Collaboration and Partnerships - XTL Biopharmaceuticals Ltd. is exploring collaboration with strategic partners for clinical trials related to hCDR1 for the treatment of Lupus disease (SLE) and Sjögren's Syndrome (SS) [4] Intellectual Property and Asset Expansion - The company is actively seeking to expand its IP portfolio by identifying additional assets [4] Financial Activities - A private placement of US$1.5 million has been approved, conditional upon the acquisition of The Social Proxy Ltd. [7]

Financial Position and Capital Requirements - As of December 31, 2023, the company had approximately $1,401 thousand in cash and cash equivalents and working capital of approximately $1,840 thousand[33]. - The accumulated deficit stood at approximately $158,246 thousand, indicating substantial operating losses since inception[33]. - The company expects to continue incurring losses in drug development activities for the foreseeable future and may never achieve profitability[30]. - Future capital requirements will depend on various factors, including the need for additional financing to support clinical trials and product development[35]. - The company estimates that existing cash balances will finance activities for at least 12 months from the report date, but additional financing will be necessary for ongoing clinical trials[33]. - The company may seek additional capital through private and public equity offerings, debt financings, and strategic partnerships, which could dilute existing shareholders[36]. - If the company fails to raise additional capital under acceptable terms, it may have to reduce development activities or sell rights to its technologies[33]. - The company reported a net cash used in operating activities of $707 thousand for the year ended December 31, 2023, indicating a need for significant additional financing[98]. - The company may not be able to continue operations if additional capital is not available, which could lead to a complete discontinuation of operations[98]. Regulatory and Clinical Trial Risks - The company faces risks related to the success of clinical trials and regulatory approvals, which are critical for product commercialization[31]. - Clinical trials are subject to delays due to factors such as patient recruitment rates and regulatory requirements[41]. - Regulatory approvals are necessary for the commercialization of products, and failure to obtain them could severely impact the company's business strategy[42]. - The company may incur additional costs and delays if clinical trials do not meet regulatory requirements or if negative results are obtained[46]. - The regulatory approval process for drug candidates is lengthy and expensive, requiring extensive pre-clinical and clinical data submissions to the FDA[210]. - The FDA requires a comprehensive NDA submission that includes pre-clinical and clinical data, manufacturing specifications, and proposed labeling for product approval[216]. - Unacceptable toxicity or side effects during trials can lead to interruptions or termination of drug development[215]. - The duration of clinical trials can vary significantly, and delays may arise from slow patient enrollment, inadequate site personnel, or adverse medical events[215]. Market and Competitive Landscape - Market acceptance of the company's products is uncertain and will depend on factors such as safety, efficacy, and competitive advantages over existing treatments[58]. - The pharmaceutical industry is highly competitive, with competitors potentially developing products that are less expensive, more effective, or safer, which could harm revenues and commercial opportunities[64]. - The company is aware of competitive clinical trials that may affect patient enrollment in its studies[41]. Operational and Management Challenges - As of April 30, 2024, the company has no employees and only four part-time service providers, which may impair performance and technological capabilities[66]. - The Chief Financial Officer devotes approximately 6 hours a week to the company's operations, which may impact timely completion of financial statements[67]. - The company has identified a material weakness in internal control over financial reporting related to the improper classification of warrants as equity instead of non-current liabilities[141]. - The company may face substantial litigation costs related to intellectual property claims, which could divert management's attention from business operations[94]. Intellectual Property and Licensing - The company actively files patent applications but faces uncertainty regarding the breadth and enforceability of these patents, which could affect competitive advantage[90]. - The company relies on third-party licenses for drug candidates, and failure to meet obligations could result in termination of these agreements, adversely affecting business[84]. - The company has not yet met the second milestone under the license agreement with Yeda, which may lead to termination of the agreement[87]. - The company is responsible for a total patent expense reimbursement to Yeda of $382,989, with the first two installments paid in shares valued at approximately $38,000 and $84,000 respectively[191]. Geopolitical and Economic Factors - The company’s operations may be adversely affected by political, economic, and military instability in Israel and the Middle East[30]. - The company is currently operating in a period of economic uncertainty due to geopolitical instability, which may adversely affect financial condition and results of operations[79]. - Political instability in Israel, including the potential for escalated conflicts, may adversely affect the company's business conditions and financial results[125]. - The company holds most of its cash in U.S. dollars, exposing it to risks from currency fluctuations against the New Israeli Shekel (NIS) and inflation in Israel[131]. Future Plans and Developments - The drug candidate hCDR1 is Phase II-ready for the treatment of systemic lupus erythematosus (SLE), with an estimated 1.5 million Americans affected by the disease[150][166]. - The company plans to reduce research and development expenditures for hCDR1 until full funding or strategic partnerships are secured[151][157]. - The company has entered into a binding term sheet to acquire The Social Proxy, which will represent 44.6% of the issued and outstanding share capital post-transaction[160]. - The company is exploring the expansion of its intellectual property portfolio surrounding hCDR1 while seeking additional assets for its portfolio[155][157]. - The company plans to consider a small Phase 2 clinical trial for hCDR1 in pSS, subject to adequate financing or collaboration[181].

Financial Position and Capital Requirements - As of December 31, 2022, the company had approximately $2,094 thousand in cash and cash equivalents and working capital of approximately $3,619 thousand[36]. - The accumulated deficit was approximately $156,467 thousand, indicating substantial operating losses since inception[36]. - The company expects to continue incurring losses in the foreseeable future due to ongoing drug development activities[33]. - Future capital requirements will depend on various factors, including the success of clinical trials and regulatory approvals[38]. - The company estimates that its current cash and cash equivalents will finance activities for at least 12 months from the report date[36]. - Additional financing will be necessary to continue product development and commercialization efforts[35]. - The company may need to raise additional capital through public or private equity or debt financings[37]. - If the company fails to raise additional capital, it may have to reduce development activities or sell technologies[36]. - The net cash used in operating activities for the year ended December 31, 2022, was $901 thousand, indicating a need for significant additional financing to continue operations[98]. Product Development and Commercialization Risks - The company has not yet commercialized any products or technologies, which poses a risk to achieving profitability[29]. - The company faces risks related to the timing and costs of clinical trials and regulatory approvals, which could impact its business strategy[28]. - The company is currently not seeking regulatory approval for any drug candidates, including hCDR1, and will need to conduct significant additional research and human testing[44]. - The company faces risks related to the completion of clinical trials, including potential delays in patient enrollment and the need for additional clinical data[43][48]. - The company relies on third-party manufacturers for the production of drug candidates and may face challenges if these manufacturers do not meet quality or delivery standards[61][62]. - The company anticipates that market acceptance of its products will depend on their demonstrated advantages over existing therapies, which is uncertain[60]. - The company faces significant competition from larger pharmaceutical and biotechnology firms, which may hinder its ability to develop and market products effectively[67]. - The company has licensed all its drug candidates and technologies, and failure to meet obligations under these agreements could result in loss of rights[83]. - The company is seeking a strategic partner for Phase 2 of its drug development, and failure to secure this could lead to termination of its license agreement[86]. Regulatory and Compliance Challenges - The company is subject to ongoing regulatory scrutiny, and any changes in regulations could impact its ability to market products[50][64]. - The company must establish and maintain strategic partnerships for drug development and marketing, which may not always be successful[58]. - The company may incur significant costs related to clinical trials, regulatory approvals, and commercialization activities[39]. - The company must maintain stockholders' equity of at least $2.5 million and a market value of listed securities of $35 million to comply with Nasdaq listing requirements[115]. - If the company fails to comply with Nasdaq's continued listing standards, it risks delisting, which could impair its ability to raise capital and depress the price of its ADSs[116]. Shareholder and Market Considerations - Approximately 23.54% of the company's ordinary shares are beneficially held by one shareholder, which may significantly influence corporate decisions[103]. - The trading price of the ADSs is likely to be highly volatile, influenced by factors such as developments concerning drug candidates and market conditions[100]. - Future issuances of a substantial number of ADSs could depress the market price of the ordinary shares or ADSs, making it difficult to raise funds through equity sales[102]. - The company has never declared or paid any cash dividends on its ordinary stock and does not anticipate doing so in the foreseeable future[111]. - The ADS holders do not have the same rights as shareholders, including voting rights and rights to receive dividends directly[110]. - The concentration of ownership may depress the market price of the ordinary shares or ADSs, limiting new investors' influence over corporate decisions[103]. Operational and Economic Risks - The company is significantly affected by political, economic, and military conditions in Israel, which may harm operations and results[119]. - The company holds most cash and equivalents in U.S. dollars, while a significant portion of expenses is in New Israeli Shekels (NIS), exposing it to currency fluctuation risks[122]. - The company is monitoring the impact of the COVID-19 pandemic, which has not materially affected operations or financial results to date[68]. - The ongoing military conflict between Russia and Ukraine has created economic uncertainty and could adversely affect the company's financial condition and results[78]. - The company is subject to economic boycotts and restrictive laws from several countries, which may adversely impact operating results and business expansion[121]. - The company may face challenges in enforcing non-competition agreements with employees, potentially allowing competitors to benefit from former employees' expertise[128]. - The company is exposed to inflation risks in Israel, which could exceed the rate of devaluation of the NIS against the U.S. dollar, affecting financial results[122]. Legal and Tax Considerations - The company has identified a material weakness in internal control over financial reporting related to the classification of warrants, which could impact financial statement accuracy[132]. - Israeli law may delay or impede mergers and acquisitions, requiring specific approvals and timeframes that could hinder potential beneficial transactions[123]. - The company may encounter difficulties in enforcing U.S. judgments or securities law claims in Israel, complicating legal recourse[126]. - The Israeli tax law may make potential transactions less appealing, as it does not recognize tax-free share exchanges to the same extent as U.S. tax law[124]. Management and Operational Structure - The company has no employees as of March 22, 2023, relying on four part-time service providers for operations[70]. - The Chief Financial Officer devotes approximately 6 hours a week to the company's operations, which may impact timely completion of financial statements[71]. - The company may pursue acquisitions or in-licensing transactions that could dilute equity or require significant cash, posing operational risks[72]. - The company has developed new controls to address previously identified material weaknesses, involving key management and legal counsel to ensure proper financial reporting[132].

Financial Performance - The company reported a total profit of $221,000 for the six months ended June 30, 2022, compared to a loss of $865,000 for the same period in 2021, indicating a significant turnaround[10] - The company recorded finance income of $672,000 for the six months ended June 30, 2022, compared to finance expenses of $(330,000) for the same period in 2021, indicating a positive shift in financial performance[10] - The basic and diluted earnings per share improved from $(0.002) in the six months ended June 30, 2021, to $0.000 in the same period of 2022[10] - The company recognized a loss of $1,289 thousand in finance income (expense), net, during the six months ended June 30, 2021[35] - The company disposed of warrants resulting in a loss of $512 thousand during the six months ended June 30, 2021[35] Assets and Liabilities - Total assets decreased from $6,618,000 as of December 31, 2021, to $5,757,000 as of June 30, 2022, representing a decline of approximately 13%[6] - Cash and cash equivalents decreased from $2,969,000 at the beginning of the period to $2,346,000 at the end of the period, a reduction of about 21%[16] - Marketable securities decreased from $3,158,000 as of December 31, 2021, to $2,810,000 as of June 30, 2022, a decline of approximately 11%[28] - The warrant liability decreased significantly from $1,054,000 as of December 31, 2021, to $22,000 as of June 30, 2022, a reduction of approximately 98%[6] - The balance of warrant liability increased from $2,637 thousand at the beginning of 2021 to $3,414 thousand by June 30, 2021, before decreasing to $22 thousand by June 30, 2022[35] Equity and Deficit - The company’s accumulated deficit improved slightly from $(155,133,000) as of December 31, 2021, to $(154,903,000) as of June 30, 2022[6] - Total equity attributable to equity holders of the company increased from $5,333,000 as of December 31, 2021, to $5,563,000 as of June 30, 2022, an increase of about 4%[6] Research and Development - Research and development expenses increased to $21,000 for the six months ended June 30, 2022, from $18,000 in the same period of 2021, reflecting a growth of approximately 17%[10] Warrants - As of June 30, 2022, the company had outstanding warrants totaling 1,797,500, which could potentially convert into 179,750,000 shares[32] - The company recorded finance income of $1,032 thousand and $495 thousand for the six and three months ended June 30, 2022, respectively, related to warrant liability revaluation[33] - A total of 60,000,000 warrants from the February 23, 2017 round expired on August 23, 2022[36] - The company expects the life of the warrants to be based on their expiration dates[34] - The expected volatility for the warrants was calculated based on actual historical share price movements over the contractual term[34] Dividends - The company has not paid dividends in the past and does not expect to pay dividends in the future[34]

Financial Position - As of December 31, 2021, the company had approximately $2,969 thousand in cash and cash equivalents, working capital of approximately $6,006 thousand, and an accumulated deficit of approximately $155,133 thousand[36]. - The company estimates that its outstanding cash and cash equivalent balances will allow it to finance its activities for at least 12 months from the date of the report[36]. - The net cash used in operating activities for the year ended December 31, 2021, was $1,049 thousand, indicating a need for significant additional financing[99]. - The company is required to maintain stockholders' equity of at least $2.5 million and a market value of listed securities of $35 million to comply with Nasdaq listing standards[116]. - Future issuances of a substantial number of ADSs could depress the market price of the ordinary shares or ADSs, making it more difficult to raise funds through equity sales[103]. - The company has never declared or paid any cash dividends on its ordinary stock and does not anticipate paying any cash dividends in the foreseeable future[112]. Operating Losses and Financing Needs - The company expects to continue incurring operating losses for the foreseeable future due to ongoing drug development activities[33]. - The company will require substantial additional financing to achieve its goals, and failure to obtain necessary capital could delay or terminate product development efforts[35]. - The company may need to raise additional financing by issuing securities to continue its clinical trials aimed at obtaining marketing approval for its products[36]. - The company may seek additional capital due to favorable market conditions or strategic considerations even if it believes it has sufficient funds for current operations[37]. - The company may seek additional capital through various means, which could dilute existing shareholders' interests[39]. Clinical Trials and Product Development - The company has not yet commercialized any products or technologies and may never achieve profitability[29]. - The company is currently developing the hCDR1 product candidate, which is planned for advanced clinical studies[59]. - The company faces risks related to the success of its clinical trials, which are uncertain and could adversely affect its business strategy[30]. - The company faces risks related to the completion of clinical trials, including potential delays in patient enrollment and site engagement[43]. - The company has limited experience in conducting clinical trials necessary for obtaining regulatory approvals[44]. - The company must demonstrate safety and efficacy in humans to obtain FDA approval, which requires significant additional research and testing[44]. - The company anticipates significant operating and capital expenditures for the foreseeable future related to research and development, clinical trials, and regulatory approvals[37]. - The company is at risk of incurring additional costs and delays if clinical trials do not yield positive results or if regulatory approvals are not obtained[51]. Third-Party Reliance and Risks - The company relies on third parties for clinical trials and manufacturing, and any failure in these areas could harm its business[31]. - The company relies on third-party manufacturers for the production of drug candidates, which poses risks if these manufacturers fail to deliver on time or meet quality standards[65]. - The company is subject to risks related to third-party manufacturers' compliance with regulations, which could impact product commercialization[69]. - The company relies on licensed drug candidates and technologies, and failure to meet obligations could result in loss of rights[89]. Market and Competitive Environment - The company faces competition from pharmaceutical and biotechnology companies with greater capital resources and experience in drug development[71]. - The company anticipates that market acceptance of its products will depend on factors such as safety, efficacy, and cost-effectiveness compared to existing treatments[63]. - The company may face challenges in establishing strategic partnerships and licensing arrangements, which are crucial for commercialization[61]. Legal and Regulatory Risks - The company may incur substantial costs and management distraction if securities class-action litigation is instituted against it following periods of market volatility[102]. - Political, economic, and military conditions in Israel may adversely affect the company's operations and results, particularly due to the ongoing hostilities and threats in the region[120]. - The company may encounter difficulties in enforcing U.S. judgments or securities law claims in Israel, complicating legal recourse[127]. - Tax considerations under Israeli law may make certain transactions less appealing, impacting shareholder interests and potential mergers[125]. - Israeli law may delay or impede potential mergers or acquisitions, requiring specific approvals and timeframes that could hinder strategic transactions[124]. Currency and Economic Risks - The company holds most of its cash and equivalents in U.S. dollars, while a significant portion of its expenses is in New Israeli Shekels (NIS), exposing it to currency fluctuation risks[123]. - Inflation and currency devaluation risks in Israel could adversely affect the company's financial results, especially if inflation exceeds the rate of currency devaluation[123]. - The ongoing military conflict between Russia and Ukraine has led to significant volatility in global markets, which may adversely affect the company's financial condition[84]. - The company is subject to economic boycotts and restrictive laws from several countries, which may adversely impact its operating results and business expansion[122]. Shareholder and Market Considerations - The concentration of ownership among two principal shareholders, Mr. Alexander Rabinovitch and Mr. David Bassa, who hold approximately 25.79% of the ordinary shares, may significantly influence corporate decisions[104]. - The trading volume of the company's ADSs has historically been low, limiting the ability to sell at desirable prices[100]. - The trading price of the ADSs is likely to be highly volatile, influenced by various factors including drug candidate developments and market conditions[101]. - If the company fails to maintain compliance with Nasdaq's continued listing standards, it may face delisting, which could impair capital-raising efforts and reduce liquidity[117]. - Delisting of the ADSs could result in them being classified as "penny stocks," leading to reduced trading activity and attractiveness to investors[118]. - The effective trading prices of the company's securities may differ on Nasdaq and TASE due to different currencies and trading times[105].

Financial Performance - Total comprehensive loss for the year was $782,000, compared to a loss of $1,347,000 in 2019, representing a 42% improvement[25] - Research and development expenses were $38,000 in 2020, slightly increasing from $35,000 in 2019[25] - General and administrative expenses rose to $910,000 in 2020, up from $807,000 in 2019, indicating a 12.7% increase[25] - The company reported a net cash used in operating activities of $850 thousand for the year ended December 31, 2020, indicating a need for significant additional financing to continue operations[95] Cash and Assets - Cash, cash equivalents, and short-term bank deposits decreased to $3,631,000 in 2020 from $4,455,000 in 2019, a decline of 18.5%[26] - Total assets decreased to $6,503,000 in 2020 from $7,212,000 in 2019, reflecting a 9.8% reduction[26] - Total shareholders' equity was $6,249,000 in 2020, down from $6,980,000 in 2019, a decrease of 10.5%[26] - As of December 31, 2020, the company had approximately $3,631 thousand in cash and cash equivalents, with an accumulated deficit of approximately $154,661 thousand[36] - The company estimates that its existing cash and cash equivalents will finance activities for at least 12 months from the report date[36] Future Profitability and Losses - The company has incurred substantial operating losses since inception and expects to continue incurring losses in the future[31] - The company expects to continue incurring losses for the foreseeable future, with no assurance of achieving profitability[34] - The company has not yet commercialized any products or technologies and may never become profitable[31] - The company has not yet commercialized any products and may never achieve profitability[42] Clinical Trials and Regulatory Risks - The company faces risks related to the successful completion of clinical trials for its drug candidates, which could adversely affect its business strategy[32] - Clinical trials are subject to rigorous regulatory requirements, and delays in these trials could adversely affect the company's business strategy[44] - The company faces risks related to obtaining regulatory approvals, which are critical for the commercialization of its products[46] - The company relies on third parties for clinical trials, and any failure of these parties to perform could delay or prevent product development[53] Manufacturing and Development Risks - The company does not currently have the ability to manufacture its drug candidates and relies on third-party manufacturers, which poses risks if they fail to deliver on time or meet quality standards[63] - The company relies on third-party manufacturers for drug candidates and technologies, which may lead to delays or termination of development programs if agreements are not successfully established or maintained[59] - Significant operating and capital expenditures are anticipated for product development, including research, manufacturing, and clinical trials[37] Market and Competitive Risks - Market acceptance of the company's drug candidates is uncertain and depends on factors such as safety, efficacy, and cost-effectiveness compared to existing treatments[60] - The pharmaceutical industry is highly competitive, and the company faces risks if competitors develop more effective or cheaper products[68] Financing and Shareholder Considerations - The company may require additional financing through public or private equity, debt financings, or strategic partnerships to support its development activities[39] - Approximately 31.83% of the company's ordinary shares are beneficially held by two principal stockholders, potentially limiting new investors' influence on corporate decisions[100] - The company must maintain stockholders' equity of at least $2.5 million and a market value of listed securities of $35 million to comply with Nasdaq listing requirements[113] - Future issuances of ADSs could depress the market price of the company's ordinary shares or ADSs, affecting the ability to raise funds[99] Legal and Intellectual Property Risks - Legal actions related to intellectual property infringement could divert management's attention and resources, impacting business operations[91] - The company has licensed all its drug candidates and technologies from third parties, and failure to meet obligations could result in loss of rights to these candidates[85] - The company actively files patent applications but faces uncertainty regarding the enforceability and breadth of these patents, which may affect competitive advantage[87] - Trade secrets are difficult to protect, and the company relies on confidentiality agreements, which may not be sufficient to safeguard proprietary information[90] Operational and External Risks - The company has no employees and relies on part-time service providers, which may affect its ability to attract and retain skilled personnel necessary for drug development[73] - Political, economic, and military conditions in Israel may adversely affect the company's operations, as key facilities and personnel are located there[118] - The company is exposed to risks from inflation and foreign currency fluctuations, particularly as a significant portion of expenses are in New Israeli Shekels (NIS) while cash reserves are held in U.S. dollars[122] - Israeli corporate law may impede potential mergers or acquisitions, requiring lengthy approval processes and specific conditions to be met[123] - Tax considerations under Israeli law may deter potential transactions, as tax-free share exchanges are not recognized to the same extent as in U.S. law[124] - Enforcement of non-competition agreements may be difficult, potentially allowing competitors to benefit from the expertise of former employees[128] - Employees may claim compensation for inventions made during their employment, which could impact future revenue and profitability[129] Dividend and Stock Considerations - The company has never declared or paid any cash dividends on its ordinary stock and does not anticipate doing so in the foreseeable future[109] - The trading volume of the company's ADSs has historically been low, which may hinder shareholders' ability to sell at desirable prices[96] - Delisting could result in the company's ADSs being classified as "penny stocks," leading to reduced trading activity and making it less attractive to institutional investors[116] - The company may face delisting from Nasdaq if it fails to maintain compliance with continued listing standards, which could severely limit liquidity and adversely affect capital raising efforts[114] - The company may be classified as a passive foreign investment company (PFIC), which could impose special federal income tax rules on U.S. holders of its shares[102]

Financial Performance - For the year ended December 31, 2019, the total comprehensive loss was $1,347 thousand, compared to a comprehensive income of $2,986 thousand in 2018[23]. - Research and development expenses for 2019 were $35 thousand, a decrease from $38 thousand in 2018[23]. - Cash, cash equivalents, and short-term bank deposits as of December 31, 2019, were $4,455 thousand, down from $5,275 thousand in 2018[25]. - Total assets decreased to $7,212 thousand in 2019 from $8,575 thousand in 2018[25]. - The accumulated deficit as of December 31, 2019, was approximately $153,930 thousand[32]. - The company reported a net cash usage of $908 thousand for the year ended December 31, 2019, indicating a need for significant additional financing[89]. Future Outlook and Financing - The company expects to continue incurring losses in the foreseeable future due to ongoing drug development activities[29]. - The company estimates that its cash and cash equivalents will finance activities for at least 12 months from the report date[32]. - The company plans to raise additional financing to support clinical trials and product development[33]. - The company may need to raise additional capital through equity or debt financing, which could dilute existing shareholders[1]. - Future issuances of ADSs could dilute existing shareholders' equity and depress the market price of the company's shares[93]. Drug Development and Commercialization Risks - The company has not yet commercialized any drug candidates or technologies and cannot ensure future profitability[30]. - The company has not yet commercialized any products or technologies and may never achieve profitability[38]. - The company is currently not seeking regulatory approval for any drug candidates with the FDA or other regulatory authorities[42]. - The company faces risks related to the completion of clinical trials, which may take longer than projected and incur additional costs[40]. - The company relies on third parties for clinical trials and manufacturing, which may lead to delays or failures in obtaining regulatory approval[49][60]. - The company’s product candidate hCDR1 is planned for advanced clinical studies, but must show positive clinical results to proceed[53]. - Market acceptance of the company’s products will depend on perceptions of safety and efficacy by healthcare providers[56]. - The company’s financial results may be materially impaired if clinical trials do not confirm positive early data[54]. - The company faces risks related to third-party manufacturers' compliance with FDA regulations, which could impact product commercialization[62]. - The company is at risk of losing market share if competitors develop more effective or cheaper products, potentially harming revenues[64]. Operational and Strategic Challenges - The company has limited personnel resources, with only one part-time employee and two part-time service providers, which could impair performance[67]. - The company relies on licensed drug candidates and technologies, and failure to meet obligations could result in losing these rights[79]. - The company may face substantial costs and operational risks associated with acquisitions or in-licensing transactions, which could dilute equity[69]. - The company intends to expand insurance coverage for product liability but faces increasing costs and potential inadequacy of coverage[74]. - The company is exposed to product liability risks that could lead to substantial liabilities or limit commercialization of approved products[73]. - The company must actively defend its patent rights, which could involve significant costs and impact its ability to compete effectively[85]. - The expiration of the hCDR1 patent in 2024 poses a risk if the company fails to obtain patent term extensions[5]. - The company may face challenges in establishing strategic partnerships and licensing arrangements, which are crucial for commercialization[55]. Market and Regulatory Environment - The trading volume of the company's ADSs has historically been low, making it difficult for shareholders to sell at favorable prices[90]. - The trading price of the company's ADSs is likely to be highly volatile, influenced by various factors beyond its control, including market fluctuations in the biotechnology sector[92]. - Approximately 31.83% of the company's ordinary shares are held by two principal shareholders, potentially limiting new investors' influence on corporate decisions[94]. - The company must maintain stockholders' equity of at least $2.5 million and a market value of listed securities of $35 million to comply with Nasdaq listing requirements[107]. - If the company fails to meet Nasdaq's continued listing standards, its ADSs may be delisted, which could significantly impair liquidity and capital-raising efforts[108]. - The company has never declared or paid cash dividends on its ordinary stock and does not anticipate doing so in the foreseeable future[103]. - The company may be classified as a passive foreign investment company (PFIC), which could impose additional tax liabilities on U.S. shareholders[96]. - The effective trading prices of the company's securities may differ between the Nasdaq and TASE due to different trading currencies and times[95]. - The depositary for the ADSs may not be able to make distributions to ADS holders if it is unlawful or impractical to do so[105]. - The company is permitted to follow home country corporate governance practices, which may provide less protection to investors compared to U.S. domestic issuers[99]. External Factors and Risks - Political, economic, and military conditions in Israel may adversely affect the company's operations and results, particularly due to ongoing hostilities and threats in the region[112]. - The company holds most of its cash and equivalents in U.S. dollars, while a significant portion of expenses is in New Israeli Shekels (NIS), exposing it to currency fluctuation risks[116]. - Israeli law may delay or impede mergers and acquisitions, requiring specific approvals and a minimum holding period for tax deferral on certain transactions[117][118]. - The company is subject to economic boycotts and restrictive laws from several countries, which may negatively impact its operating results and business expansion[115]. - The company’s commercial insurance does not cover losses from security-related events, which could materially affect its business if government coverage is not maintained[114]. - Inflation and currency fluctuations in Israel could harm the company's financial results, particularly if inflation exceeds the rate of devaluation of the NIS against the U.S. dollar[116]. - Enforcement of non-competition agreements may be difficult under Israeli law, potentially allowing competitors to benefit from the expertise of former employees[122]. - Employees may claim compensation for inventions made during their employment, which could impact future revenue and profitability[123]. - Shareholder rights and responsibilities are governed by Israeli law, which may differ from those of U.S. companies, imposing additional obligations on shareholders[124].

Financial Performance - For the year ended December 31, 2018, the company reported a total comprehensive income of $2,986 thousand, a significant improvement compared to a loss of $897 thousand in 2017[23]. - Basic and diluted earnings per share from continuing operations were $0.006 in 2018, compared to a loss of $0.002 in 2017, showing a positive shift in profitability[23]. - The accumulated deficit as of December 31, 2018, was approximately $152,588 thousand, highlighting ongoing financial challenges[32]. - The company reported a net cash used in operating activities of $816 thousand for the year ended December 31, 2018, indicating a need for significant additional financing[89]. - The company’s financial results and commercial prospects may be materially impaired if clinical trials do not meet required criteria or if additional trials are needed[46]. Assets and Liquidity - The company's cash, cash equivalents, and short-term bank deposits stood at $5,275 thousand as of December 31, 2018, down from $5,796 thousand in 2017[25]. - Total assets increased to $8,575 thousand in 2018, up from $6,586 thousand in 2017, reflecting growth in the company's financial position[25]. - The company had a working capital of $7,942 thousand as of December 31, 2018, compared to $5,906 thousand in 2017, indicating improved liquidity[25]. Research and Development - Research and development expenses decreased to $38 thousand in 2018 from $443 thousand in 2016, indicating a reduction in operational costs[23]. - The company plans to initiate and manage pre-clinical development and clinical trials for current and new product candidates, indicating a focus on expanding its product pipeline[34]. - The company is focused on the development of hCDR1 for the treatment of systemic lupus erythematosus (SLE) and Sjogren's syndrome (SS)[135]. - hCDR1 is a Phase II-ready asset, with over 400 patients involved in previous trials demonstrating a favorable safety profile[137]. - The company plans to initiate a new advanced clinical trial for hCDR1, focusing on the 0.5 mg weekly dose based on positive findings from previous trials[137]. Regulatory and Market Risks - The company faces risks related to the costs and timing of obtaining regulatory approvals for its product candidates, including hCDR1, which is pending approval[42]. - The company must demonstrate proof of safety and efficacy in humans to obtain FDA approval, which requires substantial resources and time[42]. - The company anticipates that market acceptance of its products will depend on perceptions of safety and efficacy by healthcare providers[56]. - The company may face significant costs related to patent claims and the expiration of the hCDR1 patent in 2024, which could impact its competitive position[36]. - The FDA's approval process for new drugs is lengthy and uncertain, requiring extensive pre-clinical and clinical data[197]. Competition and Market Landscape - The company faces competition from pharmaceutical and biotechnology companies with greater capital resources and experience, which may hinder its ability to develop and market its products effectively[66]. - Only one drug, GlaxoSmithKline's Benlysta, has been approved for SLE in the last 50 years, highlighting the competitive challenges faced by the company[182]. - The pipeline for SLE treatments includes multiple candidates, with two late-stage drugs failing Phase 3 trials in the past eighteen months[183]. - For pSS, no specific drug has been approved, with treatments primarily focused on symptomatic relief[184]. Capital and Financing - The company is seeking additional capital through private and public equity offerings, debt financings, and strategic partnerships, which may dilute existing shareholders[36]. - Future capital requirements will depend on various factors, including the success of clinical trials and the ability to secure additional financing[35]. - The company plans to outsource production for its drug candidates, relying on contract manufacturers for clinical supply needs[190]. - The company does not have manufacturing capabilities and does not intend to establish any[188]. Corporate Governance and Compliance - The company is permitted to follow certain home country corporate governance practices, which may provide less protection to investors compared to U.S. domestic issuers[101]. - If the company fails to maintain compliance with Nasdaq's continued listing standards, it may face delisting, which could adversely affect the liquidity and market price of its ADSs[111]. - The concentration of ownership among principal stockholders, holding approximately 31.88% of outstanding ordinary shares, may limit the influence of new investors on corporate decisions[96]. Intellectual Property - The company is responsible for a total patent expense reimbursement of $382,989 to Yeda, with various installments already issued[175]. - The license agreement with Yeda includes milestone payments of up to $2.2 million, with specific payments tied to clinical trial phases and FDA approvals[176]. - The company may face challenges in protecting its intellectual property, which could adversely affect its competitive position[80]. Operational Challenges - The company has limited experience in conducting clinical trials, which may delay or prevent regulatory approvals and commercialization of its products[42]. - The company relies on third parties for clinical trials and manufacturing, and any failure by these parties could adversely affect product development and commercialization[49][60]. - The company intends to expand its product liability insurance coverage but faces increasing costs and potential inadequacy of coverage[74]. - The company’s Chief Financial Officer dedicates approximately 6 hours a week to operations, which may impact timely completion of financial statements[68]. Economic and Political Risks - The company is exposed to risks from political, economic, and military conditions in Israel, which may adversely affect operations and results[114]. - Economic boycotts and restrictive laws against Israeli companies may adversely impact the company's operating results and financial condition[117]. - The company is exposed to inflation and foreign currency fluctuations, particularly with expenses in New Israeli Shekels (NIS) while holding cash in U.S. dollars[118].