UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of e ...

[Key Information](index=12&type=section&id=ITEM%203.%20KEY%20INFORMATION) [Selected Financial Data](index=12&type=section&id=A.%20Selected%20Financial%20Data) The company presents selected consolidated financial data for the five years ended December 31, 2020, highlighting consistent operating losses, a significant increase in net loss to $28.1 million in 2020, and substantial asset growth to $83.8 million Consolidated Statement of Operations (Years Ended December 31) | | 2020 (USD thousands) | 2019 (USD thousands) | 2018 (USD thousands) | 2017 (USD thousands) | 2016 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | 1,000 | 1,000 | 1,000 | 100 | - | | Research and development expenses | 7,488 | 2,674 | 5,268 | 4,640 | 4,180 | | Sales, general and administrative expenses | 6,306 | 6,078 | 5,195 | 6,397 | 3,003 | | Operating loss | 12,612 | 7,156 | 7,826 | 11,966 | 7,183 | | Financing expense (income), net | 15,462 | (1,479) | (2,257) | 947 | 4,942 | | Loss for the year | 28,074 | 5,893 | 5,569 | 12,913 | 12,125 | | Loss per ordinary share (Basic and diluted) | (2.44) | (3.00) | (3.9) | (13.7) | (21.1) | Statement of Financial Position Data (As of December 31) | | 2020 (USD thousands) | 2019 (USD thousands) | 2018 (USD thousands) | 2017 (USD thousands) | 2016 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 11,247 | 4,385 | 5,163 | 3,947 | 6,758 | | Working capital | 56,184 | 4,756 | 5,200 | 4,010 | 13,625 | | Total assets | 83,803 | 14,718 | 14,723 | 14,183 | 14,914 | | Total equity | 79,752 | 10,859 | 11,004 | 8,688 | 13,385 | Adjusted Operating Loss (Non-IFRS) | | 2020 (USD thousands) | 2019 (USD thousands) | 2018 (USD thousands) | 2017 (USD thousands) | 2016 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating loss for the year | 12,612 | 7,156 | 7,826 | 11,966 | 7,183 | | Less ESOP expenses | (2,645) | (1,273) | (773) | (2,308) | (400) | | Adjusted operating loss | 9,967 | 5,883 | 7,053 | 9,658 | 6,783 | [Risk Factors](index=15&type=section&id=D.%20Risk%20Factors) The company outlines significant risks across financial, operational, regulatory, and legal domains that could adversely affect its business, financial condition, and future results [Risks Related to Financial Condition and Capital Requirements](index=15&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) The company faces financial risks including a history of operating losses, a cumulative deficit of approximately $77.5 million by year-end 2020, and an ongoing need for substantial additional capital to fund operations - The company has incurred losses of approximately **$77.5 million** since the commencement of its pharmaceutical R&D activities through December 31, 2020, and expects to incur significant additional losses[44](index=44&type=chunk) - Profitability is dependent on the successful development and commercialization of its oncology candidates (NT219, CM24) and the successful marketing of its FDA-approved drug, Consensi[44](index=44&type=chunk)[45](index=45&type=chunk) - The company needs to raise additional capital to fund its operations; failure to do so could force delays, scope reductions, or elimination of research, development, or commercialization programs[46](index=46&type=chunk) [Risks Related to Business and Regulatory Matters](index=18&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Regulatory%20Matters) The company faces significant business and regulatory risks, including potential clinical trial failures, reliance on third parties, COVID-19 impacts, and obligations to the Israel Innovation Authority - Clinical trials for therapeutic candidates may fail to demonstrate adequate safety and efficacy, which is a primary risk that could prevent or delay regulatory approval and commercialization[51](index=51&type=chunk) - The company relies on third parties for critical functions including Chemistry Manufacturing and Controls (CMC), research, preclinical studies, and clinical trials, making it vulnerable to their performance and compliance[71](index=71&type=chunk)[72](index=72&type=chunk) - The COVID-19 pandemic may adversely affect operations, including causing slowdowns in clinical trial site activities, difficulties in patient enrollment, and potential disruptions to production and supply chains[95](index=95&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - The company's subsidiary, TyrNovo, has obligations to the Israel Innovation Authority (IIA) for grants received, which include royalty payments on future revenues and restrictions on transferring manufacturing and know-how outside of Israel[129](index=129&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Risks Related to the Pharmaceutical Industry](index=37&type=section&id=Risks%20Related%20to%20Our%20Industry) The company operates in a highly competitive and regulated pharmaceutical industry, facing challenges in market viability, competition, reimbursement, and compliance with extensive healthcare laws - Even with regulatory approval, Consensi and future therapeutic candidates may not become commercially viable due to factors like low market acceptance, competition, and insufficient reimbursement[142](index=142&type=chunk)[144](index=144&type=chunk) - The pharmaceutical industry is highly competitive, with many companies having greater resources; new drugs or technologies developed by others could render the company's products obsolete[146](index=146&type=chunk)[147](index=147&type=chunk) - Profitability is heavily dependent on adequate coverage and reimbursement from third-party payers; there is significant uncertainty regarding reimbursement for new products, and payers are increasingly focused on cost-containment[150](index=150&type=chunk)[151](index=151&type=chunk) - The company is subject to numerous federal and state healthcare laws, including the Anti-Kickback Statute and the False Claims Act; failure to comply could result in significant penalties and harm to the business[162](index=162&type=chunk)[163](index=163&type=chunk) [Risks Related to Legal Proceedings and Intellectual Property](index=44&type=section&id=Risks%20Related%20to%20Legal%20Proceedings%20and%20Intellectual%20Property) The company faces risks from ongoing legal proceedings, including patent ownership claims and infringement suits, and challenges in obtaining and enforcing intellectual property protection - The company is involved in multiple legal proceedings, including a patent ownership claim by Bar Ilan University against its subsidiary TyrNovo and a patent infringement lawsuit filed against Lupin Ltd. regarding a generic version of Consensi[175](index=175&type=chunk)[176](index=176&type=chunk) - The company is also facing class action motions in Israel related to its public disclosures in 2015 and the subsequent investigation by the Israel Securities Authority (ISA), which was settled via an Enforcement Arrangement[177](index=177&type=chunk)[179](index=179&type=chunk) - The company's success depends on its ability to obtain and enforce patent protection for its therapeutic candidates, but the patent process is complex and uncertain, and issued patents may be challenged or circumvented by competitors[183](index=183&type=chunk)[185](index=185&type=chunk) [Risks Related to Operations in Israel](index=49&type=section&id=Risks%20Related%20to%20our%20Operations%20in%20Israel) As an Israeli-incorporated company, the company is exposed to regional political and economic instability, challenges in enforcing U.S. judgments, and currency fluctuation risks - The company's operations are based in Israel, making it susceptible to political, economic, and military instability in the region, which could adversely affect business and operations[203](index=203&type=chunk) - It may be difficult for investors to enforce U.S. judgments against the company, its Israeli-resident officers, and directors, or to assert U.S. securities law claims in Israeli courts[197](index=197&type=chunk) - Provisions of Israeli law and the company's articles of association, such as those regulating mergers and tender offers, may delay or prevent a change of control[208](index=208&type=chunk) - The company is exposed to currency fluctuations as a portion of its expenses are in NIS while its reporting currency is the U.S. dollar[213](index=213&type=chunk) [Risks Related to ADSs and Ordinary Shares](index=53&type=section&id=Risks%20Primarily%20Related%20to%20Our%20ADSs%20and%20Ordinary%20Shares) The market price of the company's ADSs and ordinary shares is subject to high volatility, potential dilution from future sales, delisting risks, and adverse U.S. tax consequences for investors - The market price of the company's ADSs and ordinary shares is subject to significant fluctuation and volatility, common for biotechnology and pharmaceutical companies[219](index=219&type=chunk)[221](index=221&type=chunk) - The company regained compliance with NASDAQ's minimum **$1.00** bid price requirement in September 2020 after a ratio change, but failure to maintain this in the future could lead to delisting[224](index=224&type=chunk) - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in negative tax consequences for U.S. investors[235](index=235&type=chunk) - As a foreign private issuer, the company is exempt from certain SEC reporting and corporate governance requirements applicable to U.S. domestic companies, potentially providing less information and protection to investors[236](index=236&type=chunk)[237](index=237&type=chunk) [Information on the Company](index=60&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) [History and Development](index=60&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Incorporated in Israel in 1968, the company evolved into a biopharmaceutical entity through strategic acquisitions of Kitov Pharmaceuticals, TyrNovo, and FameWave, culminating in its renaming to Purple Biotech Ltd. in December 2020 - The company's ADSs have been traded on NASDAQ since November 2015 under the symbol "PPBT"[252](index=252&type=chunk) - Key strategic acquisitions include Kitov Pharmaceuticals (Consensi) in 2013, a majority stake in TyrNovo (NT219) in 2017, and FameWave (CM24) in 2020[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - The company changed its name from Kitov Pharma Ltd. to Purple Biotech Ltd. on December 7, 2020[257](index=257&type=chunk) [Business Overview](index=61&type=section&id=B.%20Business%20Overview) Purple Biotech is a clinical-stage company focused on developing therapies to overcome tumor immune evasion and drug resistance, operating in Oncology and Pain/Hypertension segments - The company operates through two segments: Oncology (CM24 and NT219) and Pain and Hypertension (Consensi)[261](index=261&type=chunk)[262](index=262&type=chunk) - The U.S. commercial launch of Consensi began in May 2020 through its distribution partner[262](index=262&type=chunk) - The company's strategy is to focus on oncology assets, leverage its clinical and regulatory expertise, expand its pipeline through acquisitions or in-licensing, and collaborate with third parties for development and commercialization[276](index=276&type=chunk)[284](index=284&type=chunk) [Oncology Segment (CM24 and NT219)](index=65&type=section&id=Oncology%20Segment) The oncology segment focuses on clinical-stage candidates CM24, an immune checkpoint inhibitor, and NT219, a small molecule targeting cancer drug resistance, both advancing in Phase 1/2 trials - CM24 is a humanized monoclonal antibody targeting the CEACAM1 immune checkpoint; a Phase 1/2 trial is planned in collaboration with Bristol Myers Squibb to evaluate CM24 in combination with nivolumab (Opdivo)[264](index=264&type=chunk)[278](index=278&type=chunk) - NT219 is a small molecule dual inhibitor of IRS1/2 and STAT3 designed to overcome cancer drug resistance; a Phase 1/2 first-in-human study of NT219 as a single agent and in combination with cetuximab began in H2 2020[265](index=265&type=chunk)[292](index=292&type=chunk)[307](index=307&type=chunk) - The company has entered into a master development services agreement with Rentschler Biopharma SE for the manufacturing of CM24 clinical trial batches for a total of **$6.4 million**[291](index=291&type=chunk) [Pain and Hypertension Segment - Consensi](index=70&type=section&id=Pain%20and%20Hypertension%20Segment%20-%20Consensi) This segment centers on Consensi®, an FDA-approved fixed-dose combination drug commercially launched in the U.S. in May 2020, with additional licensing agreements for South Korea and China - Consensi is an FDA-approved combination of celecoxib and amlodipine besylate for the simultaneous treatment of osteoarthritis pain and hypertension[334](index=334&type=chunk) - The company launched U.S. commercial sales of Consensi in May 2020[347](index=347&type=chunk) - Exclusive commercialization agreements are in place for South Korea with Kuhnil Pharmaceutical and for China with Hebei Changshan Biochemical Pharmaceutical Co., Ltd[366](index=366&type=chunk)[367](index=367&type=chunk) - The company entered into an exclusive marketing and distribution agreement with Coeptis for the U.S. market, which includes royalties of **20%** on net sales and potential milestone payments up to **$99.5 million**[368](index=368&type=chunk) [Intellectual Property](index=80&type=section&id=Intellectual%20Property) The company protects its proprietary technology through patents and licenses, with extensive patent families covering its oncology and pain/hypertension assets, and is actively involved in patent infringement litigation - FameWave's CM24 is covered by five patent families with patents granted in the U.S., Europe, and other key markets, with terms extending to **2030** and beyond[371](index=371&type=chunk) - TyrNovo's NT219 is covered by five patent families with patents granted in the U.S. and Europe, with terms extending to **2027** and beyond[383](index=383&type=chunk) - Consensi is protected by U.S. patents covering its composition and methods of use, with terms extending to **2029** and **2030**[392](index=392&type=chunk)[393](index=393&type=chunk) - In September 2020, the company filed a patent infringement complaint against Lupin Ltd. for its attempt to market a generic version of Consensi[397](index=397&type=chunk) [Government Regulations and Funding](index=86&type=section&id=Government%20Regulations%20and%20Funding) The company is subject to extensive regulation by the FDA and other international authorities, with a lengthy drug approval process, and has received grants from the Israel Innovation Authority with associated obligations - The company's operations are subject to extensive regulation by the FDA and other global health authorities, covering all stages from development to post-marketing[403](index=403&type=chunk) - The company utilized the Section 505(b)(2) NDA pathway for Consensi, which allows for an expedited approval process by referencing data from previously approved drugs[414](index=414&type=chunk) - The company's subsidiary TyrNovo has received approximately **NIS 5.5 million** (**$1.71 million**) in grants from the Israel Innovation Authority (IIA), creating a contingent royalty obligation on future sales[434](index=434&type=chunk)[440](index=440&type=chunk) [Organizational Structure](index=95&type=section&id=C.%20Organizational%20Structure) Purple Biotech Ltd. is an Israeli company with wholly-owned subsidiaries FameWave Ltd. and Kitov USA Inc., and a majority-owned subsidiary, TyrNovo Ltd. - The company's structure includes wholly-owned subsidiaries FameWave Ltd. and Kitov USA Inc., and a majority-owned subsidiary, TyrNovo Ltd. (**98.47%** ownership)[441](index=441&type=chunk) [Property, Plant and Equipment](index=95&type=section&id=D.%20Property,%20Plant%20and%20Equipment) The company leases all its facilities, with its principal executive offices located in Rehovot, Israel, under a lease expiring in December 2025 with an extension option - The company leases its principal executive offices in Rehovot, Israel, under a lease agreement that expires on December 31, 2025, with an option to extend[442](index=442&type=chunk) [Operating and Financial Review and Prospects](index=97&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Operating Results](index=101&type=section&id=A.%20Operating%20Results) For the year ended December 31, 2020, revenues remained stable at $1.0 million, but operating loss increased by 76% to $12.6 million, and net loss surged to $28.1 million, primarily due to higher R&D and non-cash finance expenses Comparison of Operating Results (2020 vs. 2019) | Metric | 2020 (USD thousands) | 2019 (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 1,000 | 1,000 | 0% | | R&D Expenses | 7,500 | 2,700 | 180% | | Operating Loss | 12,600 | 7,200 | 76% | | Finance Expenses, net | 15,500 | (1,500) (income) | N/A | | Net Loss | 28,100 | 5,900 | 376% | - The **180%** increase in R&D expenses in 2020 was primarily due to costs related to the initiation of NT219 clinical trials and manufacturing for the planned CM24 clinical trials[474](index=474&type=chunk) - The significant increase in net loss in 2020 was largely driven by a **$17.1 million** increase in non-cash finance expenses related to changes in the fair value of derivative warrants[478](index=478&type=chunk)[479](index=479&type=chunk) [Liquidity and Capital Resources](index=103&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company significantly strengthened its financial position in 2020 by raising approximately $55.1 million in net proceeds, resulting in $60.8 million in cash and deposits by year-end, though substantial additional funds will be needed for future development - In 2020, the company raised approximately **$55.1 million** in net proceeds through a series of financing activities, including public offerings and warrant exercises[498](index=498&type=chunk) - As of December 31, 2020, the company had approximately **$60.8 million** in cash, cash equivalents, and short- and long-term deposits[494](index=494&type=chunk) Cash Flow Summary (Years Ended December 31) | Activity | 2020 (USD millions) | 2019 (USD millions) | 2018 (USD millions) | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (12.1) | (5.6) | (8.5) | | Net Cash Provided by (Used in) Investing Activities | (49.6) | (0.4) | 2.0 | | Net Cash Provided by Financing Activities | 68.5 | 5.2 | 7.8 | Contractual Obligations as of December 31, 2020 | Obligation Type | Total (USD thousands) | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Obligations | 1,087 | 222 | 445 | 420 | - | | Purchase Obligations | 2,857 | 2,652 | - | 205 | - | | Other Long-term Liabilities | 265 | - | - | 265 | - | | **Total** | **4,209** | **2,874** | **445** | **890** | **-** | [Directors, Senior Management and Employees](index=107&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [Directors and Senior Management](index=107&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership comprises experienced professionals, including Dr. Eric Rowinsky as independent Chairman, Isaac Israel as CEO, and Gil Efron as Deputy CEO and CFO - Dr. Eric Rowinsky, an expert in cancer therapeutic development, serves as the Independent Director and Chairman of the Board[506](index=506&type=chunk) - Isaac Israel is the Chief Executive Officer and a Director[506](index=506&type=chunk)[507](index=507&type=chunk) - Gil Efron serves as the Deputy Chief Executive Officer and Chief Financial Officer[506](index=506&type=chunk)[513](index=513&type=chunk) [Compensation](index=110&type=section&id=B.%20Compensation) For 2020, aggregate compensation for directors and officers was approximately $3.6 million, with the five most highly compensated officers receiving $3.5 million, and shareholders approved new equity grants to leadership - Aggregate compensation for all directors and officers in 2020 was approximately **$3.6 million**[519](index=519&type=chunk) 2020 Compensation for Five Most Highly Compensated Office Holders (USD) | Name | Position | Salary/Other | Bonus | Share-based Payment | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Isaac Israel | CEO and Director | 375,318 | 134,778 | 618,649 | 1,128,745 | | Gil Efron | CFO and Deputy CEO | 265,844 | 114,471 | 378,095 | 758,410 | | Dr. Bertrand Liang | Chief Medical Officer | 345,368 | 101,519 | 306,708 | 753,595 | | Dr. Hadas Reuveni | VP of R&D | 219,754 | 52,258 | 234,784 | 506,796 | | Dr. Michael Schickler | Head of Clinical Operations | 158,375 | 60,762 | 149,544 | 368,681 | - In August 2020, shareholders approved grants of options and RSUs to all directors and officers, vesting over three years[524](index=524&type=chunk) [Board Practices](index=112&type=section&id=C.%20Board%20Practices) The Board of Directors consists of seven members, with a majority independent, operating under a staggered three-year term structure and adhering to a shareholder-approved Compensation Policy - The Board of Directors has seven members, divided into three staggered classes with three-year terms[533](index=533&type=chunk)[534](index=534&type=chunk) - The company has opted out of the Israeli Companies Law requirement to appoint external directors, instead complying with NASDAQ's director independence and committee composition rules for U.S. domestic issuers[538](index=538&type=chunk) - The company has an Audit Committee, a Compensation Committee, and a Nominations Committee to oversee financial reporting, compensation policies, and director nominations, respectively[541](index=541&type=chunk)[548](index=548&type=chunk)[560](index=560&type=chunk) - A comprehensive Compensation Policy, approved by shareholders in August 2020, governs the terms of service and employment for directors and officers[554](index=554&type=chunk) [Employees](index=123&type=section&id=D.%20Employees) As of December 31, 2020, the company had 13 employees and full-time consultants, primarily located in Israel, with no history of labor-related work stoppages - As of December 31, 2020, the company had **13** employees (including full-time consultants), up from **9** in 2019 and **10** in 2018[591](index=591&type=chunk)[592](index=592&type=chunk)[593](index=593&type=chunk) - The workforce is split between research and development (**7**) and general/administrative roles (**6**)[591](index=591&type=chunk) [Major Shareholders and Related Party Transactions](index=126&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) [Major Shareholders](index=126&type=section&id=A.%20Major%20Shareholders) As of March 7, 2021, CVI Investments, Inc. was the only shareholder known to beneficially own 5% or more of the company's ordinary shares, while officers and directors collectively owned less than 1% 5% or Greater Shareholders (as of March 7, 2021) | Name of Beneficial Owner | Shares Beneficially Owned | Percentage | | :--- | :--- | :--- | | CVI Investments, Inc. | 13,488,880 | 7.2% | - As of March 7, 2021, all officers and directors as a group beneficially owned less than **1%** of the company's ordinary shares[597](index=597&type=chunk) [Related Party Transactions](index=127&type=section&id=B.%20Related%20Party%20Transactions) The company engages in related party transactions primarily with its subsidiaries, including intercompany loans and service agreements for R&D, management, and administrative services reimbursed at cost plus 5% - Purple Biotech provided a loan of up to **~$2 million** to its subsidiary FameWave in connection with its acquisition[614](index=614&type=chunk) - The company has service agreements with its subsidiaries FameWave and TyrNovo, providing various services for which it is reimbursed at cost plus **5%**[615](index=615&type=chunk)[616](index=616&type=chunk) [Financial Information](index=129&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) [Consolidated Statements and Other Financial Information](index=129&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section references the full consolidated financial statements and details ongoing legal proceedings, including class action motions in Israel, a patent ownership claim against TyrNovo, and a patent infringement lawsuit against Lupin Ltd. [Legal Proceedings](index=129&type=section&id=Legal%20Proceedings) The company is involved in several legal proceedings, including ongoing class action motions in Israel related to past disclosures and its U.S. IPO, a patent ownership claim against TyrNovo, and a patent infringement lawsuit against Lupin Ltd. - A 2015 motion for a class action lawsuit in Israel is ongoing, claiming damages of approximately **NIS 16.4 million** related to the company's November 2015 U.S. IPO[620](index=620&type=chunk) - The company settled an investigation by the Israel Securities Authority (ISA) via an Enforcement Arrangement, agreeing to pay a fine of **NIS 1.5 million** for negligent disclosures in 2014 and 2015[624](index=624&type=chunk)[625](index=625&type=chunk) - A patent ownership claim was filed against subsidiary TyrNovo by Bar Ilan University in December 2020[633](index=633&type=chunk) - The company filed a patent infringement lawsuit against Lupin Ltd. in September 2020 after Lupin sought FDA approval to market a generic version of Consensi[634](index=634&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=148&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) [Market Risk](index=148&type=section&id=Market%20Risk) The company's primary market risk is foreign currency exchange risk due to NIS-denominated expenses, while interest rate and credit risks are considered immaterial as funds are held in short-term deposits - The company's main market risk is foreign currency exposure, as some expenses are in NIS while its functional currency is the USD[735](index=735&type=chunk) - Interest rate and credit risks are considered immaterial as cash is held in short-term deposits with major banking institutions[732](index=732&type=chunk)[733](index=733&type=chunk) Sensitivity to USD/NIS Exchange Rate Changes (as of Dec 31, 2020) | Change in Exchange Rate | Impact on Income (loss) (USD thousands) | | :--- | :--- | | 5% Decrease | (40) | | 2% Decrease | (15) | | 2% Increase | 15 | | 5% Increase | 40 | [Controls and Procedures](index=151&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) [Internal Controls](index=151&type=section&id=Internal%20Controls) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2020, a conclusion attested to by the independent registered public accounting firm - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[748](index=748&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[750](index=750&type=chunk) - The independent registered public accounting firm has issued an attestation report on the effectiveness of the company's internal control over financial reporting[752](index=752&type=chunk) [Financial Statements](index=155&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) [Consolidated Financial Statements](index=164&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for 2020 show a significant increase in total assets to $83.8 million, driven by financing activities, and a net loss of $28.1 million, primarily due to non-cash finance expenses and increased R&D costs Key Financial Position Data (as of Dec 31) | | 2020 (USD thousands) | 2019 (USD thousands) | | :--- | :--- | :--- | | **Total current assets** | 59,282 | 8,302 | | **Total assets** | 83,803 | 14,718 | | **Total current liabilities** | 3,098 | 3,546 | | **Total equity** | 79,752 | 10,859 | Key Operations Data (Year ended Dec 31) | | 2020 (USD thousands) | 2019 (USD thousands) | 2018 (USD thousands) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,000 | 1,000 | 1,000 | | **Operating Loss** | 12,612 | 7,156 | 7,826 | | **Loss for the year** | 28,074 | 5,893 | 5,569 | | **Basic and diluted loss per ADS (USD)** | 2.44 | 3.00 | 3.90 | Key Cash Flow Data (Year ended Dec 31) | | 2020 (USD thousands) | 2019 (USD thousands) | 2018 (USD thousands) | | :--- | :--- | :--- | :--- | | **Net cash used in operating activities** | (12,092) | (5,581) | (8,480) | | **Net cash provided by (used in) investing activities** | (49,595) | (449) | 2,044 | | **Net cash provided by financing activities** | 68,488 | 5,233 | 7,788 | [Notes to the Consolidated Financial Statements](index=170&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, segment reporting, asset acquisitions, significant equity increases from 2020 financing rounds, and contingent liabilities related to IIA grants and ongoing legal claims - The company operates in two segments: Oncology (NT219, CM24) and Pain and Hypertension (Consensi); in 2020, the Oncology segment incurred **$6.5 million** in R&D expenses, while the Pain and Hypertension segment incurred **$0.3 million**[904](index=904&type=chunk)[908](index=908&type=chunk) - The acquisition of FameWave in January 2020 was accounted for as an asset purchase, with **$14.3 million** allocated to in-process research and development (IPR&D)[929](index=929&type=chunk)[932](index=932&type=chunk)[933](index=933&type=chunk) - In 2020, the company raised a total of approximately **$55.1 million** net from multiple financing rounds, significantly increasing its share premium and cash reserves[952](index=952&type=chunk)[954](index=954&type=chunk)[957](index=957&type=chunk)[961](index=961&type=chunk) - The company has contingent liabilities to the Israel Innovation Authority (IIA) for grants received by TyrNovo, with a maximum royalty repayment of approximately **NIS 5.5 million** (**$1.6 million**) plus interest, payable from future revenues[993](index=993&type=chunk)[994](index=994&type=chunk)

[Key Information](index=10&type=section&id=ITEM%203.%20KEY%20INFORMATION) [Selected Financial Data](index=10&type=section&id=A.%20Selected%20Financial%20Data) The company reported stable revenues of **$1.0 million** in 2019 and 2018, with a persistent operating loss of **$7.2 million** in 2019 and stable total assets of **$14.7 million** Selected Consolidated Statement of Operations Data (U.S. Dollars in thousands) | Indicator | 2019 (thousands USD) | 2018 (thousands USD) | 2017 (thousands USD) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,000 | 1,000 | 100 | | **Research and development expenses** | 2,674 | 5,268 | 4,640 | | **General and administrative expenses** | 6,078 | 5,195 | 6,397 | | **Operating loss** | 7,156 | 7,826 | 11,966 | | **Loss for the year** | 5,893 | 5,569 | 12,913 | | **Loss per ordinary share (Basic and diluted)** | (0.30) | (0.39) | (1.37) | Selected Consolidated Statement of Financial Position Data (U.S. Dollars in thousands) | Indicator | As of Dec 31, 2019 (thousands USD) | As of Dec 31, 2018 (thousands USD) | | :--- | :--- | :--- | | **Cash and cash equivalents** | 4,385 | 5,163 | | **Working capital** | 4,756 | 5,200 | | **Total assets** | 14,718 | 14,723 | | **Total liabilities** | (3,859) | (3,719) | | **Total equity** | 10,859 | 11,004 | - The company uses a non-IFRS measure, Adjusted Operating Loss, which excludes non-cash share-based compensation expenses, to assess operational performance. For 2019, the Adjusted Operating Loss was **$5.88 million**, compared to an IFRS operating loss of **$7.16 million**[34](index=34&type=chunk) [Risk Factors](index=12&type=section&id=D.%20Risk%20Factors) The company faces significant risks related to its financial condition, business operations, industry, legal proceedings, intellectual property, and publicly traded securities [Risks Related to Financial Condition and Capital Requirements](index=14&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) - The company has a history of operating losses, accumulating a deficit of approximately **$49.5 million** through December 31, 2019, and expects to incur significant additional losses in the future[40](index=40&type=chunk) - Future operations are dependent on raising additional capital to fund research, development, and commercialization of its therapeutic candidates, particularly the oncology pipeline (NT219 and CM-24)[42](index=42&type=chunk) - The company's revenue is dependent on a limited portfolio, primarily the successful commercialization of its one FDA-approved drug, Consensi™, and the development of its two oncology candidates[41](index=41&type=chunk) [Risks Related to Business and Regulatory Matters](index=16&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Regulatory%20Matters) - The company relies heavily on third parties for critical functions, including conducting CMC (Chemistry, Manufacturing, and Controls), preclinical studies, and clinical trials, which reduces direct control over these activities[67](index=67&type=chunk) - There is a risk of substantial delays in clinical trials for CM-24 and NT219 due to factors like regulatory consensus, patient recruitment, and potential clinical holds. The COVID-19 pandemic introduces additional uncertainty regarding trial conduct[94](index=94&type=chunk)[96](index=96&type=chunk) - The company's subsidiary, TyrNovo, has obligations to the Israel Innovation Authority (IIA) for grants received, which require royalty payments from future revenues and restrict the transfer of manufacturing and know-how outside of Israel[142](index=142&type=chunk)[146](index=146&type=chunk) - The recent coronavirus (COVID-19) outbreak may adversely affect operations, including potential disruptions to clinical trials, supply chains, and regulatory reviews, as the FDA has postponed most foreign inspections[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Risks Related to Our Industry](index=45&type=section&id=Risks%20Related%20to%20Our%20Industry) - The pharmaceutical and biotechnology industry is highly competitive, with many larger companies possessing greater resources for R&D, marketing, and manufacturing[158](index=158&type=chunk)[159](index=159&type=chunk) - Commercial success is heavily dependent on adequate coverage and reimbursement from third-party payers (government and private insurance), which is uncertain and may not be sufficient to ensure profitability[162](index=162&type=chunk)[165](index=165&type=chunk) - Legislative and regulatory reforms in the U.S. healthcare system, such as changes to the Affordable Care Act, could negatively impact drug pricing, reimbursement, and market access, thereby harming future business[170](index=170&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk) [Risks Related to Legal Proceedings and Intellectual Property](index=54&type=section&id=Risks%20Related%20to%20Legal%20Proceedings%20and%20Intellectual%20Property) - The company has been involved in multiple legal proceedings, including class action lawsuits in the U.S. and Israel, and a formal investigation by the Israeli Securities Authority (ISA) concerning public disclosures[191](index=191&type=chunk) - In August 2019, the company reached a settlement (Enforcement Arrangement) with the ISA regarding claims of negligent disclosures in 2014 and 2015. The company agreed to pay a fine of **NIS 1.5 million** (approx. **$430,000**), and the ISA discontinued its criminal investigation[193](index=193&type=chunk)[195](index=195&type=chunk) - The U.S. class action lawsuits were settled for an aggregate consideration of **$2.0 million**, which was funded by insurance carriers. The settlement contained no admission of wrongdoing[192](index=192&type=chunk) - The company's success depends on its ability to obtain and enforce patent protection for its therapeutic candidates. There is a risk that pending applications may not be issued or that issued patents may be circumvented or challenged by competitors[203](index=203&type=chunk)[205](index=205&type=chunk) [Risks Related to Operations in Israel](index=62&type=section&id=Risks%20Related%20to%20our%20Operations%20in%20Israel) - As an Israeli-incorporated company with principal offices in Israel, operations may be adversely affected by political, economic, and military instability in the region[225](index=225&type=chunk) - It may be difficult for U.S. investors to enforce U.S. judgments against the company and its officers and directors, as most reside and have assets outside the U.S[217](index=217&type=chunk) - Provisions of Israeli law and the company's articles of association, such as rules on mergers and tender offers, may delay or prevent a change of control[230](index=230&type=chunk) - A portion of the company's expenses are in currencies other than the U.S. dollar (e.g., New Israeli Shekel - NIS), exposing the company to currency fluctuation risks[235](index=235&type=chunk) [Risks Related to ADSs and Ordinary Shares](index=68&type=section&id=Risks%20Primarily%20Related%20to%20Our%20ADSs%20and%20Ordinary%20Shares%20and%20Other%20Listed%20Securities) - The company received a notice from NASDAQ on July 8, 2019, for failing to meet the minimum bid price requirement of **$1.00** per ADS. It was granted a second 180-day compliance period ending July 6, 2020, to regain compliance, failure of which could result in delisting[247](index=247&type=chunk) - As a "foreign private issuer," the company is permitted to follow certain home country (Israeli) corporate governance practices instead of NASDAQ requirements, which may result in less protection for investors compared to U.S. domestic issuers[262](index=262&type=chunk) - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. investors[260](index=260&type=chunk)[261](index=261&type=chunk) - The company is an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced disclosure requirements, which may make its shares less attractive to some investors[280](index=280&type=chunk) [Information on the Company](index=79&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) [History and Development of the Company](index=79&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Kitov Pharma, incorporated in Israel in 1968, has evolved into a clinical-stage biopharmaceutical company through strategic acquisitions and recent public offerings, raising **$6 million** in March 2020 - The company acquired FameWave Ltd., developer of the oncology therapeutic candidate CM-24, in a transaction that closed in January 2020[286](index=286&type=chunk)[288](index=288&type=chunk) - In January 2017, the company acquired a majority equity stake in TyrNovo Ltd., developer of the oncology therapeutic candidate NT219[284](index=284&type=chunk) - In March 2020, the company closed a public offering of ADSs, Pre-funded Warrants, and investor warrants, raising gross proceeds of **$6 million**[287](index=287&type=chunk) [Business Overview](index=81&type=section&id=B.%20Business%20Overview) Kitov Pharma is a clinical-stage biopharmaceutical company focused on developing therapies for oncology and pain & hypertension, leveraging its pipeline and strategic collaborations - The company's business is structured into two main operating segments: Oncology (CM-24 and NT219) and Pain and Hypertension (Consensi™)[295](index=295&type=chunk)[296](index=296&type=chunk) - The strategic focus is on advancing first-in-class therapies for cancer, leveraging clinical and regulatory expertise, and expanding the oncology pipeline through acquisitions and licensing[294](index=294&type=chunk)[314](index=314&type=chunk) [Oncology Segment](index=81&type=section&id=Oncology%20Segment) - **CM-24:** A humanized monoclonal antibody targeting CEACAM1, a novel immune checkpoint. A Phase 1/2 study in combination with nivolumab (Opdivo®) for non-small cell lung cancer is planned for the second half of 2020, under a clinical collaboration with Bristol Myers Squibb[297](index=297&type=chunk)[299](index=299&type=chunk)[311](index=311&type=chunk) - **NT219:** A small molecule targeting cancer drug resistance pathways IRS1/2 and STAT3. The company plans to submit an Investigational New Drug (IND) application in the first half of 2020 to begin a Phase 1/2 study in combination with cetuximab for head and neck cancer and as a monotherapy for advanced solid tumors[298](index=298&type=chunk)[299](index=299&type=chunk)[328](index=328&type=chunk) [Pain and Hypertension Segment](index=94&type=section&id=Pain%20and%20Hypertension%20Segment) - **Consensi™:** An FDA-approved (May 31, 2018) fixed-dose combination of celecoxib (for osteoarthritis pain) and amlodipine besylate (for hypertension)[301](index=301&type=chunk)[384](index=384&type=chunk) - Commercial launch in the U.S. is expected in May 2020 through partner Coeptis Pharmaceuticals. The company is eligible for up to **$99.5 million** in milestones, reimbursements, and royalties from this agreement[388](index=388&type=chunk)[389](index=389&type=chunk)[412](index=412&type=chunk) - Exclusive commercialization agreements are also in place for South Korea with Kuhnil Pharmaceutical and for China with Hebei Changshan Biochemical Pharmaceutical Co., Ltd[410](index=410&type=chunk)[411](index=411&type=chunk) [Intellectual Property](index=106&type=section&id=Intellectual%20Property) - **Consensi™:** Protected by U.S. patents covering the method of use (expiring up to 2030) and the oral dosage composition (expiring up to 2029)[441](index=441&type=chunk)[442](index=442&type=chunk) - **CM-24 (FameWave):** Portfolio includes five patent families covering the anti-CEACAM1 antibody and its uses, with granted patents in the U.S., Europe, and other jurisdictions, providing protection into the 2030s[415](index=415&type=chunk)[422](index=422&type=chunk) - **NT219 (TyrNovo):** Portfolio includes six patent families covering the compounds and their use in treating cancer and other disorders, with granted patents in the U.S. and Europe providing protection into the late 2020s and early 2030s[429](index=429&type=chunk)[438](index=438&type=chunk) [Government Regulations and Funding](index=116&type=section&id=Government%20Regulations%20and%20Funding) - The company is subject to extensive regulation by the FDA in the U.S., as well as authorities in Israel and Europe, covering all aspects of drug development, manufacturing, and marketing[450](index=450&type=chunk) - Consensi™ was approved via the Section 505(b)(2) NDA pathway, which allows reliance on existing data for previously approved drugs, potentially expediting the process[463](index=463&type=chunk) - The company's subsidiary, TyrNovo, has received grants from the Israel Innovation Authority (IIA) totaling approximately **NIS 5.5 million**, which are subject to royalty payments and restrictions on transferring manufacturing and know-how outside of Israel[484](index=484&type=chunk)[491](index=491&type=chunk) [Organizational Structure](index=128&type=section&id=C.%20Organizational%20Structure) Kitov Pharma Ltd. is an Israeli company with two key subsidiaries: wholly-owned FameWave Ltd. and majority-owned TyrNovo Ltd - The corporate structure consists of the parent company, Kitov Pharma Ltd., and its subsidiaries: wholly-owned FameWave Ltd. and majority-owned (**98.47%**) TyrNovo Ltd[494](index=494&type=chunk) [Property, Plant and Equipment](index=128&type=section&id=D.%20Property,%20Plant%20and%20Equipment) The company leases all its facilities and does not own any real property, with its principal executive offices located in Tel-Aviv, Israel - The company leases all its facilities and does not own any real property. Its main offices are located in Tel-Aviv, Israel[496](index=496&type=chunk) [Operating and Financial Review and Prospects](index=128&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Operating Results](index=135&type=section&id=A.%20Operating%20Results) The company reported stable revenues of **$1.0 million** in 2019, with a significant **49.3%** decrease in R&D expenses and an **8.6%** improvement in operating loss to **$7.2 million** Comparison of Operating Results (Years Ended December 31, in thousands of USD) | Item | 2019 (thousands USD) | 2018 (thousands USD) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,000 | 1,000 | 0.0% | | **R&D Expenses** | 2,674 | 5,268 | (49.3%) | | **SG&A Expenses (net)** | 5,482 | 4,452 | 23.1% | | **Operating Loss** | 7,156 | 7,826 | (8.6%) | | **Net Loss** | 5,893 | 5,569 | 5.8% | - The decrease in R&D expenses in 2019 was primarily due to lower costs related to the clinical development of Consensi™ following its FDA approval in May 2018[532](index=532&type=chunk) - The increase in SG&A expenses in 2019 was mainly due to a **$0.9 million** annual fee paid to the FDA for Consensi™, which will be covered by the company's U.S. marketing partner from 2020 onwards[533](index=533&type=chunk) [Liquidity and Capital Resources](index=139&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from equity offerings, with **$4.4 million** in cash as of December 31, 2019, supplemented by **$8.7 million** in subsequent financing, deemed sufficient for the next 12 months - As of December 31, 2019, the company had **$4.4 million** in cash and cash equivalents[549](index=549&type=chunk) - Subsequent to year-end, the company raised **$3.5 million** in a private placement in January 2020 and a net amount of approximately **$5.2 million** in a public offering in March 2020[549](index=549&type=chunk) - Management believes existing working capital is sufficient to meet requirements for at least the next twelve months, but substantial additional funds will be needed for long-term development plans[506](index=506&type=chunk)[550](index=550&type=chunk) - Net cash used in operating activities decreased to **$5.6 million** in 2019 from **$8.5 million** in 2018, primarily due to lower operating losses and changes in working capital[554](index=554&type=chunk) [Trend Information](index=141&type=section&id=D.%20Trend%20Information) As a pharmaceutical development company, predicting outcomes is challenging, with primary expenditures on R&D fluctuating based on clinical trial activities - The company's primary expenditure is on research and development, and the level of this spending is dependent on the progress and results of its CMC, preclinical, and clinical trial activities[559](index=559&type=chunk) [Off-Balance Sheet Arrangements](index=141&type=section&id=E.%20Off-Balance%20Sheet%20Arrangements) The company is not a party to any material off-balance sheet arrangements - The company has no material off-balance sheet arrangements[560](index=560&type=chunk) [Contractual Obligations](index=141&type=section&id=F.%20Tabular%20Disclosure%20of%20Contractual%20Obligations) As of December 31, 2019, the company had total contractual obligations of approximately **$2.0 million**, primarily comprising purchase and operating lease obligations Contractual Obligations as of December 31, 2019 (U.S. dollars in thousands) | Obligation Type | Total (thousands USD) | Less than 1 year (thousands USD) | 1-3 years (thousands USD) | 3-5 years (thousands USD) | More than 5 years (thousands USD) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Operating Lease Obligations** | 259 | 59 | 220 | - | - | | **Purchase Obligations** | 1,444 | 1,444 | - | - | - | | **Other Long-term Liabilities** | 285 | - | - | 285 | - | | **Total** | **1,988** | **1,503** | **220** | **285** | **-** | [Directors, Senior Management and Employees](index=143&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [Directors and Senior Management](index=143&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership includes Chairman Dr. Eric Rowinsky and CEO Isaac Israel, supported by an experienced senior management team in key functional areas - The Board of Directors is chaired by Eric Rowinsky, M.D., an expert in oncology drug development[565](index=565&type=chunk) - Isaac Israel serves as the Chief Executive Officer and a Director[565](index=565&type=chunk)[566](index=566&type=chunk) - The senior management team includes Gil Efron as Deputy CEO and CFO, Gil Ben-Menachem as VP of Business Development, Hadas Reuveni as VP of R&D, Michael Schickler as Head of Clinical Operations, and Bertrand Liang as Chief Medical Officer[565](index=565&type=chunk) [Compensation](index=146&type=section&id=B.%20Compensation) Aggregate compensation for all directors and office holders totaled approximately **$3.0 million** in 2019, with the CEO being the highest compensated at **$749,866** - Aggregate compensation paid to all directors and office holders for the year ended December 31, 2019, was approximately **$3.0 million**[591](index=591&type=chunk) 2019 Compensation for Five Most Highly Compensated Office Holders (USD) | Name | Position | Salary/Fees (USD) | Bonus (USD) | Share-Based Payment (USD) | Total (USD) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Isaac Israel** | CEO and Director | 391,459 | 173,025 | 185,382 | **749,866** | | **Gil Efron** | CFO and Deputy CEO | 262,621 | 94,286 | 222,282 | **579,189** | | **Dr. Hadas Reuveni** | VP of R&D | 217,489 | 79,288 | 179,325 | **476,101** | | **Dr. Gil Ben-Menachem** | VP Business Development | 218,211 | 51,003 | 123,595 | **392,809** | | **Dr. J. Paul Waymack** | Former Chairman | 195,120 | 65,040 | 7,993 | **268,153** | - Non-executive directors receive an annual fee of **$40,000**, plus additional fees for committee service, capped at **$47,000** annually. The Chairman receives an annual fee of **$60,000**[581](index=581&type=chunk) [Board Practices](index=156&type=section&id=C.%20Board%20Practices) The company's seven-member board is staggered into three classes, with five independent directors, and adheres to NASDAQ independence rules while opting out of certain Israeli external director requirements - The board of directors is comprised of seven members and is divided into three staggered classes, with each class serving a three-year term[620](index=620&type=chunk)[627](index=627&type=chunk) - The company has elected to "opt out" of the Israeli Companies Law requirement to appoint external directors, and instead complies with NASDAQ's director independence and committee composition requirements[623](index=623&type=chunk)[624](index=624&type=chunk) - The Audit Committee consists of three independent directors, all of whom are determined to be audit committee financial experts[638](index=638&type=chunk)[639](index=639&type=chunk) - The Compensation Committee consists of two independent directors and is responsible for recommending the compensation policy and approving terms of employment for officers and directors[641](index=641&type=chunk)[642](index=642&type=chunk) [Employees](index=174&type=section&id=D.%20Employees) As of December 31, 2019, the company had nine full-time employees and consultants, primarily in business development and R&D, subject to Israeli labor laws Employee and Consultant Headcount by Function (as of Dec 31) | Function | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Business Development, General & Admin** | 6 | 6 | 6 | | **Research & Development** | 3 | 4 | 3 | | **Total** | **9** | **10** | **9** | [Share Ownership](index=174&type=section&id=E.%20Share%20Ownership) As of March 16, 2020, directors, senior management, and employees collectively owned **3.80%** of outstanding shares, with the CEO holding **1.22%** - As of March 16, 2020, all directors, senior management, and employees as a group beneficially owned **1,541,716** ordinary shares, representing **3.80%** of the company[698](index=698&type=chunk) - CEO Isaac Israel is the largest individual beneficial owner among the management and board, holding **1.22%** of the company's shares[698](index=698&type=chunk)[699](index=699&type=chunk) - The company has a 2016 Equity-Based Incentive Plan with **7,500,000** ordinary shares reserved for issuance[700](index=700&type=chunk) [Major Shareholders and Related Party Transactions](index=178&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) [Major Shareholders](index=178&type=section&id=A.%20Major%20Shareholders) As of March 16, 2020, several entities became major shareholders, with M. Arkin (1999) Ltd. holding **11.0%** and others holding approximately **9.9%** each Beneficial Ownership of 5% or Greater Shareholders (as of March 16, 2020) | Shareholder | Percentage Ownership | | :--- | :--- | | **M. Arkin (1999) Ltd.** | 11.0% | | **OrbiMed Israel Partners Limited Partnership** | 9.9% | | **Pontifax Group** | 9.9% | | **Armistice Capital Master Fund, Ltd.** | 9.9% | | **CVI Investments, Inc.** | 9.9% | - The significant shareholdings of M. Arkin, OrbiMed, and Pontifax Group resulted from the acquisition of FameWave in January 2020, where they exchanged their FameWave shares for Kitov ADSs and warrants and made a concurrent cash investment[716](index=716&type=chunk)[717](index=717&type=chunk)[718](index=718&type=chunk) - The significant shareholdings of Armistice Capital and CVI Investments resulted from their participation in the March 2020 public offering[720](index=720&type=chunk)[721](index=721&type=chunk) [Related Party Transactions](index=182&type=section&id=B.%20Related%20Party%20Transactions) The company engaged in related party transactions primarily with its subsidiaries, including a **$2 million** loan to FameWave Ltd. and services provided to TyrNovo Ltd. at cost plus **5%** - The company provided a loan of up to approximately **$2 million** to FameWave Ltd. to facilitate the acquisition of CM-24 intellectual property rights, which became an intercompany loan after the acquisition closed[725](index=725&type=chunk)[726](index=726&type=chunk) - Kitov Pharma provides services to its subsidiary TyrNovo Ltd. and is reimbursed at cost plus **5%** under a formal services agreement[727](index=727&type=chunk) [Financial Information](index=184&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) [Consolidated Statements and Other Financial Information](index=184&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section details the company's significant legal proceedings, including settled U.S. class actions for **$2.0 million** and an ISA investigation, and confirms no cash dividends are expected - The company does not expect to pay cash dividends in the foreseeable future, retaining earnings for business growth and development[771](index=771&type=chunk) [Legal Proceedings](index=184&type=section&id=Legal%20Proceedings) - The company settled an investigation by the Israeli Securities Authority (ISA) via an Enforcement Arrangement in August 2019, agreeing to pay a fine of **NIS 1.5 million** (approx. **$430,000**) to resolve claims of negligent disclosures in 2014-2015. The ISA discontinued its criminal investigation[737](index=737&type=chunk)[744](index=744&type=chunk) - Related U.S. class action lawsuits filed in New York and California were settled in March 2019 for an aggregate of **$2.0 million**, funded by the company's insurance carriers, with no admission of wrongdoing[764](index=764&type=chunk)[765](index=765&type=chunk) - A 2015 class action motion and related 2017 motions in Israel are still ongoing. Following the ISA settlement, a stay on these proceedings was lifted[730](index=730&type=chunk)[750](index=750&type=chunk)[752](index=752&type=chunk) [Significant Changes](index=194&type=section&id=B.%20Significant%20Changes) No significant changes have occurred since December 31, 2019, beyond those already disclosed in the annual report - No significant changes have occurred since December 31, 2019, except as otherwise disclosed in the annual report[773](index=773&type=chunk) [The Offer and Listing](index=194&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) [Offer and Listing Details](index=194&type=section&id=A.%20Offer%20and%20Listing%20Details) The company's ordinary shares trade on TASE, while its ADSs and warrants trade on NASDAQ, where it is currently addressing a minimum bid price deficiency - The company's ADSs (KTOV) and public warrants (KTOVW) are traded on the NASDAQ Capital Market, while its ordinary shares (KTOV) are traded on the Tel Aviv Stock Exchange[774](index=774&type=chunk) - The company is not in compliance with NASDAQ's minimum bid price rule of **$1.00** per share and was granted a second 180-day compliance period, ending July 6, 2020, to resolve the deficiency[775](index=775&type=chunk) [Additional Information](index=194&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) [Memorandum and Articles of Association](index=194&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) The company's articles of association detail its authorized share capital, staggered board, quorum requirements, and exclusive forum provisions, which may affect change of control - Authorized share capital is **250,000,000** ordinary shares and **50,000,000** non-voting senior preferred shares[784](index=784&type=chunk) - The articles of association include an exclusive forum provision, designating courts in Tel Aviv, Israel, or the federal district court for the District of New York for certain types of shareholder litigation[827](index=827&type=chunk) - The board of directors is staggered into three classes, which can have an anti-takeover effect[835](index=835&type=chunk) [Material Contracts](index=208&type=section&id=C.%20Material%20Contracts) The company has several material contracts, including the FameWave Ltd. acquisition, a U.S. commercialization agreement for Consensi™, and a manufacturing agreement for CM-24 clinical supply - **FameWave Acquisition:** Acquired **100%** of FameWave in exchange for **8,075,610** ADSs and warrants to purchase **4,037,805** additional ADSs. The deal included a concurrent **$3.5 million** private placement by key FameWave shareholders[838](index=838&type=chunk)[839](index=839&type=chunk)[841](index=841&type=chunk) - **Coeptis Commercialization Agreement (U.S.):** Amended in October 2019, this agreement for Consensi™ entitles Kitov to **20%** royalties on net sales (with minimums) and up to **$99.5 million** in milestone and reimbursement payments[854](index=854&type=chunk) - **Rentschler Manufacturing Agreement:** Engaged Rentschler Biopharma to manufacture CM-24 batches for clinical studies for a total of **$6.4 million** over two years[855](index=855&type=chunk) [Exchange Controls](index=216&type=section&id=D.%20Exchange%20Controls) There are currently no material Israeli currency control restrictions on payments of dividends or proceeds from the sale of the company's securities, although legislation remains in effect that could allow for such controls to be imposed by administrative action - No material Israeli currency control restrictions currently affect payments of dividends or proceeds from security sales, though the government retains the power to impose them[859](index=859&type=chunk) [Taxation](index=216&type=section&id=E.%20Taxation) This section summarizes Israeli and U.S. federal income tax considerations, including potential Passive Foreign Investment Company (PFIC) classification for U.S. Holders and Israeli tax rates - The Israeli corporate tax rate is **23%**. Capital gains for non-controlling individual shareholders are generally taxed at **25%**, and dividends at **25%**[865](index=865&type=chunk)[868](index=868&type=chunk)[874](index=874&type=chunk) - The company believes it may be classified as a Passive Foreign Investment Company (PFIC) for the 2020 tax year, which could have adverse U.S. federal income tax consequences for U.S. Holders[896](index=896&type=chunk) - The Foreign Account Tax Compliance Act (FATCA) imposes a **30%** withholding tax on certain payments to foreign financial institutions and other non-U.S. entities unless they comply with specific reporting requirements[914](index=914&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=230&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is foreign currency exchange exposure, particularly to the New Israeli Shekel (NIS), while interest rate risk is considered immaterial - The main market risk is foreign currency exposure, particularly between the U.S. dollar and the New Israeli Shekel (NIS), as a portion of expenses are denominated in NIS[929](index=929&type=chunk) Sensitivity to U.S. Dollar / NIS Exchange Rate Changes (as of Dec 31, 2019, in thousands of USD) | Change in Exchange Rate | Impact on Income (Loss) (thousands USD) | | :--- | :--- | | **5% Down** | (72) | | **2% Down** | (29) | | **2% Up** | 29 | | **5% Up** | 72 | - Interest rate and credit risks are considered immaterial as liquid instruments are invested in short-term deposits with a major, highly-rated Israeli bank[926](index=926&type=chunk)[927](index=927&type=chunk) [Description of Securities Other Than Equity Securities](index=230&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section describes the company's American Depositary Shares (ADSs) and Series A Warrants, including their trading venue, exercise price of **$3.78** per ADS, and expiration date - Each American Depositary Share (ADS) represents one ordinary share and is traded on the NASDAQ Capital Market[936](index=936&type=chunk) - The Series A Warrants are exercisable at a price of **$3.78** per ADS and expire on November 25, 2020[942](index=942&type=chunk)[944](index=944&type=chunk) - A cashless exercise provision for the Series A Warrants is available if a registration statement covering the underlying shares is not effective and no exemption is available[943](index=943&type=chunk) [Controls and Procedures](index=235&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) As of December 31, 2019, management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that as of December 31, 2019, the company's disclosure controls and procedures were effective[952](index=952&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019[955](index=955&type=chunk) - The annual report does not include an auditor's attestation report on internal control over financial reporting, as the company is exempt as an emerging growth company under the JOBS Act[957](index=957&type=chunk) [Corporate Governance and Other Matters](index=236&type=section&id=ITEM%2016.%20Corporate%20Governance%20and%20Other%20Matters) [Audit Committee Financial Expert](index=236&type=section&id=16A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The board of directors has determined that three members of its audit committee, Mr. Tzror, Mr. Steinberg, and Ms. Stern-Raff, qualify as "audit committee financial experts" as defined by SEC rules - The board has identified Mr. Tzror, Mr. Steinberg, and Ms. Stern-Raff as audit committee financial experts[959](index=959&type=chunk) [Code of Ethics](index=236&type=section&id=16B.%20CODE%20OF%20ETHICS) The company has adopted a Code of Business Conduct and Ethics that applies to all employees, including its senior financial officers. The code is available on the company's website - A Code of Business Conduct and Ethics has been adopted and applies to all employees, including the CEO and CFO[960](index=960&type=chunk) [Principal Accountant Fees and Services](index=237&type=section&id=16C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) The company paid its independent auditor, Somekh Chaikin (KPMG Israel), **$116,000** in 2019 and **$88,000** in 2018, primarily for audit and tax services Principal Accountant Fees (in thousands of U.S. dollars) | Fee Type | 2019 (thousands USD) | 2018 (thousands USD) | | :--- | :--- | :--- | | **Audit fees** | 81 | 70 | | **Tax fees** | 35 | 18 | | **Total** | **116** | **88** | [Corporate Governance](index=237&type=section&id=16G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company follows Israeli corporate governance practices, differing from NASDAQ rules in areas like shareholder approval and quorum requirements - The company relies on the "foreign private issuer exemption" to follow Israeli corporate governance practices in several areas, including shareholder approval requirements, quorum for meetings, and director nominations[967](index=967&type=chunk) - Key differences from NASDAQ rules include not requiring shareholder approval for establishing or amending most equity compensation plans and having a lower quorum requirement (**25%**) for shareholder meetings[969](index=969&type=chunk)[972](index=972&type=chunk) [Financial Statements](index=244&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) [Consolidated Statements of Financial Position](index=253&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of December 31, 2019, the company reported stable total assets of **$14.7 million**, with **$4.4 million** in cash and **$10.9 million** in total equity Consolidated Statements of Financial Position (in thousands of USD) | | Dec 31, 2019 (thousands USD) | Dec 31, 2018 (thousands USD) | | :--- | :--- | :--- | | **Total current assets** | 8,302 | 8,514 | | **Intangible assets** | 6,172 | 6,172 | | **Total assets** | **14,718** | **14,723** | | **Total current liabilities** | 3,546 | 3,314 | | **Total non-current liabilities** | 313 | 405 | | **Total liabilities** | **3,859** | **3,719** | | **Total equity** | **10,859** | **11,004** | [Consolidated Statements of Operations and other Comprehensive Loss](index=254&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20other%20Comprehensive%20Loss) For the year ended December 31, 2019, the company reported **$1.0 million** in revenues, an operating loss of **$7.2 million**, and a net loss of **$5.9 million** Consolidated Statements of Operations (in thousands of USD, except per share data) | | 2019 (thousands USD) | 2018 (thousands USD) | 2017 (thousands USD) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,000 | 1,000 | 100 | | **Research and development expenses** | 2,674 | 5,268 | 4,640 | | **Sales, general and administrative expenses** | 6,078 | 5,195 | 6,397 | | **Operating Loss** | 7,156 | 7,826 | 11,966 | | **Finance expenses (income), net** | (1,479) | (2,257) | 947 | | **Loss for the year** | **5,893** | **5,569** | **12,913** | | **Basic and diluted loss per share - USD** | **(0.30)** | **(0.39)** | **(1.37)** | [Consolidated Statements of Cash Flows](index=258&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year ended December 31, 2019, net cash used in operating activities was **$5.6 million**, offset by **$5.2 million** from financing activities, resulting in a net decrease in cash to **$4.4 million** Consolidated Statements of Cash Flows (in thousands of USD) | | 2019 (thousands USD) | 2018 (thousands USD) | 2017 (thousands USD) | | :--- | :--- | :--- | :--- | | **Net cash used in operating activities** | (5,581) | (8,480) | (8,627) | | **Net cash provided by (used in) investing activities** | (449) | 2,044 | 2,772 | | **Net cash provided by financing activities** | 5,233 | 7,788 | 2,995 | | **Net (decrease) increase in cash and cash equivalents** | (797) | 1,352 | (2,860) | | **Cash and cash equivalents at end of the year** | **4,385** | **5,163** | **3,947** |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of ...