A. RESERVED. B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors An investment in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the factors described below, together with all other information included in this annual report, including our financial statements and the related notes included elsewhere in this annual report. Our business includes both therapeutic development activities and a contract development and manufacturing organization (CDMO) business, each of which is subject to distinct risks and uncertainties. We may face additional risks and uncertainties not currently known to us or that we currently deem to be immaterial. If any of these risks occur, our business, financial condition, results of operations and business prospects could be materially and adversely affected. In that event, the trading price of the ADSs could decline and you could lose all or part of your investment. Summary of Risk Factors The following is a summary of some of the principal risks we face. The list below is not exhaustive, and investors should read this “Risk factors” section in full. ● We have a going concern qualification and will require substantial additional financing to fund our operations and development programs. If we are unable to obtain additional capital when needed, we may be required to delay, limit, reduce or terminate our activities, or cease operations. Any such financing may also result in significant dilution to our existing shareholders or impose restrictive covenants. ● We have a history of operating losses and are not currently profitable. Although we generate revenues from our CDMO activities, we may continue to incur losses and may not achieve profitability in the near future, or at all. ● Our failure to meet the continued listing requirements of Nasdaq could result in the delisting of our ADSs, which could adversely affect the market liquidity and price of our shares. ● Our business strategy, including the development and growth of our CDMO business alongside our therapeutic pipeline, may not be successful. ● Our CDMO business is dependent on market demand for our services and our ability to attract and retain customers, enter into contracts on commercially acceptable terms, and deliver high-quality services on time. Failure to do so could adversely affect our revenues and prospects. ● Our CDMO operations are complex and subject to strict regulatory and quality requirements, and any failure to meet such requirements could harm our reputation and business. ● We are dependent on third parties and collaborators to develop, commercialize and market our product candidates, and we may be unsuccessful in entering into or maintaining such relationships. ● Our product candidates are at an early stage of development and do not generate revenue, and we may not be successful in discovering, developing or commercializing any product candidates. 1 ● Clinical trials are expensive, time-consuming and uncertain, and delays or failures in clinical development could adversely affect our business. ● Results from earlier preclinical or clinical studies may not be predictive of future results. ● We face significant competition in both our therapeutic development activities and our CDMO business. ● Our NanoAbs programs depend on licenses from third parties, including MPG and UMG, and we could lose our rights under such licenses if we fail to comply with their terms. ● Our ability to operate our business depends on the continued operation of our manufacturing facilities, and disruptions to our facilities in Jerusalem or Yavne could adversely affect our operations. Risks Related to Our Financial Position and Capital Requirements We have a going concern qualification and will require substantial additional financing to fund our operations and development programs. If we are unable to obtain additional capital when needed, we may be required to delay, limit, reduce or terminate our activities, or cease operations. Any such financing may also result in significant dilution to our existing shareholders or impose restrictive covenants. Our financial statements include a going concern qualification, and we will need to raise significant additional capital to finance our operations. If we are unable to do so, we may be required to significantly reduce or cease our operations. As of December 31, 2025, December 31, 2024 and December 31, 2023, our cash and cash equivalents totaled $1.6 million, $1.9 million and $.9 million, respectively. For the years then ended, we incurred operating losses of $7.5 million, $8.6 million and $9.7 million, respectively, and had negative cash flows from operating activities of $6.0 million, $6.3 million and $9.3 million, respectively. Our current cash position is not sufficient to fund our planned operations for at least one year from the date of the issuance of our financial statements. Accordingly, there is substantial doubt about our ability to continue as a going concern. While we generate revenues from our CDMO activities, these revenues are not currently sufficient to fund our operations. Our ability to continue as a going concern is dependent on our ability to obtain additional financing, reduce costs and manage our liabilities as they become due. There can be no assurance that we will be able to obtain such financing on acceptable terms, or at all, particularly in light of current market conditions and our market capitalization. We will require substantial additional financing not only to continue our operations but also to support the growth of our CDMO business and advance our therapeutic development programs. We expect to continue to incur significant operating and capital expenditures, including costs related to expanding our CDMO capabilities, research and development activities, manufacturing and regulatory compliance. If we are unable to obtain sufficient financing, we may be required to delay, limit, reduce or terminate certain of our activities, implement additional cost-saving measures, or cease operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2 We have a history of operating losses and are not currently profitable. Although we generate revenues from our CDMO activities, we may continue to incur losses and may not achieve profitability in the near future, or at all. We have a history of operating losses and are not currently profitable, and we may not achieve or sustain profitability in the future. We have incurred losses since inception, primarily as a result of research and development activities, clinical trials, investment in our manufacturing infrastructure and general administrative expenses. As of December 31, 2025 and December 31, 2024, we had an accumulated deficit of $122.0 million, $117.6 million and $122.5 million, respectively. Although we generate revenues from our CDMO activities, these revenues have been limited to date and are not sufficient to offset our operating expenses. Our product candidates are at an early stage of development and do not generate revenue. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we invest in the growth of our CDMO business and continue development activities. To achieve and sustain profitability, we will need to generate significant additional revenues, including from our CDMO operations and, if successfully developed and commercialized, from our product candidates. There can be no assurance that we will be able to do so. Our failure to achieve or maintain profitability, or delays in doing so, could adversely affect the value of our securities and our ability to raise additional financing. We cannot precisely estimate our future capital requirements, and failure to secure adequate funding could adversely affect our business. As of December 31, 2025 and December 31, 2024, we had approximately $1.6 million and $1.9 million, respectively, in cash and cash equivalents and short-term deposits, working capital of $0.46 million and $0.59 million, respectively, and an accumulated deficit of $125.8 million and $117.6 million, respectively. Our existing cash resources are not sufficient to fund our projected cash requirements at current operating levels for at least the next 12 months. Our future capital requirements will depend on many factors, including: ● our ability to establish and maintain strategic partnerships, licensing or other arrangements, and the financial terms of such agreements; ● costs associated with expanding our CDMO capabilities; ● our ability to generate meaningful revenues from our CDMO business; ● our ability to identify and pursue new business opportunities; ● our ability to identify, acquire rights to, or independently develop new product candidates; ● the scope, timing and costs of research and development, regulatory approval, manufacturing and commercialization of any product candidates; ● the costs associated with attracting and retaining qualified personnel; and ● potential product liability or other litigation related to our activities or any current or future product candidates. Due to these and other factors, many of which are outside our control, we will require additional funding to support our operations. We may seek such funding through public or private equity or debt financings, strategic collaborations, licensing arrangements or other non-dilutive sources. However, such funding may not be available on acceptable terms, or at all, particularly if we are unable to maintain our Nasdaq listing. If we are unable to obtain sufficient funding when needed, we may be required to delay, limit, reduce or terminate our CDMO activities, product development programs or other operations. Any such outcome would materially and adversely affect our business, financial condition and results of operations. 3 Our business strategy, including the development and growth of our CDMO business alongside our therapeutic pipeline, may not be successful. Our current business strategy involves operating a contract development and manufacturing organization (CDMO) business while continuing to advance our therapeutic development programs. This strategy requires us to successfully manage and allocate resources between these activities, each of which has different operational, financial and risk profiles. Our ability to grow our CDMO business depends on a number of factors, including market demand for our services, our ability to attract and retain customers, our ability to execute contracts on commercially acceptable terms, and our ability to scale our manufacturing and operational capabilities efficiently. There can be no assurance that we will be successful in achieving these objectives or that our CDMO business will generate sufficient revenues to support our operations. At the same time, our therapeutic development activities are subject to the risks inherent in early-stage biopharmaceutical development, including significant costs, long development timelines and uncertainty regarding regulatory approval and commercial success. Our strategy requires significant management attention and financial resources, and we may face challenges in effectively balancing and prioritizing these activities. If we are unable to successfully execute our strategy, including the growth of our CDMO business and the advancement of our pipeline, our business, financial condition and results of operations could be materially and adversely affected. Raising additional capital may cause dilution to our existing shareholders, and debt financing, if available, while an inability to raise additional capital may restrict our operations or require us to relinquish rights to our technologies or product candidate(s). We may seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing shareholders will be diluted, and the terms may include liquidation or other preferences that adversely affect shareholder rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring future indebtedness, making capital expenditures or declaring dividends. If we raise additional funds through strategic partnerships, alliances and licensing arrangements with third parties, we may have to relinquish Risks Related to Development, Clinical Testing and Regulatory Approval of NanoAbs and any Other Current and Future Product Candidate(s) Our IL-17 program is subject to significant contractual, development and strategic uncertainties Our IL-17 development program is subject to significant development, strategic and contractual uncertainties. Under our license agreement with Max Planck Gesellschaft (“MPG”) and University Medical Center Göttingen (“UMG”), we are required to meet certain development milestones, including the submission of an Investigational New Drug (IND) application within specified timelines. We have requested extensions to the applicable IND submission deadline in order to support modifications to our development strategy. There can be no assurance that such extensions will be granted, or that any extension will not be subject to additional conditions, including potential payments. If we are unable to obtain the requested extensions or satisfy any related conditions, we may be at risk of losing our rights under the license agreement. In parallel, we have been reassessing the development strategy for our IL-17 program. Our initial approach focused on an intradermal IL-17-targeting therapy; however, this approach has presented scientific and technical challenges, including formulation and delivery considerations. As a result, we are evaluating alternative approaches, including the use of nanoAbs as components in more complex biologic constructs, such as multi-specific antibodies, which may require additional development time and investment. In addition, the therapeutic landscape for IL-17-targeting therapies has become increasingly competitive, with multiple approved products and development-stage candidates addressing overlapping indications. In this environment, a new IL-17-targeting monotherapy may face significant commercial challenges unless it demonstrates meaningful differentiation. These factors have contributed to our ongoing evaluation of the strategic direction, development approach and overall prioritization of our IL-17 program. As a result of the foregoing, there can be no assurance that we will continue to pursue the IL-17 program under its current structure, on its current timeline, or at all. Any decision to modify, delay or discontinue the program could result in the loss of rights under the applicable license agreement and may have a material adverse effect on our business and prospects. 4 We have not yet commercialized any product candidate(s), and we may never become profitable. We are party to licensing and research collaboration arrangements with MPG and UMG pursuant to which we are developing a pipeline of VHH antibody fragment (NanoAb) drug candidates targeting diseases with significant unmet medical need and potential commercial opportunity. Our initial licensed program focused on an inhalable COVID-19 NanoAb. While preclinical studies demonstrated promising results in an industry-accepted animal (hamster) model, the market for COVID-19 therapeutics has declined significantly, along with available capital. As a result, we suspended further development of this program and, together with the licensors, elected to abandon the related patents due to limited industry and investor interest and the costs associated with maintaining such assets. Our current development focus is on NanoAbs targeting Interleukin-17 (IL-17), which we licensed in June 2023, initially for indications such as plaque psoriasis and psoriatic arthritis. In addition, we have entered into an option agreement to acquire Pincell srl, the owner of PC111, a monoclonal antibody targeting soluble Fas ligand, and we are exploring additional NanoAb licensing opportunities under our existing collaborations. Notwithstanding the foregoing, we currently have no product candidates in clinical trials or on the market, and our preclinical pipeline remains limited. Even if we successfully advance one or more product candidates, we will not achieve commercial success unless we complete development, obtain regulatory approvals, and achieve market acceptance at favorable pricing and reimbursement levels. The degree of market acceptance of any current or future product candidates will depend on a number of factors, including: ● the timing, scope and outcome of regulatory approvals, if any; ● the competitive landscape; ● demand for our product candidates; ● the ability to demonstrate safety, efficacy and clinical differentiation; ● our ability to enter into strategic partnerships for development, commercialization or distribution; ● the effectiveness of our marketing and commercialization capabilities; ● our ability to manufacture at scale with consistent quality; and ● pricing, coverage and reimbursement decisions by governmental and third-party payors. Physicians, patients, payors and the broader medical community may be unwilling to accept, adopt or reimburse our product candidates. As a result, we cannot predict the extent of our future losses or the time required to achieve profitability, if ever. Even if we successfully develop one or more product candidates, we may never become profitable. In addition, we currently have limited internal marketing and commercial capabilities. If we are unable to enter into partnerships with third parties that have established commercialization infrastructure, we may need to build our own sales and marketing organization, which would require significant time, resources and capital. We may be unable to do so effectively or at all, which could delay or prevent successful commercialization. NanoAbs represent a relatively new approach to treating diseases, and we must overcome significant challenges in order to successfully develop, commercialize and manufacture product candidates based on this technology. We are currently concentrating our development efforts on the IL-17 NanoAb as a treatment for all potential indications where IL-17 plays a meaningful role, starting with psoriasis and psoriatic arthritis. The processes and requirements imposed by the U.S. Food and Drug Administration (the “FDA”) or other applicable health authorities may cause delays and additional costs in obtaining approvals for marketing authorization for our products. Because our platform is relatively new and only one drug developed by a competing company and related to rare blood diseases has been approved to date in the market, regulatory agencies, as well as insurance and other coverage providers and payers, may lack experience in evaluating our product candidates. This inexperience may lengthen the regulatory review process, increase our development costs and delay or prevent reimbursement and commercialization of our platform products. Additionally, advancing this novel platform creates significant challenges for us, and we must be able to overcome these challenges in order to successfully develop, commercialize and manufacture our product candidates. In light of our current resources and limited commercial experience, we have and may need to continue to establish third-party relationships to successfully develop, commercialize and market our pipeline candidates. Our long-term commercial viability may depend, in part, on our ability to successfully execute current strategic collaborations and establish new strategic collaborations with contract commercial organizations, pharmaceutical and biotechnology companies, non-profit organizations, and government agencies. Establishing and maintaining strategic collaborations and obtaining government funding is difficult and time-consuming. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position or based on their internal pipeline or available resources; government agencies may reject contract or grant applications based on their assessment of public need, the public interest, the ability of our products to address these areas, or other reasons beyond our expectations or control. If we fail to establish or maintain collaborations necessary for successful development, commercialization and marketing on acceptable terms, we may not be able to develop, commercialize or market product candidates or generate sufficient revenue to fund further research and development efforts. 5 New or existing collaborations, including our collaboration with MPG and UMG, may never result in the successful development or commercialization of any pipeline candidates for several reasons, including the fact that: ● we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development, manufacture and commercialization of pipeline candidates, in a timely manner or at all; ● such partners may not devote sufficient resources to our pipeline candidates or properly maintain or defend our intellectual property rights (if required); ● such partners may decide to pursue competitive product candidates developed outside of the partnership arrangement; ● any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our pipeline candidates and affect our ability to realize product revenue; ● disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time-consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals, and commercialization activities; and ● such partners may decide to terminate or not to renew the collaboration for these or other reasons. If we or our collaborators fail to maintain our existing agreements or in the event we fail to establish agreements as necessary, we could be required to undertake research, development, manufacturing, and commercialization activities solely at our own expense. These activities would significantly increase our capital requirements and, given our lack of sales, marketing and distribution capabilities, significantly delay the commercialization of our pipeline candidates. We may be unable to exercise our option to acquire Pincell, or if we exercise the option we may be required to resell our shares in Pincell to the previous shareholder, either of which will affect our future prospects. On March 27, 2025, we announced that we had entered into a binding option agreement for the acquisition of Pincell, the owner of PC111, a monoclonal antibody in development for treating Pemphigus, Steven Johnson’s Syndrome (SJS) and Toxic Epidermal Necrolysis (TEN). Pursuant to the terms of the option agreement with Pincell, we had the right to exercise, at our sole discretion, a full sale and transfer of Pincell’s shares by the end of 2025, subject to approval of the Golden Power regulatory clearance by the Italian government and satisfaction of certain closing requirements, which include the requirement to either obtain an award of a grant to our wholly owned Polish subsidiary under the European Funds for a Modern Economy (FENG) program in Poland or secure $3 million by December 31, 2025 to fund the development of PC111. On September 11, 2025, the parties entered into a first amendment to the option agreement, extending the deadlines for fulfillment of the option conditions and exercise of the option. On February 28, 2026, the parties entered into a second amendment to the option agreement, further extending the deadline for fulfillment of the option conditions to August 31, 2026, and the exercise of the option to September 30, 2026. On June 5, 2025, we announced that the Italian government had granted Golden Power regulatory clearance. On September 18, 2025, we received notification from the Polish National Center for Research and Development that our application for the award of a grant under the FENG program was not selected for funding. We filed an appeal, which was subsequently rejected for reasons relating to not sufficiently addressing the potential national impact and innovation of the portion of the project to be funded by the grant proceeds as reflected in the application. On March 2, 2026, we announced that we plan to submit by March 31st a revised application to the FENG program reflecting structural enhancements to project design and translational scope. If we are not successful in either obtaining the grant under the FENG program or securing $3 million by August 31, 2026 to fund the development of PC111, we will be unable to exercise the option. If we are unable to exercise the option, our future prospects will be affected. In addition, pursuant to the option agreement, if we or our affiliates have not filed an IND application for PC111 to the FDA, or any similar dossier application in a country other than the U.S., by December 31, 2028, the option agreement grants each seller the right to repurchase the shares of Pincell it sold to us for the lower of (i) the fair market value of Pincell and (ii) the sum funded by us or our affiliates into Pincell at that time (but in any event not less than the nominal value of the shares of Pincell). If we have difficulty in funding the development of PC111, including if we exercise our option to acquire Pincell but do not receive the grant from the FENG program in Poland, or if for any other reason we do not file an IND application for PC111 to the FDA, or any similar dossier application in a country other than the U.S., by December 31, 2028, we will be required to resell our shares in Pincell to the previous shareholders of Pincell, which will affect our future prospects. 6 Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required, and we may not adequately develop such protocols to support approval. In addition to FDA requirements and those of other regulatory authorities, an independent institutional review board or an independent ethics committee at each medical institution proposing to participate in the conduct of the clinical trial generally must review and approve the clinical trial design and patient informed consent form before commencement of the study at the respective medical institution. The institutional review boards approve the clinical trial protocols and conduct periodic reviews of the clinical trials. The clinical trial protocols describe the type of people who may participate in the clinical trial, the schedule of tests and procedures, the medications and dosages to be studied, the length of the study, the study’s objectives, and other details. In general, the institutional review board will consider, among other matters, ethicastil factors, the safety of human subjects and the possibility of liability of the institution conducting the trial. Our pre-clinical studies may not be adequate proof of safety and efficacy, and as a result, we may not be successful in developing clinical trial protocols necessary to support institutional review board approval. Any delay or failure to obtain institutional review board approval to conduct a clinical trial at a prospective site could materially impact the costs, timing, or successful completion of a clinical trial. Current and future product candidates would be subject to extensive regulation and may never obtain regulatory approval. The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidate(s) are subject to extensive regulation by the Food and Drug Administration (the “FDA”) in the United States (the “U.S.”) as detailed in Title 21 of the U.S. Code or elsewhere and by comparable authorities in foreign markets. In the U.S., we are not permitted to market our product candidate(s) until we receive regulatory approval from the FDA. The process of obtaining regulatory approval is expensive, often takes many years and can vary substantially based upon the type, complexity and novelty of the product candidate(s) involved, as well as the target indications and patient population. Current and future product candidates must satisfy rigorous standards of safety and efficacy before product candidates can be approved for commercial use by the European Medicines Agency (the “EMA”) in the European Union (the “EU”) or the FDA in the U.S., or any other regulatory authorities for all or any of the indications for which product candidates are intended to be used. The EMA, FDA and any other regulatory authorities have substantial discretion over the approval process, and approval is never guaranteed. We may need to conduct significant additional research before we can file applications for product approval. Typically, in the pharmaceutical industry, there is a high rate of attrition for product candidates in clinical trials. Success in early clinical trials does not ensure that later clinical trials will be successful. For example, a number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate(s) for many reasons, including: ● such authorities may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities in foreign markets that a product candidate(s) is safe and effective for any indication; ● such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S.; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; or ● such authorities may find deficiencies in manufacturing processes or facilities, including the processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies. In addition, delays or rejections may be encountered based upon additional government regulation, including any changes in legislation or policy of the EMA, FDA or any other regulatory policy, during the process of product development, clinical trials and regulatory reviews. Approval procedures vary among countries, and may involve additional product testing, administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the EMA, FDA and comparable foreign regulatory authorities in reviewing new pharmaceutical products based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Failure to obtain EMA, FDA or any other regulatory approval for current and future product candidates in a timely manner or at all will severely undermine our business by delaying or halting commercialization of our products, imposing costly procedures, diminishing competitive advantages and reducing the number of saleable products and, therefore, corresponding product revenues. 7 Current and future product candidates will remain subject to ongoing regulatory requirements even if we receive regulatory approval to market such product candidate(s), and if we fail to comply with such requirements, we could lose those approvals that have been obtained, and the sales of any approved commercial products could be suspended. Even if we receive regulatory approval to market current and future product candidates, such product candidate(s) will remain subject to extensive regulatory requirements, including requirements relating to manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping. Even if regulatory approval of any product candidate(s) is granted, approval may be subject to limitations on the uses for which the product candidate(s) may be marketed or the conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product candidate(s), which could negatively impact us or our collaboration partners by reducing revenues or increasing expenses, and cause the approved product candidate(s) not to be commercially viable. In addition, as clinical experience with a drug expands after approval, typically because it is used by a greater number and more diverse group of people after approval than during clinical trials, side effects and other problems may be observed over time after approval that were not seen or anticipated during pre-approval clinical trials or other studies. Any adverse effects observed after the approval and marketing of a product candidate(s) could result in limitations on the use of, withdrawal of EMA, FDA or any other regulatory approval or withdrawal of any approved product candidate(s) from the marketplace. Absence of long-term safety data may also limit the approved uses of our product candidate(s), if any. If we fail to comply with the regulatory requirements of the EMA, FDA and any other applicable regulatory authorities, or previously unknown problems with any approved commercial product candidate(s), manufacturers or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions or other setbacks, including, without limitation, the following: ● suspension or imposition of restrictions on the product candidate(s), manufacturers or manufacturing processes, including costly new manufacturing requirements; ● warning letters; ● civil or criminal penalties, fines and/or injunctions; ● product seizures or detentions; ● import or export bans or restrictions; ● voluntary or mandatory product recalls and related publicity requirements; ● suspension or withdrawal of regulatory approvals; ● total or partial suspension of production; and ● refusal to approve pending applications for marketing approval of new product candidate(s) or supplements to approved applications. If we or our partners, if any, are slow to adapt, or are unable to adapt, to changes in existing regulatory requirements or adoption of new regulatory requirements or policies, marketing approval for our product candidate(s) may be lost or cease to be achievable, resulting in decreased revenue from milestones, product sales or royalties, or otherwise, which would have a material adverse effect on our business, financial condition or results of operations. Current and future product candidates, if approved, may face competition sooner than anticipated. Our product candidates may face serious competition from other products targeting the same disease or condition, including biosimilar products. In the United States, to the extent any of our current or future product candidates are regulated as biologic products and approved under a biologics license application, or BLA, they may be subject to competition under the abbreviated biosimilar pathway established by the Biologics Price Competition and Innovation Act of 2009, or BPCIA. Under current U.S. law, a biosimilar application generally may not be submitted until four years after the date on which the reference product was first licensed by the FDA, and FDA generally may not make approval of such biosimilar effective until twelve years after the date of first licensure of the reference product, subject in certain cases to an additional six-month pediatric exclusivity period. These exclusivity protections are separate from, and do not replace, patent protection. In the European Union, biologic products are subject to a different regulatory exclusivity framework. Under current EU rules, medicinal products generally benefit from eight years of data exclusivity and ten years of market protection, which may in certain cases be extended by one additional year. As a result, biosimilar competition in the European Union may arise on a different timetable than in the United States. In addition, another company may seek approval of a competing biologic through a full regulatory submission based on its own preclinical and clinical data rather than through an abbreviated biosimilar pathway. Further, the legal and regulatory framework governing biologics, biosimilars, regulatory exclusivity and competition in both the United States and Europe is complex and may change as a result of future legislation, regulatory action, judicial decisions or broader pharmaceutical reform initiatives. For example, the European Union is currently considering significant reforms to its pharmaceutical legislation, including changes to regulatory protection periods. Any such developments could permit competition earlier than we anticipate or otherwise adversely affect the commercial prospects of our product candidates, if approved. 8 Although, if approved, we expect our biologic product candidates to be eligible for regulatory exclusivity under the Biologics Price Competition and Innovation Act of 2009, or BPCIA, there can be no assurance that such exclusivity will be granted or that it will provide the scope or duration of protection we anticipate. For example, the FDA may determine that one or more of our products does not qualify as a reference product, which could allow earlier biosimilar competition. In addition, the duration and scope of regulatory exclusivity for biologic products in the United States remains subject to potential legislative, regulatory and policy changes, including those driven by broader healthcare and drug pricing reform efforts. Any such changes could reduce the period of exclusivity or otherwise facilitate earlier competition. The legal and regulatory framework governing biosimilars, including issues related to interchangeability, substitution and market uptake, continues to evolve through FDA guidance, regulatory practice and litigation. These factors may impact the extent to which biosimilar products, once approved, are able to compete effectively with any of our products. Furthermore, a competitor may seek approval of a competing biologic through a full BLA supported by its own preclinical and clinical data, rather than relying on the abbreviated biosimilar pathway. In such cases, any regulatory exclusivity to which we may be entitled would not prevent such competitor from obtaining approval and marketing its product upon approval. In the European Union and other jurisdictions, regulatory exclusivity frameworks differ from those in the United States and are also subject to change, including ongoing legislative reform initiatives. As a result, the timing and extent of potential competition for our product candidates, if approved, may vary across jurisdictions and may occur sooner than we anticipate. If the results of any future clinical trials show that current and future product candidates are effective based on certain endpoints but nevertheless fail to achieve all the primary/secondary endpoint(s) requiring us to conduct additional clinical trials, or if clinical trials that we conduct for such products in the future are prolonged or delayed, we would be unable to commercialize current and future product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenues from potential sales of such product candidate(s). If we fail to achieve all the primary/secondary endpoints, then we may be required by the FDA or any other regulatory authority to conduct additional clinical studies. We cannot predict whether we will encounter problems with any such clinical trials that will cause us or any regulatory authority to delay or suspend those clinical trials or delay the analysis of data derived from them. A number of events, including any of the following, could delay the completion of any such additional clinical trials and negatively impact our ability to obtain regulatory approval for, and to market and sell, a particular product candidate(s): ● conditions imposed on us by the FDA or any applicable foreign regulatory authority regarding the scope or design of our clinical trials; ● delays in recruiting and enrolling participants or volunteers into any potential future clinical trials; ● delays in obtaining, or our inability to obtain, required approvals from institutional review boards (“IRBs”) or other reviewing entities at clinical sites selected for participation in our clinical trials; ● insufficient supply or deficient quality of our product candidate(s) or other materials necessary to conduct our clinical trials; ● lower than anticipated retention rate of subjects and participants in clinical trials; ● negative or inconclusive results from clinical trials, or results that are inconsistent with earlier results, that necessitate additional clinical studies; ● serious and unexpected drug-related side effects experienced by subjects and participants in clinical trials; or ● failure of our third-party contractors to comply with regulatory requirements or otherwise meet their contractual obligations to us in a timely manner. 9 Clinical trials require sufficient participant enrollment, which is a function of many factors, including the size of the participant population, the nature of the trial protocol, the proximity of participants to clinical sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial. Delays in participant enrollment can result in increased costs and longer development times. The failure to enroll participants in a clinical trial could delay the completion of the clinical trial beyond our current expectations. In addition, the FDA or foreign applicable regulatory authorities could require us to conduct clinical trials with a larger number of subjects than we have prior experience with. We may not be able to enroll a sufficient number of participants in a timely or cost-effective manner. Furthermore, enrolled participants may drop out of clinical trials, which could impair the validity or statistical significance of those clinical trials. Prior to commencing clinical trials in the U.S., we must submit an Investigational New Drug (“IND”) application to the FDA and the IND application must become effective. Delays in any clinical trials the FDA or EMA may require us to conduct will result in increased development costs for current and future product candidates. In addition, if any such clinical trials are delayed, our competitors may be able to bring products to market before we do and the commercial viability of current and future product candidates could be limited. Clinical trials are very expensive, time-consuming and difficult to design and implement, and, as a result, we may suffer delays or suspensions in future trials which would have a material adverse effect on our ability to generate revenues. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Regulatory authorities, such as the EMA and FDA, may preclude clinical trials from proceeding. Additionally, the clinical trial process is time-consuming, failure can occur at any stage of the trials and we may encounter problems that cause us to abandon or repeat clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including: ● unforeseen safety issues; ● determination of proper dosing; ● lack of effectiveness or efficacy during clinical trials; ● failure of our contract manufacturers or inability of our in-house facility to manufacture our product candidate(s) in sufficient quantities and in accordance with current good manufacturing practices, or cGMP; ● our failure or the failure of third party suppliers to perform final manufacturing steps for the drug substance; ● slower than expected rates of participant recruitment and enrollment; ● lack of healthy volunteers and participants to conduct trials; ● inability to monitor participants adequately during or after treatment; ● failure or delay in reaching an agreement with a third party contract research organization or clinical trial site(s), and failure of third party contract research organizations to properly implement or monitor the clinical trial protocols; ● failure of the FDA, Institutional Review Boards (“IRBs”), or other regulatory bodies to authorize our clinical trial protocols, or a decision by a regulatory body to place one or more of our trials on hold; ● inability or unwillingness of medical investigators and Contract Research Organizations to follow our clinical trial protocols and applicable regulatory requirements; and ● lack of sufficient funding to finance the clinical trials. 10 In addition, we or regulatory authorities may suspend or terminate our clinical trials at any time if it appears that we are exposing participants to unacceptable health risks, if the regulatory authorities find deficiencies in our regulatory submissions or the conduct of these trials, if inspection of the clinical trial operations or trial site by a regulatory authority results in the imposition of a clinical hold, or if there is a failure to demonstrate a benefit from using the product candidate(s), or changes in governmental regulations or administrative actions. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial. Any suspension of clinical trials will delay possible regulatory approval, if any, and adversely impact our ability to develop product candidate(s) and generate revenue. We may in the future conduct clinical trials of current and future product candidates at sites outside the U.S., and the FDA may not accept data from trials conducted in foreign locations. We may in the future conduct clinical trials of current and future product candidates outside of the U.S. Although the FDA may accept data from clinical trials conducted outside the U.S., acceptance of this data is subject to certain conditions imposed by the FDA. For example, under 21 Code of Federal Regulations (“CFR”) 312.20, the clinical trial must be well designed and conducted in accordance with good clinical practice, or GCP, requirements, and the FDA must be able to validate the clinical trial data through an on-site inspection, if necessary, among other things. If a marketing application is based solely on foreign clinical data, the FDA can require such data to be applicable to the U.S. population and U.S. medical practice, and for the clinical trials to have been performed by clinical investigators of recognized competence. There can be no assurance the FDA will accept data from trials conducted outside of the U.S. If the FDA does not accept the data from any clinical trials that may be conducted outside of the U.S. of current and future product candidates, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of the product candidate(s). Positive results from earlier preclinical data and clinical trials may not be predictive of the results in later clinical trials of current and future product candidates, and the results of our clinical trials may not be replicated in additional clinical trials that we may be required to conduct, which could result in development delays or a failure to obtain marketing approval. Positive results from previous clinical trials may not be predictive of the results of later clinical trials of current and future product candidates, and any early clinical trials may not be predictive of results in later clinical trials that we may conduct. A number of companies in the pharmaceutical and biopharmaceutical industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in early-stage development. Accordingly, the results from preclinical studies and clinical trials for current and future product candidates may not be predictive of the results we may obtain in later stage trials. Our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials. Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain FDA or European Medicines Agency, or other applicable regulatory agency, approval for their product candidates. We face significant technical, regulatory and execution risks related to the development of NanoAb product candidates across different delivery formats. Our nanobody platform supports multiple product formats, including local (intradermal), inhaled and systemic antibody-based approaches. However, each of these approaches presents distinct development challenges and uncertainties. Local intradermal delivery, which was initially pursued for our anti-IL-17 NanoAb program, may require sustained-release formulations, specialized delivery devices and novel clinical approaches. These requirements may increase development timelines, costs and regulatory uncertainty, and there can be no assurance that such approaches will result in a clinically or commercially viable product. Systemic applications of nanobodies, including bi-specific or multi-specific antibody formats, require drug engineering, manufacturing capabilities and development expertise that we do not fully possess in-house and may need to access through third-party collaborations. These approaches may also involve additional complexity in design, manufacturing and regulatory approval. As a result, we may be required to reprioritize, delay or discontinue certain development programs, and there can be no assurance that any of our product candidates will successfully advance through development or achieve regulatory approval. If we experience delays in the enrollment of participants in any future clinical trials we may conduct, our receipt of necessary regulatory approvals could be delayed or prevented. We may not be able to initiate clinical trials for current and future product candidates. Participant enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the population eligible to participate, the proximity of potential participants to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and participants’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating. If we fail to enroll and maintain the number of participants for which the clinical trial was designed, the statistical power of that clinical trial may be reduced, which would make it harder to demonstrate that the product candidate being tested in such clinical trial is safe and effective. Additionally, enrollment delays in any clinical trials may result in increased development costs for current and future product candidates, which could materially harm our financial condition and limit our ability to obtain additional financing. Our inability to enroll a sufficient number of participants for any clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. 11 The occurrence of serious complications or side effects in connection with current and future product candidates, either in future clinical trials we may conduct or post-approval, could impede such future clinical trials, if any, and lead to refusal of regulatory authorities to approve our product candidate(s) or, post-approval, revocation of marketing authorizations or refusal to approve new indications, which could severely harm our business, prospects, operating results and financial condition. In any future clinical trials of current and future product candidates that we may conduct, or following regulatory approval, illnesses, injuries, discomforts and other adverse events may be reported by subjects. In addition, side effects are sometimes only detectable after they are made available to patients on a commercial scale after approval. Results of any future clinical trials we may undertake for current and future product candidates could reveal a high and unacceptable severity and prevalence of such side effects. In such an event, any clinical trials we may conduct could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of current and future product candidates for any or all targeted indications. Drug-related side effects could affect patient recruitment for any clinical trials we may conduct or the ability of enrolled participants to complete such trials or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, if current and future product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such product candidate(s), a number of potentially significant negative consequences could result, including: ● such authorities may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities in foreign markets that a product candidate(s) is safe and effective for any indication; ● such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S.; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; or ● such authorities may find deficiencies in manufacturing processes or facilities. Any of these events could prevent us from achieving or maintaining market acceptance of current and future product candidates, if approved, and could significantly harm our business, results of operations and prospects. If we are not successful in discovering, developing and commercializing current and future product candidates, our ability to expand our business and achieve our strategic objectives may be impaired. Research programs designed to identify current and future product candidates may require substantial technical, financial and human resources, whether or not such efforts are successful. Our research programs may initially show promise in identifying current and future product candidates, yet fail to lead to clinical development or commercialization for many reasons, including the following: ● the research methodology used may not be successful in identifying potential product candidate(s); ● competitors may develop alternatives that render our product candidate(s) obsolete; ● a product candidate(s) may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; ● a product candidate(s) may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and ● a product candidate(s) may not be accepted as safe and effective by regulatory authorities, participants, the medical community or third-party payors. If we are unable to identify suitable compounds for preclinical and clinical development, we may not be able to obtain sufficient product revenues in future periods, which likely would result in significant harm to our financial position and adversely impact the price of the ADSs. 12 Inadequate funding, resource constraints or shifting priorities at regulatory authorities may delay the development and approval of our product candidates. The ability of the U.S. Food and Drug Administration (FDA) and other regulatory authorities, including European agencies such as the Paul-Ehrlich-Institut (PEI), to review and approve product candidates, provide scientific advice, and respond to regulatory submissions depends on a variety of factors, including government funding levels, staffing, regulatory priorities and policy changes. Any constraints on resources or changes in priorities may result in delays in regulatory interactions, including scientific advice meetings, review of submissions and approval timelines. Our development programs rely on timely feedback and engagement from regulatory authorities to define development pathways, including clinical trial design, manufacturing requirements and product positioning. Delays or disruptions in regulatory processes may adversely affect our ability to advance our programs, particularly for product candidates involving novel approaches, such as local delivery or complex biologic formats, where regulatory expectations may be less established. In addition, government budget constraints, shutdowns or other disruptions may limit the ability of regulatory agencies to perform routine functions, including the review of investigational applications and marketing submissions. Any such delays could extend development timelines, increase costs and adversely affect our business, financial condition and results of operations. Coverage and reimbursement may not be available for current and future product candidates (if and when approved for commercial sale), which could make it difficult for us to sell such product candidates profitably. Market acceptance and sales of current and future product candidates will depend on coverage and reimbursement policies. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which products they will pay for and establish reimbursement levels. We cannot be sure that coverage and reimbursement will be available for current and future product candidates we may develop. Even if coverage is provided, we cannot be sure that the amount of reimbursement available, if any, will not reduce the demand for, or the price of, our product candidate(s). If reimbursement is not available or is available only at limited levels, we may not be able to successfully compete through sales of our proposed product candidate(s). In the United States, no uniform policy of coverage and reimbursement for pharmaceutical products exists among third-party payors. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement for pharmaceutical products can differ significantly from payor to payor. Certain Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act marketplace and other private payor plans are required to include coverage for certain preventative services, including vaccinations recommended by the U.S. Centers for Disease Control’s, or CDC’s, Advisory Committee on Immunization Practices, or ACIP, without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members. For Medicare beneficiaries, vaccines may be covered for reimbursement under either the Part B program or Part D depending on several criteria, including the type of vaccine and the beneficiary’s coverage eligibility. If our vaccine candidate(s), once approved, is reimbursed only under the Part D program, physicians may be less willing to use our product candidate(s) because of the claims adjudication costs and time related to the claims adjudication process and collection of co-payments associated with the Part D program. Outside the United States, certain countries, including a number of member states of the European Union, set prices and reimbursement for pharmaceutical products, with limited participation from the marketing authorization holders. We cannot be sure that such prices and reimbursement will be acceptable to us or our partners, if any. If the regulatory authorities in these jurisdictions set prices or reimbursement levels that are not commercially attractive for us, our revenues from sales by us, and the potential profitability of our product candidate(s), in those countries would be negatively affected. Additionally, some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. As a result, we might obtain marketing approval for a product candidate(s) in a particular country, but then may experience delays in the reimbursement approval of our product candidate(s) or be subject to price regulations that would delay our commercial launch of the product candidate(s), possibly for lengthy time periods, which could negatively impact the revenues we are able to generate from the sale of the product candidate(s) in that particular country. Current and future healthcare legislation and pricing regulations may adversely affect our ability to obtain approval for, commercialize, and achieve profitability from our product candidates. In the United States and other jurisdictions, there have been and continue to be legislative and regulatory efforts to control healthcare costs, including measures affecting drug pricing, reimbursement and market access. These efforts may reduce the demand for, or the price that may be obtained for, newly approved therapies. Recent and potential future reforms, including those affecting Medicare and other government healthcare programs, may result in increased pressure on drug pricing, expanded rebate obligations, limitations on reimbursement or increased scrutiny of the value and cost-effectiveness of new therapies. In addition, private payors are increasingly adopting similar cost-containment measures. Because we do not currently have approved products, our ability to successfully commercialize any future product candidates will depend significantly on coverage and reimbursement decisions by government and private payors. These decisions are uncertain and may be influenced by evolving regulatory and legislative policies. Any changes in healthcare laws, regulations or reimbursement policies, or their interpretation, may increase the cost of obtaining regulatory approval, delay commercialization, reduce the prices we are able to charge, or otherwise adversely affect our business, financial condition and results of operations. 13 We are subject to extensive and costly government regulation. Any current and future product candidate(s) we may develop will be, subject to extensive and rigorous domestic government regulation, including with respect to Europe, regulation by the EMA and other relevant regional, national and local authorities, with respect to Israel, regulation by the Israeli Ministry of Health, and with respect to the U.S., regulation by the FDA, the CMS, other divisions of the U.S. Department of Health and Human Services, including its Office of Inspector General, the U.S. Department of Justice, the Departments of Defense and Veterans Affairs and, to the extent our product candidate(s) are paid for directly or indirectly by those departments, state and local governments and their respective foreign equivalents. The FDA regulates the research, development, preclinical and clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion, sale, distribution, and import and export of pharmaceutical products under various regulatory provisions. Current and future product candidates we may develop, which will be tested and marketed abroad, will be subject to extensive regulation by foreign governments, whether or not we have obtained EMA, the Israeli Ministry of Health’s approval and/or FDA approval. Such foreign regulation may be equally or more demanding than corresponding European, Israeli or U.S. regulation. Government regulation substantially increases the cost and risk of researching, developing, manufacturing, and selling products. Our failure to comply with these regulations could result in, by way of example, significant fines, criminal and civil liability, product seizures, recalls, withdrawals, withdrawals of approvals, and exclusion and debarment from government programs. Any of these actions, including the inability of current and future product candidates to obtain and maintain regulatory approval, would have a materially adverse effect on our business, financial condition, results of operations and prospects. Our relationships with customers, third-party payors, physicians and healthcare providers will be subject to applicable anti-kickback, fraud and abuse, and other healthcare laws and regulations, which could expose us to significant liability and adversely affect our business. Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and use of any product candidates for which we obtain marketing approval. Our current and future arrangements with customers, third-party payors and healthcare providers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct research and, if approved, market, sell and distribute our product candidates. Although we do not currently control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patient rights may apply to our business. These laws and regulations include, among others: ● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, to induce or reward referrals of, or the purchase, lease, order or recommendation of, any item or service reimbursable under a federal healthcare program such as Medicare or Medicaid. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation, and it has been interpreted to apply broadly to arrangements between pharmaceutical manufacturers and prescribers, purchasers and formulary managers; ● federal civil and criminal false claims laws, including the False Claims Act, which prohibit, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment to the federal government or knowingly making or using false records or statements material to such claims. Manufacturers may be held liable even if they do not submit claims directly if they are deemed to have “caused” the submission of false claims. In addition, violations of the Anti-Kickback Statute may form the basis for liability under the False Claims Act. The False Claims Act also allows private individuals to bring actions on behalf of the government and share in any recovery; ● the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which includes criminal provisions that prohibit knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services; ● the federal Physician Payments Sunshine Act and its implementing regulations (commonly referred to as the Open Payments program), which require certain manufacturers of drugs, biologics and medical devices reimbursable under federal healthcare programs to report annually to the Centers for Medicare & Medicaid Services (CMS) information related to payments or other transfers of value to physicians, teaching hospitals and certain non-physician healthcare providers, as well as ownership and investment interests; ● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and practices that may harm consumers; and ● analogous state and foreign laws and regulations, including state anti-kickback and false claims laws, state transparency laws and laws that may require pharmaceutical companies to comply with industry compliance standards or restrict payments to healthcare providers. 14 Ensuring that our business arrangements comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities may conclude that our business practices do not comply with such laws and regulations. If our operations or arrangements are found to be in violation of any applicable laws, we may be subject to significant civil, criminal and administrative penalties, including fines, damages, disgorgement, exclusion from participation in government healthcare programs such as Medicare and Medicaid, reputational harm, and the curtailment or restructuring of our operations. We may also be subject to additional reporting obligations or oversight if we become subject to a corporate integrity agreement or similar arrangement. If our partners or counterparties, including healthcare providers or other third parties, are found to be non-compliant with applicable laws, we may also be exposed to liability or reputational harm, which could adversely affect our business, financial condition and results of operations. Changes in regulatory requirements and guidance or unanticipated events may occur during any future clinical trials we may conduct, which may result in necessary changes to clinical trial protocols, which could result in increased costs to us, delay our development timeline or reduce the likelihood of successful completion of such clinical trials. Changes in regulatory requirements and guidance or unanticipated events may occur during any clinical trials we may conduct may occur, as a result of which we may need to amend clinical trial protocols. Amendments may require us to resubmit our clinical trial protocols to IRBs for review and approval, which may adversely affect the cost, timing and successful completion of a clinical trial. If we experience delays in the completion of, or if we terminate, any future clinical trials we may conduct, the commercial prospects for current and future product candidates would be harmed and our ability to generate product revenue would be delayed, possibly materially. If we acquire or license additional technologies or product candidate(s), we may incur a number of additional costs, have integration difficulties and/or experience other risks that could harm our business and results of operations. We may acquire and in-license current and future product candidate(s) and technologies. Any current and future product candidate(s) 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(s) or product candidate(s) developed based on in-licensed technology will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any current and future product candidate(s) that we develop based on acquired or licensed technology that is granted regulatory approval will be manufactured or produced economically, successfully commercialized or widely accepted or competitive in the marketplace. Moreover, integrating any newly acquired or in-licensed product candidate(s) could be expensive and time-consuming. If we cannot effectively manage these aspects of our business strategy, our business may not succeed. Natural disasters, public health emergencies and other disruptions could adversely affect our business, operations and ability to execute our development and commercialization plans. Our operations and those of our partners and suppliers may be adversely affected by natural disasters, public health emergencies, geopolitical events or other disruptions, including pandemics, epidemics, or other widespread health crises. Such events may result in travel restrictions, workforce disruptions, supply chain interruptions, limitations on business operations or other government-imposed measures that could negatively impact our activities. We rely on third parties, including contract research organizations (CROs), contract manufacturing organizations (CMOs), suppliers and collaborators, to support our development programs and operations. Disruptions affecting these parties may impair their ability to perform their obligations, which could delay or disrupt our research, development, manufacturing or future commercialization efforts. In addition, such events may adversely affect global financial markets and economic conditions, which could reduce our ability to raise capital on acceptable terms or at all. Public health emergencies and other disruptions may also impact the operations of regulatory authorities, including the U.S. Food and Drug Administration (FDA) and foreign regulators, potentially delaying regulatory interactions, inspections and the review of submissions. 15 While we maintain business continuity plans, these plans may not be sufficient to mitigate the impact of such events. The extent to which any such disruption may affect our business, financial condition and results of operations will depend on future developments that are uncertain and beyond our control Risks Related to Our CDMO Business Unit Our CDMO business is relatively new and may not achieve commercial success, which could adversely affect our results of operations and financial condition. In September 2023, we launched Scinai Bioservices as a CDMO business unit to provide process development and GMP manufacturing services to biotechnology companies. This business represented a strategic shift in our operations and exposes us to a range of risks associated with building and scaling a service-based business. We have limited operating history in providing CDMO services and may face challenges in attracting and retaining customers, achieving sufficient facility utilization, and generating recurring revenues. Our ability to grow this business will depend on our ability to compete with established CDMOs that have greater resources, broader capabilities and longer track records. In addition, our CDMO activities are subject to strict regulatory requirements, including compliance with current Good Manufacturing Practices (cGMP). Any failure to maintain compliance or to meet quality standards could result in regulatory action, loss of customers, reputational harm and potential liability. Our success depends on our ability to hire, train and retain personnel with relevant technical and operational expertise, manage complex projects, and maintain efficient and reliable operations. We may also be exposed to credit risk from customers, delays in customer programs, or variability in demand, which could impact our revenues and cash flow. If we are unable to successfully execute our CDMO strategy, achieve sustainable customer demand, or operate efficiently and in compliance with applicable regulations, our business, financial condition and results of operations may be materially adversely affected. We may not achieve the expected benefits from our acquisition of Recipharm Israel Ltd. (now Scinai Biopharma Services Ltd.) and our related strategic collaboration with Recipharm, and we may encounter significant integration challenges. On February 17, 2026, we acquired 100% of the shares of Recipharm Israel Ltd., which operates a manufacturing site in Yavne, Israel, and entered into a long-term strategic commercial collaboration with Recipharm. Following the acquisition, the entity was renamed Scinai Biopharma Services Ltd. (“Scinai Biopharma”). We expect this transaction to enhance our CDMO capabilities, including expanding into small-molecule manufacturing alongside peptides and liposomes, strengthening our industrial credibility and broadening our service offering and client base. However, there can be no assurance that we will realize these anticipated benefits. The success of this transaction depends on a number of factors, including our ability to effectively integrate the acquired operations into our existing business. The integration process is complex and may involve challenges, including aligning quality systems and regulatory compliance processes, integrating financial reporting and internal controls, maintaining operational continuity, and managing manufacturing activities efficiently. In addition, the success of the acquisition and collaboration depends on our ability to retain key personnel and customers, avoid disruptions to ongoing projects, and successfully execute on the strategic collaboration with Recipharm. We may also encounter unforeseen costs, operational difficulties or delays associated with the integration of the acquired business, and the integration process may place a significant burden on management and require substantial time and resources, potentially diverting attention from other strategic priorities. Furthermore, the expected commercial benefits of the collaboration with Recipharm may not materialize to the extent anticipated, or at all. If we are unable to successfully integrate Scinai Biopharma and realize the expected benefits of the acquisition and collaboration in a timely and efficient manner, our business, financial condition and results of operations may be materially adversely affected. 16 External competition from other CDMO providers may be harmful to our planned CDMO business. We face competition from other companies that are large, well-established manufacturers with financial, technical, research and development and sales and marketing resources that are significantly greater than ours. To be successful, we will need to convince potential clients that our overall value proposition is superior to the one of other CDMOs. Our ability to achieve this and to successfully compete against other manufacturers will depend, in large part, on our success in developing processing technologies that improve the efficiency of and reduce the cost and/or time associated with drug development projects. If we are unable to successfully demonstrate our competitive advantages, we may not be able to compete against other CDMOs and generate significant revenues. Our CDMO business depends on our ability to attract and retain customers and on the level of spending by those customers on development and manufacturing services. Our CDMO revenues are dependent on our ability to secure new customers and maintain existing relationships, as well as on the level of activity and spending by our customers. Many of our customers are biotechnology companies whose spending is influenced by their access to capital, clinical progress and strategic priorities, which may change over time. Customers may delay, reduce or cancel projects for a variety of reasons, including financial constraints, changes in development strategy, clinical or regulatory setbacks, or a decision to bring activities in-house or shift to other service providers. As a result, our revenues may be variable and difficult to predict. In addition, consolidation within the pharmaceutical and biotechnology industries may reduce the number of potential customers or result in customers developing internal manufacturing capabilities, which could decrease demand for our services. If we are unable to attract new customers, retain existing customers or maintain or grow customer spending, our CDMO revenues, utilization levels and profitability may be adversely affected. This, in turn, could negatively impact our business, financial condition and results of operations and may require us to seek additional capital. CDMO services are highly complex and failure to provide quality and timely services to our CDMO clients could adversely impact our business. The CDMO services we offer can be highly complex, due in part to strict regulatory requirements and the inherent complexity of the services provided. A failure of our quality management systems and processes in our facilities could cause problems in connection with facility operations for a variety of reasons, including equipment malfunction, viral contamination, failure to follow specific manufacturing instructions, protocols and standard operating procedures, problems with raw materials or environmental factors. Such issues could affect production of a single manufacturing run or manufacturing campaigns, requiring the destruction of products, or could halt manufacturing operations altogether. In addition, any failure to meet required quality standards may result in our failure to timely deliver products to our clients which, in turn, could damage our reputation for quality and service. Any such incident could, among other things, lead to increased costs, lost revenue, reimbursement to clients for lost drug substances, damage to and possibly termination of client relationships, time and expense spent investigating and remediating the cause and, depending on the cause, similar losses with respect to other manufacturing runs. In addition, such issues could subject us to litigation, the cost of which could be significant. Problems may arise during the production of our products and product candidates, as well as those we produce for our CDMO clients, due to the complexity of the processes involved in their development, manufacturing and shipment or other factors. Significant delays in product manufacturing or development and our ability to produce sufficient quantities to meet the needs of our clients could cause delays in recognizing revenues, which would harm our business, financial condition, operating results and cash flows. The majority of our products and our clients’ products are complex biological drug candidates. Manufacturing biological drug candidates, especially in large quantities, is complex. The products must be made consistently and in compliance with a clearly defined manufacturing processes. Problems during manufacturing may arise for a variety of reasons, including problems with raw materials, equipment malfunction and failure to follow specific protocols and procedures. Slight deviations anywhere in the manufacturing process, including obtaining materials, maintaining master cell banks and preventing genetic drift, cell growth, fermentation, contamination including from particulates among other things, filtration, filling, labeling, packaging, storage and shipping, potency and stability issues and other quality control testing, may result in lot failures or manufacturing shut-downs, delays in the release of lots, product recalls, spoilage or regulatory action. Such deviations may require us to revise manufacturing processes or change manufacturers. Additionally, as our equipment ages, it will need to be replaced, which has the potential to result in similar consequences. Success rates can also vary dramatically at different stages of the manufacturing process, which can reduce yields and increase costs. From time to time, we may experience deviations in the manufacturing process that may take significant time and resources to resolve and, if unresolved, may affect manufacturing output and could cause us to fail to satisfy client orders or contractual commitments, lead to a termination of one or more of our contracts, lead to delays in our clinical trials, result in litigation, or other restrictions on the marketing or manufacturing of a product, any of which could be costly to us, damage our reputation and negatively impact our business. Regulatory action, including the issuance of Forms FDA 483 and warning letters, can also have an impact. 17 We may be required to ship biological candidates manufactured at our facility to clinical trial facilities at a prescribed temperature range and variations from that temperature range could result in loss of product and could significantly and adversely impact the related drug development program timelines, which could harm our business, financial condition, operating results and cash flows. In addition, we may not be able to produce sufficient quantities to meet the rapidly changing demand or specifications of our clients on the desired timeframe, if at all. Our inability to produce sufficient quantities to meet the demand or specifications of our clients or the inability to timely obtain regulatory authorization to produce the products or product candidates of our clients could also harm our business, financial condition, operating results and cash flows. Risks Related to Our R&D Business Unit The members of our management team are important to the efficient and effective operation of our business, and we may need to attract and retain additional management and experts. Our limited financial resources may hinder the successful retention of our management and consulting team and adding additional experts, which could have a material adverse effect on our business, financial condition or results of operations. Our executive officers, management team and technical personnel, as well as certain consultants, are important to the efficient and effective operation of our business, particularly Mr. Amir Reichman, our Chief Executive Officer, and Mr. Elad Mark, our Chief Operating Officer. The early stage of our NanoAbs program creates uncertainty about our prospects and may make it more difficult to attract and retain qualified executives and other key personnel. Our limited financial resources may hinder the successful retention of our management and consulting team and adding additional experts, which could have a material adverse effect on our business, financial condition or results of operations. We are a developmental stage biopharmaceutical company with no product candidate(s) approved for marketing by regulatory agencies such as FDA, which makes it difficult to assess our future viability. We are a developmental stage biopharmaceutical company with a limited operating history. We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in rapidly evolving fields, particularly in the pharmaceutical area. For example, to execute any future business plan, we may need to successfully: ● execute development activities; ● obtain required FDA and applicable foreign regulatory authorizations for the development and commercialization of current and future product candidates; ● maintain, leverage and expand our intellectual property portfolio; ● build and maintain robust manufacturing, sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners; ● gain market acceptance for our product candidate(s); ● develop and maintain any strategic relationships we elect to enter into; and ● manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals and commercialization. If we are unsuccessful in accomplishing these objectives, we may not be able to develop any current and future product candidate(s), raise capital, expand our business or continue our operations. 18 We face significant competition. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer and we may never be profitable. We compete against fully integrated pharmaceutical and biopharmaceutical companies and smaller companies that are collaborating with pharmaceutical companies, academic institutions, government agencies and other public and private research organizations. In addition, many of these competitors, either alone or together with their strategic partners, operate larger research and development programs than we do, and have substantially greater financial resources than we do, as well as significantly greater experience in: ● developing immuno-modulating products; ● undertaking preclinical testing and human clinical trials; ● obtaining FDA approvals and addressing various regulatory matters and obtaining other regulatory approvals of drugs; ● formulating and manufacturing drugs; and ● launching, marketing and selling drugs. Generally, our competitors currently include large fully integrated pharmaceutical companies as well as smaller biotech companies and academic research institutes attempting to develop antibodies directed at IL-17 as therapies or related therapies aimed at treating the same therapeutic areas, such as BMS, Novartis, Lilly, UCB, Moonlake, and others. If our competitors develop and commercialize products faster than we do or develop and commercialize products that are superior to our product candidate(s), our commercial opportunities will be reduced or eliminated. Our competitors may succeed in developing and commercializing products earlier and obtaining regulatory approvals from the FDA and foreign regulatory authorities more rapidly than we do. Our competitors may also develop products or technologies that are superior to those we are developing and render our product candidate(s) obsolete or non-competitive. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer and we may never be profitable. The extent to which our product candidate(s) achieves market acceptance will depend on competitive factors, many of which are beyond our control. Competition in the biotechnology and biopharmaceutical industry is intense and has been accentuated by the rapid pace of technology development. Our competitors also compete with us to: ● attract parties for acquisitions, joint ventures or other collaborations; ● license proprietary technology that is competitive with current and future product candidates; ● attract funding; and ● attract and hire scientific talent and other qualified personnel. We may be subject to legal proceedings and/or to product liability lawsuits. We could incur substantial costs and be required to limit commercialization in connection with product liability claims relating to current and future product candidates, which may result in substantial losses. Current and future product candidates could cause adverse events, including injury, disease or adverse side effects. These adverse events may not be observed in clinical trials but may nonetheless occur in the future. If any of these adverse events occur, they may render current and future product candidates ineffective or harmful in some participants, and any future sales would suffer, materially adversely affecting our business, financial condition and results of operations. 19 In addition, potential adverse events caused by current and future product candidates could lead to product liability lawsuits. If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may be required to limit the marketing and commercialization of any current and future product candidate(s). Our business exposes us to potential product liability risks, which are inherent in the testing, manufacturing, marketing and sale of pharmaceutical products. We may not be able to avoid product liability claims. For example, changes in laws outside the U.S. are expanding our potential liability for injuries that occur during clinical trials. Product liability insurance is expensive, subject to deductibles and coverage limitations, and may not be available in the amounts that we desire for a price we are willing to pay. Product liability insurance for the pharmaceutical and biotechnology industries is generally expensive, if available at all. If, at any time, we are unable to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims, we may be unable to clinically test, market or commercialize any current and future product candidate(s). A successful product liability claim brought against us in excess of our insurance coverage, if any, may cause us to incur substantial liabilities, and, as a result, our business, liquidity and results of operations would be materially adversely affected. In addition, the existence of a product liability claim could affect the market price of the ADSs. If our employees commit fraud or other misconduct, including noncompliance with regulatory standards and requirements, and insider trading, our business may experience serious adverse consequences. We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures: to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state health-care fraud and abuse laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Our board of directors adopted a Code of Ethics. However, it is not always possible to identify and deter employee misconduct, 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 or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions. In addition, during the course of our operations, our directors, executives and employees may have access to material, non-public information regarding our business, our results of operations or potential transactions we are considering. If a director, executive or employee was to be investigated, or an action was to be brought against a director, executive or employee for insider trading, it could have a negative impact on our reputation and the market price of the ADSs. Such a claim, with or without merit, could also result in substantial expenditures of time and money, and divert attention of our management team from other tasks important to the success of our business. We may encounter difficulties in managing our growth. Failure to manage our growth effectively will have a material adverse effect on our business, results of operations and financial condition. We may not be able to successfully grow and expand. Successful implementation of any future business plan will require management of growth, including potentially rapid and substantial growth, which will result in an increase in the level of responsibility for management personnel and place a strain on our human and capital resources. To manage growth effectively, we will be required to continue to implement and improve our operating and financial systems and controls to expand, train and manage our employee base. Our ability to manage our operations and growth effectively will require us to continue to expend funds to enhance our operational, financial and management controls, reporting systems and procedures, and to attract and retain sufficient talented personnel. If we are unable to scale up and implement improvements to our control systems in an efficient or timely manner, or if we encounter deficiencies in existing systems and controls, then we will not be able to successfully commercialize any current and future product candidate(s). Failure to attract and retain sufficient talented personnel will further strain our human resources and could impede our growth or result in ineffective growth. Moreover, the management, systems and controls currently in place or to be implemented may not be adequate for such growth, and the steps we have taken to hire personnel and to improve such systems and controls might not be sufficient. If we are unable to manage our growth effectively, it will have a material adverse effect on our business, results of operations and financial condition. 20 If we are unable to obtain adequate insurance, our financial condition could be adversely affected in the event of uninsured or inadequately insured loss or damage. Our ability to effectively recruit and retain qualified officers and directors could also be adversely affected if we experience difficulty in obtaining adequate directors’ and officers’ liability insurance. Our business will expose us to potential liability that results from risks associated with conducting clinical trials of current and future product candidates. A successful clinical trial liability claim, if any, brought against us could have a material adverse effect on our business, prospects, financial condition and results of operations even though clinical trial insurance is successfully maintained or obtained. The current and planned insurance coverages may only mitigate a small portion of a substantial claim against us. In addition, we may be unable to maintain sufficient insurance as a public company to cover liability claims made against our officers and directors. If we are unable to adequately insure our officers and directors, we may not be able to retain or recruit qualified officers and directors to manage the Company. Disruptions in the financial markets and economic conditions could affect our ability to raise capital. In recent years, the U.S. and global economies suffered dramatic downturns as the result of a deterioration in the credit markets and related financial crises as well as a variety of other factors including, among other things, the COVID-19 pandemic, extreme volatility in security prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining valuations of others. While the financial markets have improved, they are still somewhat unstable, and future disruptions or the return of adverse economic conditions may cause a significant impact on our ability to raise capital, if needed, on a timely basis and on acceptable terms or at all. We may be subject to extensive environmental, health and safety, and other laws and regulations in multiple jurisdictions. Our business involves the controlled use, directly or indirectly through our service providers, of hazardous materials, various biological compounds and chemicals; therefore, we, our agents and our service providers may be subject to various environmental, health and safety laws and regulations, including those governing air emissions, water and wastewater discharges, noise emissions, the use, management and disposal of hazardous, radioactive and biological materials and wastes and the cleanup of contaminated sites. The risk of accidental contamination or injury from these materials cannot be eliminated. If an accident, spill or release of any regulated chemicals or substances occurs, we could be held liable for resulting damages, including for investigation, remediation and monitoring of the contamination, including natural resource damages, the costs of which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials and chemicals. Although we maintain workers’ compensation insurance to cover the costs and expenses that may be incurred because of injuries to our employees resulting from the use of these materials, this insurance may not provide adequate coverage against potential liabilities. Additional or more stringent federal, state, local or foreign laws and regulations affecting our operations may be adopted in the future. We may incur substantial capital costs and operating expenses and may be required to obtain consents to comply with any of these or certain other laws or regulations and the terms and conditions of any permits or licenses required pursuant to such laws and regulations, including costs to install new or updated pollution control equipment, modify our operations or perform other corrective actions at our respective facilities or the facilities of our service providers. Governments may impose strict price controls, which may adversely affect our revenues, from the sale of product candidates. In some countries, including the countries comprising the European Union (the “EU”), the pricing of pharmaceuticals and certain other therapeutics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate(s) to other available therapies. If reimbursement of our product candidate(s) is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially. 21 Our internal computer systems, or those used by our contractors or consultants, may fail or experience security breaches or other unauthorized or improper access. Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to privacy and information security incidents, such as data breaches, damage from computer viruses and unauthorized access, malware, natural disasters, fire, terrorism, war and telecommunication, electrical failures, cyber-attacks or cyber-intrusions over the internet and attachments to emails. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed, ongoing or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we will rely on third parties to conduct clinical trials for, and manufacture, current and future product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. Unauthorized disclosure of sensitive or confidential data, including personally identifiable information, whether through a breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, or unauthorized access to or through our information systems and networks, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation. Unauthorized disclosure of personally identifiable information could also expose us to sanctions for violations of data privacy laws and regulations around the world. To the extent that any disruption or security breach result 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 candidate(s) could be delayed. As we become more dependent on information technologies to conduct our operations, cyber incidents, including deliberate attacks and attempts to gain unauthorized access to computer systems and networks, may increase in frequency and sophistication. These threats pose a risk to the security of our systems and networks, the confidentiality and the availability and integrity of our data and these risks apply both to us, and to third parties on whose systems we rely for the conduct of our business. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we and our partners may be unable to anticipate these techniques or to implement adequate preventative measures. Further, we do not have any control over the operations of the facilities or technology of our cloud and service providers, including any third party vendors that collect, process and store personal data on our behalf. Our systems, servers and platforms and those of our service providers may be vulnerable to computer viruses or physical or electronic break-ins that our or their security measures may not detect. Individuals able to circumvent such security measures may misappropriate our confidential or proprietary information, disrupt our operations, damage our computers or otherwise impair our reputation and business. We may need to expend significant resources and make significant capital investment to protect against security breaches or to mitigate the impact of any such breaches. There can be no assurance that we or our third party providers will be successful in preventing cyber-attacks or successfully mitigating their effects. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our current and future product candidate(s) could be delayed. Failure to comply with data protection, privacy and security laws and regulations could expose us to liability and adversely affect our business. We and our partners and third-party service providers may be subject to a variety of federal, state and foreign laws and regulations governing the collection, use, disclosure, storage and protection of personal information, including health-related data. These laws are complex, evolving and may differ significantly across jurisdictions. In the United States, applicable laws may include, among others, federal and state privacy and data security laws, data breach notification laws and consumer protection laws enforced by the Federal Trade Commission and state authorities. In addition, certain state laws, such as the California Consumer Privacy Act (CCPA), provide individuals with enhanced rights regarding their personal information and impose additional compliance obligations on businesses. Outside the United States, we may be subject to data protection laws such as the European Union’s General Data Protection Regulation (GDPR), which imposes strict requirements on the processing of personal data, including requirements relating to consent, data subject rights, data breach notifications and cross-border data transfers. Noncompliance with the GDPR and similar laws may result in significant fines and penalties. Compliance with these laws and regulations may require us to implement and maintain appropriate policies, procedures and technical safeguards, limit our ability to collect, use and disclose data, and incur significant costs. In addition, we may be required to enter into more restrictive contractual arrangements with third parties. We rely on internal personnel and external legal and regulatory advisors to assist in monitoring and managing compliance with applicable data protection and privacy laws. However, given the complexity and evolving nature of these laws, there can be no assurance that our compliance efforts will be sufficient or that we will be able to fully and timely adapt to new or changing requirements. Any failure by us or our partners and third-party service providers to comply with applicable data protection, privacy or security laws, or any unauthorized access to or disclosure of personal data, could result in government enforcement actions, fines, penalties, private litigation, reputational harm and disruption to our operations. Such events could adversely affect our business, financial condition and results of operations. Outside the United States, we may be subject to data protection laws such as the European Union’s General Data Protection Regulation (GDPR), which imposes strict requirements on the processing of personal data. Compliance with these laws and regulations may require us to implement and maintain appropriate policies, procedures and technical safeguards, limit our ability to collect, use and disclose data, and incur significant costs. In addition, we may be required to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, and in some cases impact our ability to operate in certain jurisdictions. Any failure by us or our partners and third-party service providers to comply with applicable data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties, private litigation and/or adverse publicity and could negatively affect our operating results and business. 22 Risks Related to Dependence on Third Parties Our NanoAb development programs depend on exclusive license agreements with MPG and UMG, and the loss or limitation of these rights could materially adversely affect our business. We rely on exclusive license agreements with Max Planck Gesellschaft (MPG) and University Medical Center Göttingen (UMG) for core intellectual property underlying our NanoAb programs, including our IL-17 NanoAb candidates and other potential NanoAb targets. These agreements grant us rights to develop and commercialize products based on this intellectual property, subject to various financial, development and other obligations. Our rights under these license agreements are subject to conditions and may be terminated or modified by the licensors in certain circumstances, including if we fail to meet specified development milestones, such as the timely submission of regulatory filings, fail to comply with payment or other contractual obligations, or if the underlying licensed intellectual property is challenged, invalidated or otherwise limited. In addition, our license agreements may be subject to interpretation, and disputes may arise with MPG and/or UMG regarding the scope of our rights, performance obligations or other contractual terms. Any such dispute could result in delays, increased costs, or the loss or impairment of our licensed rights. If our license rights are terminated, narrowed or otherwise adversely affected, we may lose the ability to develop or commercialize our NanoAb product candidates, which would have a material adverse effect on our business, financial condition and results of operations. We rely on MPG to create and provide additional support for our IL-17 NanoAbs program and any additional NanoAbs for our NanoAbs program, which are part of the Research Collaboration Agreement We rely on MPG to provide additional support for our IL-17 NanoAbs program and any additional NanoAbs which are part of our five year Research Collaboration Agreement with MPG and UMG. If the supply of NanoAbs is disrupted or delayed, we may not be able to complete at all or in a timely manner, the successful development and commercialization of our current or future product candidates. There is no guarantee that we will be successful in in in-licensing additional NanoAbs from MPG and UMG, or developing, and/or commercializing any of our NanoAbs If we were to conduct clinical trials, we would rely on third parties to conduct any such clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials. We will rely on third parties such as contract research organizations, clinical data management organizations, medical institutions and clinical investigators, to conduct any future clinical trials on our behalf. Any of these third parties may terminate their engagement with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities. Our reliance on these third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. We remain responsible for ensuring that our clinical trial is conducted in accordance with the requirements of the relevant regulator, and failure to do so can result in fines, adverse publicity and civil and criminal sanctions. Furthermore, third parties that we rely on for our clinical development activities may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any current and future product candidate(s). Our product development costs will increase if we experience delays in testing or obtaining marketing approvals. Disruptions to our CDMO manufacturing operations or third-party service providers could adversely affect both our CDMO business and our product development activities. We conduct our manufacturing activities primarily through our CDMO infrastructure, including our facilities in Jerusalem and Yavne, Israel. These facilities support our CDMO services as well as certain development activities for our NanoAb programs. In addition, we rely on third-party contract research organizations (CROs) and contract manufacturing organizations (CMOs) for capabilities that we do not have in-house, including technologies such as mammalian cell-based development and manufacturing. Our manufacturing operations and development activities depend on specialized equipment, materials and complex processes that would be difficult, time-consuming and costly to replicate. We do not have redundant manufacturing capabilities, and any disruption to our facilities or those of our third-party providers could delay or interrupt both our CDMO services and our product development programs. Such disruptions may result from equipment failure, contamination, regulatory non-compliance, supply chain interruptions or other unforeseen events. In addition, failure to maintain compliance with applicable current Good Manufacturing Practice (cGMP) requirements or other regulatory standards at our facilities or at third-party providers could result in regulatory actions, including suspension of operations. If our facilities or third-party providers are unable to operate effectively or meet our requirements, we may be unable to provide CDMO services to our customers or to advance our internal programs in a timely manner, if at all. Transitioning to alternative providers may not be feasible on acceptable timelines or terms. Any such disruptions could result in delays, increased costs, loss of customers or impairment of our development programs, and could materially adversely affect our business, financial condition and results of operations. 23 Use of third parties to manufacture current and future product candidate(s) may increase the risk that we will not have sufficient quantities of such product candidate(s) at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. Our GMP biologics manufacturing facility in Jerusalem and our cGMP manufacturing facility in Yavne, Israel are capable of manufacturing an annual supply of current and future product candidate(s) suitable for regulatory or other similar uses. However, we may also rely on a third party CMO for commercial supply of current and future product candidates. Reliance on a third party CMO entails risks, including: ● Reliance on third party for regulatory compliance and quality assurance; ● The possible breach of the manufacturing agreement by the third party; ● The possible failure to manufacture sufficient quantities of current and future product candidates due to reasons outside of the reasonable control of the third party; ● The possible misappropriation of our proprietary information, including our know-how; and ● The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. A CMO may not be able to comply with cGMP regulations or similar regulatory requirements outside of the U.S. Our failure, or the failure of our third-party manufacturers 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 product candidate(s), operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidate(s). We may not obtain the necessary materials for the performance of any future clinical trials in the U.S. or other countries around the world that we may conduct. Clinical trials we may conduct in the future may involve obtaining materials and information that may not currently be in our possession and that we rely on suppliers and manufacturers to provide. It is possible that the FDA or any other relevant regulatory body will request that we provide materials or information that are not in our possession at that time before allowing us to proceed with any proposed clinical trials. Risks Related to Our Intellectual Property If we fail to adequately protect, enforce or secure rights to the patents which we own or that were licensed to us or any patents we may own or license in the future, the value of our intellectual property rights would diminish and our business and competitive position would suffer. Our success, competitive position and future revenues depend in part on our ability to obtain and successfully leverage intellectual property covering our product candidate(s), know-how, methods, processes and other technologies, to protect our trade secrets, to prevent others from using our intellectual property and to operate without infringing the intellectual property rights of third parties. The risks and uncertainties that we face with respect to our intellectual property rights include, but are not limited to, the following: ● the degree and range of protection any patents will afford us against competitors; 24 ● the patents concerning our business activities were not registered in all countries and therefore our patent protection may be lacking in some territories; ● if and when patents will be issued; ● whether or not others will obtain patents claiming aspects similar to those covered by our own or licensed patents and patent applications; ● we may be subject to interference proceedings; ● we may be subject to opposition or post-grant proceedings in foreign countries; ● any patents that are issued may not provide meaningful protection; ● we may not be able to develop additional proprietary technologies that are patentable; ● other companies may challenge patents licensed or issued to us or our customers; ● other companies may independently develop similar or alternative technologies, or duplicate our technologies; ● other companies may design around technologies we have licensed or developed; ● enforcement of patents is complex, uncertain and expensive; and ● we may need to initiate litigation or administrative proceedings that may be costly whether we win or lose. If patent rights covering our product candidate(s) and methods are not sufficiently broad, they may not provide us with any protection against competitors with similar products and technologies. Furthermore, if the United States Patent and Trademark Office (the “USPTO”) or any foreign patent office issue patents to us or our licensors, others may challenge the patents or design around the patents, or the patent office or the courts may invalidate the patents. An adverse determination in any opposition, derivation, revocation, re-examination, post-grant and inter parties review or interference proceedings or foreign equivalent, or litigation, challenging our patent rights or the patent rights of others could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Such proceedings and any other patent challenges may result in loss of patent rights, loss of exclusivity, loss of priority or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products or limit the duration of the patent protection of our technology and product candidate(s). Thus, any patents we own or license from or to third parties may not provide any protection against our competitors. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. Moreover, there could be public announcements of the results of hearings, motions or other developments related to any of the foregoing proceedings. If securities analysts or investors perceive those results to be negative, it could cause the price of the ADSs to decline. Any of the foregoing could harm our business, results of operations and financial condition. We cannot be certain that patents will be issued as a result of any pending applications, and we cannot be certain that any of our issued patents or patents licensed from MPG (or any other third-party in the future) will give us adequate protection from competing products. Further, even if our owned or licensed patent applications issue as patents, the issuance of any such patents is not conclusive as to their inventorship, scope, validity or enforceability and such patents may be challenged, invalidated, narrowed or held to be unenforceable. We may be subject to a third-party pre-issuance submission of prior art to the USPTO or equivalent foreign bodies. In addition, since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions. 25 Moreover, some of our owned or in-licensed patents and patent applications may in the future be co-owned with third parties. If we are unable to obtain an exclusive license to any such co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, who could market competing products and technology. In addition, we may need the cooperation of any such co-owners in order to enforce such patents against third parties, and such cooperation may not be provided to us. It is also possible that others may obtain issued patents that could prevent us from commercializing our product candidate(s) or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. If we are unable to license such technology, or if we are forced to license such technology, on unfavorable terms, our business could be materially harmed and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. As to those patents that we have licensed, our rights depend on maintaining our obligations to the licensor under the applicable license agreement, and we may be unable to do so. In addition to patents and patent applications, we depend upon proprietary know-how to protect our proprietary technology. We require our employees, consultants, advisors and partners to enter into confidentiality agreements that prohibit the disclosure of confidential information to any other parties. We also require our employees and consultants to disclose and assign to us their ideas, developments, discoveries and inventions. These agreements may not, however, provide adequate protection for our know-how or other proprietary information in the event of any unauthorized use or disclosure. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements. Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. 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 application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to office actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. Costly litigation may be necessary to protect our intellectual property rights and we may be subject to claims alleging the violation of the intellectual property rights of others. We may face significant expense and liability as a result of litigation or other proceedings relating to patents and other intellectual property rights of others. In the event that another party has also filed a patent application or been issued a patent relating to an invention or technology claimed by us in pending applications, we may be required to participate in an interference proceeding declared by the USPTO to determine priority of invention, which could result in substantial uncertainties and costs for us, even if the eventual outcome is favorable to us. We, or our licensors, also could be required to participate in interference proceedings involving issued patents and pending applications of another entity. An adverse outcome in an interference proceeding could require us to cease using the technology or to license rights from prevailing third parties. 26 The cost to us of any patent litigation or other proceeding relating to our licensed patents or patent applications, even if resolved in our favor, could be substantial and could divert management’s resources and attention. Competitors and other third parties may infringe, misappropriate or otherwise violate our issued patents or other intellectual property or the patents or other intellectual property of our licensors. Our ability to enforce our patent protection could be limited by our financial resources, and may be subject to lengthy delays. In addition, our patents or the patents of our licensors may become involved in inventorship or priority disputes. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents or that our patents are invalid or unenforceable. In a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties. A third party may claim that we are using inventions claimed by their patents and may go to court to stop us from engaging in our normal operations and activities, such as research, development and the sale of any current and future product candidate(s). Such lawsuits are expensive and would consume time and other resources. There is a risk that a court will decide that we are infringing the third party’s patents and will order us to cease the activities claimed by the patents, including to cease commercializing the infringing technology or product candidate(s), redesign our product candidate(s) or processes to avoid infringement, which may be impossible or require substantial time and monetary expenditure, or obtain licenses (which may not be available on commercially reasonable terms or at all). In addition, there is a risk that a court will order us to pay the other party damages for having infringed their patents. There is no guarantee that any prevailing patent owner would offer us a license so that we could continue to engage in activities claimed by the patent, or that such a license, if made available to us, could be acquired on commercially acceptable terms. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties and other fees. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. In addition, third parties may, in the future, assert other intellectual property infringement claims against us with respect to our product candidate(s), technologies or other matters. Any claims of infringement asserted against us, whether or not successful, may have a material adverse effect on us. Any of the foregoing events would harm our business, financial condition, results of operations and prospects. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims could result in substantial costs and diversion of management resources, which could harm our business. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs or in-license needed technology or other product candidate(s). There could also be public announcements of the results of the hearing, motions or other interim proceedings or developments. If securities analysts or investors perceive those results to be negative, it could cause the price of the ADSs to decline. Any of the foregoing events could harm our business, financial condition, results of operations and prospects. We rely on confidentiality agreements that could be breached and may be difficult to enforce, which could result in third parties using our intellectual property to compete against us. Although we believe that we take reasonable steps to protect our intellectual property, including the use of agreements relating to the non-disclosure of confidential information to third parties, as well as agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them, the agreements can be difficult and costly to enforce. Although we seek to enter into these types of agreements with our contractors, consultants, advisors and research and other partners, to the extent that employees and consultants utilize or independently develop intellectual property in connection with any of our projects, disputes may arise as to the intellectual property rights associated with current and future product candidates. If a dispute arises, a court may determine that the right belongs to a third party. In addition, enforcement of our rights can be costly and unpredictable. We also rely on trade secrets and proprietary know-how that we seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others. We cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. Despite the protective measures we employ, we still face the risk that: ● these agreements may be breached; 27 ● these agreements may not provide adequate remedies for the applicable type of breach; ● our proprietary know-how will otherwise become known; or ● our competitors will independently develop similar technology or proprietary information. International patent protection is particularly uncertain, and if we are involved in opposition proceedings in foreign countries, we may have to expend substantial sums and management resources. Patent law outside the United States may be different than in the United States. Further, the laws of some foreign countries, such as China where certain patents owned or licensed by us were granted, may not protect our intellectual property rights to the same extent as the laws of the United States, if at all. A failure to obtain sufficient intellectual property protection in any foreign country could materially and adversely affect our business, results of operations and future prospects. Moreover, we may participate in opposition proceedings to determine the validity of our foreign patents or our competitors’ foreign patents, which could result in substantial costs and divert management’s resources and attention. Additionally, due to uncertainty in patent protection law, we have not filed patent applications in many countries where significant markets exist. Intellectual property rights do not necessarily address all potential threats to our competitive advantage. The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: ● others may be able to make compounds that are the same as or similar to current and future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; ● we or our licensors or any future strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; ● we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; and ● the patents of others may have an adverse effect on our business. We may be subject to claims challenging the inventorship of our patents and other intellectual property. We may be subject to claims that employees, partners or other third parties who were involved in the development of intellectual property for the Company have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who were involved in the development of intellectual property for the Company. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 28 We may become subject to claims for remuneration or 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 and may in the future be developed by our employees in the course of their employment for us. Under the Israeli Patents Law, 5727-1967 (the “Patents Law”), inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patents Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration for his inventions. Decisions by the Committee have created uncertainty in this area, as it held that employees may be entitled to remuneration for their service inventions despite having specifically waived any such rights. However, a later decision by the Committee held that such right can be waived by the employee. The Committee further held that an explicit reference to the waived right is not necessary in every circumstance in order for the employee’s waiver of such right to be valid. Such waiver can be formalized in writing or orally or be implied by the actions of the parties in accordance with the rules of interpretation of Israeli contract law. We generally enter into assignment-of-invention agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees have agreed to assign to us service invention rights, we may face claims demanding remuneration in consideration for assigned inventions. We may receive less revenue from any current and future product candidate(s) if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability. Our employees may have been previously employed at other biotechnology or pharmaceutical companies. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s former employer. Litigation may be necessary to defend against these claims. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs, delay development of our product candidate(s) and be a distraction to management. Any of the foregoing events would harm our business, prospects and results of operations. The terms and scope of our patents may be insufficient to protect our product candidates for an adequate period of time, which could allow earlier competition than anticipated.. Patents have a limited lifespan. In most jurisdictions, including the United States, the natural expiration of a patent is generally 20 years from its earliest non-provisional filing date, subject to the payment of maintenance fees. Given the time required for the development, testing and regulatory review of our product candidates, any patents protecting such product candidates may expire before or shortly after commercialization, if at all. Although certain extensions of patent term may be available, including under the Drug Price Competition and Patent Term Restoration Act of 1984 in the United States and through Supplementary Protection Certificates (SPCs) in the European Union, such extensions are limited in duration, subject to strict eligibility criteria, and may not be granted. In the United States, patent term extensions are limited to a maximum of five years, cannot extend the total patent term beyond 14 years from the date of regulatory approval, and may be granted for only a single patent per approved product. There can be no assurance that we will be able to obtain such extensions, or that any extension granted will be sufficient to protect our commercial interests. In addition, to the extent our product candidates are regulated as biologics, they may be eligible for a period of regulatory exclusivity under the Biologics Price Competition and Innovation Act of 2009. However, such exclusivity is limited in duration, is separate from patent protection, and may be subject to change as a result of legislative, regulatory or policy developments. Furthermore, the strength and breadth of our patent portfolio may be insufficient to prevent competitors from developing and commercializing products that are similar to or compete with our product candidates, including through alternative technologies or design-around strategies. If we are unable to maintain adequate patent protection or other forms of exclusivity, our competitors may be able to enter the market earlier than expected, which could adversely affect our competitive position, business, financial condition and results of operations. 29 Risks Related to Our Operations in Israel Our operations are located primarily in Israel, and geopolitical, security and economic conditions in the region may adversely affect our business. We are incorporated in Israel and conduct substantially all of our operations, including our CDMO manufacturing activities, in Israel. As a result, our business is directly affected by economic, political, geopolitical and military conditions in the region. Israel has experienced ongoing armed conflicts, terrorist activity and geopolitical tensions involving neighboring countries and other regional actors. 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 extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and later against Hezbollah in Lebanon. Hostilities subsequently escalated between Israel and a number of its other neighbors, including conflicts with Hezbollah along Israel’s northern border with Lebanon, with Iran (including a war during June 2025) and with the Houthi movement in Yemen, which both launched drone and missile attacks on military and civilian targets within Israel. In addition, the Houthi movement disrupted international commerce by launching a number of attacks on commercial vessels traversing the Gulf of Aden and the Red Sea. While a ceasefire between Israel and Lebanon (with respect to Hezbollah) was announced in November 2024, a ceasefire between Israel and Iran was announced in June 2025 and the latest ceasefire between Israel and Hamas was announced in October 2025, in February 2026, hostilities between Israel and Iran escalated again. In late February 2026, the United States, together with Israel, launched a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian response and contributed to significant regional instability, including, in early March 2026, resumed conflicts with Hezbollah. The security situation in the region remains highly fluid, and we are unable to predict if, when, or on what terms, this escalation will be resolved. A military campaign against this terrorist organization commenced in parallel to its continued rocket and terror attacks. Moreover, there were clashes between Israel and Hezbollah in Lebanon, including limited ground operations by Israel against Hezbollah in Lebanon. Additionally, Israel and Iran traded their first ever direct attacks, as well as proxy and covert actions, throughout 2024, and Yemeni rebel group, the Houthis, have launched attacks on Israel and on global shipping routes in the Red Sea, causing disruptions of supply chain. Some, or all of these hostilities may escalate in the future into more violent events which may adversely affect our ability to continue carrying out various administrative, research, operational and commercial functions and activities both in Israel and globally. Any escalation of hostilities, including military conflicts, missile attacks, or other security incidents, could disrupt our operations, damage infrastructure, limit access to our facilities, or otherwise adversely affect business conditions. Such events may also impact our workforce. Many of our employees reside in Israel and may be subject to military reserve duty, which could result in reduced workforce availability and disruptions to our operations. In addition, travel restrictions, security concerns or government-imposed limitations on movement may impair our ability to conduct business activities, including interactions with customers, partners and suppliers. Our operations and those of our suppliers and customers may also be affected by disruptions to infrastructure, logistics or supply chains, which could impair our ability to manufacture products or deliver CDMO services. Geopolitical instability may also adversely affect global financial markets and investor sentiment toward Israeli companies, which could impact our ability to raise capital on favorable terms, if at all. In addition, political developments within Israel, including potential changes to governmental or judicial structures, as well as international trade restrictions, boycotts or other measures directed at Israel or Israeli companies, could adversely affect our business, financial condition and results of operations. The security and political situation in the region is unpredictable and may deteriorate in the future. Any such developments could materially adversely affect our business, financial condition and results of operations 30 Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel. We are incorporated in Israel. Most of our current executive officers and directors reside in Israel and most of our assets reside outside of the United States. Therefore, a judgment obtained against us or any of these persons in the United States, including one 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 unless certain provisions of Israeli law are satisfied. It may also be difficult 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. Under Israeli law, if U.S. law is found to be applicable to such a claim, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would be governed by Israeli law. There is little binding case law in Israel addressing these matters. Under applicable U.S. and Israeli law, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. In addition, employees may be entitled to seek compensation for their inventions irrespective of their agreements with us, which in turn could impact our future profitability. We generally enter into non-competition agreements with our employees and key consultants. These agreements prohibit our employees and key consultants, if they cease working for us, from competing directly with us or working for our competitors or clients for a limited period of time. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information or the protection of its intellectual property. If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished. Your rights and responsibilities as our shareholder will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations. Since we are incorporated under Israeli law, the rights and responsibilities of our shareholders are governed by our articles of association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders of U.S.-based corporations. In particular, a shareholder of an Israeli company, such as us, has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards us and other shareholders and to refrain from abusing its power in us, including, among other things, in voting at the general meeting of shareholders on certain matters, such as an amendment to our articles of association, an increase of our authorized share capital, a merger and approval of related party transactions that require shareholder approval. A shareholder also has a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder or a shareholder who knows that it possesses the power to determine the outcome of a shareholders vote or to appoint or prevent the appointment of an office holder of ours or other power towards us has a duty to act in fairness towards us. However, Israeli law does not define the substance of this duty of fairness. Since Israeli corporate law underwent extensive revisions approximately 15 years ago, the parameters and implications of the provisions that govern shareholder behavior have not been clearly determined. These provisions may be interpreted to impose additional obligations and liabilities on our shareholders that are not typically imposed on shareholders of U.S. corporations. 31 Changes in Israeli tax laws and examinations by the Israeli Tax Authorities could increase our overall tax liabilities. We are subject to various taxes and tax compliance obligations in Israel. Changes in Israeli tax laws and regulations or their implementation in the future could increase our tax liabilities and our tax compliance obligations. In addition, the proper application of Israeli tax laws is subject to certain uncertainties and require the exercise of judgement. We may be subject to examinations by the Israeli Tax Authorities, and if our application or interpretation of Israeli tax laws is successfully challenged, we could be subject to additional tax liabilities, including interest and penalties, which could adversely affect our business and financial position. Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders. Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date that a merger proposal was filed by each merging company with the Israel Registrar of Companies and at least 30 days from the date that the shareholders of both merging companies approved the merger. In addition, the holder of a majority of each class of securities of the target company must approve a merger. Moreover, a full tender offer can only be completed if the acquirer receives at least 95% of the issued share capital (provided that a majority of the offerees that do not have a personal interest in such tender offer shall have approved the tender offer, except that if the total votes to reject the tender offer represent less than 2% of the company’s issued and outstanding share capital, in the aggregate, approval by a majority of the offerees that do not have a personal interest in such tender offer is not required to complete the tender offer), and 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 the court to alter the consideration for the acquisition (unless the acquirer stipulated in the tender offer that a shareholder that accepts the offer may not seek appraisal rights). Our articles of association provide that our directors (other than external directors) are elected to terms, with only two or three of our directors (other than external directors) to be elected each year, in each case for a term of three years. The staggering of the terms of our directors prevents a potential acquirer from readily replacing our entire board of directors at a single annual general shareholder meeting. This could prevent an acquirer from seeking to effect a change in control of our company by proposing an acquisition proposal offer opposed by our board, even if beneficial to our shareholders. Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to those of 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 numerous conditions, including a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are restricted. 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 actual disposition of the shares has occurred. These and other similar 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. Because a certain portion of our expenses is incurred in currencies other than the U.S. Dollar, our results of operations may be harmed by currency fluctuations and inflation. Our reporting and functional currency is the U.S. Dollar, but some portion of our operational expenses are in NIS and Euros. As a result, we are exposed to some currency fluctuation risks. We may, in the future, decide to enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rate of the currencies mentioned above in relation to the U.S. Dollar. These measures, however, may not adequately protect us from adverse effects. 32 Risks Related to our Securities Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of the ADSs. The delisting could adversely affect the market liquidity of our shares and the market price of our shares could decrease significantly. If we fail to satisfy Nasdaq’s continued listing requirements, Nasdaq may take steps to delist the ADSs. On March 12, 2026, we received a notice of non-compliance from Nasdaq that we are not in compliance with the requirement to maintain a minimum bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (the “Minimum Price Rule”). We were given 180 days, or until September 8, 2026, to regain compliance. Similarly, on November 1, 2023, we received a notice of non-compliance from Nasdaq that we are not in compliance with the Minimum Price Rule, and on April 30, 2024, we received a staff determination letter from Nasdaq notifying us that, due to our continued non-compliance with the Minimum Price Rule, the ADSs would be scheduled for delisting from Nasdaq and suspended for trading4 unless we timely request a hearing before an independent Nasdaq Hearings Panel (the “Hearing Panel”). We appealed this determination and requested a hearing before the Hearing Panel, which stayed the suspension. Our board of directors also approved a ratio change of the ADSs to our non-traded Ordinary Shares, increasing the number of Ordinary Shares represented by each ADS from 400 to 4,000, which was equivalent to a reverse split of 1 for 10. This action resulted in our compliance with the Minimum Price Rule. In addition, we received notification letters from Nasdaq dated September 28, 2022 and May 1, 2023 advising us that we are not in compliance with Listing Rule 5550(b)(1) requiring companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders’ equity (the “Minimum Stockholders’ Equity Rule”) for continued listing. On August 1, 2023, we announced that Nasdaq reviewed our plan to regain compliance with the Minimum Stockholders’ Equity Rule and provided us with an extension until October 30, 2023 to demonstrate compliance. On November 20, 2023, we announced the receipt of formal notification from Nasdaq that we had regained compliance with the Minimum Stockholders’ Equity Rule. Nasdaq also indicated that if we do not evidence such compliance in our next periodic report (the Annual Report on Form 20-F), Nasdaq may provide notification to us that the ADSs may be subject to delisting, at which time we may appeal the determination to a Hearings Panel. Our shareholders’ equity as of December 31, 2023, as reflected in our financial statements for the year ended December 31, 2023, was less than the minimum of $2,500,000 in stockholders’ equity required by Nasdaq for continued listing. As a result, on May 20, 2024, we received a staff determination letter from the Staff of Nasdaq that we are not in compliance with the Minimum Stockholders’ Equity Rule. On June 18, 2024, a hearing was held before an independent Nasdaq Hearings Panel (the “Hearings Panel”), and we presented our views with respect to the stockholders’ equity deficiency, including presenting a plan to address the Equity Requirement matter by converting a significant portion of the loan owed by us to the EIB into equity. On August 29, 2024, following completion of the conversion of a significant portion of the loan owed by us to the EIB into preferred shares as described below, we announced that we had received formal notification from the Staff that we have regained compliance with the Equity Requirement. In addition, on January 13, 2026, Nasdaq filed a proposed rule change with the SEC which would provide that a listed company’s securities will be subject to immediate suspension and delisting if it has failed to maintain a value of at least $5 million in Market Value of Listed Securities (as defined in the Nasdaq rules) of its securities for a period of 30 consecutive business days, which is an additional ground for immediate suspension and delisting. The proposed rule change is currently under review by the SEC, with a final decision expected shortly. In the event that the proposed rule change is approved and becomes effective, if the market value of the ADSs falls below $5 million for a period of 30 consecutive business days, the trading in the ADSs would immediately have their trading suspended and be delisted, with no cure period or appeal available except to challenge errors in the initial suspension determination. If the ADSs are delisted from Nasdaq, trading of our securities would most likely take place in an over-the-counter market for unlisted securities. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our securities in an over-the-counter market, and many investors would likely not buy or sell our securities due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our securities would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our securities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our securities, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition, and results of operations, including our ability to attract and retain qualified employees and raise capital. A delisting from Nasdaq would likely have a negative effect on the price of the ADSs and would impair shareholders’ ability to sell or purchase their ADSs when they wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow the ADSs to become listed again, stabilize the market price or improve the liquidity of the ADSs, prevent the ADSs from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. 33 We are a “foreign private issuer” and have disclosure obligations that are different from those of U.S. domestic reporting companies. We are a foreign private issuer and are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports or proxy statements that comply with the requirements applicable to U.S. domestic reporting companies. Furthermore, although under the regulations promulgated under the Companies Law, as an Israeli public company listed overseas we will be required to disclose the compensation of our five most highly compensated officers on an individual basis (rather than on an aggregate basis, as was previously permitted for Israeli public companies listed overseas prior to such amendment), this disclosure will not be as extensive as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file our annual reports with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report short-swing profit recovery contained in Section 16 of the Exchange Act. Also, as a “foreign private issuer,” we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies reduce the frequency and scope of information and protections available to you in comparison to those applicable to U.S. domestic reporting companies. As a “foreign private issuer,” we are permitted, and follow certain home country corporate governance practices instead of otherwise applicable SEC and NASDAQ Capital Market requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers. As a “foreign private issuer,” we are permitted, and follow certain home country corporate governance practices instead of those otherwise required under the listing rules of the Nasdaq Capital Market for domestic U.S. issuers. For instance, we intend to follow home country practice in Israel with regard to, among other things, board independence requirements, director nomination procedures and quorum requirements. In addition, we may follow our home country law instead of the listing rules of the Nasdaq Capital Market that require that we obtain shareholder approval for certain dilutive events, such as the establishment or amendment of certain equity based compensation plans, an issuance that will result in a change of control, certain transactions other than a public offering involving issuances of a 20% or greater interest in the Company, and certain acquisitions of the stock or assets of another company. We also intend to follow our home country rules regarding the periodic approval of and changes to the formal charter for our compensation committee instead of the listing rules of the Nasdaq Capital Market. We may in the future elect to follow home country corporate governance practices in Israel with regard to other matters. Following our home country corporate 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 listing rules of the Nasdaq Capital Market applicable to domestic U.S. issuers. We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses. We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. If in the future we are not a foreign private issuer as of the last day of the second fiscal quarter in any fiscal year, we would be required to comply with all of the periodic disclosure, current reporting requirements and proxy solicitation rules of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either (a) a majority of our Ordinary Shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our managing directors, supervisory directors and executive officers may not be United States citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we were to lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. These rules and regulations could also make it more difficult for us to attract and retain qualified managing directors and supervisory directors. 34 We have not paid, and do not currently intend to pay, dividends on the ADSs and, therefore, unless our traded securities appreciate in value, our investors may not benefit from holding our securities. We have not paid any cash dividends on the ADSs since inception. We do not anticipate paying any cash dividends on the ADSs in the foreseeable future. Moreover, the Companies Law imposes certain restrictions on our ability to declare and pay dividends. As a result, investors in the ADSs will not be able to benefit from owning these securities unless their market price becomes greater than the price paid by such investors and they are able to sell such securities. We cannot assure you that you will ever be able to resell our securities at a price more than the price paid. You may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive dividends or other distributions on our Ordinary Shares and you may not receive any value for them, if it is illegal or impractical to make them available to you. The depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on Ordinary Shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of Ordinary Shares the ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act, but that are not properly registered or distributed under an applicable exemption from registration. In addition, conversion into U.S. dollars from foreign currency that was part of a dividend made in respect of deposited Ordinary Shares may require the approval or license of, or a filing with, any government or agency thereof, which may be unobtainable. In these cases, the depositary may determine not to distribute such property and hold it as “deposited securities” or may seek to effect a substitute dividend or distribution, including net cash proceeds from the sale of the dividends that the depositary deems an equitable and practicable substitute. We have no obligation to register under U.S. securities laws any ADSs, Ordinary Shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, Ordinary Shares, rights or anything else to holders of ADSs. In addition, the depositary may withhold from such dividends or distributions its fees and an amount on account of taxes or other governmental charges to the extent the depositary believes it is required to make such withholding. This means that you may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive any value for such distributions or dividends if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of the ADSs. Holders of ADSs must act through the depositary to exercise their rights as our shareholders. Holders of the ADSs do not have the same rights of our ordinary shareholders and may only exercise the voting rights with respect to the underlying Ordinary Shares in accordance with the provisions of the deposit agreement for the ADSs. Under Israeli law, the minimum notice period required to convene a shareholders meeting is no less than 35 or 21 calendar days, depending on the proposals on the agenda for the shareholders meeting. When a shareholder meeting is convened, holders of the ADSs may not receive sufficient notice of a shareholders’ meeting to permit them to withdraw their Ordinary Shares to allow them to cast their vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting instructions to holders of the ADSs or carry out their voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to holders of the ADSs in a timely manner, but we cannot assure holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote their ADSs. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of the ADSs may not be able to exercise their right to vote and they may lack recourse if their ADSs are not voted as they requested. In addition, in the capacity as a holder of ADSs, they will not be able to call a shareholders’ meeting. 35 You may be subject to limitations on transfer of the ADSs. The ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement. General Risks We incur significant costs as a public company in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing U.S. and Israeli reporting requirements. We are a publicly traded company in the U.S. As a public company in the U.S., we incur additional significant accounting, legal and other expenses. We also incur costs associated with corporate governance requirements of the SEC and the NASDAQ Capital Market, as well as requirements under Section 404 and other provisions of the Sarbanes-Oxley Act. The implementation and testing of such processes and systems may require us to hire outside consultants and incur other significant costs. Any future changes in the laws and regulations affecting public companies in the United States, including Section 404 and other provisions of the Sarbanes-Oxley Act, and the rules and regulations adopted by the SEC and the NASDAQ Capital Market, for so long as they apply to us, will result in increased costs to us as we respond to such changes. These laws, rules and regulations could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, if any, or as executive officers. The market price for the ADSs has been and will likely remain volatile. The market price for the ADSs has been and is likely to remain highly volatile and subject to wide fluctuations in response to numerous factors including the following: ● our failure to obtain the authorizations necessary to commence future clinical trials; ● results of clinical and preclinical studies; ● announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● announcements of technological innovations, new product candidate(s) or product enhancements by us or others; ● adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; ● changes or developments in laws, regulations, or decisions applicable to our product candidate(s) or patents; ● any adverse changes to our relationship with manufacturers or suppliers; ● announcements concerning our competitors or the pharmaceutical or biotechnology industries in general; ● achievement of expected product sales and profitability or our failure to meet expectations; 36 ● our commencement of or results of, or involvement in, litigation, including, but not limited to, any product liability actions or intellectual property infringement actions; ● any major changes in our board of directors, management or other key personnel; ● legislation in the United States, Europe and other foreign countries relating to the sale or pricing of pharmaceuticals; ● announcements by us of entering into or termination of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments; ● expiration or terminations of licenses, research contracts or other collaboration agreements; ● public concern as to the safety of therapeutics we, our licensees or others develop; ● success of research and development projects; ● developments concerning intellectual property rights or regulatory approvals; ● variations in our and our competitors’ results of operations; ● changes in earnings estimates or recommendations by securities analysts, if the ADSs are covered by these analysts; ● future issuances of Ordinary Shares, ADSs or other securities; ● general market conditions, including the volatility of market prices for shares of biotechnology companies generally, and other factors, including factors unrelated to our operating performance; and ● the other factors described in this “Risk Factors” section. These factors and any corresponding price fluctuations may materially and adversely affect the market price of the ADSs, which would result in substantial losses by our investors. Additionally, market prices for securities of biotechnology and pharmaceutical companies historically have been very volatile. The market for these securities has from time to time, experienced significant price and volume fluctuations for reasons unrelated to the operating performance of any one company. In the past, the COVID-19 pandemic resulted in significant financial market volatility and uncertainty. A resurgence of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price of the ADSs. In the past, securities class action litigation has often been brought against a company and its management following a decline in the market price of its securities. This risk is especially relevant for biopharmaceutical companies, which have experienced significant share price volatility in recent years. In addition, the trading prices for securities of other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic. The extent to which the outbreak may impact our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence. In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of any particular company. These market fluctuations may also have a material adverse effect on the market price of the ADSs. Your percentage ownership in us may be diluted by future issuances of share capital, which could reduce your influence over matters on which shareholders vote. Our board of directors has the authority, in most cases without action or vote of our shareholders, to issue all or any part of our authorized but unissued shares, including Ordinary Shares and ADSs issuable upon the exercise of outstanding options. Issuances of additional shares and ADSs would reduce your influence over matters on which our shareholders vote. 37 If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our traded securities, the market price for the ADSs and trading volume could be negatively impacted. The trading market for our securities may be influenced by the research and reports that industry or securities analysts publish about us, our business, our market or our competitors. We do not have any control over these analysts, and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding the ADSs, or provide more favorable relative recommendations about our competitors, the price of the ADSs would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could negatively impact the price of the ADSs or their trading volume.