NOTE 1:- GENERAL

Celsus Therapeutics Plc. (the “Company”) (a development stage company), was incorporated in Great Britain as a private limited company and commenced business operations on October 7, 2004. On February 15, 2005 the Company was registered as a non-traded public company under the laws of England and Wales. The Company listed its securities on the NASDAQ Stock Market in January 2014. The Company was dedicated to the discovery and development of novel, first-in-class, non-steroidal, synthetic anti-inflammatory drugs. In February 2015, the Company announced that the Phase II Trial of MRX-6 Cream 2% in pediatric atopic dermatitis did not reach the primary endpoint and did not demonstrate any improvement over the vehicle (placebo) cream. Following the announcement, after considering various alternatives, the Company decided to suspend development of the MRX-6 cream program and on April 6, 2015 sent a letter to the FDA to close its IND for the MRX-6 cream 2%.

On January 28, 2005 the Company acquired Celsus Therapeutics Inc. (the “Subsidiary”). The Subsidiary was the owner of the intellectual property rights in drugs which it develops under a license that was granted by Yissum, the research development company of the Hebrew University of Jerusalem Israel (“Yissum”) on November 27, 2002 and in connection with which a sublicense agreement was signed between the Subsidiary and the Company on February 1, 2005 (for details about the license agreement and the sublicense agreement see Note 6 to the consolidated financial statements as of December 31, 2014).

On March 22, 2011 the Company established an Israeli subsidiary, Morria Biopharma Ltd., which is wholly-owned by the Company. As of the date of the condensed consolidated financial statements, this Israeli subsidiary is inactive.

The Financial statements are in United States dollars:

Most of the Company’s costs and financing are in U.S. dollars (“Dollar”). The Company’s management believes that the Dollar is the currency of the primary economic environment in which the Company and its subsidiaries have operated and expect to continue to operate in the foreseeable future. Therefore, the functional currency of the Company and its subsidiaries is the Dollar.

The Company and its subsidiaries’ transactions and balances denominated in Dollars are presented at their original amounts. Non-Dollar transactions and balances have been remeasured to Dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-Dollar currencies are reflected in the statements of income as financial income or expenses, as appropriate.

As of June 30, 2015, the Company has accumulated losses in the total amount of $ 34,178 and has negative cash flow from operating activity in the total amount of $ 3,498 during the six month period ended June 30, 2015.

In July 2015, the Company announced that it entered into a Definitive Exchange Agreement with RPC Pharma Limited (“RPC”) for the acquisition of all the capital stock of Volution Immuno Pharmaceuticals SA (“Volution”) (the “Acquisition”), (as further described in Note 7). The closing of the Acquisition is subject to the shareholders approval and entails numerous significant risks and uncertainties and there can be no assurance that the Acquisition will be completed.

The Company is currently focusing on the following principal activities following the negative outcome of the MRX-6 cream trial: (i) reduction of its costs, which includes a reduction in staff, (ii) activities associated with closing the Acquisition, and (iii) its compliance activities associated with being a public company in good regulatory standing.

The Company is addressing its liquidity needs by implementing initiatives to raise additional funds, as well as other measures that will allow it to cover its anticipated budget deficit. In the event that the Company will not be able to complete the Acquisition or secure additional financing, such initiatives will include one or a combination of sublease of its office space and reduction of costs including employees’ compensation.

There are no assurances that the Company will be successful in obtaining an adequate level of financing. If the Company is unable to raise sufficient capital resources, the Company will not be able to implement its business plan. The Company’s management believes that current liquidity resources will be sufficient to maintain the Company’s operations at least through September 30, 2016.