20-F

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2017

OR  

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

For the transition period from _____________ to ____________

OR  

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _____________

Commission file number 0-30820

TIKCRO TECHNOLOGIES LTD.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant's name into English)

ISRAEL

(Jurisdiction of incorporation or organization)

7 Sapir Street, 5th floor, Ness Ziona 7403630, Israel

(Address of principal executive offices)

Aviv Boim, T: +972-8-996-9800, info@tikcro.com

7 Sapir Street, 5th floor, Ness Ziona 7403630, Israel (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

Title of each class   None Name of each exchange on which registered    

             

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

Ordinary Shares, no par value

(Title of Class)

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

None 

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

9,878,861 Ordinary Shares, no par value

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

☐ Yes☒ No

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

☐ Yes☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of "large accelerated filer,"  "accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer    ☐ Non-accelerated filer      ☒ Accelerated filer                                  ☐ Emerging growth company               ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒     IFRS as issued by the IASB ☐     Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐    Item 18 ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

☐ Yes ☒ No

TABLE OF CONTENTS

PART I		4
ITEM 1.	Identify of Directors, Senior Management and Advisors	4
ITEM 2.	Offer Statistics and Expected Timetable	4
ITEM 3.	Key Information	4
A.	Selected Financial Data	4
B.	Capitalization and Indebtedness	6
C.	Reasons for the Offer and Use of Proceeds	6
D.	Risk Factors	7
ITEM 4.	Information on the Company	20
A.	History and Development of the Company	20
B.	Business Overview	21
C.	Organizational Structure	28
D.	Property, Plants and Equipment	28
ITEM 4A.	Unresolved Staff Comments	28
ITEM 5.	Operating and Financial Review and Prospects	28
A.	Operating Results	28
B.	Liquidity and Capital Resources	33
C.	Research and Development, Patents and Licenses	33
D.	Trend Information	34
E.	Off-balance Sheet Arrangements	34
F.	Tabular Disclosure of Contractual Obligations	34
ITEM 6.	Directors, Senior Management and Employees	34
A.	Directors and Senior Management	34
B.	Compensation	36
C.	Broad Practices	37
D.	Employees	43
E.	Share Ownership	43

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ITEM 7.	Major Shareholders and Related Party Transactions	44
A.	Major Shareholders	44
B.	Related Party Transactions	45
C.	Interests of Experts and Counsel	45
ITEM 8.	Financial Information	45
A.	Consolidated Statements and other Financial Information	45
B.	Significant Changes	45
ITEM 9.	The Offer and Listing	45
A.	Offer and Listing Details	45
B.	Plan of Distribution	47
C.	Markets	47
D.	Selling Shareholders	47
E.	Dilution	47
F.	Expenses of the Issue	47
ITEM 10.	Additional information	47
A.	Share Capital	47
B.	Memorandum and Articles of Association	47
C.	Material Contracts	53
D.	Exchange Controls	54
E.	Taxation	54
F.	Dividends and Paying Agents	64
G.	Statement by Experts	64
H.	Documents On Display	64
I.	Subsidiary Information	65
ITEM 11.	Quantitative and Qualitative Disclosures about Market Risk	65
ITEM 12.	Description of Securities other than Equity Securities	65

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PART II.		66
ITEM 13	Defaults, Dividend Averages and Delinquencies	66
ITEM 14	Material Modifications to the Rights of Security Holders and Use of Proceeds	66
ITEM 15.	Controls and Procedures	66
ITEM 16A.	Audit Committee Financial Expert	67
ITEM 16B.	Code of Ethics	67
ITEM 16C.	Principal Accountant Fees and Services	67
ITEM 16D.	Exemptions from Listing Standards for Audit Committees	68
ITEM 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	68
ITEM 16F.	Change in Registrant's Certifying Accountant	68
ITEM 16G.	Corporate Governance	68
ITEM 16H.	Mine Safety Disclosure	68
PART III		68
ITEM 17.	Financial Statements	68
ITEM 18	Financial Statements	68
ITEM 19.	Exhibits	68

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PART I

Unless the context otherwise requires, “Tikcro,” “us,” “we” and “our” refer to Tikcro Technologies Ltd., an Israeli company. References to “U.S. dollars,” and “$” are to the lawful currency of the United States of America, and references to “NIS” are to new Israeli shekels. As of December 31, 2017, the exchange rate published by the Bank of Israel was NIS 3.467 per $1.00.

Statements in this Annual Report concerning our business outlook or future economic performance; anticipated revenues, expenses or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements” as that term is defined under the United States Federal Securities Laws. In some cases, you can identify forward-looking statements by our use of words such as “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek” and “estimate” and similar expressions.  Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth under “Risk Factors” and elsewhere in this Annual Report as well as our reports on Form 6-K submitted to the Securities and Exchange Commission.The forward-looking statements contained in this Annual Report reflect our views and assumptions as of the effective date of this Annual Report. Except as required by law, we assume no responsibility for updating any forward-looking statements.We qualify all of our forward-looking statements by these cautionary statements.

ITEM 1. Identity of Directors, Senior Management and Advisors

Not applicable.

ITEM 2. Offer Statistics and Expected Timetable

Not applicable.

ITEM 3. Key Information

A. Selected Financial Data

We have derived the following selected financial data, with respect to the five years from 2013 through 2017, from the audited financial statements of Tikcro, which have been prepared in accordance with U.S generally accepted accounting principles.

The selected financial data set forth below as of December 31, 2016 and 2017 and for each of the years ended December 31, 2015, 2016 and 2017 are derived from our audited financial statements which are incorporated by reference into this Annual Report.

The selected financial data as of December 31, 2013, 2014 and 2015 and for the years ended December 31, 2013 and 2014 are derived from our audited financial statements which are not included in this Annual Report.

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You should read the selected financial data together with Item 5 “Operating and Financial Review and Prospects” and our financial statements included elsewhere or incorporated by reference in this Annual Report.

In 2014, we initiated a biotechnology project in the area of cancer immune treatment with the aim to develop new antibodies with enhanced clinical qualities for the treatment of cancer through the re-modulation of certain identified immune pathways. For that purpose, we entered into aresearch and license agreement with Yeda Research and Development Company Ltd. ("Yeda"), the technology transfer arm of the Weizmann Institute of Science (the "Weizmann Institute") in Israel.The agreement is for the development of new antibodies originating from specified research at the Weizmann Institute addressing identified targets of the immune system for cancer treatment.Under the agreement, Tikcro will provide funding for research at the Weizmann Institute to develop certain antibodies selected and verified in pre-clinical trials. In 2015, we extended the terms of the agreement for a multi-year engagement. In 2018, we amended the agreement to have equal ownership rights with Yeda in CTLA-4 antibodies which were derived under the agreement with our contribution. The immunization approach used to generate antibodies is an innovative process that is aimed to result with high selectivity and blocking qualities towards certain cancer immune modulators, thus to have clinically functional qualities. This project is the only project that we are currently promoting. Please see Item 4.B “Business Overview” for more information.

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	2013			2014			2015			2016			2017
	(Dollars in thousands)
Statement of Operations Data:
Research and development	$	29		$	89		$	247		$	601		$	678
General and administrative expenses		542			348			609			676			618
Consulting services		-			-			-			-
Operating loss	$	(571	)	$	(437	)	$	(856	)	$	(1,277	)	$	(1,296	)
Financial income (expenses), net		579			(240	)		(29	)		(3	)		45
Income (loss) before taxes		8			(677	)		(885	)		(1,280	)		(1,251	)
Net income (loss)	$	8		$	(677	)	$	(885	)	$	(1,280	)	$	(1,251	)
Basic net earnings (loss) per share	$	(0.00	)	$	(0.08	)	$	(0.10	)	$	(0.13	)	$	(0.13	)
Diluted net earnings (loss) per share	$	(0.00	)	$	(0.08	)	$	(0.10	)	$	(0.13	)	$	(0.13	)
Number of shares used in computing basic net earnings (loss) per share		8,747,776			8,832,385			8,839,965			9,878,861			9,878,861
Number of shares used in computing diluted net earnings (loss) per share		8,747,776			8,832,385			8,839,965			9,878,861			9,878,861

	2013		2014		2015		2016		2017
	(Dollars in thousands)
Balance Sheet Data:
Cash and cash equivalents, marketable securities and deposits	$	9,120	$	8,722	$	8,560	$	7,426	$	6,449
Restricted cash		-		-		-		81		113
Investment in BioCancell - Short-term*		397		85		50		50		-
Working capital		9,403		8,648		8,507		7,359		6,274
Total assets		9,531		8,920		8,800		7,732		6,708
Shareholders' equity		9,403		8,736		8,574		7,495		6,399

__________________

* See Item 4 “Information on the Company” for more information on our investment in BioCancell.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

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D. Risk Factors

The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this Annual Report and those we may make from time to time. You should carefully consider the risks described below, in addition to the other information contained in this Annual Report, before making an investment decision. Our business, financial condition or results of operations could be harmed by any of these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations. We believe that the occurrence of any one or some combination of the following factors could have a material adverse effect on our business, financial condition and results of operations.

Risks relating to our business and industry

We currently conduct limited business activities pursuing early stage antibody development in the biotechnology field, which may not be successful.

Our activities are limited to the promotion of early stage biotechnology projects. Since December 2014, we have focused on a project addressing new antibodies generated by an innovative immunization approach. Resulting antibodies are expected to have high selectivity, binding and blocking qualities towards certain cancer immune modulators. In 2017, we were successful in developing a full human CTLA-4 antibody with certain favorable pre-clinical characteristics over its references. Our development aim is to develop highly selective antibodies compared with antibodies resulting from currently known generation and screening methodologies. Due to the early stage status of this project, we may not be successful in achieving additional research goals.

We are dependent on the success of pre-clinical drug candidates, and we do not have any assurance that our drug candidates will successfully conclude pre-clinical and clinical trials through regulatory approval or be successfully commercialized.

Our operations have been limited to developing proprietary technology and obtaining pre-clinical data for product candidates in the biotechnology field. These operations provide a limited basis to assess our ability to continue to develop our technology, identify product candidates, develop and commercialize any product candidates and enter into collaborative arrangements with other companies on attractive commercial terms, as well to assess the advisability of investing in our securities. Each of these requirements will require substantial time, effort and financial resources.

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Risks relating to our antibody program

Our antibody program addressing cancer immune modulators is in discovery and pre-clinical development, and there is no assurance that it will be successful.

Our antibody program is the only program that we are currently promoting. We generated a new full human functional CTLA-4 antibody, which is in pre-clinical and animal trial development. We pursue the early development of antibodies targeting additional other cancer immune modulators. Pre-clinical development is highly speculative and carries a high risk of failure. There is no assurance that we will be successful in this aim. Positive pre-clinical results and future in-vivo animal studies may not necessarily be predictive of future clinical trials in humans. We can provide no assurances that pre-clinical toxicology and/or pre-clinical activity of our product candidates will support moving any of these product candidates into clinical development. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced in-vivo animal trials and/or in clinical trials after achieving positive results in pre-clinical development, and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, pre-clinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including adverse events. Moreover, pre-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in pre-clinical studies and clinical trials nonetheless failed to obtain regulatory approval. Specifically, in-vivo animal trial models used to verify immunological agents pose high complexity since human immune systems vary considerably from small animal immune systems. Therefore, results from trials with small animals and non-human primates may be a weak predictor for clinical results with humans. If we fail to produce positive results in in-vitro, in-vivo animal trials and in clinical trials of lead-candidate antibodies, our business and financial prospects would be materially adversely affected.

Our approach to the discovery and development of antibody candidates is unproven, and we do not know whether we will be able to develop any products of commercial value.

While we were successful selecting a CTLA-4 antibody which shows favorable pre-clinical data, our antibody candidates are derived from emerging technologies and, consequently, there are significant risks that such technologies may ultimately fail to identify commercially viable drugs to treat human patients with cancer or other diseases.

New data from our research and development activities could modify our strategy and result in the need to adjust our projections of timelines and costs.

Because we are focused on novel technologies to develop antibody candidates for cancer immune modulators, our research and development activities involve the ongoing discovery and generation of new data, based on which we determine next steps for a relevant program. We monitor the likelihood of success of our initiatives and we may need to discontinue funding of such activities if they do not prove to be commercially feasible. For example, our new CTLA-4 antibody is expected to face competing antibodies and other therapeutics agents for immune-oncology treatment, which may prove to have sufficient clinical effect and, as a result, eliminate the need for a new CTLA-4 antibody. Moreover, despite showing favorable pre-clinical data, our product candidates may be inferior to existing products, or may not be effective in treating any disease or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may prevent or limit commercial use.

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We rely, and expect to continue to rely, on third parties to conduct parts of our preclinical studies and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or complying with applicable regulatory requirements.

We rely on third-party contract research academic centers and organizations to conduct a significant part of our pre-clinical studies, and we expect that our clinical trials for future product candidates will be conducted in a similar manner. Our reliance on these third parties for research and development activities reduces our control over these activities but will not relieve us of our responsibilities to comply with certain regulatory protocols. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process, increase our expenses and increase the risk of earlier market launch of competing drugs. Switching or adding additional contract research organizations involves additional cost and requires management time and focus. As a result, delays could occur, which could compromise our ability to meet our desired development timelines.

Clinical drug development is expensive, time consuming and uncertain, and we may ultimately not be able to obtain regulatory approvals for the commercialization of antibody products.

The research, testing, manufacturing, labeling, approval, selling, marketing and distribution of drug products are subject to extensive regulation by the U.S. Food and Drug Administration, or FDA, European Union, and EU Member State legislators and agencies, such as the European Medicines Agency, or EMA, and other non-U.S. regulatory authorities, which enforce regulations that differ from country to country. We will not be permitted to market product candidates in the United States until we receive approval of a biologics license application, or BLA, from the FDA or in any other country until we receive marketing approval from applicable regulatory authorities outside the United States. Our in-development product candidates are in very early stages of development and are subject to the risks of failure inherent in drug development. We have not submitted an application, or received marketing approval, for any product candidates. Obtaining approval of a BLA or other marketing application can be a lengthy, expensive and uncertain process, and delay or failure can occur at any stage of the process.

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Our in-development antibody product candidates, if promoted to clinical trials, will face a variety of risks and uncertainties, including the following:

· future clinical trial results may show that our antibody product is not effective, our clinical trial designs are flawed or clinical trial subjects do not comply with trial protocols;

· our product candidates may not be well tolerated or may cause negative side effects;

· our ability to complete the development and commercialization of products may be significantly dependent upon our ability to obtain and maintain experienced and committed collaborators to assist us with obtaining clinical and regulatory approvals for, and the manufacturing, marketing and distribution of, our products;

· even if a product is shown to be safe and effective for its intended purposes, we may face significant or unforeseen difficulties in obtaining or manufacturing sufficient quantities or at reasonable prices;

· even if a product is successfully developed, commercially produced and receives all necessary regulatory approvals, there is no guarantee that there will be market acceptance; and

· our competitors have developed competing antibodies and invest significant efforts to develop therapeutics or other treatments that may be superior to or less costly than our own with the result that our products, even if they are successfully developed, manufactured and approved, may not generate significant revenues.

If we are unsuccessful in dealing with any of these risks, or if we are unable to successfully commercialize antibody products for some other reason, it would likely have a material adverse effect on our business, prospects, financial condition and results of operations.

The commencement and completion of clinical trials can be delayed or prevented for a number of reasons.

Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage of any of our clinical trials. The commencement and completion of clinical trials can be delayed or prevented for a number of reasons, including due to the need to have healthcare regulatory approvals, having agreements with  contract research organizations, contract manufacturing organizations, and trial sites, having regulatory requests for alterations to any of our study designs, pre-clinical strategy or manufacturing plans, challenges for recruiting and enrolling subjects to participate in clinical trials, changes in regulatory requirements, policy and guidelines.

If we do not succeed in conducting and managing our preclinical development activities or clinical trials, or in obtaining regulatory approvals, we might not be able to commercialize product candidates, or might be significantly delayed in doing so, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

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Our competitors in the biotechnology and pharmaceutical industries have already FDA approved drugs targeting certain cancer immune modulators, pursue numerous clinical trials with combination therapies, and have superior development and manufacturing capabilities, selling and marketing expertise and financial resources.

Our antibody product program is in early development stage. While we have screened a new CTLA-4 antibody which shows favorable pre-clinical characteristics, it will be first evaluated to allow initial clinical trials for U.S. Food and Drug Administration (FDA) approval only in several years. We may fail to penetrate the markets because of competition from major pharmaceutical and specialized biotechnology companies that already have FDA approved antibody products, including CTLA-4 antibodies, pursue clinical trials for additional cancer indications with combinations of new immune therapy antibodies and existing drugs and that are engaged in clinical development of product candidates directed at the same or at similar cancer immune modulators and treat similar cancer indications. Our competitors have greater development, manufacturing, sales, marketing, financial and human resources and have more experience than we do.

A number of antibodies that address cancer immune modulators have obtained FDA approvals and are offered on the market, including the following:

· Bristol-Myers Squibb’s  ipilimumab, an anti-cytotoxic T-lymphocyte-associated protein 4 (CTLA-4) antibody, was FDA approved in 2011 for the treatment of melanoma, a type of skin cancer;

· Merck’s pembrolizumab, an anti programmed cell death protein 1 (PD-1) antibody, was FDA approved in 2014 for the treatment of melanoma, and since then it was approved for a number of additional cancerous indications; and

· Bristol-Myers Squibb’s nivolumab, an anti PD-1 antibody, was FDA approved in 2014 for the treatment of unresectable or metastatic melanoma patients, and since then it was approved for a number of additional cancerous indications.

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In addition, in 2016 and 2017, two anti-programmed cell death protein ligand 1 (PD-L1) antibodies were FDA approved for the treatment of cancer indications that were not previously approved for PD-1 antibodies:

· Roche Genentech's atezolizumab, for treatment of urothelial carcinoma (primarily bladder cancers) for a sub-group of locally advanced or metastatic condition; and

· Pfizer's andMerck KGaA's joint program of Avelumab, for a sub-group of patients with metastatic Merkel cell carcinoma (MCC).

To date, the FDA approvals for pembrolizumab, nivolumab, atezolizumab and avelumab were expanded to treat several additional clinical indications, resulting in a significant increase of patients using these antibodies. Additional clinical indications for these antibodies are in trials. In addition, in 2018, the FDA approved AstraZeneca Medimmune's durvalumab, an antibody that binds to PD-L1, for a sub-group of stage III non-small cell lung cancer (NSCLC) patients. Additional antibodies that target cancer immune modulators which are in clinical development include, without limitation, AstraZeneca Medimmune's anti-CTLA-4 and an anti-PD-1 antibody, Novartis' anti-PD-1 antibody, Sanofi and Regeneron’s joint program's anti-PD-1 antibody and Agenus' anti-CTLA-4 and anti-PD-1 antibodies.

Numerous clinical trials for cancer treatment using new antibodies that target the modulation of additional immune targets have commenced. The clinical success of PD-1 and, to a lesser extent, CTLA-4 antibodies drive this effort, which is expected to increase. In addition, there are approved as well as advanced clinical trials for other agents like T-cell modulators and cancer vaccines that trigger an immune response against cancer cells. In certain cancer indications, these agents resulted with superior clinical efficacy over antibody treatment and other agents targeting immune modulations.

In addition, there are numerous pre-clinical programs pursued by biotechnology and pharmaceuticalcompanies and academic centers for the development of antibodies that target the same or other cancer immune modulators as our antibody program. Specifically, Merck recently initiated a clinical trial for the combination treatment of a range of solid cancer indications with its new CTLA-4 antibody and pembrolizumab. In addition, several biotechnology companies released their plans to initiate in 2018 clinical trials for their new CTLA-4 antibodies.

There is no assurance that our CTLA-4 antibody products in pre-clinical stage of development will be able to compete with the above antibodies and other therapeutic agents, alone or in combination with other agents that trigger a superior immune response, specifically with the products that are expected to have an established market presence and clinical track record for several years prior to our having an FDA approved product addressing immune cancer modulators, even if any of our in-development products ultimately obtains FDA approval.

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Accelerated FDA approval protocols used to allow clinical use for cancer immune modulator agents are expected to increase competition in this area.

Since the clinical effects of antibodies directed at cancer immune modulators in certain cancer indications proved to be superior compared to current treatments, the FDA has used accelerated approval protocols for such products. For example, the FDA approvals of Merck’s and Bristol-Myers Squibb’s PD-1 cancer immune antibodies in 2014 and 2015, as well as Roche Genentech's, Pfizer's and Merck KGaA's joint program of PD-L1 cancer immune antibodies in 2016 and 2017, were granted pursuant to an accelerated and priority review program, which provides for an expedited review of drug candidates that treat serious conditions and, once approved, would significantly improve safety or effectiveness in the treatment of a serious condition. Such approval protocols are expected to increase competition for our antibody development program, with accelerated launches of new agents for the treatment of cancer through the modulation of immune modulations and other comparable technologies.

Manufacturing products resulting from our antibody program may cause delays, increased costs, or loss of revenues.

Our antibody program will require substantial development and investment in manufacturing. Since the project is still in preclinical stage, we have not initiated the development process required to manufacture antibody candidates under Good Manufacturing Practice (GMP). We intend to utilize consultants and advisors to assist advancing these operations. We intend to rely on contract manufacturing organizations, or CMOs, and contract research organizations, or CROs, to support our antibody programs which would cause us to incur additional costs and risks. In addition, since the manufacturing process by a CMO or a CRO is complex and includes several distinct milestones over the course of over a year, there are  risks that the schedule and cost through completion of GMP manufacturing will be subject to delays and additional expenses.

If we fail to comply with our obligations under our intellectual property licenses with third parties, we could lose license rights that are important to our business.

We are currently party to an intellectual property license agreement with Yeda and pursue additional licenses.Such engagements impose various diligence, milestone payment, royalty, insurance and other obligations. If we fail to comply with our obligations under such licenses, the licensors may have the right to terminate their respective license agreements, in which event we might not be able to pursue the development and eventually to market any product that is covered by the agreement. Termination of a license agreement or reduction or elimination of our licensed rights may result in our having to negotiate a new or reinstated license with less favorable terms, which could harm our business.

Healthcare legislative changes may harm our business and future prospects.

Healthcare costs have risen significantly over the past decade. Globally, governments are becoming increasingly aggressive in imposing health care cost-containment measures. Certain proposals, if passed, would impose limitations on prices of pharmaceutical agents. Such limitations will affect prices and the amounts of reimbursement available for these products from governmental agencies or third-party payors. These limitations could in turn reduce the attractiveness to invest in our antibody project and harm our ability to raise funds.

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Other business risks

We fund early stage technology projects, which involves a high risk.

We fund early-stage biotechnology projects. Currently, our antibody project is the sole project that we are promoting. Since this project is at a pre-clinical stage, the risk of loss is high.  In 2016 and 2017, we invested $601,000 and $678,000, respectively, in research and development in our antibody project with Yeda, and the expenses required to advance this project are expected to increase significantly. There is no assurance that this project will ultimately succeed or that we will be able to recoup our investment in this project or any other project.

Our shareholders will be subject to dilution of the value of our shares if we issue newly issued securities, enter into a strategic transaction regarding any of the technology projects or conduct a business combination.

In order to pursue the funding of early stage technology and pre-clinical projects, we will need a significant amount of cash. It is most likely that we will issue new securities or enter into a strategic transaction involving any of our technology projects, or a business combination. Each alternative is likely to involve the issuance of a significant number of additional shares or transferring certain rights in technology projects to a strategic party. Depending upon the amount of funds we raise in any such equity financing or strategic partnership, the value of the assets acquired in such transaction or the funds raised from a strategic partner in return for rights in any of our technology projects, will likely result in a significant decrease of the per-share value of our ordinary shares.

The growth of our business depends on our obtaining additional financing, which may be unavailable to us or available at unfavorable terms.

In order to pursue the investment in technology projects, including in our antibody project, we will need to raise significant additional funds through public or private equity or debt financings. We may be unable to obtain additional financing on acceptable terms or at all, which would harm our financial condition and results of operations.

Conditions and changes in the national and global economic and political environments may adversely affect our business and financial results.

Current global financial conditions have been characterized by increased volatility. Oil and other commodity prices are subject to fluctuations, affecting global stability. In addition, in the past several years, several financial institutions have either gone into bankruptcy or have had to be rescued by governmental authorities. Accordingly, credit was constricted in recent years, and may likely remain so and even worsen. In addition, there are concerns regarding weak European Union member countries, which may lead to weaker global consumer demand. These factors may have a negative impact on our financial condition and share price, which may impact our ability to obtain financing and other sources of funding in the future on terms favorable to us, if at all. If such increased levels of volatility continue, it may materially adversely affect our results of operations.

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We may be deemed an “investment company” under the Investment Company Act of 1940.

We may be deemed an “investment company” under the Investment Company Act of 1940, unless we qualify for an exemption. If we acquire stakes in operating companies, we may be deemed an investment company if we do not have sufficient control over such companies or qualify for another exemption under the Investment Company Act of 1940. If we are deemed an investment company, we could be found to be in violation of the Investment Company Act of 1940. A violation of that law could make it more difficult for us to register securities and raise funding and subject us to other material adverse consequences.

We might lose money from the investment of our cash.

We invest the majority of our cash on hand in bank deposits and financial instruments. If the obligor of any of the instruments we hold defaults or undergoes a reorganization in bankruptcy, we may lose all or a portion of our investment. This would harm our financial condition.  For information on the types of our investments as of December 31, 2017, see Item 11 “Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk Management”.

We are subject to costs and risks associated with complying with extensive corporate governance and disclosure requirements.

As a foreign private issuer in Israel subject to U.S. federal securities laws, we are required to comply with laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, various SEC regulations and the Israeli Companies Law. Section 404 of the Sarbanes-Oxley Act requires management’s annual review and evaluation of our internal control over financial reporting and attestation of the effectiveness of these controls by our management. There is no guarantee that these efforts will result in management assurance that our internal control over financial reporting is adequate in future periods. The additional management attention and costs relating to compliance with the Sarbanes-Oxley Act and other corporate governance requirements could materially and adversely affect our financial results.

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Risks relating to our presence in Israel

Our incorporation in Israel may limit our ability to attract investors, industry research coverage and business partners and to engage with industry-leading health care providers and suppliers outside Israel.

We are incorporated and headquartered in Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its Arab neighbors, Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon). Recent political events and continuous unrest in various countries in the Middle East and Northern Africa, including Syria, have shaken and continue to impact the stability of those countries, enabling the development of extremist groups. In addition, Iran has threatened to attack Israel and is believed to be developing nuclear weapons.  Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza and Hezbollah in Lebanon. This situation may potentially escalate in the future to violent events which may affect Israel and us. We cannot predict the effect on us of the increase in the degree of terror attacks against Israel, political instability in the region or military action elsewhere in the Middle East.  Furthermore, several countries restrict doing business with Israel and Israeli companies, and additional companies may restrict doing business with Israel and Israeli companies as a result of an actual or feared increase in hostilities or due to disagreement with Israel’s policies. This may also seriously harm our operating results, financial condition and the ability to expand our business.

It may be difficult to enforce a U.S. judgment against us, our officers and directors or to assert U.S. securities law claims in Israel.

Service of process upon our directors and officers named herein may be difficult to effect within the United States because some of these people reside outside the United States. Any judgment obtained in the United States against us or these individuals or entities may not be enforceable within the United States.

In addition, it may be difficult to assert U.S. securities law claims in original actions instituted in Israel.  Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim.  In addition, even if any Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim.  If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process.  Certain matters of procedure will also be governed by Israeli law.  There is little binding case law in Israel addressing these matters.

Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter, including judgments based upon the civil liability provisions of the U.S. securities laws and including a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met:

· subject to limited exceptions, the judgment is final and non-appealable;

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· the judgment was given by a court competent under the laws of the state of the court and is otherwise enforceable in such state;

· the judgment was rendered by a court competent under the rules of private international law applicable in Israel;

· the laws of the state in which the judgment was given provide for the enforcement of judgments of Israeli courts;

· adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence;

· the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel;

· the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and

· an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.

Provisions of Israeli law may delay, prevent or make more difficult a merger or other business combination, which may depress our share price.

Provisions of Israeli corporate law may have the effect of delaying, preventing or making more difficult a merger with, or acquisition of, us.  The Israeli Companies Law generally provides that a merger be approved by the board of directors and a majority of the shares present and voting on the proposed merger.  For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares not held by the other party to the merger (or by any person who holds 25% or more of the shares or the right to appoint 25% or more of the directors of the other party or its general manager) have voted against the merger.  Upon the request of any creditor of a party to the proposed merger, a court may delay or prevent the merger if it concludes that there is a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the surviving company.  Finally, a merger may not be completed unless at least (i) 50 days have passed since the filing of a merger proposal signed by both parties with the Israeli Registrar of Companies and (ii) 30 days have passed since the merger was approved by the shareholders of each merging company.

The Companies Law also provides that an acquisition of shares in a public company must be made by means of a tender offer if as a result of the acquisition the purchaser would become a 25% or greater shareholder of the company, unless there is already another 25% or greater shareholder of the company.  Similarly, an acquisition of shares must be made by means of a tender offer if as a result of the acquisition the purchaser would become a 45% or greater shareholder of the company, unless there is already a 45% or greater shareholder of the company. In any event, if as a result of an acquisition of shares the acquirer will hold more than 90% of a company’s shares, the acquisition must be made by means of a tender offer for all of the shares.

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

The described restrictions could prevent or make more difficult an acquisition of Tikcro, which could depress our share price.

Risks relating to the market for our ordinary shares

Holders of our ordinary shares who are U.S. residents face certain potentially adverse U.S federal income tax consequences.

As a consequence of our ownership of relatively substantial cash and investment assets, it is likely that we would be classified for U.S. federal income tax purposes as having been a passive foreign investment company, or PFIC, for each year since 2003, although the determination of PFIC status is made separately for each year and our PFIC status could change. Classification as a PFIC could result in a reduction in the after-tax return to U.S. holders of our ordinary shares, which could, in turn, cause a reduction in the value of our ordinary shares.  Classification as a PFIC also triggers the application of certain United States income tax reporting requirements.

U.S. residents should carefully read Item 10.E “Taxation – United States Federal Income Tax Consequences” for a more complete discussion of the U.S. federal income tax risks related to owning and disposing of our ordinary shares and the consequences of PFIC status.

The trading market for our ordinary shares has extremely low liquidity, which could make it difficult for our shareholders to effect transactions in our shares at desired prices and amounts.

Our ordinary shares are traded on the OTCQB. The market for shares quoted on the OTCQB is significantly less liquid than that for shares listed on national stock exchanges, such as the Nasdaq Stock Market, where we do not meet the listing criteria. This makes it more difficult for our shareholders to effect transactions with their shares at desired prices and amounts and is likely to have the quoted share price be subject to a wide range between the sell and actual buy prices, resulting with high costs to our shareholders. In addition, major retail U.S. banks have implemented internal policies not to allow holdings of OTC shares, due to their low liquidity and low confidence in their market price indications. Holders of our shares are therefore restricted to holding and transferring our shares via lower-tier and virtual electronic banks. This policy may expand to other banks, which would result in even more stringent limitations on holding and trading of our shares.

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The market price of our ordinary shares is subject to fluctuations.

The market value of our ordinary shares has fluctuated over time, not necessarily in connection with the performance of our business. The following factors, among others, may significantly impact the market price of our ordinary shares:

• our company's releases regarding developments in our business and key financial results;

• industry developments, including business developments of competitors and FDA policy and drug evaluation announcements;

• extremely low trading volume of our ordinary shares;

• political, economic or other developments affecting Israel;

• global economic and other external factors; and

• quarter-to-quarter fluctuations in our financial results.

Our major shareholders may be able to control us.

Aviv Boim, our CEO, beneficially owns approximately 27.8% of our outstanding ordinary shares (including 1,898,671 shares, or 16.1% of our outstanding ordinary shares, issuable upon the exercise of options at an exercise price of $1.01 per share), Steven N. Bronson beneficially owns approximately 15.2% of our outstanding ordinary shares, Eric Paneth, one of our directors, beneficially owns approximately 11.7% of our outstanding ordinary shares, and Izhak Tamir, our Chairman of the Board, beneficially owns approximately 10.7% of our outstanding ordinary shares. In addition, Mr. Boim holds unvested options to purchase 391,996 ordinary shares exercisable at a price of $1.01 per share, which represent approximately 3.2% of our outstanding ordinary shares on a fully diluted basis. These options are subject to partial accelerated vesting upon the termination of employment, except termination for cause, and to full accelerated vesting upon termination of employment following a change of control of our company. Currently, none of these holders is a party to a shareholders agreement. However, if these shareholders (or a combination thereof) act together, they effectively may have the power to control the outcome of all matters submitted for the vote of our shareholders, including the election of directors and the approval of significant change in control transactions. The combined equity interest of these holders may have the effect of making certain transactions more difficult and may result in delaying, deferring or preventing a change in control of Tikcro unless approved by one or more of them.

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Our shareholder bonus rights plan may delay, prevent or make more difficult a hostile acquisition of Tikcro, which could depress our share price.

In September 2005, we adopted a shareholder bonus rights plan pursuant to which share purchase bonus rights were distributed to our shareholders. The term of the plan, as amended, expires on December 31, 2025.  These rights generally will be exercisable and transferable apart from our ordinary shares ten business days after a person or group acquires beneficial ownership of 15% or more of our ordinary shares, or commences a tender or exchange offer upon consummation of which that person or group would hold such a beneficial interest. Once these rights become exercisable and transferable, the holders of rights, other than the person or group triggering their transferability, will be generally entitled to purchase our ordinary shares at a discount from the market price. In addition, the Board may exchange the rights (other than rights owned by the person or group triggering their transferability), in whole or in part, at an exchange ratio of one ordinary share per right (subject to adjustment). While these rights remain outstanding, they may make an acquisition of us more difficult and result in delaying or preventing a change in control of Tikcro. On November 20, 2012, Mr. Steven N. Bronson filed a Statement on Schedule 13D reflecting beneficial ownership of 1,500,094 of our ordinary shares, or 16.9% of our outstanding ordinary shares as of that date, thereby crossing the 15% ownership threshold. Currently, Mr. Bronson's shares represent 15.2% of our outstanding ordinary shares. We have deferred the "Distribution Date" under the bonus rights plan to the close of business on the 30th business day following the termination of a standstill and confidentiality agreement that we entered into with Mr. Bronson, which shall remain in effect until terminated by either party.

ITEM 4. Information on the Company

A.  History and Development of the Company

We were incorporated on December 14, 1999 under the laws of the State of Israel. We are governed by the Israeli Companies Law, 5759-1999.  In September 2003, we changed our name from “Tioga Technologies Ltd.” to “Tikcro Technologies Ltd.” Our principal executive offices are located at 7 Sapir Street, 5th floor, Ness Ziona 7403630, Israel and our telephone number is (+972) 8-996-9800.

Principal Capital Expenditures

In 2015, 2016 and 2017, we had capital expenditures of $25,000, $129,000 and $0, respectively. Our capital expenditures were to purchase laboratory equipment for our business, and we plan to continue purchasing laboratory equipment from time to time as necessary. In 2017, our capital expenditures to purchase laboratory equipment was fully offset by the proceeds we generated from the sale of our Biocancell shares.

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B. Business Overview

General

Since 2014, we pursue an early stage biotechnology project generating new antibodies for cancer treatment addressing immune modulation. This project is based on certain technology from the Weizmann Institute of Science in Israel. This project  promotes a new immunization approach for the generation of antibodies targeted at immune modulators which are expected to have superior selectivity and blocking capabilities and, as a result, are expected to effectively modulate the immune system. This project currently focuses on the cornerstone of immune modulators which have been clinically validated, as well as on new emerging immune pathways, including  anti-cytotoxic T-lymphocyte-associated protein 4 (CTLA-4) and its binding group of ligands. In 2017, we were successful in developing a full human CTLA-4 antibody with certain favorable pre-clinical characteristics over its references.  It is in in-vitro and animal trials. For other targets, numerous cycles of animal immunization and clone selection processes are on-going, in an effort to generate a short list of candidates of antibodies to proceed to further validation.

We intend to increase the amounts we spend for research and development and general expenses required to promote this project through additional development milestones and, to a lesser extent, to pursue other technology projects by continuing the selection of technology projects with academic centers.

Antibody Project - Cancer Immune Treatment

General Market Description, Drivers and Growth

Following extensive research and clinical trials in this area, advances in cancer treatment emerged since 2011 as the FDA approved therapeutic monoclonal antibodies targeting certain receptors, facilitating immune responses against cancers. These antibodies, known as blocking antibodies, or neutralizing antibodies, which have a therapeutic application in stimulating the immune system against tumors by blocking interactions of the targeted protein with other binding partners.

Specifically, in 2011, and since 2014, six new blocking antibodies were approved for treating cancer through the modulation of immune pathways. Of them, five antibodies were approved for PD-1 and PD-L1 immune modulators and one antibody was approved for CTLA-4; PD-1 is a receptor, and PD-L1 is one of its ligands of the same immune modulator. These treatments have not only led to increased survival periods for many patients with certain forms of late stage cancer, but are leading to apparent cures in a minority of patients with advanced metastatic cancer of melanoma. However, clinical data suggests that the majority of the patient population in a number of indications has not responded to such treatments. Also, some of the responders have incurred recurrences. Also, adverse toxicity side effects were observed in a relatively large portion of the patients, which required simultaneous treatment with suppressive therapeutic agents to counter the effects triggered by the immune system over healthy cells.

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In 2011, the FDA approved the first antibody that targets an immune modulator CTLA-4, for the treatment of advanced melanoma cancer. In late 2014 and 2015, the FDA approved two additional antibodies targeting a different immune modulator, PD-1, to treat certain cancer indications. In 2016 through 2018, following successful limited clinical results, the FDA approved three additional antibodies targeting PD-L1, the ligand of PD-1, for the treatment of cancer indications that were not previously approved for PD-1 antibodies. Positive encouraging clinical results were first reached with the treatment of cancer patients in advanced stage of melanoma cancer and since then FDA approval was granted for several cancerous indications, including the treatment of certain sub-types of lung cancer, late stage renal cell, head and neck, Hodgkin lymphoma, Merkel cell and urothelial carcinoma. These antibodies address a considerable cancer patient population, which is expected to increase as additional clinical indications are in clinical trials, for earlier lines of treatment, combination treatments and new cancer indications.

Industry-wide revenues from the aggregate sale of blocking CTLA-4, PD1 and PD-L1 increased significantly, from $1.3 billion in 2014, to $2.6 billion in 2015, $6.3 billion in 2016 and $10.5 billion in 2017. Substantially all this recent revenue growth was derived from PD1 antibodies, while revenues from the single CTLA-4 antibody reached a stable level. Industry analysts estimate a further significant increase of revenues from immune modulator antibodies in the coming years, as well as from other therapeutic approaches targeting immune system modulators for the treatment of cancer. While it is likely that revenues from PD1 and PD-L1 antibodies will further increase, there are several combination treatments with such antibodies which might eliminate the use of a CTLA-4 antibody, mainly due to immune-related adverse effects. However, long term efficacy analysis for a combination treatment is still lacking to have a complete comparison.

In an effort to improve the therapeutic benefit of such immune modulation agents, it is likely that more specifically designed antibodies with improved functional qualities will allow for a lower therapeutic dose and for an increasing therapeutic effect while reducing adverse side effects.

The Therapeutic Need

Immune pathways are processes that regulate immune responses within the body. The modulation of such pathways contribute to rapid activation of the immune system, on the one hand, and, on the other hand, trim down the immune response when threats are eliminated and limit the immune response to minimize damage to unimpaired tissues.

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There are numerous immune pathways, with their receptors and ligands expressed on various cell types involved in immune responses. As scientific tools and industry resource allocation into this scientific area have increased, more data on each pathway, its receptors and ligands, effects on various cells of the immune system, as well as data on new cancer pathways, are being discovered. While in healthy conditions these pathways work well to control our immune responses, in certain indications, these pathways are manipulated through their respective receptors or ligands, and intensify cancer and auto-immune diseases. While cancer should be recognized by the immune system as “non-self” and trigger potential immune control and destruction, in numerous indications it “hijacks” certain immune pathways to protect itself from detection and destruction by the body's immune system, resulting with continuous proliferation of the infected cells. The opposite phenomenon occurs with auto-immune diseases, with infected cells that “hijack” certain immune pathways to recognize healthy cells by the immune system as "non-self" and subject them to attack by the immune system.

The aim of our antibody development effort is to identify lead candidates of antibodies for the treatment of patients with cancer through the modulation of the immune system. This approach is driven by using research tools and customization that are expected to allow the generation, design and the first production of quality human monoclonal antibodies with high selectivity and functional qualities. In comparison to antibodies that were recently FDA approved for the treatment of cancer through immune modulation, the goal is to have antibodies which result in better therapeutic outcomes, used alone or in combinations, leveraging the qualities of high specificity and functional parameters. By using such new antibodies under development, the therapeutic  aim is to partially disable the mechanisms that cancer cells employ to evade detection and destruction by the immune system. We have identified a lead CTLA-4 full human antibody candidate which targets of the immune system. It has  a promising binding affinity to its receptor, blocking qualities to its ligands and showed favorable tumor inhibition in a small-animal trial. It is going through further in-vitro trials and small-animal trials. If successful, this antibody candidate will need to undergo further in vivo animal trials, manufacturing scale-up and human clinical trials in order to apply for FDA and other regulatory approvals.

Our Strategy and Business Plan

We currently focus our efforts primarily on the identification, isolation through in-vivo immunization and pre-clinical verification of antibody drug candidates addressing immune pathways and further characterize these antibody candidates in in-vitro functional testing and through in-vivo small-animal trials.  We currently focus our efforts on a new antibody for CTLA-4 and have early discovery efforts for antibodies targeting other immune modulators. We do not have an animal facility for in-vivo trials, any clinical or commercial manufacturing or sales capabilities and plan to rely on sub-contractors and other third party entities for such capabilities. Once we identify and validate lead antibody candidates, we expect to use contract manufacturers for the manufacture of our product candidates. We intend to license to, or enter into strategic alliances with, larger companies in the biopharmaceutical field, which are equipped to manufacture, market and sell our products, if any, through their well-developed manufacturing capabilities and distribution networks.

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Our strategy is to pursue the development of lead antibody candidates which:

• allow superior selectivity, binding, blocking and functional qualities towards cancer immune modulators;

• target difficult to generate classes of antibodies of immune cancer pathways which are biology-validated and structurally analyzed; and

• bind exclusively as much as possible to immune modulators without interfering with suppressive modulators or other receptors or ligands.

This strategy aims to yield best-in-class antibody agents and cancer treatments that bind and block better the targeted immune modulator, functionally activate the immune system and also reduce toxicity and adverse side effects.

We intend to develop and commercialize antibody product candidates by continuing our existing arrangement with an academic collaborator, Yeda, the technology transfer arm of the Weizmann Institute, and by entering into new collaborations and to procure licenses to have additional building blocks that are required for an effective therapeutic agent.

To facilitate this project, in December 2014 we entered into a research and license agreement with Yeda. This agreement was expanded in 2015 for a multi-year term, and we have the right to continue the agreement for so long as we continue to fund the development of the project. In 2018, we amended the agreement to have equal ownership rights with Yeda in CTLA-4 antibodies which were derived under the agreement with our contribution. The agreement is for the development of new antibodies originating from a novel immunization approach which is under research at the Weizmann Institute addressing validated targets of cancer immune modulators. Under the agreement, we expect to provide funding for further research at the Weizmann Institute to develop certain antibodies selected and verified in pre-clinical trials. The antibodies may have high selectivity and binding qualities towards cancer immune modulators. Further research and development will be required to promote such antibodies as therapeutic candidates for immune modulation in oncology. We, alone or through sub-licensees, will have the right to obtain the research results and to pursue development through commercialization. The license consideration due from us to Yeda includes royalties from net sales, sub-license fees and fixed fees linked to clinical and commercial sales milestones. We expect to use contract manufacturers for certain pre-clinical selection processes and scale-up manufacturing of antibody candidates we develop. We currently do not have any clinical or commercial manufacturing or sales capabilities nor intend to have it.

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We intend to periodically assess the development, commercialization and/or partnering strategies with respect to our lead antibody candidates based on several factors, including pre-clinical trial results, competitive positioning and funding requirements and resources. Our lead product candidate for a CTLA-4 antibody shows promising in-vitro binding and blocking qualities and small-animal trial results for tumor inhibition. It will require extensive additional pre-clinical trials, manufacturing scale-up, clinical trials and approvals from the FDA and other regulatory agencies, as well as acceptance in the marketplace, all of which are lengthy multi-year processes, which will take a decade or more.

Intellectual Property Rights

We seek to protect our technologies through a combination of patents, trade secrets and know-how. We are at an early stage of development efforts mainly supported by the Weizmann Institute, and we intend to seek patent protection for newly-identified therapeutic antibodies and product candidates. We can provide no assurance that any of our or future patent applications, whether licensed to us from Yeda or owned by us, will have commercial value or will result in the issuance of valid and enforceable patents.

The patent landscape in the field of therapeutic antibody development, optimization, manufacture and commercialization is crowded. For example, we are aware of third party patents directed to methods for identifying and producing therapeutic antibodies. We are also aware of third party patents directed at antibodies to numerous targets, including CTLA-4, for which we also seek to identify, develop, and commercialize antibodies. For example, some patents claim antibodies based on a target epitope of a receptor or ligand, competitive binding and blocking capabilities to certain receptors and ligands or an immune reaction,  some claim antibodies based on specifying sequence or other structural information, and some claim various methods of discovery, optimization, production or use of such antibodies. Pursuant to common patent protection and filing strategies, additional claims addressing the same invention are likely to be filed and be published over many years following the original patent filing date. This practice increases the uncertainty for future third party rights and limitations on our rights, with limitations appearing with retroactive effect on our inventions and antibody products. These or other third party patents could impact our freedom to operate in relation to the development, manufacturing and commercialization of antibodies identified by us as potential therapeutic candidates.

Competition

Competition in the pharmaceutical and biotechnology industries is intense. Many pharmaceutical or biotechnology companies have products on the market and are actively engaged in the research and development of products for the treatment of cancer through the modulation of cancer immune pathways or through other approaches, including but not limited to T-cell related agents, vaccination, inhibitors and combinations thereof and the combination with existing chemotherapy agents.

Many competitors have substantially greater financial, manufacturing, marketing, sales, distribution and technical resources, and more experience in research and development, clinical trials and regulatory matters than we do. Competing companies developing or acquiring rights to more efficacious therapeutic products for the diseases we are targeting, or which offer significantly lower costs of treatment, could render our products noncompetitive or obsolete. See Item 3D. “Risk Factors-Risks Related to our Antibody Project”.

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Academic institutions, governmental agencies and other public and private research institutions conduct significant amounts of research in biotechnology, medicinal chemistry and pharmacology. These entities are increasingly active in seeking patent protection and licensing revenues for their research results in research areas which address our antibody project and our activities.

Our antibody project is targeting a limited number of immune pathways and is currently in preclinical development. We are aware of numerous companies that have antibody-based products on the market, in late clinical trials or in clinical and pre-clinical development that are directed to the same biological targets as we pursue or at targets that are likely to have similar clinical effects over the immune system. We are also aware of companies that promote bispecific antibodies, T-cell modified agents or treatments with multiple antibodies and inhibitors that target the immune system and the same  immune pathways.

A number of antibodies that address cancer immune modulators have obtained FDA approvals and are offered on the market, including the following:

· Bristol-Myers Squibb’s  ipilimumab, an anti CTLA-4 antibody, was FDA approved in 2011 for the treatment of melanoma, a type of skin cancer;

· Merck’s pembrolizumab, an anti PD-1 antibody, was FDA approved in 2014 for the treatment of melanoma for use following treatment with ipilimumab, and further in 2015 it was approved as a first line treatment before ipilimumab;

· Bristol-Myers Squibb’s nivolumab, an anti PD-1 antibody, was FDA approved in 2014 for the treatment of unresectable or metastatic melanoma patients who no longer respond to other drugs, and it was approved as an adjuvant treatment for melanoma patients.

In addition, in 2016 and 2017, two anti PD-L1 antibodies were FDA approved:

· Roche Genentech's atezolizumab, for treatment of urothelial carcinoma (primarily bladder cancers) for a sub-group of locally advanced or metastatic condition; and

· Pfizer's and Merck KGaA's joint program of Avelumab, for a sub-group of patients with metastatic Merkel cell carcinoma (MCC).

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To date, the FDA approval for pembrolizumab, nivolumab, atezolizumab and avelumab were expanded to treat several additional clinical indications, resulting in a significant increase of patients using these antibodies. Additional clinical indications for these antibodies are in trials. In addition, in 2018, the FDA approved AstraZeneca Medimmune's durvalumab, an antibody that binds to PD-L1, for a sub-group of stage III non-small cell lung cancer (NSCLC) patients. 

Additional antibodies that target cancer immune modulators which are in clinical development include, without limitation, AstraZeneca Medimmune's anti-CTLA-4 and an anti-PD-1 antibody, Novartis' anti-PD-1 antibody, Sanofi and Regeneron joint program's anti PD-1 antibody and Agenus’ anti-CTLA-4 and PD-1 antibodies.

In addition, there are numerous pre-clinical programs by companies and academic centers for the development of antibodies that target the same cancer immune pathways as our program targets, as well as pre-clinical programs for the development of antibodies that address different cancer immune pathways. Recently, numerous earlier-stage clinical trials for cancer treatment using new antibodies that target the modulation of additional immune targets have commenced. The clinical success of PD-1 and, to a lesser extent, CTLA-4 antibodies drive the further expected increase in the number of such clinical trials. In addition, there are approved agents and advanced clinical trials for agents, such as cancer vaccines and T-cell modulators, that trigger an immune response against cancer cells. In certain cancer indications, these agents resulted with superior clinical efficacy over antibody treatment and other immune modulations.

We anticipate increased competition as new companies enter this market and scientific developments surrounding immunotherapy and other traditional cancer therapies continue to accelerate. There is no assurance that our antibody products will be able to compete with the above antibodies, specifically with anti PD-1, PD-L1 and CTLA-4 antibodies, which already have an established market presence and clinical track record for a considerable period of time, while our product-candidates are still in a pre-clinical stage, with many years ahead to our having FDA approved antibody products, if successful. Furthermore, other emerging immune modulators directly modifying T-cells may prove to be more efficient in treating cancer. In order to be successful, we need to offer major clinical advantages over the existing antibody products. Otherwise, we will likely not be able to raise the required resources and compete for market share.

Government Regulation

Government authorities in the United States (including federal, state and local authorities) and in other countries, extensively regulate, among other things, the manufacturing, research and clinical development, marketing, labeling and packaging, storage, distribution, post-approval monitoring and reporting, advertising and promotion, pricing and export and import of pharmaceutical products, such as those we are developing. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Moreover, failure to comply with applicable regulatory requirements may result in, among other things, warning letters, clinical holds, civil or criminal penalties, recall or seizure of products, injunction, disbarment, partial or total suspension of production or withdrawal of the product from the market. Any agency or judicial enforcement action could have a material adverse effect on us.

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Historical Investment - BioCancell

In July 2008, pursuant to our strategy to fund biotechnology projects, we invested in BioCancell, a clinical-stage biopharmaceutical company headquartered in Israel and listed on the Tel Aviv Stock Exchange. To date, we have liquidated substantially all of that investment. BioCancell focuses on the discovery and development of novel therapies for treating solid cancer tumors. In exchange for our investment of $2.5 million we acquired from BioCancell in a privately negotiated transaction shares of its common stock for consideration of $0.5 million, and a four-year convertible note due June 2012 in the principal amount of $2.0 million. As part of the transaction we also received a five-year warrant. In July 2012, our convertible note in BioCancell was repaid in full, including accrued interest, in the total gross amount of approximately $2.5 million. In 2017, we sold the remaining shares we held of BioCancell, and as of December 31, 2017, we held no ordinary shares of BioCancell.

C. Organizational Structure

We do not have any significant subsidiaries.

D. Property, Plants and Equipment

Welease offices and a lab at the Kiryat Weizmann Science Park in Ness Ziona, Israel. The lease covers approximately 7,000 square feet, of which 3,500 square feet we sublease to third parties for substantially the same period. We were granted options to extend this lease through December 31, 2019.

ITEM 4A.        Unresolved Staff Comments

Not applicable.

ITEM 5. Operating and Financial Review and Prospects

A.  Operating Results

Our operating and financial review and prospects should be read in conjunction with our audited financial statements, accompanying notes thereto and other financial information appearing elsewhere in this Annual Report.

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Overview

Our business plan focuses on promoting early stage biotechnology projects originated by Israeli universities and academic centers, through advanced stages of development. Since late 2014, we have been developing antibodies targeting immune modulators for therapeutic cancer treatment. In 2017, we were successful in generating a full human CTLA-4 antibody with favorable pre-clinical characteristics over its references.  This is a first validation of a new approach for immunization which results in blocking antibodies to targeted immune modulators with satisfactory selectivity. This approach allows for precise targeting of discontinued epitopes in their three-dimensional structure. Nevertheless, this project is at high risk to meet its development milestones. If successful, it is expected that additional significant amounts of funds to be invested over a long period will be required in order to advance product candidates through initial clinical trials and commercialization or, alternatively, to effect a strategic partnership, trade sale or sub-licensing transaction at an earlier development stage.

In 2015, 2016 and 2017, we recorded aggregate research and development expenses of $247,000, $601,000 and $678,000, respectively, related to biotechnology projects. In December 2014, we entered into a research and license agreement with Yeda for the development of new antibodies for the treatment of cancer through the modulation of immune cancer pathways. This agreement was amended in 2015 to extend the term for several years. From late 2015 through 2016, we recruited research and development staff, opened an office and laboratory site and established a working-condition biotechnology development facility, in order to advance this antibody project to a higher scale selection and validation stage. The increase in research and development expenses in 2017 was mainly due to an increase in the purchase of laboratory materials and salaries, offset in part by a decrease in investment in the Yeda agreement, contracting services and purchase of laboratory equipment and materials.

On December 31, 2015, we completed a private placement of 980,000 ordinary shares, constituting 9.9% of our outstanding shares post-closing. The price per share was $0.615, and the total proceeds were approximately $600,000.  In 2015, we had financial expenses, net of $29,000, mainly from the devaluation of our investment in BioCancell shares. In 2016, we had financial expenses, net of $3,000. In 2017, we had financial income, net of $45,000 mainly from the evaluation of our investment in BioCancell's shares, which we sold in 2017.

In 2015, 2016 and 2017, we had an operating loss of $856,000, $1,277,000 and $1,296,000, respectively, mainly from research and expenses and general and administrative expenses.

Application of Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles.

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For additional information regarding our significant accounting policies please refer to Note 2 of our financial statements as of December 31, 2017 included in this Annual Report. While all the accounting policies impact the financial statements, certain policies may be viewed to be critical.  These policies are most important for the fair portrayal of our financial condition and results of operations and are those that require our management to make difficult, subjective and complex judgments, estimates and assumptions, based upon information available at the time that they are made, historical experience and various other factors that are believed to be reasonable under the circumstances.

In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. generally accepted accounting principles and does not require management’s judgment in its application.  There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.

We are also subject to risks and uncertainties that may cause actual results to differ from estimates and assumptions. Certain of these risks, uncertainties and assumptions are discussed in Item 3.D “Risk Factors.” To facilitate the understanding of our business activities, described below are certain accounting policies that are relatively more important to the portrayal of our financial condition and results of operations and that require management’s subjective judgments. We base our judgments on past experience and various other assumptions that are believed to be reasonable under the circumstances.

On an on-going basis, to fully understand and evaluate our reported financial results, we believe it is important to understand the significant estimates and judgments applied as they relate to our policies for income taxes and for valuation of our holdings in BioCancell, which is measured at fair value at each reporting date, with gains and losses being recorded as our audited financial statements, which are included elsewhere in this Annual Report.

Income Taxes

Based on the guidance in ASC 740 “Income Taxes”, we use a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We accrue interest and penalties related to unrecognized tax benefits in the provision for income tax.

Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different.  We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate.  To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related interest.

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Investment in BioCancell

We elected to apply the fair value option for our holdings in BioCancell’s common stock, and warrant in accordance with ASC No. 825, “Financial Instruments”. The primary reasons for electing the fair value option were simplification and cost-benefit considerations as well as expansion of the use of fair value measurement being consistent with the FASB’s measurement objectives for accounting for financial instruments. ASC No. 825 provides companies with an option to report selected financial assets and financial liabilities at fair value, which can be elected on an instrument-by-instrument basis. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date.

Our holding in BioCancell's shares of common stock is based on quoted prices in an active market. We liquidated that investment in 2017.

Results of Operations

The table below sets forth, for the periods indicated, financial data (in thousands of dollars) which we believe to be significant in analyzing our results of operations.

	2015			2016			2017
	(Dollars in thousands)
Statement of Operations Data:
Research and development	$	247		$	601		$	678
General and administrative expenses, net		609			676			618
Operating loss		(856	)		(1,277	)		(1,296	)
Financial income (expenses), net		(29	)		(3	)		45
Income (loss) before taxes		(885	)		(1,280	)		(1,251	)
Net income (loss)	$	(885	)	$	(1,280	)	$	(1,251	)

Research and development expenses. In  2015, 2016 and 2017, we had expenses of $247,000, $601,000 and $678,000, respectively, mainly for research and development in our antibody project, which included mainly salaries, laboratory materials, depreciation of laboratory equipment and amounts paid in relation with our Yeda agreement.

General and administrative expenses. General and administrative expenses increased from $609,000 in 2015 to $676,000 in 2016, mainly due to an increase in non-cash employee compensation and net expenses related to a lease agreement, which was offset by a decrease in legal and related expenses. In 2017, general and administrative expenses decreased to $618,000 mainly due to a decrease in non-cash employee compensation. Financial income, net.  Financial income consists primarily of mark-to-market of the investment in BioCancell. In 2015, our financial expense consisted primarily of the mark-to-market adjustment of securities of BioCancell in the amount of $36,000. In 2016, we had insignificant financial expenses of $3,000. In 2017, our financial income of $45,000 consisted primarily from the income from the sale of our BioCancell shares.

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Tax.  We did not have tax expenses in 2015, 2016 or 2017.

Net loss.  In 2015, we had a net loss of $885,000 as a result of financial expenses in the amount of $29,000 and an operating loss in the amount of $856,000. In 2016, we had a net loss of $1,280,000, mainly as a result of our operating loss of $1,277,000. In 2017, we had a net loss of $1,251,000 mainly as a result of our operating loss of $1,296,000, offset by financial income of $45,000.

Impact of Inflation, Devaluation and Fluctuation of Currencies on Results of Operations Liabilities and Assets

A devaluation of the new Israeli shekel in relation to the U.S. dollar would have the effect of decreasing the dollar value of our assets in new Israeli shekels to the extent the underlying value is new Israeli shekel-based. Such a devaluation also would have the effect of reducing the U.S. dollar amount of any of our liabilities which are payable in new Israeli shekels (unless such payables are linked to the U.S. dollar).

We may have from time to time expenses denominated in new Israeli shekels. Such expenses would decrease as a result of a devaluation of the new Israeli shekel in relation to the U.S. dollar. In 2015, the change of value of the U.S dollar against the NIS was insignificant. In 2016 and 2017, the value of the U.S dollar decreased against the NIS which caused our NIS denominated expenses to increase. We do not presently engage in any hedging or other transactions intended to manage risks relating to foreign currency exchange rate fluctuations.

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The following table presents information about the rate of inflation in Israel, the rate of devaluation of the new Israeli shekel against the U.S. dollar, and the rate of inflation of Israel adjusted for the devaluation:

Years Ended December 31,	Israeli Inflation Rate			NIS-USD Devaluation Rate			Israel Inflation Adjusted f or Devaluation
2013		1.8			(7.0	)		8.8
2014		(0.2	)		12.0			(12.2	)
2015		(0.8	)		0.3			(1.1	)
2016		(0.4	)		(1.5	)		1.1
2017		0.4			(9.8	)		10.2

B. Liquidity and Capital Resources

We had working capital of $8.5 million as of December 31, 2015, $7.4 million as of December 31, 2016 and $6.3 million as of December 31, 2017. We believe that we have sufficient working capital for at least the next 12 months.

In 2015, wehad a net loss of $885,000 and we used $740,000 of cash for operations.  In 2016, we had a net loss of $1,280,000 and we used $924,000 of cash for operations. In 2017, wehad a net loss of $1,251,000 and we used $977,000 of cash for operations. We used a net amount of $25,000, $210,000 of cash in investment activities in2015, and 2016, respectively. In 2017, we did not have any cash flow from investing activities . In 2016, an amount of $81,000 of our investment activity was used for the deposit of restricted cash in connection with a lease agreement.

On December 31, 2015, we completed a private placement of 980,000 ordinary shares, constituting 9.9% of our outstanding shares post-closing for the total proceeds of $603,000, which comprised the net cash we received from financing activities.In 2016 and 2017, we did not have any cash flow from financing activities.

C. Research and Development, Patents and Licenses

Research and development expenses include salaries, contracting services, equipment and material for our early-stage antibody development project and are charged to the statement of operations, as incurred.

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D. Trend Information

None.

E. Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

F. Tabular Disclosure of Contractual Obligations

The following table summarizes our contractual commitments as of December 31, 2017.

	Payments Due by Period (U.S. dollars in thousands)
Contractual Commitments as of December 31, 2017	Total		Less than 1 year		1-3 Years		3-5 Years		More than 5 Years
Sub-contracting research services		75		75		-		-		-
Operating lease (*)		140		140		-		-		-
Total		215		215		-		-		-

_____________

 ^(*)      The Company sub-leased a substantial portion of the lease area and as a result a significant portion of these amounts are due to the Company by the sub-lessees.

ITEM 6. Directors, Senior Management and Employees

A. Directors and Senior Management and Employees

The following table lists our current directors and senior managers as of April 20, 2018:

Name	Age	Position
Izhak Tamir	65	Chairman of the Board
Eric Paneth	67	Director
Liat Hadad	46	External Director
Rami Skaliter	60	External Director
Aviv Boim	50	Chief Executive Officer

The business experience of each of our directors and executive officers is as follows:

Izhak Tamir has served as Chairman of our Board of Directors since January 2000 and served as our Chief Executive Officer from August 2003 to December 2007. He co-founded Orckit Communications Ltd. ("Orckit") in 1990 and served as President and a Director until 2014 and as Chief Executive Officer from 2012 until 2014. Mr. Tamir served as Chairman of the Board of Orckit-Corrigent Ltd., a subsidiary of Orckit, from 2001 to 2014, and as Chief Executive Officer of Orckit-Corrigent Ltd. from 2007 to 2014 and as a Director of Gilat Satellite Networks Ltd. from 2005 to 2012. From 1987 until 1989, Mr. Tamir was employed by Comstream Inc., in San Diego, California.  From 1985 until 1987, he was vice president of A.T. Communication Channels Ltd., a subsidiary of Bezeq.  From 1978 to 1985, he was a senior engineer in the Israeli Government. Mr. Tamir holds an engineering degree from the Technion, and an M.B.A. from Tel Aviv University.

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Eric Paneth has served as one of our Directors since January 2000 and served as our Chief Executive Officer from November 2008 to October 2010.  He co-founded Orckit in 1990 and served as Chief Executive Officer and a Director until 2014.  From 1975 until 1983, Mr. Paneth was a senior engineer in the Israeli Government, and from 1985 to 1990, he was a technical department head in the Israeli Government.  From 1983 until 1985, he was employed by Linkabit Inc. in San Diego, California. Mr. Paneth holds an advanced engineering degree from the Technion.

Liat Hadad has served as one of our external directors since September 2009. Since April 2017, Ms. Hadad has served as Director of Business Development at Ramot, the technology transfer arm of Tel Aviv University.  From 2016 to 2017, she served as Director of Business Development at Agan Aroma & Fine Chemicals.  From 2010 to 2014, Ms. Hadad served as VP of Marketing and Business Development at Allium Medical. From May 2009 to March 2010, she served as Director of Business Development at McCann Erickson Digital Israel. From 2001 to 2008, Ms. Hadad served as an associate in the Life Sciences Division of Giza Venture Capital. From 1999 to 2001, she was a Business Development and Marketing Manager at Girafa.com Ltd. From 1996 to 1998, she was a System Integrations Project Manager at IBM Israel. Ms. Hadad holds a B.A. in sociology, anthropology and political science and an Executive M.B.A. in entrepreneurial studies, marketing and finance, both from Tel Aviv University.

Dr. Rami Skaliter has served as one of our external directors since January 2016. He has served in various executive roles at Quark Pharmaceuticals since 1995, including Vice President and Executive Vice President of Research & Development, and currently serves as the Chief Operating Officer. Under his leadership, Quark’s research and development unit generated most of its current product pipeline. Dr. Skaliter holds a B.Sc. in biology from the Ben-Gurion University and an M.Sc. and Ph.D. in biochemistry at the Weizmann Institute in Israel. He specialized in the biochemistry of replication and mutagenesis mechanisms. From 1993 to 1995, Dr. Skaliter completed a post-doctoral fellowship at Stanford University.

Aviv Boim has served as our Chief Executive Officer since October 2010. He joined Tikcro in January 2008. From 2008 to 2012, he served as a member of the board of directors and the executive committee of BioCancell. From 1998 to 2007, he served as the Chief Financial Officer of Orckit. From August 1996 to February 1998, Mr. Boim was a banker with BT Alex. Brown Incorporated, an investment banking firm. From August 1993 until August 1996, Mr. Boim was a vice president of Giza Ltd., Tel Aviv, an investment banking firm. Mr. Boim holds a B.A. and an M.A. in economics and management from Tel Aviv University and an L.L.B. from Tel Aviv University Law School.

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In June 2014, a liquidator was appointed in respect of Orckit at the request of a creditor, and Orckit subsequently underwent a court-approved debt restructuring. In March 2017, the liquidator filed a petition in the District Court of Tel Aviv against former directors and officers of Orckit, including Messrs. Tamir, Paneth and Boim, and Orckit's professional liability insurer, seeking civil monetary damages.

There are no family relationships between any director or senior manager. There are no arrangements or understandings between any director or senior manager and any other person pursuant to which the director or senior manager was selected.

B. Compensation

The aggregate direct remuneration, including fringe benefits commonly provided by companies in Israel, paid or accrued by us to all persons as a group (five persons) who served in the capacity of director or executive officer in the year ended December 31, 2017, was approximately $213,000. The foregoing amounts consist of the fees paid to our directors and our chief executive officer. In 2017, our statutory external directors were paid cash compensation of NIS 60,000 (approximately $15,600) per year and NIS 2,009 (approximately $520) per meeting in accordance with applicable regulations. Mr. Paneth, as a member of board and our compensation committee, is paid the fixed amounts under applicable regulations, which is NIS 27,080 (approximately $7,000) per year and NIS 1,722 (approximately $450) per meeting.  Mr. Tamir, as our Chairman of the Board, is paid NIS 37,000 (approximately $9,600) per year and 2,400 (approximately $625) per meeting.

The table below reflects the compensation of our five most highly compensated office holders during or with respect to the year ended December 31, 2017. This group consists of our Chief Executive Officer, who is our only officer, and our four directors.

For purposes of the table below, “compensation” includes salary cost, director fees, bonuses, equity-based compensation and social benefits. All amounts reported in the table are in terms of cost to the Company, as recognized in our financial statements for the year ended December 31, 2017.

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The amounts set forth in the table below are given in thousands of U.S. Dollars.

Name and Position	Salary Cost (1)	Director  Fees	Bonus	Equity-BasedCompensation(2)	Total
Aviv Boim, CEO	150	--	--	155	305
Izhak Tamir, Chairman	--	13	--	--	13
Eric Paneth, Director	--	10	--	--	10
Rami Skaliter, External Director	--	20	--	--	20
Liat Hadad, External Director	--	20	--	--	20

____________________

⁽¹⁾ Salary cost includes Mr. Boim's gross salary plus customary payment of social benefits made by the Company on his behalf.

⁽²⁾ Represents the equity-based compensation expenses recorded in the Company's financial statements for the year ended December 31, 2017 based on the fair value of the applicable securities on the date of grant thereof, in accordance with accounting guidance for equity-based compensation. For a discussion of the assumptions used in reaching this valuation, see Note 7(b) to our consolidated financial statements included in our annual report on Form 20-F for the year ended December 31, 2017.

C. Board Practices

Israeli Companies Law

We are subject to the provisions of the Israeli Companies Law, 5759-1999, and the regulations adopted thereunder.

Board of Directors

According to the Companies Law and our articles of association, the oversight of the management of our business is vested in our board of directors.  The board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders. As part of its powers, our board of directors may cause us to borrow or secure payment of any sum or sums of money for our purposes, at times and upon terms and conditions as it thinks fit, including the grant of security interests in all or any part of our property.  Our board of directors may consist of not less than three and no more than 15 directors and as of the date hereof,consists of four directors, including our external directors.

Under the Companies Law, our board of directors must determine the minimum number of directors having financial and accounting expertise, as defined in the regulations, that our board of directors should have.  In determining the number of directors required to have such expertise, the board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we require one director with the requisite financial and accounting expertise and that Izhak Tamir has such expertise.

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According to the Companies Law, a company’s chairman of the board may not serve as its chief executive officer, unless otherwise approved by the shareholders for periods of up to three years.  Our directors are elected at annual meetings of our shareholders by a vote of the holders of a majority of the ordinary shares voting thereon. Generally, our directors hold office until the next annual meeting of shareholders following the annual meeting at which they were elected. Directors may be removed earlier from office by resolution passed at a general meeting of our shareholders.Pursuant to the Israeli Companies Law, external directors are elected by shareholders for a three-year term and may be re-elected by shareholders for up to two additional three-year terms.

Unless otherwise unanimously decided by our directors, a quorum at a meeting of the board of directors is constituted by the presence of a majority of the directors then in office who are lawfully entitled to participate in the meeting, but not less than two directors.  A resolution proposed at a meeting of the board of directors is deemed adopted if approved by a majority of the directors present and voting on the matter.

There are no arrangements or understandings between us and any of our directors for benefits upon termination of service.

External Directors

Qualifications of External Directors

Under the Companies Law, companies incorporated under the laws of Israel whose shares are listed for trading on a stock exchange or have been offered to the public in or outside of Israel are required to appoint at least two external directors. External directors are required to possess professional qualifications as set out in regulations promulgated under the Companies Law. The Companies Law provides that a person may not be appointed as an external director if (i) the person or the person’s relative or affiliate has, as of the date of the person’s appointment to serve as an external director, or had, during the two years preceding that date any affiliation with the company, any controlling shareholder thereof, or any affiliate thereof, or (ii) in a company that does not have a 25% shareholder, if such person has an affiliation with any person who, at the time of appointment, is the chairman, the chief executive officer, the chief financial officer or a 5% shareholder of the company.

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The Companies Law defines the term “office holder” of a company to include a director, the chief executive officer, the chief business manager, a vice president and any officer that reports directly to the chief executive officer.

No person can serve as an external director if the person’s position or other business creates, or may create conflict of interests with the person’s responsibilities as an external director or may otherwise interfere with the person’s ability to serve as an external director. Until the lapse of two years from termination of office, a company or its controlling shareholder may not give any direct or indirect benefit to the former external director.

Election of External Directors

External directors are to be elected by a majority vote at a shareholders’ meeting, provided that either:

• at least a majority of the shares of non-controlling shareholders voted at the meeting vote in favor of the election; or

• the total number of shares voted against the election of the external director does not exceed two percent of the aggregate voting rights in the company.

The initial term of an external director is three years and may be extended for up to two additional three year terms. Thereafter, he or she may be reelected by our shareholders for additional periods of up to three years each only if the audit committee and the board of directors confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the reelection for such additional periods is beneficial to the company. Reelection of an external director may be effected through one of the following mechanisms: (1) the board of directors proposed the reelection of the nominee and the election was approved by the shareholders by the majority required to appoint external directors for their initial term; or (2) a shareholder holding 1% or more of the voting rights or the nominee himself proposed the reelection of the nominee, and the reelection is approved by a majority of the votes cast by the shareholders of the company, excluding the votes of controlling shareholders and those who have a personal interest in the matter as a result of their relations with the controlling shareholders, provided that the aggregate votes cast in favor of the reelection by such non-excluded shareholders constitute more than 2% of the voting rights in the company. External directors may be removed from office only by the same percentage of shareholders as is required for their election, or by a court, and then only if the external directors cease to meet the statutory qualifications for their appointment or if they violate their duty of loyalty to the company. Each committee of a company’s board of directors is required to include at least one external director, except for the audit committee which is required to include all the external directors. On December 31, 2015, Liat Hadad commenced her third term as an external director and Dr. Rami Skaliter commenced his first term as an external director.  

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Audit Committee

Under the Companies Law, our board of directors is required to appoint an audit committee, comprised of at least three directors including all of the external directors. The members of the audit committee must satisfy certain independence standards under the Companies Law, and the chairman of the audit committee is required to be an external director. Our audit committee consists of Ms. Hadad (Chairperson), Dr. Skaliter and Mr. Paneth.

The role of the audit committee is to examine deficiencies in the management of the company’s business, in consultation with the internal auditor and the company’s independent accountants, suggest remedial action, approve specified related party transactions and assess the company's internal audit system and the performance of its internal auditor. Our audit committee currently consists of our two external directors.

Our audit committee also has the authority and responsibility to oversee our independent auditors, to recommend for shareholder approval the appointment and, where appropriate, replacement of our independent auditors and to pre-approve audit engagement fees and all permitted non-audit services and fees. Our audit committee also serves as our qualified legal compliance committee, responsible for investigating reports, made by attorneys appearing and practicing before the SEC in representing us, of perceived material violations of U.S. federal or state securities laws, breaches of fiduciary duty or similar violations by us or any of our agents.

Compensation Committee

Under the Israeli Companies Law, the board of directors of a public company is required to establish a compensation committee. The compensation committee needs to have at least three directors who satisfy certain independence qualifications, and the chairman of the compensation committee is required to be an outside director. Under the Israeli Companies Law, the role of the compensation committee is to recommend to the board of directors, a policy governing the compensation of office holders based on specified criteria, to review modifications to the compensation policy from time to time, to review its implementation and to approve the actual compensation terms of office holders prior to the approval thereof by the board of directors. Our compensation committee consists of Ms. Hadad (Chairperson), Dr. Skaliter and Mr. Paneth.

Internal Auditor

Our board of directors has appointed an internal auditor.  Under the Companies Law, the role of the internal auditor is to examine, among other things, whether the company’s actions comply with the law and orderly business procedure. Under the Companies Law, the internal auditor may not be an interested party, an office holder or a relative of any of the foregoing, nor may the internal auditor be the company’s independent accountant or its representative. The Companies Law defines the term “interested party” to include a person who holds 5% or more of the company’s outstanding share capital or voting rights, a person who has the right to appoint one or more directors or the general manager, or any person who serves as a director or as the general manager.

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Fiduciary Duties of Office Holders

The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.  The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.  The duty of care includes a duty to use reasonable means to obtain:

• information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and

• all other important information pertaining to these actions.

The duty of loyalty of an office holder includes a duty to:

• refrain from any conflict of interest between the performance of his duties in the company and the performance of his other duties or his personal affairs;

• refrain from any activity that is competitive with the company;

• refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and

• disclose to the company any information or documents relating to a company’s affairs which the office holder has received due to his position as an office holder.

Approval of Specified Related Party Transactions Under Israeli Law

Transactions with an Office Holder

The Companies Law requires that an office holder of a company disclose to the company any personal interest that he may have and all related material information known to him, in connection with any existing or proposed transaction by the company.  The disclosure is required to be made promptly and in any event no later than the board of directors meeting in which the transaction is first discussed.

Under the Companies Law, an extraordinary transaction is a transaction:

•           other than in the ordinary course of business;

•           otherwise than on market terms; or

• that is likely to have a material impact of the company’s profitability, assets or liabilities.

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Once an office holder complies with the above disclosure requirement, the board of directors may approve a transaction between the company and an office holder, or a third party in which an office holder has a personal interest.  To be approved, a transaction must be for the benefit of the company.

If the transaction is an extraordinary transaction, approval of both the audit committee and the board of directors is required.  Under specific circumstances, shareholder approval may also be required.  A person who has a personal interest in a transaction that is considered at a meeting of the board of directors or the audit committee generally may not be present at this meeting or vote on this matter, unless a majority of the members of the board of directors or the audit committee, as the case may be, has a personal interest in the matter.  If a majority of members of the board of directors have a personal interest therein, shareholder approval is also required.

Office Holder Compensation

Under the Israeli Companies Law, we are required to adopt a compensation policy, recommended by the compensation committee, and approved by the board of directors and the shareholders, in that order. The shareholder approval requires a majority of the votes cast by shareholders, excluding any controlling shareholder and those who have a personal interest in the matter (similar to the threshold described in the following paragraph). Nevertheless, even if the shareholders reject a proposed compensation policy, the compensation committee and the board of directors may approve the compensation policy if they have determined that the compensation policy is for the benefit of the company despite the opposition of the shareholders.In general, all office holders’ terms of compensation are required to comply with the company's compensation policy. In addition, the compensation terms of directors, the chief executive officer, and any employee or service provider who is considered a controlling shareholder generally need to be approved separately by the compensation committee, the board of directors and the shareholders of the company (by the same threshold noted above), in that order. The compensation terms of other officers require the approval of the compensation committee and the board of directors.

Transactions with a Controlling Shareholder

Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.  A controlling shareholder is a shareholder who has the ability to direct the activities of a company, including, for this purpose, a shareholder that owns 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights, but excluding a shareholder whose power derives solely from his or her position on the board of directors or any other position with the company.  Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest require the approval of the audit committee, the board of directors and the shareholders of the company in that order.  The shareholder approval must be by a majority of the shares voted on the matter, provided that either:

• at least a majority of the shares of shareholders who have no personal interest in the transaction and who vote on the matter vote in favor thereof; or

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• the shareholders who have no personal interest in the transaction who vote against the transaction do not represent more than two percent of the voting rights in the company.

In addition, any such transaction whose term is longer than three years requires further shareholder approval every three years, unless (with respect to transactions not involving management fees or employment terms) the audit committee approves that a longer term is reasonable under the circumstances.

Shareholders generally have the right to examine any document in the company’s possession pertaining to any matter that requires shareholder approval.

D. Employees

We have four employees as of the date of this filing, and had four employees as of December 31, 2016 and two employees as of December 31, 2015.

E. Share Ownership

As of March 31, 2018, Mr. Aviv Boim beneficially owned 3,273,958 ordinary shares, or approximately 27.8% of our outstanding ordinary shares, Mr. Eric Paneth beneficially owned 1,156,602 ordinary shares, or approximately 11.7% of our outstanding ordinary shares, and Mr. Izhak Tamir beneficially owned 1,061,701 ordinary shares, or approximately 10.7% of our outstanding ordinary shares. Mr. Boim's beneficial ownership includes 1,898,671 shares issuable upon the exercise of options that are vested as of March 31, 2018 or 60 days thereafter. The options have an exercise price equal to $1.01 per share and expire on March 25, 2025.  None of our other directors beneficially owns 1% or more of our outstanding ordinary shares.

Share Incentive Plans

We have a share incentive plan that was initially adopted in 2003 pursuant to which options, shares, restricted shares or restricted share units may be granted to our directors, officers, employees, consultants and contractors.  Restricted shares are grants of our ordinary shares that are subject to certain re-sale restrictions for a specified period of time, and RSUs are rights to receive our ordinary shares under certain conditions, for no consideration. The share incentive plan is administered by our board of directors, which determines the grantees, dates of grant and the terms of the awards.  Unless otherwise decided by our board of directors, awards granted under the share incentive plan are non-assignable except by the laws of descent. Under the share incentive plan, the grantee is responsible for all personal tax consequences of the award.  The plan allows us to grant awards to qualified persons pursuant to the “capital gains route” under Section 102 of the Israeli Income Tax Ordinance.  The term of the plan expires on December 31, 2023.

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As of March 31, 2018, there were outstanding options to purchase a total of 2,290,667 ordinary shares held by our Chief Executive Officer. No other options were held by our office holders.

ITEM 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of March 31, 2017 (unless otherwise specified), by each person who is known to own beneficially more than 5% of the outstanding ordinary shares.  The voting rights of all major shareholders are the same as for all other shareholders.

Identity of Person or Group	Amount Owned		Percent of Class(1)
Aviv Boim(2)		3,273,958		27.8	%
Steven N. Bronson(3)		1,500,094		15.2	%
Eric Paneth		1,156,602		11.7	%
Izhak Tamir		1,061,701		10.7	%

_______________

⁽¹⁾ Based on 9,878,861 ordinary shares outstanding on March 31, 2018.

⁽²⁾ Includes 1,898,671 shares issuable upon the exercise of options, at a price of $1.01 per share, that are vested as of March 31, 2018 or 60 days thereafter.

⁽³⁾ Includes (i) 1,400,422 ordinary shares held jointly by Mr. Bronson and his spouse, (ii) 58,806 ordinary shares held in Mr. Bronson's IRA and (iii) 40,866 ordinary shares held in Mr. Bronson's spouse's IRA (with respect to which Mr. Bronson has voting and dispositive power). Based on a Schedule 13D/A filed February 5, 2013. Mr. Bronson has undertaken to us not to vote in excess of 1,334,829 ordinary shares, or 14.9% of our outstanding shares, until the 30^th day following the termination of a confidentiality and standstill agreement between us, dated February 1, 2013, which may be terminated by either party upon ten business days' notice.  Based on a Schedule 13D/A filed by Mr. Bronson on February 19, 2010, he beneficially owned 1,198,755 ordinary shares, or 13.9% of our outstanding shares, at that time.

As of April 22, 2015, Mr. Aviv Boim beneficially owned 885,287 ordinary shares, constituting 9.9% of our outstanding shares. The change reflected above takes into account the vesting of options granted in March 2015 and a private placement in December 2015, which are described elsewhere in this Annual Report.

As of April 23, 2018, there were 34 holders of record of our ordinary shares in the United States who collectively held approximately 60% of our outstanding ordinary shares. The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since most these ordinary shares were held of record by brokers or other nominees.

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B. Related Party Transactions

We entered into an agreement with Mr. Steven Bronson, one of our major shareholders, as of February 1, 2013, pursuant to which Mr. Bronson undertook to maintain the confidentiality of non-public information that we may provide to him about our business.  Mr. Bronson also undertook not to be the beneficial owner of more than 1,500,094 of our ordinary shares and not to vote more than 1,334,829 of our ordinary shares, or 14.99% of our outstanding ordinary shares.  We undertook to postpone the "Distribution Date" under our shareholder bonus rights plan for 30 business days following the termination of the agreement.  This agreement will be in effect until either of the parties elects to terminate it.

In a private placement that was closed on December 31, 2015, Mr. Aviv Boim, our Chief Executive Officer, purchased 490,000 ordinary shares for an aggregate purchase price of approximately $300,000.  Another investor in the private placement invested on the same terms. Pursuant to the share purchase agreement, upon request and subject to certain conditions, we undertook to register the investors' shares with the Securities and Exchange Commission in connection with a registration initiated by us or by a third party.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8. Financial Information

A. Consolidated Statements and other Financial Information

See financial statements under Item 18.

Legal Proceedings

We are currently not a party to any legal proceedings.

B. Significant Changes

No significant change has occurred since December 31, 2017, except as otherwise disclosed in this Annual Report.

ITEM 9. The Offer and Listing

A. Offer and Listing Details

Our ordinary shares are currently quoted on the OTCQB, a marketplace of the OTC Markets Group, under the symbol TIKRF. The OTCQB typically has a significantly lower liquidity than the Nasdaq Stock Market. The following table sets forth, for the periods indicated, the high and low sales prices of our ordinary shares as reported on the OTC Bulletin Board, the Pink Sheets, the OTCQB or the OTCQX, as applicable.

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Calendar Year	Price Per Share
	High		Low
2013	$	0.75	$	0.45
2014		0.61		0.46
2015		0.74		0.47
2016		0.64		0.25
2017		0.50		0.30
Calendar Quarter
2016
First Quarter		0.54		0.37
Second Quarter		0.56		0.37
Third Quarter		0.64		0.34
Fourth Quarter		0.48		0.25
2017
First Quarter		0.35		0.33
Second Quarter		0.34		0.33
Third Quarter		0.50		0.33
Fourth Quarter		0.42		0.30
2018
First Quarter		0.42		0.30
Monthly
October 2017		0.36		0.36
November 2017		0.36		0.36
December 2017		0.42		0.30
January 2018		0.42		0.30
February 2018		0.42		0.33
March 2018		0.34		0.30
April 2018 (through April 20, 2018)		0.34		0.31

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B.         Plan of Distribution

Not applicable.

C.         Markets

Our ordinary shares are quoted on the OTCQB, a marketplace of the OTC Markets Group, under the symbol TIKRF.

D.         Selling Shareholders

Not applicable.

E.          Dilution

Not applicable.

F.          Expenses of the Issue

Not applicable.

ITEM 10. Additional Information

A.          Share Capital

Not applicable.

B.          Memorandum and Articles of Association

Objects and Purposes

We were organized under Israeli law on December 14, 1999 as a private company, and on June 30, 2000 became a public company. Our registration number with the Israeli registrar of companies is 51-286883-7. Our object is to engage, directly or indirectly, in any lawful undertaking or business whatsoever, including, without limitation, as stipulated in section 2 of our memorandum of association, which was filed with the Israeli registrar of companies.

Transfer of Shares and Notices

Fully paid ordinary shares may be freely transferred pursuant to our articles of association unless the transfer is restricted or prohibited by another instrument. Unless otherwise prescribed by law, shareholders of record are entitled to at least 21 calendar days’ prior notice of any general shareholders meeting.

The ownership or voting of our ordinary shares by non-residents of Israel, except with respect to citizens of countries which are in a state of war with Israel, is not restricted in any way by our memorandum of association or articles of association or by the laws of the State of Israel.

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Dividend and Liquidation Rights

Our board of directors is authorized to declare dividends, subject to applicable law. Dividends may be paid only out of profits and other surplus, as defined in the Companies Law, as of the end of the most recent financial statements or as accrued over a period of two years, whichever is higher. Alternatively, if we do not have sufficient profits or other surplus, then permission to effect a distribution can be granted by order of an Israeli court.  In any event, a distribution is permitted only if there is no reasonable concern that the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.

In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of ordinary shares in proportion to their respective holdings.  Dividend and liquidation right may be affected by the grant of preferential dividends or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.

Voting, Shareholders’ Meetings and Resolutions

Holders of ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders. These voting rights may be affected by the grant of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future.  No cumulative voting is permitted.

We have two types of general shareholders meetings: the annual general meetings and extraordinary general meetings. These meetings may be held either in Israel or in any other place the board of directors determines. An annual general meeting must be held in each calendar year, but not more than 15 months after the last annual general meeting.  Our board of directors may convene an extraordinary meeting, from time to time, at its discretion and is required to do so upon the request of any two directors, at least 25% of the directors, or shareholders holding at least 5% of our ordinary shares.  The quorum required for an ordinary meeting of shareholders consists of at least two shareholders present in person or by proxy who hold or represent between them at least 25% of the outstanding voting shares unless otherwise required by applicable rules.  A meeting adjourned for lack of a quorum generally is adjourned to the same day in the following week at the same time and place or any time and place as the chairman may designate with the consent of the holders of a majority of the voting power represented at the meeting and voting on the matter adjourned.  At such reconvened meeting the required quorum consists of any two members present in person or by proxy.

Under the Companies Law and our articles of association, all resolutions of the shareholders require a simple majority of the shares present, in person or by proxy, and voting on the matter.

These voting rights may be affected by the grant of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future.

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Duties of Shareholders

Under the Companies Law, each and every shareholder has a duty to act in good faith in exercising his rights and fulfilling his obligations towards us and other shareholders and to refrain from abusing his power in Tikcro, such as in voting in the general meeting of shareholders on the following matters:

· any amendment to the articles of association;

· an increase of our authorized share capital;

· a merger; or

· approval of certain actions and transactions which require shareholder approval.

In addition, each and every shareholder has the general duty to refrain from depriving other shareholders of their rights.

Furthermore, any controlling shareholder, any shareholder who knows that it possesses the power to determine the outcome of a shareholder vote and any shareholder that, pursuant to the provisions of the articles of association, has the power to appoint or to prevent the appointment of an office holder in Tikcro or any other power toward Tikcro is under a duty to act in fairness towards us.  The Companies Law does not describe the substance of this duty of fairness.

Mergers and Acquisitions under Israeli Law; Anti-takeover Provisions

The Companies Law includes provisions that allow a merger transaction and requires that each company that is a party to a merger have the transaction approved by its board of directors and a vote of the majority of its shares.  For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares held by parties other than the other party to the merger, or by any person who holds 25% or more of the shares or the right to appoint 25% or more of the directors of the other party, vote against the merger.  Upon the request of a creditor of either party of the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger.  In addition, a merger may not be completed unless at least (i) 50 days have passed from the time that a proposal of the merger has been filed with the Israeli Registrar of Companies by each merging company and (ii) 30 days have passed since the merger was approved by the shareholders of each merging company.

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The Companies Law also provides that an acquisition of shares of a public company must be made by means of a tender offer if as a result of the acquisition the purchaser would become a 25% or greater shareholder of the company and there is no existing 25% or greater shareholder in the company.  An acquisition of shares of a public company must be made by means of a tender offer if as a result of the acquisition the purchaser would become a 45% or greater shareholder of the company and there is no existing 45% or greater shareholder in the company.  This requirement does not apply if the acquisition (i) occurs in the context of a private placement by the company that received shareholder approval, (ii) was from a 25% shareholder of the company and resulted in the acquirer becoming a 25% shareholder of the company or (iii) was from a 45% shareholder of the company and resulted in the acquirer becoming a 45% shareholder of the company. The tender offer must be extended to all shareholders, but the offeror is not required to purchase more than 5% of the company’s outstanding shares, regardless of how many shares are tendered by shareholders.  The tender offer may be consummated only if (i) at least 5% of the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer.

If as a result of an acquisition of shares the acquirer will hold more than 90% of a company’s outstanding shares, the acquisition must be made by means of a tender offer for all of the outstanding shares.  If as a result of a full the tender offer the acquirer would own more than 95% of the outstanding shares, then all the shares that the acquirer offered to purchase will be transferred to it. The law provides for appraisal rights if any shareholder files a request in court within six months following the consummation of a full tender offer, but the acquirer will be entitled to stipulate that tendering shareholders forfeit their appraisal rights.  If as a result of a full tender offer the acquirer would own 95% or less of the outstanding shares, then the acquirer may not acquire shares that will cause his shareholding to exceed 90% of the outstanding shares.

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

Our articles of association provide that our board of directors may, at any time in its sole discretion, adopt protective measures to prevent or delay a coercive takeover of Tikcro, including, without limitation, the adoption of a shareholder rights plan. On April 30, 2015,our board of directors amended and restated our shareholder bonus rights plan.

The rights plan is intended to help ensure that all of our shareholders are able to realize the long-term value of their investment in Tikcro in the event of a potential takeover which does not reflect the full value of Tikcro and is otherwise not in the best interests of Tikcro and its shareholders. The rights plan is also intended to deter unfair or coercive takeover tactics.

Each right initially will entitle shareholders to buy one-half of one of our ordinary shares for $7.50. The rights generally will only be exercisable and transferable apart from our ordinary shares ten business days after a person or group becomes an “acquiring person” by acquiring beneficial ownership of 15% or more of our ordinary shares, subject to certain exceptions set forth in the rights plan, or commencing a tender or exchange offer upon consummation of which such person or group would become an “acquiring person,” or on such later date as may be determined by our audit committee and board of directors. Subject to certain conditions described in the rights plan, once the rights become exercisable, the holders of rights, other than the acquiring person, will be entitled to purchase ordinary shares at a discount from the market price. In addition, at any time after a person becomes an acquiring person and prior to the acquisition by such person or group of 50% or more of the outstanding ordinary shares, we may exchange the rights (other than rights owned by the acquiring person), in whole or in part, at an exchange ratio of one ordinary share per right (subject to adjustment).

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The rights expire on December 31, 2025 and are generally redeemable by our board of directors, at a nominal amount per right, at any time until the tenth business day following public disclosure that a person or group has become an “acquiring person”.

On November 20, 2012, Mr. Steven N. Bronson filed a Statement on Schedule 13D reflecting beneficial ownership of 1,500,094 of our ordinary shares, or 16.9% of our outstanding ordinary shares, thereby crossing the 15% ownership threshold. We have deferred the "Distribution Date" under the bonus rights plan to the close of business on the 30th business day following the termination of a standstill and confidentiality agreement that we entered into with Mr. Bronson, which shall remain in effect until terminated by either party.

On December 31, 2015, Mr. Aviv Boim's holdings crossed the 15% beneficial ownership threshold due to Mr. Boim’s participation as an investor in a private placement of our shares. Our board of directors waived the implementation of the bonus rights in connection with this transaction.

Modification of Class Rights

Our articles of association provide that the rights attached to any class (unless otherwise provided by the terms of that class), such as voting, rights to dividends and the like, may be varied by a shareholders resolution, subject to the sanction of a resolution passed by the holders of a majority of the shares of that class at a separate class meeting.

Indemnification, Exculpation and Insurance of Office Holders

Exculpation of Office Holders

Under the Companies Law, an Israeli company may not exempt an office holder from liability for breach of his duty of loyalty, but may exempt in advance an office holder from liability to the company, in whole or in part, for a breach of his duty of care (except in connection with distributions), provided the articles of association of the company allow it to do so.  Our articles of associationallow us to exempt our office holders to the fullest extent permitted by law.

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Insurance of Office Holders

Our articles of association provide that, subject to the provisions of the Companies Law, we may enter into an insurancecontract which would provide coverage for any monetaryliability incurred byany of our office holders, with respect to an act performed in the capacity of an office holder for:

• a breach of his duty of care to us or to another person;

• a breach of his duty of loyalty to us, provided that the office holder acted in good faith and had reasonable cause to assume that his act would not prejudice our interests; or

• a financial liability imposed upon him in favor of another person.

Indemnification of Office Holders

The Companies Law and our articles of association provide that a company may indemnify an office holder against the following obligations and expenses imposed on the office holder with respect to an act performed in the capacity of an office holder:

• a financial obligation imposed on him in favor of another person by a court judgment, including a compromise judgment or an arbitrator’s award approved by the court; such indemnification may be approved (i) after the liability has been incurred or (ii) in advance, provided that our undertaking to indemnify is limited to events that our board of directors believes are foreseeable in light of our actual operations at the time of providing the undertaking and to a sum or criterion that our board of directors determines to be reasonable under the circumstances.

• reasonable litigation expenses, including attorneys’ fees, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent; and

• reasonable litigation expenses, including attorneys’ fees, expended by the office holder or charged to him by a court in connection with:

• proceedings we institute against him or that are instituted on our behalf or by another person;

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• a criminal charge from which he is acquitted; or

• a criminal proceeding in which he is convicted of an offense that does not require proof of criminal intent.

Limitations on Exculpation, Insurance and Indemnification

The Companies Law provides that a company may not exculpate or indemnify an office holder, or enter into an insurance contract which would provide coverage for any monetary liability incurred as a result of any of the following:

• a breach by the office holder of his duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

• a breach by the office holder of his duty of care if the breach was done intentionally or recklessly;

• any act or omission done with the intent to derive an illegal personal benefit; or

• any fine levied against the office holder.

In addition, under the Companies Law, exculpation of, indemnification of, and procurement of insurance coverage for, our office holders must be approved by our audit committee and our board of directors and, if the beneficiary is a director, by our shareholders.

Our articles of associations also provide that, subject to the provisions of applicable law, we may procure insurance for or indemnify any person who is not an office holder, including without limitation, any of our employees, agents, consultants or contractors.

In accordance with the foregoing provisions, we have obtained liability insurance in favor of our directors and officers and have granted them letters of indemnification and exculpation.

C.          Material Contracts

On April 30, 2015, we entered into an amended and restated bonus rights agreement, with a trustee on behalf of our shareholders, which is summarized above under Item 10.B “—Mergers and Acquisitions under Israeli Law; Anti-Takeover Provisions” and is incorporated by reference as an exhibit to this Annual Report.

On February 1, 2013, we entered into an agreement with Mr. Steven Bronson which is summarized above under Item 7.B “Major Shareholders and Related Party Transactions— Related Party Transactions”.

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D.          Exchange Controls

There are currently no Israeli currency control restrictions on payments of dividends or other distributions with respect to our ordinary shares or the proceeds from the sale of the shares, except for the obligation of Israeli residents to file reports with the Bank of Israel regarding certain transactions.  However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.

E.          Taxation

The following is a general summary only and should not be considered as income tax advice or relied upon for tax planning purposes. Holders of our ordinary shares should consult their own tax advisors as to the United States, Israeli or other tax consequences of the purchase, ownership and disposition of ordinary shares, including, in particular, the effect of any foreign, state or local taxes.

United States Federal Income Tax Consequences

The following summary describes the material U.S. federal income tax consequences to “U.S. Holders” (as defined below) arising from the purchase, ownership or disposition of our ordinary shares. This summary is based on the Internal Revenue Code of 1986, as amended, or the “Code,” the final, temporary and proposed U.S. Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change (possibly with retroactive effect) or different interpretations. For purposes of this summary, a “U.S. Holder” will be deemed to refer only to any of the following holders of our ordinary shares:

· an individual who is either a U.S. citizen or a resident of the U.S. for U.S. federal income tax purposes;

· a corporation or other entity taxable as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the U.S. or any political subdivision thereof;

· an estate the income of which is subject to U.S. federal income tax regardless of the source of its income; and

· a trust, if (a) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

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This summary does not consider all aspects of U.S. federal income taxation that may be relevant to particular U.S. Holders by reason of their particular circumstances, including potential application of the U.S. federal alternative minimum tax, or any aspect of state, local or non-U.S. federal tax laws or U.S. federal tax laws other than U.S. federal income tax laws. In addition, this summary is directed only to U.S. Holders that hold our ordinary shares as “capital assets” within the meaning of Section 1221 of the Code and does not address the considerations that may be applicable to particular classes of U.S. Holders, including financial institutions, regulated investment companies, real estate investment trusts, pension funds, insurance companies, broker-dealers, tax-exempt organizations, grantor trusts, partnerships or other pass-through entities, partners or other equity owners in partnerships or other pass-through entities, expatriates or former long-term residents of the United States, U.S. Holders whose functional currency is not the U.S. dollar, U.S. Holders who have elected mark-to-market accounting, U.S. Holders who acquired our ordinary shares through the exercise of options or otherwise as compensation, U.S. Holders who hold our ordinary shares as part of a “straddle,” “hedge” or “conversion transaction,” U.S. Holders selling our ordinary shares short, U.S. Holders deemed to have sold our ordinary shares in a “constructive sale,” U.S. Holders required to accelerate the recognition of any item of gross income with respect to our ordinary shares as a result of such income being recognized on an applicable financial statement, and U.S. Holders, directly, indirectly or through attribution, of 10% or more (by vote or value) of our outstanding ordinary shares. If a partnership (including for this purpose any entity, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ordinary shares, the U.S. federal income tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partnership.

Each U.S. Holder should consult with its own tax advisor as to the particular tax consequences to it of the purchase, ownership and sale of our ordinary shares, including the effects of applicable tax treaties, state, local, foreign or other tax laws and possible changes in the tax laws.

Sale, Exchange or Other Taxable Disposition of Ordinary Shares

Subject to the discussion below under “Passive Foreign Investment Company Status,” a U.S. Holder’s sale, exchange or other taxable disposition of ordinary shares generally will result in the recognition by such U.S. Holder of capital gain or loss in an amount equal to the difference between the U.S. dollar value of the amount realized and the U.S. Holder’s tax basis in the ordinary shares disposed of (determined in U.S. dollars).  This gain or loss will be long-term capital gain or loss if such ordinary shares have been held or are deemed to have been held for more than one year at the time of the disposition.  Individual U.S. Holders are subject to a maximum tax rate of 20% on long-term gains. A noncorporate U.S. Holder may be subject to an additional tax based on its “net investment income” (generally, gross income from interest, dividends, annuities, royalties and rents and gain from the sale of property (other than property held in the active conduct of a trade or business that does not regularly trade financial instruments or commodities), less the amount of deductions properly allocable to such income or gain). Such tax is equal to 3.8% of the lesser of an individual U.S. Holder’s (i) net investment income, or (ii) the excess of such U.S. Holder’s “modified adjusted gross income” (adjusted gross income plus the amount of any foreign earned income excluded from income under Section 911(a)(1) of the Code, net of deductions and exclusions disallowed with respect to such foreign earned income) over a specified threshold amount ($250,000 in the case of a joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return and $200,000 in any other case). In the case of a U.S. Holder which is an estate or trust, the tax is equal to 3.8% of the lesser of (i) undistributed net investment income, or (ii) the excess of adjusted gross income (as defined in Section 67(e) of the Code) over the dollar amount at which the highest tax bracket applicable to an estate or trust begins.  Short-term capital gains generally are taxed at the same rates applicable to ordinary income.  If the U.S. Holder’s holding period on the date of the taxable disposition is one year or less, such gain or loss is treated as a short-term capital gain or loss.  See “Israeli Tax Considerations — Capital Gains Tax” for a discussion of taxation by Israel of capital gains realized on sales of our ordinary shares.  Any capital loss realized upon the taxable disposition of ordinary shares generally is deductible only against capital gains and not against ordinary income, except that non-corporate U.S. Holders generally may deduct annually from ordinary income up to $3,000 of capital losses in excess of capital gains.  In general, any capital gain or loss recognized by a U.S. Holder upon the taxable disposition of ordinary shares will be treated as U.S.-source income or loss for U.S. foreign tax credit purposes, although the tax treaty between the United States and Israel may permit gain derived from the taxable disposition of ordinary shares by a U.S. Holder to be treated as foreign-source income for U.S. foreign tax credit purposes under certain circumstances.

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A U.S. Holder’s tax basis in his, her or its ordinary shares generally will be equal to the U.S. dollar purchase price paid by such U.S. Holder to acquire such ordinary shares.  The U.S. dollar cost of an ordinary share purchased with foreign currency generally will be equal to the U.S. dollar value of the purchase price on the date of purchase or, in the case of ordinary shares that are purchased by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), on the settlement date for the purchase.  Such an election by an accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without the consent of the U.S. Internal Revenue Service. The holding period of each ordinary share owned by a U.S. Holder will commence on the day following the date of the U.S. Holder’s purchase of such ordinary share and will include the day on which the ordinary share is sold by such U.S. Holder.

In the case of a U.S. Holder who uses the cash basis method of accounting and who receives NIS in connection with a taxable disposition of ordinary shares, the amount realized will be based on the “spot rate” of exchange on the settlement date of such taxable disposition.  If such U.S. Holder subsequently converts NIS into U.S. dollars at a conversion rate other than the spot rate in effect on the settlement date, he, she or it may have a foreign currency exchange gain or loss treated as ordinary income or loss for U.S. federal income tax purposes.  A U.S. Holder who uses the accrual method of accounting may elect the same treatment required of cash method taxpayers with respect to a taxable disposition of ordinary shares, provided that the election is applied consistently from year to year.  Such election may not be changed without the consent of the U.S. Internal Revenue Service.  If an accrual method U.S. Holder does not elect to be treated as a cash method taxpayer (pursuant to U.S. Treasury Regulations applicable to foreign currency transactions), such U.S. Holder may be deemed to have realized an immediate foreign currency gain or loss for U.S. federal income tax purposes in the event of any difference between the U.S. dollar value of the NIS on the date of taxable disposition and the settlement date.  Any such currency gain or loss generally would be treated as U.S.-source ordinary income or loss and would be subject to tax in addition to any gain or loss recognized by such U.S. Holder on the taxable disposition of ordinary shares.

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Treatment of Distributions

Subject to the discussion below under “Passive Foreign Investment Company Status,” for U.S. federal income tax purposes, the amount of any distribution with respect to our ordinary shares will equal the amount of cash distributed, the fair market value of any property distributed and the amount of any Israeli taxes withheld on such distribution as described below under “Israeli Tax Considerations -- Tax on Dividends.” Other than distributions in liquidation or in redemption of our ordinary shares that are treated as exchanges, a distribution with respect to our ordinary shares to a U.S. Holder generally will be treated as a dividend to the extent the distribution does not exceed our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. The amount of any distribution that exceeds these earnings and profits will be treated first as a non-taxable return of capital, reducing the U.S. Holder’s tax basis in his, her or its ordinary shares (but not below zero), and then generally as capital gain from a deemed sale or exchange of such ordinary shares. Corporate U.S. Holders generally will not be allowed a deduction under Section 243 of the Code for dividends received on our ordinary shares and thus will be subject to tax at the rate applicable to their taxable income. A noncorporate U.S. Holder’s “qualified dividend income” generally is subject to tax at a rate of 20% and also may be subject to the additional tax on “net investment income” described above in “Sale, Exchange or Other Taxable Disposition of Ordinary Shares.” For this purpose, “qualified dividend income” generally includes dividends paid by a foreign corporation if, among other things, the noncorporate U.S. Holder meets certain minimum holding period requirements, there is no obligation to make related payments with respect to positions in substantially similar or related property, and either (a) the stock of such corporation is readily tradable on an established securities market in the U.S., or (b) such corporation is eligible for the benefits of a comprehensive income tax treaty with the U.S. which includes an information exchange program and is determined to be satisfactory by the U.S. Secretary of the Treasury. The U.S. Secretary of the Treasury has indicated that the income tax treaty between the U.S. and Israel is satisfactory for this purpose. Dividends paid by us will not qualify for the 20% U.S. federal income tax rate, however, if we are treated, for the tax year in which the dividends are paid or the preceding tax year, as a “passive foreign investment company” for U.S. federal income tax purposes. See the discussion below under the heading “Passive Foreign Investment Company Status.”

A dividend paid by us in NIS will be included in the income of U.S. Holders at the U.S. dollar amount of the dividend, based on the “spot rate” of exchange in effect on the date of receipt or deemed receipt of the distribution, regardless of whether the payment is in fact converted into U.S. dollars.  U.S. Holders will have a tax basis in the NIS for U.S. federal income tax purposes equal to that U.S. dollar value. Any gain or loss upon the subsequent conversion of the NIS into U.S. dollars or other disposition of the NIS will constitute foreign currency gain or loss taxable as ordinary income or loss and will be treated as U.S.-source income or loss for U.S. foreign tax credit purposes.

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Dividends received with respect to our ordinary shares will constitute “portfolio income” for purposes of the limitation on the deductibility of passive activity losses and, therefore, generally may not be offset by passive activity losses. Dividends received with respect to our ordinary shares also generally will be treated as “investment income” for purposes of the investment interest deduction limitation contained in Section 163(d) of the Code, and as foreign-source passive income for U.S. foreign tax credit purposes or, in the case of a U.S. Holder that is a financial services entity, financial services income. Subject to certain limitations, U.S. Holders may elect to claim as a foreign tax credit against their U.S. federal income tax liability any Israeli income tax withheld from distributions on our ordinary shares which constitute dividends under U.S. income tax law. U.S. Holders that do not elect to claim a foreign tax credit may instead claim a deduction for Israeli income tax withheld, but only if the U.S. Holder elects to do so with respect to all foreign income taxes in such year. In addition, special rules may apply to the computation of foreign tax credits relating to “qualified dividend income,” as defined above. The calculation of foreign tax credits and, in the case of a U.S. Holder that elects to deduct foreign income taxes, the availability of deductions involves the application of complex rules that depend on a U.S. Holder’s particular circumstances.

U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal income tax consequences of their receipt of any distributions with respect to our ordinary shares.

Passive Foreign Investment Company Status

Generally, a foreign corporation is treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any tax year if, in such tax year, either (i) 75% or more of its gross income (including its pro rata share of the gross income of any company in which it owns 25% or more of the shares by value) is passive in nature (the “Income Test”), or (ii) the average percentage of its assets during such tax year (including its pro rata share of the assets of any company in which it owns 25% or more of the shares by value)  which produce, or are held for the production of, passive income (determined by averaging the percentage of the fair market value of its total assets which are passive assets as of the end of each quarter of such year) is 50% or more (the “Asset Test”).   Passive income for this purpose generally includes dividends, interest, rents, royalties and gains from securities and commodities transactions.

There is no definitive method prescribed in the Code, U.S. Treasury Regulations or administrative or judicial interpretations thereof for determining the value of a publicly-traded foreign corporation’s assets for purposes of the Asset Test.  The legislative history of the U.S. Taxpayer Relief Act of 1997 (the “1997 Act”) indicates that for purposes of the Asset Test, “the total value of a publicly-traded foreign corporation’s assets generally will be treated as equal to the sum of the aggregate value of its outstanding stock plus its liabilities.”  It is unclear, whether other valuation methods could be employed to determine the value of our assets for purposes of the Asset Test.

Based on the composition of our gross income, the composition and value of our gross assets and the amount of our liabilities during each year since 2003, we believe that we are likely to be treated as having been a PFIC in each such year, including 2017.  There also can be no assurance that we will not be deemed a PFIC in 2018 or any other future tax year.

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If we are treated as a PFIC for U.S. federal income tax purposes for any year during a U.S. Holder’s holding period of ordinary shares and the U.S. Holder does not make a QEF Election or a “mark-to-market ”  election (both as described below):

· The U.S. Holder would be required to (a) report as ordinary income any so-called “excess distributions” allocated to the current tax year, (b) pay tax on amounts allocated to each prior tax year in which we were a PFIC at the highest rate applicable to ordinary income in effect for such prior year, and (c) pay an interest charge on the resulting tax at the rate applicable to deficiencies of U.S. federal income tax. “Excess distributions” with respect to any U.S. Holder are amounts received by such U.S. Holder with respect to our ordinary shares in any tax year that exceed 125% of the average distributions received by such U.S. Holder from us during the shorter of (i) the three previous years, or (ii) such U.S. Holder’s holding period of our ordinary shares before the then-current tax year.  Excess distributions must be allocated ratably to each day that a U.S. Holder has held our ordinary shares.

· The entire amount of any gain realized by such U.S. Holder upon the sale or other disposition of our ordinary shares also would be treated as an “excess distribution” subject to tax as described above.

· The tax basis of ordinary shares acquired from a decedent who was a U.S. Holder generally would not receive a step-up to fair market value as of the date of the decedent’s death, but instead would be equal to the decedent’s basis, if lower.

Although we generally will be treated as a PFIC as to any U.S. Holder if we are a PFIC for any year during the U.S. Holder’s holding period, if we cease to be a PFIC, the U.S. Holder may avoid the consequences of PFIC classification for subsequent years if such U.S. Holder elects to recognize gain based on the unrealized appreciation in such U.S. Holder’s ordinary shares through the close of the tax year in which we cease to be a PFIC.

A U.S. Holder who beneficially owns shares of a PFIC must file U.S. Internal Revenue Service Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with the U.S. Internal Revenue Service for each tax year in which such U.S. Holder recognizes gain upon a disposition of our ordinary shares, receives certain distributions from us or makes the QEF Election or mark-to-market election described below

For any tax year in which we are treated as a PFIC, a U.S. Holder may elect to treat his, her or its ordinary shares as an interest in a qualified electing fund (a “QEF Election”), in which case the U.S. Holder would be required to include in income currently his, her or its proportionate share of our earnings and profits in years in which we are a PFIC regardless of whether distributions of our earnings and profits are actually made to the U.S. Holder.  Any gain subsequently recognized by the U.S. Holder upon the sale of his, her or its ordinary shares, however, generally would be taxed as capital gain and the denial of the basis step-up at death described above would not apply.

A U.S. Holder may make a QEF Election with respect to a PFIC for any tax year of the U.S. Holder.  The election is effective for the tax year for which it is made and all subsequent tax years of the U.S. Holder.  Procedures exist for both retroactive elections and the filing of protective statements.  A  QEF Election is made by completing U.S. Internal Revenue Service Form 8621 and attaching it to a timely-filed (including extensions) U.S. federal income tax return for the first tax year to which the election will apply.  A U.S. Holder must satisfy certain additional filing requirements each year the election remains in effect. Upon the request of a U.S. Holder who wishes to make a QEF Election, we will provide to such U.S. Holder the information required to make the QEF Election and to make subsequent annual filings.

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As an alternative to a QEF Election, a U.S. Holder generally may elect to mark his, her or its ordinary shares to market annually, recognizing ordinary income or loss (subject to certain limitations) equal to the difference, as of the close of each tax year, between the fair market value of his, her or its ordinary shares and the adjusted tax basis of such shares.  If a mark-to-market election with respect to ordinary shares is in effect on the date of a U.S. Holder’s death, the normally available step-up in tax basis to fair market value generally will not be available.  Rather, the tax basis of ordinary shares in the hands of a U.S. Holder who acquires them from a decedent will be the lesser of the decedent’s tax basis or the fair market value of the ordinary shares. Once made, a mark-to-market election generally continues, unless revoked with the consent of the U.S. Internal Revenue Service.

Due to the complexity of the PFIC rules, U.S. Holders should consult their own tax advisors regarding our status as a PFIC and, if we are treated as a PFIC, compliance with the applicable reporting requirements and the eligibility, manner and advisability of making a QEF Election or a mark-to-market election.

Information Reporting and Backup Withholding

Payments in respect of our ordinary shares that are made in the U.S. or by certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding tax at a rate which currently is 24%.  Information reporting will not apply, however, with respect to payments to certain U.S. Holders, including corporations and tax-exempt organizations.  In addition, backup withholding will not apply to a U.S. Holder that (i) is a corporation or comes within certain exempt categories, and demonstrates that fact when so required, or (ii) furnishes a correct taxpayer identification number and other required certifications. U.S. Holders required to establish their exemption from backup withholding generally must provide a certification on U.S. Internal Revenue Service Form W-9 (or substitute form). A non-U.S. holder will be required to provide a certificate of non-U.S. status on an appropriate IRS Form W-8. The backup withholding tax is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a U.S. Holder’s U.S. federal income tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service.  U.S. Holders should consult their own tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable.

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In addition, U.S. Holders should be aware of annual reporting requirements on U.S. Internal Revenue Service Form 8938 (Statement of Specified Foreign Financial Assets) with respect to the holding of certain foreign financial assets, including our ordinary shares that are not held in an account maintained by certain types of financial institutions, if the aggregate value of all of such assets exceeds $50,000 (or $100,000 for married couples filing a joint return).

The foregoing discussion of certain U.S. federal income tax considerations is a general summary only and should not be considered as income tax advice or relied upon for tax planning purposes. Each U.S. Holder should consult with his, her or its own tax advisor regarding U.S. federal, state, local and non-U.S. income and other tax consequences of the acquisition, ownership and disposition of our ordinary shares.

Israeli Tax Considerations

The following is a summary of the principal tax laws applicable to companies in Israel, with special reference to their effect on us.  This section also contains a discussion of certain Israeli tax consequences to persons holding ordinary shares.  This summary does not discuss all the provisions of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to certain types of investors subject to special treatment under Israeli law, such as traders in securities or persons that own, directly or indirectly, 10% or more of our outstanding voting share capital.  To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, there can be no assurance that the views expressed in this discussion will be accepted by the tax authorities or the courts. The discussion should not be construed as legal or professional tax advice and is not exhaustive of all possible tax considerations.

Potential investors are urged to consult their own tax advisors as to the Israeli or other tax consequences of the purchase, ownership and disposition of ordinary shares, including, in particular, the effect of any foreign, state or local taxes.

General Corporate Tax Structure

Generally, Israeli companies are subject to Corporate Tax. In 2017 and 2016, the corporate tax rate was 24% and 25%, respectively. The corporate tax rate for 2018 and thereafter is scheduled to be 23%.  Israeli companies are generally subject to capital gains tax at the corporate tax rate.

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Capital Gains Tax on Sales of Our Ordinary Shares

Israeli law generally imposes a capital gains tax on the sale of any capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of any capital assets located in Israel, including shares in Israeli companies by non-residents of Israel, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder’s country of residence provides otherwise. The law distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain that is equivalent to the increase of the relevant asset’s purchase price that is attributable to the increase in the Israeli consumer price index, or in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. The real gain is the excess of the total capital gain over the inflationary surplus.

Provisions of Israeli tax law may treat a sale of securities listed on a stock exchange differently than the sale of other securities. In the past, the Israeli Tax Authority, or the ITA, has indicated that it does not recognize the OTC market as a “stock exchange” for purposes of the Tax Ordinance. However, the current position of the ITA is to view securities quoted on the OTC market as listed on a “stock exchange” where such securities were previously delisted from a “stock exchange” (such as the Nasdaq Global Market or the Tel Aviv Stock Exchange), such as our ordinary shares.

The tax rate generally applicable to capital gains derived from the sale of shares, whether listed on a stock market or not, is 25% for Israeli individuals, unless such shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain will generally be taxed at a rate of 30%. Additionally, if such shareholder is considered a “significant shareholder” at any time during the 12-month period preceding such sale (i.e., such shareholder holds directly or indirectly, including jointly with others, at least 10% of any means of control in the company) the tax rate will be 30%. However, the above tax rates may not apply to dealers in securities and shareholders who acquired their shares prior to an initial public offering. Israeli companies are subject to the corporate tax rate on capital gains derived from the sale of listed shares.

The tax basis of listed shares acquired prior to January 1, 2003 will be determined in accordance with the average closing share price in the three trading days preceding January 1, 2003.  However, a request may be made to the tax authorities to consider the actual adjusted cost of the shares as the tax basis if it is higher than such average price.

Starting with 2013, shareholders that are individuals who have taxable income that exceeds NIS 800,000 in a tax year (linked to the CPI) will be subject to an additional tax, referred to as High Income Tax, at the rate of 2% on their taxable income for such tax year which is in excess of such threshold. For this purpose, taxable income will include taxable capital gains from the sale of our shares and taxable income from dividend distributions.Under an amendment to the Israeli Income Tax Ordinance enacted in December 2016, for 2017 and thereafter the rate of High Income Tax will increase to 3% and will be applicable to annual income exceeding NIS 640,000 (linked to the CPI each year,which amounts to NIS 641,880 for 2018).

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Non-Israeli residents are exempt from Israeli capital gains tax on any gains derived from the sale of shares of Israeli companies publicly traded on a recognized stock exchange outside of Israel, provided that such capital gains are not derived from a permanent establishment in Israel and that such shareholders did not acquire their shares prior to the issuer’s initial public offering. However, non-Israeli corporations will not be entitled to such exemption if Israeli residents (i) have a controlling interest of more than 25% in such non-Israeli corporation, or (ii) are the beneficiaries of or are entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly.

In some instances where our shareholders may be liable to Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at the source.

Pursuant to the Convention between the Government of the United States of America and the Government of Israel with Respect to Taxes on income, as amended, known as the U.S.-Israel Tax Treaty, the sale, exchange or disposition of ordinary shares by a person who holds the ordinary shares as a capital asset and who qualifies as a resident of the United States within the meaning of the treaty and who is entitled to claim the benefits afforded to a resident by the treaty generally will not be subject to Israeli capital gains tax.  This exemption does not apply if: (i) the treaty U.S. resident holds, directly or indirectly, shares representing 10% or more of our issued voting power during any part of the twelve-month period preceding the applicable sale, exchange or disposition, subject to specific conditions, or (ii) the capital gains from such sale, exchange or disposition can be allocated to a permanent establishment in Israel. In these cases, the sale, exchange or disposition would be subject to Israel tax, to the extent applicable, as mentioned above. However, under the U.S.-Israel Tax Treaty, the treaty U.S. resident would be permitted to claim a credit for the capital gains tax paid in Israel against the U.S. federal income tax imposed with respect to the applicable sale, exchange or disposition, subject to the limitations in U.S. laws applicable to foreign tax credits. The U.S.-Israel Tax Treaty does not relate to U.S. state or local taxes.

Tax on Dividends to Non-Israeli Resident Shareholders

Non-residents of Israel are subject to income tax on income accrued or derived from sources in Israel.  These sources of income include passive income such as dividends.  On distributions of dividends other than bonus shares, or stock dividends, income tax is generally applicable at the rate of 25%, or 30% for a shareholder that is considered a significant shareholder at any time during the 12-month period preceding such distribution.  A different rate may be provided in a treaty between Israel and the shareholder’s country of residence.  Under the U.S.-Israel Tax Treaty, the maximum tax on dividends paid to a holder of ordinary shares who is a U.S. resident (as defined in the treaty) is 25%, and in certain circumstances if such shareholder is a U.S. corporation holding at least 10% of our issued voting power during the part of the tax year which precedes the date of payment of the dividend as well as the previous tax year, and not more than 25% of our gross income consists of interest or dividends,the maximum Israeli tax on dividends paid to such corporation is 12.5%.

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A non-resident of Israel who receives interest or dividend income derived from or accrued in Israel, from which tax was withheld at the source, is generally exempted from the duty to file tax returns in Israel with respect to such income, provided such income was not derived from a business conducted in Israel by the taxpayer and the taxpayer has no other taxable sources of income in Israel.

F.          Dividends and Paying Agents

Not applicable.

G.          Statement by Experts

Not applicable.

H.          Documents On Display

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, applicable to foreign private issuers and fulfill the obligations with respect to such requirements by filing reports with the Securities and Exchange Commission.  You may read and copy any document we file with the Securities and Exchange Commission without charge at the Securities and Exchange Commission’s public reference room at 100 F Street, N.E., Washington, D.C. 20549.  Copies of such material may be obtained by mail from the Public Reference Branch of the Securities and Exchange Commission at such address, at prescribed rates.  The SEC also maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.  The address of this web site is http://www.sec.gov.  Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference room.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act.  In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the Securities and Exchange Commission as frequently or as promptly as United States companies whose securities are registered under the Exchange Act.

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I.          Subsidiary Information

Not applicable.

ITEM 11. Quantitative and Qualitative Disclosures about Market Risk

General

We are exposed to market risk, including movements in interest rates and foreign currency exchange rates.  Our financial results may be negatively impacted by foreign currency fluctuations because we generate most of our financial income in U.S. dollars but incur some of our expenses in new Israeli shekels. Because our financial results are reported in U.S. dollars, our results of operations may be impacted by fluctuations in the rates of exchange between the U.S. dollar and new Israeli shekels as our financial results are converted into U.S. dollars.

We do not presently engage in any hedging or other transactions intended to manage risks relating to foreign currency exchange rate or interest rate fluctuations.  At December 31, 2016, we did not own any market risk sensitive instruments. However, we may in the future undertake hedging or other similar transactions or invest in market risk sensitive instruments if our management determines that it is necessary to offset these risks.

Interest Rate Risk Management

As of December 31, 2017, we had $6.44 million of cash and short-term investments, primarily all of which was linked to the U.S. dollar.

ITEM 12. Description of Securities other than Equity Securities

None.

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PART II

ITEM 13. Defaults, Dividend Averages and Delinquencies

Not applicable.

ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

ITEM 15. Controls and Procedures

Disclosure Controls and Procedures

We performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of December 31, 2017. The evaluation was performed with the participation of our senior management and under the supervision and with the participation of our principal executive and financial officer. Based on this evaluation, our principal executive and financial officer has concluded that our disclosure controls and procedures are effective to alert him on a timely basis to material information required to be included in our periodic reports with the Securities and Exchange Commission.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance to our management and our board of directors regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurances with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may decline.

Our management conducted an evaluation, pursuant to Rule 13a-15(c) under the Exchange Act, of the effectiveness, as of the end of the period covered by this Annual Report, of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, management assessed the effectiveness of our internal control over financial reporting as at December 31, 2017 and concluded that our internal control over financial reporting was effective as of December 31, 2017.

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Attestation Report of the Registered Public Accounting Firm

Not applicable.

Changes in Financial Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during 2017 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A.      Audit Committee Financial Expert

Our board of directors has determined that we require one director with “financial and accounting expertise”, as defined under the Companies Law, and that Izhak Tamir has such expertise.  Mr. Tamir qualifies as an “independent director” under the Nasdaq Listing Rules.  Mr. Tamir is not a member of our audit committee and does not satisfy all the qualifications of an “audit committee financial expert”, as defined in Item 16A of Form 20-F, but we believe that his qualifications are sufficient for the scope and complexity of our operations.

ITEM 16B.      Code of Ethics

Our board of directors has adopted a Code of Ethics.  We will provide a copy of our Code of Ethics free of charge to any person who requests one. Such requests may be sentto Ms. Liat Hadad, the Chairperson of our Audit Committee.

ITEM 16C.      Principal Accountant Fees and Services

For 2016 and 2017, our independent accountant was Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global. The following table sets forth, for each of the years indicated, the fees paid to these accountants::

	Year Ended December 31,
	2016		2017
Audit Fees	$	29,500	$	39,500
Tax and other Fees		9,500		5,500
Audit related Fees		-		5,000
Total	$	39,000	$	50,000

“Audit Fees” are the aggregate fees billed for the audit of our annual financial statements. This category also includes services that generally the independent accountant provides, consents and assistance with and review of documents filed with the SEC.

“Audit-Related fees” relate to assurance and associated services that are traditionally performed by the independent auditor, including: accounting consultation and consultation concerning financial accounting, reporting standards and due diligence investigations.

“Tax and other Fees” are the aggregate fees billed for professional services rendered for tax compliance, tax advice, and other advice other than in connection with the audit.  Tax compliance involves preparation of original and amended tax returns, tax planning and tax advice.

Our Audit Committee pre-approves the engagement of our independent accountant to perform audit and non-audit services.

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ITEM 16D.      Exemptions from Listing Standards for Audit Committees

Not applicable.

ITEM 16E.      Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 16F.      Change in Registrant’s Certifying Accountant

None.

ITEM 16G.      Corporate Governance

Not Applicable.

ITEM 16H.      Mine Safety Disclosure

Not Applicable.

PART III

ITEM 17. Financial Statements

We have responded to Item 18 in lieu of this item.

ITEM 18. Financial Statements

Our financial statements are attached hereto, commencing on page F-1 of this Annual Report.

ITEM 19. Exhibits

The exhibit lists required by this Item is incorporated by reference to the Exhibit Index, which appears following the signature page of this Annual Report.

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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20‑F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

TIKCRO TECHNOLOGIES LTD.

By:  /s/ Aviv Boim

Aviv Boim

Chief Executive Officer

Date:  April 30, 2018

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Exhibit Index

Exhibit No.	Exhibit
1.1	Memorandum of Association, as amended (a)
1.2	Amended and Restated Articles of Association (a)
1.3	Amended and Restated Bonus Rights Agreement, dated as of April 30, 2015, between Tikcro Technologies Ltd. and American Stock Transfer & Trust Company, as Rights Agent (b)
4.1	Compensation Policy for Office Holders (c)
4.2	Tikcro 2003 Stock Option Plan, as amended (d)
4.3	Form of Share Purchase Agreement, dated as of December 23, 2015 (e)
8.1	List of Subsidiaries (d)
12.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act (f)
13.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act (f)
14.1	Consent of Independent Registered Public Accounting Firm (f)
101.1	Interactive Data Files  in XBRL format of the materials set forth in Exhibit 15.1 (g)

________________________

(a) Incorporated by reference to Tikcro’s Annual Report on Form 20-F for the year ended December 31, 2012, filed with the Securities and Exchange Commission on April 30, 2013.

(b) Incorporated by reference to Tikcro’s Report on Form 8-A/A filed with the Securities and Exchange Commission on April 30, 2015.

 (c) Incorporated by reference to Tikcro’s Report on Form 6-K filed with the Securities and Exchange Commission on November 21, 2013.

(d) Incorporated by reference to Tikcro’s Annual Report on Form 20-F for the year ended December 31, 2014, filed with the Securities and Exchange Commission on April 30, 2015.

(e) Incorporated by reference to Tikcro’s Annual Report on Form 20-F for the year ended December 31, 2016, filed with the Securities and Exchange Commission on April 21, 2017.

(f) Included herewith.

(g) In accordance with Rule 406T of Regulation S-T, the information in Exhibit 101.1 is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

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TIKCRO TECHNOLOGIES LTD.

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2017

IN U.S. DOLLARS

INDEX

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Changes in Shareholders' Equity	F-5
Statements of Cash Flows	F-6
Notes to Financial Statements	F-7 - F-19

 Kost Forer Gabbay & Kasierer 144 Menachem Begin St. Tel-Aviv 6492102, Israel Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

TIKCRO TECHNOLOGIES LTD.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Tikcro Technologies Ltd. ("the Company") as of December 31, 2017 and 2016, the related statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KOST FORER GABBAY & KASIERER

A Member of Ernst & Young Global

           We have served as the Company‘s auditor at least since 2003.

Tel-Aviv, Israel

April 30, 2018

F - 2

TIKCRO TECHNOLOGIES LTD.

BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

	December 31,
	2016			2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,426		$	6,449
Restricted cash		81			113
Receivables and other financial asset		89			21
Total current assets		7,596			6,583
Property and equipment, net		136			125
Total assets	$	7,732		$	6,708
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES	$	237		$	309
Total current liabilities		237			309
COMMITMENTS AND CONTINGENT LIABILITIES (Note 6)
SHAREHOLDERS' EQUITY (Note 7):
Share capital -
Ordinary shares no par value - Authorized: 16,666,667 shares at December 31, 2016 and 2017; Issued: 11,325,912 at December 31, 2016 and 2017; Outstanding: 9,878,861 at December 31, 2016 and 2017.		-			-
Additional paid-in capital		147,645			147,800
Treasury shares, at cost, 1,447,051 Ordinary shares at December 31, 2016 and 2017		(1,065	)		(1,065	)
Accumulated deficit		(139,085	)		(140,336	)
Total shareholders' equity		7,495			6,399
Total liabilities and shareholders' equity	$	7,732		$	6,708

The accompanying notes are an integral part of the financial statements.

F - 3

TIKCRO TECHNOLOGIES LTD.

STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share and per share data

	Year ended December 31,
	2015			2016			2017
Operating costs and expenses:
Research and development	$	(247	)	$	(601	)	$	(678	)
General and administrative expenses		(609	)		(676	)		(618	)
Operating loss		(856	)		(1,277	)		(1,296	)
Financial incomes (expenses), net (Note 10b)		(29	)		(3	)		45
Loss	$	(885	)	$	(1,280	)	$	(1,251	)
Loss per share:
Basic and diluted net loss per share	$	(0.10	)	$	(0.13	)	$	(0.13	)
Total comprehensive income (loss)	$	(885	)	$	(1,280	)	$	(1,251	)
Weighted average number of shares used in computing basic and diluted loss per share		8,839,965			9,878,861			9,878,861

F - 4

TIKCRO TECHNOLOGIES LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands, except share data

	Outstanding				Additional								Total
	Ordinary shares				paid-in		Treasury			Accumulated			shareholders'
	Number		Amount		capital		shares			deficit			Equity
Balance at January 1, 2015		8,898,861		-	$	146,721	$	(1,065	)	$	(136,920	)	$	8,736
Issuance of share capital		980,000		-		603		-			-			603
Stock based compensation		-		-		120		-			-			120
Net loss		-		-		-		-			(885	)		(885	)
Balance at December 31, 2015		9,878,861		-	$	147,444	$	(1,065	)	$	(137,805	)	$	8,574
Stock based compensation		-				201		-			-			201
Net  loss		-						-			(1,280	)		(1,280	)
Balance at December 31, 2016		9,878,861		-	$	147,645	$	(1,065	)	$	(139,085	)	$	7,495
Stock based compensation		-		-		155		-			-			155
Net  loss		-		-		-		-			(1,251	)		(1,251	)
Balance at December 31, 2017		9,878,861		-	$	147,800	$	(1,065	)	$	(140,336	)	$	6,399

The accompanying notes are an integral part of the financial statements.

F - 5

TIKCRO TECHNOLOGIES LTD.

STATEMENTS OF CASH FLOWS

U.S. dollars in thousands, except share and per share data

	Year ended December 31,
	2015			2016			2017
Cash flows from operating activities:
Loss	$	(885	)	$	(1,280	)	$	(1,251	)
Adjustments required to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation of  property and equipment		46			60			64
Stock based compensation		120			201			155
Decrease (increase) in receivables and other financial assets		(63	)		84			18
Profit from the sale of shares of Biocancell		-			-			(35	)
Increase in current liabilities		42			11			72
Net cash used in operating activities		(740	)		(924	)		(977	)
Cash flows from investing activities:
Proceeds from sale of BioCancell securities		-			-			85
Investment in restricted cash		-			(81	)		(32	)
Purchase of  property and equipment		(25	)		(129	)		(53	)
Net cash  provided by (used for) investing activities		(25	)		(210	)		-
Cash flows from finance activities:
Issuance of share capital		603			-			-
Net cash provided by finance activities		603			-			-
Decrease in cash and cash equivalents		(162	)		(1,134	)		(977	)
Cash and cash equivalents at the beginning of the year		8,722			8,560			7,426
Cash and cash equivalents at the end of the year	$	8,560		$	7,426		$	6,449

The accompanying notes are an integral part of the financial statements.

F - 6

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:- GENERAL

Tikcro Technologies Ltd. ("the Company" or "Tikcro") was incorporated in 1999, under the laws of Israel.

The Company is enagrged in biotechnology development of projects originated in Israeli academic centers. The Company developes certain antibodies, in selection and pre-clinical trials with a focus on antibodies blocking immune modulators for cancer treatment.

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES

a. Basis of presentation:

The financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"), followed consistently.

b. Use of estimates:

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, the Company's management evaluates estimates, including those related to fair values of investment in BioCancell Therapeutics, Inc. ("BioCancell"), of which the significant majority was liquidated, see Note 4 and fair values of stock-based awards. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

c. Financial statements in U.S. dollars:

A substantial portion of the Company's cash flow transactions is incurred in dollars. Investing activities and equity transactions are made in dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and presentation currency of the Company is the dollar.

F - 7

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with Accounting Standards Codification ("ASC") No. 830. All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

d. Cash equivalents:

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less.

e. Restricted cash

Restricted cash are in respect of withdrawal by a bank as collateral for office facility operating lease agreement.

f. Investment:

The Company applies ASC No. 825, "Financial Instruments" as of the date of the investment in BioCancell and elected to apply the fair value option to its investment. The primary reasons for electing the fair value option were simplification and cost-benefit considerations, as well as expansion of the use of fair value measurement being consistent with the FASB's measurement objectives for accounting for financial instruments. The losses and gains due to changes in fair value for items measured at fair value pursuant to election of the fair value option are included in statement of operation. Refer also Note 4.

g. Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated according to the estimated useful lives of the assets. The Company's Property and equipment includes laboratory equipment. The estimated useful life of the assets is 3 to five years. For certain assets depreciation is calculated in a method in which the first year has an increased benefit.

Impairment of long lived assets:

Property and equipment subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017, 2016 and 2015 , no impairment losses were recorded.

F - 8

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES (Cont.)

h. Research and development expenses:

Research and development expenses include funding for early-stage biotechnology projects mainly performed by research facilities, and are charged to the statement of operations, as incurred.

i. Income taxes:

The Company account for income taxes in accordance with ASC No. 740, "Income Taxes". This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it not is more likely than not that a portion or all of the deferred tax assets will be realized.

Based on ASC No. 740 a two-step approach is used to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. When necessary, The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income tax.

j. Accounting for stock-based compensation:

The Company accounts for stock-based compensation in accordance with ASC No. 718, "Compensation-Stock Compensation". ASC No. 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's income statements.

The Company recognizes compensation expenses for the value of its awards granted based on the straight line method over the requisite service period of each of the awards.

F - 9

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, and the expected option

term. In 2015 the Company granted options, see note 7. No options were granted in 2016 and in 2017. The Company grants restricted shares and values them based on the market value of the underlying shares at the date of grant.

The weighted-average estimated fair value of employee stock options granted during the year ended December 31, 2015 was $0.256 per option, using the Binomial option pricing formula. Fair values were estimated using the following assumptions (annualized percentages):

	Year Ended December 31,
	2015
Dividend yield		0%
Expected volatility		53.1%
Risk-free interest		1.6%
Expected life	5.83 years
Early exercise multiple		4.0%

The volatility was measured according to the average volatility of similar companies stock since the Company's stock is traded in low frequency. The risk free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company's options. The dividend yield assumption is based on the Company's historical experience and expectation of no future dividend payouts and may be subject to substantial change in the future. The early exercise multiple is based on common empirical evidence for similar grants' terms.

The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances, if any. The Company revised its estimated forfeiture rate if actual forfeitures differed from its initial estimates. Effective as of January 1, 2017, the Company adopted a change in accounting policy in accordance with Accounting Standards Update 2016-09, "Compensation Stock Compensation (Topic 718)" (“ASU 2016-09”) to account for forfeitures as they occur. The change has no impact on the Company's' Financial Statements.

k.          Fair value of financial instruments:

The Company measures its investment at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

F - 10

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Level 2 - Other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with

insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity and significant to the overall fair value measurement.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

l. Basic and diluted net earnings (loss) per share:

Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No. 260, "Earnings per Share".

The total number of options excluded from the calculation of the diluted net earnings (loss) per share, because they had anti-dilutive effect, for the years ended December 31, 2015, 2016 and 2017, were 2,357,334, 2,290,667 and 2,290,667, respectively.

m. Concentrations of credit risks:

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents.

Cash and cash equivalents are invested in major banks in Israel and the U.S., mainly in U.S. dollars. The significant majority of the Company's cash and cash equivalents are invested in one bank in the United States. Such funds in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the institutions in which the Company invests and the financial institutions that hold the Company's investments are of investment-grade level, and, accordingly, commercially acceptable credit risk exists with respect to these investments.

In addition, with respect to the Company's investment in Biocancell, refer to Note 4.
The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

n. Treasury shares:

Company shares held by the Company are recognized at cost of purchase and presented as a deduction from equity. The Company has not repurchased Ordinary shares in 2015, 2016 and 2017.

F - 11

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES (Cont.)

o. Recent Accounting Pronouncements:

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), whereby lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Companies may not apply a full retrospective transition approach. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the potential impact of ASU 2016-02 on its consolidated financial statements and related disclosures.

The Company has not yet estimated the expected effect of this new guidance on its financial statements.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This new guidance doesn't have a material impact on the Company’s financial statements.

In May 2017, the FASB issued ASU 2017-09, Stock Compensation – Scope of Modification Accounting, guidance that clarifies that all changes to share-based payment awards are not necessarily accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective prospectively beginning January 1, 2018. This guidance will apply to any future modifications. The Company does not expect this guidance to have a material impact on its financial statements.

F - 12

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 3:- FAIR VALUE MEASUREMENTS

In accordance with ASC No. 820 and ASC No. 825, the Company measures its investment, (see also Note 4) at fair value.

The Company's financial assets measured at fair value on a recurring basis consisted of the following types of instruments:

	As of December 31, 2017
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	-	$	-	$	-	$	-

	As of December 31, 2016
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	50	$	-	$	-	$	50

F - 13

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 4:-        RECEIVABLES AND OTHER FINANCIAL ASSET

	December 31,
	2016		2017
Investment in shares of Biocancell	$	50		-
Prepaid expenses		12	$	12
Other		27		9
	$	89	$	21

In July 2008, the Company signed an agreement with BioCancell Therapeutics, Inc. ("BioCancell"), an Israel-based clinical-stage biopharmaceutical company, whose Common stock is listed on the Tel Aviv Stock Exchange. As part of the agreement, the Company provided funding to BioCancell, was entitled to appoint one member to BioCancell's board of directors and provided BioCancell with certain consulting services. The Company's investment was realized through the years and as of December 31, 2017, the investment was fully realized.

The Company undertook to pay a fee of 4% of the net realized profits from securities held in portfolio companies.

NOTE 5:-        PROPERTY AND EQUIPMENT, NET

	December 31,
	2016		2017
Cost:
Laboratory equipment	$	252	$	297
Office equipment		-		8
		252		305
Accumulated depreciation:
Laboratory equipment	$	116	$	179
Office equipment		-		1
		116		180
Depreciated cost	$	136	$	125

Depreciation expenses for the years ended December 31, 2015, 2016 and 2017 were $46, $60 and $64 respectively.

NOTE 6:- COMMITMENTS AND CONTINGENT LIABILITIES

a. Directors and officers indemnification agreements:

The Company, from time to time, has entered into indemnification agreements with several of its directors and officers, in which the Company undertakes to indemnify them, to the fullest extent permitted by law, for acts taken or omitted by them in their respective capacities as directors or officers of the Company. Pursuant to these agreements, the obligations of the Company remain in effect even after the termination of the directors and officers services to or employment with the Company.

b. Litigation:

The Company is currently not party to any legal proceedings.

F - 14

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 6:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

c. Research and development agreements:

The Company, as part of its business activities to support early stage development projects in the biotechnology area, signed in December 2014 an agreement with Yeda Research and Development Company Ltd. ("Yeda")for the development by the academic center of new antibodies originating from specified research at the academic center addressing identified targets of cancer immune modulators. Under the agreement, the Company undertook a funding obligation of further research at the academic center for the development of certain antibodies in pre-clinical selection and trials which may have high selectivity and binding qualities towards cancer immune modulators. Significantly additional development and clinical trials will be required to promote selected antibodies as therapeutic candidates for immune modulation in cancer treatment. Pursuant to the agreement, the Company alone or through sub-licensees, has the right to obtain the research results and to pursue further development through commercialization. The license consideration due from the Company to Yeda includes royalties from net sales, sub-license fees and fixed fees linked to clinical and commercial sales milestones. In the end of 2015 the Company extended the agreement with Yeda for additional years to cover and to address additional targets for cancer immune modulators. The Company undertook to pursue an additional funding of research to be performed by the academic center. Under the agreement, the Company is obliged for funding of a total amount of $75 in 2018.

The Company uses third party services in its research and development activities. The consideration due from the Company for such services includes future considerations which are linked to clinical and commercial milestones of drug-candidates derived from such services. 

d. Lease agreements

The Company entered into a lease agreement in the end of 2015, effective January 1, 2016.  Under the agreement the Company rented offices and lab at the Kiryat Weizmann Science Park in Ness Ziona, Israel. The Company was obliged to pay lease amounts of $215 per year for a period of 2 years. The Company sub leased a substantial portion of its rented area for a period corresponding to its main contractual obligations. Starting 2018, the Company extended the agreement for an additional year, decreased the rented area and in parallel decreased the sub leased area. Under the extended agreement, the Company is obliged to pay lease amounts of approximately $138 per year.

NOTE 7:- SHAREHOLDERS' EQUITY

a. Ordinary shares:

The Ordinary shares confer upon the holders the right to receive notice to participate and vote in general meetings of the Company and the right to receive dividends, if declared.

b. Stock option plans:

1. Under the Company's stock option plan (as amended in December 2007) ("the Plan"), shares and options to purchase shares may be granted to employees, officers, consultants and directors of the Company.

2. No options were granted or exercised during 2016 and 2017. In 2015 2,290,667 options were granted. In 2016, 66,667 options were forfeited. As of December 31, 2017, an aggregate of 3,000,000 Ordinary shares of the Company were reserved for issuance under the plan.

F - 15

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 7:- SHAREHOLDERS' EQUITY (Cont.)

3. Options granted generally become fully exercisable after two to four years and expire no later than 10 years from the approval date of the option plan under terms of grant. Any option forfeited or cancelled before expiration become available for future grants.

The following is a summary of the Company's stock options transactions in 2017:

	Amount		Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value *)
Options outstanding at beginning of year		2,290,667	$	1.01		8.24	$	-
Granted		-		-		-	$	-
Forfeited		-		-		-		-
Options outstanding at end of year		2,290,667	$	1.01		7.24		-
Options exercisable at end of year		1,768,000	$	1.01		7.24	$	-

*) All options were out of the money as of December 31, 2017 and 2016 and their intrinsic value was considered as zero.

The total stock-based compensation expenses recognized in General and administrative expenses for the years ended December 2017, 2016 and 2015 were $155, $201 and $120, respectively.

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TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 7:- SHAREHOLDERS' EQUITY (Cont.)

c. Shareholder bonus rights plan:

On September 12, 2005, the Company's Board of Directors adopted a Shareholder Bonus Rights Plan (the "Rights Plan") pursuant to which share purchase bonus rights (the "Right") were distributed on September 26, 2005, at the rate of one Right for each of the Company's Ordinary shares held by shareholders of record as of the close of business on that date.

The Rights Plan is intended to help ensure that all of the Company's shareholders are able to realize the long-term value of their investment in the Company in the event of a potential takeover which does not reflect the full value of the Company and is otherwise not in the best interests of the Company and its shareholders. The Rights Plan is also intended to deter unfair or coercive takeover tactics.

Each right will entitle shareholders to buy one-half of one of the Company's Ordinary shares. The Rights generally will be exercisable and transferable apart from the Company's Ordinary shares only if a person or group becomes an "Acquiring Person" by acquiring beneficial ownership of 15% or more of the Company's Ordinary shares, subject to certain exceptions set forth in the Rights Plan, or commences a tender or exchange offer upon consummation of which such person or group would become an Acquiring Person. Subject to certain conditions described in the Rights Plan, once the Rights become exercisable, the holders of Rights, other than the Acquiring Person, will be entitled to purchase Ordinary shares at a 50% discount from the market price.

On April, 2015, the board of directors extended the term of the Rights Plan through December 31, 2025. It also allowed for the Company to unilaterally exchange the rights for shares at a ratio of 1:1 and to make such other adjustments as may be deemed advisable by counsel.  The Rights are generally redeemable by the Company's Board of Directors, at $ 0.003 per Right, at any time until the tenth business day following public disclosure that a person or group has become an "Acquiring Person".

d. Share issuance:

On December 31, 2015, the Company completed a private placement of 980,000 ordinary shares at a price of $ 0.615 per share, for total proceeds of $ 603. See also note 9.

F - 17

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 8:- TAXES ON INCOME

a. Tax rates:

The Israeli corporate income tax rate was 24% in 2017, 25% in 2016 and 26.5% in 2015.

Effective January 1, 2018 the Israeli corporate income tax rate is 23%.

b. Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31,
	2016			2017
Deferred tax assets:
Net operating loss and capital loss carry forward	$	36,284		$	40,551
Valuation allowance		(36,284	)		(40,551	)
Net deferred tax asset		-			-

Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax assets regarding the loss carry-forward will not be realized in the foreseeable future.

c. Net operating losses carry-forward:

The Company has accumulated operating losses for tax purposes as of December 31, 2017 in the amount of approximately $34,988 (denominated in NIS), which may be carried forward and offset against taxable income in the future for an indefinite period.

The Company has accumulated capital losses of approximately $130,014 (denominated in NIS), which may be carried forward and offset against capital gains.

d. The main reconciling item from the statutory tax rate of the Company to the effective tax rate are valuation allowances provided for deferred tax assets.

e. Tax reports filed by the Company in Israel through the year ended December 31, 2012 are considered final.

f. As of December 31, 2015, 2016 and 2017, the Company did not have any unrecognized tax benefits or uncertain tax positions.

NOTE 9:- RELATED PARTY TRANSACTIONS

A private placement for a total of 980,000 ordinary shares  was completed on December 31, 2015. The Company's Chief Executive Officer participated in this placement and purchased 490,000 ordinary shares for an aggregate purchase price of $ 301. See also note 6d.

F - 18

TIKCRO TECHNOLOGIES LTD.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 10:- SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

a. Current liabilities:

	December 31,
	2016		2017
Director fees	$	21	$	48
Trade payables		20		61
Accrued expenses and other		196		200
	$	237	$	309

b. Financial expenses, net

	Year ended December 31,
	2015			2016			2017
Financial expenses:
Loss from change in fair value of investment in BioCancell and sale of BioCancell shares	$	(36	)	$	-		$	-
Other		(2	)		(15	)		(3	)
		(38	)		(15	)		(3	)
Financial income:
Income from the sale of Biocancell shares		-			-			35
Other		9			12			13
		9			12			48
	$	(29	)	$	(3	)	$	45

F - 19

EX-12.1

Exhibit 12.1

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 17 CFR 240.13a-14(a),

as adopted pursuant to §302 of the Sarbanes-Oxley Act

I, Aviv Boim, certify that:

1. I have reviewed this annual report on Form 20-F of Tikcro Technologies Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.    I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 30, 2018

By:	/s/ Aviv Boim
	Aviv Boim Principal Executive Officer and Principal Financial Officer

EX-13.1

Exhibit 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of Tikcro Technologies Ltd. (the "Company") for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Aviv Boim, certifies, pursuant to 18 U.S.C. sec. 1350, as adopted pursuant to sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 (1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 30, 2018

By:	/s/ Aviv Boim
	Aviv Boim Principal Executive Officer and Principal Financial Officer

EX-14.1

Exhibit 14.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-212579) pertaining to the 2003 Stock Option Plan, as amended, of Tikcro Technologies Ltd. of our report dated April 30, 2018, with respect to the financial statements of Tikcro Technologies Ltd. included in this Annual Report on Form 20-F for the year ended December 31, 2017.

April 30, 2018	/s/ Kost, Forer Gabbay and Kasierer KOST, FORER GABBAY and KASIERER
Tel-Aviv, Israel	A Member of E Y Global

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document and Entity Information [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Entity Registrant Name	TIKCRO TECHNOLOGIES LTD
Entity Central Index Key	0001117095
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	9,878,861
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No

XML

BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 6,449	$ 7,426
Restricted cash	113	81
Receivables and other financial asset	21	89
Total current assets	6,583	7,596
Property and equipment, net	125	136
Total assets	6,708	7,732
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES	309	237
Total current liabilities	309	237
COMMITMENTS AND CONTINGENT LIABILITIES (Note 6)
SHAREHOLDERS' EQUITY (Note 7):
Share capital - Ordinary shares no par value - Authorized: 16,666,667 shares at December 31, 2016 and 2017; Issued: 11,325,912 at December 31, 2016 and 2017; Outstanding: 9,878,861 at December 31, 2016 and 2017.
Additional paid-in capital	147,800	147,645
Treasury shares, at cost, 1,447,051 Ordinary shares at December 31, 2016 and 2017	(1,065)	(1,065)
Accumulated deficit	(140,336)	(139,085)
Total shareholders' equity	6,399	7,495
Total liabilities and shareholders' equity	$ 6,708	$ 7,732

XML

BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Ordinary shares, no par value
Common Stock, shares authorized	16,666,667	16,666,667
Common Stock, shares issued	11,325,912	11,325,912
Common Stock, shares outstanding	9,878,861	9,878,861
Treasury shares, shares	1,447,051	1,447,051

XML

STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating costs and expenses:
Research and development	$ (678)	$ (601)	$ (247)
General and administrative expenses	(618)	(676)	(609)
Operating loss	(1,296)	(1,277)	(856)
Financial incomes (expenses), net (Note 10b)	45	(3)	(29)
Loss	$ (1,251)	$ (1,280)	$ (885)
Loss per share:
Basic and diluted net loss per share	$ (0.13)	$ (0.13)	$ (0.10)
Total comprehensive income (loss)	$ (1,251)	$ (1,280)	$ (885)
Weighted average number of shares used in computing basic and diluted loss per share	9,878,861	9,878,861	8,839,965

XML

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Outstanding Ordinary shares [Member]	Additional paid-in capital [Member]	Treasury shares [Member]	Accumulated deficit [Member]	Total
Balance at Dec. 31, 2014		$ 146,721	$ (1,065)	$ (136,920)	$ 8,736
Balance, shares at Dec. 31, 2014	8,898,861
Issuance of share capital		603			603
Issuance of share capital, shares	980,000
Stock based compensation		120			120
Net income (loss)				(885)	(885)
Balance at Dec. 31, 2015		147,444	(1,065)	(137,805)	8,574
Balance, shares at Dec. 31, 2015	9,878,861
Issuance of share capital
Stock based compensation		201			201
Net income (loss)				(1,280)	(1,280)
Balance at Dec. 31, 2016		147,645	(1,065)	(139,085)	$ 7,495
Balance, shares at Dec. 31, 2016	9,878,861				9,878,861
Issuance of share capital
Stock based compensation		155			155
Net income (loss)				(1,251)	(1,251)
Balance at Dec. 31, 2017		$ 147,800	$ (1,065)	$ (140,336)	$ 6,399
Balance, shares at Dec. 31, 2017	9,878,861				9,878,861

XML

STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Loss	$ (1,251)	$ (1,280)	$ (885)
Adjustments required to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation of property and equipment	64	60	46
Stock based compensation	155	201	120
Decrease (increase) in receivables and other financial assets	18	84	(63)
Profit from the sale of shares of Biocancell	(35)
Increase in current liabilities	72	11	42
Net cash used in operating activities	(977)	(924)	(740)
Cash flows from investing activities:
Proceeds from sale of BioCancell securities	85
Investment in restricted cash	(32)	(81)
Purchase of property and equipment	(53)	(129)	(25)
Net cash provided by (used for) investing activities		(210)	(25)
Cash flows from finance activities:
Issuance of share capital			603
Net cash provided by finance activities			603
Decrease in cash and cash equivalents	(977)	(1,134)	(162)
Cash and cash equivalents at the beginning of the year	7,426	8,560	8,722
Cash and cash equivalents at the end of the year	$ 6,449	$ 7,426	$ 8,560

XML

GENERAL

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1:- GENERAL

Tikcro Technologies Ltd. ("the Company" or "Tikcro") was incorporated in 1999, under the laws of Israel.

The Company is enagrged in biotechnology development of projects originated in Israeli academic centers. The Company developes certain antibodies, in selection and pre-clinical trials with a focus on antibodies blocking immune modulators for cancer treatment.

XML

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:-        SIGNIFICANT ACCOUNTING POLICIES

a. Basis of presentation:

The financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"), followed consistently.

b. Use of estimates:

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, the Company's management evaluates estimates, including those related to fair values of investment in BioCancell Therapeutics, Inc. ("BioCancell"), of which the significant majority was liquidated, see Note 4 and fair values of stock-based awards. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

c. Financial statements in U.S. dollars:

A substantial portion of the Company's cash flow transactions is incurred in dollars. Investing activities and equity transactions are made in dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and presentation currency of the Company is the dollar.

Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with Accounting Standards Codification ("ASC") No. 830. All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

d. Cash equivalents:

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less.

e. Restricted cash

Restricted cash are in respect of withdrawal by a bank as collateral for office facility operating lease agreement.

f. Investment:

The Company applies ASC No. 825, "Financial Instruments" as of the date of the investment in BioCancell and elected to apply the fair value option to its investment. The primary reasons for electing the fair value option were simplification and cost-benefit considerations, as well as expansion of the use of fair value measurement being consistent with the FASB's measurement objectives for accounting for financial instruments. The losses and gains due to changes in fair value for items measured at fair value pursuant to election of the fair value option are included in statement of operation. Refer also Note 4.

g. Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated according to the estimated useful lives of the assets. The Company's Property and equipment includes laboratory equipment. The estimated useful life of the assets is 3 to five years. For certain assets depreciation is calculated in a method in which the first year has an increased benefit.

Impairment of long lived assets:

Property and equipment subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017, 2016 and 2015 , no impairment losses were recorded.

h. Research and development expenses:

Research and development expenses include funding for early-stage biotechnology projects mainly performed by research facilities, and are charged to the statement of operations, as incurred.

i. Income taxes:

The Company account for income taxes in accordance with ASC No. 740, "Income Taxes". This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it not is more likely than not that a portion or all of the deferred tax assets will be realized.

Based on ASC No. 740 a two-step approach is used to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. When necessary, The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income tax.

j. Accounting for stock-based compensation:

The Company accounts for stock-based compensation in accordance with ASC No. 718, "Compensation-Stock Compensation". ASC No. 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's income statements.

The Company recognizes compensation expenses for the value of its awards granted based on the straight line method over the requisite service period of each of the awards.

The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, and the expected option

term. In 2015 the Company granted options, see note 7. No options were granted in 2016 and in 2017. The Company grants restricted shares and values them based on the market value of the underlying shares at the date of grant.

The weighted-average estimated fair value of employee stock options granted during the year ended December 31, 2015 was $0.256 per option, using the Binomial option pricing formula. Fair values were estimated using the following assumptions (annualized percentages):

	Year Ended December 31,
	2015
Dividend yield		0%
Expected volatility		53.1%
Risk-free interest		1.6%
Expected life	5.83 years
Early exercise multiple		4.0%

The volatility was measured according to the average volatility of similar companies stock since the Company's stock is traded in low frequency. The risk free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company's options. The dividend yield assumption is based on the Company's historical experience and expectation of no future dividend payouts and may be subject to substantial change in the future. The early exercise multiple is based on common empirical evidence for similar grants' terms.

The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances, if any. The Company revised its estimated forfeiture rate if actual forfeitures differed from its initial estimates. Effective as of January 1, 2017, the Company adopted a change in accounting policy in accordance with Accounting Standards Update 2016-09, "Compensation Stock Compensation (Topic 718)" (“ASU 2016-09”) to account for forfeitures as they occur. The change has no impact on the Company's' Financial Statements. 

k.          Fair value of financial instruments:

The Company measures its investment at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with

insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity and significant to the overall fair value measurement.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

l. Basic and diluted net earnings (loss) per share:

Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No. 260, "Earnings per Share".

The total number of options excluded from the calculation of the diluted net earnings (loss) per share, because they had anti-dilutive effect, for the years ended December 31, 2015, 2016 and 2017, were 2,357,334, 2,290,667 and 2,290,667, respectively.

m. Concentrations of credit risks:

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents.

Cash and cash equivalents are invested in major banks in Israel and the U.S., mainly in U.S. dollars. The significant majority of the Company's cash and cash equivalents are invested in one bank in the United States. Such funds in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the institutions in which the Company invests and the financial institutions that hold the Company's investments are of investment-grade level, and, accordingly, commercially acceptable credit risk exists with respect to these investments.

In addition, with respect to the Company's investment in Biocancell, refer to Note 4.
The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

n. Treasury shares:

Company shares held by the Company are recognized at cost of purchase and presented as a deduction from equity. The Company has not repurchased Ordinary shares in 2015, 2016 and 2017.

o. Recent Accounting Pronouncements:

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), whereby lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Companies may not apply a full retrospective transition approach. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the potential impact of ASU 2016-02 on its consolidated financial statements and related disclosures.

The Company has not yet estimated the expected effect of this new guidance on its financial statements.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This new guidance doesn't have a material impact on the Company’s financial statements.

In May 2017, the FASB issued ASU 2017-09, Stock Compensation – Scope of Modification Accounting, guidance that clarifies that all changes to share-based payment awards are not necessarily accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective prospectively beginning January 1, 2018. This guidance will apply to any future modifications. The Company does not expect this guidance to have a material impact on its financial statements.

XML

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 3:- FAIR VALUE MEASUREMENTS

In accordance with ASC No. 820 and ASC No. 825, the Company measures its investment, (see also Note 4) at fair value.

The Company's financial assets measured at fair value on a recurring basis consisted of the following types of instruments:

	As of December 31, 2017
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	-	$	-	$	-	$	-

	As of December 31, 2016
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	50	$	-	$	-	$	50

XML

RECEIVABLES AND OTHER FINANCIAL ASSET

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

RECEIVABLES AND OTHER FINANCIAL ASSET

NOTE 4:-        RECEIVABLES AND OTHER FINANCIAL ASSET

	December 31,
	2016		2017
Investment in shares of Biocancell	$	50		-
Prepaid expenses		12	$	12
Other		27		9
	$	89	$	21

In July 2008, the Company signed an agreement with BioCancell Therapeutics, Inc. ("BioCancell"), an Israel-based clinical-stage biopharmaceutical company, whose Common stock is listed on the Tel Aviv Stock Exchange. As part of the agreement, the Company provided funding to BioCancell, was entitled to appoint one member to BioCancell's board of directors and provided BioCancell with certain consulting services. The Company's investment was realized through the years and as of December 31, 2017, the investment was fully realized.

The Company undertook to pay a fee of 4% of the net realized profits from securities held in portfolio companies.

XML

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2017

Property And Equipment Net

PROPERTY AND EQUIPMENT, NET

NOTE 5:-        PROPERTY AND EQUIPMENT, NET

	December 31,
	2016		2017
Cost:
Laboratory equipment	$	252	$	297
Office equipment		-		8
		252		305
Accumulated depreciation:
Laboratory equipment	$	116	$	179
Office equipment		-		1
		116		180
Depreciated cost	$	136	$	125

Depreciation expenses for the years ended December 31, 2015, 2016 and 2017 were $46, $60 and $64 respectively.

XML

COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 6:- COMMITMENTS AND CONTINGENT LIABILITIES

a. Directors and officers indemnification agreements:

The Company, from time to time, has entered into indemnification agreements with several of its directors and officers, in which the Company undertakes to indemnify them, to the fullest extent permitted by law, for acts taken or omitted by them in their respective capacities as directors or officers of the Company. Pursuant to these agreements, the obligations of the Company remain in effect even after the termination of the directors and officers services to or employment with the Company.

b. Litigation:

The Company is currently not party to any legal proceedings.

c. Research and development agreements:

The Company, as part of its business activities to support early stage development projects in the biotechnology area, signed in December 2014 an agreement with Yeda Research and Development Company Ltd. ("Yeda")for the development by the academic center of new antibodies originating from specified research at the academic center addressing identified targets of cancer immune modulators. Under the agreement, the Company undertook a funding obligation of further research at the academic center for the development of certain antibodies in pre-clinical selection and trials which may have high selectivity and binding qualities towards cancer immune modulators. Significantly additional development and clinical trials will be required to promote selected antibodies as therapeutic candidates for immune modulation in cancer treatment. Pursuant to the agreement, the Company alone or through sub-licensees, has the right to obtain the research results and to pursue further development through commercialization. The license consideration due from the Company to Yeda includes royalties from net sales, sub-license fees and fixed fees linked to clinical and commercial sales milestones. In the end of 2015 the Company extended the agreement with Yeda for additional years to cover and to address additional targets for cancer immune modulators. The Company undertook to pursue an additional funding of research to be performed by the academic center. Under the agreement, the Company is obliged for funding of a total amount of $75 in 2018.

The Company uses third party services in its research and development activities. The consideration due from the Company for such services includes future considerations which are linked to clinical and commercial milestones of drug-candidates derived from such services. 

d. Lease agreements

The Company entered into a lease agreement in the end of 2015, effective January 1, 2016.  Under the agreement the Company rented offices and lab at the Kiryat Weizmann Science Park in Ness Ziona, Israel. The Company was obliged to pay lease amounts of $215 per year for a period of 2 years. The Company sub leased a substantial portion of its rented area for a period corresponding to its main contractual obligations. Starting 2018, the Company extended the agreement for an additional year, decreased the rented area and in parallel decreased the sub leased area. Under the extended agreement, the Company is obliged to pay lease amounts of approximately $138 per year.

XML

SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

NOTE 7:- SHAREHOLDERS' EQUITY

a. Ordinary shares:

The Ordinary shares confer upon the holders the right to receive notice to participate and vote in general meetings of the Company and the right to receive dividends, if declared.

b. Stock option plans:

1. Under the Company's stock option plan (as amended in December 2007) ("the Plan"), shares and options to purchase shares may be granted to employees, officers, consultants and directors of the Company.

2. No options were granted or exercised during 2016 and 2017. In 2015 2,290,667 options were granted. In 2016, 66,667 options were forfeited. As of December 31, 2017, an aggregate of 3,000,000 Ordinary shares of the Company were reserved for issuance under the plan.

3. Options granted generally become fully exercisable after two to four years and expire no later than 10 years from the approval date of the option plan under terms of grant. Any option forfeited or cancelled before expiration become available for future grants.

The following is a summary of the Company's stock options transactions in 2017:

	Amount		Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value *)
Options outstanding at beginning of year		2,290,667	$	1.01		8.24	$	-
Granted		-		-		-	$	-
Forfeited		-		-		-		-
Options outstanding at end of year		2,290,667	$	1.01		7.24		-
Options exercisable at end of year		1,768,000	$	1.01		7.24	$	-

*) All options were out of the money as of December 31, 2017 and 2016 and their intrinsic value was considered as zero.

The total stock-based compensation expenses recognized in General and administrative expenses for the years ended December 2017, 2016 and 2015 were $155, $201 and $120, respectively.

c. Shareholder bonus rights plan:

On September 12, 2005, the Company's Board of Directors adopted a Shareholder Bonus Rights Plan (the "Rights Plan") pursuant to which share purchase bonus rights (the "Right") were distributed on September 26, 2005, at the rate of one Right for each of the Company's Ordinary shares held by shareholders of record as of the close of business on that date.

The Rights Plan is intended to help ensure that all of the Company's shareholders are able to realize the long-term value of their investment in the Company in the event of a potential takeover which does not reflect the full value of the Company and is otherwise not in the best interests of the Company and its shareholders. The Rights Plan is also intended to deter unfair or coercive takeover tactics.

Each right will entitle shareholders to buy one-half of one of the Company's Ordinary shares. The Rights generally will be exercisable and transferable apart from the Company's Ordinary shares only if a person or group becomes an "Acquiring Person" by acquiring beneficial ownership of 15% or more of the Company's Ordinary shares, subject to certain exceptions set forth in the Rights Plan, or commences a tender or exchange offer upon consummation of which such person or group would become an Acquiring Person. Subject to certain conditions described in the Rights Plan, once the Rights become exercisable, the holders of Rights, other than the Acquiring Person, will be entitled to purchase Ordinary shares at a 50% discount from the market price.

On April, 2015, the board of directors extended the term of the Rights Plan through December 31, 2025. It also allowed for the Company to unilaterally exchange the rights for shares at a ratio of 1:1 and to make such other adjustments as may be deemed advisable by counsel.  The Rights are generally redeemable by the Company's Board of Directors, at $ 0.003 per Right, at any time until the tenth business day following public disclosure that a person or group has become an "Acquiring Person".

d. Share issuance:

On December 31, 2015, the Company completed a private placement of 980,000 ordinary shares at a price of $ 0.615 per share, for total proceeds of $ 603. See also note 9.

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TAXES ON INCOME

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

TAXES ON INCOME

NOTE 8:- TAXES ON INCOME

a. Tax rates:

The Israeli corporate income tax rate was 24% in 2017, 25% in 2016 and 26.5% in 2015.

Effective January 1, 2018 the Israeli corporate income tax rate is 23%.

b. Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31,
	2016			2017
Deferred tax assets:
Net operating loss and capital loss carry forward	$	36,284		$	40,551
Valuation allowance		(36,284	)		(40,551	)
Net deferred tax asset		-			-

Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax assets regarding the loss carry-forward will not be realized in the foreseeable future.

c. Net operating losses carry-forward:

The Company has accumulated operating losses for tax purposes as of December 31, 2017 in the amount of approximately $34,988 (denominated in NIS), which may be carried forward and offset against taxable income in the future for an indefinite period.

The Company has accumulated capital losses of approximately $130,014 (denominated in NIS), which may be carried forward and offset against capital gains.

d. The main reconciling item from the statutory tax rate of the Company to the effective tax rate are valuation allowances provided for deferred tax assets.

e. Tax reports filed by the Company in Israel through the year ended December 31, 2012 are considered final.

f. As of December 31, 2015, 2016 and 2017, the Company did not have any unrecognized tax benefits or uncertain tax positions.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 9:- RELATED PARTY TRANSACTIONS

A private placement for a total of 980,000 ordinary shares  was completed on December 31, 2015. The Company's Chief Executive Officer participated in this placement and purchased 490,000 ordinary shares for an aggregate purchase price of $ 301. See also note 6d.

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SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

12 Months Ended

Dec. 31, 2017

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION [Abstract]

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

NOTE 10:- SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

a. Current liabilities:

	December 31,
	2016		2017
Director fees	$	21	$	48
Trade payables		20		61
Accrued expenses and other		196		200
	$	237	$	309

b. Financial expenses, net

	Year ended December 31,
	2015			2016			2017
Financial expenses:
Loss from change in fair value of investment in BioCancell and sale of BioCancell shares	$	(36	)	$	-		$	-
Other		(2	)		(15	)		(3	)
		(38	)		(15	)		(3	)
Financial income:
Income from the sale of Biocancell shares		-			-			35
Other		9			12			13
		9			12			48
	$	(29	)	$	(3	)	$	45

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of presentation

a. Basis of presentation:

The financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"), followed consistently.

Use of estimates

b. Use of estimates:

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, the Company's management evaluates estimates, including those related to fair values of investment in BioCancell Therapeutics, Inc. ("BioCancell"), of which the significant majority was liquidated, see Note 4 and fair values of stock-based awards. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Financial statements in U.S. dollars

c. Financial statements in U.S. dollars:

A substantial portion of the Company's cash flow transactions is incurred in dollars. Investing activities and equity transactions are made in dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and presentation currency of the Company is the dollar.

Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with Accounting Standards Codification ("ASC") No. 830. All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

Cash equivalents

d. Cash equivalents:

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less.

Restricted cash

e. Restricted cash

Restricted cash are in respect of withdrawal by a bank as collateral for office facility operating lease agreement.

Investment

f. Investment:

The Company applies ASC No. 825, "Financial Instruments" as of the date of the investment in BioCancell and elected to apply the fair value option to its investment. The primary reasons for electing the fair value option were simplification and cost-benefit considerations, as well as expansion of the use of fair value measurement being consistent with the FASB's measurement objectives for accounting for financial instruments. The losses and gains due to changes in fair value for items measured at fair value pursuant to election of the fair value option are included in statement of operation. Refer also Note 4.

Property and equipment

g. Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated according to the estimated useful lives of the assets. The Company's Property and equipment includes laboratory equipment. The estimated useful life of the assets is 3 to five years. For certain assets depreciation is calculated in a method in which the first year has an increased benefit.

Impairment of long lived assets:

Property and equipment subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017, 2016 and 2015 , no impairment losses were recorded.

Research and development expenses

h. Research and development expenses:

Research and development expenses include funding for early-stage biotechnology projects mainly performed by research facilities, and are charged to the statement of operations, as incurred.

Income taxes

i. Income taxes:

The Company account for income taxes in accordance with ASC No. 740, "Income Taxes". This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it not is more likely than not that a portion or all of the deferred tax assets will be realized.

Based on ASC No. 740 a two-step approach is used to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. When necessary, The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income tax.

Accounting for stock-based compensation

j. Accounting for stock-based compensation:

The Company accounts for stock-based compensation in accordance with ASC No. 718, "Compensation-Stock Compensation". ASC No. 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's income statements.

The Company recognizes compensation expenses for the value of its awards granted based on the straight line method over the requisite service period of each of the awards.

The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, and the expected option

term. In 2015 the Company granted options, see note 7. No options were granted in 2016 and in 2017. The Company grants restricted shares and values them based on the market value of the underlying shares at the date of grant.

The weighted-average estimated fair value of employee stock options granted during the year ended December 31, 2015 was $0.256 per option, using the Binomial option pricing formula. Fair values were estimated using the following assumptions (annualized percentages):

	Year Ended December 31,
	2015
Dividend yield		0%
Expected volatility		53.1%
Risk-free interest		1.6%
Expected life	5.83 years
Early exercise multiple		4.0%

The volatility was measured according to the average volatility of similar companies stock since the Company's stock is traded in low frequency. The risk free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company's options. The dividend yield assumption is based on the Company's historical experience and expectation of no future dividend payouts and may be subject to substantial change in the future. The early exercise multiple is based on common empirical evidence for similar grants' terms.

The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances, if any. The Company revised its estimated forfeiture rate if actual forfeitures differed from its initial estimates. Effective as of January 1, 2017, the Company adopted a change in accounting policy in accordance with Accounting Standards Update 2016-09, "Compensation Stock Compensation (Topic 718)" (“ASU 2016-09”) to account for forfeitures as they occur. The change has no impact on the Company's' Financial Statements. 

Fair value of financial instruments

k.          Fair value of financial instruments:

The Company measures its investment at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with

insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity and significant to the overall fair value measurement.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Basic and diluted net earnings (loss) per share

l. Basic and diluted net earnings (loss) per share:

Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No. 260, "Earnings per Share".

The total number of options excluded from the calculation of the diluted net earnings (loss) per share, because they had anti-dilutive effect, for the years ended December 31, 2015, 2016 and 2017, were 2,357,334, 2,290,667 and 2,290,667, respectively.

Concentrations of credit risks

m. Concentrations of credit risks:

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents.

Cash and cash equivalents are invested in major banks in Israel and the U.S., mainly in U.S. dollars. The significant majority of the Company's cash and cash equivalents are invested in one bank in the United States. Such funds in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the institutions in which the Company invests and the financial institutions that hold the Company's investments are of investment-grade level, and, accordingly, commercially acceptable credit risk exists with respect to these investments.

In addition, with respect to the Company's investment in Biocancell, refer to Note 4.
The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Treasury shares

n. Treasury shares:

Company shares held by the Company are recognized at cost of purchase and presented as a deduction from equity. The Company has not repurchased Ordinary shares in 2015, 2016 and 2017.

Recent Accounting Pronouncements

o. Recent Accounting Pronouncements:

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), whereby lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Companies may not apply a full retrospective transition approach. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the potential impact of ASU 2016-02 on its consolidated financial statements and related disclosures.

The Company has not yet estimated the expected effect of this new guidance on its financial statements.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This new guidance doesn't have a material impact on the Company’s financial statements.

In May 2017, the FASB issued ASU 2017-09, Stock Compensation – Scope of Modification Accounting, guidance that clarifies that all changes to share-based payment awards are not necessarily accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective prospectively beginning January 1, 2018. This guidance will apply to any future modifications. The Company does not expect this guidance to have a material impact on its financial statements.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2017

Significant Accounting Policies Tables

Schedule of Fair Value Assumptions

Fair values were estimated using the following assumptions (annualized percentages):

	Year Ended December 31,
	2015
Dividend yield		0%
Expected volatility		53.1%
Risk-free interest		1.6%
Expected life	5.83 years
Early exercise multiple		4.0%

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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value

The Company's financial assets measured at fair value on a recurring basis consisted of the following types of instruments:

	As of December 31, 2017
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	-	$	-	$	-	$	-

	As of December 31, 2016
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Other financial assets	$	50	$	-	$	-	$	50

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RECEIVABLES AND OTHER FINANCIAL ASSET (Tables)

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Receivables and Other Financial Asset

	December 31,
	2016		2017
Investment in shares of Biocancell	$	50		-
Prepaid expenses		12	$	12
Other		27		9
	$	89	$	21

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PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2017

Property And Equipment Net Tables

Schedule of Property and Equipment

PROPERTY AND EQUIPMENT, NET

	December 31,
	2016		2017
Cost:
Laboratory equipment	$	252	$	297
Office equipment		-		8
		252		305
Accumulated depreciation:
Laboratory equipment	$	116	$	179
Office equipment		-		1
		116		180
Depreciated cost	$	136	$	125

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SHAREHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Summary of Stock Option Activity

The following is a summary of the Company's stock options transactions in 2017:

	Amount		Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value *)
Options outstanding at beginning of year		2,290,667	$	1.01		8.24	$	-
Granted		-		-		-	$	-
Forfeited		-		-		-		-
Options outstanding at end of year		2,290,667	$	1.01		7.24		-
Options exercisable at end of year		1,768,000	$	1.01		7.24	$	-

*) All options were out of the money as of December 31, 2017 and 2016 and their intrinsic value was considered as zero.

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TAXES ON INCOME (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Deferred Income Taxes

Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31,
	2016			2017
Deferred tax assets:
Net operating loss and capital loss carry forward	$	36,284		$	40,551
Valuation allowance		(36,284	)		(40,551	)
Net deferred tax asset		-			-

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SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION [Abstract]

Schedule of Other Current Liabilities

Current liabilities:

	December 31,
	2016		2017
Director fees	$	21	$	48
Trade payables		20		61
Accrued expenses and other		196		200
	$	237	$	309

Schedule of Financial Income (Expenses), Net

Financial expenses, net

	Year ended December 31,
	2015			2016			2017
Financial expenses:
Loss from change in fair value of investment in BioCancell and sale of BioCancell shares	$	(36	)	$	-		$	-
Other		(2	)		(15	)		(3	)
		(38	)		(15	)		(3	)
Financial income:
Income from the sale of Biocancell shares		-			-			35
Other		9			12			13
		9			12			48
	$	(29	)	$	(3	)	$	45

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SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Anti-dilutive securities	2,290,667	2,290,667	2,357,334
Percentage of uncertain tax to measure income tax benefit	More than 50%
Weighted average estimated fair value of employee stock options granted			$ 0.256
Equipment [Member] | Minimum [Member]
Estimated useful life	3 years
Equipment [Member] | Maximum [Member]
Estimated useful life	5 years

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SIGNIFICANT ACCOUNTING POLICIES (Schedule of Fair Value Assumptions) (Details)	12 Months Ended
	Dec. 31, 2015
Significant Accounting Policies Schedule Of Fair Value Assumptions Details
Dividend yield	0.00%
Expected volatility	53.10%
Risk-free interest	1.60%
Expected life	5 years 9 months 29 days
Early exercise multiple	4.00%

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FAIR VALUE MEASUREMENTS (Schedule of Assets Measured at Fair Value) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment in BioCancell		$ 50
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment in BioCancell		50
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment in BioCancell
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment in BioCancell

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RECEIVABLES AND OTHER FINANCIAL ASSET (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Receivables And Other Financial Asset Details
Investment in shares of Biocancell		$ 50
Prepaid expenses	12	12
Other	9	27
Receivables and other financial asset	$ 21	$ 89

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RECEIVABLES AND OTHER FINANCIAL ASSET (Narrative) (Details)	Dec. 31, 2017
Schedule of Cost-method Investments [Line Items]
Investment fee percentage	4.00%

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PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Cost	$ 305	$ 252
Accumulated depreciation	180	116
Depreciated cost	125	136
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	297	252
Accumulated depreciation	179	116
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	8
Accumulated depreciation	$ 1

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PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property And Equipment Net Narrative Details
Depreciation of property and equipment	$ 64	$ 60	$ 46

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COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018
Loss Contingencies [Line Items]
Amount obliged for funding	$ 138
Payment for obliged amount under the agreement	$ 215
Oblged amount payable period	2 years
Subsequent Event [Member]
Loss Contingencies [Line Items]
Amount obliged for funding		$ 75

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SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ordinary shares reserved for issuance	3,000,000
Stock based compensation	$ 155	$ 201	$ 120
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Private placement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ordinary shares isuued to private placement, shares			980,000
Ordinary shares isuued to private placement, amount			$ 603
Ordinary shares isuued to private placement, per share			0.615
Shareholder Bonus Rights Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage of common stock issuable	15.00%
Percentage of discount on common stock at market price	50.00%
Maximum term	10 years
Redemption price of rights	$ 0.003

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SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) $ / shares shares
Amount
Options outstanding at beginning of year | shares	2,290,667
Granted | shares
Forfeited | shares	66,667
Options outstanding at end of year | shares	2,290,667
Options exercisable at end of year | shares	1,768,000
Weighted average exercise price
Options outstanding at beginning of year | $ / shares	$ 1.01
Granted | $ / shares
Forfeited | $ / shares
Options outstanding at end of year | $ / shares	1.01
Options exercisable at end of year | $ / shares	$ 1.01
Weighted average remaining contractual life
Options outstanding at beginning of year	8 years 2 months 27 days
Options outstanding at end of year	7 years 2 months 27 days
Options exercisable at end of year	7 years 2 months 27 days
Aggregate intrinsic value
Options outstanding at beginning of year | $		[1]
Granted | $		[1]
Forfeited | $		[1]
Options outstanding at end of year | $		[1]
Options exercisable at end of year | $		[1]

[1] All options were out of the money as of December 31, 2017 and 2016 and their intrinsic value was considered as zero.

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TAXES ON INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net operating loss and capital loss carry forward		$ 40,551	$ 36,284
Valuation allowance		(40,551)	(36,284)
Net deferred tax asset
Accumulated operating losses		34,988
Accumulated capital losses		$ 130,014
Subsequent Event [Member]
Corporate taxable income rate	23.00%
Israeli corporate tax [Member]
Corporate taxable income rate		24.00%	25.00%	26.50%

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RELATED PARTY TRANSACTIONS (Details) - Private placement [Member]	Dec. 31, 2015 $ / shares shares
Purshase of shares by related party	980,000
Chief Executive Officer [Member]
Purshase of shares by related party	490,000
Purchase price | $ / shares	$ 301

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SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other current liabilities:
Director fees	$ 48	$ 21
Trade payables	61	20
Accrued expenses and other	200	196
Other current liabilities	309	237
Financial expenses:
Loss from change in fair value of investment in BioCancell and sale of BioCancell shares			$ (36)
Other	(3)	(15)	(2)
Financial expenses	(3)	(15)	(38)
Financial income:
Income from the sale of Biocancell shares	35
Other	13	12	9
Financial income	48	12	9
Financial income (expenses), net	$ 45	$ (3)	$ (29)