to the members of our board of directors either (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, as such regulations may be amended from time to time, or (ii) in accordance with the amounts determined in the compensation policy.

Employment and Consulting Agreements

Our employees are employed under the terms prescribed in their respective employment contracts. The employees are entitled to the social benefits prescribed by law and as otherwise provided in their agreements. These agreements each contain provisions standard for a company in our industry regarding non-competition, confidentiality of information and assignment of inventions. Under currently applicable labor laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. Each of the executive officers with whom we have entered into an employment or service agreement may be terminated with immediate effect if terminated for cause as defined in their respective agreements. In cases where an executive officer is terminated for cause they will not be entitled to receive any compensation during the notice period. See “Risk Factors—Risks Related to Our Business and Strategy” for a further description of the enforceability of non-competition clauses. We also provide certain of our employees with a company car, which is leased from a leasing company.

Our executive officers are also employed on the terms and conditions prescribed in their employment or service agreements or terms. These agreements and terms provide for notice periods of varying duration for termination of the agreement without cause, by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits.

C. Board Practices

Board of Directors

Under the Companies Law and our amended and restated articles of association, our business and affairs will be managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to executive management. Our chief executive officer (referred to as a “general manager” under the Companies Law) is responsible for our day-to-day management. Our chief executive officer is appointed by, and serves at the discretion of, our board of directors, subject to the agreed upon employment terms approved by our shareholders. All other executive officers are appointed by the chief executive officer, subject to applicable corporate approvals, and are subject to the terms of any applicable employment or consulting agreements that we may enter into with them. Under our amended and restated articles of association, other than external directors, for whom special election requirements apply under the Companies Law, as detailed below, the number of directors on our board of directors will be no less than five and no more than nine directors divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting the entire board of directors (other than the external directors). At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class of directors will be for a term of office that expires on the third annual general meeting following such election or re-election, such that from the annual general meeting of 2023 and after, each year the term of office of only one class of directors will expire. Our directors who are not external directors will be divided among the three classes as follows:

●	the Class I director is Roy Golan, and her term will expire at our annual meeting of shareholders to be held in 2026;
●	the Class II directors are Alon Ben-Noon and Mark Leuchtenberger, and their term will expire at our annual meeting of shareholders to be held in 2027; and
●	the Class III director is Dr. Revital Mandil-Levin, and her term will expire at our annual general meeting of shareholders to be held in 2025.

Cary Claiborne and Christine Pellizzari serve as our external directors and each has a term of three years.

Our directors, aside from our external directors, are appointed by a simple majority vote of holders of our ordinary shares, participating and voting at an annual general meeting of our shareholders, provided that (i) in the event of a contested election, the method of calculation of the votes and the manner in which the resolutions will be presented to our shareholders at the general meeting shall be determined by our board of directors in its discretion, and (ii) in the event that our board of directors does not or is unable to make a determination on such matter, then the directors will be elected by a plurality of the voting power represented at the general meeting in person or by proxy and voting on the election of directors. Each director, aside from our external directors, will hold office until the annual general meeting of our shareholders for the year in which such director’s term expires, unless the tenure of such director expires earlier pursuant to the Companies Law or unless such director is removed from office as described below.

Under our amended and restated articles of association, the approval of the holders of at least 66^2/3^% of the total voting power of our shareholders is generally required to remove any of our directors (other than the external directors) from office and any amendment to this provision shall require the approval of at least 66^2/3^% of the total voting power of our shareholders. In addition, vacancies on our board of directors may only be filled by a vote of a simple majority of the directors then in office.

A director so appointed will hold office until the next annual general meeting of our shareholders for the class of directors in respect of which the vacancy was created, or in the case of a vacancy due to the number of directors being less than the maximum number of directors stated in our amended and restated articles of association, until the next annual general meeting of our shareholders for the class of directors to which such director has been assigned by our board of directors.

Chair of the Board

Our amended and restated articles of association provide that the chair of the board is appointed by the members of the board of directors and serves as chair of the board throughout his or her term as a director, unless resolved otherwise by the board of directors. Under the Companies Law, in a public company, the chief executive officer (or any relative of the chief executive officer) may not serve as the chair of the board of directors, and the chair (or any relative of the chair) may not be vested with authorities of the chief executive officer without shareholder approval consisting of a majority vote of the shares present and voting at a shareholders meeting, provided that either:

●	at least a majority of the shares of non-controlling shareholders or shareholders that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or
●	the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed 2% of the aggregate voting rights in the company.
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The shareholders’ approval can be provided for a period of five years following an initial public offering, and subsequently, for additional periods of up to three years.

In addition, a person subordinated, directly or indirectly, to the chief executive officer may not serve as the chair of the board of directors; the chair of the board may not be vested with authorities that are granted to those subordinated to the chief executive officer; and the chair of the board may not serve in any other position in the company or a controlled company, but he or she may serve as a director or chair of a subsidiary.

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 generally required to appoint at least two external directors.

Pursuant to the regulations promulgated under the Companies Law, companies whose shares are traded on specified U.S. stock exchanges, including Nasdaq, which do not have a controlling shareholder (as such term is defined in the Companies Law) and which comply with the independent director requirements and the audit committee and compensation committee composition requirements of U.S. law and the U.S. stock exchange applicable to domestic issuers, may (but are not required to) elect to opt out of the requirement to maintain external directors and opt out of the composition requirements under the Companies Law with respect to the audit and compensation committees. We currently do not qualify for such exemption.

The provisions of the Companies Law set forth special approval requirements for the election of external directors. External directors must be elected by a majority vote of the shares present and voting at a meeting of shareholders, provided that either:

●	such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in the election of the external director (other than a personal interest not deriving from a relationship with a controlling shareholder) that are voted at the meeting, excluding abstentions, to which we refer as a disinterested majority; or
●	the total number of shares voted by non-controlling shareholders and by shareholders who do not have a personal interest in the election of the external director against the election of the external director does not exceed 2% of the aggregate voting rights in the company.
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The term “controlling shareholder” as used in the Companies Law for purposes of all matters related to external directors and for certain other purposes (such as the requirements related to appointment to the audit committee or compensation committee, as described below), means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in a company or has the right to appoint a majority of the directors of the company or its general manager. With respect to certain matters (various related party transactions), a controlling shareholder is deemed to include a shareholder that holds 25% or more of the voting rights in a public company if no other shareholder holds more than 50% of the voting rights in the company, but excludes a shareholder whose power derives solely from his or her position as a director of the company or from any other position with the company. For the purpose of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders.

The initial term of an external director is three years. Thereafter, an external director may be re-elected, subject to certain circumstances and conditions, by shareholders to serve in that capacity for up to two additional three-year terms, provided that either:

(i)	his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Companies Law with respect to affiliations of external director nominees;
(ii)	the external director proposed his or her own nomination, and such nomination was approved in accordance with the requirements described in the paragraph above; or
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(iii)	his or her service for each such additional term is recommended by the board of directors and is approved at a meeting of shareholders by the same majority required for the initial election of an external director (as described above).
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The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including Nasdaq, may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the re-election for such additional period(s) is beneficial to the company, and provided that the external director is re-elected subject to the same shareholder vote requirements (as described above regarding the re-election of external directors). Prior to the approval of the re-election of the external director at a general meeting of shareholders, the company’s shareholders must be informed of the term previously served by him or her and of the reasons why the board of directors and audit committee recommended the extension of his or her term.

External directors may be removed from office by a special general meeting of shareholders called by the board of directors, which approves such dismissal by the same shareholder vote percentage required for their election or by a court, in each case, only under limited circumstances, including ceasing to meet the statutory qualifications for appointment or violating their duty of loyalty to the company. An external director may also be removed by order of an Israeli court if, following a request made by a director or shareholder of the company, the court finds that such external director has ceased to meet the statutory qualifications for his or her appointment as stipulated in the Companies Law or has violated his or her duty of loyalty to the company.

If an external directorship becomes vacant and there are fewer than two external directors on the board of directors at the time, then the board of directors is required under the Companies Law to call a meeting of the shareholders as soon as practicable to appoint a replacement external director. Each committee of the board of directors that exercises the powers of the board of directors must include at least one external director, except that the audit committee and the compensation committee must include all external directors then serving on the board of directors and an external director must serve as chair thereof. Under the Companies Law, external directors of a company are prohibited from receiving, directly or indirectly, any compensation from the company other than for their services as external directors pursuant to the Companies Law and the regulations promulgated thereunder. Compensation of an external director is determined prior to his or her appointment and may not be changed during his or her term subject to certain exceptions.

The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no controlling shareholder or any shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director any affiliation or other disqualifying relationship with a person then serving as chair of the board or chief executive officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer.

The term “relative” is defined in the Companies Law as a spouse, sibling, parent, grandparent or descendant, a spouse’s sibling, parent or descendant and the spouse of each of the foregoing persons. Under the Companies Law, the term “affiliation” and the similar types of disqualifying relationships include (subject to certain exceptions):

●	an employment relationship;
●	a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships);
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●	control; and
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●	service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
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The term “office holder” is defined in the Companies Law as a general manager (i.e., chief executive officer), chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of that person’s title, a director and any other manager directly subordinate to the general manager.

In addition, no person may serve as an external director if that person’s position or professional or other activities create, or may create, a conflict of interest with that person’s responsibilities as a director or otherwise interfere with that person’s ability to serve as an external director or if the person is an employee of the Israel Securities Authority, or ISA, or an Israeli stock exchange. A person may also not continue to serve as an external director if he or she received direct or indirect compensation from the company including amounts paid pursuant to indemnification or exculpation contracts or commitments and insurance coverage for his or her service as an external director, other than as permitted by the Companies Law and the regulations promulgated thereunder.

Following the termination of an external director’s service on a board of directors, such former external director and his or her spouse and children may not be provided a direct or indirect benefit by the company, its controlling shareholder or any entity under its controlling shareholder’s control. This includes engagement as an office holder of the company or a company controlled by its controlling shareholder or employment by, or provision of services to, any such company for consideration, either directly or indirectly, including through a corporation controlled by the former external director. This restriction extends for a period of two years with regard to the former external director and his or her spouse or child and for one year with respect to other relatives of the former external director.

If at the time at which an external director is appointed all members of the board of directors who are not controlling shareholders or relatives of controlling shareholders of the company are of the same gender, the external director to be appointed must be of the other gender. A director of one company may not be appointed as an external director of another company if a director of the other company is acting as an external director of the first company at such time.

According to the Companies Law and regulations promulgated thereunder, a person may be appointed as an external director only if he or she has professional qualifications or if he or she has accounting and financial expertise (each, as defined below); provided that at least one of the external directors must be determined by our board of directors to have accounting and financial expertise. However, if at least one of our other directors (i) meets the independence requirements under the Exchange Act, (ii) meets the independence requirements of Nasdaq rules for membership on the audit committee and (iii) has accounting and financial expertise as defined under the Companies Law, then neither of our external directors is required to possess accounting and financial expertise as long as each possesses the requisite professional qualifications.

A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses an expertise in, and an understanding of, financial and accounting matters and financial statements, such that he or she is able to understand the financial statements of the company and initiate a discussion about the presentation of financial data. A director is deemed to have professional qualifications if he or she has any of the following: (i) an academic degree in economics, business management, accounting, law or public administration, (ii) an academic degree or has completed another form of higher education in the primary field of business of the company or in a field which is relevant to his or her position in the company or (iii) at least five years of experience serving in one of the following capacities or at least five years of cumulative experience serving in two or more of the following capacities: (a) a senior business management position in a company with a significant volume of business, (b) a senior position in the company’s primary field of business or (c) a senior position in public administration or service. The board of directors is charged with determining whether a director possesses financial and accounting expertise or professional qualifications.

Committees of the Board of Directors

Our board of directors has established the following standing committees.

Audit Committee

Companies Law Requirements

Under the Companies Law, the board of directors of a public company must appoint an audit committee. The audit committee must be comprised of at least three directors, including all of the external directors, one of whom must serve as chair of the committee. The audit committee may not include the (i) chair of the board; (ii) a controlling shareholder of the company; (iii) a relative of a controlling shareholder; (iv) a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or (v) a director who derives most of his or her income from a controlling shareholder. In addition, under the Companies Law, the audit committee of a publicly traded company must consist of a majority of unaffiliated directors. In general, an “unaffiliated director” under the Companies Law is defined as either an external director or as a director who meets the following criteria:

●	he or she meets the qualifications for being appointed as an external director, except for the requirement (i) that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed for trading outside of Israel) and (ii) for accounting and financial expertise or professional qualifications; and
●	he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in his or her service as a director shall not be deemed to interrupt the continuity of the service.
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Each member of our audit committee (each, as identified in the second paragraph under “—Listing Requirements” below) is an unaffiliated director under the Companies Law, thereby fulfilling the foregoing Israeli law requirement for the composition of the audit committee.

Listing Requirements

Under the corporate governance rules of Nasdaq, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise.

Our audit committee consists of Cary Claiborne, Christine Pellizzari and Roy Golan. Mr. Claiborne serves as the chair 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 corporate governance rules of Nasdaq. Our board of directors has determined that Mr. Claiborne is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the corporate governance rules of Nasdaq.

Our board of directors has determined that each member of our audit committee is “independent” as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.

Audit Committee Role

Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which is consistent with the Companies Law, the SEC rules and the corporate governance rules of Nasdaq and includes:

●	retaining and terminating our independent auditors, subject to ratification by the board of directors, and in the case of retention, to ratification by the shareholders;
●	pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms;
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●	overseeing the independence, compensation and performance of the company’s independent auditors;
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●	reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC;
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●	recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly or periodic work plan proposed by the internal auditor;
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●	identifying irregularities in our business administration by, among other things, consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors;
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●	reviewing policies and procedures with respect to transactions between the Company and officers and directors (other than transactions related to the compensation or terms of service of the officers and directors), or affiliates of officers or directors, or transactions that are not in the ordinary course of the Company’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and
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●	establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
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Additionally, under the Companies Law, the role of the audit committee includes the identification of irregularities in our business management, among other things, by consulting with the internal auditor or our independent auditors and suggesting an appropriate course of action to the board of directors. In addition, the audit committee or the board of directors, as set forth in the articles of association of the company, is required to approve the yearly or periodic work plan proposed by the internal auditor. The audit committee is required to assess the company’s internal audit system and the performance of its internal auditor. The Companies Law also requires that the audit committee assess the scope of the work and compensation of the company’s external auditor. In addition, the audit committee is required to determine whether certain related party actions and transactions are “material” or “extraordinary” for the purpose of the requisite approval procedures under the Companies Law and whether certain transactions with a controlling shareholder will be subject to a competitive procedure.

The audit committee charter will state that in fulfilling its role the committee is empowered to conduct or authorize investigations into any matters within its scope of responsibilities.

Compensation Committee

Companies Law Requirements

Under the Companies Law, the board of directors of a public company must appoint a compensation committee. The compensation committee generally (subject to certain exceptions that do not apply to the Company) must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee. The chair of the compensation committee must be an external director. Each compensation committee member who is not an external director must be a director whose compensation does not exceed an amount that may be paid to an external director. The compensation committee is subject to the same Companies Law restrictions as the audit committee as to who may not be a member of the compensation committee. Each member of our compensation committee (each, as identified in the second paragraph under “—Listing Requirements” below) fulfils the foregoing Israeli law requirements related to the composition of the compensation committee.

Listing Requirements

Under the corporate governance rules of Nasdaq, we are required to maintain a compensation committee consisting of at least two independent directors.

Our compensation committee consists of Christine Pellizzari, Cary Claiborne, and Dr. Revital Mandil Levin. Ms. Pellizzari serves as chair of the committee. Our board of directors has determined that each member of our compensation committee is independent under the corporate governance rules of Nasdaq, including the additional independence requirements applicable to the members of a compensation committee.

Compensation Committee Role

In accordance with the Companies Law, the roles of the compensation committee are, among others, as follows:

●	making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years;
●	reviewing the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates of the compensation policy;
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●	resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and
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●	exempting, under certain circumstances, transactions with our chief executive officer from the approval of our shareholders.
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Our board of directors adopted a compensation committee charter setting forth the responsibilities of the committee, which is consistent with the corporate governance rules of Nasdaq and includes among others:

●	recommending to our board of directors for its approval a compensation policy in accordance with the requirements of the Companies Law as well as other compensation policies, incentive-based compensation plans and equity-based compensation plans, and overseeing the development and implementation of such policies and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law;
●	reviewing and approving the granting of options and other incentive awards to our chief executive officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and other executive officers, including evaluating their performance in light of such goals and objectives;
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●	approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; and
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●	administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans and the awards and agreements issued pursuant thereto, and making awards to eligible persons under the plans and determining the terms of such awards.
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Compensation Policy Under the Companies Law

In general, under the Companies Law, a public company must have a compensation policy approved by its board of directors after receiving and considering the recommendations of the compensation committee. In addition, our compensation policy must be approved at least once every three years, first, by our board of directors, upon recommendation of our compensation committee, and second, by a simple majority of the ordinary shares present, in person or by proxy, and voting at a shareholders meeting, provided that either:

●	such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or
●	the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy, does not exceed 2% of the aggregate voting rights in the Company.
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In the event that the shareholders fail to approve the compensation policy in a duly convened meeting, the board of directors may nevertheless override that decision, provided that the compensation committee and then the board of directors decide, on the basis of detailed reasons and after further review of the compensation policy, that approval of the compensation policy is for the benefit of the company despite the failure of the shareholders to approve the policy.

If a company that adopts a compensation policy in advance of its initial public offering describes the policy in its prospectus for such offering, then that compensation policy shall be deemed validly adopted in accordance with the Companies Law and will remain in effect for term of five years from the date such company becomes a public company. Our compensation policy became effective immediately prior to the closing of our initial public offering and will be in force for an initial period of five years.

The compensation policy must be based on certain considerations, include certain provisions and reference certain matters as set forth in the Companies Law.

The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must relate to certain factors as set forth in the Companies Law, including advancement of the company’s objectives, business plan and long-term strategy, and creation of appropriate incentives for office holders. It must also consider, among other things, the company’s risk management, size and the nature of its operations. The compensation policy must furthermore consider the following additional factors:

●	the education, skills, experience, expertise and accomplishments of the relevant office holder;
●	the office holder’s position, responsibilities and prior compensation agreements with him or her;
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●	the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company;
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●	if the terms of employment include variable components — the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and
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●	if the terms of employment include severance compensation — the term of employment or office of the office holder, the terms of his or her compensation during such period, the company’s performance during the such period, his or her individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company.
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The compensation policy must also include, among other things:

●	with regard to variable components of compensation:
●	with the exception of office holders who report directly to the chief executive officer, provisions determining the variable components on the basis of long-term performance and on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries per annum, while taking into account such office holder’s contribution to the company; and
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●	the ratio between variable and fixed components, as well as the limit on the values of variable components at the time of their grant.
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●	a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements;
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●	minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and
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●	a limit on retirement grants.
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Our compensation policy, which was approved by our board of directors on October 31, 2021 and by our shareholders on November 7, 2021, became effective immediately prior to the closing of our initial public offering and is filed as an exhibit to this annual report.

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 cannot be an interested party or an office holder or a relative of an interested party or an office holder, nor may the internal auditor be the company’s independent auditor or its representative. An “interested 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. On March 31, 2022, we appointed Israel Gewirts from Fahn Kanne & Co. Grant Thornton Israel, as our internal auditor.

Approval of Related Party Transactions underIsraeli Law

Fiduciary Duties of Directors and Officers

The Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director and any other manager directly subordinate to the general manager.

An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of loyalty requires that an office holder act in good faith and in the best interests of the company.

The duty of care includes a duty to use reasonable means to obtain:

●	information on the appropriateness of a given action submitted for his or her approval or performed by virtue of his or her position; and
●	all other important information pertaining to these actions.
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The duty of loyalty includes a duty to:

●	refrain from any conflict of interest between the performance of his or her duties in the company and his or her personal affairs;
●	refrain from any activity that is competitive with the business of the company;
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●	refrain from exploiting any business opportunity of the company in order to receive a personal gain for himself or herself or others; and
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●	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.
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Under the Companies Law, a company may approve an act specified above which would otherwise constitute a breach of the office holder’s duty of loyalty, provided that the office holder acted in good faith, neither the act nor its approval harms the company and the office holder discloses his, her or its 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 organs of the company required to provide such approval and the methods of obtaining such approval.

Disclosure of Personal Interests of an OfficeHolder and Approval of Certain Transactions

The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that he or she may have, and all related material information known to him or her concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one’s relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from one’s ownership of shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder’s vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.

If it is determined that an office holder has a personal interest in a non-extraordinary transaction, approval by the board of directors is required for the transaction, unless the company’s articles of association provide for a different method of approval. Any transaction that is adverse to the company’s interests may not be approved by the board of directors.

Approval first by the company’s audit committee and subsequently by the board of directors is required for an extraordinary transaction, meaning any transaction that is not in the ordinary course of business, not on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities.

A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee or the board of directors has a personal interest in the approval of such a transaction then all of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof and, in such case, shareholder approval is also required.

Pursuant to the Companies Law, compensation arrangements including insurance, indemnification or exculpation arrangements with office holders generally require compensation committee approval and subsequent approval by the board of directors. Compensation arrangements need to comply with the compensation policy of the company. In special circumstances, the compensation committee and the board of directors may approve compensation arrangements that do not comply with the compensation policy of the company, subject to the approval of a majority vote of the shares present and voting at a shareholders meeting, provided that either: (a) such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such compensation arrangement; or (b) the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation arrangement and who vote against the arrangement does not exceed two percent of the company’s aggregate voting rights, or the Special Majority Vote for Compensation. In the event that the Special Majority Vote for Compensation is not obtained, the compensation committee and the board of directors may, subject to certain requirements stipulated in the Companies Law, reconsider the compensation arrangement and approve it, after a detailed review.

Certain disclosure and approval requirements apply under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a personal interest and certain arrangements regarding the terms of service or employment of a controlling shareholder. For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company’s actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company. Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder for these purposes.

For a description of the approvals required under Israeli law for compensation arrangements of officers and directors, see “—Compensation of Directors and Executive Officers.”

Compensation of Directors and ExecutiveOfficers

Directors. Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and, unless exempted under regulations promulgated under the Companies Law, the approval of the shareholders at a general meeting. If the compensation of our directors is inconsistent with our compensation policy, then, the compensation committee and board of directors may approve such compensation under special circumstances, as long as they consider those provisions that must be included in the compensation policy according to the Companies Law, and provided that shareholder approval is obtained, which approval should satisfy one of the following:

●	at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or
●	the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the compensation package does not exceed 2% of the aggregate voting rights in the company.
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Executive Officers (otherthan the Chief Executive Officer). The Companies Law requires the approval of the compensation of a public company’s executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company’s board of directors and (iii) if such compensation arrangement is inconsistent with the company’s compensation policy, the company’s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, 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 override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision.

Chief Executive Officer. The Companies Law requires the approval of the compensation of a public company’s chief executive officer in the following order: (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, if the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide a detailed report for their decision. The approval of each of the compensation committee and the board of directors should be in accordance with the company’s compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive officer that are inconsistent with such policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained (by a special majority vote as discussed above with respect to the approval of director compensation). In addition, the compensation committee may waive the shareholder approval requirement with regards to the approval of the engagement terms of a candidate for the chief executive officer position, if they determine that the compensation arrangement is consistent with the company’s compensation policy, and that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company and that subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate.

Shareholder Duties

Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters:

●	an amendment to the company’s amended and restated articles of association;
●	an increase of the company’s authorized share capital;
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●	a merger; or
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●	interested party transactions that require shareholder approval.
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In addition, a shareholder has a general duty to refrain from discriminating against other shareholders. Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder as such term is used under the Companies Law, any shareholder who knows that it has the power to determine the outcome of a shareholder vote and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or exercise any other rights available to it under the company’s articles of association with respect to the company. The Companies Law does not define the substance of this duty of fairness, 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 of fairness.

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Exculpation, Insurance and Indemnificationof Directors and Officers

Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. 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. A company may not exculpate in advance a director from liability arising from a breach of his or her duty of care in connection with a prohibited dividend or distribution to shareholders.

As permitted under the Companies Law, our amended and restated articles of association provide that we 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:

●	a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent 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, which were incurred by the office holder as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding was either (i) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding, (ii) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent or (iii) in connection with a monetary sanction;
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●	reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted or (iii) in a criminal indictment for which the office holder was convicted of an offense that does not require proof of criminal intent;
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●	expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under Israeli securities laws, if applicable, and payments made to injured persons under specific circumstances thereunder; and
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●	any other matter in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder in the company.
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As permitted under the Companies Law, our amended and restated articles of association provide that we may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder:

●	a breach of the duty of loyalty 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 another person, to the extent such a breach arises out of the negligent conduct of the office holder;
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●	a monetary liability imposed on the office holder in favor of a third party;
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●	expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under the Israeli securities laws if applicable, and payments made to injured persons under specific circumstances thereunder; and
●	any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an office holder in the company.
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Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:

●	a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty 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;
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●	an act or omission committed with intent to derive illegal personal benefit; or
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●	a fine or forfeit levied against the office holder.
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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 controlling shareholders have a personal interest, also by the shareholders.

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. As of the date of this annual report, no claims for directors’ and officers’ liability insurance have been filed under this policy and we are not aware of any pending or threatened litigation or proceeding involving any of our office holders, including our directors, in which indemnification is sought.

We have entered into agreements with 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, subject to limited exceptions, and undertaking to indemnify them to the fullest extent permitted by law, to the extent that these liabilities are not covered by insurance. This indemnification is limited, with respect to any monetary liability imposed in favor of a third party, to events determined as foreseeable by the board of directors based on our activities. The maximum aggregate amount of indemnification that we may pay to our office holders based on such indemnification agreement is the greater of (i) an amount equal to 25% of our shareholders’ equity on a consolidated basis, based on our most recent financial statements made publicly available before the date on which the indemnity payment is made, and (ii) $25 million. Such indemnification amounts are in addition to any insurance amounts. These indemnification agreements supersede all previous letters of indemnification that we have provided to him or her in the past, if any. However, in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy and therefore unenforceable.

D. Employees

As of December 31, 2024, we had fifteen full and part time employees and several part-time consultants, most of whom work at our headquarters in Herzliya, Israel and the rest of whom work in Zurich, Switzerland and Cambridge, Massachusetts.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

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We have no collective bargaining agreements with our employees. We consider our relationship with our employees to be positive and have not experienced any major labor disputes.

E. Share Ownership

For information regarding the share ownership of our directors and executive officers, please see “Item 7.A. Major Shareholders.”

2018 Share Incentive Plan

The 2018 Plan was adopted by our board of directors as the 2018 Employee Share Option Plan on December 16, 2018 and was subsequently amended and renamed the 2018 Share Incentive Plan. The 2018 Plan provides for the grant of options to our employees, offices, directors, advisors and consultants in order to promote a close identity of interests between those individuals and the Company and/or an affiliate of the Company.

Shares Available for Grant. As of December 31, 2024, there were 760,705 ordinary shares available for issuance under the 2018 Plan. The number of shares reserved for issuance is subject to an annual increase to be added as of the first day of the Company’s fiscal year, equal to 4% of the total number of shares issued and outstanding on a fully-diluted basis as of the end of the immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the Board in its sole discretion). Ordinary shares subject to options granted under the 2018 Plan that expire or forfeited or otherwise terminated without having been exercised in full will become available again for future grant under the 2018 Plan. On October 31, 2021, our Board approved an amendment to the 2018 Plan to increase the number of shares reserved under this plan to 1,151,130. On March 31, 2025, our Board approved an amendment to the 2018 Plan to increase the number of shares reserved under this plan to 4,117,863.

Administration. Our board of directors, or a duly authorized committee of our board of directors, administers the 2018 Plan. Under the 2018 Plan, the administrator has the authority, subject to applicable law, to interpret the terms of the 2018 Plan, determine eligible participants, the number of awards for each participant and the exercise price, time or times at which awards will be granted, whether, to what extent, and under what circumstances an award may be settled, cancelled, forfeited, exchanged, or surrendered, any terms and conditions in addition to those specified in the 2018 Plan under which an award may be granted, accelerate the date of exercise of granted awards, waive or amend 2018 Plan provisions relating to exercise of awards, including exercise of Awards after termination of employment, for any reason and the terms and conditions under which a participant may elect to receive ordinary shares upon the exercise of the award or in exchange for the underlying shares and take any actions, as deemed necessary or advisable for the administration and implementation of the Plan.

Eligibility. The 2018 Plan provides for granting options, shares, restricted shares and RSUs in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961, or the Ordinance, or, for awards granted to consultants, advisors, service providers or controlling shareholders of the company, under Section 3(i) of the Ordinance. Section 102 of the Ordinance allows employees, directors and officers who are not controlling shareholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of awards. Our non-employee service providers and controlling shareholders may only be granted awards under section 3(i) of the Ordinance, which does not provide for similar tax benefits. Section 102 includes two alternatives for tax treatment involving the issuance of awards to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of awards directly to the grantee. Section 102(b)(2) of the Ordinance, the most favorable tax treatment for the grantee, permits the issuance to a trustee under the “capital gain track.”

Grant. All awards granted pursuant to the 2018 Plan will be evidenced by a grant letter. The grant letter will set forth the terms and conditions of the option grant, including the tax provision under which the award is granted, the tax track that the Company has elected according to the 2018 Plan (if applicable), the exercise price, the number of awards granted to the participant, the date of grant and the vesting schedule. Each option will expire ten years from the date of the grant thereof, unless such shorter term of expiration is otherwise designated by the administrator.

Exercise. An option under the 2018 Plan may be exercised by providing the company with an exercise notice in a form prescribed by the administrator, including the identity of the participant, the number of options to be exercised and the exercise price to be paid and full payment of the exercise price for such shares underlying the option, in such manner as determined by the administrator. An option may not be exercised for fractional shares.

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Transferability. Awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent

Termination of Employment. In the event of termination of a participant’s employment or service with the company or any of its affiliates and except as described below:

(i) all vested and exercisable options held by such as of the date of termination may be exercised within ninety days after such date of termination, unless otherwise provided by the administrator. All other options held by such participant will expire upon the date of termination of employment;

(ii) all RSUs not vested on the date of termination shall terminate immediately and have no legal effect, unless determined otherwise by the administrator; and

(iii) all ordinary shares remaining subject to a vesting schedule or performance conditions on the date of termination shall terminate immediately and have no legal effect, unless determined otherwise by the administrator.

In the event of termination of a participant’s employment or service with the company or any of its affiliates for cause, all unexercised options held by such participant, whether vested or not on the date of termination will expire on the date of such termination and any unvested options Shares shall terminate and expire on the day the Participant has been notified of his/her dismissal, or on such earlier date as the Administrator may determine.

In the event of termination of a participant’s employment or service with the company or any of its affiliates due to such participant’s death, all options held by such participant as of the date of termination to the extent they are vested with sixty days of the participant’s death, may be exercised by the participant’s estate, personal representative or beneficiaries at any time but not later than the earlier of: (i) the one-year anniversary of the participant’s death or (ii) the end of the term of the options.

In the event of termination of an participant’s employment or service with the company or any of its affiliates by reason of retirement or disability of the participant, the participant may exercise any portion of the options which have vested within the ninety days period following the date of retirement or disability, at any time but not later than the earlier of: (i) the one-year anniversary of the participant’s retirement or disability, as the case may be; or (ii) the end of the term of the options. All other options for the benefit of a participant and which have not vested within such 90 days period shall expire upon the date of retirement or disability, as applicable.

Transactions. In the event of a stock split, reverse stock split, combination, reclassification, the payment of a stock dividend, or any other increase or decrease in the number of issued shares effected without receipt of consideration by the company (but not including the conversion of any convertible securities of the company), the administrator in its sole discretion shall make an appropriate adjustment in the number of shares related to each outstanding award, the number of shares reserved for issuance under the 2018 Plan, and the exercise price per share of each outstanding award. Except as expressly provided therein, no issuance by the company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to an award.

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In the event a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries; or a sale of all or substantially all of the shares of the share capital of the Company whether by a single transaction or a series of related transactions which occur either over a period of 12 months or within the scope of the same acquisition agreement; or a merger, consolidation or like transaction of the Company with or into another corporation in which the Company is not the surviving entity, including a reverse triangular merger but excluding a re-organization as defined under the 2018 Plan (any of the foregoing, a “Transaction”), any and all outstanding and unexercised unvested awards will be cancelled for no consideration, unless determined otherwise by the Administrator, and the Administrator at its sole and absolute discretion may decide: (i) if and how the unvested awards, as the case may be, shall be canceled, exchanged, assumed, replaced, repurchased or accelerated, (ii) if and how vested awards (including awards with respect to which the vesting period has been accelerated) shall be exercised, exchanged, assumed, replaced and/or sold by the Trustee or the Company (as the case may be) on behalf of the participants, including determining that all unexercised vested awards shall be cancelled for no consideration upon a Transaction; (iii) how underlying shares issued upon exercise of the options (or, if applicable, the vesting of other Awards) granted under of the trust tracks and held by the trustee under Section 102 of the Ordinance on behalf of participants shall be replaced and/or sold by the trustee on behalf of these participant; and (iv) how any treatment of awards and underlying shares may be made subject to any payment or escrow arrangement, or any other arrangement determined within the scope of the Transaction in relation to awards and underlying shares of the Company.

In the case of assumption and/or substitution of awards, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the grant letter shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Board, which its determination shall be at its sole discretion and final. The grant of any substitutes for the awards to participants further to a Transaction will be considered to be in full compliance with the terms of this Plan. The value of the exchanged awards pursuant to this provision will be determined in good faith solely by the Board, based on the fair market value as defined in the 2018 Plan, and its decision shall be final and binding on all the participants.

Without derogating from the above, in the event of a Transaction the Board may, at its sole discretion, require the participants to exercise all vested awards within a set time period and sell all of their shares on the same terms and conditions as applicable to the other shareholders selling their Company shares as part of the Transaction. Each participant acknowledges and agrees that the Board shall be entitled, subject to any applicable law, to authorize any one of its members to sign any agreement and any share transfer deeds in customary form with respect to the shares held by such participant and that such agreement and share transfer deed, as applicable, shall bind the participant.

F. Disclosure of a registrant’s actionto recover erroneously awarded compensation.

There was no erroneously awarded compensation that was required to be recovered pursuant to the NeuroSense Therapeutics Ltd. Compensation Clawback Policy during the fiscal year ended December 31, 2024.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS

A. Major Shareholders

The following table presents information relating to the beneficial ownership of our ordinary shares as of April 7, 2025, for:

●	each person, or group of affiliated persons, known by us to own beneficially 5% or more of our outstanding ordinary shares;
●	each of our executive officers and directors; and
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●	all of our executive officers and directors as a group.
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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. For purposes of the table below, we deem ordinary shares issuable pursuant to options that are currently exercisable or exercisable within 60 days of the date of this annual report to be outstanding and to be beneficially owned by the person holding the options or warrants 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 percentage of ordinary shares beneficially owned is based on 23,988,669 ordinary shares outstanding as of April 7, 2025.

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Except where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary shares listed below have sole investment and voting power with respect to such shares.

None of our shareholders has different voting rights from other shareholders. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

Except where otherwise indicated, each shareholder’s address is c/o NeuroSense Therapeutics Ltd., 11 HaMenofim Street, Building B, Herzliya 4672562 Israel.

Shareholder	Number
5% Shareholders
Alon Ben-Noon^(1)^		3,281,932	13.62	%
Rimon Gold Assets Ltd. ^(2)^		2,407,229	9.99	%
Executive Officers and Directors
Alon Ben-Noon^(1)^		3,281,932	13.62	%
Or Eisenberg^(3)^		568,590	2.36	%
Dr. Ferenc Tracik^(4)^		364,285	1.51	%
Dr. Niva Russek-Blum^(5)^		111,428	*
Hagit Binder^(6)^		65,000	*
Mark Leuchtenberger^(7)^		232,000	*
Cary Claiborne^(8)^		96,000	*
Roy Golan^(9)^		-	-
Christine Pellizzari^(10)^		96,000	*
Revital Mandil-Levin^(11)^		100,526	*
All executive officers and directors, as a group (10 persons)		4,915,761	19.81	%
*	Indicates beneficial ownership of less than 1% of the total outstanding ordinary shares.
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(1)	Consists of 3,175,266<br> ordinary shares and warrants to purchase 106,666 ordinary shares that are exercisable within 60 days of April 7, 2025.
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(2)	Based in part<br> upon information contained in a Schedule 13G filed by the shareholder on December 9, 2024. Consists of (i) 2,303,729 ordinary<br> shares, and (ii) 103,500 ordinary shares issuable upon exercise of pre-funded warrants. Does not include (i) 1,552,771 ordinary<br> shares issuable upon exercise of pre-funded warrants, and (iii) 7,920,000 ordinary shares issuable upon exercise of warrants. The<br> pre-funded warrants and warrants are subject to a beneficial ownership limitation of 9.99%, which such limitation restricts holder<br> from exercising that portion of the pre-funded warrants and warrants that would result in the holder and its affiliates owning,<br> after exercise, a number of ordinary shares in excess of the beneficial ownership limitation. Rimon<br> Gold Assets Ltd. (“Rimon Gold”), an Israeli private company, is wholly owned by the Goldfinger Trust (the<br> “Trust”), a trust organized under the laws of Jersey. Mr. Abir Raveh serves as Trustee of the Trust and as the sole<br> director and executive officer of Rimon Gold. Yair Goldfinger is the sole beneficiary of the Trust. The principal business office of<br> each of Rimon Gold and the Goldfinger Trust is 32A Habarzel, Tel Aviv, Israel. The address of Mr. Raveh is 32 Brenner St. Herzelia,<br> Israel.
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(3)	Consists of 480,924 ordinary shares and options to purchase 21,000 ordinary shares and warrants to purchase 66,666 ordinary shares that are exercisable within 60 days of April 7, 2025.
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(4)	Consists of 189,618<br> ordinary shares and options to purchase 108,000 ordinary shares and warrants to purchase 66,667 ordinary shares that are exercisable<br> within 60 days of April 7, 2025.
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(5)	Consists of 75,428 ordinary shares and options to purchase 36,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not include 10,000 ordinary shares issuable upon vesting of outstanding RSUs that are not do not vest within 60 days of April 7, 2025.
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(6)	Consists of 32,000<br> ordinary shares and options to purchase 33,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not<br> include 10,000 ordinary shares issuable upon vesting of outstanding RSUs do not vest within 60 days of April 7, 2025 and 3,000<br> ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of April 7, 2025.
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(7)	Consists of 64,000 ordinary shares and options to purchase 168,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not include 24,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of April 7, 2025 and 64,000 ordinary shares issuable upon vesting of outstanding RSUs that do not vest within 60 days of April 7, 2025.
(8)	Consists of 24,000 ordinary shares and options to purchase 72,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not include 24,000 ordinary shares issuable upon vesting of outstanding RSUs that do not vest within 60 days of April 7, 2025.
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(9)	Does not include 24,000 ordinary shares issuable upon vesting of outstanding RSUs that do not vest within 60 days of April 7, 2025.
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(10)	Consists of 24,000 ordinary shares and options to purchase 72,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not include 24,000 ordinary shares issuable upon vesting of outstanding RSUs that do not vest within 60 days of April 7, 2025.
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(11)	Consists of 28,526 ordinary shares and options to purchase 72,000 ordinary shares that are exercisable within 60 days of April 7, 2025. Does not include 24,000 ordinary shares issuable upon vesting of outstanding RSUs that do not vest within 60 days of April 7, 2025.
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Significant Changes in the Ownership of MajorShareholders

To our knowledge, other than as disclosed in the table above, our other filings with the SEC and this annual report, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2022.

Holdings by U.S. Shareholders

As of April 7, 2025, there were 1,361 holders of record of our ordinary shares, out of which 15 holders of record had a registered address in the United States. The number of record holders is not representative of the number of beneficial holders of our ordinary shares, as 78.4% of our outstanding ordinary shares are recorded in the name of Cede & Co. as nominee for the Depository Trust Company, in whose name all shares held in “street name” are held in the United States. Except where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary shares listed below have sole investment and voting power with respect to such shares.

B. Related Party Transactions

Agreements with Directors and Officers

Employment Agreements

We have entered into employment agreements with each of our executive officers. See “Item 6B. Directors, Senior Management and Employees — Compensation.”

December 2024 Offering

On December 2, 2024, we entered into a securities purchase agreement with an institutional investor and our chief executive officer pursuant to which we sold an aggregate of (i) 2,343,729 of our ordinary shares (ii) pre-funded warrants to purchase up to an aggregate of 1,656,271 ordinary shares and (iii) 8,000,000 ordinary warrants, each representing the right to acquire one ordinary share, in a private placement at a combined offering price of $1.25 per ordinary share and ordinary warrant and $1.2499 per pre-funded warrant and ordinary warrant. Each pre-funded warrant represented the right to purchase one ordinary shares at an exercise price of $0.0001 per share. The pre-funded warrants were exercisable immediately and at any time until the pre-funded warrants were exercised in full (subject to a beneficial ownership limitation set forth therein). The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.25 per share, and will expire on the fifth anniversary of the original issuance date. Aggregate gross proceeds from the private placement were approximately $5.0 million, before deducting offering expenses. The offering closed on December 17, 2024. All consideration in this issuance was classified to equity.

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C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Financial Statements and Other FinancialInformation

The financial statements required by this item are found at the end of this annual report, beginning on page F-1.

Legal Proceedings

We are not currently a party to any material legal proceedings.

Dividend Policy

We have never declared or paid any cash dividends on our ordinary shares and 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. See “Risk Factors—Risks Related to an Investment in Our Ordinary Shares and Warrants.”

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. As of December 31, 2024, we did not have distributable earnings pursuant to the Companies Law. Dividend distributions may be determined by our board of directors, as our amended and restated articles of association do not provide that such distributions require shareholder approval.

B. Significant Changes

Except as otherwise disclosed in this annual report, no significant change has occurred since December 31, 2024.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Our Ordinary Shares and Warrants have been trading on The Nasdaq Capital Market under the symbol “NRSN” and “WNRSN”, respectively, since December 9, 2021. Prior to that date, there was no public trading market for our Ordinary Shares or Warrants. Our initial public offering of units comprised of one Ordinary Share and one Warrant was priced at $6.00 per unit.

On April 4, 2025, the last reported closing price of our Ordinary Shares on The Nasdaq Capital Market was $0.99 per share.

On April 4, 2025, the last reported closing price of our Warrants on The Nasdaq Capital Market was $0.20 per warrant.

B. Plan of Distribution

Not applicable.

C. Markets

Our Ordinary Shares and Warrants are listed and traded on The Nasdaq Capital Market under the symbols “NRSN” and “NRSNW,” respectively.

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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.

B. Memorandum and Articles of Association

General

Our authorized share capital consists of 90,000,000 ordinary shares, no par value per share.

All of our outstanding ordinary shares are validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any preemptive rights.

Registration Number and Purpose

Our registration number with the Israeli Registrar of Companies, or IRC, is 51-5610822. Our purpose as set forth in our amended and restated articles of association is to engage in any lawful activity.

Voting Rights and Conversion

All ordinary shares will have identical voting and other rights in all respects. None of our major shareholders have different voting rights than our other shareholders.

Transfer of Shares

Our fully paid ordinary shares are issued in registered form and may be freely transferred under our amended and restated articles of association, unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our amended and restated articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel.

Liability to Further Capital Calls

Our board of directors may make, from time to time, such calls as it may deem fit upon shareholders with respect to any sum unpaid with respect to shares held by such shareholders, which is not payable at a fixed time. Such shareholder shall pay the amount of every call so made upon him. Unless otherwise stipulated by the board of directors, each payment in response to a call shall be deemed to constitute a pro rata payment on account of all shares with respect to which such call was made. A shareholder shall not be entitled to his rights as shareholder, including the right to dividends, unless such shareholder has fully paid all the notices of call delivered to him, or which according to our amended and restated articles of association are deemed to have been delivered to him, together with interest, linkage and expenses, if any, unless otherwise determined by the board of directors.

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Business Combinations

Under our amended and restated articles of association, we may not engage in any “business combinations” with any “interested shareholder” for a three-year period following the time that such shareholder became an interested shareholder, unless:

●	prior to the time that such shareholder became an interested shareholder, our board of directors approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder;
●	upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced, excluding for purposes of determining our voting shares outstanding (but not the outstanding voting shares owned by the interested shareholder) those shares owned by persons who are directors and also officers; or
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●	at the time that such shareholder became an interested shareholder, or subsequent to such time, the business combination is approved by our board of directors and authorized at a general meeting of shareholders by the affirmative vote of at least 66^2/3^% of our voting shares outstanding that are not owned by the interested shareholder.
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Generally, a “business combination” includes any merger, consolidation, sale or other transaction resulting in a financial benefit to the interested shareholder. Subject to certain exceptions, an “interested shareholder” is any person (other than us and any of our direct or indirect majority-owned subsidiaries) who, together with such person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting shares.

Under certain circumstances, this provision will make it more difficult for a person who would be an “interested shareholder” to effect various business combinations with a corporation for a three-year period. This provision may encourage companies interested in acquiring us to negotiate in advance with our board of directors because the shareholder approval requirement would be avoided if our board of directors approves either the business combination or the transaction which results in the shareholder becoming an interested shareholder. These provisions also may have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions which shareholders may otherwise deem to be in their best interests.

Election of Directors

Our ordinary shares do not have cumulative voting rights for the election of directors. As a result, the holders of a majority of the voting power represented at a shareholders meeting have the power to elect our directors, subject to the special approval requirements for external directors under the Companies Law described under “Management—External Directors.”

Under our amended and restated articles of association, the number of directors on our board of directors must be no less than three and no more than nine, including any external directors required to be appointed under the Companies Law. The minimum and maximum number of directors may be changed, at any time and from time to time, by a special vote of the holders of at least 66^2/3^ of our outstanding shares.

Other than external directors, for whom special election requirements apply under the Companies Law, the vote required to appoint a director is a simple majority vote. In addition, under our amended and restated articles of association, our board of directors may elect new directors to fill vacancies (whether such vacancy is due to a director no longer serving or due to the number of directors serving being less than the maximum required in our amended and restated articles of association), provided that the total number of directors shall not, at any time, exceed nine directors and provided that our board of directors may not elect external directors. Our amended and restated articles of association provide that the term of a director appointed by our board of directors to fill any vacancy will be for the remaining term of office of the director(s) whose office(s) have been vacated. Furthermore, under our amended and restated articles of association, our directors, other than external directors, are divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of 1/3 of the total number of directors constituting the entire board of directors (other than the external directors). For a more detailed description on the composition of our board of election procedures of our directors, other than our external directors, see “Management—Board of Directors.”

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External directors are elected for an initial term of three years, may be elected for additional three-year terms, and may be removed from office pursuant to the terms of the Companies Law. For further information on the election and removal of external directors, see “Management—External Directors.”

Dividend and Liquidation Rights

We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our amended and restated articles of association do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.

Pursuant to the Companies Law, subject to certain exceptions with respect to the buyback by the Company of its ordinary shares, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two years, according to our then last reviewed or audited financial statements (less the amount of previously distributed dividends, if not reduced from the earnings), provided that the end of the period to which the financial statements relate is not more than six months prior to the date of the distribution. If we do not meet such criteria, then we may distribute dividends only with court approval. In each case, we are only permitted to distribute a dividend if our board of directors and, if applicable, the court determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.

Shareholder Meetings

Under Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later than 15 months after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders are referred to in our amended and restated articles of association as special meetings. Our board of directors may call special meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, as a company whose shares are listed for trade on an exchange outside of Israel, Israeli law provides that our board of directors is required to convene a special general meeting upon the written request of (i) any two of our directors or one-quarter of the members of our board of directors or (ii) one or more shareholders holding, in the aggregate, either (a) 10% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 10% or more of our outstanding voting power.

Under Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors include a matter in the agenda of a general meeting to be convened in the future (or, with respect to a company whose shares are listed for trade on an exchange outside of Israel, 5% if the matter is the appointment or removal of a director, provided that it is appropriate to discuss such a matter at the general meeting. Our amended and restated articles of association contain procedural guidelines and disclosure items with respect to the submission of shareholder proposals for shareholders meetings.

Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board of directors, which may be between four and 60 days prior to the date of the meeting. Furthermore, the Companies Law requires that resolutions regarding, among other things, the following matters must be passed at a general meeting of our shareholders:

●	amendments to our amended and restated articles of association;
●	appointment or termination of our auditors;
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●	election of directors, including external directors (unless otherwise determined in our amended and restated articles of association);
●	approval of certain related party transactions;
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●	increases or reductions of our authorized share capital;
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●	a merger; and
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●	the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
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Under our amended and restated articles of association, we are not required to give notice to our registered shareholders pursuant to the Companies Law, unless otherwise required by law. The Companies Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days prior to the meeting and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, or an approval of a merger, or as otherwise required under applicable law, notice must be provided at least 35 days prior to the meeting. Under the Companies Law, shareholders of a public company are not permitted to take action by written consent in lieu of a meeting.

Voting Rights

Quorum Requirements

Pursuant to our amended and restated articles of association, holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at a general meeting. Under our amended and restated articles of association, the quorum required for general meetings of shareholders must consist of at least two shareholders present in person or by proxy (including by voting deed) holding 25% or more of our voting rights. A meeting adjourned for lack of a quorum will generally be adjourned to the same day of the following week at the same time and place, or to such other day, time or place as indicated by our board of directors if so specified in the notice of the meeting. At the reconvened meeting, any number of shareholders present in person or by proxy shall constitute a lawful quorum.

Vote Requirements

Our amended and restated articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required by the Companies Law or by our amended and restated articles of association.

Our amended and restated articles of association provide that all resolutions of our board of directors require a simple majority vote of the directors present and voting at such meeting, unless otherwise required by the Companies Law or by our amended and restated articles of association. Pursuant to our amended and restated articles of association, in the event the vote is tied, the chair of the board of directors will have a casting vote.

Pursuant to our amended and restated articles of association, an amendment to our articles of association regarding any change of the composition or election procedures of our directors will require a special majority vote (66⅔%). In addition, any change to the rights and privileges of the holders of any class of our shares requires a simple majority of the class so affected (or otherwise in accordance with the terms of such class), in addition to the simple majority vote of all classes of shares voting together as a single class at a shareholder meeting.

Under the Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder and (ii) the terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if not extraordinary) requires the approval described above under “Management—Approval of Related Party Transactions under Israeli Law—Fiduciary Duties of Directors and Officers.” Certain transactions with respect to remuneration of our office holders and directors require further approvals described above under “Management—Approval of Related Party Transactions under Israeli Law—Fiduciary Duties of Directors and Officers.” Another exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting, in person or by proxy and voting on the resolution.

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Access to Corporate Records

Under the Companies Law, shareholders are provided access to: minutes of our general meetings; our shareholders register and material shareholders register, our amended and restated articles of association, our financial statements and any document that we are required by law to file publicly with the Israeli Companies Registrar or the ISA. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Companies Law. We may deny this request if we believe it has not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.

Modification of Class Rights

Under the Companies Law and our amended and restated articles of association, the rights attached to any class of share, such as voting, liquidation and dividend rights, may be amended by adoption of a resolution by the holders of a majority of the shares of that class present at a separate class meeting, or otherwise in accordance with the terms of such class of shares, in addition to the simple majority vote of all classes of shares voting together as a single class at a shareholder meeting, as set forth in our amended and restated articles of association.

Acquisitions Under Israeli Law

Full Tender Offer. A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and outstanding share capital is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.

Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.

If (a) the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of the company or of the applicable class or the shareholders who accept the offer constitute less than a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold 2% or more of the issued and outstanding share capital of the company (or of the applicable class), the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted the tender offer.

Special Tender Offer. The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholder approval, (2) was from a 25% or greater shareholder of the company which resulted in the acquirer becoming a 25% or greater shareholder of the company, or (3) was from a 45% or greater shareholder of the company which resulted in the acquirer becoming a 45% or greater shareholder of the company.

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A special tender offer must be extended to all shareholders of a company but the offeror is not required to purchase shares representing more than 5% of the voting power attached to the company’s outstanding shares, regardless of how many shares are tendered by shareholders. A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer (excluding the purchaser and its controlling shareholders, holders of 25% or more of the voting rights in the company or any person having a personal interest in the acceptance of the tender offer or any other person acting on their behalf, including the relatives and entities under such person’s control). If a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.

Merger. The Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described under the Companies Law are met, by a majority vote of each party’s shares, and, in the case of the target company, a majority vote of each class of its shares, voted on the proposed merger at a shareholders meeting.

For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person (or group of persons acting in concert) who holds (or hold, as the case may be) 25% or more of the voting rights or the right to appoint 25% or more of the directors of the other party, vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders. See “Management—Approval of Related Party Transactions under Israeli Law—Fiduciary Duties of Directors and Officers—Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions.”

If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value to the parties to the merger and the consideration offered to the shareholders of the company.

Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure the rights of creditors.

In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal for approval of the merger was filed by each party with the IRC and at least 30 days have passed from the date on which the merger was approved by the shareholders of each party.

Israeli tax law treats some acquisitions, such as share-for-share exchanges between an Israeli company and a foreign company, less favorably than U.S. tax laws. For example, Israeli tax law may, under certain circumstances, subject a shareholder who exchanges his ordinary shares for shares in another corporation to taxation prior to the sale of the shares received in such share-for-share swap.

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Anti-Takeover Measures Under Israeli Law

The Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares providing certain preferred rights with respect to voting, distributions or other matters and shares having preemptive rights. No preferred shares are authorized under our amended and restated articles of association. In the future, if we do authorize, create and issue a specific class of preferred shares, such class of shares, depending on the specific rights that may be attached to it, may have the ability to frustrate or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market value of their ordinary shares. The authorization and designation of a class of preferred shares will require an amendment to our amended and restated articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to our issued and outstanding shares at a general meeting. The convening of the meeting, the shareholders entitled to participate and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Companies Law as described above in “—Voting Rights.”

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.

Changes in Capital

Our amended and restated articles of association enable us to increase or reduce our share capital. Any such changes are subject to the provisions of the Companies Law and must be approved by a resolution duly adopted by our shareholders at a general meeting. In addition, transactions that have the effect of reducing capital, such as the declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our board of directors and an Israeli court.

Establishment

We were incorporated under the laws of the State of Israel on February 13, 2017. We are registered with the IRC.

Exclusive Forum

Our amended and restated articles of association provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against us and our directors, officers and employees.

This exclusive forum provision would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which U.S. federal courts would have exclusive jurisdiction. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

Alternatively, if a court were to find these provisions of our amended and restated articles of association inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Our amended and restated articles of association also provide that unless we consent in writing to the selection of an alternative forum, the competent courts in Tel Aviv, Israel shall be the exclusive forum for any derivative action or proceeding brought on behalf of the Company, any action asserting a breach of a fiduciary duty owed by any of our directors, officers or other employees to the Company or our shareholders or any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law.

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Any person or entity purchasing or otherwise acquiring any interest in our share capital shall be deemed to have notice of and to have consented to these choice of forum provisions.

Transfer Agent and Registrar

The transfer agent and registrar for our ordinary shares and Warrants is Equiniti Trust Company, LLC. Its address is 6201 15^th^ Avenue, Brooklyn, New York 11219, and its telephone number is (800) 937-5449.

C. Material Contracts

For a description of other material agreements, please see “Item 4. Information on the Company – B. Business Overview.”

D. Exchange Controls

There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of certain countries that are, or have been, in a state of war with Israel at such time.

E. Taxation

Israeli Tax Considerations and Government Programs

The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our securities offered hereby. 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

The following is a brief summary of certain material Israeli tax laws applicable to us, and certain Israeli government programs that benefit us. This section also contains a discussion of certain material Israeli tax consequences concerning the ownership and disposition of our securities offered hereby. 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 such investors include residents of Israel or traders in securities who are subject to special tax regimes not covered in this discussion. To the extent that the discussion is based on tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. The discussion below is not intended, and should not be construed, as legal or professional tax advice and is not exhaustive of all possible tax considerations. The discussion 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, possibly with a retroactive effect.

THEREFORE, YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR SECURITIES OFFERED HEREBY, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.

General Corporate Tax Structure in Israel

Israeli companies are generally subject to corporate tax at a flat rate. In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years) (or “EEL”), which reduced the corporate income tax rate from 25% to 24% effective from January 1, 2017, and to 23% effective from January 1, 2018 and thereafter. However, the effective tax rate payable by a company that derives income from an Approved Enterprise, a Preferred Enterprise, a Benefited Enterprise or a Preferred Technological Enterprise (as discussed below) may be considerably lower. Capital gains derived by an Israeli company are generally subject to corporate tax rate.

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Law for the Encouragement of Industry (Taxes),5729-1969

The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, (or “IEL”), provides several tax benefits for “Industrial Companies.” We may qualify as an Industrial Company within the meaning of the IEL.

The IEL defines an “Industrial Company” as an Israeli resident-company, of which 90% or more of its income in any tax year, other than income from certain government loans, capital gains, interest and dividends, is derived from an “Industrial Enterprise” owned by it and located in Israel or in the “Area,” in accordance with the definition under Section 3A of the Israeli Income Tax Ordinance (New Version) 1961 (or the “Ordinance”). An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.

The following are the main tax benefits available to Industrial Companies:

●	Amortization of the cost of purchased patent, rights to use a patent, and know-how, which were purchased in good faith and are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first exercised;
●	Under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and
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●	Expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.
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Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.

Tax Benefits and Grants for Research and Development

Israeli tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:

●	The research and expenditures are approved by the relevant Israeli government ministry, determined by the field of research;
●	The research and development must be for the promotion of the company; and
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●	The research and development is carried out by or on behalf of the company seeking such tax deduction.
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The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Expenditures that are unqualified under the conditions above are deductible, under certain conditions in equal amounts over three years.

From time to time we may apply to the Israel Innovation Authority, (or “IIA”) for approval to allow a tax deduction for all or most of research and development expenses during the year incurred. There can be no assurance that such application will be accepted. If we will not be able to deduct research and development expenses during the year of the payment, we may be able to deduct research and development expenses in equal amounts over a period of three years commencing in the year of the payment of such expenses.

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Law for the Encouragement of Capital Investments,5719-1959

The Law for the Encouragement of Capital Investments, 5719-1959 (or “the Investment Law”), provides certain incentives for capital investments in production facilities (or other eligible assets). Generally, an investment program that is implemented in accordance with the provisions of the Investment Law, referred to as an Approved Enterprise, a Beneficiary Enterprise, a Preferred Enterprise, a Preferred Technological Enterprise, or a Special Preferred Technological Enterprise, is entitled to benefits as discussed below. These benefits may include cash grants from the Israeli government and tax benefits, based upon, among other things, the geographic location in Israel of the facility in which the investment is made. In order to qualify for these incentives, the Company is required to comply with the requirements of the Investment Law.

The Investment Law was significantly amended effective as of April 1, 2005, (or the “2005 Amendment”), as of January 1, 2011, (or the “2011 Amendment”), and as of January 1, 2017 (or the “2017 Amendment”). Pursuant to the 2005 Amendment, tax benefits granted in accordance with the provisions of the Investment Law prior to its revision by the 2005 Amendment remain in force but any benefits granted subsequently are subject to the provisions of the amended Investment Law. Similarly, the 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. However, companies entitled to benefits under the Investment Law as in effect prior to January 1, 2011 were entitled to choose to continue to enjoy such benefits, provided that certain conditions are met, or elect instead, irrevocably, to forego such benefits and have the benefits of the 2011 Amendment apply. The 2017 Amendment introduces new benefits for Technological Enterprises, alongside the existing tax benefits.

Tax Benefits Under the 2011 Amendment

The 2011 Amendment canceled the availability of the benefits granted to Industrial Companies under the Investment Law prior to 2011 and, instead, introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company includes a company incorporated in Israel that is not fully owned by a governmental entity, and that has, among other things, Preferred Enterprise status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to its income derived by its Preferred Enterprise in 2011 and 2012, unless the Preferred Enterprise is located in a specified development zone, in which case the rate will be 10%. Under the 2011 Amendment, such corporate tax rate was reduced from 15% and 10%, respectively, to 12.5% and 7%, respectively, in 2013, 16% and 9% respectively, in 2014, 2015 and 2016, and 16% and 7.5%, respectively, in 2017 and thereafter. Income derived by a Preferred Company from a “Special Preferred Enterprise” (as such term is defined in the Investment Law) would be entitled, subject to certain conditions and during a benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred Enterprise is located in a certain development zone.

Dividends distributed from income which is attributed to a “Preferred Enterprise” will be subject to tax at the following rates: (i) Israeli resident corporations–0% (although, if such dividends are subsequently distributed to individuals or a non-Israeli company the below rates detailed in sub sections (ii) and (iii) shall apply) (ii) Israeli resident individuals–20% (iii) non-Israeli residents (individuals and corporations)–20%, subject to a reduced tax rate under the provisions of any applicable tax treaty. The withholding tax rate applicable to distribution of dividend from such income to non-Israeli residents is 25% (or 30% if distributed to a “substantial shareholder” at the time of the sale or at any time during the preceding twelve months period, as defined below), which may be reduced under an applicable tax treaty by applying in advance for a withholding certificate from the Israel Tax Authority (or “ITA”). A “substantial shareholder” is generally a person who alone or together with such person’s relative or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the “Means of Control” of the corporation. “Means of control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right.

The 2011 Amendment also provided transitional provisions to address companies already enjoying existing tax benefits under the Investment Law. These transitional provisions provide, among other things, that unless an irrevocable request is made to apply the provisions of the Investment Law as amended in 2011 with respect to income to be derived as of January 1, 2011, a Beneficiary Enterprise can elect to continue to benefit from the benefits provided to it before the 2011 Amendment came into effect, provided that certain conditions are met.

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New Tax Benefits Under the 2017 AmendmentThat Became Effective on January 1, 2017

The 2017 Amendment was enacted as part of the EEL that was published on December 29, 2016 and is effective as of January 1, 2017. The 2017 Amendment provides new tax benefits for two types of “Technological Enterprises,” as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.

The 2017 Amendment provides that a Preferred Company satisfying certain conditions will qualify as having a “Preferred Technological Enterprise” and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as “Preferred Technological Income,” as defined in the Investment Law. The corporate tax rate is further reduced to 7.5% with respect to a Preferred Technological Enterprise located in development zone “A.” In addition, a Preferred Company qualify as having a “Preferred Technological Enterprise” will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “Benefitted Intangible Assets” (as defined in the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a foreign company on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the IIA.

The 2017 Amendment further provides that a Preferred Company satisfying certain conditions (including group consolidated revenues of at least NIS 10 billion) will qualify as having a “Special Preferred Technological Enterprise” and will thereby enjoy a reduced corporate tax rate of 6% on “Preferred Technological Income” regardless of the company’s geographic location within Israel. In addition, a Special Preferred Technological Enterprise will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefitted Intangible Assets” to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technological Enterprise that acquires Benefitted Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law.

Dividends distributed by a Preferred Technological Enterprise or a Special Preferred Technological Enterprise, paid out of Preferred Technological Income, are generally subject to tax at the rate of 20% or such lower rate as may be provided in an applicable tax treaty. The withholding tax rate applicable to distribution of dividend from such income to non-Israeli residents is 25% (or 30% if distributed to a “substantial shareholder” at the time of the sale or at any time during the preceding twelve months period), which may be reduced under an applicable tax treaty by applying in advance for a withholding certificate from the ITA. In addition, if such dividends are distributed to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met, the withholding tax rate will be 4% (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld.

Taxation of Our Securityholders

Capital gains Tax on Sales of our OrdinaryShares and Warrants

Israeli law generally imposes a capital gains tax on the sale of any capital assets by Israeli residents, as defined for Israeli tax purposes, and on the sale of capital assets located in Israel, including shares of Israeli companies, by both Israeli residents and non-Israeli residents, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder’s country of residence provides otherwise. The Ordinance distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price attributable to an increase in the Israeli consumer price index, or in certain circumstances a foreign currency exchange rate, between the date of purchase and the date of sale. Inflationary surplus is currently not subject to tax in Israel. The real gain is the excess of the total capital gain over the inflationary surplus.

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Capital Gains Taxes Applicable to Non-IsraeliResident Securityholders

A non-Israeli resident who derives capital gains from the sale of shares or warrants in an Israeli resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel, will be exempt from Israeli tax as long as (among other conditions) the securities were not held through a permanent establishment that the non-resident maintains in Israel. However, non-Israeli corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest of more than 25% in such non-Israeli corporation whether directly or indirectly, or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the securities are deemed to be business income.

Additionally, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under the Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended, or the U.S. Israel Tax Treaty, the sale, exchange or other disposition of shares by a shareholder who is a United States resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S. Israel Tax Treaty (or a “U.S. Resident”), is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12 month period preceding the disposition, subject to certain conditions; or (v) such U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year. In any such case, the sale, exchange or disposition of such shares by the U.S. Resident would be subject to Israeli tax (unless exempt under the Israeli domestic law as described above). Under the U.S. Israel Tax Treaty, the gain may be treated as foreign source income for United States foreign tax credit purposes, upon an election by the U.S. Resident, and such U.S. Resident may be permitted to claim a credit for such taxes against the United States federal income tax imposed on such sale, subject to the limitations under the United States federal income tax laws applicable to foreign tax credits. The U.S. Israel Tax Treaty does not provide such credit against any United States state or local taxes.

Regardless of whether securityholders may be liable for Israeli tax on the sale of our securities, the payment of the consideration may be subject to the withholding of Israeli tax at source. Securityholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale (i.e., provide a non-Israeli resident certificate and other documentation).

Capital Gains Taxes Applicable to IsraeliResident Securityholders

An Israeli resident corporation who derives capital gains from the sale of shares or warrants in an Israeli resident company will generally be subject to tax on the real capital gains generated on such sale at the corporate tax rate (currently of 23%). An Israeli resident individual will generally be subject to capital gain tax at the rate of 25%. However, if the individual securityholder is claiming deduction of interest expenditures or he is a “substantial shareholder” at the time of the sale or at any time during the preceding twelve months period, such gain will be taxed at the rate of 30%. Individual holders dealing in securities in Israel for whom the income from the sale of securities is considered “business income” as defined in section 2(1) of the Ordinance are taxed at the marginal tax rates applicable to business income (at a rate of up to 47% in 2025 (not including Surtax as discussed below)). Certain Israeli institutions who are exempt from tax under section 9(2) or section 129(C)(a)(1) of the Ordinance (such as exempt trust funds and pension funds) may be exempt from capital gains tax from the sale of the securities.

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Exercise of Warrants and Certain Adjustmentsto the Warrants

Purchasers will generally not recognize gain or loss for Israeli tax purposes on the exercise of a Warrant and related receipt of an ordinary share (unless, for instance, cash is received in lieu of the issuance of a fractional ordinary share). Nevertheless, the Israeli income tax treatment and the tax consequences of a cashless exercise of Warrants into ordinary shares is unclear. Furthermore, the exercise terms of the Warrants may be adjusted in certain circumstances. An adjustment to the number of ordinary shares that will be issued on the exercise of the Warrants or an adjustment to the exercise price of a Warrant may be treated as a taxable event under Israeli tax law even if such holder does not receive any cash or other property in connection with the adjustment. Purchasers should consult their tax advisors regarding the proper treatment of any exercise of and/or adjustments to the Warrants.

Taxation of Israeli Shareholders on Receiptof Dividends

An Israeli resident individual is generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares at the rate of 25%. With respect to a person who is a “substantial shareholder” at the time of receiving the dividend or on any time during the preceding twelve months, the applicable tax rate is 30%. Such dividends are generally subject to Israeli withholding tax at a rate of 25% if the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not). If the recipient of the dividend is an Israeli resident corporation such dividend income will be exempt from tax provided the income from which such dividend is distributed was derived or accrued within Israel and was received directly or indirectly from another corporation that is liable to Israeli corporate tax. An exempt trust fund, pension fund or other entity that is exempt from tax under section 9(2) or section 129C(a)(1) of the Ordinance is exempt from tax on a dividend.

Dividend distribution by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise is subject to beneficial withholding tax rates. For a further discussion, see “Taxation and Government Programs—Israeli Tax Considerations—Law for the Encouragement of Capital Investments, 5719-1959—New Tax Benefits Under the 2017 Amendment that Became Effective on January 1, 2017.”

Taxation of Non-Israeli Shareholders onReceipt of Dividends

Non-Israeli residents (either individuals or corporations) are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder’s country of residence. With respect to a person who is a “substantial shareholder” at the time of receiving the dividend or on any time during the preceding twelve months, the applicable tax rate is 30%. Such dividends are generally subject to Israeli withholding tax at a rate of 25% if the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not), unless a reduced rate is provided under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). For example, under the U.S. Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our ordinary shares who is a U.S. Resident is 25%. However, generally, the maximum rate of withholding tax on dividends, not generated by a Preferred Technological Enterprise, Preferred Enterprise, Approved Enterprise or Beneficial Enterprise, that are paid to a United States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved Enterprise, Preferred Technological Enterprise, Benefited Enterprise or Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the conditions related to the outstanding voting rights and the gross income for the previous year (as set forth in the previous sentences) are met. If the dividend is attributable partly to income derived from an Approved Enterprise, Preferred Technological Enterprise, Benefited Enterprise or Preferred Enterprise, and partly to other sources of income, the withholding rate may be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders’ tax liability. Application for the reduced tax rate requires appropriate documentation presented and specific instruction received from the ITA. To the extent tax is withheld at source at the maximum rates (see above), a qualified tax treaty recipient will have to comply with some administrative procedures with the ITA in order to receive a refund of any excess tax withheld.

A foreign resident who had income from a dividend that was accrued from Israeli source, from which (among other conditions) the full tax was deducted, will be exempt from filing a tax return in Israel, unless (i) such income was generated from a business conducted in Israel by such foreign resident, (ii) such foreign resident has other taxable sources of income in Israel with respect to which a tax return is required to be filed, or (iii) such foreign resident is liable to Surtax (see below) in accordance with section 121B of the Ordinance.

Dividend distribution by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise is subject to beneficial withholding tax rates. For a further discussion, see “Taxation and Government Programs—Israeli Tax Considerations—Law for the Encouragement of Capital Investments, 5719-1959—New Tax benefits Under the 2017 Amendment that Became Effective on January 1, 2017.”

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Surtax

Individual holders who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income, including, but not limited to, income derived from dividends, interest and capital gains, exceeding a certain threshold (currently NIS 721,560 for years 2024 through 2027, which amount will be updated annually starting January 1, 2028, based on the change in the Israeli consumer price index) (the “Threshold Amount”). An additional 2% tax applies to “capital income” earned as of January 1, 2025 (including capital gains, dividends, and interest) exceeding the Threshold Amount.

Estate and Gift Tax

Israeli law presently does not impose estate or gift taxes.

Certain Material United States Federal IncomeTax Considerations

The following discussion describes certain material United States federal income tax considerations relating to the acquisition, ownership, and disposition of ordinary shares and Warrants by a U.S. Holder (as defined below) and holds them as a capital asset. This discussion is based on the tax laws of the United States, including the Code, the United States Department of the Treasury, or Treasury, regulations promulgated or proposed thereunder, administrative and judicial interpretations thereof, and the United States-Israel income tax treaty all as in effect on the date hereof. These tax laws are subject to change, possibly with retroactive effect, and subject to differing interpretations that could affect the tax consequences described herein. This discussion does not address the tax consequences to a U.S. Holder under the laws of any state, local or foreign taxing jurisdiction.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ordinary shares or Warrants that, for United States federal income tax purposes, is:

●	an individual who is a citizen or resident of the United States;
●	a corporation or other entity taxable 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 corporation;
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●	an estate the income of which is subject to United States federal income taxation regardless of its source; or
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●	a trust if (1) a court within the United States is able to exercise primary supervision over the trust’s administration and one or more United States persons have the authority to control all substantial decisions of the trust or (2) a valid election under the Treasury regulations is in effect for the trust to be treated as a United States person.
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This discussion does not address all aspects of United States federal income taxation that may be applicable to U.S. Holders in light of their particular circumstances or status (including, for example, banks and other financial institutions, insurance companies, broker and dealers in securities or currencies, traders in securities that have elected to mark securities to market, regulated investment companies, real estate investment trusts, grantor trusts, partnerships or other pass-through entities and arrangements, corporations that accumulate earnings to avoid U.S. federal income tax, tax-exempt organizations, pension plans, persons that own or who are treated as constructively owning 10 percent or more of our stock by vote or by value, persons who expatriates out of the United States or former long-term residents of the United States, persons who acquired our ordinary shares or Warrants in connection with employment or other performance of services, persons that hold our ordinary shares or Warrants as part of a straddle, hedge or other integrated investment, and persons subject to alternative minimum tax or whose “functional currency” is not the U.S. dollar).

If a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes) holds our ordinary shares or Warrants the tax treatment of a person treated as a partner in the partnership for United States federal income tax purposes generally will depend on the status of the partner and the activities of the partnership. Partnerships (and other entities or arrangements so treated for United States federal income tax purposes) and their partners should consult their own tax advisors.

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This discussion addressesonly U.S. Holders and does not discuss any tax considerations other than United States federal income tax considerations. Investors areurged to consult their own tax advisors regarding the United States federal, state, and local, and non-United States tax consequencesof the purchase, ownership, and disposition of our ordinary shares and Warrants.

Exercise or Expiration of Warrants

In general, a U.S. Holder will not recognize gain or loss for U.S. federal income tax purposes upon exercise of a Warrant. A U.S. Holder will take a tax basis in the ordinary shares acquired on the exercise of a Warrant equal to the exercise price of the Warrant, increased by such U.S. Holder’s adjusted tax basis in the Warrant exercised. Subject to the PFIC, rules discussed below, such U.S. Holder’s holding period in the ordinary shares acquired on exercise of the Warrant will begin on the date of exercise of the Warrant and will not include any period for which such U.S. Holder held the Warrant.

The lapse or expiration of a Warrant generally will be treated as if the U.S. Holder sold or exchanged the Warrant and recognized a capital loss equal to the U.S. Holder’s adjusted tax basis in the Warrant. The deductibility of capital losses is subject to limitations.

The tax consequences of a cashless exercise of Warrants are unclear and could differ from the consequences described above. It is possible that a cashless exercise could be a taxable event. U.S. Holders should consult their own tax advisors regarding the U.S. federal income tax consequences of the cashless exercise of Warrants, including with respect to whether the exercise is a taxable event, and their holding period and tax basis in the ordinary shares received.

Dividends

We do not expect to make any distribution with respect to our ordinary shares. However, if we make any such distribution, under the United States federal income tax laws, and subject to the PFIC rules discussed below, the gross amount of any dividend we pay out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) will be includible in income for a U.S. Holder and subject to United States federal income taxation. Dividends paid to a noncorporate U.S. Holder that constitute qualified dividend income will be taxable at a preferential tax rate applicable to long-term capital gains of, currently, 20 percent, provided that the U.S. Holder holds the ordinary shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meets other holding period requirements. If we are treated as a PFIC, dividends paid to a U.S. Holder will not be treated as qualified dividend income. If we are not treated as a PFIC, dividends we pay with respect to the ordinary shares generally will be qualified dividend income, provided that the holding period requirements are satisfied by the U.S. Holder and in the year that the U.S. Holder receives the dividend, our ordinary shares are readily tradable on an established securities market in the United States or we are eligible for benefits under the United States-Israel income tax treaty.

A U.S. Holder must include any Israeli tax withheld from the dividend payment in the gross amount of the dividend even though the U. S. Holder does not in fact receive it. The dividend is taxable to the U.S. Holder when the U.S. Holder of ordinary shares receives the dividend, actually or constructively. Because we are not a United States corporation, the dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of the dividend distribution includible in a U.S. Holder’s income will be the U.S. dollar value of the NIS payments made, determined at the spot NIS/U.S. dollar rate on the date the dividend distribution is includible in income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is included in income to the date the payment is converted into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes.

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Subject to certain significant conditions and limitations, including potential limitations under the United States-Israel income tax treaty, the non-refundable Israeli tax withheld in accordance with the United States - Israel income tax treaty and paid over to Israel may be creditable or deductible against a U.S. Holder’s United States federal income tax liability, if the U.S. Holder satisfies certain minimum holding period requirements. The election to credit or deduct foreign taxes is made on a year-by-year basis and applies to all foreign taxes paid by a U.S. Holder or withheld from a U.S. Holder that year. Dividends that we distribute generally should constitute “passive category income,” or, in the case of certain U.S. Holders, “general category income” for foreign tax credit limitation purposes. As a result of recent changes to the U.S. foreign tax credit rules, a withholding tax may need to satisfy certain additional requirements in order to be considered a creditable tax for a U.S. Holder. We have not determined whether these requirements have been met and, accordingly, no assurance can be given that any withholding tax on dividends paid by us will be creditable. The rules relating to the determination of the foreign tax credit limitation are complex, and U.S. Holders should consult their tax advisor to determine whether and to what extent they will be entitled to a credit for Israeli withholding taxes imposed in respect of any dividend we distribute.

To the extent a distribution with respect to our ordinary shares exceeds our current or accumulated earnings and profits, as determined under United States federal income tax principles, the distribution will be treated, first, as a tax-free return of the U.S. Holder’s investment, up to the U.S. Holder’s adjusted tax basis in its ordinary shares, and, thereafter, as capital gain, which is subject to the tax treatment described below in”—Gain on Sale, Exchange or Other Taxable Disposition of our Ordinary Shares or Warrants.” We may not calculate our earnings and profits under United States federal income tax principles.

Gain on Sale, Exchange or Other Taxable Dispositionof our Ordinary Shares or Warrants

Subject to the PFIC rules described below under “***—***Passive Foreign Investment **** Company Considerations,” a U.S. Holder that sells, exchanges or otherwise disposes of ordinary shares or Warrants in a taxable disposition generally will recognize capital gain or loss for United States federal income tax purposes equal to the difference between the U.S. Dollar value of the amount realized and the U.S. Holder’s tax basis, determined in U.S. Dollars, in the ordinary shares or Warrants. Gain or loss recognized on such a sale, exchange or other disposition of ordinary shares or Warrants generally will be long-term capital gain if the U.S. Holder’s holding period in the ordinary shares or Warrants exceeds one year. Long-term capital gains of non-corporate U.S. Holders are generally taxed at preferential rates. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. A U.S. Holder’s ability to deduct capital losses is subject to limitations.

Passive Foreign Investment Company Considerations

Based on our income and assets, we expect to be a PFIC for the preceding taxable year and expect to be a PFIC for the current taxable year. Because the determination of our PFIC status is made based on the factual tests described below, however, we cannot provide any assurances regarding our PFIC status for the current or future taxable years or that the IRS will agree with our conclusion regarding our PFIC status. If we were classified as a PFIC in any taxable year, a U.S. Holder would be subject to special rules with respect to distributions on and sales, exchanges and other dispositions of the ordinary shares or Warrants. We will be treated as a PFIC for any taxable year in which at least 75 percent of our gross income is “passive income” or at least 50 percent of our gross assets during the taxable year (based on the average of the fair market values of the assets determined at the end of each quarterly period) are assets that produce or are held for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties, gains from commodities and securities transactions, and gains from assets that produce passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. However, rents and royalties received from unrelated parties in connection with the active conduct of a trade or business are not considered passive income for purposes of the PFIC test. In determining whether we are a PFIC, a pro rata portion of the income and assets of each corporation in which we own, directly or indirectly, at least a 25% interest (by value) is taken into account.

Excess Distribution Rules

If we were a PFIC with respect to a U.S. Holder, then unless the holder makes one of the elections described below, a special tax regime would apply to the U.S. Holder with respect to (a) any “excess distribution” (generally, aggregate distributions in any year that are greater than 125% of the average annual distribution received by the U.S. Holder in the shorter of the three preceding years or the U. S. Holder’s holding period for the ordinary shares) and (b) any gain realized on the sale or other disposition of the ordinary shares or Warrants. Under this regime, any excess distribution and realized gain will be treated as ordinary income and will be subject to tax as if (a) the excess distribution or gain had been realized ratably over the U.S. Holder’s holding period, (b) 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 (c) 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 would not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under “Dividends.” For ordinary shares acquired pursuant to the exercise of Warrants, a U.S. Holder’s holding period will for this purpose include the holding period of such Warrants.

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If we are treated as a PFIC for any taxable year during the holding period of a non-electing U.S. Holder (i.e., a U.S. Holder that does not elect to be taxed under one of the alternative regimes discussed below), we will continue to be treated as a PFIC for all succeeding years during which such non-electing U.S. Holder is treated as a direct or indirect non-electing U.S. Holder even if we are not a PFIC for such years. A U.S. Holder is encouraged to consult its tax advisor with respect to any available elections that may be applicable in such a situation, including the “deemed sale” election of Code Section 1298(b)(1) (which will be taxed under the adverse tax rules described above).

Certain elections by a U.S. Holder would alleviate some of the adverse consequences of PFIC status and would result in an alternative treatment of the ordinary shares, as described below. However, these elections are not available with respect to the Warrants.

QEF Election

If we were a PFIC, the rules above would not apply to a U.S. Holder that makes an election to treat our ordinary shares as stock of a QEF. A U.S. Holder that makes a QEF election is required to include in income its pro rata share of our ordinary earnings and net capital gain as ordinary income and long-term capital gain, respectively, subject to a separate election to defer payment of taxes, which deferral is subject to an interest charge. A U.S. Holder makes a QEF election generally by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), or IRS Form 8621, to a timely filed United States federal income tax return for the year beginning with which the QEF election is to be effective (taking into account any extensions). A QEF election can be revoked only with the consent of the IRS. In order for a U.S. Holder to make a valid QEF election, we must annually provide or make available to the U.S. Holder certain information. While we intend to provide to U.S. Holders the information required to make a valid QEF election, upon request, we cannot provide any assurances that we will have timely knowledge of our status as a PFIC, or that the information that we provide will be adequate to allow U.S. Holders to make a QEF election. A QEF election is not available for Warrants regardless of whether we provide such information

Mark-to-Market Election

If we were a PFIC, the rules above also would not apply to a U.S. Holder that makes a “mark-to-market” election with respect to the ordinary shares, but this election will be available with respect to the ordinary shares only if they meet certain minimum trading requirements to be considered “marketable stock” for purposes of the PFIC rules. A mark-to-market election is not available for Warrants.

Ordinary shares will be marketable stock if they are regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission or on a non-U.S. exchange or market that meets certain requirements under the Treasury regulations. Ordinary shares generally will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded.

A U.S. Holder that makes a valid mark-to-market election for the first tax year in which the U.S. Holder holds (or is deemed to hold) our ordinary shares and for which we are a PFIC will be required to include each year an amount equal to the excess, if any, of the fair market value of such shares the holder owns as of the close of the taxable year over the U.S. Holder’s adjusted tax basis in such shares. The U.S. Holder will be entitled to a deduction for the excess, if any, of the U.S. Holder’s adjusted tax basis in the ordinary shares over the fair market value of such shares as of the close of the taxable year, but only to the extent of any net mark-to-market gains with respect to such shares included by the U.S. Holder under the election for prior taxable years. The U.S. Holder’s basis in such ordinary shares will be adjusted to reflect the amounts included or deducted pursuant to the election. Amounts included in income pursuant to a mark-to-market election, as well as gain on the sale, exchange or other taxable disposition of such ordinary shares, will be treated as ordinary income. The deductible portion of any mark-to-market loss, as well as loss on a sale, exchange or other disposition of our ordinary shares to the extent that the amount of such loss does not exceed net mark-to-market gains previously included in income, will be treated as ordinary loss.

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The mark-to-market election applies to the taxable year for which the election is made and all subsequent taxable years, unless the ordinary shares cease to be treated as marketable stock for purposes of the PFIC rules or the IRS consents to its revocation. The excess distribution rules described above generally will not apply to a U.S. Holder for tax years for which a mark-to-market election is in effect. However, if we were a PFIC for any year in which the U.S. Holder owns the ordinary shares but before a mark-to-market election is made, the interest charge rules described above would apply to any mark-to-market gain recognized in the year the election is made.

PFIC Reporting Obligations

A U.S. Holder of PFIC shares or Warrants must generally file an annual information return on IRS Form 8621 containing such information as the Treasury may require. The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.

U.S. Holders are urgedto consult their tax advisors as to our status as a PFIC, and the tax consequences to them if we were a PFIC, including the reportingrequirements and the desirability of making, and the availability of, a QEF election or a mark-to-market election with respect tothe ordinary shares or Warrants.**

Medicare Tax

Non-corporate U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally are subject to a 3.8% tax on all or a portion of their net investment income, which may include their gross dividend income and net gains from the disposition of ordinary shares or Warrants. A United States person that is an individual, estate or trust is encouraged to consult its tax advisors regarding the applicability of this Medicare tax to its income and gains in respect of any investment in our ordinary shares and Warrants.

Certain Information Reporting with Respectto Foreign Financial Assets

Certain U.S. Holders may be required to file IRS Form 926, Return by U.S. Transferor of Property to a Foreign Corporation, and IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, reporting transfers of cash or other property to us and information relating to the U.S. Holder and us. Substantial penalties may be imposed upon a U.S. Holder that fails to comply. See also the discussion regarding Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, above.

Individual U.S. Holders may be subject to certain reporting obligations on IRS Form 8938 (Statement of Specified Foreign Financial Asset) with respect to the ordinary shares or Warrants for any taxable year during which the U.S. Holder’s aggregate value of these and certain other “specified foreign financial assets” exceed a threshold amount that varies with the filing status of the individual. This reporting obligation also applies to domestic entities formed or availed of to hold, directly or indirectly, specified foreign financial assets, including the ordinary shares and Warrants. Significant penalties can apply if U.S. Holders are required to make this disclosure and fail to do so.

Information Reporting and Backup Withholding

In general, information reporting, on IRS Form 1099, will apply to dividends in respect of ordinary shares and the proceeds from the sale, exchange or redemption of ordinary shares or Warrants that are paid to a U.S. Holder of ordinary shares or Warrants within the United States (and in certain cases, outside the United States), unless such U.S. Holder is an exempt recipient such as a corporation. Backup withholding (currently at a 24% rate) may apply to such payments if a U.S. Holder of ordinary shares or Warrants fails to provide a taxpayer identification number (generally on an IRS Form W-9) or certification of other exempt status or fails to report in full dividend and interest income.

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Backup withholding is not an additional tax. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed the U.S. Holder’s income tax liability by filing a refund claim with the IRS.

The discussion above isa general summary and is not intended to constitute a complete analysis of all tax consequences relating to the purchase, ownership anddisposition of our ordinary shares or Warrants. It does not cover all tax matters that may be of importance to a U.S. Holder. U.S. Holdersshould consult their own tax advisors concerning the tax consequences relating to the purchase, ownership and disposition of our ordinaryshares or Warrants.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the information reporting requirements of the Exchange Act, applicable to foreign private issuers, and under those requirements, we file reports with the SEC. Our filings with the SEC are available to the public through the SEC’s website at http://website at http://www.sec.gov.

As a foreign private issuer, we are exempt from the rules under the Exchange Act, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act, to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to comply with the informational requirements of the Exchange Act, and, accordingly, file current reports on Form 6-K, annual reports on Form 20-F and other information with the SEC.

I. Subsidiary Information

Not applicable.

J. Annual Report to Security Holders

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK

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.

Foreign Currency Exchange Risk

The U.S. dollar is our functional and reporting currency. However, a significant portion of our operating expenses are incurred in NIS. As a result, we are exposed to the risk that the NIS may appreciate relative to the dollar, or, if the NIS instead devalues relative to the dollar, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or that the timing of such devaluation may lag behind inflation in Israel. In any such event, the dollar cost of our operations in Israel would increase and our dollar-denominated results of operations would be adversely affected. We cannot predict any future trends in the rate of inflation in Israel or the rate of devaluation, if any, of the NIS against the dollar. For example, the dollar strengthened against the NIS in 2022, 2023 and 2024 by 12.5%, 3.0% and 0.55%, respectively. If the dollar cost of our operations in Israel increases, our dollar-measured results of operations will be adversely affected. Our operations also could be adversely affected if we are unable to effectively hedge against currency fluctuations in the future.

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Moreover, for the first few years after we are able to successfully commercialize one of our product candidates, we expect that the substantial majority of our revenues from the sale of our products in the United States, if any, will be denominated in U.S. dollars. Since a portion of our expenses is denominated in NIS and other non-U.S. currencies, we are exposed to risk associated with exchange rate fluctuations vis-à-vis the non-U.S. currencies. See “Risk Factors—Exchange rate fluctuations between the U.S. Dollar and the New Israeli Shekel may negatively affect our earnings.” If the NIS fluctuates significantly against the U.S. dollar it may have a negative impact on our results of operations. As of the date of this annual report and for the periods under review, fluctuations in the currencies exchange rates have not materially affected our results of operations or financial condition.

We do not hedge our foreign currency exchange risk. In the future, we may enter into formal 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.

Liquidity Risk

We monitor forecasts of our liquidity reserve (comprising cash and cash equivalents and deposits). We generally carry this out based on our expected cash flows in accordance with practice and limits set by our management. We are in the research and development stage and we are therefore exposed to liquidity risk. We believe that our existing cash, cash equivalents and short-term deposits will not be sufficient to fund our operations for a period of at least 12 months from the date of approval of our consolidated financial statements. We expect that we will require additional capital to complete clinical trials, obtain regulatory approval for, and commercialize, our product candidates.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THANEQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

The Warrants entitle the registered holders to purchase ordinary shares at a price equal to $6.00 per share, subject to adjustment as discussed below, immediately following the issuance of such Warrants and terminating at 5:00 p.m., New York City time, five years after the closing of our initial public offering.

The exercise price and number of ordinary shares issuable upon exercise of the Warrants may be adjusted in certain circumstances, including in the event of a stock dividend or recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of ordinary shares at prices below its exercise price.

Exercisability. The Warrants are exercisable immediately upon issuance and at any time up to the date that is five years from the date of issuance. The Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment in full for the number of ordinary shares purchased upon such exercise. Each Warrant entitles the holder thereof to purchase one ordinary share. Warrants are not exercisable for a fraction of a share and may only be exercised into whole numbers of shares. In lieu of fractional shares, we will, pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price and round down to the nearest whole share. Unless otherwise specified in the Warrant, the holder will not have the right to exercise the Warrants, in whole or in part, if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or 9.99% at the holder’s election) of the number of our ordinary shares outstanding immediately after giving effect to the exercise, as such percentage is determined in accordance with the terms of the Warrant. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon at least 61 days’ prior notice from the holder to us.

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Exercise Price. The exercise price per ordinary share purchasable upon exercise of the Warrants is $6.00, and is subject to adjustments for stock splits, reclassifications, subdivisions, and other similar transactions. In addition to the exercise price per ordinary share, and other applicable charges and taxes are due and payable upon exercise.

Warrant Agent; GlobalCertificate. The Warrants were issued in registered form under a warrant agency agreement between a warrant agent and us. The Warrants will initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

Transferability. Subject to applicable laws, the Warrants may be transferred at the option of the holders upon surrender of the Warrants to the warrant agent, together with the appropriate instruments of transfer.

Adjustments; FundamentalTransaction. The exercise price and the number of shares underlying the Warrants are subject to appropriate adjustment in the event of stock splits, stock dividends on our ordinary shares, stock combinations or similar events affecting our ordinary shares. In addition, in the event we consummate a merger or consolidation with or into another person or other reorganization event in which our ordinary shares are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding ordinary shares (each, a Fundamental Transaction), then following such Fundamental Transaction the holders of the Warrants will be entitled to receive upon exercise of the Warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised the Warrants immediately prior to such Fundamental Transaction. Any successor to us or surviving entity will assume the obligations under the Warrants.

Rights as a Shareholder. Except by virtue of such holder’s ownership of our ordinary shares, the holder of a Warrant does not have rights or privileges of a shareholder, including any voting rights, until the holder exercises such Warrant.

Redemption. The Warrants are callable by us in certain circumstances. Subject to certain exceptions, if, after 13 months from the initial exercise date of the Warrants, (i) the volume weighted average price of our ordinary shares for 10 consecutive trading days, or the Measurement Period, which Measurement Period shall not have commenced until 13 months after the initial exercise date of the Warrants, exceeds 300% of the then exercise price, (ii) the average daily trading volume of our ordinary shares for such Measurement Period exceeds $1,000,000 per trading day, and (iii) the holders of the Warrants are not in possession of any information that constitutes or might constitute, material non-public information which was provided by us, then we may, within one trading day of the end of such Measurement Period, upon notice to the holders of the Warrants, a Call Notice, call for cancellation of all of the Warrants for which a notice of exercise has not yet been delivered, or a Call, for consideration equal to $0.001 per warrant share. Any portion of a Warrant subject to such Call Notice for which a notice of exercise shall not have been received by us on the Call Date will be cancelled at 6:30 p.m. (New York City time) on the thirtieth day after the date the Call Notice is received by the holder. Our right to call the Warrants will be exercised with respect to all of the then issued and outstanding Warrants.

C. Other Securities

Not applicable.

D. American Depositary Shares

Not applicable.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES ANDDELINQUENCIES

Not applicable.

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ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTSOF SECURITY HOLDERS AND USE OF PROCEEDS

In December 2021, we completed our initial public offering and issued 2,000,000 units, each consisting of one ordinary share and a warrant representing the right to purchase one ordinary share with an exercise price of $6.00 per share, at an initial public offering price of $6.00 per unit. In addition, the underwriter partially exercised its overallotment option and purchased an additional 300,000 warrants, each representing the right to purchase one ordinary share. We received net proceeds of approximately $9.9 million (“IPO proceeds”), after deducting underwriting discounts and commissions and estimated offering expenses. In March 2022, we received proceeds of $3.87 million from exercise of 645,000 Warrants at a price per share of $6.

We used a portion of our IPO proceeds through December 31, 2023 proceeds to advance the clinical development of our lead product candidate, for preclinical research and development and for working capital and general corporate purposes. Other than director fees to directors and compensation to Alon-Ben Noon for his services as the Company’s chief executive officer, none of the net proceeds of our offering have been paid directly or indirectly to any of our directors or executive officers, to their associates, persons owning ten percent or more of any class of our equity securities, or to any of our affiliates.

ITEM 15. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

We performed an evaluation of the effectiveness of our disclosure controls and procedures that are designed to ensure that information required to be disclosed and filed with the SEC is recorded, processed, summarized and reported timely within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There can be no assurance that our disclosure controls and procedures will detect or uncover all failures of persons within the company to disclose information otherwise required to be set forth in our reports. Nevertheless, our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. Based on our evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report are effective at such reasonable assurance level.

(b) Management’s Annual Report onInternal Control over Financial Reporting

Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed 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. Internal control over financial reporting includes policies and procedures that:

●	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions
●	provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles
---	---
●	provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and
---	---
●	provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements
---	---

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework for Internal Control-Integrated Framework set forth by The Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013).

Based on our assessment and this framework, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

(c) Attestation Report of Registered PublicAccounting Firm

This Annual Report does not include an attestation report of our registered public accounting firm due to our status as an emerging growth company and, accordingly, are exempt from the requirement to provide such a report

(d) Changes in Internal Controls Over FinancialReporting

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2024 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 Mr. Claiborne is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the corporate governance rules of Nasdaq.

ITEM 16B. CODE OF ETHICS

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is posted on our website at https://neurosense.investorroom.com/governance-documents.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees Paid to Independent Registered PublicAccounting Firm

The following table sets forth, for each of the years indicated, the aggregate fees billed by our independent registered public accounting firm Somekh Chaikin, Tel Aviv, Israel, ID 1057 for professional services.

	Year Ended December 31,
Services Rendered	2024		2023
	(U.S. dollars in thousands)
Audit Fees (1)		238		170
Audit Related Fees				-
Tax Fees (2)		11		7
All Other Fees				-
Total		249		177
(1)	Includes professional services rendered in connection with the audit of our annual financial statements, review of our interim financial statements, and fees relating to regulatory filings including review of registration statements. (2) Tax fees are the aggregate fees for professional services rendered during the period for tax compliance and tax advice other than in connection with the audit.
---	---

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Audit Committee Pre-Approval Policies and Procedures

Our audit committee’s specific responsibilities in carrying out its oversight of the quality and integrity of the accounting, auditing and reporting practices of the Company include the approval of audit and non-audit services to be provided by the external auditor. The audit committee approves in advance the particular services or categories of services to be provided to the Company during the following yearly period and also sets forth a specific budget for such audit and non-audit services. Additional non-audit services may be pre-approved by the audit committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDSFOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BYTHE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYINGACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

As an Israeli company, we are subject to various corporate governance requirements under the Companies Law, relating to matters such as external directors, the audit committee, the compensation committee and an internal auditor.

As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Also, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information, although we have voluntarily adopted a corporate disclosure policy substantially similar to Regulation FD

As a foreign private issuer whose shares are listed on The Nasdaq Capital Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of the rules of The Nasdaq Capital Market. We are permitted to comply with Israeli corporate governance practices instead of the Nasdaq corporate governance rules, provided that we disclose which requirements we are not following and the equivalent Israeli requirement. Pursuant to this “home country practice exemption” with respect to the following:

●	we follow the quorum requirement for shareholder meetings. As permitted under the Companies Law, pursuant to our amended and restated articles of association, the quorum required for an ordinary meeting of shareholders will consist of at least two shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold at least 25% of the voting power of its 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 corporate governance rules;
●	we intend to adopt and approve material changes to equity incentive plans in accordance with the Companies Law which does not impose a requirement of shareholder approval for such actions. In addition, we intend to follow Israeli corporate governance practice instead of the Nasdaq corporate governance rule which requires shareholder approval prior to an issuance of securities in connection with equity-based compensation of officers, directors, employees, or consultants;
---	---
●	we also intend to follow Israeli corporate governance practice instead of the Nasdaq corporate governance rule requiring shareholder approval for certain dilutive events (such as issuances that will result in a change of control, certain transactions other than a public offering involving issuances of a 20% or greater interest in us and certain acquisitions of the stock or assets of another company); and
---	---

132

●

as permitted by the Companies Law, our board of directors selects director nominees, and we do not have a written charter or board resolution addressing the nominations process. Directors are not 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 corporate governance rule.

We otherwise intend to 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 corporate governance rules.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONSTHAT PREVENT INSPECTIONS

Not applicable.

ITEM 16J. INSIDER TRADING POLICIES

We have adopted a statement of trading policies that governs the trading in our securities by our directors, officers and certain other covered persons, and which is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of the Insider Trading Policy is included as Exhibit 11.1 to this annual report. In addition, with regard to any trading in our own securities, it is our policy to comply with the federal securities laws and the applicable exchange listing requirements.

ITEM 16K. CYBERSECURITY

Our current cybersecurity risk assessment and protection program consists of various cybersecurity software features designed to protect our systems and data and alert us of any cybersecurity incidents, such as software to strengthen protection against forms of malware, including ransomware, spyware, keyloggers and adware and various measures which limit the ability of different sectors within our organization to access certain types of information. We also maintain backups to our systems and data which would help us in recovery and mitigation in the event of a cybersecurity incident. Additionally, we work with external service providers that provide us with information technology services, including the assessment and identification of risks from cybersecurity threats and to help manage our risk assessment program.

The oversight of cybersecurity threats is undertaken by our CFO, who has experience in various leadership and consultancy roles. In the event of a material incident or threat, our CEO is notified as well. The CEO would then be expected to report the threat to the audit committee of the Board of Directors, which is responsible for oversight of strategic, financial and other major risks to the Company, which could include those posed by cybersecurity threats. The level of each risk would be determined by considering the impact of the risk itself and the likelihood of the risk materializing and high scoring risks are actioned upon. The Company’s risk assessment occurs annually, or as business needs change, and covers identification of risks that could act against the company’s objectives as well as specific risks related to a compromise to the security of data. See “Item 3.D Risk Factors—Risks Related to Our Business and Strategy—Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a disruption of our drug development programs.”

As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.

133

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The financial statements required by this item are found at the end of this annual report, beginning on page F-1.

ITEM 19. EXHIBITS

Exhibit no.	Exhibit
1.1*	Amended and Restated Articles of Association
2.1*	Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
4.1	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.2*	2018 Share Incentive Plan
4.3	Compensation Policy (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.4	Form of Share Purchase Agreement (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.5	Registrant’s Specimen Certificate for Ordinary Shares (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.6	Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.5 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.7	Form of Ordinary Share Purchase Warrant (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.8	Form of Warrant Agency Agreement between American Stock Transfer & Trust Company. LLC and NeuroSense Therapeutics Ltd. (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form F-1/A, filed with the SEC on December 6, 2021)
4.9	Sales Agreement, dated April 14, 2023, by and between NeuroSense Therapeutics Ltd. and A.G.P./Alliance Global Partners (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on April 14, 2023)
4.10	Placement Agent Agreement, dated as of June 22, 2023, by and between NeuroSense Therapeutics Ltd. and A.G.P./Alliance Global Partners (incorporated by reference to Exhibit 1.1 to the Registrant’s Report on Form 6-K filed with the SEC on June 23, 2023)
4.11	Form of Securities Purchase Agreement, dated as of June 22, 2023, by and between NeuroSense Therapeutics Ltd. and the purchaser identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on June 23, 2023)
4.12	Form of Ordinary Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Report on Form 6-K filed with the SEC on June 23, 2023)
4.13	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the Registrants Report on Form 6-K filed with the SEC on June 23, 2023)
4.14	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Report on Form 6-K filed with the SEC on April 12, 2024)
4.15	Placement Agent Agreement, dated as of April 10, 2024, by and between NeuroSense Therapeutics Ltd. and A.G.P./Alliance Global Partners (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on April 12, 2024)
4.16	Form of Securities Purchase Agreement, dated as of April 10, 2024, by and between NeuroSense Therapeutics Ltd. and the purchaser identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K filed with the SEC on April 12, 2024)
4.17	Form of Ordinary Warrant (incorporated by reference to Exhibit 10.3 to the Registrant’s Report on Form 6-K filed with the SEC on April 12, 2024)
4.18	Form of Securities Purchase Agreement, dated as of August 6, 2024, by and between NeuroSense Therapeutics Ltd. and the purchaser identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on August 7, 2024)

134

4.19	Form of Warrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K filed with the SEC on August 7, 2024)
4.20	Capital on Demand™ Sales Agreement, dated August 16, 2024, by and between NeuroSense Therapeutics Ltd. and JonesTrading Institutional Services LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on August 16, 2024)
4.21	Standby Equity Purchase Agreement dated October 31, 2024, by and between NeuroSense Therapeutics Ltd. and YA II PN, LTD. (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on October 31, 2024)
4.22	Form of Securities Purchase Agreement, dated as of December 2, 2024, by and between NeuroSense Therapeutics Ltd. and the purchasers identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the SEC on December 2, 2024)
4.23	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K filed with the SEC on December 2, 2024)
4.24	Form of Ordinary Warrant (incorporated by reference to Exhibit 10.3 to the Registrant’s Report on Form 6-K filed with the SEC on December 2, 2024)
8.1	List of Subsidiaries of NeuroSense Therapeutics Ltd. (incorporated by reference to Exhibit 8.1 to the Annual Report on Form 20-F, filed with the SEC on April 4, 2024)
11.1*	Insider Trading Policy
12.1*	Certification of the Chief Executive Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934
12.2*	Certification of the Chief Financial Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934
13.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350
13.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350
15.1*	Consent of Somekh Chaikin (Member firm of KPMG International), Independent Registered Public Accounting Firm
97.1+	Clawback Policy (incorporated by reference to Exhibit 97.1 to the Annual Report on Form 20-F, filed with the SEC on April 4, 2024)
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).
*	Filed herewith
---	---
+	Management contract or compensatory plan or arrangement.
---	---

135

SIGNATURE

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

NeuroSense Therapeutics LTD.
By:	/s/ Alon Ben-Noon
	Name:	Alon Ben-Noon
	Title:	Chief Executive Officer
By:	/s/ Or Eisenberg
	Name:	Or Eisenberg
	Title:	Chief Financial Officer

Date: April 7, 2025

136

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page

| Report of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057) | F-2 |

| Consolidated Statements of Financial Position as of December 31, 2024 and 2023 | F-3 |

| Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024, 2023 and 2022 | F-4 |

| Consolidated Statements of Changes in Equity (Deficit) for the Years Ended December 31, 2024, 2023 and 2022 | F-5 |

| Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 | F-6 |

| Notes to the Consolidated Financial Statements | F-7 - F-28 |

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

To the Shareholders and Board of Directors of

NeuroSense Therapeutics Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of NeuroSense Therapeutics Ltd. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1B to the consolidated financial statements, the Company’s recurring losses and its expectation to incur significant additional losses raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1B. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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. We believe that our audits provide a reasonable basis for our opinion.

/s/ Somekh Chaikin

| Somekh Chaikin |

| Member Firm of KPMG International |

We have served as the Company’s auditor since 2020.

Tel-Aviv, Israel

April 7, 2025

F-2

NeuroSense Therapeutics Ltd.Consolidated Statements of Financial Position(U.S. dollars in thousands, except share and per share data)

		As of December 31,
	Note	2024			2023
Assets
Current assets:
Cash and cash equivalent	3	$	3,378		$	2,640
Other receivables	4		989			236
Restricted deposits	2G		35			40
Total current assets			4,402			2,916
Non-current assets:
Property and equipment, net	5		66			85
Right of use assets	6		84			162
Restricted deposit	2G		23			22
Total non-current assets			173			269
Total assets		$	4,575		$	3,185
Liabilities shareholders’ and equity
Current liabilities:
Trade payables		$	1,160		$	1,459
Other current liabilities	7		832			2,000
Total current liabilities			1,992			3,459
Non-current liabilities:
Lease liability less current maturity	6		-			73
Liability in respect of warrants	8		-			1,412
			-			1,485
Total liabilities			1,992			4,944
Shareholders’ equity:	9,10
Ordinary shares, no par value:
Authorized: 90,000,000 shares at December 31, 2024 and 60,000,000 shares at December 31, 2023; Issued and outstanding: 23,228,941 and 15,379,042 shares at December 31, 2024 and 2023, respectively						-
Share Premium and Capital Reserve			39,243			24,362
Accumulated deficit			(36,660	)		(26,121	)
Total shareholders’ equity (deficit)			2,583			(1,759	)
Total liabilities and shareholders’ equity		$	4,575		$	3,185

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

F-3

NeuroSense Therapeutics Ltd.Consolidated Statements of Income and Comprehensive Loss(U.S. dollars in thousands, except share and per share data)

		For the year ended <br> December 31
	Note	2024			2023			2022
Research and development expenses	11	$	(5,698	)	$	(7,274	)	$	(5,587	)
General and administrative expenses	12		(4,204	)		(4,775	)		(4,967	)
Operating loss			(9,902	)		(12,049	)		(10,554	)
Financing income (expenses), net	13		(308	)		1,942			62
Net loss and comprehensive loss		$	(10,210	)	$	(10,107	)	$	(10,492	)
Basic and diluted net loss per share		$	(0.54	)	$	(0.74	)	$	(0.91	)
Weighted average number of ordinary shares used in computing basic net loss per share			18,602,082			13,640,168			11,504,521

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

F-4

NeuroSense Therapeutics Ltd.Consolidated Statements of Changes in Equity (deficit)(U.S. dollars in thousands, except share and per share data)

	Ordinary<br> Shares				Share<br> Premium and<br> Capital			Accumulated			Total<br> Equity
	Number		Amount		Reserve			Deficit			(Deficit)
Balance as of January 1, 2022		10,943,534	$	-	$	16,356		$	(5,522	)	$	10,834
Repurchase of options		-		-		(96	)		-			(96	)
Exercise of warrants and vested RSUs		838,429		-		3,870			-			3,870
Share based payment compensation		-		-		1,728			-			1,728
Net loss and comprehensive loss		-		-		-			(10,492	)		(10,492	)
Balance as of December 31, 2022		11,781,963	$	-	$	21,858		$	(16,014	)	$	5,844
Issuance of shares and pre-funded warrants, net		1,333,600		-		806			-			806
Exercise of pre-funded warrants, options and vested RSUs		2,263,479		-		-			-			-
Share based payment compensation		-		-		1,698			-			1,698
Net loss and comprehensive loss		-		-		-			(10,107	)		(10,107	)
Balance as of December 31, 2023		15,379,042	$	-	$	24,362		$	(26,121	)	$	(1,759	)
Issuance of shares and pre-funded warrants, net		5,981,238		-		10,806			-			10,806
Exercise of pre-funded warrants, options and vested RSUs		1,573,000		-		(*	)		-			(*	)
Issuance of shares due to SEPA agreement		224,697				281			-			281
Reclassification of warrants into equity (see Note 8)		-		-		1,695			(329	)		1,366
Bonus accrual reclassification to equity (see Note 14)		-		-		1,434			-			1,434
Share-based compensation		70,964		-		665			-			665
Net loss and comprehensive loss		-		-		-			(10,210	)		(10,210	)
Balance as of December 31, 2024		23,228,941	$	-	$	39,243		$	(36,660	)	$	2,583
(*)	less than $1.
---	---

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

F-5

NeuroSense Therapeutics Ltd.Consolidated Statements of Cash Flows(U.S. dollars in thousands, except share and per share data)

	For the year ended December 31
	2024			2023			2022
Cash flows from operating activities
Net loss for the year	$	(10,210	)	$	(10,107	)	$	(10,492	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		22			21			12
Share based compensation		557			1,537			1,728
Revaluation of liability in respect to warrants		(46	)		(2,191	)		-
Financing expenses, net		323			473			41
Changes in assets and liabilities:
Decrease in operating right of use asset		78			74			70
Decrease in operating lease liability		(69	)		(69	)		(95	)
Decrease (increase) in other current assets		(753	)		19			55
Increase (decrease) in trade payables		(299	)		961			459
Increase in other payables		262			928			606
Net cash used in operating activities		(10,135	)		(8,354	)		(7,616	)
Cash flows from investing activities
Purchase of property and equipment		(3	)		(29	)		(70	)
Redemption of (investment in) short-term deposits		-			3,500			(3,500	)
Redemption of (investment in) restricted deposit, net		4			(3	)		(20	)
Net cash provided by (used in) investing activities		1			3,468			(3,590	)
Cash flows from financing activities
Payment in respect of cancellation of options		-			-			(96	)
Exercise of warrants and options		-			5			3,870
Issuance of shares, warrants and pre-funded warrants, net		11,304			4,334			-
Issuance costs		(391	)		(364	)		-
Net cash provided by financing activities		10,913			3,975			3,774
Effects of exchange rate changes on cash and cash equivalents		(41	)		8			(88	)
Increase (decrease) in cash and cash equivalents		738			(903	)		(7,520	)
Cash and cash equivalents as at the beginning of the year		2,640			3,543			11,063
Cash and cash equivalents as of the end of the year	$	3,378		$	2,640		$	3,543
Non-cash investing and financing activities:
Reclassification of warrants into equity	$	1,366		$	-		$	-
Bonus accrual reclassification to equity (See Note 14)	$	1,434		$	-		$	-
Recognition of right of use assets	$	-		$	-		$	306
Supplemental disclosure of cash flow information:
Interest received	$	2		$	179		$	49

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

F-6

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

(U.S. dollars in thousands, except share andper share data)

Note 1 - General

NeuroSense Therapeutics Ltd. (“NeuroSense” or the “Company”) was incorporated in Israel on February 13, 2017. NeuroSense is a clinical-stage pharmaceutical company focused on discovering and developing treatments for patients suffering from debilitating neurodegenerative diseases. The Company’s lead product candidate, PrimeC, is a novel oral formulation of a fixed dose combination composed of a specific ratio and doses of two FDA-approved drugs.

In addition to PrimeC, the Company has initiated research and development efforts in Alzheimer’s disease and Parkinson’s disease, with a similar strategy of combined products.

The Company’s ordinary shares and warrants began trading on the Nasdaq Capital Market on December 9, 2021 under the ticker symbols “NRSN” and “NRSNW,” respectively.

The Company currently has no products approved for sale and the Company’s operations have been funded primarily by its shareholders. To date, the Company has generated no sales or revenues, has incurred losses and expects to incur significant additional losses due to the continuing focus on the research, development, clinical activities of its product candidates, preclinical programs, business development, organizational structure and to advance the programs within the Company’s pipeline. Consequently, its operations are subject to all the risks inherent in the establishment of a pre-revenue business enterprise as well as those risks associated with a company engaged in the research and development of pharmaceutical compounds.

Based on current expected level of operating expenditures, the Company’s cash resources as at December 31, 2024 shall not be sufficient to fund the Company’s operations for a period of at least 12 months from the approval of these consolidated financial statements, assuming that the Company will continue its development plan in accordance with the original pipeline and without delaying or slowing down the progress of its plans. The Company will require additional cash to fund the execution of its mid and long-term development program. The Company anticipates raising additional funds through public or private sales of debt or equity securities, collaborative arrangements, or some combination thereof. Whilst management is progressing with its plans to secure external financing, these still require approval by third parties, and accordingly, there is no assurance that any such arrangement will be entered into or that financing will be available when needed in order to allow it to continue its operations, or if available, on terms favorable or acceptable to it.

In the event financing is not obtained, the Company may pursue cost cutting measures or may be required to delay, reduce the scope of, or eliminate any of its development programs or clinical trials, these events could have a material adverse effect on its business. These factors raise substantial doubt about the Company ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

On October 3, 2022, the Company established a US based subsidiary, NeuroSense US Inc. (“US Subsidiary”). From establishment through December 31, 2024, the US Subsidiary had no activity. The U.S. subsidiary was formed to perform research and development activity and engage in possible collaboration agreements. On July, 2023, the Company established a German based subsidiary, NeuroSense GmbH (“NeuroSense GmbH “). NeuroSense GmbH was formed to perform research and development activity and engage in possible collaboration agreements. From establishment through December 31, 2024, NeuroSense GmbH had no material activity.

F-7

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 1 - General (cont.)

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign against Hamas. In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization), Israel’s southern border with the Gaza Strip (with the Hamas terrorist organization) and on other fronts from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. Further, on April 13, 2024, and on October 1, 2024, Iran launched a series of drone and missile strikes against Israel. As of December 31, 2024 a ceasefire agreement has been reached between Israel the Hezbollah terror organization in Lebanon. To date the Company’s operations and financial results have not been materially affected. Since the war broke out in October 2023, the Company’s operations have not been adversely affected by this situation, and it has not experienced disruptions to its clinical studies. As such, its clinical and business development activities remain on track. However, the intensity and duration of Israel’s current war against Hamas and Hezbollah is difficult to predict at this stage, as are such war’s economic implications on its business and operations and on Israel’s economy in general. If the ceasefire declared collapses or a new war commences or hostilities expand to other fronts, its operations may be adversely affected.

Note 2 - Significant Accounting Policy

A.	Basis of presentation

The consolidated financial statements have been prepared in accordance accounting principles generally accepted in the United States of America (“US GAAP”) assuming the Company will continue as a going concern.

B.	Use of estimates in preparation of consolidated financial statements

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to fair value of financial instruments and share based compensation. The Company’s management believes that the estimates, judgment, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of liabilities at the dates of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.

C.	Functional currency

The functional currency of the Company and its subsidiaries, all of which are primarily direct and integral component of the Company’s operation, is the U.S. dollar (“$” or “dollar”), as the dollar is primary currency of the economic environment in which the Company and its subsidiaries have operated and expects to continue to operate in foreseeable future.

In accordance with ASC 830, “Foreign Currency Matters”, balances denominated in or linked to foreign currency are stated on the basis of the exchange rates prevailing at the applicable balance sheet date. For foreign currency transactions included in the consolidated statement of operations and comprehensive loss, the exchange rates applicable on the relevant transaction dates are used. Gains or losses arising from changes in the exchange rates used in the translation of such transactions are presented within financing income or expenses.

D.	Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

E.	Cash and cash equivalents

Cash and cash equivalents include highly liquid investments, including short-term bank deposits (with original maturity dates of up to three months from date of deposit) that are not restricted as to withdrawal or use.

F-8

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 2 - Significant Accounting Policy (cont.)

F.	Short-term deposits

Short-term deposits in banking institutions for periods in excess of three months following the date of deposit. The deposits are presented in accordance with the terms of their deposit.

G.	Restricted deposits

Restricted deposits consist of deposits held in restricted deposit bank accounts including deposits held as collateral for guarantees to third parties, classified as current or non-current based on expected timing of the disbursement.

H.	Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When an asset is disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in the consolidated statements of operations and comprehensive loss.

The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. To date, the Company has not incurred any impairment losses.

The lives used in computing straight-line depreciation for financial reporting purposes are as follows:

	%

| Computers and peripherals and equipment | 33 |

| Office furniture and equipment | 7 - 15 |

| Leasehold improvements | The shorter of the lease term and the useful life |

I.	Research and Development

Research and development costs are expensed as incurred.

J.	Fair Value Measurements

The Company measures and discloses fair value in accordance with the ASC 820, “Fair Value Measurements and Disclosures” which defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions there exists a three-tier fair-value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2 - pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 - pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Level 3 inputs are considered as the lowest priority within the fair value hierarchy. The valuation of certain financial instruments classified under fair value through profit or loss category falls under this category.

F-9

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 2 - Significant Accounting Policy (cont.)

J.	Fair Value Measurements (cont.)

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

As of the reported periods, the fair values of the Company’s cash, cash equivalents, short-term bank deposits, current and non-current restricted deposits, other current assets, trade payables and other current liabilities approximated the carrying values of these instruments presented in the Company’s consolidated balance sheets because of their nature.

K.	Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents as well as certain other current assets that do not amount to a significant amount. Cash and cash equivalents, which are primarily held in dollar and New Israeli Shekels (NIS), are deposited with major bank in Israel. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company does not have any significant off-balance-sheet concentration of credit risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

L.	Leases

The Company entered into non-cancelable lease agreements for offices for use in its operations, which are classified as operating leases (see below).

The Company applies ASC 842, “Leases” under which the Company determines if an arrangement is a lease at inception. The Company’s assessment is based on: (i) whether the contract involves the use of an identified asset, (ii) whether the Company obtains the right to substantially all of the economic benefits from the use of the asset throughout the period of use, and (iii) whether the Company has the right to direct the use of the asset.

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all the Company’s lease contracts for premises do not meet any of the criteria above, the Company concluded that all its lease contracts should be classified as operating leases.

Right of Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing Rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Moreover, the ROU asset may also include initial direct costs, which are incremental costs of a lease that would not have been incurred if the lease had not been obtained. The Company uses the long-lived assets impairment guidance in ASC 360-10, “Property, Plant, and Equipment

Overall”, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.

F-10

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 2 - Significant Accounting Policy (cont.)

M.	Commitment and contingencies

The Company accounts for its contingent liabilities in accordance with ASC 450, Contingencies under which a provision is recorded when it is both probable that liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.

N.	Employee benefit plans

The Company’s liability for severance pay to its Israeli employees is subject to Section 14 of the Israeli Severance Compensation Act, 1963 (“Section 14”), pursuant to which all of the Company’s employees are entitled to monthly deposits by the Company, at a rate of 8.33% of their monthly salary, made in the employee’s name with insurance companies. Under Israeli employment law, payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. The fund is made available to the employee at the time the employer-employee relationship is terminated, regardless of cause of termination. The severance pay liabilities and deposits under Section 14 are not reflected in the balance sheets as the severance pay risks have been irrevocably transferred to the severance funds. All deposits required through December 31, 2024 have been made.

O.	Income taxes

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. Accordingly, deferred income taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial statement carrying amount and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the enacted tax rates expected to be in effect when these differences reverse. A valuation allowance in respect of deferred tax assets is provided for, if necessary, to reduce deferred tax assets to the amounts more likely than not to be realized.

The Company implements a two-step approach to recognize and measure tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on examination, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is greater than 50% likely to be realized upon settlement. The Company’s accounting policy is to classify interest and penalties relating to income taxes under income taxes, however the Company did not recognize such items in its consolidated financial statements during the reported periods and did not recognize any liability with respect to an unrecognized tax benefits in its balance sheets.

P.	Stock-based compensation

The Company’s employees’ and directors’ share-based payment awards are classified as equity awards. The Company accounts for these awards using the grant-date fair value method. For employees, the fair value of share-based payment transactions is recognized as an expense over the requisite service period for each separately vesting tranche of the award as if the award is, in-substance, multiple awards. Forfeitures are recognized as they occur.

For nonemployees, compensation costs are recognized in the same period and in the same manner the Company would if it had paid cash for those goods or services.

Q.	Basic and diluted net loss per share

Basic net loss per share is computed using the weighted average number of ordinary shares, pre-funded warrants to purchase ordinary shares for an exercise price of $0.0001 which are exercisable immediately and fully vested restricted share units (RSUs) outstanding during the period.

F-11

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 2 - Significant Accounting Policy (cont.)

Q.	Basic and diluted net loss per share (cont.)

Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the year using the treasury stock method with respect to options and non-vested RSUs granted under employee stock compensation plan and certain warrants granted through its Initial Public Offering (IPO) and using the if-converted method with respect to certain warrants granted through registered direct offering and accounted for as derivative liability. In computing diluted loss per share, the average share price for the period is used in determining the number of shares assumed to be purchased from the exercise of share options or warrants.

During the reported periods, all outstanding share options, warrants and non-vested RSUs have been excluded from the calculation of the diluted net loss per share as all such securities are anti-dilutive for all years presented.

R.	Segment

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the Company’s resources. Accordingly, the Company has determined that it operates in one segment.

S.	Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of the shares are recognized as a deduction from equity.

T.	Contracts over own equity

When the Company becomes party to freestanding financial instruments, the Company first analyzes the provisions of ASC 480 in order to determine whether the instrument should be classified as a liability, with subsequent changes in fair value recognized in the statements of operations in each period. Warrants to purchase ordinary shares are not within the scope of ASC 480, and as such the Company further analyzes the provisions of ASC 815-40 in order to determine whether the contract should be classified within equity or classified as a liability, with subsequent changes in fair value recognized in the statements of operations in each period.

The Company reassesses the classification of a contract over its own equity under the guidance above at each balance sheet date. If classification changes as a result of events during the reporting period, the Company reclassifies the contract as of the date of the event that caused the reclassification. When a contract over own equity is reclassified from a liability to equity, gains or losses recorded to account for the contract at fair value during the period that the contract was classified as a liability are not reversed, and the contract is marked to fair value immediately before the reclassification.

Recentlyadopted accounting pronouncements

In August 2020, the FASB issued ASU 2020-06 “Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Furthermore, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share. ASU 2020-06 is effective for the Company for annual periods beginning after December 15, 2023, and interim periods within those fiscal years. The Company adopted this guidance on January 1, 2024, and there was no material impact on the Company’s consolidated balance sheet and the consolidated statements of operations and comprehensive loss upon adoption.

---

F-12

NeuroSense

Therapeutics Ltd. Notes to the Consolidated Financial Statements

Note 2 - Significant Accounting Policy (cont.)

U.	Recently adopted accounting pronouncements (cont.)

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures” which expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280.

The guidance is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The Company has adopted this standard for the fiscal year 2024 annual financial statements and interim financial statements thereafter and has applied this standard retrospectively for all prior periods presented in the financial statements. See Note 15 – Segment Reporting for further information.

V.	Recently issued accounting pronouncements, not yet adopted

As an emerging growth company, the Jumpstart Our Business Startup Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.

In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain amendments to improve income tax disclosures effectiveness. The guidance is effective for the Company’s annual periods beginning January 1, 2026, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the consolidated financial statement disclosures.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expenses and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, SG&A and research and development). The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

---

Note 3 - Cash and cash equivalent

		December 31,<br> 2023

Denominated in NIS	3,057	$	107
Denominated in	321		*2,533
	3,378	$	2,640

All values are in US Dollars.

(*)	Including short term bank deposit for a period of 1-2 months<br>at an interest rate of 5%.

F-13

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 4 - Other receivables

	December 31,<br> 2024		December 31,<br> 2023
	U.S. dollars<br> in thousands
Advance to suppliers	$	738	$	-
Government agencies		60		29
Prepaid expenses		87		70
Other		104		137
	$	989	$	236

Note 5 - Property and equipment, net

Balance as of December 31, 2024:

	Computers<br> and<br> peripherals<br> and <br> equipment		Office<br> furniture <br> and<br> equipment		Leasehold<br> improvements			Total
	U.S. dollars in thousands
Cost:
Balance at January 1, 2024	$	92	$	28	$	3		$	123
Purchases during the year		3		-		-			3
Balance at December 31, 2024		95		28		3			126
Accumulated depreciation:
Balance at January 1, 2024		34		4		(*	)		38
Depreciation during the year		20		2		(*	)		22
Balance at December 31, 2024		54		6		(*	)		60
Depreciated cost at December 31, 2024	$	41	$	22	$	3		$	66

Balance as of December 31, 2023:

	Computers<br> and<br> peripherals<br> and <br> equipment		Office<br> furniture <br> and<br> equipment		Leasehold<br> improvements			Total
	U.S. dollars in thousands
Cost:
Balance at January 1, 2023	$	66	$	25	$	3		$	94
Purchases during the year		26		3		-			29
Balance at December 31, 2023		92		28		3			123
Accumulated depreciation:
Balance at January 1, 2023		14		3		-			17
Depreciation during the year		20		1		(*	)		21
Balance at December 31, 2023		34		4		(*	)		38
Depreciated cost at December 31, 2023	$	58	$	24	$	3		$	85

*	Less<br>than $1 thousand.

F-14

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 6 - Operating lease

The Company has lease agreements with respect to offices. In December 2021, the Company entered into an office space lease agreement (which commenced on January 1, 2022). Monthly rent payments including utilities amount to approximately $7 thousand and indexed to Israeli consumer price index. The lease period is for 24 months with an option to extend the lease period for additional two periods of 24 months each (the first one was exercised by the Company). Accordingly, the Company recognized in the consolidated balance sheet a right-of-use asset in the amount of $306 thousand concurrently with the recognition of a lease liability in the same amount.

Operating lease:

	December 31,<br> 2024

| | U.S. dollars in thousands | |

| Operating right of use asset | $ | 84 |

| Current operating lease liability | $ | 73 |

| Non-Current operating lease liability | $ | - |

| Total operating lease liability | $ | 73 |

Maturity analysis of the Company’s lease liability:

	December 31,2024
	U.S. dollarsin thousands
Less than one year	$	75
Two years		-
Total operating lease payments	$	75
Less: imputed interest	$	(2	) ****
Present value of lease liability	$	73

Additional information on lease

The following is a summary of weighted average remaining lease terms and discount rate for Company’s leases:

	December 31,<br> 2024

| Lease term (years) | | 1 | |

| Weighted average discount rate | | 6 | % |

Presented hereunder are the lease payments the Company paid in the year ended December 31, 2024, 2023 and 2022:

	For the year ended December 31,
	2024		2023		2022
	U.S. dollars in thousands
Lease payments		75		75		79
	$	75	$	75	$	79

F-15

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 7 - Other Current Liabilities

	December 31,
	2024		2023
	U.S. dollars<br> in thousands
Employees and payroll accruals (*)	$	498	$	1,481
Short term lease liability		73		69
Accrued expenses		261		450
	$	832	$	2,000
(*)	see Note 14 regarding waiver signed of bonus accrual.
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Note 8 - Liability in respect of warrants

On June 22, 2023, the Company entered into a registered direct offering under which, the Company issued to an institutional investor 3,000,000 warrants, each representing the right to acquire one ordinary share at an exercise price of $1.50 and expiring on the fifth anniversary of the original issuance date. Due to the warrants’ terms, with respect to the fundamental transaction provisions, the warrants were accounted as a financial liability measured at fair-value through profit and losses until their expiration or exercise.

On June 26, 2024, the Company and the institutional investor entered into an amendment to the warrant which included revisions to the fundamental transactions provision and the extension of the termination date from June 26, 2028 to October 12, 2029. The Company concluded that the amended warrants meet equity classification criteria and thus the warrants should be accounted as equity from the date of amendment. As a result, on June 26, 2024 the Company reclassified the warrant liability into equity according to its fair value for the same date in the amount of $1.366 million. Revaluation income in the amount of $46 thousands until June 26, 2024 was recorded within the Company’s finance expanse and the effect of the amendment was recorded in the Company’s equity in the amount of 329 thousands.

The Company’s financial measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates:

	Level 2
	December 31,
	2024		2023
	U.S. dollars<br> in thousands
Liability in respect of warrants	$	-	$	1,412
	$	-	$	1,412

As of December 31, 2024:

The fair value of the warrants, as of it’s the date of reclassification to equity, was determined by the management using the assistance of external appraiser and by using the Black-Scholes option pricing model and the following inputs:


Financial liabilities:
Expected volatility (%)	86.56-92.52
Share price (in )	0.85
Risk-free interest rate (%)	4.44-4.40
Expected life (years)	3.98-5.30
Dividend yield (%)	-

All values are in US Dollars.

F-16

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 8 - Liability in respect of warrants (cont.)

As of December 31, 2024:

The fair value of the warrants was determined by the management using the assistance of external appraiser and by using Black-Scholes option pricing model and the following inputs:

| Financial liabilities: | |

| Expected volatility (%) | 93.91 |

| Share price (in ) | 0.785 |

| Risk-free interest rate (%) | 3.90 |

| Expected life (years) | 4.47 |

| Dividend yield (%) | - |

All values are in US Dollars.

The following table summarizes the movement in warrant liability during the year ended December 31, 2023 and December 31, 2024:

	U.S. dollars<br> in thousands
Balance as at January 1, 2023	$	-
Recognition of liability in respect to warrants at the initial date		3,603
Revaluation of liability in respect to warrants		(2,191	)
Balance as at December 31, 2023	$	1,412
Revaluation of liability in respect to warrants through finance expanse		(46	)
Revaluation of liability in respect to warrants through equity		329
Reclassification of warrants into equity		(1,695	)
Balance as at December 31, 2024		-

Note 9 - Shareholders’ Equity

A.	Share capital
	Number of shares<br> December 31
---	---	---	---	---	---	---	---	---
	Authorized<br> 2024		Issued and<br> outstanding 2024		Authorized<br> 2023		Issued and<br> outstanding 2023
Ordinary shares of no par value		90,000,000		23,228,941		60,000,000		15,379,042
a.	In<br>March 2022, the Company received an amount of $3,870 thousand as a result of the exercise of 645,000 warrants at a price per share of<br>$6.00.
---	---
b.	On<br>April 14, 2023, the Company entered into a sales agreement with Alliance Global Partners, pursuant to which the Company may offer<br>and sell, from time to time, to or through the Alliance Global Partners as agent or principal, ordinary shares an at-the-market offering,<br>having an aggregate offering price of up to $5,744 thousands. On June 22, 2023, the Company filed a prospectus supplement reflecting<br>a reduction in the size of the at-the-market offering to $502 thousand. During the reporting period, the Company sold 3,600 ordinary<br>shares for gross proceeds of $7 thousand through the at-the-market offering. Issuance expenses were equal to the proceeds received.
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F-17

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 9 - Shareholders’ Equity (cont.)

A.	Share capital (cont.)

c.	On June 22, 2023, the Company entered<br>into a securities purchase agreement pursuant to which the Company agreed to issue and sell, in a registered direct offering: (i) an<br>aggregate of 1,330,000 ordinary shares, no par value, and (ii) an aggregate of 1,670,000 pre-funded warrants, each representing the right<br>to acquire one ordinary share with exercise price of $0.0001, exercisable at any time until exercised in full and (iii) an aggregate<br>of 3,000,000 warrants. The warrants are exercisable immediately upon issuance at an exercise price of $1.50 per ordinary share and will<br>expire on the fifth anniversary of the original issuance date. The gross proceeds were approximately $4.5 million before deducting the<br>placement agent fee and related offering expenses of $455 thousand. The warrant instrument is classified as a liability with an original<br>fair value in the amount of $3,603 thousand and the remaining amount of $897 thousand was attributed to the ordinary shares and pre-funded<br>warrants and recognized in equity. The direct incremental issuance costs, amounting to $454 thousand, have been allocated in the same<br>proportion as the gross proceeds. An amount of $365 thousands was allocated to the ordinary warrants and carried directly to profit or<br>loss as finance expense and an amount of $91 thousands was allocated to the ordinary shares and the pre-funded warrants and recognized<br>as a reduction of equity. See also Note 8 regarding the agreement amendment signed on June 26, 2024 and the resulting reclassification<br>of the warrant liability into equity.
d.	On June 23, 2023, one of the Company’s employees exercised 126,000 options into 126,000 ordinary shares for a total consideration of $5 thousands.
e.	During<br>October 2023, 1,670,000 pre-funded warrants were exercised into 1,670,000 ordinary shares of the Company. See also Note 9(a)(c) above.
---	---

On April 10, 2024, the Company entered into a securities purchase agreement (the “April 2024 Purchase Agreement”) with an institutional investor (the “April 2024 Purchaser”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the April 2024 Purchaser (i) an aggregate of 1,732,000 ordinary shares,; (ii) an aggregate of 1,248,000 pre-funded warrants, each representing the right to acquire one ordinary share at an exercise price of $0.0001 (either physically or on a net-cash basis at the April 2024 Purchaser’s discretion), exercisable at any time upon their issuance until exercised in full and (iii) an aggregate of 2,980,000 warrants, each representing the right to acquire one ordinary share at an exercise price of $1.50 (either physically or on a net-cash basis at the April 2024 Purchaser’s discretion) and will expire on the fifth anniversary of the original issuance date. The gross proceeds were approximately $4.47 million. As part of the April 2024 Purchase Agreement, the Company also issued 70,964 ordinary shares valued at 0.1 million as issuance expenses to the placement agent in the registered direct offering. Total issuance expenses in cash amounted to $0.153 million. All consideration in this issuance was classified to equity. On June 26, 2024, the Company and the April 2024 Purchaser reached an agreement to amend the terms of the warrants to extend the termination date from April 15, 2029, to October 12, 2029. The impact on the financial statements is immaterial.

g.	On<br>June 27, 2024, the Company’s shareholders approved an amendment to the Company’s articles of association to increase the<br>registered share capital of the Company by an additional 30,000,000 ordinary shares, such that the total registered share capital of<br>the Company would consist of 90,000,000 ordinary shares, no par value per share.

On August 6, 2024, the Company entered into a securities purchase agreement with certain investors, which include members of the Company’s senior management and existing investors. The Company agreed to sell an aggregate of 800,000 ordinary shares and warrants to purchase an aggregate of 800,000 ordinary shares, at a combined purchase price of $0.75 per share and accompanying warrant. All consideration in this issuance was classified to equity. Each warrant was immediately exercisable upon issuance and has a five-year term from the issuance date. The exercise price of each warrant is $0.75 per share, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering the ordinary shares underlying the warrants. The gross proceeds were approximately $0.6 million. Total issuance expenses in cash amounted to $0.015 million.

F-18

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 9 - Shareholders’ Equity (cont.)

A.	Share capital (cont.)
i.	On August 16, 2024, the Company entered into<br>a Capital on Demand Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC, as sales agent<br>(the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time, to or through the Sales Agent,<br>ordinary shares, having an aggregate offering price of up to gross sale proceeds of up to $2,524 thousand. The Company agreed to pay<br>the Sales Agent a commission equal to 3.0% of the gross proceeds from the sale of the ordinary shares pursuant to the Sales Agreement.<br>The Company has also agreed to reimburse the Sales Agent for certain specified expenses in connection with entering into the Sales Agreement<br>in the amount of up to $50 thousand. As of December 31, 2024, the Company sold 1,105,509 ordinary shares for aggregate gross proceeds<br>of $1,234 thousand (net proceeds of $1,067 thousand) under the Sales Agreement.
---	---
j.	During<br>the year ended December 31, 2024, the Company issued 1,248,000 and 325,000 ordinary shares following exercise of pre-funded warrants<br>from the Purchase Agreement (see Note 9f) and vested RSU’s, respectively.
---	---

On October 31, 2024, the “Company entered into a standby equity purchase agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership (“Yorkville”). Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville from time to time (each such occurrence, an “Advance”) up to $30.0 million (the “Commitment Amount”) of the Company’s ordinary shares, during the 36 months following the execution of the SEPA, subject to the restrictions and satisfaction of the conditions in the SEPA. At the Company’s option, the ordinary shares would be purchased by Yorkville from time to time at a price equal to 97% of the lowest of the three daily VWAPs (as hereinafter defined) during a three consecutive trading day period commencing on the date that the Company, subject to certain limitations, delivers a notice to Yorkville that the Company is committing Yorkville to purchase such ordinary shares (the “Advance Shares”). The Company may also specify a certain minimum acceptable price per share in each Advance. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s ordinary shares for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P. As consideration for Yorkville’s irrevocable commitment to purchase the Company’s ordinary shares up to the Commitment Amount, the Company agreed to issue 224,697 ordinary shares valued at $281 thousand to Yorkville and also paid a $25,000 structuring fee to Yorkville. The fee and shares fair value were recognized as finance expenses.

On December 2, 2024, the Company entered into a securities purchase agreement with a single investor the Company’s chief executive officer (together, the “December 2024 Purchasers”) in a private placement. The Company issued to the December 2024 Purchasers (i) an aggregate of 2,343,729 ordinary shares, (ii) an aggregate of 1,656,271 pre-funded warrants, each representing the right to acquire one ordinary share, and (iii) an aggregate of 8,000,000 ordinary warrants, each representing the right to acquire one ordinary share for total gross proceeds to the Company of $5 million (net proceeds of $4.94 million). The ordinary warrants are exercisable immediately upon issuance at an exercise price of $1.25 per share and expire five years from the date of issuance. The pre-funded warrants are exercisable immediately upon issuance at an exercise price of $0.0001 per share and may be exercised at any time until the pre-funded warrants are exercised in full. All consideration in this issuance was classified to equity.

Ordinary Shares Right

---

Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of shares outstanding.

F-19

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 10 - Share Based Payment

On December 16, 2018, the Company’s board of directors approved an employee share option plan (“ESOP”). According to the provisions of the ESOP, the exercise period, exercise price and vesting conditions for each option grant will be determined by the board of directors. The number of shares reserved for issuance is subject to an annual increase to be added as of the first day of the Company’s fiscal year, equal to 4% of the total number of shares issued and outstanding on a fully-diluted basis as of the end of the immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the Board in its sole discretion). Ordinary shares subject to options granted under the 2018 Plan that expire or forfeited or otherwise terminated without having been exercised in full will become available again for future grant under the 2018 Plan.

The expiration date of the options granted to employees and directors is after 10 years from the grant date. Relating to options granted to services providers, the expiration date of the options is between 3-10 years from the grant date. In addition, pursuant to the grant letters, the options granted to employees, directors and service providers shall become vested and exercisable upon any merger or consolidation in which the Company is a constituent party as described in the grant letters (“Exit Event”).

On October 31, 2021, the Company’s board of directors approved an amendment to the Company’s 2018 Employee Share Option Plan. The amendment determines that the total number of underlying shares reserved for future issuance under the plan and any modification thereof, shall be:

●

900,000 shares, plus

●

An annual increase to be added as of the first day of the Company’s fiscal year, beginning in 2022 and occurring each year thereafter through 2032, equal to 4% of the total number of ordinary shares issued and outstanding on a fully-diluted basis as of the end of the Company’s immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the board of directors in its sole discretion).

---

Following this amendment, the number of shares reserved under this plan was 1,151,130. As of December 31, 2024, 688,705 ordinary shares are available for future grant.

1.	On<br>January 10 and January 11, 2022, the Company’s entered into option settlement agreement (“Agreements”) with certain<br>consultants of the Company. According to the Agreements, the Company exchanged 27,000 options granted to certain consultants with cash<br>payments in the aggregate of $96 thousand. The cash payment is deemed as the sole and complete settlement of the promised options. The<br>Company recorded an additional expense of $23 thousand for such settlement which was recorded in profit and loss. The Company recorded<br>the settlement agreement as a reduction in share premium and capital reserve.
2.	On<br>January 25, 2022 and March 10, 2022, the Company’s board of directors and shareholders, respectively, approved the compensation<br>of each of the Company’s external directors and a newly appointed director. Such compensation included the grant of 72,000 options<br>to each such director at an exercise price of $1.43 per share (total 216,000 options to three directors), pursuant to the Company’s<br>2018 Employee Share Option Plan. One-third of each option award vests one year from the grant date and the remainder vests quarterly<br>and becomes fully vested three years from the grant date. The options expire 10 years after grant date.
---	---
3.	On<br>January 25, 2022, the Company’s board of directors approved the grant of aggregate amount of 192,000 options to several employees.<br>The options have an exercise price of $2.18 per share. The options vest quarterly over three years starting January 25, 2022. The options<br>expire 10 years after grant date.
---	---

F-20

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 10 - Share Based Payment (cont.)

4.	In<br>March 2022, the Company’s board of directors approved the grant of aggregate amount of 36,000 options to an employee and amount<br>of 5,000 options consultant of the Company. The options have an exercise price of $3.97 and $2.18, respectively, per share. The options<br>vest quarterly over three and one years, respectively, from grant date. The options expire 10 years after grant date.
5.	In<br>July and August 2022, the Company’s board of directors approved the grant of aggregate amount of 20,000 options to a consultant<br>and an amount of 120,000 options to several employees of the Company. The options have an exercise price of $2.18 and $1.99, respectively,<br>per share. The options vest quarterly over three and one years, respectively, from grant date. The options expire 10 years after grant<br>date.
---	---
6.	During<br>2022 the Company issued 85,449 of its ordinary shares to certain consultants in exchange for their services, with fair value of $119<br>thousand. One of the consultants received 44,000 shares of restricted stock which were issued in 4 equal installments and subject to<br>2 year lock-up period. Other consultant’s shares are subject to 6 months restriction period (which ended by December 31, 2022).
---	---
7.	On March 20, 2023, the Company’s board of directors,<br>approved the following awards:
---	---
●	Grant<br>of 320,479 RSUs to certain officers, in lieu of cash with respect to the 2022 bonus plan grants in the amount of $161 thousand.<br>The RSUs vest quarterly over two years with acceleration condition upon meeting certain milestones. The Company met the milestones in<br>2023 and therefore the vesting was accelerated accordingly.
---	---
●	A<br>bonus for certain employees in the form of 100,000 and 60,000 RSUs. The RSUs vest on a quarterly basis over one year following the grant<br>and on an annual basis over three years following the grant, respectively.
---	---
●	In<br>addition to the grants in accordance with the 2022 bonus plan mentioned above, a raise of additional 30% of the annual 2022 bonus will<br>be granted to the Company’s CEO.
---	---
●	The<br>grant of 13,628 options to a consultant of the Company with a total fair value of $22,500. The options have an exercise price of $1.82<br>per share. The options will vest monthly, over 9 months commencing January 1, 2023. The options expire 10 years after their grant date.
---	---
8.	On May 30, 2023, the Company granted 160,000 RSUs to directors<br>of the Company. The RSUs have an exercise price of $1.53 per share. The RSUs shall vest entirely on the first anniversary of the vesting<br>commencement date, provided that no termination of employment of the grantee occurs prior to such anniversary.
---	---
9.	On August 15, 2023, the Company’s board of directors<br>approved the grant of aggregate amount of 60,000 options to several employees. The options have an exercise price of $0.96 per share<br>and vest quarterly over 3 years starting August 15, 2023, and (ii) the grant of 9,000 options to an employee. The options have an exercise<br>price of $0.96 per share and vest annually over 3 years starting August 15, 2023.
---	---
10.	In May 2024, the Company’s board of directors, approved<br>the grant of 24,000 RSUs to a consultant of the Company. 12,000 RSUs vested on grant date, and the remaining 12,000 RSUs will vest monthly<br>(2,000 RSUs each month), over six months and until November 1, 2024. The fair value of RSUs is estimated by multiplying the number of<br>RSUs granted by the share price at grant date.
---	---
11.	In May 2024, the Company’s board of directors, approved<br>the grant of 24,000 RSUs to a consultant of the Company. 4,000 RSUs vested on grant date, and the remaining 20,000 RSUs will vest monthly<br>(4,000 RSUs each month), over six months and until October 1, 2024. The fair value of RSUs is estimated by multiplying the number of<br>RSUs granted by share price at grant date.
---	---

F-21

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 10 - Share Based Payment (cont.)

12.	In May 2024, the Company’s board of directors, approved<br>the grant of 9,000 options to an employee of the Company. The options will vest in equal amount annually over a 3 year period commencing<br>April 8, 2024. The options have an exercise price of $1.27 per share

On June 27, 2024, the Company’s annual general meeting of shareholders approved the following proposed resolutions:

1.	A grant of 160,000 RSUs to the non-management directors of<br>the Company. Such RSUs would vest on the one year anniversary of the date of the meeting.
2.	To approve an amendment to the Company’s Articles of<br>Association to increase the authorized share capital of the Company.
---	---
3.	An acceleration of the vesting of the 18,000 unvested options<br>of a former director, and extending the term of the unexercised options, such that they will expire 10 years from the date of grant
---	---

The weighted average grant date fair value of options granted during the years ended December 31, 2024, 2023 and 2022 was $0.88, $0.80 and $1.40 per option, respectively. The weighted average grant date fair value of RSUs granted during the years ended December 31, 2024 and 2023 was $1.08 and $1.75 per RSU, respectively.

Regarding issuance of 70,964 ordinary shares as issuance costs in April 2024, see also Note 9A(f).

Stock-based compensation expenses recognized in profit and loss as an operating expense based on fair value of the option at the grant date by using Binominal option pricing model for employees and directors and Black and Scholes pricing model for non-employees. The inputs for the valuation analysis of the share options include several assumptions of which the most significant are the fair market value of the underlying ordinary share, the expected share price volatility and the expected option term. Expected volatility was calculated based upon historical volatility of the Company and peer companies in the same industry on weekly basis. Expected option term represents the period that the Company’s share options are expected to be outstanding. Risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. Expected dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend payouts. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future.

The following table lists the inputs used for calculation of fair value of the options granted to employees and directors for the years ended December 31, 2024, 2023 and 2022:

	2024	2023	2022

| Expected volatility | 93.72% | 91.80% - 93.51% | 93.63% - 93.79% |

| Exercise price | 1.27 | 0.96 - 1.99 | 1.43 - 3.97 |

| Share price | 1.27 | 0.96 - 1.99 | 1.43 - 3.97 |

| Risk-free interest rate | 4.61% | 3.24% - 4.35% | 2.12% - 2.46% |

| Dividend yield | 0 | 0 | 0 |

| Expected life (years) | 10 | 10 | 10 |

The following table lists the inputs used for calculation of fair value of the options granted to consultants for the years ended December 31, 2024, 2023 and 2022:

	2024	2023	2022

| Expected volatility | - | 100.540% | 93.64% |

| Exercise price | - | 1.82 | 2.18 |

| Share price | - | 1.82 | 1.41 - 1.96 |

| Risk-free interest rate | - | 3.64% | 1.91% - 2.91% |

| Dividend yield | - | 0 | 0 |

| Expected life (years) | - | 10 | 10 |

F-22

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 10 - Share Based Payment (cont.)

The following table summarizes the share option activity for employees, directors, and non-employees for the annual periods ended on December 31, 2024:

	Number of			Weighted Average		Weighted<br> average<br> remaining		Intrinsicvalue

| Options outstanding at January 1, 2024 | | 1,069,128 | | $ | 2.26 | | 8.00 | $ | 62 | |

| Granted | | 9,000 | | $ | 1.27 | | 10 | $ | - | |

| Forfeited | | (9,000 | ) | $ | 0.96 | | - | $ | (* | ) |

| Options outstanding at December 31, 2024 | | 1,069,128 | | $ | 2.30 | | 6.68 | $ | - | |

| Exercisable at December 31, 2024 | | 936,968 | | $ | 2.34 | | 6.52 | $ | - | | | (*) | less than $1 thousands | | --- | --- |

The income tax benefit for the share options exercised expense after the valuation allowance is 0.

The following table summarizes the RSUs activity for the annual periods ended on December 31, 2024:

				Weighted<br><br> average<br><br> grant date<br><br> fair value
	Number of RSUs			U.S. dollars<br><br> in thousands
Outstanding at January 1, 2024		317,000		$	249
Granted		208,000			224
Exercised		(325,000	)
Outstanding at December 31, 2024		200,000		$	236

The income tax benefit for the stock-based compensation expense after the valuation allowance is 0.

The share-based expense recognized in the statements of operations were as follows:

	For the year ended December 31,
	2024		2023		2022
	U.S. dollars in thousands
Share-based compensation expense - Research and development	$	193	$	575	$	570
Share-based compensation expense - General and administrative		364		962		1,158
	$	557	$	1,537	$	1,728

As of December 31, 2024, there was $43 thousand of unrecognized compensation expense related to unvested options and RSUs. Such unrecognized expenses will be recognized over a weighted average period of approximately 1.25 years.

F-23

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 11 - Research and development expenses

	For the year ended December 31,
	2024		2023		2022
	U.S. dollars in thousands
Subcontractors and consultants	$	3,530	$	4,794	$	3,612
Share-based compensation		193		575		570
Salaries and social benefits (*)		1,975		1,905		1,405
	$	5,698	$	7,274	$	5,587

Note 12 - General and Administrative Expenses

	For the year ended December 31,
	2024		2023		2022
	U.S. dollars in thousands
Professional services	$	1,998	$	1,486	$	1,085
Share-based compensation		364		962		1,158
Salaries and social benefits (*)		865		1,011		1,014
Insurance		309		511		1,174
Traveling abroad		134		164		165
Others		534		641		371
	$	4,204	$	4,775	$	4,967
(*)	During 2024, 2023 and 2022, the Company paid to pension funds<br>and to insurance companies an amount of $115 thousand, $104 thousand and $85 thousand which are included in Company’s salary expenses<br>under research and development and general and administrative expenses, respectively.
---	---

Note 13 - Financing Income (expenses), net

	For the year ended December 31,
	2024			2023			2022
	U.S. dollars in thousands
Finance Income:
Revaluation of warrants	$	46		$	2,191		$	-
Deposit interest		2			178			91
Exchange rates		-			21			-
	$	48		$	2,390		$	91
Finance Expenses:
Issuance costs		(306	)		(439	)		-
Exchange rates		(45	)		-			(22	)
Bank fees		(5	)		(9	)		(7	)
	$	(356	)	$	(448	)	$	(29	)
Total financing income (expanse), net	$	(308	)	$	1,942		$	62

F-24

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 14 - Related Parties Balances and Transactions

On May 10 and June 21, 2022, the Company’s board of directors and shareholders, respectively, approved a bonus plan for 2022 for the Company’s officers. The bonus plan defined specified millstones (in fields of clinic trial progress, business developments and raise of money) which their achievements entitled the officers with different percentages out of fix amount of bonus. As detailed in the plan, such bonuses (if entitled) will be paid in cash or, if the Company has less than $6 million of cash and cash equivalents and deposits on December 31, 2022, a number of ordinary shares of the Company with a value equal to the cash bonus amount to which the officer would otherwise have been entitled, valuing each ordinary share at the closing price of the Company’s shares on Nasdaq on December 31, 2022. Since the cash and cash equivalents and deposits on December 31,2022 was more than $6 million, the 2022 bonus should have been paid in cash. Based on the goals achieved as of December 31, 2022, the Company recorded a payment liability in the amount of $370 thousand which has been recorded as salary fee in the year ending December 31, 2022. In March 2023, certain officer’s 2022 bonus was replaced by issuance of RSUs and an update to 2022 annual bonus of the CEO was approved (see also Note 10).

2.	During<br>March and May 2023, certain officers and directors were granted with options and RSUs, see also Note 10.

In March and May, 2023, the Company’s board of directors and shareholders, respectively, approved a bonus plan for 2023 for the Company’s officers. The bonus plan defined specified millstones (in fields of clinic trail progress, regulatory efforts, business developments and raise of money) which their achievements entitled the officers with different percentages out of fix amount of bonus.

In May 2024, the Company’s board of directors approved a change to the 2023 bonuses plan to the Company’s officers for which included a change to the bonus calculations previously approved. Following the change, such bonuses will become effective and paid only after a capital raise, that will allow the initiation of the Company’s planned phase 3 clinical study, of at least $18 million. The aggregate amount of the potential bonus payable to the officers after such capital raise will be approximately $0.8 million.

5.	In<br>May 2024, the Company’s board of directors approved a bonus plan for 2024 for certain Company’s officers. The bonus plan<br>defined specified millstones (in fields of clinic trail progress, regulatory affairs, business developments and capital raising).

F-25

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 14 - Related Parties Balances and Transactions (cont.)

5.	On June 27, 2024, the Company’s annual general meeting<br>of shareholders approved the following proposed resolutions, among others:

1.	An acceleration of the vesting of the 18,000 unvested options of a former director, and extending the term of the unexercised options, such that they will expire 10 years from the date of grant
2.	To approve a 2024 bonus plan for the Company’s CEO Officer of the Company, based on the achievement of certain Company milestones.
3.	To approve the renewal of Mr. Alon Ben-Noon’s the Company’s CEO’s employment agreement with the Company and in addition, an update to his salary in the event that the Company raises an aggregate of US 25,000,000.
4.	To approve the grant of 160,000 RSUs to the Company’s directors, see Note 10.
6.	On<br>December 17, 2024, the Company’s CEO, together with CFO, CMO, CTO, COO, signed a waiver letter with respect to bonuses, that they<br>were entitled for the years 2022-2024 in their capacity as shareholders. As part of this waiver, the Company recorded an amount of $1,434<br>thousands within additional paid in capital.
---	---
7.	During<br>August and December 2024, the Company entered into a share purchase agreement with certain senior management, see also Note 9A(h) and<br>9A(l).
---	---

Note 15 – Segment Reporting

Segment information is prepared on the same basis that the chief executive officer, who is the Company’s chief operating decision maker, manages the business, makes business decisions and assesses performance. The Company has one reportable segment specializing in the development of treatments for patients suffering from debilitating neurodegenerative diseases, as described in Note 1.

The CODM assesses performance for this segment and decides how to allocate resources based on net loss. This net loss comprised of research and development expenses related to its product, general and administrative costs and net financing income or expanses. The CODM performs the assessment of segment performance by using the reported measure of segment profit or loss to monitor budget versus actual results.

The net profit or loss report regularly reviewed by the CODM is identical to the Consolidated Statements of Income and Comprehensive Loss and the related notes in the financial statements of the company for years ending December 31, 2024, 2023 and 2022.

F-26

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 16 - Income Taxes

A.	Israeli taxation:

The tax rate relevant to the Company in the years 2024, 2023 and 2022 was 23%.

As of December 31, 2024, the Company has net operating loss carryforwards for Israeli income tax purposes of approximately $24,730, which can be offset against future taxable income for an indefinite period of time.

The Company has final (considered final) tax assessments in Israel through the 2019 tax year.

B.	Deferred taxes reflect the net tax effects of carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred tax assets are as follows:
	As of December 31,
---	---	---	---	---	---	---
	2024			2023
	U.S. dollars in thousands
Deferred tax assets
Net operating loss carryforward	$	5,688			3,315
Other temporary differences		95			71
Capitalized research and development costs		1,282			1,395
Operating lease liability		17			33
Vacation and convalescence accrual		67			50
Total deferred tax assets:		7,149			4,864
Deferred tax liability: Operating lease right-of-use assets		(19	)		(35	)
Total deferred tax liability		(19	)		(35	)
Net deferred tax assets:		7,130			4,829
Less: Valuation allowance		(7,130	)		(4,829	)
Net deferred tax asset		-			-

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating loss carryforward are available. Based on consideration of these factors, the Company recorded a valuation allowance as of December 31, 2024 and 2023 for all deferred tax assets not supported by reversing taxable temporary differences.

The portion of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits would be applied directly to contributed capital was $782 thousand and $693 thousand in 2024 and 2023, respectively.

F-27

NeuroSense Therapeutics Ltd.Notes to the Consolidated Financial Statements

Note 16 - Income Taxes (cont.)

During the years ended December 31, 2024 and 2023, the main reconciling item between the statutory income tax rate in Israel, the country of domicile of the Company (as noted in Note 16A) and the effective tax rate is mainly the recognition of valuation allowance in respect of deferred taxes relating to net operating loss carryforwards and other temporary differences due to the uncertainty of the realization of such deferred taxes.

The net change during the year ended December 31, 2024, 2023 and 2022 in the total valuation allowance amounted was $2,301 thousands, $1,813 thousands and $$1,419 thousands, respectively.

The movement of the valuation allowance (through income statement) is as follows:

	For the year ended December 31,
	2024		2023		2022
	U.S. dollars in thousands
Balance at the beginning of the year		4,829		3,016		1,607
Addition of valuation allowance		2,301		1,813		1,409
Net change in the valuation allowance		2,301		1,813		1,409
Balance at the end of the year		7,130		4,829		3,016

Note 17 - Subsequent Events

A.	As of the date hereof, the Company sold 444,216 of it’s ordinary shares pursuant to the Sales Agreement for aggregate gross proceeds of approximately $509.

B.	On March 31, 2025, the Company’s board of directors approved the grant of aggregate amount of 108,000 options to several employees. The options have an exercise price of $0.93 per share. The options vest quarterly over three years and expire 10 years after grant date.
C.	On March 31, 2025, the Company’s board of directors approved the grant of an aggregate amount of 355,512 RSUs to several consultants and service providers.

D.	On March 31, 2025, the Company’s board of directors approved the grant of an aggregate amount of 20,000 options to several consultants. The options have an exercise price of $0.93 per share. The options vest over one year and expire 10 years after grant date.

F-28

Exhibit 1.1

AMENDED AND RESTATED ARTICLES OF ASSOCIATION

NeuroSenseTherapeutics LTD.

1.	INTERPRETATION
1.1.	In these Articles the following terms shall bear the meanings set opposite to them, unless the context otherwise requires:
---	---
Terms	Meanings
---	---
Articles	These Amended and Restated Articles of Association as may be amended from time to time.
Auditor	As defined under the Companies Law.
Board	The Board of Directors of the Company.
Business Day	Any day other than Saturday, Sunday or public holiday under the laws of Israel or the State of New York or other day on which banking institutions are authorized or obligated to close in Israel or the State of New York.
Chairperson	Chairman of the Board, or the Chairperson of the General Meeting, as the context implies.
CEO	Chief Executive Officer of the Company, also referred to under the Companies Law as the General Manager.
Class Meeting	A meeting of the holders of a class of shares.
Company	NeuroSense Therapeutics Ltd.
Companies Law	Israeli Companies Law, 5759-1999 and any other law which may come in its stead, in each case, as amended from time to time.
Derivative Transaction	As defined below.
Dividend	As defined under the Companies Law.
EC Law	Israeli Economic Competition Law, 5748-1988.
External Director	As defined under the Companies Law.
---	---
General Meeting	An annual meeting or special meeting of the shareholders of the Company (as such terms are defined in Article 19 of these Articles), as the case may be.
Internal Auditor	An internal auditor appointed by the Company in accordance with Section 146(a) of the Companies Law.
Office	The registered office of the Company from time to time.
Office Holder	As defined under the Companies Law.
Ordinary Share(s)	The Company’s Ordinary Shares, of no par value per share.
Person	A company, corporate body, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof, or an individual.
Register	The Company’s shareholders register, maintained in accordance with the Companies Law.
Securities Law	Israeli Securities Law, 5728-1968.
Simple Majority	A majority of more than fifty percent (50%) of the votes cast by those shareholders voting in person or by proxy (including by voting deed), not taking into consideration abstaining votes.
Special Majority	A majority of sixty-six and two thirds percent (66 2/3%) or more of the votes cast by those shareholders voting in person or by proxy (including by voting deed), not taking into consideration abstaining votes.
Statutes	The Companies Law and, to the extent applicable to the Company, the Israeli Companies Ordinance (New Version) 1983, the Securities Law and all applicable laws and regulations applicable in any relevant jurisdiction (including without limitation U.S. federal laws and regulations), and rules of any stock market in which the Company’s shares are registered for trading as shall be in force from time to time.

Subject to the provisions of this Article 1 and unless the context necessitates another meaning, terms and expressions in these Articles which have been defined in the Statutes shall have the meanings ascribed to them therein.

Page 2

1.2.	Words importing the singular shall include the plural, and vice versa. Any pronoun shall include the corresponding masculine, feminine and neuter forms; and words importing persons shall include corporate bodies.

Any provision or part thereof of these Articles, prohibited by applicable law, shall be ineffective, without invalidating any other part of these Articles.

2.	NAME OF THE COMPANY

The name of the Company is NeuroSense Therapeutics Ltd. (and in Hebrew נוירוסנס תרפיוטיקסבע”מ).

3.	OBJECTIVES

The objectives of the Company shall be to engage in any activity permitted by law.

4.	PUBLIC COMPANY

The Company is a public company as such term is defined in, and for so long as it qualifies under, the Companies Law.

5.	LIMITED LIABILITY

The liability of each shareholder for the Company’s obligations is limited to the payment of the nominal value of the shares held by such shareholder, subject to the provisions of the Companies Law.

6.	CAPITAL, SHARES AND RIGHTS
6.1.	The registered share capital of the Company consists of 90 million Ordinary Shares without par value.
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6.2.	Subject to Article 13, all issued and outstanding shares of the Company of the same class are of equal rights between them for all intents and purposes concerning the rights set forth in these Articles.
6.3.	Subject to Article 13, each issued Ordinary Share entitles its holder to the rights as described below:
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6.3.1.	The equal right to participate in and vote at the Company’s General Meetings, and each of the shares in the Company shall entitle the holder thereof, who is present at the meeting and participating in the vote, whether in person, or by proxy, to one vote.
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6.3.2.	The equal right to participate in any Dividend or distribution of bonus shares.
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6.3.3.	The equal right to participate in the distribution of assets available for distribution in the event of liquidation of the Company.
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6.3.4.	If two or more persons are registered as joint holders of any shares, any one of such persons may give effectual receipts for any dividend or other monies in respect of such share and his or her confirmation will bind all holders of such share.
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7.	SHARE CERTIFICATES
7.1.	To the extent that the Board determines that all shares shall be certificated or, if the Board does not so determine, to the extent that any Shareholder requests a share certificate or the Company’s transfer agent so requires, share certificates shall be issued under the corporate seal of the Company or its written, typed or stamped name and shall bear the signature of one Director, the CEO, or any person or persons authorized therefor by the Board. Signatures may be affixed in any mechanical or electronic form, as the Board may prescribe.
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7.2.	The Company may issue a new certificate in lieu of a certificate that was issued and was lost, defaced, or destroyed, on the basis of such proof and guarantees as the Company may require, and after payment of an amount that shall be prescribed by the Company, and the Company may also replace existing certificates with new certificates, free of charge, subject to such conditions as the Company shall stipulate.
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8.	REGISTERED HOLDER
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8.1.	Except as otherwise provided in these Articles, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and, accordingly, shall not, except as ordered by a court of competent jurisdiction, or as required by statute, be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person.
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8.2.	Subject to and in accordance with the provisions of Sections 138 and 139 of the Companies Law, the Company may cause supplementary registers to be kept in any place outside Israel as the Board may think fit, and, subject to all applicable requirements of law, the Board may from time to time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers.
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9.	ISSUANCE AND REPURCHASE OF SHARES
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9.1.	The unissued shares from time to time shall be under the control of the Board (and, to the full extent permitted by law, any Committee thereof), which shall have the power to issue or otherwise dispose of shares and of securities convertible or exercisable into or other rights to acquire from the Company to such persons, on such terms and conditions, or subject to the provisions of the Companies Law, at a discount and/or with payment of commission, and at such times, as the Board (or the Committee, as the case may be) deems fit, and the power to give to any person the option to acquire from the Company any shares or securities convertible or exercisable into or other rights to acquire from the Company, or, subject as aforesaid, at a discount and/or with payment of commission, during such time and for such consideration as the Board (or the Committee, as the case may be) deems fit.
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9.2.	The Company may at any time and from time to time, subject to the Companies Law, repurchase or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as the Board shall determine, whether from any one or more Shareholders. Such purchase shall not be deemed as payment of dividends and as such, no Shareholder will have the right to require the Company to purchase his shares or offer to purchase shares from any other Shareholders.
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10.	TRANSFER OF SHARES
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10.1.	Registration of Transfer – No transfer of shares shall be registered unless a proper writing or instrument of transfer (in any customary form or any other form satisfactory to the Board or an executive officer of the Company) has been submitted to the Company (or its transfer agent), together with any share certificate(s) and such other evidence of title as the Board or an officer of the Company to be designated by the CEO may require. Until the transferee has been registered in the Register of Shareholders in respect of the shares so transferred, the Company may continue to regard the transferor as the owner thereof.
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10.2.	The Board, may, from time to time, prescribe a fee of the registration of a transfer, and may approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company’s shares on the Nasdaq Stock Market or on any other applicable stock exchange on which the Company’s shares are then listed for trading.
10.3.	Notwithstanding anything to the contrary herein, shares registered in the name of The Depository Trust Company or its nominee shall be transferrable in accordance with the policies and procedures of The Depository Trust Company.
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10.4.	Suspension of Registration – The Board may, in its discretion to the extent it deems necessary, close the Register and suspend the registration of transfers for a period of time as the Board shall deem fit, and no registration of transfer of shares shall be made by the Company during any such period during which the Register is so closed.
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11.	TRANSMISSION OF SHARES
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11.1.	In the case of the death, liquidation, bankruptcy, dissolution, winding-up or a similar occurrence of a shareholder, the legal successors, receivers, or liquidators (as the case may be) of such shareholder shall be the only persons recognized by the Company (after receipt of evidence to the entitlement thereto) as having any title to such shares, but nothing herein contained shall release the estate of the predecessor from any liability in respect of such shares.
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11.2.	The legal successors may, upon producing such evidence of title as the Board shall require, be registered themselves as holders of the shares, or subject to the provisions as to transfers herein contained, transfer the same to some other person.
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12.	CALLS ON SHARES
12.1.	The Board may, from time to time, make such calls as it may, in its sole discretion, deem appropriate upon shareholders with respect to the payment of any sum unpaid in respect of shares held by such shareholders which is not, by the terms of allotment thereof or otherwise, payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments), to the person(s) and at the time(s) and place(s) designated by the Board, as any such time(s) may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated by the Board (and in the notice hereafter referred to), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all shares in respect of which such call was made.
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12.2.	Notice of any call shall be given in writing to the applicable shareholder(s) not less than fourteen (14) days prior to the time of payment, specifying the time and place of payment, and designating the person to whom and the place where such payment shall be made; provided, however, that before the time for any such payment, the Board may, by notice in writing to such shareholder(s), revoke such call in whole or in part, extend such time, or alter such designated person and/or place. In the event of a call payable in installments, only one notice thereof need be given.
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12.3.	If, by the terms of allotment of any share or otherwise, any amount is made payable at any fixed time, every such amount shall be payable at such time as if it were a call duly made by the Board and of which due notice had been given, and all the provisions herein contained with respect to calls shall apply to each such amount.
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12.4.	The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof and all interest payable thereon.
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12.5.	Any amount unpaid in respect of a call shall bear interest from the date on which it is payable until actual payment thereof, at such rate (not exceeding the then prevailing debtor rate charged by leading commercial banks in Israel), and at such time(s) as the Board may prescribe.
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Page 5

12.6.	A shareholder shall not be entitled to his rights as shareholder, including the right to dividends, unless such shareholder has fully paid all the notices of call delivered to him, or which according to these Articles are deemed to have been delivered to him, together with interest, linkage and expenses, if any, unless otherwise determined by the Board.
12.7.	Upon the allotment of shares, the Board may provide for differences among the allottees of such shares as to the amount of calls and/or the times of payment thereof.
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13.	ALTERATIONS OF THE REGISTERED SHARE CAPITAL
13.1.	Subject to the Statutes, a General Meeting of shareholders may from time to time resolve to:
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a)	alter or add classes of shares that shall constitute the Company’s registered capital, including shares with preference rights, deferred rights, conversion rights or any other special rights or limitations;
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b)	increase the Company’s registered share capital by creating new shares either of an existing class or of a new class;
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c)	consolidate and/or split all or any of its share capital;
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d)	cancel any registered shares not yet allocated, provided that the Company has made no commitment to allocate such shares; and
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e)	reduce the Company’s share capital and any reserved fund for redemption of capital.
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13.2.	In executing any resolution adopted according to Article 13.1 above, the Board may, at its discretion, resolve any related issues.
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13.3.	If as a result of a consolidation or split of shares authorized under these Articles, fractions of a share will stand to the credit of any shareholder, the Board is authorized at its discretion, to act as follows:
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(a)	Determine that fractions of shares that do not entitle their owners to a whole share, will be sold by the Company and that the consideration for the sale be paid to the beneficiaries, on terms the Board may determine;
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(b)	Allot to every shareholder, who holds a fraction of a share resulting from a consolidation and/or split, shares of the class that existed prior to the consolidation and/or split, in a quantity that, when consolidated with the fraction, will constitute a whole share, and such allotment will be considered valid immediately prior to the consolidation or split;
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(c)	Determine the manner for paying the amounts to be paid for shares allotted in accordance with Article 13.3(b) above, including on account of bonus shares; and/or
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(d)	Determine that the owners of fractions of shares will not be entitled to receive a whole Share in respect of a share fraction or that they may receive a whole share.
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13.4.	Except as otherwise provided by or pursuant to these Articles or by the conditions of issue, any new share capital shall be considered as part of the original share capital and shall be subject to the same provisions of these Articles with reference to payment of calls, lien, transfer, transmission, forfeiture and otherwise, which applies to the original share capital.
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Page 6

14.	FORFEITURE AND SURRENDER
14.1.	If any Shareholder fails to pay an amount payable by virtue of a call, installment or interest thereon as provided for in accordance herewith, on or before the day fixed for payment of the same, the Board may at any time after the day fixed for such payment, so long as such amount (or any portion thereof) or interest thereon (or any portion thereof) remains unpaid, forfeit all or any of the shares in respect of which such payment was called for. All expenses incurred by the Company in attempting to collect any such amount or interest thereon, including, without limitation, attorneys’ fees and costs of legal proceedings, shall be added to, and shall, for all purposes (including the accrual of interest thereon) constitute a part of, the amount payable to the Company in respect of such call.
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14.2.	Upon the adoption of a resolution as to the forfeiture of a Shareholder’s share, the Board shall cause notice thereof to be given to such Shareholder, which notice shall state that, in the event of the failure to pay the entire amount so payable by a date specified in the notice (which date shall be not less than fourteen (14) days after the date such notice is given and which may be extended by the Board), such shares shall be ipso facto forfeited, provided, however, that, prior to such date, the Board may cancel such resolution of forfeiture, but no such cancellation shall stop the Board from adopting a further resolution of forfeiture in respect of the non-payment of the same amount.
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14.3.	Without derogating from Articles 31.2 and 31.8 hereof, whenever shares are forfeited as herein provided, all dividends, if any, theretofore declared in respect thereof and not actually paid shall be deemed to have been forfeited at the same time.
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14.4.	The Company, by resolution of the Board, may accept the voluntary surrender of any share.
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14.5.	Any share forfeited or surrendered as provided herein, shall become the property of the Company as a dormant share, and the same, subject to the provisions of these Articles, may be sold, re-issued or otherwise disposed of as the Board deems fit.
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14.6.	Any person whose shares have been forfeited or surrendered shall cease to be a shareholder in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all calls, interest and expenses owing upon or in respect of such shares at the time of forfeiture or surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate prescribed in Article 12.5 above, and the Board, in its discretion, may, but shall not be obligated to, enforce or collect the payment of such amounts, or any part thereof, as it shall deem fit. In the event of such forfeiture or surrender, the Company, by resolution of the Board, may accelerate the date(s) of payment of any or all amounts then owing to the Company by the person in question (but not yet due) in respect of all shares owned by such Shareholder, solely or jointly with another.
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14.7.	The Board may at any time, before any share so forfeited or surrendered shall have been sold, re-issued or otherwise disposed of, nullify the forfeiture or surrender on such conditions as it deems fit, but no such nullification shall stop the Board from re-exercising its powers of forfeiture pursuant to this Article 14.
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Page 7

15.	LIEN
15.1.	Except to the extent the same may be waived or subordinated in writing, the Company shall have a first and paramount lien upon all the shares registered in the name of each Shareholder (without regard to any equitable or other claim or interest in such shares on the part of any other person), and upon the proceeds of the sale thereof, for his or her debts, liabilities and engagements to the Company arising from any amount payable by such Shareholder in respect of any unpaid or partly paid share, whether or not such debt, liability or engagement has matured. Such lien shall extend to all dividends from time to time declared or paid in respect of such share. Unless otherwise provided, the registration by the Company of a transfer of shares shall be deemed to be a waiver on the part of the Company of the lien (if any) existing on such shares immediately prior to such transfer.
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15.2.	The Board may cause the Company to sell a share subject to such a lien when the debt, liability or engagement giving rise to such lien has matured, in such manner as the Board deems fit, but no such sale shall be made unless such debt, liability or engagement has not been satisfied within fourteen (14) days after written notice of the intention to sell shall have been served on such Shareholder, his or her executors or administrators.
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15.3.	The net proceeds of any such sale, after payment of the costs and expenses thereof or ancillary thereto, shall be applied in or toward satisfaction of the debts, liabilities or engagements of such shareholder in respect of such share (whether or not the same have matured), and the remaining proceeds (if any) shall be paid to the Shareholder, his or her executors, administrators or assigns.
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16.	SALE AFTER FORFEITURE OR SURRENDER OR FOR ENFORCEMENT OF LIEN
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Upon any sale of a share after forfeiture or surrender or for enforcing a lien, the Board may appoint any person to execute an instrument of transfer of the share so sold and cause the purchaser’s name to be entered in the Register in respect of such share. The purchaser shall be registered as the shareholder and shall not be bound to see to the regularity of the sale proceedings, or to the application of the proceeds of such sale, and after his or her name has been entered in the Register in respect of such share, the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

17.	MODIFICATION OF CLASS RIGHTS
17.1.	If at any time the share capital is divided into different classes of shares, any change to the rights and privileges of the holders of any such class of shares shall require the approval of a Class Meeting of such class of shares by a Simple Majority (unless otherwise provided by the Statutes or by the terms of issue of the shares of that class), in addition to the Simple Majority of all classes of shares voting together as a single class at a shareholder meeting. The provisions of this Article 17 relating to General Meetings shall apply, mutatis mutandis, to any separate General Meeting of the holders of the shares of a particular class, it being clarified that the requisite quorum at any such separate General Meeting shall be at least two shareholders in person or by proxy (including by voting deed) holding 25% of the voting rights in the Company.
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17.2.	The rights and privileges of the holders of any class of shares shall not be deemed to have been altered by creating or issuing shares of any class, including a new class (unless otherwise provided by the terms of issue of the shares of that class).
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18.	BORROWING POWERS
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The Company may, by resolution of the Board, from time to time, raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. The Company, by resolution of the Board, may also raise or secure the payment or repayment of such sum or sums in such manner and upon such terms and conditions in all respects as it deems fit, and in particular by the issue of debentures or debenture stock of the Company charged upon all or any part of the property of the Company (both present and future) including its unissued and/or its uncalled capital for the time being. Issuance of any series of debentures shall require Board approval.

Page 8

19.	GENERAL MEETINGS
19.1.	Annual general meetings shall be held at least once a calendar year, but not later than fifteen (15) months after the last annual general meeting. The meeting shall be held at such time and at such place, either within or outside Israel, as may be determined by the Board. Such general meetings shall be called “Annual Meetings” and all other general meetings of the Company shall be called “Special Meetings”.
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19.2.	The Annual Meeting shall review the Company’s financial statements and shall transact any other business required pursuant to these Articles or the Companies Law, and any other matter as shall be determined by the Board. The Board may convene a Special Meeting by its resolution, and is required to convene a Special Meeting should it receive a request, in writing, from a person or persons entitled, under the Companies Law, to demand such meeting.
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19.3.	Any request for convening a meeting must specify the purposes for which the meeting is to be called, shall be signed by the persons requesting the meeting, and shall be delivered to the Company’s Corporate Secretary.
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19.4.	Subject to any applicable law and stock exchange rules and regulations, any shareholder or shareholders of the Company holding at least the required percentage under the Companies Law of the voting rights of the Company which confers the right to request to include a matter on the agenda of a General Meeting (the “Proposing Shareholder(s)”) may request, subject to the Companies Law, that the Board include a matter on the agenda of a General Meeting to be held in the future, provided that the Board determines that the matter is appropriate to be considered at a General Meeting (a “Proposal Request”). In order for the Board to consider a Proposal Request and whether to include the matter stated therein in the agenda of a General Meeting, notice of the Proposal Request must be timely delivered in accordance with applicable law, and the Proposal Request must comply with the requirements of these Articles (including this Article 19.4) and any applicable law and stock exchange rules and regulations. The Proposal Request must be in writing, signed by all of the Proposing Shareholder(s) making such request, delivered, either in person or by certified mail, postage prepaid, and received by the Corporate Secretary (or, in the absence thereof by the CEO). The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extend any time period) for the delivery of a Proposal Request as described above. In addition to any information required to be included in accordance with applicable law, a Proposal Request must include the following: (i) the name, address, telephone number, fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity; (ii) the number of Shares held by the Proposing Shareholder(s), directly or indirectly (and, if any of such Shares are held indirectly, an explanation of how they are held and by whom), which shall be in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Company of the record holding of such Shares by the Proposing Shareholder(s) as of the date of the Proposal Request, and a representation that the Proposing Shareholder(s) intends to appear in person or by proxy at the meeting; (iii) the matter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matter is proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a position statement in support of the Proposal Request, a copy of such position statement that complies with the requirement of any applicable law (if any), (iv) a description of all arrangements or understandings between the Proposing Shareholders and any other Person(s) (naming such Person or Persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by all Proposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detail of such personal interest; (v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (vi) a declaration that all of the information that is required under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Company in connection with such matter, if any, has been provided to the Company. The Board, may, in its discretion, to the extent it deems necessary, request<br>that the Proposing Shareholder(s) provide additional information necessary so as to include a matter in the agenda of a General Meeting, as the Board may reasonably require.
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A “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proposing Shareholder or any of its affiliates or associates, whether of record or beneficial: (1) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Company, (2) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Company, (3) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes, or (4) which provides the right to vote or increase or decrease the voting power of, such Proposing Shareholder, or any of its affiliates or associates, with respect to any shares or other securities of the Company, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, share appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proposing Shareholder in the securities of the Company held by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly, a general partner or managing member.

The information required pursuant to this Article shall be updated as of (i) the record date of the General Meeting, (ii) five days before the General Meeting, and (iii) as of the General Meeting, and any adjournment or postponement thereof.

The provisions of Articles 16.2 and 16.3 shall apply, mutatis mutandis, on any matter to be included on the agenda of a Special Meeting which is convened pursuant to a request of a Shareholder duly delivered to the Company in accordance with the Companies Law.

19.5.	Subject to applicable law, the Board shall determine the agenda of any General Meeting.
19.6.	An amendment to Articles 19.4 or 19.5 or this Article 19.6 shall require a Special Majority.
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19.7.	Notice of General Meetings
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(a)	The Company is not required to give notice of a General Meeting, subject to any mandatory provision of the Companies Law.
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(b)	The accidental omission to give notice of a General Meeting to any Shareholder, or the non-receipt of notice sent to such Shareholder, shall not invalidate the proceedings at such meeting or any resolution adopted thereat.
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20.	PROCEEDINGS AT GENERAL MEETINGS

20.1.	Quorum
(a)	No business shall be transacted at any General Meeting of the Company unless a quorum of shareholders is present at the opening of the General Meeting.
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(b)	Except as provided in the following Article with regard to an adjourned General Meeting, the quorum for any General Meeting shall be the presence of at least two shareholders in person or by proxy (including by voting deed) holding 25% of the voting rights in the Company. For this purpose, abstaining shareholders shall be deemed present at the General Meeting.
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(c)	If within half an hour from the time appointed for the holding of a General Meeting a quorum is not present, the General Meeting shall stand adjourned to the same day in the following week at the same time and place or to such other day, time and place as the Board may indicate in a notice to the shareholders. At such adjourned General Meeting any number of shareholders shall constitute a quorum for the business for which the original General Meeting was called.
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20.2.	Chairperson of the General Meeting
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(a)	The Chairperson of the Board shall preside as the Chairperson at every General Meeting, but if there shall be no such Chairperson or if at any meeting the Chairperson shall not be present within fifteen (15) minutes after the time appointed for holding the same, or shall be unwilling to act as chairperson of the meeting, then any of the following may preside as Chairperson of the meeting (and in the following order): a Director designated by the Board, the CEO, the Chief Financial Officer, the General Counsel/Secretary, or any person designated by any of the foregoing. If at any such meeting none of the foregoing persons is present or all are unwilling or unable to act as Chairperson, the shareholders (or shareholder as the case may be) present at the meeting shall choose a shareholder as chairman of the meeting .
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(b)	The Chairperson of the General Meeting may, with the consent of a General Meeting at which a quorum is present, and shall if so directed by the General Meeting, adjourn any meeting, discussion or the resolution with respect to a matter that is on the agenda, from time to time and from place to place as the meeting shall determine. Except as may be required by the Companies Law, no shareholder shall be entitled to any notice of an adjournment or of the business to be transacted at an adjourned meeting. No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.
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(c)	Subject to Article 20.2(a) above, a vote in respect of the election of the Chairperson of the meeting or regarding a resolution to adjourn the meeting shall be carried out immediately. All other matters shall be voted upon during the meeting at such time and order as decided by the Chairperson of the General Meeting.
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21.	VOTE OF SHAREHOLDERS
21.1.	All resolutions proposed at any General Meeting will require a Simple Majority, unless otherwise expressly required by the Statutes or these Articles.
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21.2.	A declaration by the Chairperson of the meeting that a resolution has been adopted or rejected, whether unanimously or with a specific majority and an entry to that effect in the minutes of the meeting shall be regarded as prima facie evidence thereof.
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21.3.	A General Meeting, the consideration of any matter on its agenda or the resolution on any matter on its agenda may be postponed or adjourned, from time to time and from place to place: (i) by the Chairperson of a General Meeting at which a quorum is present (and he shall do so if directed by the General Meeting, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment); or (ii) by the Board (whether prior to or at a General Meeting), but no business shall be transacted at any such adjourned meeting except business which might lawfully have been transacted at the meeting as originally called, or a matter on its agenda with respect to which no resolution was adopted at the meeting originally called.
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21.4.	The Chairperson of the meeting will not have a second and/or a casting vote. If the vote is tied with regard to a certain proposed resolution such proposal shall be deemed rejected.
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21.5.	If two or more persons are jointly entitled to a share, the vote of the senior one who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other registered holders of the share, and for this purpose seniority shall be determined by the order in which the names stand in the Register.
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21.6.	A proxy may be appointed in respect of only some of the shares held by a shareholder, and a shareholder may appoint more than one proxy, each empowered to vote by virtue of a portion of the shares.
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21.7.	A proxyholder need not be a shareholder of the Company.
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21.8.	The instrument appointing a proxy shall be in writing signed by the grantor of the proxy or his attorney-in-fact duly authorized in writing. A corporate entity shall vote by a representative duly appointed in writing by such entity. Any instrument appointing a representative of a corporate entity or a proxy (whether for a specified meeting or otherwise) shall be in a form satisfactory to the Company.
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Such instrument shall be duly signed by the appointer or his duly authorized attorney or, if such appointer is a company or other corporate body, under its common seal, stamp or printed name or the hand of its duly authorized agent(s) or attorney(s).

21.9.	If a Shareholder is a minor, under protection, bankrupt or legally incompetent, or in the case of a corporation, is in receivership or liquidation, such shareholder may vote through a trustee, receiver, liquidator, natural guardian or another legal guardian, who may themselves vote in person or by proxy.
21.10.	Unless otherwise determined by the Board, the instrument of appointment must be submitted to the Office no later than 48 hours prior to the time fixed for such General Meeting to be attended by such proxy or representative. Notwithstanding the above, the Chairperson of the meeting shall have the right to waive the time requirement provided above with respect to all instruments of appointment and to accept any and all instruments of appointment until the beginning of a General Meeting.
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21.11.	Subject to the Companies Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the Chairperson, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and such other documents, if any, required under these Articles for such new appointment), provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in these Articles, or (ii) if the appointing Shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairperson of such meeting of written notice from such Shareholder of the revocation of such appointment, or if and when such Shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of the appointing Shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 21.11 at or prior to the time such vote was cast.
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21.12.	A shareholder being of unsound mind or pronounced to be unfit to vote by a competent court of law may vote through a legally appointed guardian or any other representative appointed by a court of law to vote on behalf of such shareholder.
21.13.	A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the prior death or bankruptcy of the appointing Shareholder (or of his or her attorney-in-fact, if any, who signed such instrument), or the transfer of the share in respect of which the vote is cast, unless written notice of such matters shall have been received by the Company or by the Chairperson of such meeting prior to such vote being cast.
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21.14.	A shareholder entitled to vote may signify in writing his approval of, or dissent from, or may abstain from any resolution included in a proxy instrument furnished by the Company. A proxy instrument may include resolutions pertaining to such issues which are permitted to be included in a proxy instrument according to the Statutes, and such other issues which the Board may decide, in a certain instance or in general, to allow voting through a proxy. A shareholder voting or abstaining through a proxy instrument shall be taken into account in determining the presence of a quorum as if such shareholder is present at the meeting.
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21.15.	The Chairperson of the General Meeting shall be responsible for recording the minutes of the General Meeting and any resolution adopted.
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21.16.	A defect in convening or conducting a General Meeting, including a defect resulting from the non-fulfillment of any provision or condition set forth in the Companies Law or these Articles, including with regard to the manner of convening or conducting the General Meeting, shall not disqualify any resolution passed at the General Meeting and shall not affect the discussions or decisions which took place thereat.
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21.17.	The provisions of this Article 21 relating to General Meetings shall, mutatis mutandis, apply to Class Meetings.
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22.	DIRECTORS
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22.1.	Powers, Number of Directors, Composition & Election
(a)	The Board shall have and execute all powers and/or responsibilities allocated to the Board by the Statutes and these Articles, including, without limitation, (i) the powers granted to the Board pursuant to Section 92 of the Companies Law, and (ii) setting the Company’s policies and supervision over the execution of the powers and responsibilities of the CEO. The Board may execute any power of the Company that is not specifically allocated by the Statutes or by these Articles to another organ of the Company.
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(b)	Without limiting the generality of the foregoing, the Board may, from time to time, set aside any amount(s) out of the profits of the Company as a reserve or reserves for any purpose(s) which the Board, in its absolute discretion, shall deem fit, including without limitation, capitalization and distribution of bonus shares, and may invest any sum so set aside in any manner and from time to time deal with and vary such investments and dispose of all or any part thereof, and employ any such reserve or any part thereof in the business of the Company without being bound to keep the same separate from other assets of the Company, and may subdivide or re-designate any reserve or cancel the same or apply the funds therein for another purpose, all as the Board may from time to time think fit.
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(c)	The number of directors on the Board shall be no less than three (3) but no more than nine (9), including any External Directors required to be appointed by the Companies Law (if required). A reduction of the maximum number of directors on the Board under this Article 22.1(c), shall not affect the term in office of serving directors determined prior to such reduction.
(d)	Notwithstanding anything to the contrary herein, this Article 22.1 may only be amended or replaced by a resolution adopted by the Special Majority.
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(e)	The directors, excluding the External Directors, shall be classified, with respect to the term for which they each severally hold office, into three classes, as nearly equal in number as practicable, hereby designated as Class I, Class II and Class III. The Board may assign members of the Board already in office to such classes at the time such classification becomes effective.
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(1)	The term of office of the initial Class I directors shall expire at the first Annual Meeting to be held in 2022 and when their successors are elected and qualified;
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(2)	The term of office of the initial Class II directors shall expire at the first Annual Meeting following the Annual Meeting referred to in Article 22.1(e) above and when their successors are elected and qualified, and
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(3)	The term of office of the initial Class III directors shall expire at the first Annual Meeting following the Annual Meeting referred to in Article 22.1(e)(2) above and when their successors are elected and qualified.
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(f)	At each Annual Meeting, commencing with the Annual Meeting to be held in 2022 , each of the successors elected to replace the directors of a Class whose term shall have expired at such Annual Meeting shall be elected to hold office until the third Annual Meeting next succeeding his or her election and until his or her respective successor shall have been elected and qualified. Notwithstanding anything to the contrary, each director shall serve until his or her successor is elected and qualified or until such earlier time as such director’s office is vacated.
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(g)	The Board may at any time and from time to time appoint any person as a director to fill a vacancy (whether such vacancy is due to a director no longer serving or due to the number of directors serving being less than the maximum number stated in Article 22.1(c) above). In the event of one or more such vacancies in the Board, the continuing directors may continue to act in every matter; provided, however, that if their number is less than the minimum number provided for pursuant to Article 22.1(c) above, they may only act in an urgent matter or to fill the office of a director which has become vacant up to a number equal to the minimum number provided for pursuant to Article 22.1(c) above. The office of a director that was appointed by the Board to fill any vacancy shall only be for the remaining period of time during which the director whose service has ended was filled would have held office, or in case of a vacancy due to the number of directors serving being less than the maximum number stated in Article 22.1(c) above, the Board shall determine at the time of appointment the class pursuant to Article 22.1(e) above, to which the additional director shall be assigned. Other than as provided in this Article 22.1(g) directors may be elected only at Annual Meetings.
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(h)

Prior to every General Meeting of the Company at which directors are to be elected, and subject to clauses (a) and (h) of this Article, the Board (or a Committee thereof) shall select, by a resolution adopted by a majority of the Board (or such Committee), a number of persons to be proposed to the shareholders of the Company for election as directors at such General Meeting (the “Nominees”).

(i)

Any Proposing Shareholder requesting to include on the agenda of a General Meeting a nomination of a Person to be proposed to the Shareholders for election as director (such person, an “Alternate Nominee”), may so request provided that it complies with this Article and Article 19.4 and applicable law. Unless otherwise determined by the Board, a Proposal Request relating to an Alternate Nominee is deemed to be a matter that is appropriate to be considered only at an Annual Meeting. In addition to any information required to be included in accordance with applicable law, such a Proposal Request shall include information required pursuant to Article 19.4, and shall also set forth: (i) the name, address, telephone number and email address of the Alternate Nominee and all citizenships and residencies of the Alternate Nominee; (ii) a description of all arrangements, relations or understandings during the past three (3) years, and any other material relationships, between the Proposing Shareholder(s) or any of its affiliates and each Alternate Nominee; (iii) a declaration signed by the Alternate Nominee that he consents to be named in the Company’s notices and proxy materials relating to the General Meeting, if provided or published, and, if elected, to serve on the Board and to be named in the Company’s disclosures and filings, (iv) a declaration signed by each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations for the appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchange rules and regulations to be provided to the Company in connection with such an appointment has been provided (including, information in respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under the applicable form prescribed by the SEC; (v) a declaration made by the Alternate Nominee of whether he meets the criteria for an independent director and, if applicable, External Director of the Company under the Companies Law and/or under any applicable law, regulation or stock exchange rules, and if not, then an explanation of why not; and (vi) any other information required at the time of submission of the Proposal Request by applicable law, regulations or stock exchange rules. In addition, the Proposing Shareholder shall promptly provide any other information reasonably requested by the Company. The Board may refuse to acknowledge the nomination of any person not made in compliance with the foregoing. The Company shall be entitled to publish any information provided by a Proposing Shareholder pursuant to this Article and Article 19, and the Proposing Shareholder shall be responsible for the accuracy and completeness thereof.

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The Nominees or Alternate Nominees shall be elected by a resolution adopted at the General Meeting at which they are subject for election. Notwithstanding Article ‎19.4(e), in the event of a Contested Election (as defined below), the method of calculation of the votes and the manner in which the resolutions will be presented to the General Meeting shall be determined by the Board in its discretion. In the event that the Board does not or is unable to make a determination on such matter, then the method described in clause (ii) below shall apply. The Board may consider, among other things, the following methods: (i) election of competing slates of director nominees (determined in a manner approved by the Board) by a majority of the voting power represented at the General Meeting in person or by proxy and voting on such competing slates, (ii) election of individual directors by a plurality of the voting power represented at the General Meeting in person or by proxy and voting on the election of directors (which shall mean that the nominees receiving the largest number of “for” votes will be elected in such Contested Election), (iii) election of each nominee by a majority of the voting power represented at the General Meeting in person or by proxy and voting on the election of directors, provided that if the number of such nominees exceeds the number of directors to be elected, then as among such nominees the election shall be by plurality of the voting power as described above, and (iv) such other method of voting as the Board deems appropriate, including use of a “universal proxy card” listing all Nominees and Alternate Nominees by the Company. For the purposes of these Articles, election of directors at a General Meeting shall be considered a “Contested Election” if the aggregate number of Nominees and Alternate Nominees at such meeting exceeds the total number of Directors to be elected at such meeting, with the determination thereof being made by the Secretary (or, in the absence thereof, by the CEO of the Company) as of the close of the applicable notice of nomination period under Article ‎19.4 or under applicable law, based on whether one or more notice(s) of nomination were timely filed in accordance with Article ‎22.1(j), this Article and applicable law; provided, however, that the determination that an election is a Contested Election shall not be determinative as to the validity of any such notice of nomination; and provided further, that, if, prior to the time of such meeting, one or more notices of nomination of an Alternate Nominee are withdrawn such that the number of candidates for election as director no longer exceeds the number of directors to be elected, the election shall not be considered a Contested Election. At any General Meeting at which Directors are to be elected, each shareholder shall be entitled to cast a number of votes with respect to nominees for election to the Board up to the total number of Directors to be elected at such meeting. Shareholders shall not be entitled to cumulative voting in the election of Directors, except to the extent specifically set forth in this Article.

(j)	The term of office of a director shall commence on the date of such director’s election by the Annual Meeting or by the Board or on a later date, should such date be determined in the resolution of appointment of the Annual Meeting or of the Board. A General Meeting may dismiss a director during the term, with or without cause, only by a Special Majority vote.
(k)	Notwithstanding anything to the contrary in these Articles, the election, qualification, removal, or dismissal of External Directors shall be in accordance with the applicable provisions set forth in the Companies Law.
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22.2.	Remuneration
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The Company shall determine the remuneration of the directors, if any, in accordance with the Companies Law.

22.3.	Chairperson of the Board

The Board shall appoint one of its members to serve as the Chairperson and may replace the Chairperson from time to time. The Chairperson shall preside at meetings of the Board, but if at any meeting the Chairperson is not present within fifteen (15) minutes after the time appointed for holding the meeting, the present directors shall choose a present director to be chairman of such meeting.

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22.4.	Vacation of Office

The office of a Director shall be vacated and he shall be dismissed or removed:

(a)	ipso facto, upon his death;
(b)	if he is prevented by applicable law from serving as a Director;
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(c)	if the Board determines that due to his mental or physical state he is unable to serve as a director;
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(d)	if his directorship expires pursuant to these Articles and/or applicable law;
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(e)	by a resolution adopted at a General Meeting by a Special Majority. Such removal shall become effective on the date fixed in such resolution;
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(f)	by his written resignation, such resignation becoming effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later; or
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(g)	with respect to an External Director, if so elected, and notwithstanding anything to the contrary herein, only pursuant to applicable law.
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23.	PROCEEDINGS OF THE DIRECTORS
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23.1.	The directors shall meet together for the conduct of business, adjourn, and otherwise regulate their meetings as they deem fit, subject to these Articles.
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23.2.	Unless otherwise determined by the Board, written notice of any meeting of the Board and the agenda setting out the matters to be discussed at such meeting, shall be given to all directors at least forty-eight (48) hours (or such shorter notice (i) if all the directors so agree or (ii) in the case of emergency, if a majority of the directors so agree) before the meeting. A majority of the members of the Board may decide to hold a meeting without such notice, provided the Chairperson participates in such meeting.
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23.3.	Quorum
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No business shall be transacted at any meeting of the Board unless a quorum of directors is present when a meeting is called to order. A quorum shall be deemed to exist when there are present at least a majority of those members of the Board then in office who are not legally prevented from participating and voting in the meeting.

If a quorum is not present at the meeting of the Board within half an hour after the time scheduled for the meeting, the meeting may be adjourned to another time as shall be decided by the Chairperson, or in his absence, the directors present at the meeting, provided that notice of no less than two (2) days in advance shall be given to all the directors of the time of the adjourned meeting. A directors may waive the necessity of such notice either beforehand or retrospectively. The quorum for the commencement of the adjourned meeting shall be at least one member of the Board.

23.4.	Methods of Attending Meetings

Some or all of the directors may attend meetings of the Board through computer network, telephone or any other media of communication, enabling all the directors participating to hear and communicate with each other simultaneously, provided that due prior notice detailing the time and manner of holding a given meeting is served upon all the directors. The Board may waive the necessity of such notice either beforehand or retrospectively.

Any resolution adopted by the Board in such a meeting, pursuant to the provisions of these Articles, will be recorded in writing and signed by the Chairperson (or in his absence by the chairman of the meeting), and shall be valid as if adopted at a meeting of the Board duly convened and held.

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23.5.	A resolution in writing signed by all of the directors eligible to participate in the discussion and vote on such resolution, or in respect of which all such directors have agreed (in writing by mail, fax, or electronic mail) not to convene, shall be as valid and effective for all purposes as if passed at a meeting of the Board duly convened and held.

Any such resolution may consist of several counterparts, each signed by one or more directors. Unless otherwise provided therein, such resolution in writing shall be effective as of the last date appearing on the resolution, or if the resolution is signed in two or more counterparts, as of the last date appearing on the counterparts.

23.6.	While exercising his/her voting right, each director shall have one vote. Resolutions of the Board will be decided by a simple majority of the directors present and voting, not taking into consideration abstaining votes, except as otherwise provided in these Articles or by the Statutes.
23.7.	[Reserved]
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23.8.	Delegation of Powers
(a)	The Board may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees (in these Articles referred to as a “Committee”), each consisting of one or more persons, and it may from time to time revoke such delegation or alter the composition of any such Committee. Any Committee so formed shall, in the exercise of the powers so delegated, conform to any regulations imposed on it by the Board, subject to applicable law. No regulation imposed by the Board on any Committee and no resolution of the Board shall invalidate any prior act done pursuant to a resolution by the Committee which would have been valid if such regulation or resolution of the Board had not been adopted. The meetings and proceedings of any such Committee shall, mutatis mutandis, be governed by the provisions herein contained for regulating the meetings of the Board, to the extent not superseded by any regulations adopted by the Board. Unless otherwise expressly prohibited by the Board or the applicable law, in delegating powers to a Committee, such Committee shall be empowered to further delegate such powers. If the Board delegates powers to a board committee, at least one external director shall serve on such committee.
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(b)	Without derogating from the provisions of Article 24, the Board may from time to time appoint a Secretary to the Company, as well as Officers, agents, employees and independent contractors, as the Board deems fit, and may terminate the service of any such person. The Board may, subject to the provisions of the Companies Law, determine the powers and duties, as well as the salaries and compensation, of all such persons.
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(c)	The Board may from time to time, by power of attorney or otherwise, appoint any person, company, firm or body of persons to be the attorney or attorneys of the Company at law or in fact for such purpose(s) and with such powers, authorities and discretions, and for such period and subject to such conditions, as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board deems fit, and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in the Board.
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23.9.	Meetings of committees and proceedings thereat (including the convening of the meetings, the election of the chairman and the votes) shall be governed by the provisions herein contained for regulating the meetings and proceedings of the Board so far as the same are applicable thereto and unless otherwise determined by the Board, including by an adoption of a charter governing the committee proceedings.
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24.	CONFLICT OF INTEREST; APPROVAL OF CERTAIN TRANSACTIONS WITH RELATED PARTIES
24.1.	Subject to the Companies Law and these Articles, a transaction between the Company and an Office Holder, and a transaction between the Company and another entity in which an Office Holder of the Company has a personal interest, in each case, which is not an Extraordinary Transaction (as defined by the Companies Law), shall require only approval by the Board or a Committee of the Board subject to the Companies Law. Such authorization, as well as the actual approval, may be for a particular transaction or more generally for specific type of transactions. Subject to the provisions of the Companies Law and these Articles, no Director shall be disqualified by virtue of his office from holding any office or place of profit in the Company or in any company in which the Company shall be a shareholder or otherwise interested, or from contracting with the Company as vendor, purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any Director shall be in any way interested, be avoided, nor, other than as required under the Companies Law, shall any Director be liable to account to the Company for any profit arising from any such office or place of profit or realized by any such contract or arrangement by reason only of such Director’s holding that office or of the fiduciary relations thereby established, but the nature of his interest, as well as any material fact or document, must be disclosed by him at the meeting of the Board at which the contract or arrangement is first considered, if his interest then exists, or, in any other case, at no later than the first meeting of the Board after the acquisition of his interest.
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25.	RECORDS AND VALIDITY OF ACTS
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25.1.	The resolutions of the Board shall be recorded in the Company’s minutes book, as required under the Statutes, signed by the Chairperson or the chairman of a certain meeting. Such signed minutes shall be deemed prima facie evidence of the meeting and the resolutions resolved therein.
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25.2.	All acts done bona fide by any meeting of the Board or of a Committee or by any person acting as a director, shall, notwithstanding it be afterwards discovered that there was some defect in the appointment of any such director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director.
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26.	CHIEF EXECUTIVE OFFICER
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26.1.	The Board shall from time to time appoint one or more persons, whether or not directors, as CEO of the Company and may confer upon such person(s), and from time to time modify or revoke, such titles and such duties and authorities of the Board as the Board may deem fit, subject to such limitations and restrictions as the Board may from time to time prescribe. Such appointment(s) may be either for a fixed term or without any limitation of time, and the Board may from time to time (subject to any additional approvals required under, and the provisions of, the Companies Law and of any contract between any such person and the Company) fix their salaries and compensation, remove, or dismiss them from office and appoint another or others in his or their place or places.
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26.2.	Unless otherwise determined by the Board, the CEO shall have authority with respect to the management and operations of the Company in the ordinary course of business.
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27.	MINUTES

Any minutes of the General Meeting or the Board or any committee thereof, if purporting to be signed by the Chairperson of the General Meeting, the Board or a committee thereof, as the case may be, or by the Chairperson of the next succeeding General Meeting, meeting of the Board or meeting of a Committee, as the case may be, shall constitute prima facie evidence of the matters recorded therein.

28.	INSURANCE, EXCULPATION, AND INDEMNITY

28.1.	Insurance of Office Holders
(a)	The Company may insure against liability of an Office Holder, to the fullest extent permitted under the Statutes.
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(b)	Without derogating from the aforesaid, the Company may enter into a contract to insure the liability of an officer therein for an obligation imposed on him in consequence of an act done in his capacity as an Office Holder, in any of the following cases:
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(1)	A breach of the duty of care vis-a-vis the Company or vis-a-vis another person.
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(2)	A breach of the duty of loyalty vis-a-vis 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;
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(3)	A monetary obligation imposed on him in favor of another person;
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(4)	A monetary liability imposed on such Office Holder in favor of a payment to a injured party at an Administrative Procedure as set forth in Section 52(54)(a)(1)(a) to the Securities Law and expenses regarding Administrative Procedures conducted in connection with such Office Holder and/or in connection with a monetary sanction, including reasonable litigation expenses and reasonable attorney’s fees;
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(5)	Any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an Office Holder in the Company, and to the extent such law requires the inclusion of a provision permitting such insurance in these Articles, then such provision is deemed to be included and incorporated herein by reference (including, without limitation, in accordance with Section 50P of the Israeli Economic Competition Law, 5758-1988, and the regulations promulgated thereunder), if and to the extent applicable).
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28.2.	Indemnity of Office Holders
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The Company may indemnify an Office Holder, to the fullest extent permitted under the Statutes. Without derogating from the aforesaid, the Company may indemnify an Office Holder for a liability or expense imposed on him in consequence of an act done in his capacity as an Office Holder in the Company, as follows:

(1)	a monetary liability incurred by or imposed on the Office Holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent court;

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(2)	reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the Office Holder as a result of an investigation or proceeding filed against the Office Holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding was either (i) concluded without the filing of an indictment against such Office Holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding; (ii) concluded without the filing of an indictment against the Office Holder but with the imposition of a monetary obligation on the Office Holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent; or (iii) in connection with a monetary sanction;
(3)	reasonable litigation expenses, including attorneys’ fees, incurred by the Office Holder or which were imposed on the Office Holder by a court (i) in a proceeding instituted against the Office Holder by the Company, on its behalf, or by a third party, or (ii) in connection with criminal indictment of which the Office Holder was acquitted, or (iii) in a criminal indictment which the Office Holder was convicted of an offense that does not require proof of criminal intent;
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(4)	a monetary liability imposed on the Office Holder in favor of all the injured parties by the breach in an Administrative Procedure as set forth in Section 52(54)(a)(1)(a) to the Securities Law;
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(5)	expenses expended by the Office Holder with respect to an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees; and
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(6)	any other obligation or expense in respect of which it is permitted or will be permitted under applicable law to indemnify an Office Holder, and to the extent such law requires the inclusion of a provision permitting such indemnity in these Articles, then such provision is deemed to be included and incorporated herein by reference (including, without limitation, in accordance with Section 50P(b)(2) of the EC Law, if and to the extent applicable.
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28.3.	Advance Indemnity
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The Company may give an advance undertaking to indemnify an Office Holder therein in respect of the following matters:

(1)	matters as detailed in Article 28.2, provided however, that the undertaking is restricted to events, which in the opinion of the Board, are anticipated in light of the Company’s activities at the time of granting the obligation to indemnify and is limited to a sum or measurement determined by the Board as reasonable under the circumstances; and
(2)	matters as detailed in Articles 28.2(2) through 28.2(6).
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28.4.	Retroactive Indemnity
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The Company may indemnify an Office Holder retroactively with respect of the matters as detailed in Article 28.2, subject to any applicable law.

28.5.	Exculpation

The Company may exempt an Office Holder in advance for all or any of his liability for damage in consequence of a breach of the duty of care vis-a-vis the Company, to the fullest extent permitted under the Statutes. However, the Company may not exempt a director in advance from his liability toward the Company due to the breach of his/her duty of care in a Dividend distribution.

28.6.

Insurance, Exculpation, and Indemnity – General

(a)

The above provisions with regard to insurance, exemption and indemnity are not and shall not limit the Company in any way with regard to its entering into an insurance contract and/or with regard to the grant of indemnity and/or exemption in connection with a person who is not an Office Holder of the Company, including employees, contractors or consultants of the Company, all subject to any applicable law.

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(b)	The Company may enter into a contract in relation to exemption, indemnification and insurance of Office Holders in companies under its control, related companies and other companies in which it has any interest, to the maximum extent permitted under the Statutes, and in this context the foregoing provisions in relation to exemption, indemnification and insurance of Office Holders in the Company shall apply, mutatis mutandis.
(c)	Any amendment to the Companies Law and/or the Statute or any other applicable law adversely affecting the right of any Office Holder to be indemnified, insured or exempt pursuant to Articles 28.1 to 28.5 and any amendments to Articles 28.1 to 28.5 shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify, insure or exempt an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.
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(d)	An undertaking in relation to exemption, indemnification and insurance of an Office Holder as aforesaid may also be valid after the office of such Office Holder in the Company has terminated.
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29.	APPOINTMENT OF AN AUDITOR
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29.1.	Subject to the Statutes, shareholders at an Annual Meeting shall appoint an Auditor for a period ending at the next Annual Meeting, or for a longer period, but no longer than until the third Annual Meeting after the meeting at which the Auditor has been appointed. The same Auditor may be re-appointed.
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29.2.	Subject to the Statutes, the terms of service (including fees) of the Auditor for the audit services shall be determined by the Board, at its discretion, or a committee of the Board if such determination was delegated to a committee, including undertakings or payments to the Auditor. The Board shall report the fees of the Auditor to the Annual Meeting.
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30.	SIGNATORIES
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Signatory rights on behalf of the Company shall be determined from time to time by the Board.

31.	DIVIDENDS
31.1.	The Board may from time declare, and cause the Company to pay, such dividend as may appear to the Board to be justified by the profits of the Company and as permitted by the Companies Law. The Board shall determine the time for payment of such dividends and the record date for determining the shareholders entitled thereto.
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31.2.	Subject to the provisions of these Articles and subject to the rights or conditions attached at that time to any share in the capital of the Company granting preferential, special or deferred rights or not granting any rights with respect to dividends, any dividend paid by the Company shall be allocated among the shareholders entitled thereto in proportion to their respective holdings of the shares in respect of which such dividends are being paid.
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31.3.	No dividend of the Company shall accrue interest.
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31.4.	The Board may determine that the Company (i) may cause any moneys, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of a reserve fund, or to the credit of a reserve fund for the redemption of capital, or in the hands of the Company and available for dividends, or representing premiums received on the issuance of shares and standing to the credit of the share premium account, to be capitalized and distributed among such of the Shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion, on the footing that they become entitled thereto as capital; and (ii) may cause such distribution or payment to be accepted by such Shareholders in full satisfaction of their interest in the said capitalized sum.
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31.5.	All unclaimed dividends or other moneys payable in respect of a share may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. The payment by the Directors of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trustee in respect thereof, and any dividend unclaimed after a period of seven (7) years from the date of declaration of such dividend, and any such other moneys unclaimed after a like period from the date the same were payable, shall be forfeited and shall revert to the Company, provided, however, that the Board may, at its discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a person who would have been entitled thereto had the same not reverted to the Company. The principal (and only the principal) of any unclaimed dividend of such other moneys shall be, if claimed, paid to a person entitled thereto.
31.6.	Any dividend or other moneys payable in cash in respect of a share may be paid by check or payment order sent through the post to, or left at, the registered address of the person entitled thereto or by transfer to a bank account specified by such person (or, if two or more persons are registered as joint holders of such share or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, to the joint holder whose name is registered first in the Register or his bank account or the person who the Company may then recognize as the owner thereof or entitled thereto under these Articles, as applicable, or such person’s bank account), or to such person and at such other address as the person entitled thereto may by writing direct, or in any other manner the Board deems appropriate. Every such check or warrant or other method of payment shall be made payable to the order of the person to whom it is sent, or to such person as the person entitled thereto as aforesaid may direct, and payment of the check or warrant by the banker upon whom it is drawn shall be a good discharge to the Company.
---	---
31.7.	The Board may settle, as it deems fit, any difficulty arising with regard to the distribution of dividends, bonus shares or otherwise, and in particular, to issue certificates for fractions of shares and sell such fractions of shares in order to pay their consideration to those entitled thereto, or to set the value for the distribution of certain assets and to determine that cash payments shall be paid to the Shareholders on the basis of such value, or that fractions whose value is less than NIS 0.01 shall not be taken into account. The Board may instruct to pay cash or convey these certain assets to a trustee in favor of those people who are entitled to a dividend, as the Board shall deem appropriate.
---	---
31.8.	The Board may deduct from any dividend or other moneys payable to any Shareholder in respect of a share any and all sums of money then payable by him or her to the Company on account of calls or otherwise in respect of shares of the Company and/or on account of any other matter of transaction whatsoever.
---	---
(a)	The Board may retain any dividend or other moneys payable or property distributable in respect of a share on which the Company has a lien, and may apply the same in or toward satisfaction of the debts, liabilities, or engagements in respect of which the lien exists.
---	---
(b)	The Board may retain any dividend or other moneys payable or property distributable in respect of a share in respect of which any person is, under Article 11, entitled to become a Shareholder, or which any person is, under said Article, entitled to transfer, until such person shall become a Shareholder in respect of such share or shall transfer the same.
---	---

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31.9.	If two or more persons are registered as joint holders of any share, or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, any one of them may give effectual receipts for any dividend or other moneys payable or property distributable in respect of such share.
32.	REDEEMABLE SECURITIES
---	---

The Company may, subject to applicable law, issue redeemable securities and redeem the same upon terms and conditions to be set forth in a written agreement between the Company and the holder of such securities or in their terms of issuance.

33.	ACCOUNTS

The Company’s books of account shall be kept at the office of the Company, or at such other place or places as the Board may think fit, and they shall always be open to inspection by all directors. No shareholder, not being a director, shall have any right to inspect any account or book or other similar document of the Company, except as conferred by law or authorized by the Board. The Company shall make copies of its annual financial statements available for inspection by the shareholders at the Office of the Company. The Company shall not be required to send copies of its annual financial statements to its shareholders.

34.	DONATIONS

The Company may make donations of reasonable amounts, as the Board may determine in its discretion, to worthy causes, even if such donations are not within the framework of business considerations for maximizing the Company’s profits.

35.	NOTICES
35.1.	Subject to the Statutes, notice or any other document which the Company shall deliver and which it is entitled or required to give pursuant to the provisions of these Articles and/or the Statutes shall be delivered by the Company to any person, in any one of the following manners as the Company may choose: in person, by mail, transmission by email or by other electronic form.
---	---

Any notice or other document which shall be sent shall be deemed to have reached its destination:

(i) in the case of mailing, forty-eight (48) hours after it has been posted, or when actually received by the addressee if sooner than forty-eight hours after it has been posted;

(ii) in the case of overnight air courier, on the next business day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner than three business days after it has been sent;

(iii) in the case of personal delivery, when actually tendered in person, to such addressee;

(iv) in the case of facsimile, email or other electronic transmission, on the first business day (during normal business hours in place of addressee) on which the sender receives automatic electronic confirmation by the addressee’s facsimile machine that such notice was received by the addressee or delivery confirmation from the addressee’s email or other communication server.

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If a notice is, in fact, received by the addressee, it shall be deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 35.

Should it be required to prove delivery, it shall be sufficient to prove that the notice or document sent contains the correct mailing or e-mail details as registered in the Register or any other address which the shareholder submitted in writing to the Company as the address and fax or e-mail details for the submission of notices or other documents.

Notwithstanding anything to the contrary hereunder, subject to the provisions of the Statutes, a notice to a shareholder (including a notice by the Company of a General Meeting) may be served, as a general notice to all shareholders, published by the Company on the website of (i) the SEC and/or (ii) the Company, in accordance with applicable rules and regulations of any stock market upon which the Company’s shares are listed and, if so published, shall be deemed to have been duly given on the date of such publication to any shareholder.

In cases where it is necessary to give advance notice of a particular number of days or notice which shall remain in effect for a particular period, the day the notice was sent shall be excluded and the scheduled day of the meeting or the last date of the period shall be included in the count.

The Company shall not be required to give notice to its registered shareholders pursuant to the Companies Law, unless otherwise required by the Statutes. Subject to the Statutes, the Company shall not be required to send notices to any shareholder who is not registered in the Register or has not provided the Company with accurate and sufficient mailing details.

35.2.	Any notice to be given to the shareholders shall be given, with respect to joint shareholders, to the person whose name appears first in the Register as the holder of the said share, and any notice so given shall be sufficient notice for all holders of the said share.
35.3.	Any notice or other document served upon or sent to any shareholder in accordance with these Articles shall, notwithstanding that he be then deceased or bankrupt, and whether the Company received notice of his death or bankruptcy or not, be deemed to be duly served or sent in respect of any shares held by him (either alone or jointly with others) until some other person is registered in his stead as the holder or joint holder of such shares, and such service or sending shall be a sufficient service or sending on or to his heirs, executors, administrators or assigns and all other persons (if any) interested in such share.
---	---
35.4.	The accidental omission to give notice to any shareholder or the non-receipt of any such notice shall not cancel or annul any action made in reliance on the notice.
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36.	WINDING-UP
---	---

If the Company is wound up, then, subject to applicable law and to the rights of the holders of shares with special rights upon winding up, the assets of the Company available for distribution among the shareholders shall be distributed to them in proportion to the nominal value of their respective holdings of the shares in respect of which such distribution is being made.

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37.	BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
37.1.	Notwithstanding any other provision of these Articles and subject to the provisions of applicable law, the Company shall not engage in any Business Combination (as defined below) with any Interested Shareholder (as defined below) for a period of three (3) years following the time that such shareholder became an Interested Shareholder, unless:
---	---
(a)	Prior to the time that such shareholder become an Interested Shareholder, the Board approved either the Business Combination or the transaction which resulted in the shareholder becoming an Interested Shareholder, or
---	---
(b)	upon consummation of the transaction which resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the Voting Shares (as defined below) of the Company outstanding at the time the transaction commenced excluding for purposes of determining the Voting Shares outstanding (but not the outstanding Voting Shares owned by the Interested Shareholder) those shares owned by persons who are directors and also officers, or
---	---
(c)	at the time that such shareholder became an Interested Shareholder, or subsequent to such time, the Business Combination is approved by the Board and authorized at a General Meeting of shareholders by the affirmative vote of at least 66 2/3% of the Voting Shares outstanding that are not owned by the Interested Shareholder.
---	---
37.2.	The restrictions set forth in this Article shall not apply if shareholder becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the shareholders cease to be an interested shareholder; and (ii) would not, at anytime within the 3-year period immediately prior to a Business Combination between the Company and such shareholder, have been an Interested Shareholder but for the inadvertent acquisition of ownership;
---	---
37.3.	As used in this Article only, the term:
---	---
(a)	“Affiliate” means a Person (as defined below) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another Person.
---	---
(b)	“Associate” when used to indicate a relationship with any Person, means (A) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent (20%) or more of any class of Voting Shares, (B) any trust or other estate in which such Person has at least a twenty percent (20%) beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, and (C) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.
---	---
(c)	“Business Combination” when used in reference to the Company and any Interested Shareholder of the Company, means:
---	---
(1)	any merger or consolidation of the Company or any direct or indirect majority owned subsidiary of the Company with (1) the Interested Shareholder, or (2) with any other corporation, partnership, unincorporated association, or other entity if the merger or consolidation is caused by the Interested Shareholder and as a result of such merger or consolidation subsection (a) of this Article is not applicable to the surviving entity;
---	---
(2)	any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a shareholder of such Company, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of the Company or of any direct or indirect majority owned subsidiary of the Company, which assets have an aggregate market value equal to ten percent (10%) or more of either the aggregate market value of all of the assets of the Company determined on a consolidated basis or the aggregate market value of all of the outstanding shares of the Company.
---	---

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(3)	any transaction which results in the issuance or transfer by the Company or by any direct or indirect majority-owned subsidiary of the Company of any shares of the Company or of such subsidiary to the Interested Shareholder, except (1) pursuant to the exercise, exchange or conversion of securities exercisable for or convertible into shares of the Company or any such subsidiary, which securities were outstanding prior to the time that the Interested Shareholder became such; (2) pursuant to Section 337(a) or Section 337(a1) of the Companies Law, (3) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company or any such subsidiary, which security is distributed pro-rata to all holders of shares of the Company subsequent to the time the Interested Shareholder became such; (4) pursuant to an exchange offer by the Company to purchase shares made on the same terms to all holders of said shares; or (5) any issuance or transfer of shares by the Company; provided, that in no case under (2) through (5) above shall there be an increase in the Interested Shareholder’s proportionate share of the shares or of the voting shares of the Company;
(4)	any transaction involving the Company or any direct or indirect majority-owned subsidiary of the Company which has the effect directly or indirectly of increasing the proportionate share of the shares of any class or series or securities convertible into the shares of any class or series of the Company or of any such subsidiary which is owned by the Interested Shareholder except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares not caused, directly or indirectly, by the Interested Shareholder; or
---	---
(5)	any receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a shareholder of such company), of any loans, advances, guarantees, pledges, or any other financial benefits (other than those expressly permitted in subparagraphs (1) through (4) above) provided by or through the Company or any direct or indirect majority owned subsidiary.
---	---
(d)	“Control” including the term “Controlling”, “Controlled by” and “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of Voting Shares, by contract or otherwise. A Person who is the owner of twenty percent (20%) or more of the outstanding Voting Shares of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds Voting Shares in good faith and not for the purpose of circumventing this Article as an agent, bank, broker, nominee, custodian, or trustee for one or more owners who do not individually or as a group have control of such entity.
---	---
(e)	“Interested Shareholder” means any person (other than the Company and any direct or indirect majority-owned subsidiary of the Company) that (A) is the Owner of fifteen percent (15%) or more of the outstanding Voting Shares of the Company, or (B) is an Affiliate or Associate of the Company and was the Owner of fifteen percent (15%) or more of the outstanding Voting Shares of the Company at any time within the 3-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Shareholder, and the Affiliates and Associates of such person. Notwithstanding the foregoing, the term Interested Shareholder shall not include any Person whose ownership of outstanding Voting Shares in excess of the fifteen percent (15%) limitation set forth herein is the result of action taken solely by the Company; provided that such Person shall be an Interested Shareholder if thereafter such person acquires, without prior approval of the Board, additional Voting Shares of the Company, except as a result of further corporate action not caused, directly or indirectly, by such Person. For the purpose of determining whether a person is an Interested Shareholder, the Voting Shares of the Company deemed to be outstanding shall include shares deemed to be owned by the person through application of paragraph (ix) of this subsection but shall not include any other unissued shares of the Company which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
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Page 27

(f)	“Person” means any individual, corporation, partnership, unincorporated association or other entity.
(g)	“Share” means with respect to any corporation shares of its capital and with respect to any other entity or equity interest.
---	---
(h)	“Voting Shares” mean with respect to any corporation Shares of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity.
---	---
(i)	“Owner” including the terms “own” and “owned”, when used with respect to any Share, means a Person that individually or with or through any of its Affiliates or Associates:
---	---
(1)	beneficially owns such share, directly or indirectly: or
---	---
(2)	has (1) the right to acquire such share (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, warrants or options, or otherwise; provided however, that a Person shall not be deemed the owner of share tendered pursuant to a tender or exchange; or (2) the right to vote such share pursuant to any agreement, arrangement or understanding; provided however, that a person shall not be deemed the owner of any share because of such person’s right to vote such share if the agreement, arrangement, or understanding to vote such share arises solely from a recoverable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more Persons: or
---	---
(3)	has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (2) of clause B of this paragraph) or disposing of such Share with any other Person that beneficially owns or whose Affiliates or Associates beneficially own, directly or indirectly, such share.
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37.4.	Any change to this Article 37 shall only be adopted by a resolution of the shareholders of the Company, adopted by the holders of securities representing at least 85% of the Voting Shares of the Company then outstanding.
---	---
38.	AMENDMENT
---	---

Any amendment of these Articles shall require, in addition to the approval of the General Meeting of shareholders in accordance with these Articles, also the approval of the Board with the affirmative vote of a majority of the then serving Directors

39.	FORUM SELECTION
40.1.	Unless the Company consents in writing to the selection of an alternative forum:
---	---
(a)	the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933 as amended, including against any person or entity, including such claims brought against the Company, its directors, officers, employees, advisors, attorneys, accountants or underwriters;
---	---
(b)	The Tel Aviv District Court (Economic Division) shall be the exclusive forum for (A) any derivative action or proceeding brought on behalf of the Company, (B) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s shareholders, or (C) any action asserting a claim arising pursuant to any provision of the Companies Law or the Securities Law and providing that any person or entity purchasing or otherwise acquiring or holding any interest in shares of the Company shall be deemed to have notice of and consented to these provisions.
---	---
40.2.	Any person or entity purchasing or otherwise acquiring any interest in any shares of the Company shall be deemed to have notice of and consented to the provisions of this Article.
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* * *

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Exhibit 2.1

DESCRIPTION OF SHARECAPITAL AND ARTICLES OF ASSOCIATION

The following descriptions of our share capital and provisions of our amended and restated articles of association are summaries and are qualified by reference to the amended and restated articles of association, which are filed as an exhibit to this Annual Report on Form 20-F.

General

Our authorized share capital consists of 90,000,000 ordinary shares, no par value per share.

All of our outstanding ordinary shares will be validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any preemptive rights.

Registration Number and Purpose

Voting Rights and Conversion

All ordinary shares will have identical voting and other rights in all respects. None of our major shareholders have different voting rights than our other shareholders.

Transfer of Shares

Liability to Further Capital Calls

Business Combinations

●	prior to the time that such shareholder became an interested shareholder, our board of directors approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder;
●	upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced, excluding for purposes of determining our voting shares outstanding (but not the outstanding voting shares owned by the interested shareholder) those shares owned by persons who are directors and also officers; or
---	---
●	at the time that such shareholder became an interested shareholder, or subsequent to such time, the business combination is approved by our board of directors and authorized at a general meeting of shareholders by the affirmative vote of at least 66 2/3% of our voting shares outstanding that are not owned by the interested shareholder.
---	---

Election of Directors

External directors are elected for an initial term of three years, may be elected for additional three-year terms, and may be removed from office pursuant to the terms of the Companies Law.

Dividend and Liquidation Rights

Exchange Controls

Shareholder Meetings

Under Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors include a matter in the agenda of a general meeting to be convened in the future (or, with respect to a company whose shares are listed for trade on an exchange outside of Israel, 5% if the matter is the appointment or removal of a director, provided that it is appropriate to discuss sucha matter at the general meeting. Our amended and restated articles of association contain procedural guidelines and disclosure items with respect to the submission of shareholder proposals for shareholders meetings.

●	amendments to our amended and restated articles of association;
●	appointment or termination of our auditors;
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●	election of directors, including external directors (unless otherwise determined in our amended and restated articles of association);
---	---
●	approval of certain related party transactions;
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●	increases or reductions of our authorized share capital;
---	---
●	a merger; and
---	---
●	the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
---	---

Voting Rights

Quorum Requirements

Vote Requirements

Under the Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder and (ii) the terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if not extraordinary) requires special approval. Certain transactions with respect to remuneration of our office holders and directors require further approvals. Another exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting, in person or by proxy and voting on the resolution.

Access to Corporate Records

Modification of Class Rights

Acquisitions Under Israeli Law

Full Tender Offer. A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and outstanding share capital is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.

Special Tender Offer. The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholder approval, (2) was from a 25% or greater shareholder of the company which resulted in the acquirer becoming a 25% or greater shareholder of the company, or (3) was from a 45% or greater shareholder of the company which resulted in the acquirer becoming a 45% or greater shareholder of the company.

Merger. The Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described under the Companies Law are met, by a majority vote of each party’s shares, and, in the case of the target company, a majority vote of each class of its shares, voted on the proposed merger at a shareholders meeting.

Anti-Takeover Measures Under Israeli Law

Borrowing Powers

Changes in Capital

Establishment

We were incorporated under the laws of the State of Israel on February 13, 2017. We are registered with the IRC.

Exclusive Forum

Any person or entity purchasing or otherwise acquiring any interest in our share capital shall be deemed to have notice of and to have consented to these choice of forum provisions.

Exhibit 4.2

NEUROSENSE THERAPEUTICS LTD.

2018 SHARE INCENTIVE PLAN

AMENDED BY THE BOARD OF DIRECTORS

ON AUGUST 30, 2022

NEUROSENSE THERAPEUTICS LTD.

2018 SHARE INCENTIVE PLAN

1. Purpose. The purpose of this 2018 Share Incentive Plan (the “Plan”) is to advance the interests of the Company and its shareholders by attracting and retaining the best available personnel for positions of substantial responsibility, providing additional incentives to employees, officers, directors, Consultants and promoting a close identity of interests between those persons and the Company and/or an Affiliate (as defined below). The provisions specified hereunder apply only to persons who are subject to taxation by the State of Israel with respect to their Awards (as defined below).

2. Definitions

2.1Defined Terms. Initially capitalized terms, as used in this Plan, shall have the meaning ascribed thereto as set forth below:

“102 Participant”	means, an Israeli tax resident who is an employee or a director of the Company or an Israeli Affiliate, on behalf of whom an Award is granted under Section 102.
“Administrator”	means the Board, or a committee to which the Board shall have delegated power to act on its behalf with respect to the Plan. The Administrator, if it is a committee, shall consist of such number of members (but not less than two (2)) as may be determined by the Board.
“Affiliate(s)”	means a present or future company that either (i) Controls the Company, (ii) is Controlled by the Company; or (iii) is Controlled by the same person or entity that Controls the Company.
“Applicable Law”	means all laws applicable to the grant of Awards pursuant to this Plan, including but not limited to the requirements under tax laws, social security laws, security laws, companies laws, any stock exchange or quotation system on which the Shares are listed or quoted, the applicable law in the country or jurisdiction of any such system, and the applicable law of any other country or jurisdiction where Awards are granted under the Plan.
“Articles”	means the Articles of Association of the Company, as may be amended from time to time.
“Award”	means, individually or collectively, Options, Shares, Restricted Shares, or Restricted Share Units.
“Board”	means the board of directors of the Company.
“CapitalGains Track Through a Trustee”	means the Company’s choice of the capital gains track of taxation for share allocation to employees under Section 102 through a trustee.
“Cause”	means, when used in connection with the termination of a Participant’s employment with, or services to the Company or an Affiliate, and forming the basis of such termination: (a) the definition ascribed to Cause in the individual employment agreement or services agreement between the Company and/or its Affiliate and the Participant; or (b) if no such definition exists, then any of the following, including but not limited to: dishonesty toward the Company or Affiliate, insubordination, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information and conduct substantially prejudicial to the business of the Company or Affiliate; or any substantial breach by the Participant of: (A) his or her employment or service agreement with the Company or an Affiliate; or (B) any other obligations towards the Company or an Affiliate. For the sake of clarity, it is hereby clarified that the Administrator may adopt another definition(s) for the term “Cause” in the applicable Grant Letter.

“Commencement Date”	means the date of commencement of the vesting schedule with respect to a Grant of Awards which, unless otherwise determined by the Administrator, shall be the date on which such Awards shall be granted.
“Company”	means NeuroSense Therapeutics Ltd., a company incorporated under the laws of the State of Israel.
“Consultant”	means an Israeli resident, who serves as a consultant or adviser of the Company or of an Israeli resident Affiliate and is not entitled to receive Awards under Section 102, on behalf of whom an Award is granted under Section 3(i). For the sake of clarity, non-Israeli consultants or advisers to the Company or any of its Affiliates may only be granted Awards under Section 3(i).
“Control” or “Controlled”	shall have the meaning ascribed thereto in Section 102.
“Date of Grant”	shall have the meaning set forth in Section 6.2 of this Plan.
“Director”	means a member of the Board.
“Disability”	means total and permanent physical or mental impairment or sickness of a Participant, making it impossible for the Participant to continue such Participant’s employment with or service to the Company or Affiliate. For the sake of clarity, it is hereby clarified that the Administrator may adopt another definition(s) for the term “Disability” in the applicable Grant Letter.
“Earned Income Track”	means the Company’s choice of the work income course of taxation for share allocation to employees under Section 102 through a trustee.
“Election”	shall have the meaning set forth in Section 11.1 of this Plan.
“Employee”	shall have the meaning set forth in Section 102.
“Exercise Conditions”	means a vesting schedule and/or Performance Conditions.
“Exercise Notice”	shall have the meaning set forth in Section 7.4(a) of this Plan.
“Exercise Price”	means the price determined by the Administrator in accordance with Section 7.1 below which is to be paid to the Company in order to exercise a Granted Award and convert such Award into an Underlying Share.
“Exercised Share”	means a Share issued upon exercise of an Award or vesting of an Award, as applicable, or, if applicable, a freely transferable Share issued to a Participant not resulting from another type of Award.

“Fair Market Value”	means, as of any date, the value of a Share determined as follows: (i) if the Company’s shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, Nasdaq Global Market or the Nasdaq Capital Market of the Nasdaq Stock Market, the Fair Market Value shall be the closing sales price of such shares (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; without derogating from the above and solely for the purpose of determining the tax liability pursuant to Section 102 (and in particular Section 102(b)(3)), if on the date of grant the Company’s shares are listed on any established stock exchange or a national market system or if the Company’s shares will be registered for trading within ninety days following the date of grant under the Section 102 Capital Gains Track Through a Trustee, the Fair Market Value of a Share on its date of grant shall be determined in accordance with the average value of the Company’s shares during the thirty trading days immediately preceding the date of grantor during the thirty (30) trading days immediately following the date of registration for trading (if the Company’s shares will be listed within ninety days following the date of grant), as the case may be; or (ii) if the Company’s shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the Company’s shares on the last market trading day prior to the day of determination; or (iii) in the absence of an established market for the Company’s shares, the Fair Market Value shall be determined in good faith by the Administrator (including in accordance with an independent third party valuation of the Company which may be obtained by the Administrator).
“Grant Letter”	means a written agreement between the Company to a Participant evidencing the terms and conditions of an individual grant of Awards. The Grant Letter shall specify among others: (i) the Tax Provision under which the Award is granted; (ii) the Tax Track that the Company has elected according to Section 11 of the Plan (if applicable); (iii) the Exercise Price, if applicable; (iv) the number of Awards granted to the Participant; (v) the Date of Grant; and (vi) the vesting schedule (including acceleration events, if any).
“Grant of Awards” or “Granted Awards”	means the grant of Awards by the Company to a Participant pursuant to a Grant Letter.
“Holding Period”	means with respect to Awards granted under Section 102, the minimum period in which the Awards granted to a Participant or, upon exercise thereof, the Underlying Shares, are to be held by the Trustee on behalf of the Participant, in accordance with Section 102, and pursuant to the Tax Track which the Company elected.
“IPO”	means the initial public offering of shares of the Company and the listing of such shares for trading on any recognized stock exchange or over-the-counter or computerized securities trading system.
“ITA”	means the Israeli Tax Authority.
“Merger Transaction” or “Merger”	means any of the following but excluding any Re-organization or Spin-off Transaction: (a) a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries; or (b) a sale of all or substantially all of the shares of the share capital of the Company whether by a single transaction or a series of related transactions which occur either over a period of 12 months or within the scope of the same acquisition agreement; or (c) a merger, consolidation or like transaction of the Company with or into another corporation in which the Company is not the surviving entity, including a reverse triangular merger but excluding a merger which falls within the definition of Re-organization. For the sake of clarity, whether a transaction is a “Merger Transaction” or “Merger” shall be finally and conclusively determined by the Board in its absolute discretion.

“Option”	means an option to purchase one Share of the Company.
“Non-Qualified Participant”	means a person who is not qualified to receive Awards under the provisions of Section 102, on behalf of whom an Award is granted under Section 3(i).
“Participant”	means 102 Participant, or a Non-Qualified Participant, or a Consultant.
“Performance Based Award”	means a performance based Award as defined in Section 8B.1 below.
“Performance Conditions”	mean Performance Conditions as defined in Section 8B.1 below
“Plan” or “Incentive Plan”	means this 2018 Share Incentive Plan, as may be amended from time to time.
“Re-organization”	means, any re-domestication of the Company, share flip, creation of a holding company for the Company which will hold substantially all of the shares of the Company or any other transaction involving the Company in which the ordinary shares of the Company outstanding immediately prior to such transaction continue to represent, or are converted into or exchanged for shares that represent, immediately following such transaction, at least a majority, by voting power, of the share capital of the surviving, acquiring or resulting corporation and in which there is no material change to the interests held by the Shareholders prior to such transaction and thereafter.
“Restricted Share”	means a Share issued under this Plan to a Participant for such consideration, if any, and subject to such restrictions as established by the Company, as detailed in Section 8A below
“RSU”	means Restricted Share Unit, as defined in Section 8 below.
“Retirement”	means the termination of a Participant’s employment as a result of his or her reaching the earlier of (i) the age of retirement as defined by the Applicable Law; or (ii) the age of retirement specified in the Participant’s employment agreement.
“Section 102”	means Section 102 of the Tax Ordinance.
“Section 102 Rules”	means the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003.
“Section 3(i)”	means section 3(i) of the Tax Ordinance and the applicable rules thereto or under applicable regulations.
“Service Provider”	means an Employee, Director or Consultant.
“Share” “Shareholders”	means, ordinary share(s) of the Company, having a no par value. means, the shareholders of the Company.
“Spin-off Transaction”	means, any transaction in which assets of the Company are transferred or sold to a company or corporate entity in which the Shareholders hold equal stakes, pro-rata to their ownership of the Company.
“Tax Ordinance”	means the Israeli Income Tax Ordinance [New Version], 1961, as amended, and any regulations, rules, orders or procedures promulgated thereunder.

“Tax Provision”	means, with respect to the Grant of Awards, the provisions of one of the three Tax Tracks in Section 102, or the provisions of Section 3(i).
“Tax Track”	means one of the three tax tracks described under Section 102, specifically: (1) the Capital Gains Track Through a Trustee; (2) Earned Income Track; or (3) the Income Tax Track Without a Trustee.
“Term of the Awards”	means, with respect to granted but unexercised Awards, the time period set forth in Section 9 below.
“Trust Agreement”	means the agreement/s between the Company and the Trustee regarding the Awards granted under this Plan to Section 102 Partipants and the underlying Shares to be held in trust, as in effect from time to time.
“Trustee”	means a trustee appointed by the Company and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Tax Ordinance, to hold in trust, the Granted Awards and the Underlying Shares issued upon exercise of such Awards, on behalf of Participants. The Trustee may be replaced from time to time subject to the provisions of Section 102.
“Underlying Shares”	means Shares issued or to be issued upon exercise of the Awards granted in accordance with the Plan.

2.2 General. Without derogating from the meanings ascribed to the capitalized terms above, all singular references in this Plan shall include the plural and vice versa, and reference to one gender shall include the other, unless otherwise required by the context.

3. SharesAvailable for Awards. The total number of Underlying Shares reserved for issuance under the Plan and any modification thereof, shall be:

(a) 1,400,000 Shares, plus

(b) an annual increase to be added as of the first day of the Company’s fiscal year, beginning in 2022 and occurring each year thereafter through 2032, equal to the 4% of the total number of Shares issued and outstanding on a fully-diluted basis as of the end of the Company’s immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the Board in its sole discretion).

Such number of Shares shall be subject to adjustment as required for the implementation of the provisions of the Plan, in accordance with Section 4 below. In the event that Awards are expired or forfeited or otherwise terminated in accordance with the provisions of the Plan, such expired or terminated Awards shall become available for future grants under the Plan.

4. Adjustments

4.1 Changesin Capitalization. Subject to any required action by the Shareholders, the number of Underlying Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, and the per share exercise price of each such Award, shall be proportionately and equitably adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, combination, reclassification, the payment of a stock dividend on the Shares or any other increase or decrease in the number of such Shares effected without receipt of consideration by the Company without changing the aggregate exercise price, provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. The Administrator may, if it so determines in the exercise of its sole discretion, also make provision for proportionately adjusting the number or class of securities covered by any Award, as well as the price to be paid therefor, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of its outstanding Shares, and in the event of the Company being consolidated with or merged into any other corporation.

4.2 MergerTransaction. In the event of a Merger Transaction, any and all outstanding and unexercised unvested Awards will be cancelled for no consideration, unless determined otherwise by the Administrator. The Administrator at its sole and absolute discretion may decide: (i) if and how the unvested Awards, as the case may be, shall be canceled, exchanged, assumed, replaced, repurchased or accelerated; (ii) if and how vested Awards (including Awards with respect to which the vesting period has been accelerated) shall be exercised, exchanged, assumed, replaced and/or sold by the Trustee or the Company (as the case may be) on behalf of the Participants, including determining that all unexercised vested Awards shall be cancelled for no consideration upon a Merger Transaction; (iii) how Underlying Shares issued upon exercise of the Options (or, if applicable, the vesting of other Awards) granted under of the trust tracks and held by the Trustee on behalf of 102 Participants shall be replaced and/or sold by the Trustee on behalf of these Participant; and (iv) how any treatment of Awards and underlying Shares may be made subject to any payment or escrow arrangement, or any other arrangement determined within the scope of the Merger Transaction in relation to Awards and underlying Shares of the Company.

In the case of assumption and/or substitution of Awards, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the Grant Letter shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Board, which its determination shall be at its sole discretion and final. The grant of any substitutes for the Awards to Participants further to a Merger Transaction, as provided in this section, shall be considered to be in full compliance with the terms of this Plan. The value of the exchanged Awards pursuant to this section shall be determined in good faith solely by the Board, based on the Fair Market Value, and its decision shall be final and binding on all the Participants.

For the purposes of this section, the mechanism for determining the assumption or exchange as aforementioned shall be agreed upon between the Board and the successor company.

Without derogating from the above, in the event of a Merger Transaction, the Board shall be entitled, at its sole discretion, to require the Participants to exercise all vested Awards within a set time period and sell all of their Shares on the same terms and conditions as applicable to the other shareholders selling their Company’s Shares as part of the Merger Transaction. Each Participant acknowledges and agrees that the Board shall be entitled, subject to any applicable law, to authorize any one of its members to sign any agreement and any share transfer deeds in customary form with respect to the Shares held by such Participant and that such agreement and share transfer deed, as applicable, shall bind the Participant.

Despite the aforementioned and for the avoidance of any doubt, if and when the method of treatment of Awards within the scope of a Merger Transaction, as provided above, will in the sole opinion of the Board prevent the consummation of the Merger Transaction, or materially risk the consummation of the Merger Transaction, the Board may determine different treatment for different Awards held by Participants such that not all Awards will be treated equally within the scope of the Merger Transaction.

4.3 Fractionof Shares. In the event that the Company will be required to issue to a Participant a fraction of a Share pursuant to this Section 4, the Company will not issue fraction of a Share and the number of Shares shall be rounded down to the closest whole number of Shares.

4.4 Calculation. For the purposes of this section, the Company’s calculation will be final, and the Participant shall have no claims or demands against the Company or anyone on its behalf.

4.5 Re-Organization. In the event of a Re-Organization the Shares underlying the Awards subject to the Plan shall be exchanged or converted into Shares of the Company or successor company in accordance with the exchange effectuated in relation to the Shares of the Company, and the Exercise Price and quantity of shares shall be adjusted in accordance with the terms of the Re-organization. The adjustments required thereby shall be determined in good faith solely by the Board.

4.6****Spin-Off Transaction. In the event of a Spin-Off Transaction, the Board may determine that the holders of Awards shall be entitled to receive equity in the new company formed as a result of the Spin-Off Transaction, in accordance with equity granted to the ordinary Shareholders within the Spin-Off Transaction, taking into account the terms of the Awards, including the vesting schedule and Exercise Price. The determination regarding the Participant’s entitlement within the scope of a Spin-Off Transaction shall be in the sole and absolute discretion of the Board.

5. Administrationof the Plan

5.1 Power. Subject to the Applicable Law, the Articles and any resolution to the contrary by the Board, the Administrator is authorized, at its sole and absolute discretion, to exercise all powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan (subject to the approval of the Board, if such approval is required by the Applicable Law) including, without limitation:

(A) to determine: (i) the Participants in the Plan, the number of Awards for each Participant’s benefit and the Exercise Price; (ii) the time or times at which Awards shall be granted; (iii) whether, to what extent, and under what circumstances an Award may be settled, canceled, forfeited, exchanged, or surrendered; (iv) any terms and conditions in addition to those specified in the Plan under which an Award may be granted; (v) any measures, and to take any actions, as deemed necessary or advisable for the administration and implementation of the Plan; (vi) the terms and conditions under which a Participant may elect to receive Ordinary Shares upon the exercise of the Award or in exchange for the Underlying Shares; (vii) subject to Applicable Law, to make an Election and (viii) to appoint a Trustee; and

(B) to interpret the provisions of the Plan and to take all actions resulting therefrom including without limitation: (i) subject to Section 7 below, to accelerate the date on which Granted Award under the Plan becomes exercisable; (ii) to waive or amend Plan provisions relating to exercise of Awards, including exercise of Awards after termination of employment, for any reason; and (iii) to amend any of the terms of the Plan, or any prior determinations of the Administrator.

5.2 Limitations. Notwithstanding the provisions of Section 5.1 above, no interpretations, determinations or actions of the Administrator shall contradict the provisions of Applicable Law, and no waiver or amendment with respect to the Plan shall have a material adverse affect on any Participant’s rights in connection with any Granted Award under the Plan without receiving the consent of such Participant.

6. Grantof Options

6.1 Conditionsfor Granting Options. Options may be granted at any time after the fulfillment of all of the following conditions: (i) the Plan has been approved by the necessary corporate bodies of the Company; (ii) thirty (30) days after a request for approval of the Plan has been filed for approval with the ITA or any longer period, as pursuant to the requirements of the Tax Ordinance; (iii) the Grant has been approved by the necessary corporate bodies of the Company; and (iv) all other approvals, consents or requirements necessary by Applicable Law have been received or met.

6.2 Dateof grant. The date on which Options shall be deemed granted under the Plan shall be the date on which the Company’s Board approved the grant or the date specified as the date of grant in the Grant Letter, if specified (the “Date of Grant”).

6.3 Eligibilityfor Options. The Administrator may grant Options to any Employee, officer, Director, or Consultant of the Company and its Affiliates.

6.4 Grant Letter. Any grant of Options to a Participant shall be made in a form of a Grant Letter and shall include a copy of the Plan. The receipt by a Participant of such Grant Letter shall be deemed as consent by such Participant that the Option is subject to all the terms and conditions of the Grant Letter and the Plan.

6.5 MaterialBreach. In an event of a material breach by a Participant of the terms of this Plan or the Grant Letter provided to the Participant, or the applicable engagement agreement with such Participant, and without derogating from any of the remedies available to the Company under any Applicable Law, the Company may, at its sole discretion, after sending a written notice to such Participant, forfeit the right of the Participant to some or all the Options granted to such Participant.

7. Exerciseof Options and Sale of Shares

7.1 ExercisePrice**; Purchase Price**. The Exercise Price per Underlying Share deliverable upon the exercise of an Option shall be determined by the Administrator. The Exercise Price shall be set forth in the respective Grant Letter.

7.2 VestingSchedule. All Options granted on a certain date may be subjected to continued employment with or service to the Company or Affiliate by the Participant, become vested and exercisable in accordance with the vesting schedule as shall be determined by the Administrator for each Participant and detailed in the respective Grant Letter.

7.3 minimumExercise. Unless otherwise determined by the Administrator, no exercise of Options by any Participant shall be for a quantity of less than 10% of the Granted Options. An Option may not be exercised for fractional shares. The exercise of a portion of the Granted Options shall not cause the expiration, termination or cancellation of the remaining unexercised Options.

7.4 Mannerof Exercise. An Option may be exercised by and upon the fulfillment of the following prerequisite terms and conditions:

(A) ExerciseNotice- The signing by the Participant, and delivery to both the Company (at its principal office) and the Trustee (if the Options are held by a Trustee), of an exercise notice form as prescribed by the Administrator, with such details including but not limited to: (i) the identity of the Participant; (ii) the number of Options to be exercised; and (iii) the Exercise Price to be paid (the “ExerciseNotice”).

(B) ExercisePrice- The payment by the Participant to the Company, in such manner as shall be determined by the Administrator, of the Exercise Price with respect to all the Options exercised, as set forth in the Exercise Notice.

(C) Issuanceof Underlying Shares- Upon the delivery of a duly signed Exercise Notice and the payment to the Company of the Exercise Price with respect to all the Options specified therein, the Company shall issue the Underlying Shares to the Trustee (according to the applicable Holding Period) or to the Participant, as the case may be.

(D) Expenses- All costs and expenses including broker fees and bank commissions, derived from the exercise of Options or Underlying Shares, shall be borne solely by the Participant.

7.5 Net Exercise. Notwithstanding the provisions of Section 7.4 above, the Board may determine (and, if so, only if indicated the same in the Grant Letter or amendment thereto) that Options may be exercised (either as an alternative for the cash exercise method in Section 7.4 or as the only exercise method) using the following method (the “Net Exercise”):

(a) Upon exercise of the Options, the Company shall issue to the Participant (or for his benefit) the Net Exercise Shares (as defined below), and the following formula shall apply:

X=Y(A-B) / A

Whereas:

X = The number of Shares resulting from the exercise of the Options (the “Net Exercise Shares”).

Y = The number Options in respect of which an Exercise Notice has been delivered to the Company.

A= The Fair Market Value.

B= The Exercise Price.

(b) The Participant shall not be required to pay to the Company any sum with respect to the exercise of such Options.

(c) In any event, no fractional Shares will be issued to the Participant and the number of Shares granted to the Participant under the Plan shall be rounded off (upward or downward, as the Administrator shall determine) to the nearest whole number.

7.6 ExerciseRestrictions. Notwithstanding anything to the contrary herein, in the event the Participant initiates any legal proceedings to be maintained or instituted against the Company or its Representatives or participates in any manner in any legal proceedings against the Company or its respective Representatives at any time, the Participant’s right to exercise any unexercised Options granted to such Participant, whether vested or not on such date, shall cease as of such date and the Options shall thereupon expire. For purposes of this Section only, the term “Representatives” shall mean the respective past, present and future officers, directors, employees, consultants, holders of equity securities, Affiliates, successors and assigns.

8. RestrictedShare Units

8.1 Subject to the sole and absolute discretion and determination of the Administrator, the Administrator may decide to grant under the Plan, Restricted Share Unit(s) (“RSU(s)”). A RSU is a right to receive a Share of the Company, under certain terms and conditions, for no consideration. Upon the lapse of the Exercise Conditions of a RSU, such RSU shall automatically vest into an Exercised Share of the Company (subject to adjustments under Section 4 herein).

8.2 Unless determined otherwise by the Administrator, in the event of a Termination of Employment (as defined under section 11.1 below) of a Participant, for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then all RSUs theretofore granted to such Participant when such Participant was a Service Provider of the Company that are not vested on the date of Termination of Employment, shall terminate immediately and have no legal effect.

8.3 All other terms and conditions of the Plan applicable to Options (section 6 and 7 above), shall apply to RSUs, mutatis mutandis. It is clarified, that without deviating from the foregoing in Sub-Section 8.2, the provisions of Section 11 herein, shall, mutatis mutandis, apply to RSUs in the event of Termination of Employment (as defined under section 11.1 below).

8A.Restricted Share

8A.1 Restricted Share Awards may be granted upon such terms and conditions, as the Administrator shall determine.

8A.2 Purchase Price. No monetary payment (other than payments made for applicable Taxes) shall be required as a condition of receiving Shares pursuant to a grant of Restricted Shares.

8A.3 Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Shares may (but need not) be made subject to Exercise Conditions as described herein, as shall be established by the Administrator and set forth in the applicable Grant Letter evidencing such Award. During any restriction period in which Shares acquired pursuant to an award of Restricted Shares remain subject to Exercise Conditions, such Shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of unless otherwise provided in the Plan. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of Shares hereunder, and the Company may place appropriate legends evidencing any such transfer restrictions on the relevant share certificates.

8A.4 Voting Rights; Dividends and Distributions. Except as provided in this section and in any Grant Letter, during any restriction period applicable to Shares subject to an award of Restricted Shares, the Participant shall have all of the rights of a shareholder of the Company holding Shares, including the right to receive all dividends and other distributions paid with respect to such Shares. However, in the event of a dividend or distribution paid in Shares or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4, any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s award of Restricted Shares shall be immediately subject to the same Exercise Conditions as the Shares subject to the award of Restricted Shares with respect to which such dividends or distributions were paid or adjustments were made.

8A.5 Termination of Employment. Unless otherwise provided by the Administrator, in the event of Termination of Employment (as defined under section 11.1 below) of a Participant, for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then the Participant shall forfeit to the Company any Shares acquired by the Participant pursuant to an award of Restricted Shares which remain subject to Exercise Conditions as of the date of Termination of Employment.

8A.6 All other terms and conditions of the Plan applicable to Options (sections 6 and 7 above), shall apply to Restricted Shares, mutatis mutandis. It is clarified, that without deviating from the foregoing in Sub-Section 8A.5., the provisions of Section 11 herein, shall, mutatismutandis, apply to Restricted Shares in the event of Termination of Employment (as defined under section 11.1 below).

8B.Performance Based Awards:

8B.1 Subject to the sole and absolute discretion and determination of the Administrator, the Administrator may decide to grant Awards under the Plan, the exercise or vesting of which, as applicable, shall be conditional upon the performance of the Company and/or an Affiliate and/or a division or other business unit of the Company or of an Affiliate and/or upon the performance of the Participant, over such period and measured against such criteria as shall be determined by the Administrator and notified to the Participant as part of the Grant Letter (“Performance Based Award(s)”). In granting each Performance Based Award, the Administrator shall establish in writing the applicable performance period (“Performance Period”), performance formula (“Performance Formula”) and one or more performance goals (“Performance Goal(s)”) which, when measured at the end of the Performance Period, shall determine on the basis of said Performance Formula the extent to which the Performance Based Award has vested and/or become exercisable (collectively, the “Performance Conditions”). For the avoidance of doubt, Performance Conditions may be determined for an Award either in addition to, or in substitution for, a Vesting Schedule.

8B.2 After a Performance Based Award has been granted, the Administrator may, in appropriate circumstances, amend any Performance Condition, at its sole and absolute discretion.

8B.3 If, in consequence of the applicable Performance Conditions being met a Performance Based Award becomes vested and/or exercisable in respect of some, but not all of the number of Shares underlying such Award, the portion of the Performance Based Award which did not become vested and exercisable by the end of the Performance Period, shall thereupon lapse and cease to be exercisable in respect of the balance of the Shares over which it was held.

8B.4 Performance Conditions shall not be automatically waived merely due to an event of (i) a Termination of Employment, (ii) a Merger Transaction, (iii) any other adjustment under Section 4 above.

8B.5 Measurement of Performance Goals**.** Performance Goals shall be established by the Administrator on the basis of targets to be attained with respect to one or more measures of business or financial performance or individual key performance indicators (“KPIs”) that may have the same meanings as used in the Company’s financial statements, or, if such terms are not used in the Company’s financial statements, they may have the meaning applied pursuant to generally accepted accounting principles, or as used generally in the Company’s industry or, if based on individual or other KPIs, in all cases, as determined by the Administrator (“Performance Measures”). For purposes of the Plan, the Performance Measures applicable to a Performance Based Award shall be calculated as instructed by the Administrator, which may include being calculated in accordance with generally accepted accounting principles, excluding the effect (whether positive or negative) of any change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Administrator, occurring after the establishment of the Performance Goals applicable to the Performance Based Award. Each such adjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period for the calculation of Performance Measures in order to prevent the dilution or enlargement of the Participant’s rights with respect to a Performance Based Award. Performance Measures may be, among others, one or more of the following, as determined by the Administrator: revenue; sales; expenses; operating income; gross margin; operating margin; earnings before any one or more of: share-based compensation expense, interest, taxes, depreciation and amortization; pre-tax profit; net operating income; net income; economic value added; free cash flow; operating cash flow; share price; earnings per share; return on shareholder equity; return on capital; return on assets; return on investment; employee satisfaction and/or individual KPIs; employee retention; balance of cash, cash equivalents and marketable securities; market share; customer satisfaction; product development; research and development expenses; R&D development milestones, including with respect to clinical trials; completion of an identified special project; and completion of a joint venture or other Corporate Transaction.

8B.6 All other terms and conditions of the Plan applicable to Awards, shall apply to Performance Based Awards, mutatis mutandis.

9. Waiverof Award Rights. At any time prior to the expiration of any unexercised Granted Award, a Participant may waive his rights to such Award by a written notice to the Company’s principal office. Such notice shall specify the number of Granted Awards, which the Participant waives, and shall be signed by the Participant. Upon receipt by the Company of a notice of waiver of such rights, such Awards shall expire and shall become available for future Grants under the Plan.

10. Termof the Awards. Unless earlier terminated pursuant to the provisions of this Plan, all granted but unexercised Awards shall expire and cease to be exercisable at 5:00 p.m. Israel time on the 10^th^ anniversary of the Commencement Date of such Awards.

11. Terminationof Employment

11.1Termination of Employment. If a Participant ceases to be an employee, director, officer or Consultant of the Company or Affiliate for any reason (“Termination of Employment”) other than by reason of death, Retirement, Disability or Cause, then any vested but unexercised Awards on the date of Termination of Employment (as shall be determined by the Company or Affiliate, at its sole discretion) granted on the Participant’s behalf (“Exercisable Awards”) may be exercised, if not previously expired, on or prior to the earlier of: (a) 90 days after the date of Termination of Employment; or (b) the end of the Term of the Awards. All other Granted Awards for the benefit of Participant shall expire upon the date of Termination of Employment.

11.2 Terminationfor Cause. In the event of Termination of Employment of a Participant for Cause, then: (A) the Participant’s right to exercise any unexercised Granted Awards, whether vested or not on the date of Termination of Employment, shall cease as of such date of Termination of Employment, and the Awards shall thereupon expire, and (B) any unvested Shares shall terminate and expire on the day the Participant has been notified of his/her dismissal. Pending a determination of whether a Participant’s conduct, activities or circumstances give rise to Cause, the Administrator shall have the authority to suspend the exercise, payment, delivery or settlement of all or any portion of such Participant’s outstanding Awards pending any investigation of the matter. If subsequent to the Participant’s Termination of Employment, but prior to the exercise of Awards granted to such Participant, the Administrator determines that either prior or subsequent to the Participant’s Termination of Employment, the Participant engaged in conduct which would constitute Cause, then the Participant’s right to exercise the Awards granted to such Participant shall immediately cease upon such determination and the Awards shall thereupon expire. The determination by the Administrator as to the occurrence of Cause shall be final and conclusive for all purposes of this Plan.

11.3 Terminationby Reason of Death, Retirement, or Disability

(A) Death- If Termination of Employment is by reason of death of the Participant, than his/her estate, personal representative or beneficiaries may exercise the Participant’s Awards, to the extent it was vested within the sixty (60) days period following the Participant’s death, at any time but not later than the earlier of: (i) the one (1) year anniversary of Participant’s death; or (ii) the end of the Term of the Awards. All other Awards granted for the benefit of a Participant and which have not vested within such 60-days period shall expire upon the date of death.

(B) Disability andRetirement- If Termination of Employment is by reason of Retirement or Disability of the Participant, the Participant may exercise any portion of the Awards which have vested within the ninety (90) days period following the date of Retirement or Disability, at any time but not later than the earlier of: (i) the one (1) year anniversary of the date of Retirement or Disability, as the case may be; or (ii) the end of the Term of the Awards. All other Awards for the benefit of a Participant and which have not vested within such 90 days period shall expire upon the date of Retirement or Disability, as applicable.

11.4 Exceptions. In special circumstances pertaining to the Termination of Employment of a certain Participant, the Administrator may at its sole discretion decide to extend any of the periods stated above in Sections 10.1-10.3.

11.5 Transferof Employment or Service. Subject to the receipt of appropriate approvals from the ITA, if applicable, a Participant’s right to Awards granted to him/her under this Plan shall not be terminated, expire or forfeited solely as a result of the fact that the Participant’s employment or service as an employee, officer or director changes from the Company to an Affiliate or vice versa. Any and all tax consequence of such a transfer, if any, shall be solely borne by the Participant.

Furthermore, and notwithstanding the foregoing provisions of this Section 11, unless determined otherwise by the Administrator, the transfer of a Participant from a status of an Employee to a status of a Consultant or from a status of a Consultant to a status of an Employee, shall not be deemed a Termination of Employment for purposes hereof.

12. Awardsand Tax Provisions. All Awards shall be granted under the Plan in accordance with one of the following Tax Provisions:

(A) The Company may grant Awards to 102 Participant in accordance with the provisions of Section 102 and the Section 102 Rules; and

(B) The Company may Grant Awards to Non-Qualified Participant in accordance with the provisions of Section 3(i).

12.1 TaxProvision Selection. The Company shall elect under which Tax Provision each Award is granted at its sole discretion and in accordance with any Applicable Law (the “Election”). The Company shall notify each Participant in the Grant Letter, under which Tax Provision the Awards and/or Shares are granted and, if applicable, under which Tax Track, each Award is granted.

12.2 Section102 Trustee Tax Tracks.

(a) If the Company elects to grant Awards to 102 Participants through: (i) the Capital Gains Track Through a Trustee; or (ii) the Earned Income Track, then, in accordance with the requirements of Section 102, the Company shall appoint a Trustee who will hold in trust at least for the Holding period on behalf of each 102 Participant the granted Awards and the Underlying Shares issued upon exercise of such Awards.

(b) The Holding Period for the Awards and/or Shares will be as follows: (i) The Capital Gains Tax Track Through a Trustee - if the Company elects to grant the Awards according to the provisions of this track, then the Holding Period will be 24 months from the Date of Grant, or such period as may be determined in any amendment of Section 102; and (ii) Earned Income Track - if the Company elects to grant Awards according to the provisions of this track, then the Holding Period will be 12 months from the Date of Grant, or such period as may be determined in any amendment of Section 102.

(c) Subject to Section 102 and the Section 102 Rules, Participants shall not be able to receive from the Trustee, nor shall they be able to sell or dispose of the Awards or Underlying Shares before the end of the applicable Holding Period. If a Participant sells or removes the Awards or the Underlying Shares form the Trustee before the end of the applicable Holding Period (“Breach”), the Participant shall pay all applicable taxes imposed on such Breach by Section 7 of the Section 102 Rules.

(d) In the event of a distribution of rights, including an issuance of bonus shares, in connection with Awards and/or Underlying Shares (the “Additional Rights”), all such Additional Rights shall be granted and/or issued to the Trustee for the benefit of Participants, and shall be held by the Trustee at least for the remainder of the Holding Period applicable to the Awards and/or Underlying Shares, as applicable. Such Additional Rights shall be treated in accordance with the provisions of the applicable Tax Track.

12.3 IncomeTax Track Without a Trustee. If the Company elects to grant Awards to 102 Participants according to the provisions of the Income Tax Track Without a Trustee, then the Awards will not be subject to a Holding Period.

12.4 ConcurrentConditions. The Holding Period, if any, is in addition to the vesting period with respect to Awards, as specified in Section 7.2 of the Plan or in the Grant Letter. The Holding Period and vesting period may run concurrently, but neither is a substitute for the other, and each are independent terms and conditions for granted Awards.

12.5 TrustAgreement. The terms and conditions applicable to the trust relating to the Tax Track elected by the Company, as appropriate, shall be set forth in Trust Agreement.

13. Termof Shares Held In Trust. Unless otherwise extended by the Administrator, in its sole discretion, no Underlying Shares issued upon exercise of Awards shall be held by the Trustee on behalf of the Participant for a period longer than ten (10) years after the end of the Term of the applicable Awards. The Administrator shall instruct the Trustee as to the transfer of any Underlying Shares

14. Rightsas a Shareholder. Unless otherwise specified in the Plan, a Participant shall not have any rights as a Shareholder with respect to Underlying Shares issued under this Plan, until such time as the Shares shall be registered in the name of the Participant in the Company’s register of Shareholders

14.1 Dividend. The Participants shall be entitled to receive any cash dividend paid to the Shareholders with respect to Underlying Shares issued to them under this Plan. Payments of such dividend to the Participants shall be subject to any required tax being withheld or otherwise deducted by the Trustee or the Company, as agreed between the Company and the Trustee, in accordance with Applicable Law.

15. NoSpecial Employment Rights. Nothing contained in this Plan shall confer upon any Participant any right with respect to the continuation of employment by or service to the Company or Affiliate or to interfere in any way with the right of the Company or Affiliate, to terminate such employment or service or to increase or decrease the compensation of the Participant. The Awards are extraordinary, one-time benefits granted to the Participants and are not and shall not be deemed a salary component for any purpose whatsoever, including, in connection with calculating severance compensation under any Applicable Law.

16. Restrictionson Sale of Awards and Shares

16.1 Awards. Awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent.

16.2 AccelerationProvision. The Administrator, at its sole discretion, may decide to add a provision in certain Grant Letters, according to which in case of a Merger or other events, all or some of the unvested Awards or/and Shares, shall automatically accelerate, and become fully vested and exercisable upon such event.

16.3 AcknowledgementTo Restrictions. As a condition for the grant of Awards and issuance of Underlying Shares thereunder, each Participant shall acknowledge the terms and provisions of the corporate documents of the Company, including organizational documents, as amended from time to time, and all other agreements among the Shareholders which are applicable to the holders of the Company’s Shares and shall agree to be bound by their terms with respect to any restriction applicable to the Shares of the Company (including without limitation, any right of first refusal, co-sale and bring along provisions, as applicable).

17. TaxMatters.

(a) This Plan shall be governed by, and shall conform with and be interpreted so as to comply with, the requirements of Section 102 and any written approval or ruling from the ITA. All tax consequences under any Applicable Law (other than stamp duty) which may arise from the Grant of the Awards, from the exercise of Awards or from the holding or sale of the Underlying Shares (or other securities issued under the Plan) by or on behalf of the Participant or from any other event or act hereunder (whether any act of the Participant or of the Company or its Affiliates or of the Trustee), shall be borne solely on the Participant. The Participant shall indemnify the Company and/or Affiliate and /or the Trustee, as the case may be, and hold them harmless, against and from any liability for any such tax or any penalty, interest or indexing.

(b) Except as otherwise required by Applicable Law, the Company shall not be obligated to honor the exercise of any Award by or on behalf of a Participant or the sale, exchange or other transfer of any Underlying Shares issued upon exercise of Awards until all tax consequences (if any) arising from the exercise of such Awards or sale, exchange or other transfer of Shares are resolved to the full satisfaction of the Company. Without derogating from the above, the Company and/or, when applicable, the Trustee shall not be required to release any share certificate to a Participant until all required payments have been fully made.

(c) If the Company elects to grant Awards according to the provisions of the Income Tax Track Without a Trustee, and if prior to the Exercise of any and/or all of these Awards, such Participant ceases to be an Employee, director, or officer of the Company or Affiliate, the Participant shall deposit with the Company a guarantee or other security as required by law, in order to ensure the payment of applicable taxes upon the Exercise of such Awards, as the case may be.

(d) It is clarified that if any grants made under either of the tax tracks under Section 102 do not comply with the requirement of such tax route, the grant shall be considered subject to the Income Tax Track Without a Trustee, or Section 3(i) or Section 2 of the Tax Ordinance, as applicable, and the Participant irrevocably waives any claim and/or demand it has or may have with respect to the tax treatment of the Award.

18. WithholdingTaxes.

(a) Whenever an amount with respect to withholding tax relating to Awards granted to a Participant and/or Underlying Shares issued upon the exercise or vesting thereof is due from the Participant and/or the Company and/or an Affiliate, the Company and/or an Affiliate and/or the Trustee shall have the right to demand from a Participant such amount that would be sufficient to satisfy any applicable withholding tax requirements related thereto, and whenever Shares or any other non-cash assets are to be delivered pursuant to the exercise or vesting of an Award and the sale of Underlying Shares, or transferred thereafter, the Company and/or an Affiliate and/or the Trustee shall have the right to require the Participant to remit to the Company and/or to the Affiliate, or to the Trustee an amount in cash sufficient to satisfy any applicable withholding tax requirements related thereto, and if such amount is not timely remitted, the Company and/or the Affiliate and/or the Trustee shall have the right to withhold or set-off (subject to Applicable Law) such Shares or any other non-cash assets pending payment by the Participant of such amounts. In particular, the Company shall have the right, but not the obligation, to deduct from (i) the Shares issuable to a Grantee upon the exercise or vesting of an Award, or to accept from the Grantee the tender of, and/or to make resales (in the Stock Market, if applicable) of, in each case, a number of whole Shares having a fair market value, as determined by the Company, and/or (ii) Grantee’s compensation (including salary) a cash amount, in each case, that will enable the Company to satisfy any tax withholding obligations of the Company or its Affiliates.

(b) In any case where a tax is required to be withheld in connection with the delivery of Shares of the Company or of an Affiliate under the Plan, the Administrator may at its sole discretion (subject to Applicable Law) grant (either at the time of the grant or thereafter) to a Participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, that: (i) the Company reduce the number of Shares to be delivered by (or otherwise reacquire from the Participant) the appropriate number of Shares, valued in a consistent manner at their Fair Market Value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the minimum applicable withholding obligation on exercise, vesting or payment; or (ii) have the Company withhold from proceeds of the sale of such Shares (either through a voluntary sale or through a mandatory sale arranged by the Company on the Participant’s behalf) the minimum amount required to be withheld.(c) Until all taxes have been paid in accordance with Rule 7 of the Section 102 Rules or any other Applicable Law, Awards and/or Underlying Shares may not be sold, transferred, assigned, pledged, encumbered, or otherwise willfully hypothecated or disposed of, and no power of attorney or deed of transfer, whether for immediate or future use may be validly given. Notwithstanding the foregoing, the Awards and the Underlying Shares may be validly transferred upon the death of a Participant in accordance with Section 19 of this Plan, provided that the transferee thereof shall be subject to the provisions of Section 102 and the Section 102 Rules as would have been applicable to the deceased Participant in the event he/she would have survived.

19. NoTransfer of Awards. The Trustee shall not transfer Awards to any third party, including a 102 Participant, except in accordance with instructions received from the Administrator.

20. Transferof Rights Upon Death. No transfer of any Award or Underlying Share issued upon the exercise thereof by will or by the laws of descent shall be effective to bind the Company unless the Company shall have been furnished with all of the following signed and notarized documents: (i) a written request for such transfer and a copy of the legal documents creating and confirming the right of the person acting with respect to the Participant’s estate and of the transferee; (ii) written consent by the transferee to pay any payment due according to the provisions of the Plan and otherwise comply by all the terms of the Plan; and (iii) any such other evidence as the Administrator may deem necessary to establish the right to the transfer of the Granted Awards or Underlying Shares issued upon the exercise thereof and the validity of the transfer.

21. NoRight of Others to Awards. Subject to the provisions of the Plan, no person other than the Participant shall have any right with respect to Awards granted to the Participants under the Plan.

22. Expensesand Receipts. The expenses incurred in connection with the administration and implementation of the Plan (including any applicable stamp duty) shall be borne by the Company. Any proceeds received by the Company in connection with the exercise of any Award may be used for general corporate purposes.

23. RequiredApprovals. The Plan is subject to the receipt of all approvals required under the Applicable Law including under the Tax Ordinance.

24. Treatmentof Participants. There is no obligation for uniformity of treatment of Participants.

25.No Conflicts. In the event of any conflict between the terms of the Plan and the Grant Letter, the Plan shall prevail, unless the Grant Letter stated specifically that the conflicting provision in the Grant Letter shall prevail.

26. ParticipantUndertakings. By execution of any Grant Letter, the Participant shall be deemed to have agreed to the following: (i) agree and acknowledge that he or she have received and read the Plan, the Grant Letter and the Trust Agreement; (ii) undertake all the provisions set forth in Section 3(i) or Section 102 as applicable (including provisions regarding the applicable Tax Track that the Company has elected), the Plan, the Grant Letter and the Trust Agreement (if applicable); (iii) sign any required documentation, including but not limited, an irrevocable power of attorney and proxy; and (iv) to the extent the Awards are granted under Section 102, the 102 Participant shall undertake that subject to the provisions of Section 102 and the Section 102 Rules, he/she shall not sell or release the Awards or Underlying Shares from trust before the end of the Holding Period (if any).

27. GoverningLaw and Jurisdiction. This Plan shall be governed by and construed and enforced in accordance with the laws of the State of Israel, without giving effect to its principles of conflict of laws. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matters pertaining to this Plan.

28. Non-Exclusivityof the Plan. The adoption of this Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or imposing any limitations on the power of the Board to adopt other incentive arrangements as it may deem desirable, including, without limitation, the granting of shares or Awards otherwise than under this Plan.

* * * * *

Exhibit 11.1

NeuroSense TherapEutics Ltd.

Insider Trading Compliance Policy

Effective Date: November 9, 2021

U.S. federal securities laws prohibit trading in the securities of a company while in possession of material nonpublic information and providing material nonpublic information to others so that they can trade. Violating such laws can undermine investor trust, harm the Company’s reputation, and result in your dismissal from NeuroSense Therapeutics Ltd. (together with its subsidiaries, the “Company”) or even serious criminal and civil charges against you and the Company.

This Insider Trading Compliance Policy (this “Policy”) outlines your responsibilities to avoid insider trading and implements certain procedures to help you avoid even the appearance of insider trading.

I.	Summary

Preventing insider trading is necessary to comply with U.S. federal securities laws and to preserve the reputation and integrity of the Company. “Insider trading” occurs when any person purchases or sells a security while in possession of material nonpublic information relating to the security. Insider trading is a crime. The criminal penalties for violating insider trading laws include imprisonment and fines of up to $5 million for individuals and $25 million for corporations. Insider trading may also result in civil penalties, including disgorgement of profits and civil fines of up to the greater of $1,275,000 or three times the profit made or loss avoided. Insider trading is also prohibited by this Policy, and violation of this Policy may result in Company-imposed sanctions, including removal or dismissal for cause.

This Policy applies to all officers, directors, and employees of the Company. As someone subject to this Policy, you are responsible for ensuring that members of your household (and individuals not residing in your household but whose transactions are subject to your influence or control), your spouse, domestic partner and minor children (even if financially independent), and anyone to whom you provide significant financial support also comply with this Policy. This Policy also applies to any entities you control (control is generally applicable when you have greater than 50% ownership of an entity), including any corporations, partnerships, or trusts, and transactions by such entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account. The Company may determine that this Policy applies to additional persons with access to material nonpublic information, such as contractors or consultants. This Policy extends to all activities within and outside your Company duties. Every officer, director, and employee must review this Policy. Questions regarding the Policy should be directed to the Company’s Compliance Officer.

For purposes of this Policy, the “Compliance Officer” shall be the Company’s Chief Financial Officer.

In all cases, as someone subject to this Policy, you bear full responsibility for ensuring your compliance with this Policy, and also for ensuring that members of your household (and individuals not residing in your household but whose transactions are subject to your influence or control), your spouse, domestic partner and minor children (even if financially independent), anyone to whom you provide significant financial support and entities under your influence or control are in compliance with this Policy.

Actions taken by the Company, the Compliance Officer, or any other Company personnel do not constitute legal advice, nor do they insulate you from the consequences of noncompliance with this Policy.

II.	Statement of Policies Prohibiting Insider Trading

No officer, director, or employee (or any other person designated as subject to this Policy) shall purchase or sell any type of security while in possession of material nonpublic information relating to the security or the issuer of such security, whether the issuer of such security is the Company or any other company.

These prohibitions do not apply to:

●	purchases of the Company’s securities from<br>the Company or sales of the Company’s securities to the Company;
●	exercises of stock options or other equity awards<br>or the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a<br>manner permitted by the applicable equity award agreement, or vesting of equity-based awards that, in each case, do not involve a market<br>sale of the Company’s securities (the “cashless exercise” of a Company stock option through a broker does<br>involve a market sale of the Company’s securities, and therefore would not qualify under this exception);
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●	bona fide gifts of the Company’s<br>securities; or
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●	purchases or sales of the Company’s securities<br>made pursuant to any binding contract, specific instruction or written plan entered into while the purchaser or seller, as applicable,<br>was unaware of any material nonpublic information and which contract, instruction, or plan (i) meets all requirements of the affirmative<br>defense provided by Rule 10b5-1 (“Rule 10b5-1”) promulgated under the Securities Exchange Act of 1934, as amended (the<br>“1934 Act”), (ii) was precleared in advance pursuant to this Policy and (iii) has not been amended or modified in any<br>respect after such initial preclearance without such amendment or modification being precleared in advance pursuant to this Policy. For<br>more information about Rule 10b5-1 trading plans, see Section VI below.
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No officer, director, or employee shall directly or indirectly communicate (or “tip”) material nonpublic information to anyone outside the Company (except in accordance with the Company’s policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a “need-to-know” basis.

III.	Explanation of Insider Trading

“Insider trading” refers to the purchase or sale of a security while in possession of material nonpublic information relating to the security.

“Purchase” and “Sale” are defined broadly under the federal securities law. “Purchase” includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. “Sale” includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, conversions, the exercise of stock options, and acquisitions and exercises of warrants or puts, calls, or other derivative securities.

It is generally understood that insider trading includes the following:

●	trading by insiders while in possession of material,<br>non-public information;
●	trading by persons other than insiders while<br>in possession of material, non-public information, if the information either was given in breach of an insider’s fiduciary duty<br>to keep it confidential or was misappropriated; and
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●	communicating or tipping material, non-public<br>information to others, including recommending the purchase or sale of a security while in possession of such information.
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“Securities” includes stocks, bonds, notes, debentures, options, warrants, and other convertible securities, as well as derivative instruments.

A.	What Facts Are Material?

The materiality of a fact depends upon the circumstances. A fact is considered “material” if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell, or hold a security, or if the fact is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to any type of security, debt, or equity. Also, information that something is likely to happen in the future—or even just that it may happen—could be deemed material.

Examples of material information include (but are not limited to) information about corporate earnings or earnings forecasts; significant changes in key performance indicators of the Company; possible mergers, acquisitions, tender offers, joint ventures or dispositions; changes in control of the Company or changes in senior management; new products or developments regarding customers (e.g., the acquisition or loss of a contract); changes in auditors or auditor notification that the Company may no longer rely on an audit report; significant events concerning the Company’s physical assets; events regarding the Company’s securities (e.g., defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits, dividends, changes to the rights of security holders or public or private sales of additional securities); new equity or debt offerings or significant borrowing; changes in debt ratings, or analyst upgrades or downgrades of the issuer or one of its securities; bankruptcies or receiverships; cybersecurity or data security incidents; the initiation, suspension and results of the Company’s clinical trials and any other material information relating thereto; significant actions by regulatory bodies; significant changes in accounting treatment, write-offs or effective tax rate; receipt, cancellation or deferral of significant purchase orders; and significant litigation or regulatory actions. Moreover, material information does not have to be related to a company’s business. For example, the contents of a forthcoming newspaper column that is expected to affect the market price of a security can be material.

Questions regarding material information should be directed to the Compliance Officer. A good rule of thumb: when in doubt, do not trade.

B.	What Is Nonpublic?

Information is “nonpublic” if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors, through newswire services such as Dow Jones, Reuters, Bloomberg, Business Wire, The Wall Street Journal, Associated Press, or United Press International; broadcasts on widely available radio or television programs; publication in a widely available newspaper, magazine, or news website; a Regulation FD-compliant conference call; or public disclosure documents filed with the U.S. Securities and Exchange Commission (the “SEC”) that are available on the SEC’s website. Note that simply posting information to the Company’s website may not be sufficient disclosure to make the information public.

The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination. In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow two full trading days following publication as a reasonable waiting period before such information is deemed to be public.

C.	Who Is an Insider?

“Insiders” include officers, directors, and any employees of a company, or anyone else who has material nonpublic information about a company. Insiders have independent fiduciary duties to their company and its stockholders not to trade on material nonpublic information relating to the company’s securities. Insiders may not trade in the Company’s securities while in possession of material nonpublic information relating to the Company, nor may they tip such information to anyone outside the Company (except in accordance with the Company’s policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a “need-to-know” basis.

Individuals subject to this Policy are responsible for ensuring that members of their households, their spouses, domestic partners and minor children (even if financially independent), and anyone to whom such individuals subject to this Policy provide significant financial support also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual’s own account. Further, this Policy applies to (i) any account over which the individuals subject to this Policy have or share the power, directly or indirectly, to make investment decisions (whether or not such persons have a financial interest in the account) and (ii) those accounts established or maintained by such persons with their consent or knowledge and in which such persons have a direct or indirect financial interest.

D.	Trading by Persons Other Than Insiders

Insiders may be liable for communicating or tipping material nonpublic information to a third party (“tippee”), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders can also be liable for insider trading, including tippees who trade on material nonpublic information tipped to them or individuals who trade on material nonpublic information that has been misappropriated. Insiders may be held liable for tipping even if they receive no personal benefit from tipping and even if no close personal relationship exists between them and the tippee.

Tippees inherit an insider’s duties and are liable for trading on material, non-public information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee’s liability for insider trading is no different from that of an insider. Tippees can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at social, business, or other gatherings.

E.	Penalties for Engaging in Insider Trading

Penalties for trading on or tipping material nonpublic information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC and Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the federal securities laws include:

●	SEC administrative sanctions;
●	securities industry self-regulatory organization<br>sanctions;
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●	civil injunctions;
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●	damage awards to private plaintiffs;
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●	disgorgement of all profits;
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●	civil fines for the violator of up to three times<br>the amount of profit gained or loss avoided;
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●	civil fines for the employer or other controlling<br>person of a violator (i.e., where the violator is an employee or other controlled person) of up to the greater of $1.425 million or three<br>times the amount of profit gained or loss avoided by the violator;
●	criminal fines for individual violators of up<br>to $5 million ($25 million for an entity); and
---	---
●	jail sentences of up to 20 years.
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In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act (RICO), may also be violated in connection with insider trading.

F.	Size of Transaction and Reason for Transaction Do Not Matter

The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The SEC has the ability to monitor even the smallest trades, and the SEC performs routine market surveillance. Brokers or dealers are required by law to inform the SEC of any possible violations by people who may have material nonpublic information. The SEC aggressively investigates even small insider trading violations.

G.	Other Companies’ Stock

Employees and directors who learn material information about suppliers, customers, or competitors through their work at the Company must keep it confidential and not buy or sell stock in such companies until the information becomes public. Employees and directors should not give tips about such stock.

IV.	Statement of Procedures to Prevent Insider Trading

The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading.

A.	Blackout Periods

The period during which the Company prepares quarterly financials is a sensitive time for insider trading purposes, as Company personnel may be more likely to possess, or be presumed to possess, material nonpublic information. To avoid the appearance of impropriety and assist Company personnel in planning transactions in the Company’s securities for appropriate times, no officer, director, or employee shall purchase or sell any security of the Company during the period beginning on the 14th calendar day before the end of any fiscal quarter of the Company and ending upon completion of the second full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company, except for:

●	purchases of the Company’s securities from<br>the Company or sales of the Company’s securities to the Company;

●	exercises of stock options or other equity awards,<br>the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner<br>permitted by the applicable equity award agreement, or the vesting of equity-based awards that do not involve a market sale of the Company’s<br>securities (the cashless exercise of a Company stock option through a broker does involve a market sale of the Company’s<br>securities, and therefore would not qualify under this exception);
●	bona fide gifts of the Company’s<br>securities; and
---	---
●	purchases or sales of the Company’s securities<br>made pursuant to any binding contract, specific instruction, or written plan entered into while the purchaser or seller, as applicable,<br>was unaware of any material nonpublic information and which contract, instruction, or plan (i) meets all requirements of the affirmative<br>defense provided by Rule 10b5-1, (ii) was precleared in advance pursuant to this Policy, and (iii) has not been amended or modified in<br>any respect after such initial preclearance without such amendment or modification being precleared in advance pursuant to this Policy.
---	---

Exceptions to the blackout period policy may be approved only by the Company’s Chief Financial Officer or, in the case of exceptions for directors, the Board of Directors.

From time to time, the Company, through the Board of Directors or Chief Financial Officer, may recommend that officers, directors, employees, or others suspend trading in the Company’s securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all those affected should not trade in the Company’s securities while the suspension is in effect.

When such event-specific blackout periods occur, those subject to it will be notified by the Company. The event-specific blackout period will not be announced to those not subject to it, and those subject to it or otherwise aware of it should not disclose it to others.

Even if the Company has not notified you that you are subject to an event-specific blackout period, if you are aware of material nonpublic information about the Company, you should not trade in Company securities. Even if the Company does not designate you as subject to an event-specific blackout period, or does not notify you of such designation, this does not relieve you of your obligation not to trade in the Company’s securities while possessing material nonpublic information. None of the Company, the Compliance Officer, or the Company’s other employees will have any liability for any decisions regarding event-specific blackout periods or delays or failures to notify individuals of event-specific blackout periods.

B.	Preclearance of All Trades by All Officers, Directors and Certain Key Employees

To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company’s securities, all transactions in the Company’s securities (including, without limitation, acquisitions and dispositions of Company stock; the exercise of stock options; elective transactions under any 401(k), ESPP or deferred compensation plans; and the sale of Company stock issued upon exercise of stock options) by officers, directors, and certain key employees listed on Schedule I (as amended from time to time) (each, a “Preclearance Person”) must be precleared by the Company’s Compliance Officer, except for certain exempt transactions as explained in Section VI of this Policy.

A request for preclearance should be in writing (including by e-mail), should be made at least two business days in advance of the proposed transaction, and should include the identity of the Preclearance Person, a description of the proposed transaction, the proposed date of the transaction, and the number of shares or other securities to be involved. In addition, the Preclearance Person must execute a certification (in the form approved by the Compliance Officer) that he or she is not aware of material nonpublic information about the Company. The Compliance Officer shall have sole discretion to decide whether to clear any contemplated transaction. All trades that are precleared must be effected within five business days of receipt of the preclearance, unless a specific exception has been granted by the Compliance Officer. A precleared trade (or any portion of a precleared trade) that has not been effected during the five business day period must be precleared again prior to execution. Notwithstanding receipt of preclearance, if the Preclearance Person becomes aware of material nonpublic information or becomes subject to a blackout period before the transaction is effected, the transaction may not be completed.

None of the Company, the Compliance Officer, or the Company’s other employees will have any liability for any delay in reviewing, or refusal of, a request for preclearance submitted pursuant to this Section IV.B. Notwithstanding any preclearance of a transaction pursuant to this Section IV.B, none of the Company, the Compliance Officer, or the Company’s other employees assumes any liability for the legality or consequences of such transaction to the person engaging in such transaction.

C.	Post-Termination Transactions

With the exception of the preclearance requirement, this Policy continues to apply to transactions in the Company’s securities even after termination of service to the Company. If you are in possession of material nonpublic information when your service terminates, you may not trade in the Company’s securities until that information has become public or is no longer material.

D.	Information Relating to the Company

Access to Information

Access to material nonpublic information about the Company, including the Company’s business, earnings, or prospects, should be limited to officers, directors, and employees of the Company on a “need-to-know” basis. In addition, such information should not be communicated to anyone outside the Company under any circumstances (except in accordance with the Company’s policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company on an other than “need-to-know” basis.

In communicating material nonpublic information to employees of the Company, all officers, directors, and employees must take care to emphasize the need for confidential treatment of such information and adherence to the Company’s policies with regard to confidential information.

Inquiries From Third Parties

Inquiries from third parties, such as industry analysts or members of the media, about the Company should be directed to the Chief Financial Officer at or@neurosense-tx.com

V.	Additional Prohibited Transactions

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, officers, directors, and employees shall comply with the following policies with respect to certain transactions in the Company securities:

A.	Short Sales

Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller’s incentive to improve the Company’s performance. This type of activity is inherently speculative in nature and is contrary to the best interests of the Company and its stockholders. For these reasons, short sales of the Company’s securities are prohibited by this Policy.

B.	Publicly Traded Options

A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that an officer, director, or employee is trading based on material nonpublic information. Transactions in options may also focus an officer’s, director’s, or employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls, or other derivative securities involving the Company’s equity securities, on an exchange or in any other organized market, are prohibited by this Policy.

C.	Hedging Transactions

Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an officer, director, or employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. Such transactions allow the officer, director, or employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the officer, director, or employee may no longer have the same objectives as the Company’s other stockholders. Therefore, such transactions involving the Company’s equity securities are prohibited by this Policy.

D.	Purchases of the Company’s Securities on Margin; Pledging the Company’s Securities to Secure<br>Margin or Other Loans

Purchasing on margin means borrowing from a brokerage firm, bank, or other entity in order to purchase the Company’s securities (other than in connection with a cashless exercise of stock options under the Company’s equity plans). Margin purchases of the Company’s securities are prohibited by this Policy. Pledging the Company’s securities as collateral to secure loans is also prohibited. This prohibition means, among other things, that you cannot hold the Company’s securities in a “margin account” (which would allow you to borrow against your holdings to buy securities).

VI.	Rule 10b5-1 Trading Plans

The trading restrictions set forth do not apply to transactions under a previously established contract, plan, or instruction to trade in the Company’s stock in accordance with the terms of Rule 10b5-1 and all applicable state laws (a “Trading Plan”) that:

●	has been submitted to and preapproved by the<br>Company’s Compliance Officer, or such other person as the Board of Directors may designate from time to time (the “Authorizing<br>Officer”), at least 30 days before the commencement of any transactions under the Trading Plan;
●	you entered into in good faith at a time when<br>you were not in possession of material nonpublic information about the Company; and
---	---
●	either (i) specifies the amounts, prices, and<br>dates of all security transactions under the Trading Plan, (ii) provides a written formula, algorithm, or computer program for determining<br>the amount, price, and date of the transactions, or (iii) prohibits you from exercising any subsequent influence over the transactions.
---	---

You may adopt more than one Trading Plan at a time. You may only amend or revoke a Trading Plan outside of quarterly trading blackout periods when you do not possess material nonpublic information. Any amendment or revocation of a Trading Plan must be preapproved by the Authorizing Officer at least 30 days before you trade under an amended Trading Plan or outside of a revoked Trading Plan.

The Company reserves the right to publicly announce, or respond to inquiries from the media regarding, the implementation of Trading Plans or the execution of transactions made under a Trading Plan. The Company also reserves the right, from time to time, to suspend, discontinue, or otherwise prohibit transactions under a Trading Plan if the Authorizing Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation, or other prohibition is in the best interests of the Company. Transactions prohibited under Section V of this Policy, including short sales and hedging transactions, may not be carried out through a Trading Plan.

Compliance of a Trading Plan with the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, and none of the Company, the Authorizing Officer, or the Company’s other employees assume any liability for any delay in reviewing and/or refusing a Trading Plan submitted for approval nor the legality or consequences relating to a person entering into or trading under a Trading Plan.

VII.	Execution and Return of Certification of Compliance

After reading this Policy, all officers, directors, and employees should execute and return to the Company’s Compliance Officer the Certification of Compliance form attached hereto as “Attachment A.”

Schedule I

Individuals Subject to Preclearance Requirement

1.	Alon Ben-Noon
2.	Or Eisenberg
---	---
3.	Ferenc Tracik
---	---
4.	Mark Leuchtenberger
---	---
5.	Cary Claiborne
---	---
6.	Christine Pellizzari
---	---
7.	Caren Deardorf
---	---
8.	Yael German
---	---

Attachment A

Certification of Compliance

Return by [_________] [insert return deadline]

To:	__________________, [____]
From:	__________________________
---	---
Re:	Insider Trading Compliance Policy of NeuroSense Therapeutics Ltd.
---	---

I have received, reviewed, and understand the above-referenced Insider Trading Compliance Policy and undertake, as a condition to my present and continued employment (or, if I am not an employee, affiliation with) NeuroSense Therapeutics Ltd., to comply fully with the policies and procedures contained therein.

I hereby certify, to the best of my knowledge, that during the calendar year ending December 31, 20[__], I have complied fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Policy.

Signature	Date
Title

Exhibit 12.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alon Ben-Noon, certify that:

1.	I have reviewed this annual report on Form 20-F of NeuroSense<br>Therapeutics Ltd.;
2.	Based on my knowledge, this report does not contain any untrue<br>statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under<br>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<br>financial information included in this report, fairly present in all material respects the financial condition, results of operations<br>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<br>responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))<br>and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
a)	Designed such disclosure controls and procedures, or caused<br>such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company,<br>including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which<br>this report is being prepared;
---	---
b)	Designed such internal control over financial reporting, or<br>caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally<br>accepted accounting principles;
---	---
c)	Evaluated the effectiveness of the company’s disclosure<br>controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br>as of the end of the period covered by this report based on such evaluation; and
---	---
d)	Disclosed in this report any change in the company’s<br>internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,<br>or is reasonably likely to materially affect, the company’s internal control over financial reporting;
---	---
5.	The company’s other certifying officer(s) and I have<br>disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the<br>audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
a)	All significant deficiencies and material weaknesses in the<br>design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s<br>ability to record, process, summarize and report financial information; and
---	---
b)	Any fraud, whether or not material, that involves management<br>or other employees who have a significant role in the company’s internal control over financial reporting.
---	---
Date: April 7, 2025
---
/s/ Alon Ben-Noon
Alon Ben-Noon
Chief Executive Officer

Exhibit 12.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Or Eisenberg, certify that:

1.	I have reviewed this annual report on Form 20-F of NeuroSense<br>Therapeutics Ltd.;
2.	Based on my knowledge, this report does not contain any untrue<br>statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under<br>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<br>financial information included in this report, fairly present in all material respects the financial condition, results of operations<br>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<br>responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))<br>and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
e)	Designed such disclosure controls and procedures, or caused<br>such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company,<br>including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which<br>this report is being prepared;
---	---
f)	Designed such internal control over financial reporting, or<br>caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally<br>accepted accounting principles;
---	---
g)	Evaluated the effectiveness of the company’s disclosure<br>controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br>as of the end of the period covered by this report based on such evaluation; and
---	---
h)	Disclosed in this report any change in the company’s<br>internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,<br>or is reasonably likely to materially affect, the company’s internal control over financial reporting;
---	---
5.	The company’s other certifying officer(s) and I have<br>disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the<br>audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
c)	All significant deficiencies and material weaknesses in the<br>design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s<br>ability to record, process, summarize and report financial information; and
---	---
d)	Any fraud, whether or not material, that involves management<br>or other employees who have a significant role in the company’s internal control over financial reporting.
---	---
Date: April 7, 2025
---
/s/ Or Eisenberg
Or Eisenberg
Chief Financial Officer

Exhibit 13.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUAN TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of NeuroSense Therapeutics Ltd. (the “Company”) on Form 20-F for the period ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:

(1)	The Report fully complies with the requirements of section<br>13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents,<br>in all material respects, the financial condition and results of operations of the Company.
---	---
Dated: April 7, 2025
---
/s/ Alon Ben-Noon
Alon Ben-Noon
Chief Executive Officer

Exhibit 13.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUAN TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1)	The Report fully complies with the requirements of section<br>13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents,<br>in all material respects, the financial condition and results of operations of the Company.
---	---
Dated: April 7, 2025
---
/s/ Or Eisenberg
Or Eisenberg
Chief Financial Officer

Exhibit 15.1

Consent of Independent Registered Public AccountingFirm

We consent to the incorporation by reference in the registration statements (No. 333-262480) on Form S-8 and (No. 333-269306, No. 333-284051, 333-283656 and 333-260338) on Form F-3 of our report dated April 7, 2025, with respect to the consolidated financial statements of Neurosense Therapeutics Ltd.

/s/ Somekh Chaikin
Member Firm of KPMG International
Tel Aviv, Israel
April 7, 2025