Exhibit 99.2 POLYPID LTD. PETACH TIKVA, ISRAEL PROXY STATEMENT ANNUAL AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 5, 2023 The enclosed proxy is being solicited by the board of directors (the "Board of Directors") of PolyPid Ltd. (the "Company") for use at the Company's annual and extraordinary general meeting of shareholders (the "Meeting") to be held on May 5, 2023, at 2:00 p.m. Israel time, or at any adjournment or postponement thereof. Upon the receipt of a properly executed proxy ...

Introduction [Company Overview and Lead Product Development](index=6&type=section&id=INTRODUCTION) PolyPid is a Phase 3 biopharma company developing PLEX technology for prolonged drug release, led by D-PLEX100 for SSIs - PolyPid Ltd. is a **Phase 3 clinical-stage biopharmaceutical company** focused on developing targeted, locally administered, and prolonged-release therapeutics using its proprietary **PLEX technology**[20](index=20&type=chunk) - The lead product candidate, **D-PLEX100**, is in a pivotal **Phase 3 confirmatory trial** for the prevention of open abdominal SSIs, utilizing doxycycline for prolonged and continuous release at the surgical site for **30 days**[20](index=20&type=chunk) - The SHIELD I Phase 3 study (September 2022) did not achieve its primary endpoint in the ITT population (23% decrease, p=0.1520), but a pre-specified subgroup of **423 subjects with large incisions** showed a significant **54% reduction** in the primary endpoint (p=0.0032), with SSIs decreasing from **9.7% to 4.4%** within 30 days post-surgery[24](index=24&type=chunk) - Following positive Type D meeting communication in January 2023, the FDA acknowledged SHIELD I results for complex surgeries as supportive evidence and recommended an additional study (**SHIELD II**) to support a potential NDA submission[25](index=25&type=chunk) - SHIELD II patient recruitment is expected to resume in **Q2 2023**, with an estimated **550 additional patients** over approximately **12 months**, and top-line results anticipated in **mid-2024**[26](index=26&type=chunk) - In September 2022, the EMA confirmed **D-PLEX100's eligibility for Marketing Authorization Application (MAA) submission** under the EMA's centralized procedure[27](index=27&type=chunk) - The company's pipeline includes **OncoPLEX**, an early-stage oncology program utilizing PLEX technology for intra-tumoral delivery of docetaxel to reduce local tumor reoccurrence[28](index=28&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=8&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section emphasizes that the annual report contains forward-looking statements, which are not guarantees of future performance and are subject to various risks and uncertainties - Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, based on management's assumptions and assessments[34](index=34&type=chunk) - Important factors that could cause actual results to differ materially include dependence on clinical trial enrollment, outcomes of interim analyses, ability to raise capital, and regulatory approvals[35](index=35&type=chunk)[38](index=38&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[36](index=36&type=chunk) [Summary Risk Factors](index=10&type=section&id=SUMMARY%20RISK%20FACTORS) This section provides a high-level overview of the principal risks associated with an investment in the company, categorized into financial condition, product discovery and development, and operational challenges - The company has never generated revenues, incurred significant losses since inception, and anticipates continued losses, potentially never achieving profitability[44](index=44&type=chunk) - Substantial additional funding is expected to be required, and failure to obtain it on acceptable terms may lead to curtailment or discontinuation of product development[44](index=44&type=chunk) - Heavy dependence on the success of **D-PLEX100**, including obtaining regulatory approval in the United States and European Union, is a key risk[44](index=44&type=chunk) - Regulatory approval processes are lengthy, time-consuming, costly, and unpredictable, and the PLEX technology's novelty makes development time and cost difficult to predict[44](index=44&type=chunk) - Reliance on third parties for preclinical studies, clinical trials, analytical tests, and manufacturing poses risks if they fail to meet contractual duties or regulatory requirements[44](index=44&type=chunk) - Inability to obtain and maintain effective patent rights or protect trade secrets for product candidates could impair competitive position[49](index=49&type=chunk) - The company has limited manufacturing experience and no marketing and sales organization, which could hinder commercialization efforts if products are approved[46](index=46&type=chunk) - Risks related to ownership of Ordinary Shares include market price volatility, significant control by executive officers/directors/principal shareholders, potential classification as a passive foreign investment company (PFIC), and risk of Nasdaq delisting[47](index=47&type=chunk) - Operations in Israel expose the company to political, economic, and military instability, and Israeli government grants may impose restrictions on technology transfer and require royalty payments[48](index=48&type=chunk) Part I [Item 1. Identity of Directors, Senior Management and Advisers](index=13&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This item is not applicable to the report [Item 2. Offer Statistics and Expected Timetable](index=13&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This item is not applicable to the report [Item 3. Key Information](index=13&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section provides critical information about the company's financial status, capitalization, and a comprehensive overview of significant risks - The company has incurred operating losses each year since its inception, including **$38.9 million in 2022** and **$43.1 million in 2021**, resulting in an accumulated deficit of **$214.4 million** as of December 31, 2022[58](index=58&type=chunk) - The company has never generated any revenue from product sales and does not anticipate doing so for at least the next few years, with future profitability dependent on successful product development, regulatory approvals, and commercialization[60](index=60&type=chunk) - The report of the independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern[64](index=64&type=chunk) - Substantial additional funding will be required to advance D-PLEX100 through clinical development and regulatory approval, and to fund other product candidates and operations[65](index=65&type=chunk)[66](index=66&type=chunk) [A. Selected Financial Data. [Reserved]](index=13&type=section&id=A.%20%5BReserved%5D) This sub-item is reserved and contains no information [B. Capitalization and Indebtedness](index=13&type=section&id=B.%20Capitalization%20and%20Indebtedness) This sub-item is not applicable to the report [C. Reasons for the Offer and Use of Proceeds](index=13&type=section&id=C.%20Reasons%20for%20the%20Offer%20and%20Use%20of%20Proceeds) This sub-item is not applicable to the report [D. Risk Factors](index=13&type=section&id=D.%20Risk%20Factors) This extensive section details significant risks that could materially affect the company's business, financial condition, and operations - The company has incurred significant losses since inception, with an accumulated deficit of **$214.4 million** as of December 31, 2022, and expects to continue incurring losses for the foreseeable future[58](index=58&type=chunk) - The company is heavily dependent on the success of **D-PLEX100**, including obtaining regulatory approval in the United States and the European Union, and the regulatory approval processes are lengthy, costly, and unpredictable[75](index=75&type=chunk)[82](index=82&type=chunk) - Reliance on third parties for clinical trials, raw material manufacturing, and other tasks exposes the company to risks if these third parties fail to perform or comply with regulations[145](index=145&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk) - Inability to obtain and maintain effective patent rights or protect the confidentiality of trade secrets for its product candidates could impair the company's competitive position[158](index=158&type=chunk)[168](index=168&type=chunk) - The company has limited manufacturing experience and no marketing and sales organization, which could hinder its ability to generate product revenue if its candidates are approved[208](index=208&type=chunk)[213](index=213&type=chunk) - The market price of the company's Ordinary Shares may be highly volatile, and there is a risk of delisting from Nasdaq if the minimum bid price requirement is not met[263](index=263&type=chunk)[244](index=244&type=chunk) - Operations in Israel expose the company to political, economic, and military instability, and Israeli government grants may impose restrictions on technology transfer and require royalty payments[248](index=248&type=chunk)[255](index=255&type=chunk) [Item 4. Information on the Company](index=63&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of PolyPid Ltd., including its history, business model, product pipeline, and strategic goals - PolyPid Ltd. was incorporated in Israel in **2008** and its Ordinary Shares have been trading on the Nasdaq Global Market under the symbol '**PYPD**' since **June 2020**[273](index=273&type=chunk) - The company operates as an '**emerging growth company**' and a '**foreign private issuer**,' which provides certain exemptions from U.S. reporting and corporate governance requirements[274](index=274&type=chunk)[275](index=275&type=chunk) - Capital expenditures are primarily for manufacturing facility and equipment, computers, software, research and development equipment, and office improvements, substantially all in Israel[276](index=276&type=chunk) Capital Expenditures (2020-2022) | Year | Capital Expenditures (in millions) | | :--- | :------------------------------- | | 2022 | $2.2 | | 2021 | $4.0 | | 2020 | $0.8 | [A. History and Development of the Company](index=63&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) PolyPid Ltd. was incorporated in Israel in 2008, with its Ordinary Shares trading on Nasdaq since June 2020, operating as an emerging growth company - PolyPid Ltd. was incorporated in the State of Israel on **February 28, 2008**[273](index=273&type=chunk) - Ordinary Shares are listed for trading on the Nasdaq Global Market under the symbol '**PYPD**' since **June 2020**[273](index=273&type=chunk) - The company is an '**emerging growth company**' and a '**foreign private issuer**,' allowing it to take advantage of certain exemptions from reporting and governance requirements[274](index=274&type=chunk)[275](index=275&type=chunk) Capital Expenditures (2020-2022) | Year | Capital Expenditures (in millions) | | :--- | :------------------------------- | | 2022 | $2.2 | | 2021 | $4.0 | | 2020 | $0.8 | [B. Business Overview](index=64&type=section&id=B.%20Business%20Overview) PolyPid is a Phase 3 biopharmaceutical company leveraging its PLEX technology for targeted, prolonged drug release, with lead candidate D-PLEX100 for SSIs - PolyPid is a **Phase 3 clinical-stage biopharmaceutical company** focused on developing targeted, locally administered, and prolonged-release therapeutics using its proprietary **PLEX technology**[277](index=277&type=chunk) - **D-PLEX100**, the lead product candidate, is in a pivotal **Phase 3 confirmatory trial** for the prevention of open abdominal SSIs, combining PLEX technology with doxycycline[277](index=277&type=chunk) - SSIs are estimated to cost up to **$10 billion annually in the U.S.** and **€11 billion in the EU**, occurring in **2% to 5%** of inpatient surgeries worldwide[278](index=278&type=chunk) - The SHIELD I Phase 3 study did not achieve its primary endpoint in the ITT population, but a pre-specified subgroup analysis of **423 subjects with large incisions (>20 cm)** showed a significant **54% reduction** in the primary endpoint (p=0.0032)[281](index=281&type=chunk) SHIELD I Large-Incision Subgroup Analysis (30 days post-surgery) | Parameter | D-PLEX (N=212) | Control (N=211) | Effect | | :------------------------------------------------ | :------------- | :-------------- | :----- | | Primary endpoint | 17 (8%) | 37 (17.5%) | 54% | | Infection rate | 9 (4.4%) | 19 (9.7%) | 55% | | DSSI rate | 0 | 2 (1.0%) | 100% | | Mortality rate | 6 (2.8%) | 10 (4.7%) | 40% | - The FDA acknowledged SHIELD I results for complex surgeries as supportive evidence and recommended an additional study (**SHIELD II**) for potential NDA submission[283](index=283&type=chunk)[287](index=287&type=chunk) - **D-PLEX100** has received three **Qualified Infectious Disease Product (QIDP)** designations, **Fast Track Designation**, and **Breakthrough Therapy Designation** from the FDA, and EMA eligibility for centralized MAA submission[293](index=293&type=chunk)[295](index=295&type=chunk)[298](index=298&type=chunk) - The company has a license, distribution, and supply agreement with Advanz Pharma for D-PLEX100 in the European Economic Area and the United Kingdom, including an upfront payment of **€2.5 million** (approx. **$2.6 million**) and potential milestones up to **€110 million**[296](index=296&type=chunk)[297](index=297&type=chunk) - **OncoPLEX**, an early-stage oncology program, utilizes PLEX technology for intra-tumoral delivery of docetaxel, showing positive preclinical data in colon carcinoma and glioblastoma models, including **98% tumor growth inhibition** in a glioblastoma mouse model[299](index=299&type=chunk)[370](index=370&type=chunk) - The **PLEX technology platform** consists of a proprietary matrix of chemically inactive and biocompatible polymers and lipids, designed for controlled, prolonged local drug release (days to months) without chemical modification to the embedded drug[303](index=303&type=chunk)[315](index=315&type=chunk)[318](index=318&type=chunk) - The company operates a state-of-the-art, sterile manufacturing facility in Israel, **cGMP certified** by the IMOH and inspected by an EU-qualified person, capable of meeting clinical and initial commercial demand for D-PLEX100[301](index=301&type=chunk)[307](index=307&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk) - The intellectual property portfolio includes **146 issued patents**, **5 allowed patent applications**, and **10 pending patent applications**, with issued patents expiring between **2029 and 2035**[305](index=305&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk) - The biopharmaceutical industry is intensely competitive, with competitors including major multinational and specialty pharmaceutical companies developing similar or more advanced products and drug delivery systems[374](index=374&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) [C. Organizational Structure](index=102&type=section&id=C.%20Organizational%20Structure) PolyPid Ltd. operates with two wholly-owned subsidiaries: PolyPid Inc. in Delaware and PolyPid Pharma SRL in Romania - PolyPid Ltd. has two wholly owned subsidiaries: PolyPid Inc. (Delaware corporation with operations in New Jersey) and PolyPid Pharma SRL (Romania)[463](index=463&type=chunk) [D. Property, Plants and Equipment](index=102&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The company's primary operational facilities, including headquarters, R&D labs, and manufacturing, are located in a leased 49,000 sq ft facility in Petach Tikva, Israel - The principal executive offices, research and development laboratories, and state-of-the-art manufacturing facility are located at 18 Hasivim Street, Petach Tikva, Israel, in an approximately **49,000 square foot leased facility**[464](index=464&type=chunk) - The monthly rent payment for the Israeli facility is **NIS 264,844** (approximately **$79,221**)[464](index=464&type=chunk) [Item 4.A Unresolved Staff Comments](index=102&type=section&id=ITEM%204.A%20UNRESOLVED%20STAFF%20COMMENTS) This item is not applicable to the report [Item 5. Operating and Financial Review and Prospects](index=104&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial condition and results of operations, highlighting significant losses, absence of revenue, and ongoing funding needs - The company has incurred significant operating losses since inception, with an accumulated deficit of **$214.4 million** as of December 31, 2022[470](index=470&type=chunk) - Operating losses were **$38.9 million** for the year ended December 31, 2022, and **$43.1 million** for the year ended December 31, 2021[470](index=470&type=chunk) - The company has not generated any revenue from product sales and does not expect to for at least the next few years[471](index=471&type=chunk)[475](index=475&type=chunk) - A cost reduction plan, including a **20% reduction in headcount** across all departments, was announced in October 2022[472](index=472&type=chunk) - Future expenses are expected to increase due to ongoing clinical development of D-PLEX100, regulatory filings, preclinical R&D for OncoPLEX, investment in manufacturing, establishment of commercial infrastructure, and public company operating costs[474](index=474&type=chunk) [A. Operating Results](index=104&type=section&id=A.%20Operating%20Results) The company continues to incur significant operating losses, with a net loss of $39.6 million in 2022, driven by R&D and G&A expenses without product sales revenue Consolidated Statements of Operations (2021 vs. 2022) | Metric | Year Ended Dec 31, 2021 (in thousands) | Year Ended Dec 31, 2022 (in thousands) | | :----------------------------- | :------------------------------------- | :------------------------------------- | | Research and development, net | $30,553 | $27,990 | | Marketing and business development | $2,983 | $2,888 | | General and administrative | $9,609 | $8,010 | | **Operating loss** | **$43,145** | **$38,888** | | Financial (income) expense, net | $(544) | $540 | | Loss before income tax | $42,601 | $39,428 | | Income tax expense | $- | $129 | | **Net loss** | **$42,601** | **$39,557** | - Research and development, net, decreased by **$2.6 million** in 2022 compared to 2021, primarily due to decreased costs related to the completion of the SHIELD I trial and paused SHIELD II trial[488](index=488&type=chunk) - General and administrative expenses decreased by **$1.6 million** in 2022, mainly due to lower directors' and officers' insurance premiums and personnel costs[490](index=490&type=chunk) - Financial (income) expense, net, changed by **$1.1 million** in 2022, primarily driven by the loan provided by Kreos[491](index=491&type=chunk) - Net loss decreased by **$3.1 million** in 2022 compared to 2021, mainly due to decreases in R&D and G&A expenses, partially offset by increased financial expenses[493](index=493&type=chunk) - The company is exposed to foreign currency exchange risk, with approximately **50% of expenses denominated in NIS**[494](index=494&type=chunk) - The company has elected to use the extended transition period under the JOBS Act for complying with new or revised accounting standards[498](index=498&type=chunk) [B. Liquidity and Capital Resources](index=109&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company relies on equity sales, loans, and grants for funding, with $12.6 million in cash as of December 31, 2022, and requires substantial additional funding to continue operations - As of December 31, 2022, the company had **$12.6 million** in cash, cash equivalents, and short-term deposits[506](index=506&type=chunk) - In April 2022, the company entered into a secured loan agreement with Kreos Capital VI (Expert Fund) LP for up to **$15 million**, drawing **$12.5 million** in two tranches[500](index=500&type=chunk)[501](index=501&type=chunk)[502](index=502&type=chunk)[514](index=514&type=chunk)[515](index=515&type=chunk) - An amendment to the Kreos Credit Line in March 2023 delayed **70% of principal and interest repayments** to August 2024-May 2026, increased the interest rate to **10.00%**, and included a restructuring fee and a potential claw-back payment (**$1.5 million to $3 million**)[502](index=502&type=chunk)[514](index=514&type=chunk)[880](index=880&type=chunk) - During 2022, the company sold **1,065,057 Ordinary Shares** under an At-The-Market (ATM) offering for a total of **$4.6 million** (net **$4.4 million**)[505](index=505&type=chunk)[513](index=513&type=chunk) Cash Flows (2021 vs. 2022) | Cash Flow Activity | Year Ended Dec 31, 2021 (in thousands) | Year Ended Dec 31, 2022 (in thousands) | | :----------------------------- | :------------------------------------- | :------------------------------------- | | Net cash used in operating activities | $(32,386) | $(34,317) | | Net cash provided by investing activities | $36,900 | $16,575 | | Net cash provided by financing activities | $1,034 | $16,428 | - Net cash used in operating activities increased in 2022 primarily due to ongoing and closing costs of SHIELD I and continued patient recruitment for SHIELD II[509](index=509&type=chunk) - Net cash provided by investing activities in 2022 was mainly from the release of short-term and long-term deposits[511](index=511&type=chunk) - Net cash provided by financing activities in 2022 increased significantly due to proceeds from the Kreos loan and ATM sales[512](index=512&type=chunk) - In March 2023, the company completed a public offering of **16,859,000 Ordinary Shares** for gross proceeds of **$7.1 million** and a concurrent private placement of pre-funded warrants for **10,357,139 Ordinary Shares** for gross proceeds of **$4.4 million**[517](index=517&type=chunk)[882](index=882&type=chunk) - Existing cash and cash equivalents are expected to fund operating expenses and capital expenditure requirements well into **Q1 2024**[520](index=520&type=chunk) [C. Research and Development, Patents and Licenses, etc.](index=113&type=section&id=C.%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20etc.) The company's R&D focuses on D-PLEX100 and OncoPLEX, supported by an extensive intellectual property portfolio of 146 issued patents and a team of 48 R&D professionals - The company's preclinical and clinical development efforts are focused on **D-PLEX100** for the prevention of abdominal (soft tissue) and sternal (bone) SSIs, and the early-stage oncology program **OncoPLEX**[524](index=524&type=chunk) - The R&D team comprises **48 scientists, doctors, and clinicians** based at the corporate headquarters in Petach Tikva, Israel[524](index=524&type=chunk) - The patent estate includes **146 issued patents**, **5 allowed patent applications**, **10 pending patent applications**, and one published PCT application, covering the PLEX technology platform and product candidates[524](index=524&type=chunk) [D. Trend Information](index=113&type=section&id=D.%20Trend%20Information) The company has not generated product sales revenue and anticipates continued significant R&D and commercialization expenses, requiring additional funding for future performance - The company has not generated any revenue from product sales to date and does not expect to for at least the next few years[525](index=525&type=chunk) - From inception through December 31, 2022, the company incurred **$135.5 million** in research and development expenses, net[525](index=525&type=chunk) - The company expects to continue incurring significant expenses for ongoing clinical trials, marketing approval, and future product development, as well as commercialization expenses if products are approved[525](index=525&type=chunk) [E. Critical Accounting Estimates](index=114&type=section&id=E.%20Critical%20Accounting%20Estimates) The company's financial statements rely on critical accounting estimates for share-based compensation, accrued R&D expenses, and warrant valuation, involving significant judgment and assumptions - Share-based compensation is accounted for using the **Black-Scholes-Merton model**, requiring subjective assumptions such as share price, volatility, expected option term, risk-free interest rates, and dividend yield[528](index=528&type=chunk)[530](index=530&type=chunk)[531](index=531&type=chunk) Non-Cash Share-Based Compensation Expense (2020-2022) | Year | Expense (in millions) | | :--- | :-------------------- | | 2022 | $4.3 | | 2021 | $4.8 | | 2020 | $4.6 | - Accrued research and development expenses are estimated based on services performed by third-party providers (CROs, investigative sites, vendors) for which invoices have not yet been received[534](index=534&type=chunk)[536](index=536&type=chunk) - Warrants to purchase convertible preferred shares were classified as a liability and measured at fair value prior to the IPO, then reclassified to equity[535](index=535&type=chunk) - Royalty-bearing grants from the Israeli Innovation Authority (IIA) totaling **$4.9 million** as of December 31, 2022, are recognized as a deduction from R&D expenses[537](index=537&type=chunk)[538](index=538&type=chunk) - The company adopted **ASC 842, 'Leases,'** on January 1, 2022, recognizing operating lease right-of-use (ROU) assets and lease liabilities of **$3.4 million**[540](index=540&type=chunk)[541](index=541&type=chunk) [Item 6. Directors, Senior Management and Employees](index=117&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section outlines the company's leadership, including executive officers and directors, their compensation, board practices, employee numbers, and share ownership - The executive officers include Dikla Czaczkes Akselbrad (CEO, Director), Noam Emanuel (Chief Scientific Officer, retiring Q2 2023), Dalit Hazan (EVP, R&D, Clinical & Regulatory Affairs), Ori Warshavsky (Chief Operating Officer - US), and Jonny Missulawin (Senior Vice President of Finance)[544](index=544&type=chunk)[545](index=545&type=chunk)[546](index=546&type=chunk)[547](index=547&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk) - The board of directors consists of **eight members**, with **seven deemed 'independent'** under Nasdaq Stock Market rules, including Jacob Harel (Chairman)[544](index=544&type=chunk)[568](index=568&type=chunk)[578](index=578&type=chunk) Aggregate Compensation for Directors and Senior Management (2022) | Category | Amount (in thousands) | | :-------------------- | :-------------------- | | Salary and Related Benefits | $2,394.858 | | Benefits and Perquisites | $437.904 | | Share-Based Compensation | $2,129.958 | | **Total** | **$4,962.720** | - The company is exempt from certain Israeli Companies Law requirements regarding external directors and committee composition due to its status as a foreign private issuer and compliance with Nasdaq rules[576](index=576&type=chunk) - The Audit Committee consists of Dr. Krinsky (Chairman), Ms. Tsour Segal, and Prof. Barenholz, all meeting independence requirements, with Dr. Krinsky and Ms. Segal identified as financial experts[584](index=584&type=chunk) - The Compensation, Nominating and Corporate Governance Committee is responsible for recommending and overseeing the compensation policy for office holders[593](index=593&type=chunk) - As of December 31, 2022, the company had **57 full-time and 3 part-time employees**[604](index=604&type=chunk) - The 2012 Share Option Plan had **1,116,820 shares reserved** but unissued and **3,388,008 options outstanding** as of March 26, 2023[611](index=611&type=chunk)[612](index=612&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=114&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details beneficial ownership of Ordinary Shares by major shareholders, directors, and executive officers, and outlines related party transactions, primarily compensation Major Shareholders and Directors/Executive Officers Beneficial Ownership (as of March 30, 2023) | Holder | Number of Shares Beneficially Owned | Percentage Owned | | :------------------------------------ | :---------------------------------- | :--------------- | | Aurum Ventures M.K.I. Ltd. | 1,891,152 | 8.7% | | All directors and executive officers as a group (12 persons) | 4,340,213 | 19.8% | - Over 2022, there were no material increases in major shareholder percentage ownership, but decreases for entities affiliated with Shavit Capital Funds (from **6.1% to 2.1%**)[627](index=627&type=chunk)[628](index=628&type=chunk) - As of March 22, 2023, there were **63 record holders** of shares, with **38 having registered addresses in the United States**[629](index=629&type=chunk) - Related party transactions primarily involve compensation to directors and officers, as detailed in Item 6.B[631](index=631&type=chunk)[633](index=633&type=chunk)[634](index=634&type=chunk) [Item 8. Financial Information](index=136&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This item refers to the consolidated financial statements in Item 18 and notes no significant operational changes or cash dividend payments since the financial statement date - Consolidated statements and other financial information are provided in Item 18[636](index=636&type=chunk) - No significant change, other than as otherwise described in this annual report, has occurred in the company's operations since the date of its consolidated financial statements[640](index=640&type=chunk) - The company has never declared or paid any cash dividends on its Ordinary Shares and does not anticipate paying any in the foreseeable future[637](index=637&type=chunk)[638](index=638&type=chunk) [Item 9. The Offer and Listing](index=136&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section confirms the company's Ordinary Shares have been trading on the Nasdaq Global Market under 'PYPD' since June 2020, with other sub-items not applicable - The company's Ordinary Shares have been trading under the symbol '**PYPD**' on the Nasdaq Global Market since **June 2020**[641](index=641&type=chunk)[643](index=643&type=chunk) [A. Offer and Listing Details](index=136&type=section&id=A.%20Offer%20and%20Listing%20Details) The company's Ordinary Shares have been trading on the Nasdaq Global Market under the symbol 'PYPD' since June 2020 - Ordinary Shares have been trading under the symbol '**PYPD**' on the Nasdaq Global Market since **June 2020**[641](index=641&type=chunk) [B. Plan of Distribution](index=136&type=section&id=B.%20Plan%20of%20Distribution) This sub-item is not applicable to the report [C. Markets](index=136&type=section&id=C.%20Markets) The company's Ordinary Shares have been listed for trading on the Nasdaq Global Market since June 2020 - Ordinary Shares have been listed for trading on the Nasdaq Global Market since **June 2020**[643](index=643&type=chunk) [D. Selling Shareholders](index=136&type=section&id=D.%20Selling%20Shareholders) This sub-item is not applicable to the report [E. Dilution](index=138&type=section&id=E.%20Dilution) This sub-item is not applicable to the report [F. Expenses of the Issue](index=138&type=section&id=F.%20Expenses%20of%20the%20Issue) This sub-item is not applicable to the report [Item 10. Additional Information](index=138&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides additional legal and regulatory information, including material contracts, exchange controls, and extensive tax considerations for shareholders - Material contracts include the Sales Agreement with Cantor Fitzgerald & Co., Officer Indemnity and Exculpation Agreement, Compensation Policy, Loan Facility Agreement with Kreos Capital VI (Expert Fund) LP, and License, Distribution and Supply Agreement with Advanz Pharma Holdings[651](index=651&type=chunk) - There are currently no Israeli currency control restrictions on remittances of dividends, proceeds from share sales, or interest payments to non-residents of Israel, except for shareholders from countries in a state of war with Israel[650](index=650&type=chunk) - Israeli resident companies are generally subject to a corporate tax rate of **23.0% in 2023**[653](index=653&type=chunk) - Dividends paid to Israeli individual shareholders are generally taxed at **25.0%** (or **30.0%** for 'substantial shareholders')[655](index=655&type=chunk) - Non-Israeli resident shareholders are generally exempt from Israeli capital gains tax on the sale of Ordinary Shares, provided the gains are not derived from a permanent establishment or business activity in Israel[666](index=666&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. Holders, including additional taxes and interest charges on distributions and gains[680](index=680&type=chunk)[681](index=681&type=chunk)[682](index=682&type=chunk) - As a foreign private issuer, the company files reports with the SEC (www.sec.gov), including annual reports on Form 20-F and unaudited quarterly financial information on Form 6-K[700](index=700&type=chunk)[701](index=701&type=chunk) [A. Share Capital](index=138&type=section&id=A.%20Share%20Capital) This sub-item is not applicable to the report [B. Memorandum and Articles of Association](index=138&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) A copy of the company's articles of association is attached as Exhibit 1.1 to this annual report on Form 20-F - A copy of the company's articles of association is attached as Exhibit 1.1 to this annual report on Form 20-F[649](index=649&type=chunk) [C. Material Contracts](index=138&type=section&id=C.%20Material%20Contracts) This section summarizes the key material contracts the company has entered into, including financing agreements, licensing deals, and corporate governance documents - Material contracts include the Sales Agreement with Cantor Fitzgerald & Co., Officer Indemnity and Exculpation Agreement, Compensation Policy, Loan Facility Agreement with Kreos Capital VI (Expert Fund) LP, and License, Distribution and Supply Agreement with Advanz Pharma Holdings[651](index=651&type=chunk) [D. Exchange Controls](index=138&type=section&id=D.%20Exchange%20Controls) There are currently no Israeli currency control restrictions on remittances of dividends, proceeds from share sales, or interest payments to non-residents of Israel, with an exception for shareholders from countries in a state of war with Israel - There are currently no Israeli currency control restrictions on remittances of dividends on Ordinary Shares, proceeds from the sale of shares, or interest/other payments to non-residents of Israel, except for shareholders who are subjects of countries that are, or have been, in a state of war with Israel[650](index=650&type=chunk) [E. Taxation](index=139&type=section&id=E.%20Taxation) This section provides a detailed summary of Israeli and U.S. federal income tax considerations for the company and its shareholders, including corporate tax rates and PFIC consequences - Israeli resident companies are generally subject to a corporate tax rate of **23.0% in 2023**[653](index=653&type=chunk) - Israeli individual shareholders are generally subject to a **25.0% income tax on dividends** (**30.0%** for 'substantial shareholders')[655](index=655&type=chunk)[656](index=656&type=chunk) - Non-Israeli residents are generally subject to a **25.0% Israeli income tax on dividends** (**30.0%** for 'substantial shareholders'), which is withheld at source, unless a tax certificate authorizes a reduced rate under a tax treaty[662](index=662&type=chunk) - Non-Israeli resident shareholders are generally exempt from Israeli capital gains tax on the sale of Ordinary Shares, provided the gains were not derived from a permanent establishment or business activity in Israel[666](index=666&type=chunk) - Israel's Investment Law provides tax incentives for 'Preferred Enterprise' and 'Preferred Technological Enterprise,' including reduced corporate tax rates (e.g., **7.5%-16%** for corporate tax and **4%-20%** for dividend withholding tax for non-Israeli residents)[668](index=668&type=chunk)[669](index=669&type=chunk)[672](index=672&type=chunk)[673](index=673&type=chunk)[674](index=674&type=chunk)[675](index=675&type=chunk) - The company may be classified as a **Passive Foreign Investment Company (PFIC)** for the taxable year ended December 31, 2022, and in future taxable years, particularly if it does not generate revenue from operations[680](index=680&type=chunk)[681](index=681&type=chunk) - If classified as a PFIC, U.S. Holders could face additional taxes and interest charges under the 'PFIC excess distribution regime' on distributions and gains, and a Qualified Electing Fund (QEF) election is not expected to be available[682](index=682&type=chunk)[685](index=685&type=chunk)[687](index=687&type=chunk) - Dividends paid to U.S. Holders are generally treated as ordinary income, but may qualify for reduced capital gains rates for non-corporate holders if the company is a 'qualified foreign corporation'[690](index=690&type=chunk)[692](index=692&type=chunk)[693](index=693&type=chunk) - U.S. Holders may be required to file certain U.S. information reporting returns with the IRS, including Form 8938 and Form 8621 (for PFIC shareholders)[695](index=695&type=chunk) [F. Dividends and Paying Agents](index=146&type=section&id=F.%20Dividends%20and%20Paying%20Agents) This sub-item is not applicable to the report [G. Statement by Experts](index=146&type=section&id=G.%20Statement%20by%20Experts) This sub-item is not applicable to the report [H. Documents on Display](index=146&type=section&id=H.%20Documents%20on%20Display) The company is subject to SEC information reporting requirements as a foreign private issuer and files reports electronically with the SEC, which are publicly available - The company is subject to SEC information reporting requirements as a foreign private issuer and files reports with the SEC, which are available on www.sec.gov[700](index=700&type=chunk) - As a foreign private issuer, the company is exempt from certain proxy rules and Section 16 reporting obligations, and files annual reports on Form 20-F and may submit unaudited quarterly information on Form 6-K[701](index=701&type=chunk) [I. Subsidiary Information](index=147&type=section&id=I.%20Subsidiary%20Information) This sub-item is not applicable to the report [J. Annual Report to Security Holders](index=147&type=section&id=J.%20Annual%20Report%20to%20Security%20Holders) This sub-item is not applicable to the report [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=147&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks primarily from foreign currency exchange rate fluctuations and interest rates, partially hedged but not fully protected - The company is exposed to market risks primarily from changes in foreign currency exchange rates and interest rates[706](index=706&type=chunk)[707](index=707&type=chunk) - Approximately **50% of the company's expenses are denominated in New Israeli Shekels (NIS)**[708](index=708&type=chunk) - The company currently partially hedges its foreign currency exchange rate risk, but these measures may not adequately protect against material adverse effects[709](index=709&type=chunk) - Investments consist primarily of cash, cash equivalents, and short-term deposits, with the primary objective of preserving principal while maximizing income without significantly increasing risk[707](index=707&type=chunk) [Item 12. Description of Securities Other Than Equity Securities](index=147&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This item is not applicable to the report Part II [Item 13. Defaults, Dividend Arrearages and Delinquencies](index=148&type=section&id=ITEM%2013.%20DEFAULTS%2C%20DIVIDEND%20ARREARAGES%20AND%20DELINQUENCIES) This item is not applicable to the report [Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds](index=148&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20O7F%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) In June 2020, the company completed its IPO, selling 4,312,500 Ordinary Shares for net proceeds of $62.8 million, utilized as described in the prospectus - In June 2020, the company sold **4,312,500 Ordinary Shares** in its IPO at a public offering price of **$16.00 per share**[716](index=716&type=chunk) - The aggregate gross proceeds from the IPO were **$69.0 million**, with net proceeds of approximately **$62.8 million** after deducting underwriting discounts and offering expenses[716](index=716&type=chunk) - The net proceeds from the IPO have been used as described in the final prospectus for the IPO filed with the SEC on June 29, 2020[717](index=717&type=chunk) [Item 15. Controls and Procedures](index=148&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management evaluated the effectiveness of disclosure controls and internal control over financial reporting as of December 31, 2022, concluding both were effective - Management, with the participation of the CEO and Senior Vice President of Finance, evaluated the effectiveness of disclosure controls and procedures as of December 31, 2022, and concluded they were effective[719](index=719&type=chunk) - Management is responsible for establishing and maintaining adequate internal control over financial reporting and concluded that it was effective as of December 31, 2022[721](index=721&type=chunk) - An attestation report of the independent registered public accounting firm regarding internal control over financial reporting is not included due to an exemption for emerging growth companies under the JOBS Act[722](index=722&type=chunk) - During the year ended December 31, 2022, there were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[723](index=723&type=chunk) [Item 16. [Reserved]](index=149&type=section&id=ITEM%2016.%20%5BReserved%5D) This item is reserved and contains no information [Item 16A. Audit Committee Financial Expert](index=149&type=section&id=ITEM%2016.%20A%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The board determined that Dr. Itzhak Krinsky and Ms. Anat Tsour Segal qualify as audit committee financial experts and meet Nasdaq independence requirements - Dr. Krinsky and Ms. Segal have been determined by the board of directors to be **audit committee financial experts** as defined by SEC rules and possess the requisite financial experience as defined by Nasdaq Rules[724](index=724&type=chunk) - Each member of the audit committee is 'independent' as defined in Rule 10A-3(b)(1) under the Exchange Act and satisfies the independent director requirements under the Nasdaq Rules[724](index=724&type=chunk) [Item 16B. Code of Ethics](index=149&type=section&id=ITEM%2016.%20B%20CODE%20OF%20ETHICS) The company has adopted a Corporate Code of Ethics and Conduct, applicable to all directors and employees, including senior financial officers - The company has adopted a **Corporate Code of Ethics and Conduct** applicable to all directors and employees, including the Chief Executive Officer and Senior Vice President of Finance[725](index=725&type=chunk) - The full text of the Corporate Code of Ethics and Conduct is posted on the company's website at www.polypid.com[725](index=725&type=chunk) [Item 16C. Principal Accountant Fees and Services](index=150&type=section&id=ITEM%2016.%20C%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Kost, Forer, Gabbay & Kasierer served as the principal independent registered public accounting firm, with total fees increasing to $373,900 in 2022, all pre-approved - Kost, Forer, Gabbay & Kasierer, Certified Public Accountants (Israel), a member firm of Ernst & Young Global, served as the principal independent registered public accounting firm for 2021 and 2022[727](index=727&type=chunk) Fees Paid to Principal Accountant (2021-2022) | Category | Year Ended Dec 31, 2021 (in thousands) | Year Ended Dec 31, 2022 (in thousands) | | :---------------- | :------------------------------------- | :------------------------------------- | | Audit fees | $240 | $252 | | Audit-related fees | $24 | $77 | | Tax fees | $21.251 | $44.9 | | All other fees | $- | $- | | **Total** | **$285.251** | **$373.9** | - All fees for audit and non-audit services were pre-approved by the audit committee[730](index=730&type=chunk) [Item 16D. Exemptions from the Listing Standards for Audit Committees](index=150&type=section&id=ITEM%2016.%20D%20EXEMPTIONS%20FROM%20THE%20LISTING%20STANDARDS%20FOR%20AUDIT%20COMMITTEES) This item is not applicable to the report [Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=150&type=section&id=ITEM%2016.%20E%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) This item is not applicable to the report [Item 16F. Change in Registrant's Certifying Accountant](index=150&type=section&id=ITEM%2016.%20F%20CHANGE%20IN%20REGISTRANT%27S%20CERTIFYING%20ACCOUNTANT) This item is not applicable to the report [Item 16G. Corporate Governance](index=151&type=section&id=ITEM%2016.%20G%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company follows certain Israeli corporate governance practices instead of corresponding Nasdaq Stock Market rules, maintaining compliance under applicable regulations - As a foreign private issuer, the company elects to follow Israeli Companies Law provisions instead of certain Nasdaq Stock Market rules regarding corporate governance[735](index=735&type=chunk)[736](index=736&type=chunk) - Specific exemptions include not complying with Nasdaq rules on proxy statements, quorum requirements, director nominations, independent director meetings, shareholder approval for certain security issuances, and approval of related party transactions[736](index=736&type=chunk) - The company intends to take all necessary actions to maintain compliance as a foreign private issuer under the Sarbanes-Oxley Act, SEC rules, and Nasdaq Stock Market corporate governance rules[737](index=737&type=chunk) - Directors and senior management are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act, but are subject to Section 13 reporting[737](index=737&type=chunk) [Item 16H. Mine Safety Disclosure](index=152&type=section&id=ITEM%2016.%20H%20MINE%20SAFETY%20DISCLOSURE) This item is not applicable to the report [Item 16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.](index=152&type=section&id=ITEM%2016.%20I%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS.) This item is not applicable to the report Part III [Item 17. Financial Statements](index=153&type=section&id=ITEM%2017.%20FINANCIAL%20STATEMENTS) The company has elected to provide its financial statements and related information pursuant to Item 18 of this annual report - The company has elected to provide financial statements and related information pursuant to Item 18[742](index=742&type=chunk) [Item 18. Financial Statements](index=153&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the audited consolidated financial statements of PolyPid Ltd. for the period ended December 31, 2022, prepared in U.S. GAAP - The consolidated financial statements and related notes are included in this annual report on Form 20-F, starting on page F-1 (page 156 of the document)[743](index=743&type=chunk)[751](index=751&type=chunk) - The financial statements are prepared in conformity with **U.S. generally accepted accounting principles (U.S. GAAP)**[755](index=755&type=chunk)[784](index=784&type=chunk) - The Report of Independent Registered Public Accounting Firm highlights a '**substantial doubt about the Company's ability to continue as a going concern**' due to recurring losses from operations[756](index=756&type=chunk) - The company's functional and reporting currency is the **U.S. dollar**[785](index=785&type=chunk) [Report of Independent Registered Public Accounting Firm](index=157&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28PCAOB%20ID%3A%201281%29) Kost, Forer, Gabbay & Kasierer issued an unqualified opinion on the consolidated financial statements but noted substantial doubt about the company's going concern ability - The independent registered public accounting firm, Kost, Forer, Gabbay & Kasierer, issued an **unqualified opinion** on the consolidated financial statements for the three years ended December 31, 2022[755](index=755&type=chunk) - The report contains an explanatory paragraph regarding **substantial doubt about the company's ability to continue as a going concern**, citing recurring losses from operations[756](index=756&type=chunk) - The company is not required to have, nor was the auditor engaged to perform, an audit of its internal control over financial reporting[758](index=758&type=chunk) [Consolidated Balance Sheets](index=158&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a decrease in total assets to $26.0 million in 2022 and a significant decrease in shareholders' equity to $5.8 million Consolidated Balance Sheet Highlights (in thousands USD) | Metric | December 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $8,552 | $9,819 | | Short-term deposits | $4,042 | $22,384 | | Total current assets | $14,194 | $34,811 | | Property and equipment, net | $9,247 | $8,761 | | Operating lease right-of-use assets | $2,431 | $- | | Total assets | $25,971 | $44,235 | | Current maturities of long-term debt | $4,024 | $- | | Accrued expenses and other current liabilities | $2,429 | $3,940 | | Trade payables | $1,141 | $4,136 | | Total current liabilities | $8,553 | $8,076 | | Long-term debt | $7,574 | $- | | Deferred revenues | $2,548 | $- | | Long-term operating lease liabilities | $1,173 | $- | | Total long-term liabilities | $11,589 | $199 | | Total liabilities | $20,142 | $8,275 | | Total shareholders' equity | $5,829 | $35,960 | - Total assets decreased by **$18.26 million** from 2021 to 2022, primarily due to an **$18.34 million decrease in short-term deposits**[761](index=761&type=chunk) - Total liabilities increased by **$11.87 million** from 2021 to 2022, mainly driven by the recognition of current and long-term debt (**$11.6 million**) and deferred revenues (**$2.5 million**)[763](index=763&type=chunk) - Shareholders' equity decreased by **$30.13 million** from 2021 to 2022, reflecting the net loss incurred during the period[763](index=763&type=chunk) [Consolidated Statements of Operations](index=160&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a net loss of $39.6 million in 2022, an improvement from $42.6 million in 2021, driven by reduced R&D and G&A expenses Consolidated Statements of Operations (in thousands USD) | Metric | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | | Research and development, net | $27,990 | $30,553 | $16,954 | | Marketing and business development | $2,888 | $2,983 | $1,614 | | General and administrative | $8,010 | $9,609 | $7,704 | | **Operating loss** | **$38,888** | **$43,145** | **$26,272** | | Financial (income) expense, net | $540 | $(544) | $10,597 | | Income tax expense | $129 | $- | $- | | **Net loss** | **$39,557** | **$42,601** | **$36,869** | | Basic and diluted net loss per Ordinary share | $2.04 | $2.28 | $4.48 | - Net loss decreased by **$3.04 million** from **$42.60 million in 2021** to **$39.56 million in 2022**[765](index=765&type=chunk) - Operating loss decreased by **$4.26 million** from **$43.15 million in 2021** to **$38.89 million in 2022**[765](index=765&type=chunk) - Financial (income) expense, net, shifted from an income of **$0.54 million in 2021** to an expense of **$0.54 million in 2022**[765](index=765&type=chunk) [Consolidated Statements of Changes in Convertible Preferred Shares and Shareholders' Equity (Deficit)](index=161&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Convertible%20Preferred%20Shares%20and%20Shareholders%27%20Equity%20%28Deficit%29) The consolidated statements of changes in equity reflect a significant decrease in total shareholders' equity to $5.83 million in 2022, primarily due to the net loss incurred Shareholders' Equity (Deficit) Changes (in thousands USD) | Metric | As of Dec 31, 2021 | As of Dec 31, 2022 | | :----------------------------- | :----------------- | :----------------- | | Additional paid-in capital | $210,847 | $220,273 | | Accumulated deficit | $(174,887) | $(214,444) | | **Total shareholders' equity** | **$35,960** | **$5,829** | - Total shareholders' equity decreased by **$30.13 million** from **$35.96 million in 2021** to **$5.83 million in 2022**, primarily driven by the net loss of **$39.56 million**[767](index=767&type=chunk) - Share-based compensation contributed **$4.31 million** to additional paid-in capital in 2022, and issuance of Ordinary shares (net) added **$4.42 million**[767](index=767&type=chunk) - The number of issued and outstanding Ordinary shares increased from **18,756,570 in 2021** to **19,851,833 in 2022**[767](index=767&type=chunk) [Consolidated Statements of Cash Flows](index=162&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $34.3 million in 2022, while financing activities significantly increased cash provided due to debt and share issuance Consolidated Statements of Cash Flows (in thousands USD) | Cash Flow Activity | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :------------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Net cash used in operating activities | $(34,317) | $(32,386) | $(21,596) | | Net cash provided by (used in) investing activities | $16,575 | $36,900 | $(40,768) | | Net cash provided by financing activities | $16,428 | $1,034 | $62,774 | | Increase (decrease) in cash, cash equivalents and restricted cash | $(1,314) | $5,548 | $410 | - Net cash used in operating activities increased by **$1.93 million** in 2022, primarily due to ongoing and closing costs of SHIELD I and continued patient recruitment for SHIELD II[509](index=509&type=chunk)[770](index=770&type=chunk) - Net cash provided by investing activities decreased by **$20.33 million** in 2022, mainly due to a lower release of short-term and long-term deposits compared to the prior year[511](index=511&type=chunk)[770](index=770&type=chunk) - Net cash provided by financing activities significantly increased by **$15.39 million** in 2022, driven by **$11.71 million from long-term debt** (Kreos loan) and **$4.42 million from the issuance of Ordinary shares** (ATM)[512](index=512&type=chunk)[770](index=770&type=chunk) - Overall cash, cash equivalents, and restricted cash decreased by **$1.31 million** in 2022, ending the year at **$9.14 million**[770](index=770&type=chunk)[771](index=771&type=chunk) [Notes to Consolidated Financial Statements](index=164&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information supporting the consolidated financial statements, including accounting policies, R&D activities, debt arrangements, and going concern status - The company is a **Phase 3 biopharmaceutical company** focused on developing targeted, locally administered, and prolonged-release therapeutics using its proprietary **PLEX technology**, with D-PLEX100 as its lead product candidate for surgical site infection prevention[773](index=773&type=chunk) - The company has incurred substantial losses and negative cash flows from operations, leading to a '**substantial doubt about the Company's ability to continue as a going concern**' as of December 31, 2022, with an accumulated deficit of **$214.4 million**[778](index=778&type=chunk)[781](index=781&type=chunk) - The consolidated financial statements are prepared in **U.S. GAAP**, with the **U.S. dollar** as the functional and reporting currency[784](index=784&type=chunk)[785](index=785&type=chunk) - The company adopted **ASC 842, 'Leases,'** on January 1, 2022, recognizing **$3.388 million** in operating lease right-of-use (ROU) assets and liabilities[789](index=789&type=chunk) - Research and development expenses are expensed as incurred and presented net of government grants[792](index=792&type=chunk) - As of December 31, 2022, the company received **$4.888 million** in royalty-bearing grants from the Israeli Innovation Authority (IIA), with a commitment to pay **3% royalties** on sales of developed products[794](index=794&type=chunk)[797](index=797&type=chunk) - Share-based compensation expense is recognized using the **Black-Scholes option pricing model**[797](index=797&type=chunk) - Total share-based compensation expense was **$4.31 million in 2022**, **$4.75 million in 2021**, and **$4.58 million in 2020**[865](index=865&type=chunk) - The company entered into a secured line of credit agreement with Kreos Capital for up to **$15 million**, drawing **$12.5 million in 2022**[839](index=839&type=chunk) - An amendment in March 2023 delayed repayments, increased the interest rate to **10%**, and repriced warrants[880](index=880&type=chunk) - As of December 31, 2022, the company had accumulated net operating losses (NOLs) of approximately **$152.1 million** for tax purposes, with a full valuation allowance provided for deferred tax assets[850](index=850&type=chunk)[851](index=851&type=chunk) - Subsequent events in Q1 2023 include additional ATM sales (**$2.19 million net**), repricing of employee options to **$0.77**, the Kreos credit line amendment, a public offering (**$7.08 million gross**), and a private placement of pre-funded warrants (**$4.35 million gross**)[881](index=881&type=chunk)[882](index=882&type=chunk) [Item 19. Exhibits](index=153&type=section&id=ITEM%2019.%20EXHIBITS) This section lists all exhibits filed as part of the Form 20-F annual report, including articles of association, warrant forms, and various agreements and certifications - The exhibits include the Articles of Association, Form of Warrant to purchase Series E-1 Preferred Shares, Description of Securities, Form of Officer Indemnity and Exculpation Agreement, Compensation Policy, Amended and Restated PolyPid Ltd. 2012 Share Option Plan, various Lease Agreements, Sales Agreement with Cantor Fitzgerald & Co., Agreement for the Provision of a Loan Facility with Kreos Capital VI (Expert Fund) LP, and License, Distribution and Supply Agreement with Mercury Pharma Group Limited (Advanz Pharma Holdings)[744](index=744&type=chunk)[651](index=651&type=chunk) - Also included are certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 and 18 U.S.C. 1350, and the Consent of Kost, Forer, Gabbay & Kasierer[745](index=745&type=chunk)

PolyPid Ltd (NASDAQ:PYPD) Q4 2022 Earnings Conference Call February 8, 2023 8:30 AM ET Company Participants Brian Ritchie - LifeSci Advisors Dikla Akselbrad - CEO Ori Warshavsky - COO, US Jonny Missulawin - SVP, Finance Conference Call Participants Brandon Folkes - Cantor Fitzgerald Douglas Buchanan - JMP Securities Operator Greetings, and welcome to the PolyPid Fourth Quarter and Full Year 2022 Conference Call. [Operator Instructions]. As a reminder, this call is recorded. And I would now like to introduc ...

PolyPid Ltd. (NASDAQ:PYPD) Q3 2022 Earnings Conference Call November 9, 2022 8:30 AM ET Company Participants Bob Yedid - Investor Relations, LifeSci Advisors Dikla Czaczkes Akselbrad - Chief Executive Officer Ori Warshavsky - Chief Operating Officer, U.S. Operations Conference Call Participants Brandon Folkes - Cantor Fitzgerald Elliot Wilbur - Raymond James Roy Buchanan - JMP Securities Bob Yedid Thank you all for participating in PolyPid's Third Quarter 2022 Earnings Conference Call. Joining me on the cal ...

Financial Data and Key Metrics Changes - As of June 30, 2022, the company had cash, cash equivalents, and short-term deposits of $23.8 million, excluding the second tranche of $2.5 million from the loan drawn in July 2022 [32] - Research and development expenses for Q2 2022 were $8.4 million, up from $7.4 million in the same period in 2021, primarily due to increased costs in the SHIELD I Phase 3 clinical trials [34] - The company reported a loss of $11.1 million for Q2 2022, compared to a loss of $10.5 million in the prior year period [35] Business Line Data and Key Metrics Changes - The exclusive license agreement with ADVANZ PHARMA for D-PLEX100 includes potential development-related milestones totaling up to $23.5 million and sales-related milestones of up to $89 million [9] - D-PLEX100 targets a significant market opportunity in Europe, with approximately 3 million annual surgeries in selected abdominal surgeries and an additional estimated 450,000 open heart surgeries in the big 5 EU countries [11] Market Data and Key Metrics Changes - Surgical site infections (SSIs) occur in up to 15% to 20% of major surgical procedures in Europe, representing a major unmet medical need [11] - The World Health Organization estimates that SSIs result in up to EUR 11 billion of traditional hospital costs per year in Europe [12] Company Strategy and Development Direction - The company aims to maximize the value of D-PLEX100 through additional collaborations in the U.S. and globally, with ongoing dialogues with several large and mid-sized pharmaceutical companies [14] - The SHIELD I study is the largest infection prevention trial in colorectal surgery conducted in over a decade, with full top-line results anticipated by the end of the current quarter [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential for D-PLEX100, highlighting the strong interest from additional potential partners and the strategic importance of the ADVANZ PHARMA agreement [14][12] - The company is preparing for a targeted NDA submission and potential commercialization of D-PLEX100, while also making progress with OncoPLEX, its lead intratumoral product candidate in oncology [28] Other Important Information - The company obtained a nondilutive secured term loan facility of up to $15 million, which broadens financing options and supports investment in commercial capabilities for D-PLEX100 [30] - Changes to the Board include the promotion of Jonny Missulawin to Senior Vice President of Finance [29] Q&A Session Summary Question: Can you elaborate on ADVANZ PHARMA's capabilities in the hospital space in Europe? - ADVANZ PHARMA has a strong focus on the hospital space and has significantly increased its sales force, targeting major EU countries [38] Question: What is the expected timing for filing in Europe? - The filing in Europe is expected to be around the same time as the U.S., with a potential slight delay [39] Question: What are the expectations for the rolling submission in the U.S.? - The rolling submission is expected to start early next year, with completion anticipated within six months [40] Question: How is the company preparing for the U.S. launch? - The strategy is to find a partner for co-promotion rather than licensing, maintaining some level of control in the U.S. market [42] Question: How do infection rates differ between countries in Europe? - Infection rates in Europe for major surgeries are generally around 15% to 20%, which may be slightly higher than in the U.S. [47] Question: What is the expectation for the D-PLEX label initially? - The company aims for a broad abdominal indication with the FDA, preparing for potential backup options based on ongoing studies [49] Question: Are there any new developments with competitors? - Current competitors do not have the level of evidence or trial size that D-PLEX100 is expected to provide [61]

| --- | --- | --- | |------------------------|-------|-------| | | | | | | | | | P&LYPID | | | | | | 电 | | CORPORATE PRESENTATION | | | | | | | OPTIMIZED THERAPEUTICS JUNE 2022 Disclaimer This presentation of PolyPid Ltd. (the "Company") contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such wor ...

PolyPid Ltd. (NASDAQ:PYPD) Q1 2022 Earnings Conference Call May 11, 2022 8:30 AM ET Company Participants Bob Yedid - Investor Relations, LifeSci Advisors Amir Weisberg - Chief Executive Officer Dikla Czaczkes Akselbrad - Executive Vice President and Chief Financial Officer Ori Warshavsky - Chief Operating Officer, US Operations Conference Call Participants Balaji Prasad - Barclays Michael Parolari - Raymond James Gary Nachman - BMO Capital Markets Brandon Folkes - Cantor Fitzgerald Roy Buchanan - JMP Securi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANTTO 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 Commission ...

PolyPid Ltd. (NASDAQ:PYPD) Q4 2021 Earnings Conference Call February 9, 2022 8:30 AM ET Company Participants Bob Yedid - Investor Relations Amir Weisberg - Chief Executive Officer Dikla Czaczkes Akselbrad – Executive Vice President and Chief Financial Officer Conference Call Participants Hannah Smith - Raymond James Brandon Folkes - Cantor Fitzgerald Roy Buchanan - JMP Securities Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps withi ...

Financial Data and Key Metrics Changes - As of September 30, 2021, the company had cash and cash equivalents of $42 million, down from $67 million as of December 31, 2020, indicating a decrease in liquidity [25] - The net loss attributable to ordinary shares for Q3 2021 was $9.9 million, compared to $6.5 million in the same period of 2020, reflecting increased operational costs [27] Business Line Data and Key Metrics Changes - Research and development expenses for Q3 2021 were $7.3 million, up from $4.2 million in Q3 2020, driven by costs associated with the ongoing SHIELD I and SHIELD II Phase 3 clinical trials [26] - Marketing and business development expenses increased to $400,000 in Q3 2021 from $300,000 in Q3 2020, indicating a rise in promotional activities [27] Market Data and Key Metrics Changes - Approximately 70% of patients currently enrolled in the SHIELD I trial have a colorectal cancer diagnosis, consistent with previous trials [17] - The SHIELD I trial has enrolled about 480 patients, with expectations to reach 500 by the end of the month and to continue increasing enrollment to 200-250 patients per quarter [11][12] Company Strategy and Development Direction - The company is focused on advancing its D-PLEX100 program for the prevention of surgical site infections (SSI) and has developed a comprehensive launch plan for its commercial preparations [6][9] - The company is also pursuing the OncoPLEX development platform, targeting brain tumors, and is preparing for a pre-IND meeting with the FDA to discuss clinical development plans [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial position, stating that the current balance sheet is sufficient to complete the SHIELD I study and prepare for NDA submission [10] - The company anticipates an extension of its cash runway into the end of 2022, an improvement from previous expectations [16] Other Important Information - The Data Safety Monitoring Committee has recommended continuing the SHIELD I study without modification, indicating no major safety issues observed to date [18] - The company is in discussions with potential partners for the commercialization of D-PLEX100, indicating a high level of interest from large and midsized pharmaceutical companies [20] Q&A Session Summary Question: What is the potential change in target enrollment for SHIELD I? - Management clarified that the target number for SHIELD I is expected to remain at 900 patients, as the FDA agreed that one pivotal trial is sufficient for NDA submission [30][31] Question: What are the partnership discussions regarding commercialization? - The company plans to have a strategic collaboration in the U.S. while also exploring licensing agreements in Europe and Asia [34][35] Question: What is the expected timeline for SHIELD II? - Management indicated that SHIELD II will be pursued with a broader eligibility criteria but will not require the same robust size as initially planned [46] Question: What is the status of OncoPLEX and its clinical trial? - The company is preparing for a pre-IND meeting with the FDA to discuss the clinical development plan for OncoPLEX, with a focus on initiating a Phase 1/2 trial in 2022 [24][81] Question: How is the cash runway being managed? - Management confirmed that there is no immediate need to utilize the ATM facility, as the cash runway has been extended into the end of next year [67] Question: What insights have been gained from market research on D-PLEX100? - Recent market research indicated a high level of interest and understanding of the costs associated with surgical site infections among stakeholders, which is encouraging for future commercialization efforts [78]