20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

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

OR

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

For the fiscal year ended December 31, 2021

OR

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

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:

001-37353

(Commission file number)

BiondVax Pharmaceuticals Ltd.

(Exact name of Registrant as specified in its charter)

ISRAEL

(Jurisdiction of incorporation or organization)

Jerusalem BioPark, 2nd floor

Hadassah Ein Kerem Campus

Jerusalem, Israel

(+972) 8-930-2529
(+972) 8-930-2531 (facsimile)

(Address of principal executive offices)

Amir Reichman,

Chief Executive Officer

(+972) 8-930-2529
(+972) 8-930-2531 (facsimile)

(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	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing 40 ordinary share, no par value	BVXV	Nasdaq Capital Market
Ordinary Shares, no par value		Nasdaq Capital Market*

* Not for trading; only in connection with the registration of American Depositary Shares.

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

None

(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: 573,285,824 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 ☒

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

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 the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-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. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ 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. N/A

Item 17 ☐ Item 18 ☐

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 ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. N/A

Yes ☐ No ☐

TABLE OF CONTENTS

Introduction	ii
Note Regarding Forward-Looking Statements	iii
Note Regarding the Filing of Form 20-F
PART I
Item 1. Identity of Directors, Senior Management and Advisers	1
Item 2. Offer Statistics and Expected Timetable	1
Item 3. Key Information	1
Item 4. Information on the Company	40
Item 4A. Unresolved Staff Comments	58
Item 5. Operating and Financial Review and Prospects	58
Item 6. Directors, Senior Management and Employees	64
Item 7. Major Shareholders and Related Party Transactions	84
Item 8. Financial Information	86
Item 9. The Offer and Listing	86
Item 10. Additional Information	87
Item 11. Quantitative and Qualitative Disclosures About Market Risk	99
Item 12. Description of Securities Other than Equity Securities	100
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies	102
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	102
Item 15. Controls and Procedures	102
Item 16. [Reserved]	103
Item 16A. Audit Committee Financial Expert	103
Item 16B. Code of Ethics	103
Item 16C. Principal Accountant Fees and Services	104
Item 16D. Exemptions from the Listing Standards for Audit Committees	104
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	104
Item 16F. Change in Registrant’s Certifying Accountant	104
Item 16G. Corporate Governance	105
Item 16H. Mine Safety Disclosure	106
PART III
Item 17. Financial Statements	107
Item 18. Financial Statements	107
Item 19. Exhibits	107
Signatures	108
Index to Consolidated Financial Statements	F-1

i

INTRODUCTION

Certain Definitions:

In this annual report, unless the context otherwise requires:

● references to “BiondVax,” the “Company,” “us,” “we” and “our” refer to BiondVax Pharmaceuticals Ltd. (the “Registrant”), an Israeli company;

● references to “ordinary shares,” “our shares” and similar expressions refer to the Registrant’s ordinary shares, no par value;

● references to “ADS” refer to the Registrant’s American Depositary Shares

● references to “Company product candidate(s)” refer to M-001 or any future, newly licensed or acquired product candidate(s);

● references to “dollars,” “U.S. dollars” and “$” are to United States Dollars;

● references to “shekels” and “NIS” are to New Israeli Shekels, the Israeli currency;

● references to the “Companies Law” are to Israel’s Companies Law, 5759-1999, as amended; and

● references to the “SEC” are to the United States Securities and Exchange Commission.

Trademarks and Tradenames

Solely for convenience, the trademarks, service marks and trade names referred to or incorporated by reference herein are without the ^® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This annual report contains additional trademarks, service marks and trade names of others, which are the property of their respective owners. All trademarks, service marks and trade names appearing herein are, to our knowledge, the property of their respective owners. Nanobody is a trademark registered by ABLYNX N.V., a wholly owned subsidiary of Sanofi. BiondVax has no affiliation with and is not endorsed by Sanofi. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

ii

Note Regarding Forward-Looking Statements

Some of the statements under the sections entitled “Item 3. Key Information – Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” and elsewhere in this Annual Report on Form 20-F constitute forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions, but these are not the only ways these statements are identified. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Risks and uncertainties include, but are not limited to, the risk that we may not be able to secure capital on attractive terms, if at all; our new Covid-19 NanoAbs program may fail during development; we might not find or be able to develop or acquire other suitable product candidates; the risk that the European Investment Bank may determine at any time that we have defaulted under our finance contract and accelerate the loans under such contract; our ability to enter into collaborations on terms acceptable to us or at all; the risk that drug development involves a lengthy and expensive process with uncertain outcomes; our ability to maintain, preserve and defend our intellectual property and patents granted; risks relating to the COVID-19 (coronavirus) pandemic; the adequacy of available cash resources and the ability to raise additional capital when needed. Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

Some of the additional factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements contained herein, include but are not limited to:

● our history of operating losses and the possibility we may never become profitable;

● the clinical development, commercialization and market acceptance of any Company product candidates;

● the initiation, timing, progress, cost and results of any future clinical trials, including any additional clinical trials we may be required to conduct;

● our receipt of regulatory approvals for any Company product candidates, and the timing of other regulatory filings and approvals;

● our ability to obtain and maintain ongoing regulatory requirements, even if our Company product candidates receive marketing approvals;

● changes in the competitive landscape for product candidates might lessen or eliminate market demand even if any such candidates receive marketing approval; and

● estimates of our expenses, future revenues, capital requirements and our needs for additional financing. 

iii

PART I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3. KEY INFORMATION

A. RESERVED.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

An investment in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the factors described below, together with all other information included in this annual report, including our financial statements and the related notes included elsewhere in this annual report. We may face additional risks and uncertainties not currently known to us or that we currently deem to be immaterial. If any of these risks occur, our business, financial condition, results of operations and business prospects could be materially and adversely affected. In that event, the trading price of the ADSs could decline and you could lose all or part of your investment.

Summary of Risk Factors The following is a summary of some of the principal risks we face. The list below is not exhaustive, and investors should read this “Risk factors” section in full.

● We are a developmental stage biopharmaceutical company with a history of operating losses, with no product candidate that generates revenue and as such we are not currently profitable, do not expect to become profitable in the near future, may never become profitable and as a result may need to wind up our business and operation.

● We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

● Our business strategy is evolving.

● Certain breaches of our 24 million Euro finance documentation with the EIB may result in the EIB accelerating the loans thereunder and exercising secured creditor remedies over collateral securing those loans, and that collateral consists of substantially all of our assets. The exercise of such remedies may have a material adverse effect on our company. We do not have control over certain events that constitute a breach of this finance documentation.

● We are highly dependent upon our ability to enter into agreements with partners to develop, commercialize, and market any current and future product candidate(s) or enter into other strategic partnerships;

1

● Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidate(s);

● Our novel nanosized antibodies, also known as VHH-antibodies, Nanobodies or NanoAbs, represent a relatively new approach to treating diseases, and we must overcome significant challenges in order to successfully develop, commercialize and manufacture product candidates based on this technology.

● Clinical trials are very expensive, time-consuming and difficult to design and implement, and, as a result, we may suffer delays or suspensions in future trials which would have a material adverse effect on our ability to generate revenues.

● Positive results from any clinical trials we conduct may not be predictive of the results in later clinical trials of current and future product candidates, and the results of any clinical trials we conduct may not be replicated in additional clinical trials that we may be required to conduct, which could result in development delays or a failure to obtain marketing approval.

● We may be unsuccessful in adapting our Covid-19 NanoAbs to protect against variants of COVID-19. Furthermore, our ability to commercialize our Covid-19 NanoAbs may be adversely affected to the extent that the coronavirus disease evolves worldwide. 

● If we are not successful in discovering, developing and commercializing current and future product candidates, our ability to expand our business and achieve our strategic objectives may be impaired.

● We are a developmental stage biopharmaceutical company with no product candidate(s) in clinical development or approved, which makes it difficult to assess our future viability.

● We face significant competition. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer, and we may never be profitable.

● Our NanoAbs program is based on an exclusive, worldwide license from the Max Planck Society (“MPG”), and we could lose our rights to this license if a dispute with MPG arises or if we fail to comply with the financial and other terms of the license.

Risks Related to Our Financial Position and Capital Requirements

We are a developmental stage biopharmaceutical company with a history of operating losses, with no product candidate that generates revenue and as such we are not currently profitable, do not expect to become profitable in the near future, may never become profitable and as a result may ultimately need to wind up our business and operation.

We are a development stage biopharmaceutical company and currently do not have, and may never have, any product candidate(s) that generate revenues. Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate(s) will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.

2

We are not profitable and have incurred losses since inception, principally as a result of research and development, clinical trials, construction of our GMP biologics manufacturing facility, and general administrative expenses in support of our operations. We have not generated any revenue, expect to incur substantial losses for the foreseeable future and may never become profitable. As of December 31, 2021, we had an accumulated deficit of $117.3 million, and we expect to experience negative cash flow for the foreseeable future. As a result, we will ultimately need to generate significant revenues in order to achieve and maintain profitability. We may never be able to generate revenues or achieve profitability in the future, and we expect to incur additional losses for the foreseeable future. Our failure to achieve or maintain profitability, or substantial delays in achieving profitability, could negatively impact the value of the securities and our ability to raise additional financing. A substantial decline in the value of the securities would also affect the price at which we could sell them to secure future funding, which could dilute the ownership interest of current shareholders. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Accordingly, it is difficult to evaluate our business prospects. Moreover, our prospects must be considered in light of the risks and uncertainties encountered by an early-stage company in highly regulated and competitive markets, such as the biopharmaceutical market, where regulatory approval and market acceptance of our product candidate(s) are uncertain. There can be no assurance that our efforts will ultimately be successful or result in revenues or profits.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

As of December 31, 2021, we had approximately $17.4 million in cash and cash equivalents, working capital of $15.4 million and an accumulated deficit of $117.3 million. We expect that our existing capital resources will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, this estimate is based on assumptions that may prove to be wrong and we could exhaust our available capital resources sooner than we expect.

Our ability to execute on our business plan is dependent upon our ability to raise capital through private or public financings, or enter into a commercial agreement, among others. Since our inception, most of our resources have been dedicated to product development. In the future, we believe that we will expend significant operating and capital expenditures to acquire additional product candidates, develop and, subject to results of any future clinical trials, apply for regulatory approval of current and future product candidates, if any. These expenditures may include, but are not limited to, costs associated with research and development, manufacturing, conducting clinical trials, contract manufacturing organizations, or CMOs, hiring additional management and other personnel, applying for regulatory approvals, acquisition of equipment, as well as commercializing any product candidates approved for sale. Furthermore, we incur additional costs associated with operating as a public company traded on Nasdaq in the United States. We cannot precisely estimate the actual amounts necessary to acquire additional product candidates and successfully complete the development and commercialization of product candidates. As a result of these and other factors currently unknown to us, we will require additional funds, through public or private equity or debt financings or non-dilutive sources or other sources, that may not be available to us or, if available, may not be on terms favorable to us. A failure to fund these activities may significantly harm our growth strategy, competitive position, quality compliance, financial condition and is expected to have a material adverse effect on our business and operations.

Our future capital requirements depend on many factors, including:

● our ability to establish and maintain strategic partnerships, licensing or other arrangements and the financial terms of such agreements;

● our search for new business opportunities;

● our ability to identify and acquire rights to, or develop on our own, new product candidate(s) and diversify/expand our product opportunities;

● the scope and cost of researching and developing, obtaining regulatory approval for, commercializing and manufacturing any new product candidate(s);

● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;

● the expenses needed to attract and retain skilled personnel; and

● any product liability or other lawsuits related to any current or future product candidate(s).

3

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate the potential acquisition of other product candidates, preclinical studies, clinical trials or other research and development activities for current and future product candidates or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize such product candidate(s).

Our business strategy is evolving.

In the past, BiondVax was a one product company, solely focused on developing the M-001 universal influenza vaccine. Going forward, the Company intends to implement a strategy that will build a diversified pipeline of assets along several axes, as follows:

● a pipeline of products for prevention (through vaccines) and treatment of infectious diseases and related illnesses, as well as well as other illnesses with large market opportunities for more effective treatments

● a pipeline that would present various routes of drug delivery (e.g., intra-muscular, nasal, oral, etc.)

● a pipeline that would rely on various platforms (different types of molecules and manufacturing platforms)

● a pipeline of products at different stages of clinical development.

We cannot offer any assurance that our new strategy will be successful. Further, our NanoAbs program is at a much earlier stage of clinical development than M-001, the product candidate on which we were primarily focused before this strategic change. If we are unable to successfully execute our new strategy, our business, financial condition and results of operations may be materially and adversely affected.

Certain breaches of our 24 million Euro finance documentation with the European Investment Bank, or EIB, may result in EIB accelerating the loans thereunder and exercising secured creditor remedies over collateral securing those loans, and that collateral consists of substantially all of our assets. The exercise of such remedies may have a material adverse effect on our company. We do not have control over certain events that constitute a breach of this finance documentation.

We borrowed 24 million Euro under a finance contract (the “Finance Contract”) with the EIB, to finance a portion of the cost of developing our previous leading drug candidate M-001 (Universal Influenza Vaccine drug candidate) and our GMP biologics manufacturing facility.

As part of the Finance Contract, we also entered into a security agreement (the “Security Agreement”), whereby we created a first ranking floating charge in favor of EIB over substantially all of our assets (other than certain licensed intellectual property related to our former M-001 program). While intellectual property rights are excluded from the floating charge pledge, certain breaches of the Finance Contract or the Security Agreement may cause the EIB to exercise secured creditor remedies under the floating charge pledge and foreclose on certain of our assets at the time of such exercise.

Under the Finance Contract we are not allowed to make any senior management changes without the consent of the EIB. We will be required to obtain consents from the EIB in the future if any senior management change is expected to occur and in such an event, the EIB’s consent is not guaranteed. In addition, we may not be able to anticipate a future change to our senior management and in such an event, we may not be able to obtain the consent of the EIB ahead of such an event. If we are not able to receive the EIB’s consent before such change in our senior management or we decide to change our senior management without first obtaining the consent of the EIB, which we may be forced to do or may elect to do in order to address business concerns, the EIB may accelerate all loans extended to us under the Finance Contract, and exercise secured creditor remedies against the collateral securing those loans. In such an event we may not be able to continue our business and operations as a going concern.

Furthermore, under the Finance Contract, the EIB may accelerate all loans extended thereunder if an event of default has occurred, which includes, amongst other things, an event of default arising from the occurrence of a material adverse change, defined as any event or change of condition, which in the opinion of the EIB, has a material adverse effect on: our ability to perform our obligations under the Finance Documents; our business, operations, property, condition (financial or otherwise) or prospects; or the rights or remedies of the EIB under the Finance Contract, amongst other things. If the EIB determines that an event of default has occurred, it could accelerate the amounts outstanding under the Finance Contract, making those amounts immediately due and payable. On January 26, 2021, the EIB notified us that they welcome our efforts to secure future equity financing in an amount not less than USD 2 million in order to enable us to pursue new business opportunities, strengthen our balance sheet and invest in growth. Thus, within that context, the EIB wrote in their letter that they will not consider the failure of our pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the Finance Contract. In addition, the EIB has indicated that it supports our new strategic turnaround plan.

4

However, the EIB cautioned us that their January 2021 letter is not a consent, agreement, amendment or waiver in respect of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently. There is no guarantee that the decision by the EIB in their letter will not change at any time and without any notice or that the EIB will not determine that an event of default has occurred under the Finance Contract, which could result in all loans extended under the Finance Contract being accelerated and secured creditor remedies being exercised. If some or all of the loans under the Finance Contract are accelerated by the EIB, or secured creditor remedies are exercised, we expect such events to adversely impact our ability to continue as a going concern.

As disclosed on our press release dated March 14, 2022, the Company and EIB have reached a commercial agreement, which is still subject to EIB’s formal approval of the new terms, regarding restructuring of the Finance Contract. However, until definitive documentation is signed, there can be no assurance that the Company will successfully complete this renegotiation.

Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidate(s).

We may seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing shareholders will be diluted, and the terms may include liquidation or other preferences that adversely affect shareholder rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring future indebtedness, making capital expenditures or declaring dividends. If we raise additional funds through strategic partnerships, alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or any product candidate(s) or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate any product development or commercialization efforts, or grant rights to develop and market product candidate(s) that we would otherwise prefer to develop and market ourselves.

Risks Related to Development, Clinical Testing and Regulatory Approval of NanoAbs and Any Other Current and Future Product Candidate(s)

We have not yet commercialized any product candidate(s), and we may never become profitable.

We have recently entered into a licensing and collaboration arrangement with MPG and University Medical Center Göttingen (“UMG”) and launched our Covid-19 NanoAbs program. We have no product candidates in clinical trials or on the market or other product candidates in the pipeline. Even if we are successful in developing current or future product candidates, we will not be successful unless we complete our product development efforts, obtain regulatory approval and such product candidate(s) gain(s) market acceptance for appropriate indications at favorable reimbursement rates. The degree of market acceptance of these product candidate(s) will depend on a number of factors, including, but not limited to:

● the timing of regulatory approvals in the U.S. and other countries, if any, and the uses for which we intend to pursue regulatory approval for the commercialization of current and future product candidates;

● the competitive environment;

● the demand for our product candidate(s);

● the establishment and demonstration in, and acceptance by, the medical community of the safety and clinical efficacy of our product candidate(s) and its potential advantages over other competitive products;

● our ability to enter into supply agreements with health organizations and governments around the world for the supply of our product candidate(s) or our ability to enter into strategic agreements with pharmaceutical and biopharmaceutical companies with strong marketing and sales capabilities;

● the adequacy and success of our distribution, sales and marketing efforts; and

● the pricing, coverage and reimbursement policies of government and third-party payors, such as insurance companies, health maintenance organizations and other plan administrators.

5

Physicians, participants, third-party payors or the medical community in general may be unwilling to accept, utilize or recommend, and in the case of third-party payors, cover payment for current and future product candidates. As a result, we are unable to predict the extent of our future losses or the time required for us to achieve profitability, if at all. Even if we successfully develop one or more products, we may not become profitable.

In addition, we have limited marketing capabilities, and if we are unable to enter into collaborations with marketing partners or develop our own sales and marketing capabilities, we may not be successful in commercializing current and future product candidates. If we are unable to reach and maintain agreements with one or more pharmaceutical companies or partners, we may be required to market our product candidate(s) directly. Developing a marketing and sales force is expensive and time-consuming and could delay a product launch. We may not be able to attract and retain qualified sales personnel or otherwise develop this capability.

NanoAbs represent a relatively new approach to treating diseases, and we must overcome significant challenges in order to successfully develop, commercialize and manufacture product candidates based on this technology.

We are currently concentrating our development efforts on the Covid-19 NanoAbs and additional NanoAbs contemplated by our collaboration with MPG and UMG. The processes and requirements imposed by the U.S. Food and Drug Administration (the “FDA”) or other applicable health authorities may cause delays and additional costs in obtaining approvals for marketing authorization for our products. Because our platform is relatively new and only one drug developed by a competing company and related to rare blood diseases has been approved to date in the market, regulatory agencies, as well as insurance and other coverage providers and payers, may lack experience in evaluating our product candidates. This inexperience may lengthen the regulatory review process, increase our development costs and delay or prevent reimbursement and commercialization of our platform products. Additionally, advancing this novel platform creates significant challenges for us, and we must be able to overcome these challenges in order to successfully develop, commercialize and manufacture our product candidates.

In light of our current resources and limited commercial experience, we have and may need to continue to establish third-party relationships to successfully commercialize our pipeline candidates.

Our long-term commercial viability may depend, in part, on our ability to successfully execute current strategic collaborations and establish new strategic collaborations with contract commercial organizations, pharmaceutical and biotechnology companies, non-profit organizations, and government agencies. Establishing and maintaining strategic collaborations and obtaining government funding is difficult and time-consuming. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position or based on their internal pipeline or available resources; government agencies may reject contract or grant applications based on their assessment of public need, the public interest, the ability of our products to address these areas, or other reasons beyond our expectations or control. If we fail to establish or maintain collaborations necessary for successful commercialization on acceptable terms, we may not be able to commercialize product candidates or generate sufficient revenue to fund further research and development efforts.

New or existing collaborations, including our collaboration with MPG and UMG, may never result in the successful development or commercialization of any pipeline candidates for several reasons, including the fact that:

● we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development, and commercialization of pipeline candidates, in a timely manner or at all;

● such partners may not devote sufficient resources to our pipeline candidates or properly maintain or defend our intellectual property rights (if required)

● such partners may decide to pursue competitive product candidates developed outside of the partnership arrangement;

● any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our pipeline candidates and affect our ability to realize product revenue;

● disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time-consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals, and commercialization activities; and

● such partners may decide to terminate or not to renew the collaboration for these or other reasons.

6

If we or our collaborators fail to maintain our existing agreements or in the event we fail to establish agreements as necessary, we could be required to undertake research, development, manufacturing, and commercialization activities solely at our own expense. These activities would significantly increase our capital requirements and, given our lack of sales, marketing and distribution capabilities, significantly delay the commercialization of our pipeline candidates.

Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required, and we may not adequately develop such protocols to support approval.

In addition to FDA requirements and those of other regulatory authorities, an independent institutional review board or an independent ethics committee at each medical institution proposing to participate in the conduct of the clinical trial generally must review and approve the clinical trial design and patient informed consent form before commencement of the study at the respective medical institution. The institutional review boards approve the clinical trial protocols and conduct periodic reviews of the clinical trials. The clinical trial protocols describe the type of people who may participate in the clinical trial, the schedule of tests and procedures, the medications and dosages to be studied, the length of the study, the study’s objectives, and other details. In general, the institutional review board will consider, among other matters, ethical factors, the safety of human subjects and the possibility of liability of the institution conducting the trial. Our pre-clinical studies may not be adequate proof of safety and efficacy, and as a result, we may not be successful in developing clinical trial protocols necessary to support institutional review board approval. Any delay or failure to obtain institutional review board approval to conduct a clinical trial at a prospective site could materially impact the costs, timing, or successful completion of a clinical trial.

Current and future product candidates would be subject to extensive regulation and may never obtain regulatory approval.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidate(s) are subject to extensive regulation by the Food and Drug Administration (the “FDA”) in the United States (the “U.S.”) as detailed in Title 21 of the U.S. Code or elsewhere and by comparable authorities in foreign markets. In the U.S., we are not permitted to market our product candidate(s) until we receive regulatory approval from the FDA. The process of obtaining regulatory approval is expensive, often takes many years and can vary substantially based upon the type, complexity and novelty of the product candidate(s) involved, as well as the target indications and patient population. Current and future product candidates must satisfy rigorous standards of safety and efficacy before product candidates can be approved for commercial use by the European Medicines Agency (the “EMA”) in the European Union (the “EU”) or the FDA in the U.S., or any other regulatory authorities for all or any of the indications for which product candidates are intended to be used. The EMA, FDA and any other regulatory authorities have substantial discretion over the approval process, and approval is never guaranteed. We may need to conduct significant additional research before we can file applications for product approval. Typically, in the pharmaceutical industry, there is a high rate of attrition for product candidates in clinical trials. Success in early clinical trials does not ensure that later clinical trials will be successful. For example, a number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials.

The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate(s) for many reasons, including:

● such authorities may disagree with the design or implementation of our clinical trials;

● we may be unable to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities in foreign markets that a product candidate(s) is safe and effective for any indication;

● such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S.;

● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

● such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

● approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; or

● such authorities may find deficiencies in manufacturing processes or facilities, including the processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies.

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In addition, delays or rejections may be encountered based upon additional government regulation, including any changes in legislation or policy of the EMA, FDA or any other regulatory policy, during the process of product development, clinical trials and regulatory reviews. Approval procedures vary among countries, and may involve additional product testing, administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the EMA, FDA and comparable foreign regulatory authorities in reviewing new pharmaceutical products based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Failure to obtain EMA, FDA or any other regulatory approval for current and future product candidates in a timely manner or at all will severely undermine our business by delaying or halting commercialization of our products, imposing costly procedures, diminishing competitive advantages and reducing the number of saleable products and, therefore, corresponding product revenues.

Current and future product candidates will remain subject to ongoing regulatory requirements even if we receive regulatory approval to market such product candidate(s), and if we fail to comply with such requirements, we could lose those approvals that have been obtained, and the sales of any approved commercial products could be suspended.

Even if we receive regulatory approval to market current and future product candidates, such product candidate(s) will remain subject to extensive regulatory requirements, including requirements relating to manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping. Even if regulatory approval of any product candidate(s) is granted, approval may be subject to limitations on the uses for which the product candidate(s) may be marketed or the conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product candidate(s), which could negatively impact us or our collaboration partners by reducing revenues or increasing expenses, and cause the approved product candidate(s) not to be commercially viable. In addition, as clinical experience with a drug expands after approval, typically because it is used by a greater number and more diverse group of people after approval than during clinical trials, side effects and other problems may be observed over time after approval that were not seen or anticipated during pre-approval clinical trials or other studies. Any adverse effects observed after the approval and marketing of a product candidate(s) could result in limitations on the use of, withdrawal of EMA, FDA or any other regulatory approval or withdrawal of any approved product candidate(s) from the marketplace. Absence of long-term safety data may also limit the approved uses of our product candidate(s), if any. If we fail to comply with the regulatory requirements of the EMA, FDA and any other applicable regulatory authorities, or previously unknown problems with any approved commercial product candidate(s), manufacturers or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions or other setbacks, including, without limitation, the following:

● suspension or imposition of restrictions on the product candidate(s), manufacturers or manufacturing processes, including costly new manufacturing requirements;

● warning letters;

● civil or criminal penalties, fines and/or injunctions;

● product seizures or detentions;

● import or export bans or restrictions;

● voluntary or mandatory product recalls and related publicity requirements;

● suspension or withdrawal of regulatory approvals;

● total or partial suspension of production; and

● refusal to approve pending applications for marketing approval of new product candidate(s) or supplements to approved applications.

If we or our partners, if any, are slow to adapt, or are unable to adapt, to changes in existing regulatory requirements or adoption of new regulatory requirements or policies, marketing approval for our product candidate(s) may be lost or cease to be achievable, resulting in decreased revenue from milestones, product sales or royalties, or otherwise, which would have a material adverse effect on our business, financial condition or results of operations.

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Current and future product candidates, if approved, may face competition sooner than anticipated.

Our product candidates may face serious competition from other products targeting the same disease or condition, including biosimilar products. In the U.S., current and future product candidates may be regulated by the FDA as biologic products and we may seek approval for such product candidate(s) pursuant to the biologics license application, or BLA, pathway. The Biologics Price Competition and Innovation Act of 2009, or BPCIA, amended the Public Health Service Act (the “PHSA”) and created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until twelve years from the date on which the reference product was first licensed. During this twelve-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. This twelve-year period of exclusivity does not pre-empt and is independent of any patent protection afforded to current and future product candidates. The law is complex and is still being interpreted and implemented by the FDA. Any processes adopted by the FDA to implement the BPCIA could have a material adverse effect on the future commercial prospects for our biological products, if any.

Although we believe that current and future product candidates should qualify for the twelve-year period of exclusivity described above if product candidates are approved as biological products under a BLA, we may not be granted such exclusivity. Further, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider current and future product candidates to be reference products for competing products, potentially creating the opportunity for generic or biosimilar competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar product, once approved, could be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors that are still developing. In addition, a competitor could decide to forego the biosimilar approval path and submit a full BLA after completing its own preclinical studies and clinical trials. In such cases, any exclusivity to which we may be eligible under the BPCIA would not prevent the competitor from marketing its product as soon as it is approved.

If the results of any future clinical trials show that current and future product candidates are effective based on certain endpoints but nevertheless fail to achieve all the primary/secondary endpoint(s) requiring us to conduct additional clinical trials, or if clinical trials that we conduct for such products in the future are prolonged or delayed, we would be unable to commercialize current and future product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenues from potential sales of such product candidate(s).

If we fail to achieve all the primary/secondary endpoints, then we may be required by the FDA or any other regulatory authority to conduct additional clinical studies. We cannot predict whether we will encounter problems with any such clinical trials that will cause us or any regulatory authority to delay or suspend those clinical trials or delay the analysis of data derived from them. A number of events, including any of the following, could delay the completion of any such additional clinical trials and negatively impact our ability to obtain regulatory approval for, and to market and sell, a particular product candidate(s):

● conditions imposed on us by the FDA or any applicable foreign regulatory authority regarding the scope or design of our clinical trials;

● delays in recruiting and enrolling participants or volunteers into any potential future clinical trials;

● delays in obtaining, or our inability to obtain, required approvals from institutional review boards (“IRBs”) or other reviewing entities at clinical sites selected for participation in our clinical trials;

● insufficient supply or deficient quality of our product candidate(s) or other materials necessary to conduct our clinical trials;

● lower than anticipated retention rate of subjects and participants in clinical trials;

● negative or inconclusive results from clinical trials, or results that are inconsistent with earlier results, that necessitate additional clinical studies;

● serious and unexpected drug-related side effects experienced by subjects and participants in clinical trials; or

● failure of our third-party contractors to comply with regulatory requirements or otherwise meet their contractual obligations to us in a timely manner.

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Clinical trials require sufficient participant enrollment, which is a function of many factors, including the size of the participant population, the nature of the trial protocol, the proximity of participants to clinical sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial. Delays in participant enrollment can result in increased costs and longer development times. The failure to enroll participants in a clinical trial could delay the completion of the clinical trial beyond our current expectations. In addition, the FDA or foreign applicable regulatory authorities could require us to conduct clinical trials with a larger number of subjects than we have prior experience with. We may not be able to enroll a sufficient number of participants in a timely or cost-effective manner. Furthermore, enrolled participants may drop out of clinical trials, which could impair the validity or statistical significance of those clinical trials.

Prior to commencing clinical trials in the U.S., we must submit an Investigational New Drug (“IND”) application to the FDA and the IND application must become effective.

Delays in any clinical trials the FDA or EMA may require us to conduct will result in increased development costs for current and future product candidates. In addition, if any such clinical trials are delayed, our competitors may be able to bring products to market before we do and the commercial viability of current and future product candidates could be limited.

Clinical trials are very expensive, time-consuming and difficult to design and implement, and, as a result, we may suffer delays or suspensions in future trials which would have a material adverse effect on our ability to generate revenues.

Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Regulatory authorities, such as the EMA and FDA, may preclude clinical trials from proceeding. Additionally, the clinical trial process is time-consuming, failure can occur at any stage of the trials and we may encounter problems that cause us to abandon or repeat clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including:

● unforeseen safety issues;

● determination of proper dosing;

● lack of effectiveness or efficacy during clinical trials;

● failure of our contract manufacturers or inability of our in-house facility to manufacture our product candidate(s) in accordance with current good manufacturing practices, or cGMP;

● failure of third party suppliers to perform final manufacturing steps for the drug substance;

● slower than expected rates of participant recruitment and enrollment;

● lack of healthy volunteers and participants to conduct trials;

● inability to monitor participants adequately during or after treatment;

● Failure or delay in reaching an agreement with a third party contract research organization or clinical trial site(s), and failure of third party contract research organizations to properly implement or monitor the clinical trial protocols;

● failure of the FDA, Institutional Review Boards (“IRBs”), or other regulatory bodies to authorize our clinical trial protocols, or a decision by a regulatory body to place one or more of our trials on hold;

● inability or unwillingness of medical investigators and Contract Research Organizations to follow our clinical trial protocols and applicable regulatory requirements; and

● lack of sufficient funding to finance the clinical trials.

In addition, we or regulatory authorities may suspend or terminate our clinical trials at any time if it appears that we are exposing participants to unacceptable health risks, if the regulatory authorities find deficiencies in our regulatory submissions or the conduct of these trials, if inspection of the clinical trial operations or trial site by a regulatory authority results in the imposition of a clinical hold, or if there is a failure to demonstrate a benefit from using the product candidate(s), or changes in governmental regulations or administrative actions. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial. Any suspension of clinical trials will delay possible regulatory approval, if any, and adversely impact our ability to develop product candidate(s) and generate revenue.

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We may in the future conduct clinical trials of current and future product candidates at sites outside the U.S., and the FDA may not accept data from trials conducted in foreign locations.

We may in the future conduct clinical trials of current and future product candidates outside of the U.S. Although the FDA may accept data from clinical trials conducted outside the U.S., acceptance of this data is subject to certain conditions imposed by the FDA. For example, under 21 Code of Federal Regulations (“CFR”) 312.20, the clinical trial must be well designed and conducted in accordance with good clinical practice, or GCP, requirements, and the FDA must be able to validate the clinical trial data through an on-site inspection, if necessary, among other things. If a marketing application is based solely on foreign clinical data, the FDA can require such data to be applicable to the U.S. population and U.S. medical practice, and for the clinical trials to have been performed by clinical investigators of recognized competence. There can be no assurance the FDA will accept data from trials conducted outside of the U.S. If the FDA does not accept the data from any clinical trials that may be conducted outside of the U.S. of current and future product candidates, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of the product candidate(s).

Positive results from earlier preclinical data and clinical trials may not be predictive of the results in later clinical trials of current and future product candidates, and the results of our clinical trials may not be replicated in additional clinical trials that we may be required to conduct, which could result in development delays or a failure to obtain marketing approval.

Positive results from previous clinical trials may not be predictive of the results of later clinical trials of current and future product candidates, and any early clinical trials may not be predictive of results in later clinical trials that we may conduct. A number of companies in the pharmaceutical and biopharmaceutical industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in early-stage development. Accordingly, the results from preclinical studies and clinical trials for current and future product candidates may not be predictive of the results we may obtain in later stage trials.

Specifically, the NanoAbs being developed by UMG and MPG have demonstrated strong neutralization at very low concentrations of major Variants of Concern (“VoCs”) of COVID-19 (including Alpha, Beta, Gamma and Delta) only in in-vitro studies, and the Company’s expectation that these NanoAbs can neutralize Omicron (a VoC as of the date of this annual report) is currently based only upon on in-silico studies. These studies are not a guarantee of success in future clinical trials, nor can the Company guarantee that the NanoAbs will neutralize any potential future VoCs. Furthermore, even if animal studies are able to demonstrate the potential safety and efficacy of our product candidates, there can be no guarantee that such results will be reproducible in clinical trials involving human subjects.

Our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials. Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain FDA or European Medicines Agency, or other applicable regulatory agency, approval for their product candidates.

We may be unsuccessful in adapting our Covid-19 NanoAbs to protect against variants of COVID-19. Furthermore, our ability to commercialize our Covid-19 NanoAbs may be adversely affected to the extent that the coronavirus disease evolves worldwide.

As the pandemic has continued, the SARS-CoV-2 virus continues to evolve, and new strains of the virus or those that are already in circulation may prove more transmissible or cause more severe forms of COVID-19 disease than the predominant strains to date. There is a risk that our Covid-19 NanoAbs will not be effective in protecting against variant strains of the SARS-CoV-2 virus, or that we will develop Covid-19 NanoAbs for a variant that will not have a sufficient number of participants for a clinical trial.

Furthermore, there are a number of preventative vaccines in development and others that have already been approved and widely distributed. If the COVID-19 pandemic subsides or the COVID-19 disease does not evolve into a seasonally recurrent disease, it may reduce demand for our Covid-19 NanoAbs.

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We have limited experience with the development of inhalation-administered therapies.

We intend to develop our Covid-19 NanoAbs to be administered by inhalation, targeting the virus directly in the lungs and airways. Although our team has significant experience with designing and conducting clinical trials, we have never developed or commercialized an inhalation-administered therapy. Even if our Covid-19 NanoAbs are effective against COVID-19, we are subject to development risks associated with this route of administration.

If we experience delays in the enrollment of participants in any future clinical trials we may conduct, our receipt of necessary regulatory approvals could be delayed or prevented.

We may not be able to initiate clinical trials for current and future product candidates. Participant enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the population eligible to participate, the proximity of potential participants to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and participants’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating. If we fail to enroll and maintain the number of participants for which the clinical trial was designed, the statistical power of that clinical trial may be reduced, which would make it harder to demonstrate that the product candidate being tested in such clinical trial is safe and effective. Additionally, enrollment delays in any clinical trials may result in increased development costs for current and future product candidates, which could materially harm our financial condition and limit our ability to obtain additional financing. Our inability to enroll a sufficient number of participants for any clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

The occurrence of serious complications or side effects in connection with current and future product candidates, either in future clinical trials we may conduct or post-approval, could impede such future clinical trials, if any, and lead to refusal of regulatory authorities to approve our product candidate(s) or, post-approval, revocation of marketing authorizations or refusal to approve new indications, which could severely harm our business, prospects, operating results and financial condition.

In any future clinical trials of current and future product candidates that we may conduct, or following regulatory approval, illnesses, injuries, discomforts and other adverse events may be reported by subjects. In addition, side effects are sometimes only detectable after they are made available to patients on a commercial scale after approval. Results of any future clinical trials we may undertake for current and future product candidates could reveal a high and unacceptable severity and prevalence of such side effects. In such an event, any clinical trials we may conduct could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of current and future product candidates for any or all targeted indications. Drug-related side effects could affect patient recruitment for any clinical trials we may conduct or the ability of enrolled participants to complete such trials or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

In addition, if current and future product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such product candidate(s), a number of potentially significant negative consequences could result, including:

● such authorities may disagree with the design or implementation of our clinical trials;

● we may be unable to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities in foreign markets that a product candidate(s) is safe and effective for any indication;

● such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S.;

● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

● such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

● approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; or

● such authorities may find deficiencies in manufacturing processes or facilities. 

Any of these events could prevent us from achieving or maintaining market acceptance of current and future product candidates, if approved, and could significantly harm our business, results of operations and prospects.

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If we are not successful in discovering, developing and commercializing current and future product candidates, our ability to expand our business and achieve our strategic objectives may be impaired.

Research programs designed to identify current and future product candidates may require substantial technical, financial and human resources, whether or not such efforts are successful. Our research programs may initially show promise in identifying current and future product candidates, yet fail to lead to clinical development or commercialization for many reasons, including the following:

● the research methodology used may not be successful in identifying potential product candidate(s);

● competitors may develop alternatives that render our product candidate(s) obsolete;

● a product candidate(s) may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

● a product candidate(s) may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

● a product candidate(s) may not be accepted as safe and effective by regulatory authorities, participants, the medical community or third-party payors.

If we are unable to identify suitable compounds for preclinical and clinical development, we may not be able to obtain sufficient product revenues in future periods, which likely would result in significant harm to our financial position and adversely impact the price of the ADSs.

Natural disasters, public health and other states of emergency, such as the COVID-19 outbreak, could adversely impact our business, including identifying current and future product candidates.

Natural disasters, public health and other states of emergency affecting the countries in which we operate, or the global economic markets may have an adverse impact on our business. The extent to which the COVID-19 pandemic impacts our business will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and the evolving actions to contain COVID-19 or treat its impact, among others. Quarantines, travel restrictions, shelter-in-place, nationalization efforts or similar government orders, such as lockdowns approved by the Israeli government, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could have an indeterminate impact on our operations. Our suppliers or partners could also be disrupted by conditions related to COVID-19, possibly resulting in disruption to our supply chain, collaborations or operations. If our suppliers, or other potential partners such as CMOs or contract research organizations (CROs) are unable or fail to fulfill their obligations to us for any reason, our ability to meet clinical and commercial supply demand for current and future product candidates may become impaired.

The spread of COVID-19 and actions taken to reduce its spread may also materially affect us economically. While the potential economic impact brought by, and during the duration of, COVID-19 may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position. COVID-19 and actions taken to reduce its spread continue to rapidly evolve.

Also, as governments and regulators focus on containing the COVID-19 virus outbreak, and prioritize their work and resources accordingly, there is no guarantee that interruptions or delays in the operations of the FDA or other regulatory authorities in other jurisdictions will not impact the review and approval timelines for the marketing applications we may submit for current and future product candidates. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

There is significant uncertainty relating to the ongoing effect of COVID-19 and global efforts to contain its spread on our business. While we maintain business continuity plans, they might not adequately protect us, and travel restrictions and other restrictions may remain or worsen. The extent to which COVID-19 negatively impacts our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be accurately predicted.

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Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns like the COVID-19 pandemic could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified product candidate(s) from being developed, or approved or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA, EMA and other regulatory agencies to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s and EMA’s ability to hire and retain key personnel and accept the payment of user fees, global health concerns like the COVID-19 pandemic and other events that may otherwise affect the ability of any regulatory agency such as the FDA and EMA to perform routine functions. Average review times at the FDA and EMA have fluctuated in recent years as a result. In addition, government funding of the FDA, EMA and other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA or other agencies may slow the time necessary for our product candidate(s) to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Coverage and reimbursement may not be available for current and future product candidates (if and when approved for commercial sale), which could make it difficult for us to sell such product candidates profitably.

Market acceptance and sales of current and future product candidates will depend on coverage and reimbursement policies. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which products they will pay for and establish reimbursement levels. We cannot be sure that coverage and reimbursement will be available for current and future product candidates we may develop. Even if coverage is provided, we cannot be sure that the amount of reimbursement available, if any, will not reduce the demand for, or the price of, our product candidate(s). If reimbursement is not available or is available only at limited levels, we may not be able to successfully compete through sales of our proposed product candidate(s).

In the United States, no uniform policy of coverage and reimbursement for pharmaceutical products exists among third-party payors. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement for pharmaceutical products can differ significantly from payor to payor. Certain Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act marketplace and other private payor plans are required to include coverage for certain preventative services, including vaccinations recommended by the U.S. Centers for Disease Control’s, or CDC’s, Advisory Committee on Immunization Practices, or ACIP, without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members. For Medicare beneficiaries, vaccines may be covered for reimbursement under either the Part B program or Part D depending on several criteria, including the type of vaccine and the beneficiary’s coverage eligibility. If our vaccine candidate(s), once approved, is reimbursed only under the Part D program, physicians may be less willing to use our product candidate(s) because of the claims adjudication costs and time related to the claims adjudication process and collection of co-payments associated with the Part D program.

Outside the United States, certain countries, including a number of member states of the European Union, set prices and reimbursement for pharmaceutical products, with limited participation from the marketing authorization holders. We cannot be sure that such prices and reimbursement will be acceptable to us or our partners, if any. If the regulatory authorities in these jurisdictions set prices or reimbursement levels that are not commercially attractive for us, our revenues from sales by us, and the potential profitability of our product candidate(s), in those countries would be negatively affected. Additionally, some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. As a result, we might obtain marketing approval for a product candidate(s) in a particular country, but then may experience delays in the reimbursement approval of our product candidate(s) or be subject to price regulations that would delay our commercial launch of the product candidate(s), possibly for lengthy time periods, which could negatively impact the revenues we are able to generate from the sale of the product candidate(s) in that particular country.

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Current and future legislation may increase the difficulty and cost for us and our partners, if any, to obtain marketing approval of and commercialize current and future product candidates and affect the prices we, or they, may obtain.

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell current and future product candidates for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, was enacted in the United States. Among the provisions of the Affordable Care Act of importance to our potential product candidate(s), the Affordable Care Act: established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; expands eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; created a new Medicare Part D coverage gap discount program; required certain Affordable Care Act marketplace and other private payor plans to include coverage for preventative services, including vaccinations recommended by the ACIP without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

Since its enactment, there have been judicial and congressional challenges to numerous aspects of the Affordable Care Act. By way of example, the 2017 Tax Reform Act included a provision repealing the individual mandate, effective January 1, 2019. On December 14, 2018, a U.S. District Court judge in the Northern District of Texas ruled that the individual mandate portion of the Affordable Care Act is an essential and inseverable feature of the Affordable Care Act, and therefore because the mandate was repealed, the remaining provisions of the Affordable Care Act are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court ruling that the individual mandate was unconstitutional, but remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well. On March 2, 2020, the U.S. Supreme Court granted the petitions for writs of certiorari to review the case. On November 10, 2020, the U.S. Supreme Court heard oral arguments regarding the constitutionality of the individual mandate. In June 2021, the U.S. Supreme Court ruled that the states that initially challenged the individual mandate did not have standing to sue. The U.S. Supreme Court did not rule on the constitutionality of the individual mandate. In addition, there may be other efforts to challenge, repeal or replace the Affordable Care Act. We are continuing to monitor any changes to the Affordable Care Act that, in turn, may potentially impact our business in the future.

Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and will remain in effect through 2030, unless additional congressional action is taken. In addition, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect customer demand and affordability for our product candidates, if approved, and, accordingly, the results of our financial operations. We cannot predict whether future healthcare legislative or policy changes will be implemented at the federal or state level or in countries outside of the United States in which we may do business, or the effect any future legislation or regulation will have on us, but we expect there will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering the cost of health care.

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We are subject to extensive and costly government regulation.

Any current and future product candidate(s) we may develop will be, subject to extensive and rigorous domestic government regulation, including with respect to Europe, regulation by the EMA and other relevant regional, national and local authorities, with respect to Israel, regulation by the Israeli Ministry of Health, and with respect to the U.S., regulation by the FDA, the CMS, other divisions of the U.S. Department of Health and Human Services, including its Office of Inspector General, the U.S. Department of Justice, the Departments of Defense and Veterans Affairs and, to the extent our product candidate(s) are paid for directly or indirectly by those departments, state and local governments and their respective foreign equivalents. The FDA regulates the research, development, preclinical and clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion, sale, distribution, and import and export of pharmaceutical products under various regulatory provisions. Current and future product candidates we may develop, which will be tested and marketed abroad, will be subject to extensive regulation by foreign governments, whether or not we have obtained EMA, the Israeli Ministry of Health’s approval and/or FDA approval. Such foreign regulation may be equally or more demanding than corresponding European, Israeli or U.S. regulation.

Government regulation substantially increases the cost and risk of researching, developing, manufacturing, and selling products. Our failure to comply with these regulations could result in, by way of example, significant fines, criminal and civil liability, product seizures, recalls, withdrawals, withdrawals of approvals, and exclusion and debarment from government programs. Any of these actions, including the inability of current and future product candidates to obtain and maintain regulatory approval, would have a materially adverse effect on our business, financial condition, results of operations and prospects.

Our relationships with customers, third-party payors, physicians and healthcare providers will be subject to applicable anti-kickback, fraud and abuse, and other laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and diminished profits.

Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of current and future product candidates. Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct research and would market, sell and distribute our product candidate(s). As a biopharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following:

● the federal healthcare Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving, paying or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order, arrangement, or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers, among others, on the other;

● federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by, Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery;

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● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious, or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

● the federal transparency requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the Affordable Care Act, or ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners;

● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and

● analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and local laws that require the licensure of sales representatives; and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information.

Efforts to ensure that our current and future business arrangements with third parties, and our business generally, continue to comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with any such laws and regulations. If our operations, including any arrangements with physicians and other healthcare providers, are found to be in violation of any such laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, reputational harm, exclusion from government-funded healthcare programs, such as Medicare and Medicaid, disgorgement, additional reporting requirements, and/or the curtailment or restructuring of our operations, as well as additional reporting obligations oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws. If we enter into business with any physicians or other healthcare providers or entities who are then found to not be in compliance with applicable laws, they may be subject to similar penalties.

Changes in regulatory requirements and guidance or unanticipated events may occur during any future clinical trials we may conduct, which may result in necessary changes to clinical trial protocols, which could result in increased costs to us, delay our development timeline or reduce the likelihood of successful completion of such clinical trials.

Changes in regulatory requirements and guidance or unanticipated events may occur during any clinical trials we may conduct may occur, as a result of which we may need to amend clinical trial protocols. Amendments may require us to resubmit our clinical trial protocols to IRBs for review and approval, which may adversely affect the cost, timing and successful completion of a clinical trial. If we experience delays in the completion of, or if we terminate, any future clinical trials we may conduct, the commercial prospects for current and future product candidates would be harmed and our ability to generate product revenue would be delayed, possibly materially.

If we acquire or license additional technologies or product candidate(s), we may incur a number of additional costs, have integration difficulties and/or experience other risks that could harm our business and results of operations.

We may acquire and in-license current and future product candidate(s) and technologies. Any current and future product candidate(s) or technologies we in-license or acquire will likely require additional development efforts prior to commercial sale, including extensive preclinical or clinical testing, or both, and approval by the FDA and applicable foreign regulatory authorities, if any. All product candidates are prone to risks of failure inherent in pharmaceutical product development, including the possibility that the product candidate(s) or product candidate(s) developed based on in-licensed technology will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any current and future product candidate(s) that we develop based on acquired or licensed technology that is granted regulatory approval will be manufactured or produced economically, successfully commercialized or widely accepted or competitive in the marketplace. Moreover, integrating any newly acquired or in-licensed product candidate(s) could be expensive and time-consuming. If we cannot effectively manage these aspects of our business strategy, our business may not succeed.

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Risks Related to Our Business and Industry

The members of our management team and certain consultants are important to the efficient and effective operation of our business, and we may need to attract and retain additional management and experts. Our limited financial resources may make us less successful at retaining our management and consulting team and adding additional leading experts, which could have a material adverse effect on our business, financial condition or results of operations.

Our executive officers, management team and technical personnel, as well as certain consultants, are important to the efficient and effective operation of our business, particularly Mr. Amir Reichman, our Chief Executive Officer, Dr. Tamar Ben-Yedidia, our Chief Scientific Officer, and Mr. Elad Mark, our Chief Operating Officer. The early stage of our NanoAbs program creates uncertainty about our prospects and make it more difficult to attract and retain qualified executive and other key personnel.

We are a developmental stage biopharmaceutical company with no approved product candidate(s), which makes it difficult to assess our future viability.

We are a developmental stage biopharmaceutical company with a limited operating history. We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in rapidly evolving fields, particularly in the pharmaceutical area. For example, to execute any future business plan, we may need to successfully:

● execute development activities;

● obtain required FDA and applicable foreign regulatory authorizations for the development and commercialization of current and future product candidates;

● maintain, leverage and expand our intellectual property portfolio;

● build and maintain robust sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners;

● gain market acceptance for our product candidate(s);

● develop and maintain any strategic relationships we elect to enter into; and

● manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals and commercialization.

If we are unsuccessful in accomplishing these objectives, we may not be able to develop any current and future product candidate(s), raise capital, expand our business or continue our operations.

We face significant competition. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer and we may never be profitable.

We compete against fully integrated pharmaceutical and biopharmaceutical companies and smaller companies that are collaborating with pharmaceutical companies, academic institutions, government agencies and other public and private research organizations. In addition, many of these competitors, either alone or together with their strategic partners, operate larger research and development programs than we do, and have substantially greater financial resources than we do, as well as significantly greater experience in:

● developing immuno-modulating products (including vaccines);

● undertaking preclinical testing and human clinical trials;

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● obtaining FDA approvals and addressing various regulatory matters and obtaining other regulatory approvals of drugs;

● formulating and manufacturing drugs; and

● launching, marketing and selling drugs.

Generally, our competitors currently include large fully integrated pharmaceutical companies such as Sanofi-Pasteur, GlaxoSmithKline and other companies as well as companies and academic research institutes in various developmental stages attempting to develop COVID-19 therapies, such as Adagio and Vir. If our competitors develop and commercialize products faster than we do, or develop and commercialize products that are superior to our product candidate(s), our commercial opportunities will be reduced or eliminated. Our competitors may succeed in developing and commercializing products earlier and obtaining regulatory approvals from the FDA and foreign regulatory authorities more rapidly than we do. Our competitors may also develop products or technologies that are superior to those we are developing, and render our product candidate(s) obsolete or non-competitive. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer and we may never be profitable.

The extent to which our product candidate(s) achieves market acceptance will depend on competitive factors, many of which are beyond our control. Competition in the biotechnology and biopharmaceutical industry is intense and has been accentuated by the rapid pace of technology development. Our competitors also compete with us to:

● attract parties for acquisitions, joint ventures or other collaborations;

● license proprietary technology that is competitive with current and future product candidates;

● attract funding; and

● attract and hire scientific talent and other qualified personnel.

We may be subject to legal proceedings and/or to product liability lawsuits.

We could incur substantial costs and be required to limit commercialization in connection with product liability claims relating to current and future product candidates, which may result in substantial losses.

Current and future product candidates could cause adverse events, including injury, disease or adverse side effects. These adverse events may not be observed in clinical trials, but may nonetheless occur in the future. If any of these adverse events occur, they may render current and future product candidates ineffective or harmful in some participants, and any future sales would suffer, materially adversely affecting our business, financial condition and results of operations.

In addition, potential adverse events caused by current and future product candidates could lead to product liability lawsuits. If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may be required to limit the marketing and commercialization of any current and future product candidate(s). Our business exposes us to potential product liability risks, which are inherent in the testing, manufacturing, marketing and sale of pharmaceutical products. We may not be able to avoid product liability claims. For example, changes in laws outside the U.S. are expanding our potential liability for injuries that occur during clinical trials. Product liability insurance is expensive, subject to deductibles and coverage limitations, and may not be available in the amounts that we desire for a price we are willing to pay. Product liability insurance for the pharmaceutical and biotechnology industries is generally expensive, if available at all. If, at any time, we are unable to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims, we may be unable to clinically test, market or commercialize any current and future product candidate(s). A successful product liability claim brought against us in excess of our insurance coverage, if any, may cause us to incur substantial liabilities, and, as a result, our business, liquidity and results of operations would be materially adversely affected. In addition, the existence of a product liability claim could affect the market price of the ADSs.

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If our employees commit fraud or other misconduct, including noncompliance with regulatory standards and requirements, and insider trading, our business may experience serious adverse consequences.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures: to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state health-care fraud and abuse laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Our board of directors adopted a Code of Ethics. However, it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

In addition, during the course of our operations, our directors, executives and employees may have access to material, non-public information regarding our business, our results of operations or potential transactions we are considering. If a director, executive or employee was to be investigated, or an action was to be brought against a director, executive or employee for insider trading, it could have a negative impact on our reputation and the market price of the ADSs. Such a claim, with or without merit, could also result in substantial expenditures of time and money, and divert attention of our management team from other tasks important to the success of our business.

We may encounter difficulties in managing our growth. Failure to manage our growth effectively will have a material adverse effect on our business, results of operations and financial condition.

We may not be able to successfully grow and expand. Successful implementation of any future business plan will require management of growth, including potentially rapid and substantial growth, which will result in an increase in the level of responsibility for management personnel and place a strain on our human and capital resources. To manage growth effectively, we will be required to continue to implement and improve our operating and financial systems and controls to expand, train and manage our employee base. Our ability to manage our operations and growth effectively will require us to continue to expend funds to enhance our operational, financial and management controls, reporting systems and procedures, and to attract and retain sufficient talented personnel. If we are unable to scale up and implement improvements to our control systems in an efficient or timely manner, or if we encounter deficiencies in existing systems and controls, then we will not be able to successfully commercialize any current and future product candidate(s). Failure to attract and retain sufficient talented personnel will further strain our human resources and could impede our growth or result in ineffective growth. Moreover, the management, systems and controls currently in place or to be implemented may not be adequate for such growth, and the steps we have taken to hire personnel and to improve such systems and controls might not be sufficient. If we are unable to manage our growth effectively, it will have a material adverse effect on our business, results of operations and financial condition.

If we are unable to obtain adequate insurance, our financial condition could be adversely affected in the event of uninsured or inadequately insured loss or damage. Our ability to effectively recruit and retain qualified officers and directors could also be adversely affected if we experience difficulty in obtaining adequate directors’ and officers’ liability insurance.

Our business will expose us to potential liability that results from risks associated with conducting clinical trials of current and future product candidates. A successful clinical trial liability claim, if any, brought against us could have a material adverse effect on our business, prospects, financial condition and results of operations even though clinical trial insurance is successfully maintained or obtained. The current and planned insurance coverages may only mitigate a small portion of a substantial claim against us.

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In addition, we may be unable to maintain sufficient insurance as a public company to cover liability claims made against our officers and directors. If we are unable to adequately insure our officers and directors, we may not be able to retain or recruit qualified officers and directors to manage the Company.

Recent disruptions in the financial markets and economic conditions could affect our ability to raise capital.

In recent years, the U.S. and global economies suffered dramatic downturns as the result of a deterioration in the credit markets and related financial crises as well as a variety of other factors including, among other things, the current COVID-19 pandemic, extreme volatility in security prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining valuations of others. The U.S. and certain foreign governments have taken unprecedented actions in an attempt to address and rectify these extreme market and economic conditions by providing liquidity and stability to the financial markets. If the actions taken by these governments are not successful, the return of adverse economic conditions may cause a significant impact on our ability to raise capital, if needed, on a timely basis and on acceptable terms or at all.

We may be subject to extensive environmental, health and safety, and other laws and regulations in multiple jurisdictions.

Our business involves the controlled use, directly or indirectly through our service providers, of hazardous materials, various biological compounds and chemicals; therefore, we, our agents and our service providers may be subject to various environmental, health and safety laws and regulations, including those governing air emissions, water and wastewater discharges, noise emissions, the use, management and disposal of hazardous, radioactive and biological materials and wastes and the cleanup of contaminated sites. The risk of accidental contamination or injury from these materials cannot be eliminated. If an accident, spill or release of any regulated chemicals or substances occurs, we could be held liable for resulting damages, including for investigation, remediation and monitoring of the contamination, including natural resource damages, the costs of which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials and chemicals. Although we maintain workers’ compensation insurance to cover the costs and expenses that may be incurred because of injuries to our employees resulting from the use of these materials, this insurance may not provide adequate coverage against potential liabilities. Additional or more stringent federal, state, local or foreign laws and regulations affecting our operations may be adopted in the future. We may incur substantial capital costs and operating expenses and may be required to obtain consents to comply with any of these or certain other laws or regulations and the terms and conditions of any permits or licenses required pursuant to such laws and regulations, including costs to install new or updated pollution control equipment, modify our operations or perform other corrective actions at our respective facilities or the facilities of our service providers.

Governments may impose strict price controls, which may adversely affect our revenues, if any.

In some countries, including the countries comprising the European Union (the “EU”), the pricing of pharmaceuticals and certain other therapeutics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate(s) to other available therapies. If reimbursement of our product candidate(s) is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.

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Our internal computer systems, or those used by our contractors or consultants, may fail or experience security breaches or other unauthorized or improper access.

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to privacy and information security incidents, such as data breaches, damage from computer viruses and unauthorized access, malware, natural disasters, fire, terrorism, war and telecommunication, electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed, ongoing or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we will rely on third parties to conduct clinical trials for, and manufacture, current and future product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. Unauthorized disclosure of sensitive or confidential data, including personally identifiable information, whether through a breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, or unauthorized access to or through our information systems and networks, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation. Unauthorized disclosure of personally identifiable information could also expose us to sanctions for violations of data privacy laws and regulations around the world. To the extent that any disruption or security breach result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidate(s) could be delayed.

As we become more dependent on information technologies to conduct our operations, cyber incidents, including deliberate attacks and attempts to gain unauthorized access to computer systems and networks, may increase in frequency and sophistication. These threats pose a risk to the security of our systems and networks, the confidentiality and the availability and integrity of our data and these risks apply both to us, and to third parties on whose systems we rely for the conduct of our business. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we and our partners may be unable to anticipate these techniques or to implement adequate preventative measures. Further, we do not have any control over the operations of the facilities or technology of our cloud and service providers, including any third party vendors that collect, process and store personal data on our behalf. Our systems, servers and platforms and those of our service providers may be vulnerable to computer viruses or physical or electronic break-ins that our or their security measures may not detect. Individuals able to circumvent such security measures may misappropriate our confidential or proprietary information, disrupt our operations, damage our computers or otherwise impair our reputation and business. We may need to expend significant resources and make significant capital investment to protect against security breaches or to mitigate the impact of any such breaches. There can be no assurance that we or our third party providers will be successful in preventing cyber-attacks or successfully mitigating their effects. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our current and future product candidate(s) could be delayed.

Failure to comply with current or future federal, state and foreign laws and regulations and industry standards relating to privacy and data protection laws could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and adverse publicity and could negatively affect our operating results and business.

We and our partners and third-party providers may be subject to federal, state and foreign data privacy and security laws and regulations. In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our partners and third-party providers.

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In many jurisdictions, enforcement actions and consequences for noncompliance are rising. In the United States, these include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies and state attorneys general and legislatures and consumer protection agencies. In addition, privacy advocates and industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or contractually apply to us. If we fail to follow these security standards, even if no customer information is compromised, we may incur significant fines or experience a significant increase in costs. Many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all 50 states require businesses to provide notice to customers whose personally identifiable information has been disclosed as a result of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is costly. States are also constantly amending existing laws, requiring attention to frequently changing regulatory requirements. Furthermore, California enacted the California Consumer Privacy Act (the “CCPA”), which gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

Foreign data protection laws, including EU General Data Protection Regulation (the “GDPR”), may also apply to health-related and other personal information obtained outside of the United States. The GDPR, which came into effect on May 25, 2018, introduced new data protection requirements in the European Union, as well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of annual global revenue. The regulation imposes numerous new requirements for the collection, use and disclosure of personal information, including more stringent requirements relating to consent and the information that must be shared with data subjects about how their personal information is used, the obligation to notify regulators and affected individuals of personal data breaches, extensive new internal privacy governance obligations and obligations to honor expanded rights of individuals in relation to their personal information (e.g., the right to access, correct and delete their data). Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain. For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union.

Compliance with U.S. and foreign data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure by us or our partners and third-party providers to comply with U.S. and foreign data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business. Moreover, clinical trial subjects about whom we or our potential partners obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, results of operation and financial condition.

Risks Related to Dependence on Third Parties

Our NanoAbs program is based on an exclusive license from MPG, and we could lose our rights to this license if a dispute with MPG arises or if we fail to comply with the financial and other terms of the license.

We license the core intellectual property for our NanoAbs program from MPG under an exclusive license agreement, pursuant to which we received an exclusive worldwide license for the development and commercialization of Covid-19 NanoAbs based on certain patents and intellectual property owned by MPG and related thereto. Pursuant to the terms of the license agreement, unless earlier terminated in accordance with the provisions thereof, the license agreement will expire on a product-by-product and country-by-country basis upon the later of (i) the expiration or abandonment of the patent rights that relate to such product in such country and (ii) ten years from the date of first commercial sale of such product in such country. However, MPG is entitled to terminate the exclusivity rights or to terminate the license agreement if, among other things, the Company fails to submit an IND application by a certain date or if the patent rights licensed pursuant to the License Agreement are invalidated. We have the right to license nanobodies against certain other molecular targets on the same terms described above.

If MPG terminates the license agreement, or licenses to a third party the intellectual property it had licensed to us pursuant to this license agreement, or if any dispute arises with respect to our arrangement with MPG, such dispute may disrupt our operations and would likely have a material and adverse impact on us if resolved in a manner that is unfavorable to us. Our NanoAbs program is based on the intellectual property licensed under the license agreement, and if the license agreement is terminated prior to its expiration, it could have a material adverse effect on our business, prospects and results of operations.

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We rely on MPG to create and provide NanoAbs for our Covid-19 NanoAbs program and expect to rely on them for other NanoAbs programs that we may initiate in the future.

We rely on MPG to create and provide NanoAbs for our Covid-19 NanoAbs program and expect to rely on them for other NanoAbs programs that we may initiate in the future. If the supply of NanoAbs is disrupted or delayed, we will not be able to complete, or may be delayed in our efforts to, successfully develop and commercialize our current or future product candidates.

If we are ever to conduct clinical trials, we would rely on third parties to conduct any such clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We will rely on third parties such as contract research organizations, clinical data management organizations, medical institutions and clinical investigators, to conduct any future clinical trials on our behalf. Any of these third parties may terminate their engagement with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities.

Our reliance on these third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. We remain responsible for ensuring that our clinical trial is conducted in accordance with the requirements of the relevant regulator, and failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Furthermore, third parties that we rely on for our clinical development activities may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any current and future product candidate(s). Our product development costs will increase if we experience delays in testing or obtaining marketing approvals.

A disruption to our GMP biologics manufacturing facility in Jerusalem could adversely affect our business.

Our current manufacturing facility contains highly specialized equipment and materials and utilizes complicated production processes developed over a number of years, which would be difficult, time-consuming, and costly to duplicate or, though a remote risk, may be impossible to duplicate. If this facility were damaged or destroyed, or otherwise subject to disruption, including contamination, it would require substantial lead-time to replace such manufacturing capabilities and could cause costly delays. In such event, we would be forced to identify and rely entirely on third-party contract manufacturers for an indefinite period of time, which we may not be able to do in a timely manner and would further increase our production costs. Any disruptions or delays at our facility or its failure to meet regulatory compliance would significantly impair our ability to advance our NanoAbs program, which would result in increased costs and losses and adversely affect our business and results of operations.

Use of third parties to manufacture current and future product candidate(s) may increase the risk that we will not have sufficient quantities of such product candidate(s) at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

Our GMP biologics manufacturing facility in Jerusalem is capable of manufacturing an annual supply of current and future product candidate(s) suitable for regulatory or other similar uses. However, we may also rely on a third party CMO for commercial supply of current and future product candidates.

Reliance on a third party CMO entails risks, including:

● Reliance on third party for regulatory compliance and quality assurance;

● The possible breach of the manufacturing agreement by the third party;

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● The possible failure to manufacture sufficient quantities of current and future product candidates due to reasons outside of the reasonable control of the third party;

● The possible misappropriation of our proprietary information, including our know-how; and

● The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

A CMO may not be able to comply with cGMP regulations or similar regulatory requirements outside of the U.S. Our failure, or the failure of our third party manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidate(s), operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidate(s).

We may not obtain the necessary materials for the performance of any future clinical trials in the U.S. or other countries around the world that we may conduct.

Clinical trials we may conduct in the future may involve obtaining materials and information that may not currently be in our possession and that we rely on suppliers and manufacturers to provide. It is possible that the FDA or any other relevant regulatory body will request that we provide materials or information that are not in our possession at that time before allowing us to proceed with any proposed clinical trials.

Risks Related to Our Intellectual Property

If we fail to adequately protect, enforce or secure rights to the patents which we own or that were licensed to us or any patents we may own or license in the future, the value of our intellectual property rights would diminish and our business and competitive position would suffer.

Our success, competitive position and future revenues, if any, depend in part on our ability to obtain and successfully leverage intellectual property covering our product candidate(s), know-how, methods, processes and other technologies, to protect our trade secrets, to prevent others from using our intellectual property and to operate without infringing the intellectual property rights of third parties.

The risks and uncertainties that we face with respect to our intellectual property rights include, but are not limited to, the following:

● the degree and range of protection any patents will afford us against competitors;

● the patents concerning our business activities were not registered in all countries and therefore our patent protection may be lacking in some territories;

● if and when patents will be issued;

● whether or not others will obtain patents claiming aspects similar to those covered by our own or licensed patents and patent applications;

● we may be subject to interference proceedings;

● we may be subject to opposition or post-grant proceedings in foreign countries;

● any patents that are issued may not provide meaningful protection;

● we may not be able to develop additional proprietary technologies that are patentable;

● other companies may challenge patents licensed or issued to us or our customers;

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● other companies may independently develop similar or alternative technologies, or duplicate our technologies;

● other companies may design around technologies we have licensed or developed;

● enforcement of patents is complex, uncertain and expensive; and

● we may need to initiate litigation or administrative proceedings that may be costly whether we win or lose.

If patent rights covering our product candidate(s) and methods are not sufficiently broad, they may not provide us with any protection against competitors with similar products and technologies. Furthermore, if the United States Patent and Trademark Office (the “USPTO”) or any foreign patent office issue patents to us or our licensors, others may challenge the patents or design around the patents, or the patent office or the courts may invalidate the patents. An adverse determination in any opposition, derivation, revocation, re-examination, post-grant and inter parties review or interference proceedings or foreign equivalent, or litigation, challenging our patent rights or the patent rights of others could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Such proceedings and any other patent challenges may result in loss of patent rights, loss of exclusivity, loss of priority or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products or limit the duration of the patent protection of our technology and product candidate(s). Thus, any patents we own or license form or to third parties may not provide any protection against our competitors. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. Moreover, there could be public announcements of the results of hearings, motions or other developments related to any of the foregoing proceedings. If securities analysts or investors perceive those results to be negative, it could cause the price of the ADSs to decline. Any of the foregoing could harm our business, results of operations and financial condition.

We cannot be certain that patents will be issued as a result of any pending applications, and we cannot be certain that any of our issued patents or patents licensed from MPG (or any other third-party in the future) will give us adequate protection from competing products. Further, even if our owned or licensed patent applications issue as patents, the issuance of any such patents is not conclusive as to their inventorship, scope, validity or enforceability and such patents may be challenged, invalidated, narrowed or held to be unenforceable.

We may be subject to a third-party pre-issuance submission of prior art to the United States Patent and Trademark Office, or USPTO, or equivalent foreign bodies. In addition, since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.

Moreover, some of our owned or in-licensed patents and patent applications may in the future be co-owned with third parties. If we are unable to obtain an exclusive license to any such co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, who could market competing products and technology. In addition, we may need the cooperation of any such co-owners in order to enforce such patents against third parties, and such cooperation may not be provided to us.

It is also possible that others may obtain issued patents that could prevent us from commercializing our product candidate(s) or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. If we are unable to license such technology, or if we are forced to license such technology, on unfavorable terms, our business could be materially harmed and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. As to those patents that we have licensed, our rights depend on maintaining our obligations to the licensor under the applicable license agreement, and we may be unable to do so.

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In addition to patents and patent applications, we depend upon proprietary know-how to protect our proprietary technology. We require our employees, consultants, advisors and partners to enter into confidentiality agreements that prohibit the disclosure of confidential information to any other parties. We also require our employees and consultants to disclose and assign to us their ideas, developments, discoveries and inventions. These agreements may not, however, provide adequate protection for our know-how or other proprietary information in the event of any unauthorized use or disclosure.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to office actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

Costly litigation may be necessary to protect our intellectual property rights and we may be subject to claims alleging the violation of the intellectual property rights of others.

We may face significant expense and liability as a result of litigation or other proceedings relating to patents and other intellectual property rights of others. In the event that another party has also filed a patent application or been issued a patent relating to an invention or technology claimed by us in pending applications, we may be required to participate in an interference proceeding declared by the USPTO to determine priority of invention, which could result in substantial uncertainties and costs for us, even if the eventual outcome is favorable to us. We, or our licensors, also could be required to participate in interference proceedings involving issued patents and pending applications of another entity. An adverse outcome in an interference proceeding could require us to cease using the technology or to license rights from prevailing third parties.

The cost to us of any patent litigation or other proceeding relating to our licensed patents or patent applications, even if resolved in our favor, could be substantial and could divert management’s resources and attention. Competitors and other third parties may infringe, misappropriate or otherwise violate our issued patents or other intellectual property or the patents or other intellectual property of our licensors. Our ability to enforce our patent protection could be limited by our financial resources, and may be subject to lengthy delays. In addition, our patents or the patents of our licensors may become involved in inventorship or priority disputes. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents or that our patents are invalid or unenforceable. In a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.

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A third party may claim that we are using inventions claimed by their patents and may go to court to stop us from engaging in our normal operations and activities, such as research, development and the sale of any current and future product candidate(s). Such lawsuits are expensive and would consume time and other resources. There is a risk that a court will decide that we are infringing the third party’s patents and will order us to cease the activities claimed by the patents, including to cease commercializing the infringing technology or product candidate(s), redesign our product candidate(s) or processes to avoid infringement, which may be impossible or require substantial time and monetary expenditure, or obtain licenses (which may not be available on commercially reasonable terms or at all). In addition, there is a risk that a court will order us to pay the other party damages for having infringed their patents.

There is no guarantee that any prevailing patent owner would offer us a license so that we could continue to engage in activities claimed by the patent, or that such a license, if made available to us, could be acquired on commercially acceptable terms. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties and other fees. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. In addition, third parties may, in the future, assert other intellectual property infringement claims against us with respect to our product candidate(s), technologies or other matters. Any claims of infringement asserted against us, whether or not successful, may have a material adverse effect on us. Any of the foregoing events would harm our business, financial condition, results of operations and prospects.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims could result in substantial costs and diversion of management resources, which could harm our business. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs or in-license needed technology or other product candidate(s). There could also be public announcements of the results of the hearing, motions or other interim proceedings or developments. If securities analysts or investors perceive those results to be negative, it could cause the price of the ADSs to decline. Any of the foregoing events could harm our business, financial condition, results of operations and prospects.

We rely on confidentiality agreements that could be breached and may be difficult to enforce, which could result in third parties using our intellectual property to compete against us.

Although we believe that we take reasonable steps to protect our intellectual property, including the use of agreements relating to the non-disclosure of confidential information to third parties, as well as agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them, the agreements can be difficult and costly to enforce. Although we seek to enter into these types of agreements with our contractors, consultants, advisors and research and other partners, to the extent that employees and consultants utilize or independently develop intellectual property in connection with any of our projects, disputes may arise as to the intellectual property rights associated with current and future product candidates. If a dispute arises, a court may determine that the right belongs to a third party. In addition, enforcement of our rights can be costly and unpredictable. We also rely on trade secrets and proprietary know-how that we seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others. We cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. Despite the protective measures we employ, we still face the risk that:

● these agreements may be breached;

● these agreements may not provide adequate remedies for the applicable type of breach;

● our proprietary know-how will otherwise become known; or

● our competitors will independently develop similar technology or proprietary information.

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International patent protection is particularly uncertain, and if we are involved in opposition proceedings in foreign countries, we may have to expend substantial sums and management resources.

Patent law outside the United States may be different than in the United States. Further, the laws of some foreign countries, such as China where certain patents owned or licensed by us were granted, may not protect our intellectual property rights to the same extent as the laws of the United States, if at all. A failure to obtain sufficient intellectual property protection in any foreign country could materially and adversely affect our business, results of operations and future prospects. Moreover, we may participate in opposition proceedings to determine the validity of our foreign patents or our competitors’ foreign patents, which could result in substantial costs and divert management’s resources and attention. Additionally, due to uncertainty in patent protection law, we have not filed patent applications in many countries where significant markets exist.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

● others may be able to make compounds that are the same as or similar to current and future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed;

● we or our licensors or any future strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

● we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

● it is possible that our pending patent applications will not lead to issued patents;

● issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

● we may not develop additional proprietary technologies that are patentable; and

● the patents of others may have an adverse effect on our business.

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

We may be subject to claims that employees, partners or other third parties who were involved in the development of intellectual property for the Company have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who were involved in the development of intellectual property for the Company. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

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We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property has been and may in the future be developed by our employees in the course of their employment for us. Under the Israeli Patents Law, 5727-1967 (the “Patents Law”), inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patents Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration for his inventions. Decisions by the Committee have created uncertainty in this area, as it held that employees may be entitled to remuneration for their service inventions despite having specifically waived any such rights. However, a later decision by the Committee held that such right can be waived by the employee. The Committee further held that an explicit reference to the waived right is not necessary in every circumstance in order for the employee’s waiver of such right to be valid. Such waiver can be formalized in writing or orally or be implied by the actions of the parties in accordance with the rules of interpretation of Israeli contract law. We generally enter into assignment-of-invention agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees have agreed to assign to us service invention rights, we may face claims demanding remuneration in consideration for assigned inventions.

We may receive less revenue from any current and future product candidate(s) if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability.

Our employees may have been previously employed at other biotechnology or pharmaceutical companies. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s former employer. Litigation may be necessary to defend against these claims. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs, delay development of our product candidate(s) and be a distraction to management. Any of the foregoing events would harm our business, prospects and results of operations.

Patent terms may be inadequate to protect our competitive position on our product candidate(s) for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidate(s) are obtained, once the patent life has expired for a product candidate(s), we may be open to competition from competitive medications, including generic medications. Given the amount of time required for the development, testing and regulatory review of new product candidate(s), patents protecting such product candidate(s) might expire before or shortly after such product candidate(s) are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing product candidate(s) similar or identical to ours.

Depending upon the timing, duration and conditions of any FDA marketing approval of our product candidate(s), one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, and one or more of our foreign patents may be eligible for patent term extension under similar legislation, for example, in the European Union. In the United States, the Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. However, there are no assurances that the FDA or any comparable foreign regulatory authority or national patent office will grant such extensions, in whole or in part. For example, we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. Only one patent per approved product can be extended, the extension cannot extend the total patent term beyond 14 years from approval, and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for the applicable product candidate(s) will be shortened, and our competitors may obtain approval to market competing products sooner. As a result, our revenue from applicable product candidate(s) could be reduced. Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case, and our competitive position, business, financial condition, results of operations and prospects could be materially harmed.

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Risks Related to Our Operations in Israel

Potential political, economic and military instability in the State of Israel, where our senior management, our head executive office, research and development, and manufacturing facilities are located, may adversely affect our results of operations.

Our principal executive office, our research and development facilities and our current manufacturing facility are located in Israel. Our officers and most of our directors are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of operations. In the last decade, there have been escalations in violence between Israel, on the one hand, and Hamas, the Palestinian Authority and/or other groups, on the other hand, as well as extensive hostilities along Israel’s border with the Gaza Strip, which resulted in missiles being fired from Gaza into southern and central Israel, including near Tel Aviv and at areas surrounding Jerusalem. These conflicts involved missile strikes against civilian targets in various parts of Israel, including areas in which our employees and some of our consultants are located, and negatively affected business conditions in Israel. Our offices and laboratory, located in Jerusalem, Israel, are within the range of the missiles and rockets that have been fired at Israeli cities and towns from Gaza sporadically since 2006, with escalations in violence during which there were a substantially larger number of rocket and missile attacks aimed at Israel. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business may decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. Further, in the past, the State of Israel and Israeli companies were subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business.

Our operations may be disrupted as a result of the obligation of Israeli citizens to perform military service.

Many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, financial condition and results of operations.

Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel.

We are incorporated in Israel. Most of our current executive officers and directors reside in Israel and most of our assets reside outside of the United States. Therefore, a judgment obtained against us or any of these persons in the United States, including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court unless certain provisions of Israeli law are satisfied. It may also be difficult to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel.

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Under Israeli law, if U.S. law is found to be applicable to such a claim, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would be governed by Israeli law. There is little binding case law in Israel addressing these matters.

Under applicable U.S. and Israeli law, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. In addition, employees may be entitled to seek compensation for their inventions irrespective of their agreements with us, which in turn could impact our future profitability.

We generally enter into non-competition agreements with our employees and key consultants. These agreements prohibit our employees and key consultants, if they cease working for us, from competing directly with us or working for our competitors or clients for a limited period of time. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information or the protection of its intellectual property. If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.

Your rights and responsibilities as our shareholder will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.

Since we are incorporated under Israeli law, the rights and responsibilities of our shareholders are governed by our articles of association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders of U.S.-based corporations. In particular, a shareholder of an Israeli company, such as us, has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards us and other shareholders and to refrain from abusing its power in us, including, among other things, in voting at the general meeting of shareholders on certain matters, such as an amendment to our articles of association, an increase of our authorized share capital, a merger and approval of related party transactions that require shareholder approval. A shareholder also has a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder or a shareholder who knows that it possesses the power to determine the outcome of a shareholders vote or to appoint or prevent the appointment of an office holder of ours or other power towards us has a duty to act in fairness towards us. However, Israeli law does not define the substance of this duty of fairness. Since Israeli corporate law underwent extensive revisions approximately 15 years ago, the parameters and implications of the provisions that govern shareholder behavior have not been clearly determined. These provisions may be interpreted to impose additional obligations and liabilities on our shareholders that are not typically imposed on shareholders of U.S. corporations.

Changes in Israeli tax laws and examinations by the Israeli Tax Authorities could increase our overall tax liabilities.

We are subject to various taxes and tax compliance obligations in Israel. Changes in Israeli tax laws and regulations or their implementation in the future could increase our tax liabilities and our tax compliance obligations. In addition, the proper application of Israeli tax laws is subject to certain uncertainties and require the exercise of judgement. We may be subject to examinations by the Israeli Tax Authorities, and if our application or interpretation of Israeli tax laws is successfully challenged, we could be subject to additional tax liabilities, including interest and penalties, which could adversely affect our business and financial position.

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Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date that a merger proposal was filed by each merging company with the Israel Registrar of Companies and at least 30 days from the date that the shareholders of both merging companies approved the merger. In addition, the holder of a majority of each class of securities of the target company must approve a merger. Moreover, a full tender offer can only be completed if the acquirer receives at least 95% of the issued share capital (provided that a majority of the offerees that do not have a personal interest in such tender offer shall have approved the tender offer, except that if the total votes to reject the tender offer represent less than 2% of the company’s issued and outstanding share capital, in the aggregate, approval by a majority of the offerees that do not have a personal interest in such tender offer is not required to complete the tender offer), and the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, petition the court to alter the consideration for the acquisition (unless the acquirer stipulated in the tender offer that a shareholder that accepts the offer may not seek appraisal rights).

Our articles of association provide that our directors (other than external directors) are elected to terms, with only two or three of our directors (other than external directors) to be elected each year, in each case for a term of three years. The staggering of the terms of our directors prevents a potential acquirer from readily replacing our entire board of directors at a single annual general shareholder meeting. This could prevent an acquirer from seeking to effect a change in control of our company by proposing an acquisition proposal offer opposed by our board, even if beneficial to our shareholders.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to those of our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerous conditions, including a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no actual disposition of the shares has occurred.

These and other similar provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.

Because a certain portion of our expenses is incurred in currencies other than the U.S. Dollar, our results of operations may be harmed by currency fluctuations and inflation.

Our reporting and functional currency is the NIS, but some portion of our operational expenses are in U.S. Dollars and Euros. As a result, we are exposed to some currency fluctuation risks. We may, in the future, decide to enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rate of the currencies mentioned above in relation to the NIS. These measures, however, may not adequately protect us from adverse effects.

Risks Related to our Securities

Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of the ADSs.

If we fail to satisfy Nasdaq’s continued listing requirements, Nasdaq may take steps to delist the ADSs. Such a delisting would likely have a negative effect on the price of the ADSs and would impair shareholders’ ability to sell or purchase their ADSs when they wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow the ADSs to become listed again, stabilize the market price or improve the liquidity of the ADSs, prevent the ADSs from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

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If we fail to meet all applicable Nasdaq Capital Market requirements and Nasdaq determines to delist our shares, the delisting could adversely affect the market liquidity of our shares and the market price of our shares could decrease significantly.

Nasdaq requires that the closing bid price of the ADSs do not fall below $1.00 per share for 30 consecutive business days. If we are unable to maintain compliance with this closing bid price requirement, the ADSs could be delisted from Nasdaq. If this were to occur, trading of our securities would most likely take place in an over-the-counter market for unlisted securities. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our securities in an over-the-counter market, and many investors would likely not buy or sell our securities due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our securities would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our securities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our securities, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and raise capital.

The controlling share ownership position of Angels Investments in High Tech Ltd. will limit your ability to elect the members of our board of directors, may adversely affect our share price and will result in our non-affiliated investors having limited influence on corporate actions.

Angels Investments in High Tech Ltd. (“AIHT”) is currently our controlling shareholder. As of February 15, 2021, AIHT beneficially owned approximately 22.7% of the voting power of our outstanding ADSs. Therefore, AIHT has the ability to substantially influence us through this ownership position. For example, AIHT may be able to substantially influence elections of directors, amendments of our organizational documents, and approval of any merger, amalgamation, sale of assets or other major corporate transaction. AIHT’s interests may not always coincide with our corporate interests or the interests of other shareholders, and it may exercise its voting and other rights in a manner with which you may not agree or that may not be in the best interests of our other shareholders. So long as it continues to own a significant amount of our equity, AIHT will continue to be able to strongly influence our decisions.

There is a significant risk that we will be a passive foreign investment company for U.S. federal income tax purposes for the current or any other taxable year, which generally would result in adverse U.S. federal income tax consequences to our U.S. investors.

There is a significant risk that we will be treated as a passive foreign investment company, or PFIC, for our current or any other taxable year. In general, a non-U.S. corporation is a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income (the “income test”) or (ii) 50% or more of the average value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income (the “assets test”). Generally, passive income includes interest, dividends, rents, royalties and certain gains. Cash is a passive asset for PFIC purposes. Goodwill is an active asset under the PFIC rules to the extent attributable to activities that produce active income.

The assets shown on our balance sheet are expected to consist primarily of cash and cash equivalents. Therefore, whether we will satisfy the assets test for the current or any future taxable year will depend largely on the quarterly value of our goodwill, and on how quickly we utilize our current and future cash balances in our business. Therefore, because we hold, and expect to continue to hold, substantial amounts of cash, there is a significant risk that we will be a PFIC under the assets test due to our decreased market capitalization and the volatility of the ADSs price. In addition, there is no assurance that the Internal Revenue Service will not assert that for purposes of the assets test a portion of our goodwill is not an active asset, in which case our risk of being or becoming a PFIC will increase. Further, it is not entirely clear how the income test should apply to a company like us and we may be a PFIC for any taxable year if the amount of our interest and other passive income constitutes 75% or more of our overall gross income as calculated for U.S. federal income tax purposes (generally, gross receipts minus cost of goods sold). Moreover, the composition of our income and assets may change. For these reasons, and since a company’s annual PFIC status can be determined only after the end of each taxable year, we cannot express a view as to whether we will be a PFIC for the current or any future taxable year. U.S. investors should therefore invest in the ADSs only if they are willing to bear the U.S. federal income tax consequences of an investment in a PFIC.

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If we are a PFIC for any taxable year during which a U.S. investor owns the ADSs, such U.S. investor could be subject to certain adverse U.S. federal income tax consequences, including increased tax liability on gains from dispositions of the ADSs and certain distributions, and a requirement to file annual reports with the Internal Revenue Service. We intend to post on our website the information necessary for a U.S. investor to make a qualifying electing fund (“QEF”) election with respect to us and each Lower-tier PFIC (as defined in “Taxation — Material U.S. Federal Income Tax Considerations”) that is wholly-owned by us, for the current or any future taxable year, if (i) our investment income constitutes 75% or more of our gross receipts for such taxable year, or (ii) we otherwise determine that we were a PFIC for such taxable year. Any such QEF election will result in U.S. federal income tax consequences that are different from the general PFIC rules. See “Taxation — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules” for more information. 

We are a “foreign private issuer” and have disclosure obligations that are different from those of U.S. domestic reporting companies.

We are a foreign private issuer and are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports or proxy statements that comply with the requirements applicable to U.S. domestic reporting companies. Furthermore, although under the regulations promulgated under the Companies Law, as an Israeli public company listed overseas we will be required to disclose the compensation of our five most highly compensated officers on an individual basis (rather than on an aggregate basis, as was previously permitted for Israeli public companies listed overseas prior to such amendment), this disclosure will not be as extensive as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file our annual reports with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report short-swing profit recovery contained in Section 16 of the Exchange Act. Also, as a “foreign private issuer,” we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies reduce the frequency and scope of information and protections available to you in comparison to those applicable to U.S. domestic reporting companies.

As a “foreign private issuer,” we are permitted, and follow certain home country corporate governance practices instead of otherwise applicable SEC and NASDAQ Capital Market requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.

As a “foreign private issuer,” we are permitted, and follow certain home country corporate governance practices instead of those otherwise required under the listing rules of the Nasdaq Capital Market for domestic U.S. issuers. For instance, we intend to follow home country practice in Israel with regard to, among other things, board independence requirements, director nomination procedures and quorum requirements. In addition, we may follow our home country law instead of the listing rules of the Nasdaq Capital Market that require that we obtain shareholder approval for certain dilutive events, such as the establishment or amendment of certain equity based compensation plans, an issuance that will result in a change of control, certain transactions other than a public offering involving issuances of a 20% or greater interest in the Company, and certain acquisitions of the stock or assets of another company. We also intend to follow our home country rules regarding the periodic approval of and changes to the formal charter for our compensation committee instead of the listing rules of the Nasdaq Capital Market. We may in the future elect to follow home country corporate governance practices in Israel with regard to other matters. Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq Capital Market may provide less protection to you than what is accorded to investors under the listing rules of the Nasdaq Capital Market applicable to domestic U.S. issuers.

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We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. If in the future we are not a foreign private issuer as of the last day of the second fiscal quarter in any fiscal year, we would be required to comply with all of the periodic disclosure, current reporting requirements and proxy solicitation rules of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either (a) a majority of our Ordinary Shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our managing directors, supervisory directors and executive officers may not be United States citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we were to lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. These rules and regulations could also make it more difficult for us to attract and retain qualified managing directors and supervisory directors.

We have not paid, and do not currently intend to pay, dividends on the ADSs and, therefore, unless our traded securities appreciate in value, our investors may not benefit from holding our securities.

We have not paid any cash dividends on the ADSs since inception. We do not anticipate paying any cash dividends on the ADSs in the foreseeable future. Moreover, the Israeli Companies Law, as amended (the “Companies Law”) imposes certain restrictions on our ability to declare and pay dividends. As a result, investors in the ADSs will not be able to benefit from owning these securities unless their market price becomes greater than the price paid by such investors and they are able to sell such securities. We cannot assure you that you will ever be able to resell our securities at a price more than the price paid.

You may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive dividends or other distributions on our Ordinary Shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.

The depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on Ordinary Shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of Ordinary Shares the ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act, but that are not properly registered or distributed under an applicable exemption from registration. In addition, conversion into U.S. dollars from foreign currency that was part of a dividend made in respect of deposited Ordinary Shares may require the approval or license of, or a filing with, any government or agency thereof, which may be unobtainable. In these cases, the depositary may determine not to distribute such property and hold it as “deposited securities” or may seek to effect a substitute dividend or distribution, including net cash proceeds from the sale of the dividends that the depositary deems an equitable and practicable substitute. We have no obligation to register under U.S. securities laws any ADSs, Ordinary Shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, Ordinary Shares, rights or anything else to holders of ADSs. In addition, the depositary may withhold from such dividends or distributions its fees and an amount on account of taxes or other governmental charges to the extent the depositary believes it is required to make such withholding. This means that you may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive any value for such distributions or dividends if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of the ADSs.

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Holders of ADSs must act through the depositary to exercise their rights as our shareholders.

Holders of the ADSs do not have the same rights of our ordinary shareholders and may only exercise the voting rights with respect to the underlying Ordinary Shares in accordance with the provisions of the deposit agreement for the ADSs. Under Israeli law, the minimum notice period required to convene a shareholders meeting is no less than 35 or 21 calendar days, depending on the proposals on the agenda for the shareholders meeting. When a shareholder meeting is convened, holders of the ADSs may not receive sufficient notice of a shareholders’ meeting to permit them to withdraw their Ordinary Shares to allow them to cast their vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting instructions to holders of the ADSs or carry out their voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to holders of the ADSs in a timely manner, but we cannot assure holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote their ADSs. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of the ADSs may not be able to exercise their right to vote and they may lack recourse if their ADSs are not voted as they requested. In addition, in the capacity as a holder of ADSs, they will not be able to call a shareholders’ meeting.

You may be subject to limitations on transfer of the ADSs.

The ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.

General Risks

We incur significant costs as a public company in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing U.S. and Israeli reporting requirements.

We are a publicly traded company in the U.S. As a public company in the U.S., we incur additional significant accounting, legal and other expenses. We also incur costs associated with corporate governance requirements of the SEC and the NASDAQ Capital Market, as well as requirements under Section 404 and other provisions of the Sarbanes-Oxley Act. The implementation and testing of such processes and systems may require us to hire outside consultants and incur other significant costs. Any future changes in the laws and regulations affecting public companies in the United States, including Section 404 and other provisions of the Sarbanes-Oxley Act, and the rules and regulations adopted by the SEC and the NASDAQ Capital Market, for so long as they apply to us, will result in increased costs to us as we respond to such changes. These laws, rules and regulations could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, if any, or as executive officers.

The market price for the ADSs has been and will likely remain volatile.

The market price for the ADSs has been and is likely to remain highly volatile and subject to wide fluctuations in response to numerous factors including the following:

● our failure to obtain the authorizations necessary to commence future clinical trials;

● results of clinical and preclinical studies;

● announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process;

● announcements of technological innovations, new product candidate(s) or product enhancements by us or others;

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● adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;

● changes or developments in laws, regulations or decisions applicable to our product candidate(s) or patents;

● any adverse changes to our relationship with manufacturers or suppliers;

● announcements concerning our competitors or the pharmaceutical or biotechnology industries in general;

● achievement of expected product sales and profitability or our failure to meet expectations;

● our commencement of or results of, or involvement in, litigation, including, but not limited to, any product liability actions or intellectual property infringement actions;

● any major changes in our board of directors, management or other key personnel;

● legislation in the United States, Europe and other foreign countries relating to the sale or pricing of pharmaceuticals;

● announcements by us of entering into or termination of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments;

● expiration or terminations of licenses, research contracts or other collaboration agreements;

● public concern as to the safety of therapeutics we, our licensees or others develop;

● success of research and development projects;

● developments concerning intellectual property rights or regulatory approvals;

● variations in our and our competitors’ results of operations;

● changes in earnings estimates or recommendations by securities analysts, if the ADSs are covered by these analysts;

● future issuances of Ordinary Shares, ADSs or other securities;

● general market conditions, including the volatility of market prices for shares of biotechnology companies generally, and other factors, including factors unrelated to our operating performance;

● nationalization of vaccines as part of a pandemic due to as part of national security, for example, under the U.S., Defense Production Act seizure of manufacturing; and

● the other factors described in this “Risk Factors” section.

These factors and any corresponding price fluctuations may materially and adversely affect the market price of the ADSs, which would result in substantial losses by our investors.

In the past, securities class action litigation has often been brought against a company and its management following a decline in the market price of its securities. This risk is especially relevant for biopharmaceutical companies, which have experienced significant share price volatility in recent years.

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In addition, the trading prices for securities of other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic. The COVID-19 outbreak continues to rapidly evolve. The extent to which the outbreak may impact our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of any particular company. These market fluctuations may also have a material adverse effect on the market price of the ADSs.

Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline.

Substantial sales of the ADSs on Nasdaq may cause the market price of the ADSs to decline. Sales by us or our security holders of substantial amounts of the ADSs, or the perception that these sales may occur in the future, could cause a reduction in the market price of the ADSs.

The issuance by the Company of any additional ADSs, or grant of any securities by the Company that are exercisable for or convertible into our Ordinary Shares or ADSs, may have an adverse effect on the market price of the ADSs and will have a dilutive effect on our existing shareholders and holders of ADSs.

Your percentage ownership in us may be diluted by future issuances of share capital, which could reduce your influence over matters on which shareholders vote.

Our board of directors has the authority, in most cases without action or vote of our shareholders, to issue all or any part of our authorized but unissued shares, including Ordinary Shares and ADSs issuable upon the exercise of outstanding options. Issuances of additional shares and ADSs would reduce your influence over matters on which our shareholders vote.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our traded securities, the market price for the ADSs and trading volume could be negatively impacted.

The trading market for our securities may be influenced by the research and reports that industry or securities analysts publish about us, our business, our market or our competitors. We do not have any control over these analysts, and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding the ADSs, or provide more favorable relative recommendations about our competitors, the price of the ADSs would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could negatively impact the price of the ADSs or their trading volume.

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Item 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Our History

Our legal and commercial name is BiondVax Pharmaceuticals Ltd. We are a company limited by shares organized under the laws of Israel. We were incorporated in Israel in 2003 as a privately held company. In February 2007, we completed an initial public offering of our ordinary shares on the Tel Aviv Stock Exchange (TASE), and we voluntarily delisted from the TASE in January 2018. In May 2015 we completed an initial public offering of ADSs and ADSs warrants (which have since expired) on the Nasdaq Capital Market.

Our principal executive offices are located at Jerusalem BioPark, 2^nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel, and our telephone number is +972-8-930-2529. Our website is www.biondvax.com. Information contained on, or accessible through, our website is not incorporated by reference herein and shall not be considered part of this annual report. Our agent for service of process in the United States is Puglisi & Associates, whose address is 850 Library Avenue, Suite 204, Newark, Delaware, and whose telephone number is (302) 738-6680.

Our capital expenditures for 2021, 2020 and 2019 amounted to approximately $138, 1,907, and $2,150 thousand, respectively. These expenditures were primarily for factory leasehold improvements, computers and laboratory equipment.

B. Business Overview

We are a biopharmaceutical company focused on developing, manufacturing and commercializing innovative products for the prevention and treatment of infectious diseases and other illnesses. Since our inception, we have executed eight clinical trials, including a seven country, 12,400 participant Phase 3 trial of a prior influenza vaccine candidate (“M-001”) and have built a GMP biologics manufacturing facility for biopharmaceutical products. While M-001 did not meet its clinical endpoints and is no longer under development, we developed a highly experienced pharmaceutical industry leadership team and are aiming to develop a pipeline of diversified and commercially viable products and platforms, beginning with an innovative nanosized antibody (NanoAb) pipeline. NanoAbs are novel nanosized antibodies also known as VHH-antibodies or Nanobodies.

On December 22, 2021, we signed definitive agreements with MPG, the parent organization of the Max Planck Institute for Biophysical Chemistry, and the UMG, both in Germany, to enter into a strategic collaboration for the development and commercialization of innovative Covid-19 NanoAbs. The agreements provide for an upfront payment, development and sales milestones and royalties based on sales and sharing of sublicense revenues.

On March 23, 2022, we executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions such as psoriasis, asthma, macular degeneration, and psoriatic arthritis.

We lease approximately 1,800 square meters (20,000 square feet) in the Jerusalem BioPark, located in the Ein Kerem Hadassah campus, next to Hadassah University Hospital and Hebrew University’s Medical School. The facility includes laboratories, offices, and upstream and downstream manufacturing suites for bulk production and limited capacity for single-dose syringe filling. We also have infrastructure to support future product manufacturing processes and equipment. The manufacturing facility features modular, single-use infrastructure, which enables us to adapt the facility to various manufacturing platforms (such as, for example, fermenters or bioreactors).

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Our Competitive Strengths

We believe that our people, process and technology give us distinct advantages over our competitors, as follows:

● People: Our leadership team has deep biotech and pharmaceutical industry experience, including our Chairman of the Board Mark Germain (a director and former Co-Chairman of Pluristem Therapeutics, and a co-founder and former director of a number of other biotechnology companies including, without limitation, Alexion, Neurocrine, ChromaDex, Inc., Stem Cell Innovations, Inc., Omnimmune Corp. and Collexis Holdings, Inc.), Board director Samuel Moed (former Senior VP Corporate Strategy at Bristol Myers Squibb), Board director Jay Green (former Senior VP Finance and CFO of GSK’s global vaccines business) and COO Elad Mark (formerly employed by Novartis). Our CEO, Amir Reichman, has extensive vaccines R&D, supply chain, manufacturing, and engineering experience from Novartis in the U.S. and GSK in Europe. Furthermore, our Chief Science Officer, Dr. Tamar Ben-Yedidia, oversaw M-001 from R&D at the Weizmann Institute through the pivotal Phase 3 clinical trial. Dr. Ben-Yedidia conducted her preliminary research in the 1990’s under the guidance of Professor Ruth Arnon. Professor Arnon continues to serve as head of BiondVax’s Scientific Advisory Board.

● Process: After years of experience, BiondVax has developed a mature set of business processes including pre-clinical and clinical development, regulatory, quality and GMP manufacturing processes. We are still under a master services agreement with our CRO, with whom we partnered for our Phase 3 clinical trial, and through which we retain access to over 90 medical centers in their investigational site network which can be re-activated should we in-license a clinical stage asset. These processes can help us accelerate time to market for future in-licensed assets and hence provide us with a competitive value proposition versus other companies our size. In the past, we conducted a pivotal Phase 3 trial in over 100 clinical trial sites in seven Eastern European countries, subject to, among others, the regulation of the European Medicines Agency (EMA). The trial was completed on time and on budget. Our Phase 3 clinical trial was initiated after we completed two Phase 1/2 clinical trials and three Phase 2 clinical trials in Israel pursuant to clinical trial protocols approved by the Israeli Ministry of Health, a Phase 2b clinical trial in Europe, and a Phase 2 clinical trial conducted by the NIH/NIAID in the USA.

● Technology: Our existing and advanced GMP manufacturing facility in Jerusalem uses an agile and modular ‘Single Use’ infrastructure that can be used for a wide variety of applications and technologies, such as the production of recombinant proteins, RNA, nanobodies and other vaccines and treatments. In addition, we have advanced automation, data management and IT systems necessary for regulatory compliant clinical development, clinical supplies and commercial supplies.

Our Business Strategy

In the past, BiondVax was a one product company, solely focused on developing the M-001 universal influenza vaccine. Going forward, the Company intends to implement a strategy that will build a diversified pipeline of assets along several axes, as follows:

● a pipeline of products for prevention (through vaccines) and treatment of infectious diseases and related illnesses, as well as well as other illnesses with large market opportunities for more effective treatments

● a pipeline that would present various routes of drug delivery (e.g., intra-muscular, nasal, oral, etc.)

● a pipeline that would rely on various platforms (different types of molecules and manufacturing platforms)

● a pipeline of products at different stages of clinical development.

If successfully implemented, this strategy would provide BiondVax with a diverse multi-dimensional pipeline. The Company is currently actively engaged in identifying and evaluating many opportunities. These include in-licensing, acquisitions, and joint ventures, with industry, academia, and governments. Indeed, the Company is currently engaged in due diligence and negotiations on a number of potential opportunities.

The Company has recently executed the first step of its new strategy by entering into a strategic collaboration with MPG and UMG for the development and commercialization of innovative NanoAbs for COVID-19 and several other disease indications.

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Competition

Generally, our competitors include large fully integrated pharmaceutical companies as well as companies and academic research institutes in various developmental stages attempting to develop (i) COVID-19 antibody therapeutics (such as Adagio Therapeutics, and Vir Biotechnology) as well as (ii) other products for the prevention and treatment of disease targets that are the subject of our broader agreement with MPG and UMG. 

Marketing and Sales

We do not currently have any pharmaceutical product marketing or sales capabilities. We intend to license to, or enter into strategic alliances, with governments, health systems or companies in the pharmaceutical business, which are equipped to market and/or sell any products that we acquire or develop in the future, if and when they are approved. We may seek to establish marketing and/or sales forces in the future, if and when appropriate, in addition to any such licensing arrangements or strategic alliances.

Manufacturing

We have a mid-sized manufacturing facility in Jerusalem, which is capable of manufacturing GMP-compliant product candidates for use in either clinical trials or for small to medium scale commercial supply. Although we currently anticipate using our facility for future manufacturing of product candidates, we may also rely on a third party CMO.

Properties

Office Leasing Agreement

Since August 2018, our principal executive offices and main laboratory are located at Jerusalem BioPark, 2nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel, next to Hadassah University Hospitals and Hebrew University’s Medical School. We lease this space, which presently consists of a total area of approximately 1,845 square meters (approx. 22,000 square feet), from an unaffiliated third party as of July 18, 2017. The lease period is 10 years with an option for an additional 5 years at our discretion.

We believe this existing property is sufficient for our needs in the foreseeable future and that we have the ability to renew our lease at market terms and expand if required.

Fixed assets

Our fixed assets are comprised of factory leasehold improvements, laboratory equipment, furniture, software and improvements in the leased property. The accumulated depreciation as stated in our financial reports is deducted from the fixed assets value. Our fixed assets, less deduction for the accumulated depreciation, were NIS 38.5 ($12.4 million) for the period ended on December 31, 2021 and NIS 39.6 million ($12.7 million) for the period ended on December 31, 2020.

Our Main Laboratory

Our facility in Jerusalem consists of laboratories, manufacturing suites, and offices. The laboratories include (i) an analytical lab, which conducts quality tests on our products using our designated analytical methods; (ii) virology lab; and (iii) research and development lab. The manufacturing suites, defined as “clean rooms”, include a fermentation suite (“upstream”), a protein purification suite (“downstream”) and formulation suite.

BiondVax’s modern cGMP pharmaceutical manufacturing facility is designed in a modular ‘Single Use’ technology concept enabling relatively flexible production capabilities. Equipment units are mobile and can be replaced or relocated. The facility includes sufficient room to conduct upstream, downstream and media / buffer preparation processes. Each clean room is segregated with a separate Fan Filter Unit (FFU) designed to avoid cross contamination.

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The analytical lab is equipped with advanced equipment and machinery including computerized analytical devices for qualitative and quantitative analysis, equipment for measuring light absorption properties for identifying substances, equipment for measuring weight, acidity and temperature, and equipment for identifying replication of DNA sequences.

Our laboratory also includes a separate technician room which contains our computers and software used to collect the data received from our different devices for the purpose of analyzing it. The lab also contains refrigerators and freezers which are consistently monitored and that are connected to a computerized control system. The production rooms are equipped with a fermentation facility, machinery for filtering and concentrating proteins, a computerized system for the characterization and separation of proteins, as well as equipment allowing us to work under sterile conditions.

The virology lab is equipped with microscopes, incubators for growing bacteria, animal cells and viruses, and equipment enabling us to work under sterile conditions. The work performed at the virology lab involves various virus strains and therefore mandates strict safety conditions and is subject to Israeli environmental regulation.

The facility also includes a Water for Injection (WFI) water purification system. The WFI system is controlled and monitored continuously.

Research and other Grants

Finance Contract – European Investment Bank

We have borrowed Euro 24 million pursuant to the Finance Contract with the EIB. The loan was made to support developing and marketing M-001, pursuant to the Horizon 2020 framework of the EU. To date, we have drawn down all tranches of the loan and received Euro 24 million.

We entered into the Security Agreement with EIB granting it a first ranking floating charge in favor of EIB over all assets of the Company, excluding certain assets and/or intellectual property rights subject to the license agreement between the Company and YEDA Research and Development Company Limited, the technology transfer arm of Israel’s Weizmann Institute of Science (“Yeda”).

 The EIB financing is interest free and is repayable, per each tranche, in a single installment five years following the date each tranche was received. A failure to pay any amount payable under the Finance Contract shall cause interest to accrue on each unduly paid amount, at an annual rate equal to EURIBOR plus 2%.

In the event the Company elects to prepay the EIB financing, or in the event the EIB shall demand prepayment following certain events, including a change of control, senior management change or merger events, the Company shall be required to pay EIB the principal amount of the tranches already paid (the “Prepayment Amount”), plus the greater of: (i) the amount, as determined by EIB required in order for the EIB to realize an internal rate of return on the relevant amount prepaid of 20%; and (ii) the Prepayment Amount. The finance contract also stipulates that in the event the EIB demands prepayment of the loan due to any prepayment event to non-EIB lenders, the Company shall be obligated to pay the Prepayment Amount plus an additional reduced amount.

In addition, and as consideration for the EIB financing, EIB is entitled to certain royalties on any revenue from M-001. In light of the Phase 3 clinical trial results, we do not currently expect any future revenues from M-001 and thus do not currently expect to make royalty payments to EIB.

On January 26, 2021, the EIB notified us that, among other things, they will not consider the failure of our pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the finance contract. However, the EIB cautioned us that their letter is not a consent, agreement, amendment or waiver in respect of the terms of the finance contract, reserving any other right or remedy the EIB may have now or subsequently. There is no guarantee that the decision by the EIB in their letter will not change at any time and without any notice or that the EIB will not determine that an event of default has occurred under the finance contract, which could result in all loans extended under the finance contract being accelerated and secured creditor remedies being exercised.

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As disclosed on our press release dated March 14, 2022, the Company and EIB have reached a commercial agreement, which is still subject to EIB’s formal approval, regarding restructuring of the Finance Contract in a manner that would serve both parties’ long-term interests. Proposed terms of the restructuring are as follows:

● An extension of the maturity dates from 2023 (€20 million) and 2024 (€4 million) until December 2027.

● Although the Loan has been outstanding since 2018, interest on the Loan will only begin to accrue starting January 1, 2022 at an annual rate of 7%. The interest payments will be deferred until the new maturity date and will be added to the principal balance at the end of each year during the Loan period.

● $900,000 will be paid by BiondVax as a reduction of principal shortly after the new terms become effective, and going forward 10% of any capital raises by BiondVax until maturity will be used to further repay the Loan principal.

● Once BiondVax’s commercial sales exceed €5 million, 3% of BiondVax’s topline revenues will be paid to EIB as royalties up to a combined maximum of 2.8 times the original €24 million principal.

● If BiondVax chooses to prepay any portion of the Loan (other than as required from future capital raises) the amount prepaid will be calculated such that the EIB realizes at least 20% IRR on its investment at the point of prepayment.

However, until definitive documentation is signed, there can be no assurance that the Company will successfully complete this renegotiation.

Israeli Innovation Authority

Since 2006, we received approximately $5.5 million in grants from the Israeli Innovation Authority (IIA), formerly known as the Office of the Chief Scientist. The grants were for research and development of M-001. In light of the Phase 3 clinical trial results, we do not currently expect any future revenues from M-001 and therefore do not currently expect to make any royalty payments to the IIA. The Company is subject to various other restrictions pursuant to the grant, including limitations on transferring IP developed with grant funds. In light of the Company’s new strategy, we do not expect these restrictions to be material to our ongoing operations.

Grant for the Construction of a Manufacturing Facility in Jerusalem

In 2017, we were awarded a grant of NIS 4 million for the construction of our facility in Jerusalem to support Phase 3 trials and commercial production of M-001. However, the grant money has not yet been disbursed due to the failure of M-001 in phase 3 clinical trials. BiondVax has recently reapplied for disbursement in light of its new agreements with MPI and UMG, and pursuant to a request from the Israeli Investment Authority, the IIA has appointed an external assessor to evaluate the viability and innovativeness of the technology licensed from MPI and UMG. The IIA has submitted its report to the Investment Authority, which is currently evaluating whether to approve the disbursement of the grant.

The grant is subject to certain terms and conditions, including those outlined under the Israeli Encouragement of Capital Investment Law, 1959. Pursuant to the terms of the grant, (i) at least 24% of the investments in the planned manufacturing facility’s fixed assets must be financed by additional share capital, (ii) the Company must maintain its intellectual property and manufacturing facility in Israel for a period of at least 10 years following receipt of the grant and (iii) we must grant a floating charge over our assets (excluding assets and/or intellectual property rights subject to the license agreement with Yeda). Any floating charge over our assets granted to the IIA will require the approval of the EIB.

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Government Regulation

United States

FDA Regulations

In the United States, the FDA regulates pharmaceuticals and biologics under the Food, Drug & Cosmetics Act, and the Public Health Service Act, and their implementing regulations. These products are also subject to other federal, state, and local statutes and regulations, including federal and state consumer protection laws, laws protecting the privacy of health-related information, and laws prohibiting unfair and deceptive acts and trade practices.

The process required by the FDA before a new drug product may be marketed in the United States generally involves the following: completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with the FDA’s Good Laboratory Practice, or GLP, regulations; submission to the FDA of an IND application, which must allow become effective before human clinical trials may begin and must be updated annually; performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed indication; and submission to the FDA of a “new drug application (“NDA”) for a drug, and Biologic License Application (BLA) for biological product, after completion of all pivotal clinical trials. 

An IND application while technically a request for a Federal approval to transport or distribute a drug across state lines, is, in effect, a request for authorization from the FDA to administer an investigational drug product to humans. In the future, we may consider submitting an IND application to the FDA for initiating clinical trials or, if required, to conduct a bridging clinical study to allow licensure of a vaccine or other Company product candidate in the U.S.

Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices, or GCP, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. Additionally, approval must also be obtained from each clinical trial site’s IRB, before the trials may be initiated, and the IRB must monitor the trial until completed. There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries.

Generally, three phases of clinical trials are conducted prior to receiving regulatory marketing approval: Phase 1 clinical trials are normally conducted in small groups of healthy volunteers to assess safety and find the potential dosing range. After a safe dose has been established, the drug is administered to small populations of eligible participants (Phase 2) to look for initial signs of efficacy in treating the targeted disease or condition and to continue to assess safety. In the case of vaccines, the participants are healthy and the signs of efficacy can be obtained in early Phase 1, therefore this Phase is defined as Phase 1/2. Phase 3 clinical trials are usually multi-center, double-blind controlled trials in hundreds or even thousands of subjects at various sites to assess as fully as possible both the safety and effectiveness of the drug.

The FDA, the IRB, or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group reviews unblinded data from clinical trials and provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the trial. We may also suspend or terminate a clinical trial based on evolving business objectives and/or the competitive climate.

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, detailed investigational drug product information is submitted to the FDA in the form of a BLA as compared to an NDA for generally traditional small molecule drugs requesting approval to market the product for one or more indications. The application includes all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, and controls and proposed labeling, among other things. Given the complexities of manufacturing biological products that are processed from living material, BLA content must also demonstrate purity specifically in terms of showing that the final product does not contain extra material.

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Once the BLA submission has been accepted for filing, the FDA’s goal is to review applications within 10 months of filing. However, the review process is often significantly extended by FDA requests for additional information or clarification. The FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it typically follows such recommendations.

After the FDA evaluates the BLA and conducts inspections of manufacturing facilities where the drug product will be formulated and where the drug will be produced, it may issue an approval letter or, instead, a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application is not ready for approval. A Complete Response Letter may require additional clinical data and/or an additional Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. Even if such additional information is submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval. The FDA could also approve the BLA with a risk evaluation and mitigation strategy to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, participant registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials. Such post-market testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

After regulatory approval of a drug product is obtained, the drug producer is required to comply with a number of post-approval regulations. As a holder of an approved BLA, we would be required to report, among other things, certain adverse reactions and production problems to the FDA, to provide updated safety and efficacy information, and to comply with requirements concerning advertising and promotional labeling for any of our products. These promotion and advertising requirements include, among others, standards for direct-to-consumer advertising, prohibitions against promoting drugs for uses in participant populations that are not described in the drug’s approved labeling (known as “off-label use”), rules for conducting industry-sponsored scientific and educational activities and other promotional activities, Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses. Failure to comply with FDA requirements can have negative consequences, including the immediate discontinuation of marketing activities and noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. Such enforcement may also lead to scrutiny and enforcement by other government and regulatory bodies.

Also, quality control and manufacturing procedures must continue to conform to cGMP after approval to ensure and preserve the long term stability of the drug product. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes extensive procedural, substantive, and record keeping requirements. In addition, changes to the manufacturing process are strictly regulated and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

Future FDA and state inspections may identify compliance issues at our facilities or at the facilities of our CMOs or licensees that may disrupt production or distribution or require substantial resources to correct. In addition, discovery of previously unknown problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial action that could delay or prohibit further marketing. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of other risk management measures. Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of any Company product candidates we may develop in the future.

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The FDA also may require post-marketing testing, or Phase 4 testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of the product.

Expedited Development and Review Programs

The FDA has a number of programs intended to expedite the development and review of product candidates. For example, Fast Track designation is intended to expedite or facilitate the process for reviewing new biological products that meet certain criteria. Specifically, new biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new biological product may request the FDA to designate the biological product as a Fast Track product at any time during the clinical development of the product. Unique to a Fast Track product, the FDA may consider for review sections of the marketing application on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application. FDA may revoke the Fast Track designation if it believes that the designation is no longer supported by data emerging in the clinical trial process.

Under the Breakthrough Therapy program, products intended to treat a serious or life-threatening disease or condition may be eligible for Breakthrough Therapy designation, which includes eligibility for the benefits of the Fast Track program, when preliminary clinical evidence demonstrates that such product may have substantial improvement on one or more clinically significant endpoints over existing therapies. Additionally, FDA will seek to ensure the sponsor of a breakthrough therapy product receives timely advice and interactive communications to help the sponsor design and conduct a development program as efficiently as possible.

A product is eligible for priority review if it is intended to treat a serious condition and, if approved or licensed, it would provide a significant improvement in safety or effectiveness. FDA intends to take action on a priority review marketing application within six months of receipt, compared to 10 months of receipt for regular review submissions.

Additionally, a product may be eligible for accelerated approval if it is intended to treat a serious or life-threatening disease or condition and would provide meaningful therapeutic benefit over existing treatments. Accelerated approval may be granted on the basis of adequate and well-controlled clinical studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality and is reasonably likely to predict an effect on irreversible morbidity, mortality, or other clinical benefit. As a condition of approval, the FDA may require that a sponsor of a biological product receiving accelerated approval diligently perform adequate and well-controlled postmarketing clinical studies demonstrating clinical benefit. In addition, the FDA requires as a condition for accelerated approval the submission of promotional materials, which could adversely impact the timing of the commercial launch of the product. Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval do not change the standards for licensure but may expedite the review process.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With enactment of the Food and Drug Administration Safety and Innovation Act of 2012, or FDASIA, sponsors must also submit pediatric study plans prior to the assessment data.

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Those pediatric study plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation. The applicant, the FDA and the FDA’s internal review committee must then review the information submitted, consult with each other and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after licensure of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

Pediatric exclusivity is a type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity. This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

FDA Review of BLAs

After completion of the required clinical testing, a BLA is prepared and submitted to the FDA. FDA approval of the BLA is required before marketing of the product may begin in the U.S. The BLA must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting a BLA is substantial. The submission of most BLAs is additionally subject to a substantial application user fee, currently exceeding $2,875,842 for fiscal year 2021, and the manufacturer and sponsor under an approved BLA are also subject to annual program fees, currently $336,432 for each prescription product. These fees are typically increased annually. Sponsors of applications for drugs granted Orphan Drug Designation are exempt from these user fees.

The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept a BLA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of BLAs to encourage timeliness. Applications for standard review drug products are meant to be reviewed within ten months; applications for priority review drugs are meant to be reviewed in six. Priority review can be applied to drugs that the FDA determines offer major advances in treatment or provide a treatment where no adequate therapy exists. The review process for both standard and priority review may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in the submission.

The FDA is required to refer an application for a novel biological product to an advisory committee or explain why such referral was not made. An advisory committee is typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.

Before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not license the product unless compliance with cGMPs is satisfactory, and the application meets the appropriate standard. A BLA must include data that demonstrate that the biological product is safe, pure, and potent.

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After the FDA evaluates the BLA and accompanying information and the manufacturing facilities, it issues either an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

An approval or licensure letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of BLA licensure, the FDA may require a REMS, to help ensure that the benefits of the biological product outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals and ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover, product licensure may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product licenses may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.

If the FDA approves a product, it may limit the approved indications for use for the product; require that contraindications, warnings or precautions be included in the product labeling; require that postmarketing studies, including Phase 4 clinical trials, be conducted to further assess the drug’s safety after licensure; require testing and surveillance programs to monitor the product after commercialization; or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval, as applicable, of a new BLA or supplement before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing supplements as it does in reviewing BLAs.

Biosimilars and Reference Product Exclusivity

The BPCIA created an abbreviated approval pathway for biological product candidates shown to be highly similar, or “biosimilar,” to or interchangeable with an FDA licensed reference biological product. Biosimilarity, which requires that a product is highly similar to the reference product notwithstanding minor differences in clinically inactive components, and that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can generally be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the interchangeable biosimilar and the reference biological product may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product. A product shown to be biosimilar or interchangeable with an FDA-approved reference biological product may rely in part on the FDA’s previous determination of safety and effectiveness for the reference product for approval, which can potentially reduce the cost and time required to obtain approval to market the product. Complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles and have slowed implementation of the BPCIA by the FDA.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of reference product exclusivity, another company may obtain FDA licensure and market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

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A biological product can also obtain pediatric market exclusivity in the U.S. As stated above, pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, there has been discussion of whether Congress should reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate implementation of the BPCIA is subject to significant uncertainty.

Post-Licensure FDA Requirements

Biological products manufactured or distributed pursuant to FDA licenses are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion with the product. After licensure, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and licensure. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

Often times, even after a biological product has been licensed by the FDA for sale, the FDA may require that certain post-licensure requirements be satisfied, including the conduct of additional clinical studies. If such post-approval requirements are not satisfied, the FDA may withdraw its licensure of the biological product. In addition, holders of a biological product license are required to report certain adverse reactions to the FDA, comply with certain requirements concerning advertising and promotional labeling for their products, and continue to have quality control and manufacturing procedures conform to cGMP after approval. In addition, biological product manufacturers and their subcontractors are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements and other aspects of regulatory compliance. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Among the conditions for BLA licensure is the requirement that the manufacturing operations conform on an ongoing basis with cGMP. In complying with cGMP, we must expend time, money and effort in the areas of training, production and quality control within our own organization and at our contract manufacturing facilities. A successful inspection of the manufacturing facility by the FDA is usually a prerequisite for final licensure of a biological product. Following licensure of the BLA, we and our manufacturers will remain subject to periodic inspections by the FDA to assess continued compliance with cGMP requirements and the conditions of licensure. We will also face similar inspections coordinated by foreign regulatory authorities. The FDA periodically inspects the sponsor’s records related to safety reporting and/or manufacturing facilities; this latter effort includes assessment of compliance with cGMP. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once licensure is granted, the FDA may withdraw licensure if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

● restrictions on the marketing or manufacturing of the product, including total or partial suspension of production, complete withdrawal of the product from the market or product recalls;

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● fines, warning letters or holds on post-licensure clinical trials;

● refusal of the FDA to license pending BLAs or supplements, or suspension or revocation of product licensure;

● product seizure or detention, or refusal to permit the import or export of products;

● consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

● mandated modification of promotional materials and labeling and the issuance of corrective information;

● the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or

● injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates marketing, labeling, advertising and promotion of products that are placed on the market. Biological products may be promoted only for the licensed indications and in accordance with the provisions of the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off label uses may be subject to significant liability. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

In addition, the distribution of prescription drug products, including most biological products that require a prescription, is subject to the Prescription Drug Marketing Act, or the PDMA, which regulates the distribution of drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription drug product samples and impose requirements to ensure accountability in distribution.

Other U.S. Healthcare Laws and Compliance Requirements

Among others, the FDA, HHS, Office of Inspector General, the CMS and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the preclinical and clinical development, manufacture, marketing, and distribution of drugs such as those we are developing. These agencies and other federal, state, and local entities regulate, among other activities, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, sales, commercialization, marketing, advertising and promotion, distribution, post-approval monitoring and reporting, sampling, and export and import of our product candidates. Any drug candidates that we develop must be approved by the FDA before they may be legally marketed in the U.S. and by the appropriate foreign regulatory agency before they may be legally marketed in those foreign countries. Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the U.S., although there can be important differences. Additionally, some significant aspects of regulation in the EU are addressed in a centralized way, but country-specific regulation remains essential in many respects.

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Although we do not currently have any products on the market, in addition to FDA restrictions on marketing of pharmaceutical products, we are also subject to healthcare statutory and regulatory requirements and enforcement by the U.S. federal and state governments. Pharmaceutical companies like us are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such regulation and may constrain the financial arrangements and relationships through which we research, develop, and, ultimately, sell, market, and distribute any products for which we obtain marketing approval. Such laws include, without limitation:

● The federal Anti-Kickback Statute, an intent-based criminal statute that prohibits, among other activities, persons and entities from knowingly and willfully soliciting, offering, paying, receiving, or providing any remuneration (including any kickback, bride, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order, or recommendation of, any item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare or Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

● The federal civil and criminal false claims laws, including the civil FCA, which prohibit individuals or entities from, among other activities, knowingly presenting, or causing to be presented, to the federal government claims for payment or approval that are false, fictitious, or fraudulent; knowingly making, using, or causing to be made or used, a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government. In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The FCA also permits a private individual acting as a “whistleblower” to bring qui tam actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery or settlement.

● The federal civil monetary penalties laws, which prohibit, among other activities (1) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program, (2) failing to report and return a known overpayment, or (3) offering or transferring any remuneration to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of items or services reimbursable by Medicare or Medicaid, unless an exception applies.

● The federal criminal statutes enacted under HIPAA which impose criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program; knowingly and willfully embezzling or stealing from a healthcare benefit program; willfully preventing, obstructing, misleading, or delaying a criminal investigation of a healthcare offense; and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items, or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

● The federal Physician Payment Sunshine Act, enacted as part of the ACA, which imposes annual reporting requirements for certain manufacturers of drugs, devices, biological products, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to “covered recipients,” which include U.S.-licensed physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members. For reports submitted to CMS on or after January 1, 2022, such obligations will include the reporting of payments and other transfers of value provided in the previous year to certain other healthcare professionals, including physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants and certified nurse midwives.

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● The FDCA and PHSA, which regulate licensure of biological products and prohibit the misbranding and adulteration of biological products.

● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply with respect to healthcare items or services reimbursed by non-governmental third party-payors and may be broader than their federal equivalents; state and foreign laws requiring pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and/or the relevant compliance guidance promulgated by the federal government or otherwise restricting payments that may be made to healthcare providers; state laws and regulations requiring drug manufacturer disclosures to state agencies and/or commercial purchasers with respect to certain price increases; state and foreign laws requiring drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers and restricting marketing practices or requiring disclosure of marketing expenditures and pricing information; and state and local laws that requiring registration of pharmaceutical sales representatives.

We are also subject to the Foreign Corrupt Practices Act, or FCPA, which prohibits improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business.

Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, and others may be ineffective, and violations of the FCPA and similar state laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, financial condition and results of operations.

Violations of any of these laws or any other applicable laws or regulations may result in significant penalties, including, without limitation, administrative, civil, and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations to resolve allegations of noncompliance, exclusion from participation in federal and state healthcare programs, such as Medicare and Medicaid, and imprisonment. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from its business.

Coverage and Reimbursement

Sales of any pharmaceutical product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance, and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a payor-by-payor basis. These third-party payors are increasingly reducing coverage and reimbursement for healthcare items (including drugs) and services. Moreover, for products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself may or may not be available. Instead, the hospital or administering physician may be reimbursed only for providing the treatment or procedure in which our product is used.

In addition, the U.S. government, states, and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement, and requirements for substitution of lower-cost or generic products. Adoption of price controls and cost-containment measures and adoption of more restrictive policies in jurisdictions with existing controls and measures could further limit sales of any drug product. Decreases in third-party reimbursement for any drug product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product and also have a material adverse effect on sales.

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Moreover, as a condition of participating in, and having products covered under, certain federal healthcare programs, such as Medicare and Medicaid, we may become subject to federal laws and regulations that require pharmaceutical manufacturers to calculate and report certain pricing metrics to the government, including the Average Manufacturer Price, or AMP, and Best Price under the MDRP, the Medicare Average Sales Price, the 340B Ceiling Price, and Non-Federal AMP reported to the Department of Veteran Affairs, and with respect to Medicaid, pay statutory rebates on utilization of manufacturers’ products by Medicaid beneficiaries. Compliance with these laws and regulations will require significant resources and may have a material adverse effect on our revenues.

Healthcare Reform

In the U.S., in March 2010, the ACA was enacted, which substantially changed the way healthcare is financed by both governmental and private payors, and significantly affected the pharmaceutical industry. The ACA contained a number of provisions, including those governing the federal healthcare programs, provider reimbursement, and healthcare fraud and abuse laws. For example, the ACA:

● increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1% of the AMP;

● required collection of rebates for drugs paid by Medicaid managed care organizations;

● expanded beneficiary eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 138% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;

● extended manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

● expanded the types of entities eligible for the 340B Drug Pricing Program;

● established a new methodology by which rebates owed by manufacturers under MDRP are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

● required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70 percent point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

● imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” and biologic agents apportioned among these entities according to their market share in certain federal government programs;

● established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending;

● created the Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

● required reporting of certain financial arrangements between manufacturers of drugs, biologics, devices, and medical supplies and physicians and teaching hospitals under the federal Physician Payments Sunshine Act; and

● required annual reporting of certain information regarding drug samples that manufacturers and distributors provide to licensed practitioners.

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Since its enactment, there have been executive, judicial, and legislative branch challenges to certain aspects of the ACA, and, on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court’s decision, President Biden had issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, policies that create barriers to obtaining access to health insurance coverage through the ACA marketplaces. It is unclear how healthcare reform measures enacted by Congress or implemented by the Biden administration or other efforts to challenge, repeal or replace the ACA, if any, will impact the ACA.

Other legislative changes have been proposed and adopted in the U.S. since the ACA was enacted. These changes include the Budget Control Act of 2011, which, among other changes, led to aggregate reductions in Medicare payments to providers of up to 2% per fiscal year that started in April 2013 and, due to subsequent legislation, will continue into 2031, with the exception of a temporary suspension of the payment reduction from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic, unless additional Congressional action is taken. Most recently, the American Rescue Plan Act of 2021 eliminates the statutory cap on drug manufacturers’ MDRP rebate liability effective January 1, 2024. Under current law enacted as part of the ACA, drug manufacturers’ MDRP rebate liability is capped at 100% of AMP for a covered outpatient drug.

The cost of prescription drugs has been the subject of considerable policy discussion and debate in the U.S. Congress has considered and passed legislation, and the former Trump administration pursued several regulatory reforms to further increase transparency around prices and price increases, lower out-of-pocket costs for consumers, and decrease spending on prescription drugs by government programs. Congress has also continued to conduct inquiries into the prescription drug industry’s pricing practices. While several proposed reform measures will require Congress to pass legislation to become effective, Congress and the Biden administration have expressed support for legislative and/or administrative measures to address prescription drug costs. The Biden administration has also taken several executive actions that signal changes in policy from the prior administration, including with respect to executive actions by the Trump administration related to prescription drug costs. At the state level, legislatures are increasingly passing legislation and states are implementing regulations designed to control spending on, and patient out-of-pocket costs for, drug products.

We expect that additional state and federal healthcare reform and/or drug pricing measures will be adopted in the future, any of which could affect the pricing and/or availability of drug products, the amounts that federal and state governments and other third-party payors will pay for healthcare products and services, and/or our ability to generate revenue, attain or maintain profitability, or commercialize products for which we may receive regulatory approval in the future.

Other U.S. Healthcare Laws and Compliance Requirements

For products distributed in the United States, we will also be subject to additional healthcare regulation and enforcement by the federal government and the states in which we conduct our business. 

Efforts to ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations could be costly. Although we believe our business practices are structured to be compliant with applicable laws, it is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our future operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from third party payor programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians, providers or entities with whom we may do business with will be found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusion from government funded healthcare programs.

Many aspects of these laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations which increases the risk of potential violations. In addition, these laws and their interpretations are subject to change. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business, and damage our reputation.

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In addition, from time to time in the future, we may become subject to additional laws or regulations administered by the FDA, the Federal Trade Commission, or by other federal, state, local or foreign regulatory authorities, to the repeal of laws or regulations that we generally consider favorable, or to more stringent interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals or interpretations, and we cannot predict what effect additional governmental regulation, if and when it occurs, would have on our business in the future. Such developments could, however, require reformulation of certain products to meet new standards, recalls or discontinuance of certain products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, additional personnel, or other new requirements. Any such developments could have a material adverse effect on our business.

Israel

Before an entity or person can conduct clinical testing on humans in Israel, such entity or person must receive special authorization from the ethics committee (also known as a “Helsinki Committee”) and general manager of the institution in which such entity or person intends to conduct its study, as required under the Guidelines for Clinical Trials in Human Subjects implemented pursuant to the Israeli Public Health Regulations (Clinical Trials in Human Subjects), as amended from time to time, and other applicable legislation. These regulations also require authorization from the Israeli Ministry of Health, except in certain circumstances, and in the case of genetic trials, special fertility trials and similar trials, an additional authorization of the overseeing institutional ethics committee. The institutional ethics committee must, among other things, evaluate the anticipated benefits that are likely to be derived from the project to determine if it justifies the risks and inconvenience to be inflicted on the human subjects, and the committee must ensure that adequate protection exists for the rights and safety of the participants as well as the accuracy of the information gathered in the course of the clinical testing. If we perform future clinical studies in Israel, we will be required to obtain authorization from the ethics committee and general manager of each institution in which we intend to conduct our clinical trials, and in most cases, from the Israeli Ministry of Health.

Europe and Other Territories

Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. For example, in the European Union, a clinical trial application, or CTA, must be submitted to each member state’s national health authority and an independent ethics committee. The CTA must be approved by both the national health authority and the independent ethics committee prior to the commencement of a clinical trial in the member state. The approval process varies from country to country and the time frame may be longer or shorter than that required for FDA approval. In addition, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country. In all cases, clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Helsinki Declaration.

To obtain marketing approval of a drug under European Union regulatory systems, we may submit marketing authorization applications under a centralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The centralized procedure is compulsory for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, and products with a new active substance indicated for the treatment of certain diseases, including M-00.1 It is optional for products with other new active substance (which has not been developed for the diseases named in the Annex of the relevant EU-Regulation on the authorization of medicinal products for human use and the EMA), those products that are highly innovative, or for which a centralized process is in the interest of participants. M-001 falls under the compulsory centralized procedure category. Under the centralized procedure category in the European Union, the maximum time frame for the evaluation of a marketing authorization application by the Committee of Medicinal Products for Human Use (CHMP) is 210 days after receipt of a valid application (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP). Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, for which there is no single definition, but which needs to be justified by the applicant and assessed by the CHMP on a case-by-case basis. Relevant criteria can be: the seriousness of the disease, such as seriously disabling or life-threatening diseases, to be treated; the absence or insufficiency of an appropriate alternative therapeutic approach; and anticipation of high therapeutic benefit. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days. On the basis of the CHMP opinion, the European Commission will decide on the marketing authorization within 67 days after receipt of the CHMP opinion.

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The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state, known as the reference member state. Under this procedure, an applicant submits an application, or dossier, and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application (Assessment Step I). Within 90 days of receiving the reference member state’s assessment report, each concerned member state must decide whether to approve the assessment report and related materials (Assessment Step II). If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the matter will be referred to the Coordination Group for Mutual Recognition Procedures and Decentralized Procedures (CMDh) at the EMA. If within 60 days of the referral a consensus is not reached, the matter and the disputed points will eventually be referred to the CHMP with EMA. The decision on whether the product can be approved is then taken by the European Commission on the basis of the opinion of the CHMP. The decision of the European Commission is binding on all member states. After the close of the procedure and review of the national translations of the texts for the labelling of the labelling, the package leaflet and the summary of product characteristics the reference member state and the concerned member states issue national marketing authorization within a further 30 days (National Step). 

For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials are conducted in accordance with GCPs and the applicable regulatory requirements and the ethical principles that have their origin in the Helsinki Declaration.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Intellectual Property

We license the core intellectual property for our NanoAbs program from MPG under an exclusive license agreement, pursuant to which we received an exclusive worldwide license for the development and commercialization of Covid-19 NanoAbs based on certain patents and intellectual property owned by MPG and related thereto. Pursuant to the terms of the license agreement, unless earlier terminated in accordance with the provisions thereof, the license agreement will expire on a product-by-product and country-by-country basis upon the later of (i) the expiration or abandonment of the patent rights that relate to such product in such country and (ii) ten years from the date of first commercial sale of such product in such country. We have the right to license nanobodies against certain other molecular targets on the same terms described above.

We have an exclusive license to two families of patents and pending patent applications relating to influenza vaccines, particularly M-001, and to their manufacture and use. We have an exclusive worldwide license for the development, manufacturing, marketing, sale, distribution and importing of products based, directly or indirectly, on these two families of patents from Yeda, pursuant to a license agreement executed in 2003, as amended in 2005. These patents relate to M-001, and Yeda is entitled to certain royalties on revenue developed with the licensed IP. In light of the Phase 3 clinical trial results, we do not currently expect any future revenues from M-001 and thus do not currently expect to make royalty payments to Yeda.

Environmental Matters

We are subject to various environmental, health and safety laws and regulations, including those governing the use, management and disposal of hazardous, radioactive and biological materials and wastes and the cleanup of contaminated sites. We believe that our business, operations and facilities are being operated in compliance in all material respects with applicable environmental and health and safety laws and regulations. Our laboratory personnel have ongoing communication with the Israeli Ministry of Environmental Protection in order to verify compliance with relevant instructions and regulations. In addition, all of our laboratory personnel participate in instruction on the proper handling of chemicals, including hazardous substances before commencing employment, and during the course of their employment, with us. In addition, all information with respect to any chemical substance that we use is filed and stored as a Material Safety Data Sheet, as required by applicable environmental regulations. Based on information currently available to us, we do not expect environmental costs and contingencies to have a material adverse effect on us. The operation of our facilities, however, entails risks in these areas. Significant expenditures could be required in the future if we are required to comply with new or more stringent environmental or health and safety laws, regulations or requirements.

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C. Organizational Structure

We do not have any subsidiaries and do not hold any investments in other entities.

D. Property, Plants and Equipment

Our principal executive offices and main laboratory are located at Jerusalem BioPark, 2nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel, next to Hadassah University Hospitals and Hebrew University’s Medical School.

For the year ended December 31, 2021, cash outflow for our office and laboratory leases amounted to NIS 1.1 million ($0.35 million).

Our fixed assets are comprised of factory leasehold improvements, laboratory equipment, furniture and software. The accumulated depreciation as stated in our financial reports is deducted from the fixed assets value. Our fixed assets, less deduction for the accumulated depreciation, were NIS 38.5 million ($12.4 million) as of December 31, 2021 and NIS 34.9 million ($12.7 million) as of December 31, 2020.

For a description of our current laboratory see Item 4B. “Business Overview – Manufacturing”.

Item 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating Results

The information contained in this section should be read in conjunction with our consolidated financial statements for the year ended December 31, 2021 and related notes and the information contained elsewhere in this annual report. Our financial statements have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (the “IASB”).

Company Overview

We are a biopharmaceutical company focused on developing, manufacturing and commercializing innovative products for the prevention and treatment of infectious diseases and other illnesses. Since our inception, we have executed eight clinical trials including a seven country, 12,400 participant Phase 3 trial of a prior influenza vaccine candidate (“M-001”) and have built a GMP biologics manufacturing facility for biopharmaceutical products. While M-001 did not meet its clinical endpoints and is no longer under development, we developed a highly experienced pharmaceutical industry leadership team, and are aiming to develop a pipeline of diversified and commercially viable products and platforms, beginning with an innovative nanosized antibody (NanoAb) pipeline. NanoAbs are novel nanosized antibodies also known as VHH-antibodies or Nanobodies.

On December 22, 2021, we signed definitive agreements with MPG, the parent organization of the Max Planck Institute for Biophysical Chemistry, and UMG, both in Germany, to enter into a strategic collaboration for the development and commercialization of innovative Covid-19 NanoAbs. The agreements provide for an upfront payment, development and sales milestones and royalties based on sales and sharing of sublicense revenues.

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On March 23, 2022, we executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. 

Since our incorporation, we primarily focused our efforts on research and development and clinical trials of M-001. We are not profitable and have incurred losses since inception, principally as a result of research and development, clinical trials and general administrative expenses in support of our operations. We have not generated any revenue, expect to incur substantial losses for the foreseeable future and may never become profitable. For the years ended December 31, 2019, 2020 and 2021, we had net losses of $31,596, $1,386 and $12,855 thousand, respectively, and we expect such losses to continue for the foreseeable future. In addition, as of December 31, 2021, we had an accumulated deficit of approximately $117,290 thousand and we expect to experience negative cash flow for the foreseeable future.

Key Components of Statements of Operations

Revenues

Sources of revenues. Since our inception, we have generated significant losses in connection with our research and development, clinical trials and general administrative expenses in support of our operations and, to date, have not generated revenues.

To date, we have funded our operations primarily through (i) the sale of equity securities in both public and private offerings, (ii) a rights offering, (iii) exercises of warrants issued in connection with our initial public offering in the U.S., (iv) funding received from the IIA, and (iv) proceeds from the Finance Contract with the EIB. In February, 2021 and December 2021, we raised gross proceeds of approximately $13.8 million and $9.8 million, respectively, in underwritten offerings of the ADSs. As of December 31, 2021, we had approximately NIS 54 million ($17.4 million) of cash and cash equivalents.

We expect that we will incur additional losses soon as a result of our research and development activities. Such research and development activities will require us to obtain and expend further resources if we are to be successful. As a result, we expect to continue to incur operating losses, and we may be required to obtain additional funds to further develop our research and development programs. As a result of our research and development activities and our failure to generate revenues since our inception, among other things, our net loss for the year ended December 31, 2021 was approximately NIS 39.9 million ($12.8 million).

Cost of Revenues

Our total cost of revenues includes expenses for the manufacturing of NanoAbs, including the cost of raw materials, employee-related expenses including salaries, equity based-compensation and other benefits and related expenses, rental fees, utilities and depreciation. We expect that our cost of revenues will continue to increase.

Operating Expenses

Research and development expenses. Our research and development expenses consist primarily of salaries and related personnel expenses, fees paid to consultants, patent-related legal fees, costs of preclinical studies and clinical studies, drug and laboratory supplies, and costs for facilities and equipment. We charge all research and development expenses to operations as they are incurred. We expect our research and development expenses to remain our primary expense in the near future. Increases or decreases in research and development expenditures are attributable to the number and/or duration of the clinical studies that we conduct.

We expect that a large percentage of our research and development expenses in the future will be incurred in support of our future clinical development projects. Due to the inherently unpredictable nature of clinical development processes, we are unable to estimate with any certainty the costs we will incur. Clinical development timelines, the probability of success and development costs can differ materially from expectations.

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Our future research and development expenses will depend on any Company product candidate’s commercial potential. As we obtain results from clinical studies, we may elect to discontinue or delay clinical studies for any Company product candidate in certain indications in order to focus our resources on more promising product candidates. Completion of clinical studies may take several years or more, but the length of time generally varies according to the type, complexity, novelty and intended use of a product candidate.

The lengthy process of completing clinical studies and seeking regulatory approval for any Company product candidate requires the expenditure of substantial resources. Any failure or delay in completing clinical studies, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Because of the factors set forth above, we are not able to estimate with any certainty when we would recognize any net cash inflows from our projects.

Developing bio-pharmaceutical vaccines and medicines, conducting clinical trials, obtaining commercial manufacturing capabilities and commercializing products is expensive and we will need to raise substantial additional funds to achieve our strategic objectives. Although we believe that our existing cash resources (inclusive of gross proceeds of approximately $9.8 million received by the Company from a public follow-on offering completed in December 2021 described in “Liquidity and Capital Resources” below) will be sufficient to fund our projected cash requirements at current monthly rates for at least the next 24 months. we will require significant additional financing in the future to fund our operations, including if and when we conduct clinical trials, obtain regulatory approval and obtain commercial manufacturing capabilities for any Company product candidate and commercialize such product candidates. Our future capital requirements will depend on many factors, including:

● the progress and costs of our clinical trials and other research and development activities;

● the scope, prioritization and number of our clinical trials and other research and development programs;

● the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our Company product candidates;

● the costs of the development and expansion of our operational infrastructure;

● the costs and timing of obtaining regulatory approvals for our Company product candidates;

● the ability of us, or our collaborators, to achieve development milestones, marketing approvals and other events or developments under our potential future licensing agreements;

● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

● the costs and timing of building and securing manufacturing arrangements for clinical or commercial production;

● the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves;

● the costs of acquiring or undertaking development and commercialization efforts for any Company product candidate or platforms;

● the magnitude of our general and administrative expenses; and

● any cost that we may incur under future in- and out-licensing arrangements relating to one or more of our Company product candidates.

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Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through the net proceeds received from future private or public equity raising, grants from governmental agencies such as the IIA, debt or equity or other non-dilutive financings such as the loan from EIB, among other financing mechanisms. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of or eliminate research or development plans for, or commercialization efforts with respect to any Company product candidate.

Since 2006, we received $5.5 million in IIA grants and Euro 24 million ($27.6 million) in EIB loans.

Marketing, General and Administrative Expenses:

Our general and administrative expenses consist primarily of salaries and expenses related to employee benefits, including share-based compensation, for our general and administrative employees, which includes employees in executive and operational roles, including finance and human resources, as well as consulting, legal and professional services related to our general and administrative operations.

Financial Income and Expenses

Financial income consists primarily of interest income on our cash and cash equivalents, foreign currency exchange income and warrants valuation. Financial expenses consist primarily of expenses related to bank charges foreign currency exchange expense and financial liabilities valuation.

Participation by Third Parties

Our research and development expenses are net of certain participations by third parties.

Research and development grants received from the OCS, today known as the IIA, are recognized upon receipt as a liability if future economic benefits are expected from the project that will result in royalty-bearing sales. The amount of the liability for the grant is first measured at fair value using a discount rate that reflects a market rate of interest that reflects the appropriate degree of risks inherent in our business. If no economic benefits are expected from the research activity, the grant receipts are recognized as a reduction of the related research and development expenses. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent Assets.”

At the end of each reporting period, we evaluate whether there is reasonable assurance that the received grants will not be repaid based on its best estimate of future sales and, if so, no liability is recognized and the grants are recorded against a corresponding reduction in research and development expenses.

As a result of the failure of the Phase 3 clinical trial, the Company's management estimates that there will be no future revenues from M-001. Therefore, most likely, there will be no future royalty payments to the Israel Innovation Authority ("IIA") and the European Investment Bank ("EIB").

In accordance with the EIB loan agreement, and due to the said above, the Company is required to pay EIB the principal amount of the tranches already loaned by the EIB to the Company, within five years of the date of each tranche of the loan. On December 31, 2020, the Company re-evaluated the loan in the sum of NIS 60,421 ($19,428).

As a result, the Company recorded an amount of NIS 62,800 ($20,193) as revaluation income of the EIB loan and the amount of NIS 12,685 ($4,078) for the IIA liability and recorded them under line-item ‘other income’ in the statement of other comprehensive loss.

As of December 31, 2021, the EIB loan balance is $20,338 (approximately NIS 63,252).

As of the report date, the outstanding principal amount regarding the EIB loan in nominal terms is 84,477 $27,163 (approximately NIS 84,477 ).

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Research and development grants received from the European Union are recorded against a corresponding reduction in research and development expenses.

The Company is currently negotiating a restructuring of the EIB loan with the EIB. See “Finance Contract – European Investment Bank” on page 43.

Taxes on Income

Israeli resident companies, such as the Company, are generally subject to corporate tax at the rate of 23% as of 2021.

Capital gains derived by an Israeli resident company are generally subject to tax at the same rate as the corporate tax rate. Under Israeli tax legislation, a corporation will be considered as an “Israeli Resident” if it meets one of the following: (a) it was incorporated in Israel; or (b) the control and management of its business are exercised in Israel.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Research and Development Expenses, net

Our research and development expenses, net for the year ended December 31, 2021 amounted to NIS 10.3 million ($3.3 million) compared NIS 51.5 ($16.5 million) for the year ended December 31, 2020. The decrease was primarily a result of the Phase 3 clinical trial of the universal vaccine product failure.

Marketing, General and Administrative Expenses

Our marketing, general and administrative expenses for the year ended December 31, 2021 amounted to NIS 24.5 million (approximately $7.8 million) compared to NIS 16.7 million (approximately $5.4 million) for the year ended December 31, 2020. The increase was primarily a result of an increase in Salaries and related expenses of NIS 4.8 million (approximately $1.5 million) due to increased board costs and bonuses, separation agreement with the former CEO and hiring of new employees, increase in Professional services of NIS 2.0 million (approximately $0.65 million), and insurance expenses of NIS 0.5 million (approximately $0.16 million),

Financial Expense (Income), Net

Our financial expenses, net for the year ended December 31, 2021 amounted to NIS 5.1 million ( approximately $1.6 million), primarily from financial expenses in respect of loans from EIB of NIS10.8 million approximately $3.5million), offset by currency exchange expenses of NIS 5.7 million (approximately $3.5million) .

Our financial expenses, net for the year ended December 31, 2020 amounted to NIS 11.8 million (approximately $3.8 million) primarily from warrants revaluation of NIS 14.4 million (approximately $4.6 million), off set by and currency exchange income of NIS 1.7 million (approximately $0.5 million), and Revaluation of IIA liability of NIS 2.1 million (approximately $0.7 million).

Net Loss

As a result of the foregoing research and development, marketing general and administrative expenses, other income (loss), and as we have not yet generated revenues since our inception, our net loss for the year ended December 31, 2021 was NIS 39.9 million (approximately $12.8 million), compared to our net loss for the year ended December 31, 2020 of NIS 4.5 million ($1.4 approximately million).

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

See Item 5 of the Company’s Annual Report on Form 20-F for the year ended December 31, 2020. 

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Liquidity and Capital Resources

Since our inception, we have funded our operations primarily through public and private offerings of our equity securities in Israel and the U.S., grants from the OCS (today known as the IIA), grants received by the Israeli Ministry of Economy and European grants under the UNISEC consortium and the loan from the EIB. Information regarding the outstanding loan from the EIB is set forth above in “Research and other Grants: Finance Contract – European Investment Bank.”

As of December 31, 2021, we had cash and cash equivalents of NIS 54 million (approximately $17.3 million) as compared to NIS 9.4 million (approximately $3.0 million) as of December 31, 2020. Our cash and cash equivalents are denominated in NIS and US dollars.

Net cash used in operating activities was NIS 24.5 million (approximately $7.8 million) for the year ended December 31, 2021, compared with net cash used in operating activities of NIS 72.5 million (approximately $23.3 million) for the year ended December 31, 2020.

Net cash used by investing activities for the year ended December 31, 2021 was NIS 0.36 million (approximately $0.12 million) compared with net cash used by investing activities of NIS 5.9 million (approximately $1.9 million) for the year ended December 31, 2020, and primarily reflects purchase of fixed assets, proceeds from sale of equipment and change in long term assets.

Net cash provided by financing activities for the year ended December 31, 2021 was NIS 67.7 million (approximately $21.8 million), mostly from gross proceeds from the underwritten public offerings in the U.S. in an aggregate amount of NIS 69.0 million (approximately $22.1 million), offset by payment of lease liabilities in the aggregate amount of NIS 1.2 million (approximately $0.39 million), compared NIS 13.7 million (approximately $4.4 million) as of December 31, 2020, mostly from proceeds from the exercise of warrants issued to the public in connection with our initial public offering in the U.S. in the aggregate amount of NIS 14.8 million (approximately $4.76 million), proceeds from the exercise of employee options in the aggregate amount of NIS 0.16 million (approximately $0.05 million) offset by payment of lease liabilities in the aggregate amount of NIS 1.24 million ( approximately $0.4 million).

At December 31, 2021, our accumulated deficit amounted to $117.3 million. We had working capital of $15.4 million as of December 31, 2021. In the future, we may raise additional capital from external sources in order to continue the longer-term efforts contemplated under our business plan. We expect to continue incurring losses for the foreseeable future and may need to raise additional capital to pursue our product development initiatives, to penetrate markets for the sale of our Company product candidates and continue operations as presently maintained. We cannot provide any assurance that we will raise additional capital. Our management believes that we have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, we have not secured any commitment for new financing at this time nor can we provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the economic climate in the U.S. deteriorates, our ability to raise additional capital could be negatively impacted. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash in amounts sufficient to sustain operations and meet our obligations. These measures could cause significant delays in our efforts to commercialize our products, which is critical to the realization of our business plan and our future operations.

On February 2, 2021, the Company closed an underwritten offering in which it sold 2,434,783 ADSs at a public offering price of $4.95 per ADS. On February 10, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 365,217 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $13,800. The Company received a net sum of $12,836 (approximately NIS 42,292) and a net sum of $12,465 (approximately NIS 41,137) after deduction of issuance expenses.

On December 27, 2021, the Company closed an underwritten offering in which it sold 3,813,560 ADSs at a public offering price of $2.36 per ADS. On December 27, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 330, 508 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $9,780. The Company received a net sum of $9,020 (approximately NIS 28,062). and a net sum of $8,817 (approximately NIS 27,866) after deduction of issuance expenses.

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Trend Information

We are a development stage company with no revenues to date. Accordingly, it is not possible for us to predict with any degree of accuracy the outcome of our research, development or commercialization efforts, or identify any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect in the future on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are identified in the preceding subsections of this Item 5.

E. Critical Accounting Policies

Our consolidated financial statements and the related notes thereto included elsewhere in this annual report are prepared in accordance with IFRS. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

We believe that the following accounting policies involve a substantial degree of judgment and complexity, and accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

We describe our significant accounting policies in Note 2 to our financial statements for the year ended December 31, 2021.

The discussion and the analysis of our financial results of operation are based on our financial statements, which we prepare in accordance with IFRS as issued by the IASB.

Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Executive Officers and Directors

We are managed by a board of directors, which is currently comprised of eight members, and our executive officers. Each of our executive officers is appointed by our board of directors. The table below sets forth our directors and executive officers. The business address for each of our executive officers and directors is c/o BiondVax Pharmaceuticals Ltd., Jerusalem BioPark, 2nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel.

Name	Age	Position
Amir Reichman	46	Chief Executive Officer and Director
Tamar Ben-Yedidia	58	Chief Scientist
Uri Ben-Or	51	Chief Financial Officer
Elad Mark	40	Chief Operating Officer
Mark Germain	71	Chairman of the Board of Directors
Jay Green	50	Director
George H. Lowell	76	Director
Morris Laster(1) (2)	57	Director
Yael Margolin(1) (2)	69	External Director
Samuel Moed	59	Director
Adi Raviv(1) (2)	66	External Director
Avner Rotman	78	Director

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

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Executive Officers

Mr. Amir Reichman became full-time CEO of the Company on March 2, 2021 after sharing CEO duties during a transition period beginning on January 21, 2021. Mr. Reichman served as Head of Global Vaccines Engineering Core Technologies and Asset Management at GSK Vaccines (“GSK”) in Belgium from December 2017 until March 2021. Prior to this, Mr. Reichman served as Senior Director of Vaccines Supply Chain for GSK from September 2015 to November 2017. Prior to GSK, Mr. Reichman held various leadership roles of increasing responsibility in the Global Vaccines Value Chain Management organization of Novartis Vaccines and Diagnostics Ltd. (“Novartis”) in Holly Springs, NC from 2011 until Novartis Vaccines was acquired by GSK in 2015. In 2003, Mr. Reichman’s biotechnology engineering research contributed to the founding of NeuroDerm Ltd. (“NeuroDerm”), an Israeli company focused on transdermal drug delivery systems that was acquired by Mitsubishi Tanabe Pharma Corporation in 2017 for $1.1 billion. Mr. Reichman served as NeuroDerm’s Chief Engineer and Senior Scientist until his departure in 2009. Mr. Reichman earned an M.Sc. in Biotechnology Engineering from the Ben-Gurion University of the Negev in Be’er Sheva, Israel and an MBA in Finance and Health Care Management from the Wharton School of the University of Pennsylvania in Philadelphia, PA.

Dr. Tamar Ben-Yedidia has served as our Chief Scientist since 2004 and is responsible for the pre-clinical and clinical development and trials of the Company. Dr. Ben-Yedidia began her career at Biotechnology General (Israel) Ltd., BTG (Rehovot), where she was employed as lab manager from 1991 to 1994. Dr. Ben-Yedidia joined the Department of Immunology at the Weizmann Institute of Science from 1994 – 2004. Dr. Ben-Yedidia was involved in two European Consortium projects related to the evaluation of different approaches for vaccination, has been invited to address conferences worldwide and is published in various scientific journals. Dr. Ben-Yedidia received her Ph.D. in immunology from the Weizmann Institute after completion of her doctoral thesis titled “A Peptide-Based Vaccine Against Influenza.”

Mr. Uri Ben-Or, CPA, MBA, has served as our Chief Financial Officer since 2007. In January, 2007, Mr. Ben-Or founded CFO Direct, in which he has served as the chief executive officer and through which he provides his services to our company. Mr. Ben-Or has over 20 years of experience and significant expertise in corporate finance, accounting, M&A transactions and IPOs, and has served as CFO with life science companies traded on the TASE, on Nasdaq and over the counter. Mr. Ben-Or holds a B.A. degree in Business from the College of Administration, and a M.B.A degree from the Bar Ilan University and is a certified public accountant in Israel.

Mr. Elad Mark joined the Company in 2018 as Site Head and has served as Chief Operating Officer since September 2019. As COO he oversees BiondVax’s manufacturing facility and scale up and technology transfer activities, including potential future CMO’s. Prior to joining BiondVax, Mr. Mark served for more than three years at Novartis as TPM (Technical Process Manager) and Area Lead Process for a large-scale biological facility establishment in Singapore, a $800 million investment in a biologics facility focused on drug substance manufacturing based on cell culture technology, which was designed to support both clinical and commercial production of potential new products that include monoclonal antibodies for use in helping patients with autoimmune, respiratory and oncology disorders. Before that Mr. Mark served as the Head of the Engineering Department in Biopharmax Group, a company which focusing on EPCM (Engineering, Procurement, Construction and Management) in the Pharmaceutical field. Mr. Mark is a principal bioprocess engineer with over 15 consecutive years of biotechnology engineering experience with diverse project stages including feasibility study, conceptual and detail design, commissioning, qualification and process validation. Mr. Mark holds a B.Sc. in Engineering from the Afeka Academic College of Engineering in Tel Aviv and an MBA from the Open University of Israel.

Directors

Mr. Mark Germain joined the board in 2018 and has served as the Chairman of our board of directors since 2019. Mr. Germain has been involved as a founder, director, chairman of the board of, and/or investor in, over twenty companies in the biotech field and assisted many of them in arranging corporate partnerships, acquiring technology, entering into mergers and acquisitions, and executing financings and going public transactions. He graduated from New York University School of Law in 1975, Order of the Coif, and was a partner in a New York law firm practicing corporate and securities law before leaving in 1986. Since then, and until he entered the biotech field in 1991, he served in senior executive capacities, including as president of a public company that was sold in 1991. In addition to being a director of BiondVax, Mr. Germain is a Managing Director at The Aentib Group, a boutique merchant bank, and has served as a director on the board of Pluristem Therapeutics since 2007, including time as Co-Chairman. He is also a co-founder and director of a number of private companies in and outside the biotech field.

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Mr. Jay Green CPA, CA, MAcc, completed a 19-year career with GSK across several progressive leadership positions in GSK’s three businesses of consumer healthcare, pharmaceuticals, and vaccines, as well as corporate development. He also led GSK’s global enterprise resource planning (ERP) program, one of the largest IT-enabled business transformation programs in the company’s history. Mr. Green most recently served from 2014 to 2020 as Senior Vice President, Finance and CFO of GSK’s global vaccines business. Since 2020, Mr. Green has served in an advisory role to Gavi for COVAX, an international initiative to support equitable distribution of COVID-19 vaccines. He is a Chartered Professional Accountant who holds a Master of Accounting from the University of Waterloo, Ontario, Canada.

Prof. George H. Lowell, M.D. has served as a member of our board of directors since 2008. He is also since 2019 a member of the Board of Directors and Chief Scientific Officer (CSO) of Healables Ltd., a private Israeli digital health start-up company. Prior to joining our company, Prof. Lowell served as CSO for BioDefense at GlaxoSmithkline Biologicals (2006-7) which acquired ID Biomedical Corp. (IDB) and CSO of IDB (2001-6) which acquired Intellivax Intl. Prof. Lowell served as founding CEO, President and CSO of the vaccine R&D companies he founded, Intellivax, Inc. in Baltimore and Intellivax Intl. Inc. in Montreal from 1995 until 2001. From 1974, Prof. Lowell served on active duty in the US Army Medical R&D Command (USAMRDC), retiring in 1994 with the rank of Colonel. During this period he served as consultant in pediatric infectious diseases at The Walter Reed Army Medical Center and director of his laboratories at The Walter Reed Army Institute of Research in Washington, D.C. From 1989-1991 COL Lowell served as Medical Liaison Officer attached to the US Embassy in Israel representing the USAMRDC to the IDF Medical Corps Research Unit. Prof. Lowell has held a number of academic posts, including Visiting Scientist at the Weizmann Institute of Science (Israel) and Visiting Professor, Hebrew University-Hadassah Medical Center (Israel). Prof. Lowell holds a B.A. from Yeshiva University, and an M.D. from the Albert Einstein College of Medicine of Yeshiva University. Prof. Lowell performed three years of post-doctoral training in pediatrics and pediatric infectious diseases and immunology at NYU-Bellevue Medical Center, and The Mount Sinai Medical Center, NY, NY. We believe that Prof. Lowell is qualified to serve on our board of directors based on his extensive experience and knowledge in the field of health care and years of executive leadership in the biomedical industry.

Dr. Morris Laster has served as a member of our board of directors since November 2017. Dr. Laster is a healthcare executive and entrepreneur with 30 years of experience in the biopharmaceutical industry. His expertise lies in the identification, development, management and financing of advanced biomedical drugs and technologies. Dr. Laster is currently the CEO of Clil Medical Ltd., a biomedical consultancy company, a position he has held since 2010. Since 2013, he is a Medical Venture Partner at OurCrowd, where he has led over 30 investments and represents OurCrowd on the board of directors of HiL Applied Medical, BrainQ Technologies, MigVax, Sweetch and DreaMed Diabetes. Additionally, he serves as the chairman of the board of Oncohost. Dr. Laster has founded seven companies that have gone public in the U.S., UK or Israel. He was the founder, CEO and co-chariman of Scopus Biopharma (NASDAQ: SCPS) from 2017-2020. He was also the co-founder and CEO from 2010 to 2014 of Kitov Pharmaceuticals (NASDAQ: PPBT), which has received FDA approval for its drug Consensi. Previously, he was the founding CEO of BioLineRx Ltd. (TASE:BLRX) from 2003 to 2009. In addition, he was the chairman and CEO of Keryx Biopharmaceuticals (NASDAQ:KERX) from 1997 to 2002. Dr. Laster began his career as a VP of medical venture capital at Paramount Capital in NYC. Dr. Laster received his MD from Downstate Medical Center, Brooklyn, NY in 1990 and a BS in Biology from SUNY Albany.

Dr. Yael Margolin has more than 35 years of experience as senior manager, CEO and board member in venture capital and in the pharmaceutical and biotech industries, leading strategic and business planning, financing, team building, product development and corporate partnerships. From 2005 to 2019, Dr. Margolin served as President, Chief Executive Officer and director of Gamida Cell Ltd., a clinical stage biopharmaceutical company, leading the company from preclinical development through phase 3 international registration studies. Prior to that, Dr. Margolin was Vice President of Denali Ventures LLC, a venture capital firm focused on healthcare, and a program manager at Teva Pharmaceuticals. Dr. Margolin holds a bachelor of science in biology and a master of science Cum Laude from the department of microbiology, both from Tel Aviv University in Israel, a Ph.D. from the department of membrane research at the Weitzman Institute of Science in Rehovot, Israel and was a post-doctoral associate at the Yale University School of Medicine.

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Mr. Samuel Moed is a healthcare executive with over 35 years of experience. Mr. Moed was for seven years Head of Corporate Strategy at Bristol Myers Squibb (“BMS”), a global biopharma company, until his retirement in 2020. Prior to that role, Mr. Moed was Head of Strategy Worldwide Pharma, President of US Pharma and President of the WW Consumer Healthcare Business at BMS. In addition to BiondVax, Mr. Moed serves on the board of Mediwound Ltd., a company that develops, manufactures and commercializes bio-therapeutic solutions for tissue repair and regeneration, is a Venture Partner at aMoon, a HealthTech and Life Sciences investment fund with BiondVax’s controlling shareholder Mr. Marius Nacht as the anchor investor, and advises companies in the healthcare arena. Mr. Moed received his BA in history from Columbia University in New York City in 1985.

Mr. Adi Raviv is a senior financial executive with a career spanning over 35 years. Mr. Raviv founded HTI Associates LLC in 1996 and since then has served as its managing member. In addition, since April 2016 he has been a Principal at Capacity Funding LLC, a company providing working capital solutions to small businesses. Prior to that, Mr. Raviv served in a chief financial officer position in two other companies that provide similar types of funding alternatives from 2009 to 2016. Mr. Raviv has extensive capital markets, cash management, corporate finance, investment banking, investor relations, restructuring, tax and treasury, and transactional experience along with knowledge of the private equity and venture capital arenas. Mr. Raviv co-founded THCG, Inc., a publicly traded technology merchant banking and consulting company (where he was also CFO), and has been involved with companies in challenging startup, growth, and turnaround environments. He was also an investment banker at Lehman Brothers, Oscar Gruss and Hambros for over a dozen years. Mr. Raviv has served on the boards of directors of many private and several public companies, as well as various non-profit entities. He received a bachelor’s degree in International Relations with honors from the Hebrew University of Jerusalem and an MBA, with honors, from Columbia University in New York City.

Professor Avner Rotman has been a member of our board of directors since 2005 and served as the Chairman until 2019. Prof. Rotman founded Rodar Technologies Ltd. in 2000 and served as its Chief Executive Officer and Chairman of the Board until 2019. Prof. Rotman also founded Bio-Dar Ltd. in 1984, and served as its President and CEO from 1985 until 2000. Prof. Rotman was also the chairman of the I-Tech incubator at Kyriat Weizmann. Prof. Rotman is the Founder and Chairman of the Foundation of Cardiovascular Research in Israel. Prof. Rotman holds a PhD in chemistry from the Weizmann Institute of Science, Israel, and an M.Sc and B.Sc in chemistry from the Hebrew University of Jerusalem, Israel. We believe that Prof. Rotman is qualified to serve on our board of directors based on his extensive experience and knowledge in the field of biotechnology and as an executive officer and director of multiple biotechnology companies. On August 31, 2017, Following the European Investment Bank (EIB)’s significant €20 million funding agreement, and as we progress towards Phase 3 clinical trials and construction of its commercial mid-size manufacturing facility, our board of directors at the initiation of Prof. Rotman decided that we will focus its efforts on the international scene. In that regard, it was decided, inter alia, to identify a new chairman of the board of directors with relevant global experience to guide us through the anticipated upcoming international clinical trials and global commercialization efforts.

Our Scientific Advisory Board

Our Scientific Advisory Board includes specialists and experts in Israel, with experience in the fields of biochemistry, infectious diseases and medical research. Our Scientific Advisory Board plays an active role in advising us with respect to our products, technology development, clinical trials and safety. Pursuant to their respective appointment letters, our advisory board members are entitled to receive the following compensation: (i) a per diem cash payment of $1,000 plus VAT (aside from Professor Ruth Arnon who is entitled to receive $1,400 plus VAT), for Scientific Advisory Board meetings attended in Israel or consultation services provided during a period longer than 4 consecutive hours, or a proportion of such amount for a partial day of less than 4 consecutive hours (aside from Professor Ruth Arnon, who shall be entitled to a full day amount or any proportion of such full day amount based on a full day being 8 hours); (ii) a per diem cash payment of $2,000 plus VAT (aside from Professor Ruth Arnon who is entitled to receive $2,400 plus VAT), per full day of Scientific Advisory Board meetings or full session consultation attended outside of Israel, provided, that, in the event travel time exceeds 48 hours, additional compensation will be provided at a rate of $1,000 per each 24 hours; and (iii) with respect to Professor Michel Revel, for occasional consultations (less than 4 consecutive hours per each consultation) which do not fall under any of the above categories, the compensation shall be calculated based on a fee of $250 per full hour of consultation. Each member of our Scientific Advisory Board was granted options to purchase ordinary shares of our Company pursuant to their respective appointment letters.

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The following table sets forth certain biographical information with respect to our Scientific Advisory Board members:

Professor Ruth Arnon, the head of our Scientific Advisory Board, is the inventor of the new synthetic influenza vaccine and head of BiondVax’s Scientific Advisory Board. Formerly Vice-President of the Weizmann Institute of Science (1988-1997), Professor Arnon is an internationally acclaimed immunologist. Along with Prof. Michael Sela, she conceptualized and developed Copaxone®, a drug for the treatment of multiple sclerosis which was approved by the FDA and is presently marketed worldwide. Prior to her appointment as Vice-President of the Weismann Institute, Prof. Arnon served as Head of the Department of Chemical Immunology and as Dean of the Faculty of Biology. From 1985 to 1994, Prof. Arnon was Director of the Weisman Institute’s McArthur Center for Molecular Biology of Tropical Diseases. Prof. Arnon has made significant contributions in the fields of vaccine development, cancer research and to the study of parasitic diseases. She has served as President of the European Federation of Immunological Societies, and as Secretary-General of the International Union of Immunological Societies. Dr. Arnon is the recipient of numerous international and Israeli awards including the prestigious Israel Prize. Prof. Arnon was also the Advisor for Science to the President of Israel. She is a member of the Israel Academy of Sciences, where she served as President from 2010-2015. Prof. Arnon is the incumbent of the Paul Ehrlich Chair in Immunochemistry at the Weizmann Institute.

Prof. Michel Revel, has M.D. and Ph.D. degrees. Born in 1938 in France, he joined the Weizmann Institute of Science, Rehovot, Israel in 1968, where he has been a full professor since 1973, heading for several periods the Departments of Virology and of Molecular Genetics. He has been an emeritus professor since 2010. Prof. Revel is best known for his work on the mechanism of action of interferon and the cloning of the genes for human interferon beta (IFN-β) and interleukin-6 (IL-6). He developed the first efficient genetic engineering production of a protein (IFN-b) in animal cells (CHO cells). He was Chief Scientist of InterPharm (Serono group), which produced the recombinant IFN-b (Rebif), a leading drug for treatment of multiple sclerosis, now 20 years in the market and sold in 90 countries by Merck Kga. Since 2010, Prof. Revel is co-founder and Chief Scientist of Kadimastem, an Israeli company producing human tissues by differentiation of pluripotent stem cells (ESC). The first product of Kadimastem, AstroRx, has recently been approved for clinical trial in Amyotrophic Lateral Sclerosis (ALS). Kadimastem also develops ESC-derived islet-like cells for the treatment of diabetes. Prof. Revel has received the Israel Prize for Medicine in 1999 and the Emet Prize in 2004. He was elected at the Israel National Academy of Science and Humanities in 2005. He served as chairman of the National Biotechnology Committee of Israel (1999-2002).

Prof. George H. Lowell, M.D., a member of our board of directors, also serves on our Scientific Advisory Board. Biographical information regarding Prof. Lowell appears above.

B. Compensation

Compensation of Directors and Executive Officers

Directors

 Each of our non-management directors receives a cash retainer, meeting participation fees, and equity awards, as detailed below. The compensation of our external directors is under the “relative compensation” track for external directors in accordance with the Companies Law Regulations.

Prior to April 6, 2021, each non-management director other than Mr. Germain received an annual cash retainer of NIS 26,080. Effective April 6, 2021, this amount was increased to $30,000. Prior to April 6, 2021, each non-management director received a per-meeting fee of NIS 1,556.25 for Board and committee meetings and NIS 622.50 for each written Board or committee written consent. Effective April 6, 2021, this was increased to $1,000 and $500, respectively. During 2021, we paid our directors a total of NIS 2,584 thousand ( approximately $830 thousand) in annual and meeting participation fees and bonusses. 

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The foregoing increases to cash compensation were made after the compensation committee and board of directors surveyed peer Israeli public companies based on data provided from an independent consulting firm and found that the cash compensation paid to non-management directors was, and had been, significantly below that of the average of such peer companies. In light of this survey, the compensation committee and board of directors believed that an increase in the cash compensation paid to the non-management directors was warranted due to the increased complexity associated with the efforts to grow BiondVax into a multi-asset biopharmaceutical company with a focus on infectious diseases, the greater engagement of Company directors in order to build a new product pipeline and to retain existing qualified directors and attract such qualified directors in the future.

Following shareholder approval, we have granted equity awards to our non-management directors. In 2021, shareholders approved the option and RSU awards to each of our non-management directors other than Mr. Germain and Mr. Moed. We granted to such directors options to purchase an aggregate of 150,000 ADSs of the Company at an exercise price of $6.95. The options vest in equal monthly installments over a period of three years, commencing one month following the date of shareholder approval. The options are subject to accelerated vesting and will become immediately exercisable in the event of a change of control. We granted 30,000 RSUs, which vest in equal monthly installments over a period of three years, commencing one month following the date of shareholder approval. The RSUs are subject to accelerated vesting in the event of a change of control.

In 2021, for his service on the Board, Mr. Germain was granted options to purchase 160,000 ADSs of the Company at an exercise price of $6.95. The options vest in equal monthly installments over a period of four years, commencing one month following the date of shareholder approval. The options are subject to accelerated vesting and will become immediately exercisable in the event of a change of control.

Following shareholder approval, our non-management directors also received a one-time payment for special efforts on behalf of the Company. Mr. Germain received $90,000 and each other non-management director received $30,000. 

Pursuant to shareholder approval in 2012, incumbent directors who were serving in 2012 are entitled to a one-time bonus in connection with (i) the sale of all or substantially all of our assets or (ii) a commercialization of one of our products, in each case with aggregate proceeds of at least $10 million. The one-time bonus shall be equal to 0.5% of the proceeds received by us under the material agreement, which shall be limited an aggregate amount of NIS 50 million ($15.4 million) under our Compensation Policy.

For the year ended December 31, 2021, we paid an aggregate of NIS 2,584 thousand (approximately $830 thousand) to our directors.

Executive Officers

The following table presents information regarding compensation actually received by our executive officers during the year ended December 31, 2021.

Name	Base Salary or Other Payment NIS		Value of Social Benefits (1) NIS		Value of Equity Based Compensation Granted (2) NIS		All Other Compensation (3) NIS		Total NIS		Total (USD)
Mr. Amir Reichman Chief Executive Officer		2,062		44		1,780		27		3,913		1,258
Dr. Tamar Ben-Yedidia Chief Scientific Officer		687		163		267		60		1,177		378
Mr. Uri Ben-Or Chief Financial Officer		549		33		-		-		582		187
Mr. Elad Mark Chief Operating Officer		681		65		76		67		890		412

(1) Includes payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds; vacation pay; and recuperations pay as mandated by Israeli law.

(2) Includes RSU's and options.

(3) Includes payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds; vacation pay; and recuperations pay as mandated by Israeli law.

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Employment and Services Agreements

Our employees are employed under the terms prescribed in their respective personal contracts, in accordance with the decisions of our management. Under these employment contracts, the employees are entitled to the social benefits prescribed by law and as otherwise provided in their personal contracts. These employment contracts each contain provisions standard for a company in our industry regarding non-competition, confidentiality of information and assignment of inventions. Under current applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. We also provide certain of our employees with a company car, which is leased from a leasing company, and a mobile phone and additional benefits.

Our executive officers are also employed under the terms and conditions prescribed in personal contracts. These personal contracts provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits. These agreements also contain customary provisions regarding non-competition, confidentiality of information and assignment of inventions.

We have set aside or accrued a total amount of NIS 314,000 ($101,000) during 2021 to provide pension, retirement or similar benefits.

Services Agreement with Our Chairman of the Board

We are party to a services agreement with Mr. Germain, pursuant to which he receives a monthly payment of $10,000. Pursuant to this agreement, in May 2019, Mr. Germain was granted an option to purchase 130,710 ADSs at an exercise price of $7.98 per ADS.  25% of the options vested upon approval by shareholders, and the remainder vest in equal increments on each anniversary of the grant date, becoming fully vested on April 30, 2022.

Services and Employment Agreements with Our Chief Executive Officer 

Pursuant to his employment agreement entered into with us on January 20, 2021, Mr. Reichman is entitled to an annual gross salary of USD 350,0000. During the transition period between January 20, 2021, the date the agreement was signed, and March 2, 2021, Mr. Reichman was entitled to a pro-rated portion of this amount equal to 20% of his monthly salary.

The agreement also provides that Mr. Reichman is entitled to a one-time signing bonus at the gross lump sum amount of USD 50,000 and is eligible to receive an annual cash bonus of a gross amount equal to three to six monthly salaries to the extent Mr. Reichman meets annual objectives that shall be approved by the board of directors and by shareholders. It is currently contemplated that the annual bonus would be (i) three monthly salaries for meeting a set of baseline annual objectives, and (ii) four to six monthly salaries for achieving a higher level of annual objectives. Under extraordinary circumstances reflecting performance by Mr. Reichman significantly above all such annual objectives, the board of directors may, in its sole discretion, consider an additional cash bonus of not more than an additional three monthly salaries (up to nine monthly salaries in total). The bonus amounts and annual objectives shall be subject to the terms of the Company’s Compensation Policy from time to time.

Furthermore, under the agreement Mr. Reichman is entitled to receive 600,000 restricted share units (the “RSUs”) under the Company’s 2018 Israeli Share Option Plan, which will vest over a period of five years, 20% to vest each year on January 20, 2021 (the “Commencement Date”), and would become fully vested, in accordance with the terms of the grant, on January 20, 2026. The ADSs underlying the RSUs may not be sold by Mr. Reichman during the term of his employment except that, commencing on the third anniversary of the Commencement Date, sales may be made pursuant to a Rule 10b5-1 plan, with the number of RSUs sold during any one year period not exceeding five percent of the vested RSUs held by Mr. Reichman at the time of such sales (the “Resale Limits”). If Mr. Reichman’s employment agreement is terminated by the Company for no cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall terminate. If Mr. Reichman’s employment agreement is terminated by Mr. Reichman or terminated by the Company for cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall continue until the earlier of (i) one year after such termination, or (ii) the fifth anniversary of the Commencement Date. The RSUs would be subject to accelerated vesting in the event of a change of control.

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For these purposes, a “change of control” means the first to occur of (i) a sale of all or substantially all of the assets of the Company; (ii) a merger, consolidation, or like transaction of the Company with or into another company; provided, that in the case of either clauses (i) or (ii) the Company’s stockholders of record immediately prior to such transaction will, immediately after such transaction, hold less than fifty percent (50%) of the voting power of the surviving or acquiring entity, and provided further that a change of control shall not include (x) any consolidation, merger or reorganization effected to change the domicile of the Company or (y) any transaction or series of transactions effected principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; (iii) the acquisition by any person, entity or group not directly or indirectly affiliated with Angels Investments in Hi Tech Ltd. (“Angels”) of more than 50% of the voting power of the Company, in a single or series of related transactions; and (iv) when a person, entity or group not directly or indirectly affiliated with Angels becomes a shareholder that has “control,” as defined in the Israeli Companies Law, 1999.

The Company will provide Mr. Reichman other benefits, such as a leased vehicle, vacation, sick days, contribution towards work disability insurance and a manager's insurance policy or a pension fund and other benefits and perquisites similar to those of other officers of the Company.

Each of Mr. Reichman and the Company may terminate Mr. Reichman’s employment by prior written notice of 60 days. In the event of termination by the Company without cause, the Company will pay Mr. Reichman nine monthly salaries, which includes amounts accrued in a pension insurance policy and amounts required by Israeli law.

Services and Employment Agreements with Our Chief Scientific Officer

Pursuant to her employment agreement entered into with us on March 15, 2005, as amended to date, Dr. Ben-Yedidia is employed on a full-time basis and is currently entitled to a monthly salary of NIS 46,750 which also includes monthly contributions equal to 7.5% of her monthly salary to an Education Fund (“Keren Hishtalmut”, a short-term savings plan available in Israel which is tax free to the employee up to a cap determined by law). In addition, we provide Dr. Ben-Yedidia with a leased company car and a mobile phone. Dr. Ben-Yedidia is entitled to 22 annual paid vacation days.

Dr. Ben-Yedidia’s employment agreement may be terminated by either us or Dr. Ben-Yedidia upon 120 days’ prior written notice or by us immediately for cause (i.e., termination due to embezzlement of our funds, or the material breach of the terms and conditions of the employment agreement, or if Dr. Ben-Yedidia is involved in an act which constitutes a breach of trust between her and us or constitutes a severe breach of discipline, or conduct causing grave injury to us any, monetarily or otherwise, or Dr. Ben-Yedidia’s inability to carry out her duties for a period exceeding 120 consecutive days, provided that her resumption of duties for a period of less than 15 consecutive days shall not be deemed to have broken the continuity of the aforementioned 120 days). Under her employment agreement, Dr. Ben-Yedidia received options to purchase 25,000 ordinary shares.

In addition, in February 2012 our board of directors approved the grant of the following conditioned bonus to Tamar Ben-Yedidia: in the event that we duly enter into one or more material agreement(s) (i.e. an agreement or a series of agreements, pertaining to a transaction with us (or any other entity designated by us for the transaction by us) in connection with the sale of all or substantially all of our assets or a commercialization of one of our products in the field of business, with aggregate proceeds received resultant of such agreement are no less than a sum of $10 million) with any third party during the term of Dr. Ben-Yedidia’s engagement with us or during a period of three years commencing on the date of the termination of the employment agreement by us, Dr. Ben-Yedidia shall be entitled to receive a one-time bonus per material agreement equal to 1.25% of the proceeds received by us as a result of the material agreement.

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Services and Employment Agreement with Our Chief Financial Officer

Pursuant to the service agreement entered into on June 20, 2007, between us, Mr. Ben-Or and CFO Direct, an Israeli company solely owned by him through which he provides his services to us, as amended on August 31, 2014 and extended on June 11, 2020. CFO Direct is entitled to a monthly fee of NIS 15,000. The service agreement remained in effect until June 11, 2021, unless earlier terminated by either us or CFO Direct with 60 days prior written notice. The Company is currently negotiating a new service agreement with CFO Direct. We may terminate our service agreement with CFO Direct at any time and effective immediately, without need for prior written notice, and without derogating from any other remedy to which we may be entitled, for cause (i.e., termination due to the conviction of CFO Direct and/or Uri Ben-Or of any felony, the liability of CFO Direct by a court of competent jurisdiction for fraud against us, any conduct that has a material adverse effect or is materially detrimental to us, including but not limited to, a breach of contract or any claim by CFO direct or any one connect thereto that CFO Direct is our employee). CFO Direct is entitled to receive a monthly compensation under the services agreement.

In addition, pursuant to a separate employment agreement entered into between us and Mr. Ben-Or on August 31, 2014 and extended on June 11, 2020, Mr. Ben-Or is also employed by us in a 60% employment capacity, for which he is entitled to a monthly salary of NIS 10,000. Mr. Ben-Or is entitled to 60% of the annual paid vacation days prescribed under applicable law, and we shall obtain and maintain with Mr. Ben-Or a pension insurance to Mr. Ben-Or, in a Managers Insurance and/or a pension fund, according to Mr. Ben-Or’s discretion. Mr. Ben-Or’s employment agreement remained in effect until June 2021, unless earlier terminated by either us or Mr. Ben-Or with 60 days prior written notice, or by us immediately for cause. The Company is currently negotiating a new employment agreement with Mr. Ben-Or.

Employment Agreement with Our Chief Operating Officer

Pursuant to his employment agreement entered into with us on September 5, 2018, as amended April 1, 2021, Mr. Mark is employed by us in a 80% employment capacity, and has the right to dedicate up to 20% of his time to bioprocess consulting services provided to third parties. He is currently entitled to a monthly salary of NIS 44,000 which also includes monthly contributions equal to 7.5% of his monthly salary to an Education Fund (“Keren Hishtalmut”, a short-term savings plan available in Israel which is tax free to the employee up to a cap determined by law). In addition, we provide Mr. Mark with a leased company car and a mobile phone. Mr. Mark is entitled to 16 annual paid vacation days.

Mr. Mark’s employment agreement may be terminated by either us or Mr. Mark upon 60 days’ prior written notice or by us immediately for cause (i.e., termination due to embezzlement of our funds, or the material breach of the terms and conditions of the employment agreement, or if Mr. Mark is involved in an act which constitutes a breach of trust between his and us or constitutes a severe breach of discipline, or conduct causing grave injury to us any, monetarily or otherwise, or Mr. Mark’s inability to carry out his duties for a period exceeding 120 consecutive days, provided that his resumption of duties for a period of less than 15 consecutive days shall not be deemed to have broken the continuity of the aforementioned 120 days).

Equity Compensation Plans

2005 Israeli Share Option Plan 

The 2005 Israeli Share Option Plan (the “2005 Plan”) permits grants of options to employees, directors, consultants, service providers and other entities which the board shall decide their services are considered valuable to the Company. Options granted under the 2005 Plan are subject to applicable vesting schedules and generally expire 10 years from the grant date.

Upon the termination of a recipient’s engagement with us for any reason other than death, disability or for cause, all unvested options allocated shall automatically expire and all vested options allocated will automatically expire 90 days after the termination unless expired earlier due to their term. If the recipient’s engagement was terminated for cause (as defined in the 2005 Plan), the recipient’s right to exercise any unexercised options, awarded and allocated in favor of such recipient, whether vested or not, will immediately cease and expire as of the date of such termination. If the recipient dies or is disabled, any vested but unexercised options will automatically expire 12 months from the termination of the engagement, unless expired earlier due to their term.

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In the event that options allocated under the 2005 Plan expire or otherwise terminate in accordance with the provisions of the 2005 Plan, such expired or terminated options will become available for future grant awards and allocations under the 2005 Plan. In the event of (i) the sale of all or substantially all of our assets; (ii) a sale (including an exchange) of all or substantially all of our share capital; or (iii) a merger, acquisition or reorganization of the Company with or into another corporation, then, subject to obtaining the applicable approvals of the Israeli tax authorities, unexercised options then outstanding shall be assumed or substituted for an appropriate number of shares of the successor company subject to certain adjustments as determined by the board of directors in its sole discretion. Subject to certain conditions, the board shall also have the power to provide for immediate acceleration in a recipient’s option agreement in the event of such a transaction.

As of May 6, 2021, the Company had outstanding grants under the 2005 Option Plan to acquire 14,773,400 ordinary shares.

2018 Israeli Share Option Plan

The 2018 Israeli Share Option Plan (the “2018 Plan”) permits the granting of options, restricted share units or allotment of shares or other equity-based awards to employees, directors, consultants, service providers and other entities which the board shall decide their services are considered valuable to the Company, under similar terms and conditions to the 2005 Plan.

Options granted under the 2018 Plan are subject to applicable vesting schedules and generally expire 10 years from the grant date.

Upon the termination of a recipient’s engagement with us for any reason other than death, disability or for cause, all unvested options allocated shall automatically expire and all vested options allocated will automatically expire 90 days after the termination, unless expired earlier due to their term, or unless expiration is extended beyond termination under certain circumstance for a period not to exceed the term of the options, such as was recently approved by shareholders in connection with option grants to directors. If the recipient’s engagement was terminated for cause (as defined in the 2018 Plan), the recipient’s right to exercise any unexercised options, awarded and allocated in favor of such recipient, whether vested or not, will immediately cease and expire as of the date of such termination. If the recipient dies or is disabled, any vested but unexercised options will automatically expire 12 months from the termination of the engagement, unless expired earlier due to their term.

In the event that options allocated under the 2018 Plan expire or otherwise terminate in accordance with the provisions of the 2018 Plan, such expired or terminated options will become available for future grant awards and allocations under the 2018 Plan.

Restricted share units granted under the 2018 Plan are subject to applicable vesting schedules, and the Board may condition the grant or vesting of restricted share units upon the attainment of specified performance targets or such other factors as the Board may determine, in its sole discretion.

In the event of (i) the sale of all or substantially all of our assets; (ii) a sale (including an exchange) of all or substantially all of our share capital; or (iii) a merger, acquisition or reorganization of the Company with or into another corporation, then, subject to obtaining the applicable approvals of the Israeli tax authorities, unexercised awards then outstanding shall be assumed or substituted for an appropriate number of shares of the successor company subject to certain adjustments as determined by the board of directors in its sole discretion. Subject to certain conditions, the board shall also have the power to provide for immediate acceleration in a recipient’s award agreement in the event of such a transaction.

The Company has reserved an unlimited amount of the issued and outstanding capital of the Company available for issuance under the 2018 Plan.

As of March **, 2022, the Company had awarded grants under the Option Plan to acquire 91,871,062 ordinary shares.

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C. Board Practices

Board of Directors

Under the Companies Law and our articles of association, our board of directors shall direct the Company’s policy and shall supervise the performance of the Company’s Chief Executive Officer. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to management. Our executive officers are responsible for our day-to-day management and have individual responsibilities established by our board of directors. Our Chief Executive Officer is appointed by and serves at the discretion of our board of directors, subject to an agreement with Mr. Amir Reichman. All other executive officers are also appointed by our board of directors and are subject to the terms of any applicable employment or services agreements that we may enter into with them or with certain entities through which we receive their services. Other than Mr. Reichman, who is entitled to certain termination payments under his agreement with us, none of our directors are entitled to benefits upon termination of their service.

Our board of directors has affirmatively determined that a majority of our directors are independent, in compliance with the NASDAQ Capital Market rules. The definition of independent director includes a set of statutory criteria that must be satisfied, including criteria whose aim is to ensure that there is no factor which would impair the ability of the independent director to exercise independent judgment in addition to the requirement that the board consider any factor which would impair the ability of the independent director to exercise independent judgment. Independent directors may be elected by an ordinary majority of the general shareholders meeting. 

 Under our articles of association, our board of directors must consist of at least three and not more than eleven directors, including any external directors required by Israeli law. Our board of directors currently consists of nine members, including our non-executive Chairman of the board of directors. Our directors, excluding the external directors, are divided into three groups, as nearly equal in number as practicable, with staggered three-year terms, each consisting of one-third of the directors, constituting our entire board of directors (other than the external directors). At each annual meeting, the three-year duration of service of one group of directors shall expire and the directors of such group will stand for election. Each of the directors or the successors elected to replace the directors of a group whose term shall have expired at such annual meeting shall be elected to hold office until the third annual meeting held after the date of his or her election and until his or her respective successor is elected. If no directors are appointed at the annual meeting, the directors appointed at the previous annual meeting will continue their service. Directors whose service period has ended may be appointed again.

Under our articles of association, our board of directors may appoint directors to fill vacancies on our board of directors, for a term of office for the remaining period of time during which the director whose service has ended was filled would have held office, or the conclusion of the term of office in accordance with our articles or any applicable law, subject to the maximum number of directors allowed under the articles of association. In addition, our shareholders may appoint an additional director/s to the Company, whether for the purpose of filling a position that was vacated or as an additional director/s.

Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise. In determining the number of directors required to have such expertise, our 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 the minimum number of directors of our company who are required to have accounting and financial expertise is one. Our board of directors has determined that Adi Raviv has accounting and financial expertise and possesses professional qualifications as required under the Companies Law.

Chairman of the Board

Our articles of association provide that the chairman of the board is appointed and dismissed by the members of the board of directors and serves as chairman of the board throughout his term as a director, unless resolved otherwise by the board of directors. Under the Companies Law, the chief executive officer or a relative of the chief executive officer may not serve as the chairman of the board of directors, and the chairman or a relative of the chairman may not be vested with authorities of the chief executive officer without shareholder approval by special majority and for periods of time not exceeding three years each.

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In addition, a person subordinated, directly or indirectly, to the chief executive officer may not serve as the chairman of the board of directors; the chairman of the board may not be vested with authorities that are granted to those subordinated to the chief executive officer; and the chairman of the board may not serve in any other position in the company or a controlled company, except as a director or chairman of a controlled company.

External Directors

We have elected to make advantage of an exception under the Companies Law, requiring us to elect at least two members who qualify as external directors, one of which has accounting and financial expertise, subject to the following conditions: (i) none of our shareholders is a controlling shareholder; (ii) we comply with NASDAQ rules and regulations with respect to the composition of our audit and compensation committees; (iii) we comply with NASDAQ rules and regulations with respect to the requirements of independent directors. For so long as we meet the requisite requirements, we intend to apply the exemption from appointing at least two external directors under the Companies Law.

An external director is elected for a period of three years. The provisions of the Companies Law set forth special approval requirements for the election of external directors. External directors must be elected by a majority vote of the shares present and voting at a shareholders meeting, provided that either:

● such majority includes at least a majority of the shares held by all shareholders who are non-controlling shareholders and do not have a personal interest in the election of the external director (other than a personal interest not deriving from a relationship with a controlling shareholder) that are voted at the meeting, excluding abstentions, to which we refer as a disinterested majority; or

● the total number of shares voted by non-controlling shareholders and by shareholders who do not have a personal interest in the election of the external director, against the election of the external director, does not exceed 2% of the aggregate voting rights in the company.

The term controlling shareholder is defined in the Companies Law as a shareholder with the ability to direct the activities of the company, excluding such ability deriving solely from his or her position as a director of the company or from any other position with the company. A shareholder is presumed to be a controlling shareholder if the shareholder holds 45% or more of the voting rights in a company or has the right to appoint the majority of the directors of the company or its general manager. With respect to certain matters, a controlling shareholder is deemed to include a shareholder that holds 25% or more of the voting rights in a public company if no other shareholder holds more than 45% of the voting rights in the company.

Audit Committee

Our audit committee consists of Mr. Adi Raviv, Dr. Yael Margolin and Dr. Morris Laster. Mr. Adi Raviv serves as the chairman of the audit committee.

Under the NASDAQ Capital Market corporate governance rules, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise.

All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NASDAQ Capital Market corporate governance rules. Our board of directors has affirmatively determined that Mr. Adi Raviv is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the NASDAQ Capital Market corporate governance rules.

Each of the members of the audit committee are deemed “independent” as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.

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Audit Committee Role

Our board of directors adopted an audit committee charter effective upon the listing of the ADSs and warrants on the NASDAQ Capital Market that set forth the responsibilities of the audit committee consistent with the rules of the SEC and the listing rules of the NASDAQ Capital Market, as well as the requirements for such committee under the Companies Law, including the following:

● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law;

● recommending the engagement or termination of the person filling the office of our internal auditor; and

● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors.

Our audit committee provides assistance to our board of directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control and legal compliance functions by pre-approving the services performed by our independent accountants and reviewing their reports regarding our accounting practices and systems of internal control over financial reporting. Our audit committee also oversees the audit efforts of our independent accountants and takes those actions that it deems necessary to satisfy itself that the accountants are independent of management.

Compensation Committee and Compensation Policy

Our compensation committee currently consists of Mr. Adi Raviv, Dr. Yael Margolin and Dr. Morris Laster. Dr. Yael Margolin serves as the Chairman of the Compensation committee. The duties of the compensation committee include the recommendation to the company’s board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy. That policy must be adopted by the company’s board of directors, after considering the recommendations of the compensation committee, and will need to be brought for approval by the company’s shareholders, which approval requires a special approval for Compensation as described below under “Approval of Related Party Transactions Under Israeli Law — Fiduciary Duties of Directors and Executive Officers”.

Under the Companies Law, the board of directors of a public company must appoint a compensation committee and adopt a compensation policy.

The Compensation Policy must be based on certain considerations, must include certain provisions and needs to reference certain matters as set forth in the Companies Law. The Compensation Policy must be approved by the company’s board of directors after considering the recommendations of the compensation committee. In addition, the Compensation Policy needs to be approved by the company’s shareholders by a simple majority, provided that (i) such majority includes a majority of the votes cast by the shareholders who are not controlling shareholders and who do not have a personal interest in the matter, present and voting (abstentions are disregarded) or (ii) the votes cast by shareholders who are not controlling shareholders and who do not have a personal interest in the matter who were present and voted against the Compensation Policy, constitute two percent or less of the voting power of the company. Such majority determined in accordance with clause (i) or (ii) is hereinafter referred to as the Compensation Majority.

To the extent a Compensation Policy is not approved by shareholders at a duly convened shareholders meeting, the board of directors of a company may override the resolution of the shareholders following a re-discussion of the matter by the board of directors and the compensation committee and for specified reasons, and after determining that despite the rejection by the shareholders, the adoption of the Compensation Policy is for the benefit of the company.

A Compensation Policy that is for a period of more than three years must be approved in accordance with the above procedure every three years.

Notwithstanding the above, the amendment of existing terms of office and employment of office holders (other than directors or controlling shareholders and their relatives, who serve as office holders) requires the approval of only the compensation committee, if such committee determines that the amendment is not material in relation to its existing terms.

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Pursuant to the Companies Law and following the recommendation of our compensation committee, our board of directors approved our compensation policy, and our shareholders, in turn, approved the Compensation Policy at our annual general meeting of shareholders that was held on December 27, 2021.

The Compensation Policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The Compensation Policy must relate to certain factors, including advancement of the Company’s objectives, the Company’s business plan and its long-term strategy, and creation of appropriate incentives for office holders. It must also consider, among other things, the Company’s risk management, size and the nature of its operations. The Compensation Policy must furthermore consider the following additional factors:

● the knowledge, skills, expertise and accomplishments of the relevant office holder;

● the office holder’s roles and responsibilities and prior compensation agreements with him or her;

● the ratio between the cost of the terms of employment of an office holder and the cost of the compensation of the other employees of the company, including those employed through manpower companies, in particular the ratio between such cost and the average and median compensation of the other employees of the company, as well as the impact such disparities may have on the work relationships in the company;

● the possibility of reducing variable compensation, if any, at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and

● as to severance compensation, if any, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.

The Compensation Policy must also include:

● a link between variable compensation and long-term performance and measurable criteria;

● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation;

● the conditions under which an office holder would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements;

● the minimum holding or vesting period for variable, equity-based compensation; and

● maximum limits for severance compensation.

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The compensation committee is responsible for (a) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by its shareholders) and (b) duties related to the compensation policy and to the compensation of a company’s office holders as well as functions previously fulfilled by a company’s audit committee with respect to matters related to approval of the terms of engagement of office holders, including:

● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years);

● recommending to the board of directors periodic updates to the compensation policy;

● assessing implementation of the compensation policy; and

● determining whether the compensation terms of the chief executive officer of the company need not be brought to approval of the shareholders.

Compensation Committee Role

Our compensation committee’s responsibilities include:

● reviewing and recommending overall compensation policies with respect to our Chief Executive Officers and other executive officers;

● reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officers and other executive officers including evaluating their performance in light of such goals and objectives;

● reviewing and approving the granting of options and other incentive awards; and

● reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors.

Internal Auditor

Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor in accordance with the recommendation of the audit committee. An internal auditor may not be:

● a person (or a relative of a person) who holds more than 5% of the company’s outstanding shares or voting rights;

● a person (or a relative of a person) who has the power to appoint a director or the general manager of the company;

● an office holder (including a director) of the company (or a relative thereof); or

● a member of the company’s independent accounting firm, or anyone on his or her behalf.

● The role of the internal auditor is to examine, among other things, our compliance with applicable law and orderly business procedures. The audit committee is required to oversee the activities and to assess the performance of the internal auditor as well as to review the internal auditor’s work plan. On October 22, 2014, we appointed Mr. Gewirtz Yisrael as our internal auditor. Mr. Gewirtz Yisrael is a certified internal auditor and a partner at Fahn Kanne & Co. Grant Thornton Israel, a certified public accounting firm in Israel.

● The board of directors shall determine the direct supervisor of the internal auditor. The internal auditor is required to submit his findings to the audit committee, unless specified otherwise by the board of directors.

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Approval of Related Party Transactions under Israeli Law

Fiduciary Duties of Directors and Executive Officers

The Companies Law codifies the fiduciary duties that office holders owe to a company. Each person listed in the table under “Executive Officers and Directors” is an office holder under the Companies Law.

An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. 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 loyalty requires that an office holder act in good faith and in the best interests of the company.

The duty of care includes a duty to use reasonable means to obtain:

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

● all other important information pertaining to any such action.

The duty of loyalty includes a duty to:

● refrain from any conflict of interest between the performance of his or her duties to the company and his or her other duties or 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 herself or others; and

● disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.

Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions

The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that he or she may be aware of and all related material information or documents concerning any existing or proposed transaction with the company. An interested office holder’s disclosure must be made promptly and in any event no later than the first meeting of the board of directors at which the transaction is considered. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of such person’s relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager, but excluding a personal interest stemming from one’s ownership of shares in the company. A personal interest furthermore includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to his or her vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter. An office holder is not however, obligated to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction. Under the Companies Law, an extraordinary transaction is defined as any of the following:

● a transaction other than in the ordinary course of business;

● a transaction that is not on market terms; or

● a transaction that may have a material impact on a company’s profitability, assets or liabilities.

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If it is determined that an office holder has a personal interest in a transaction, approval by the board of directors is required for the transaction, unless the company’s articles of association provide for a different method of approval. Our articles of association do not provide otherwise. Further, so long as an office holder has disclosed his or her personal interest in a transaction, the board of directors may approve an action by the office holder that would otherwise be deemed a breach of the duty of loyalty. However, a company may not approve a transaction or action that is adverse to the company’s interest or that is not performed by the office holder in good faith. An extraordinary transaction in which an office holder has a personal interest requires approval first by the company’s audit committee and subsequently by the board of directors. The compensation of, or an undertaking to indemnify or insure, an office holder who is not a director requires approval first by the company’s compensation committee, then by the company’s board of directors, and, if such compensation arrangement or an undertaking to indemnify or insure is inconsistent with the company’s stated compensation policy or if the office holder is the Chief Executive Officer (apart from a number of specific exceptions), then such arrangement is subject to the approval of a majority vote of the shares present and voting at a shareholders meeting, provided that either: (a) such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such compensation arrangement (excluding abstaining shareholders); or (b) the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation arrangement and who vote against the arrangement does not exceed 2% of the company’s aggregate voting rights. We refer to this as the Special Approval for Compensation. Arrangements regarding the compensation, indemnification or insurance of a director require the approval of the compensation committee, board of directors and shareholders by ordinary majority, in that order, and under certain circumstances, a Special Approval for Compensation.

Generally, a person who has a personal interest in a matter which is considered at a meeting of the board of directors or the audit committee may not be present at such a meeting or vote on that matter unless the chairman of the relevant committee or board of directors, as applicable, determines that he or she should be present in order to present the transaction that is subject to approval. Generally, if a majority of the members of the audit committee or the board of directors, as applicable, have a personal interest in the approval of a transaction, then all directors may participate in discussions of the audit committee or the board of directors, as applicable. In the event a majority of the members of the board of directors have a personal interest in the approval of a transaction, then the approval thereof shall also require the approval of the shareholders.

Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions

Pursuant to Israeli law, the disclosure requirements regarding personal interests that apply to directors and executive officers also apply to a controlling shareholder of a public company. In the context of a transaction involving a shareholder of the company, a controlling shareholder also includes a shareholder who holds 25% or more of the voting rights in the company if no other shareholder holds more than 45% of the voting rights in the company. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated. The approval of the audit committee or the compensation committee, as the case may be, the board of directors and the shareholders of the company, in that order is required for (a) extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, (b) the engagement with a controlling shareholder or his or her relative, directly or indirectly, for the provision of services to the company, (c) the terms of engagement and compensation of a controlling shareholder or his or her relative who is not an office holder or (d) the employment of a controlling shareholder or his or her relative by the company, other than as an office holder (collectively referred as Transaction with a Controlling Shareholder). In addition, such shareholder approval requires one of the following, which we refer to as a Special Majority:

● at least a majority of the shares held by all shareholders who do not have a personal interest in the transaction and who are present and voting at the meeting approving the transaction, excluding abstentions; or

● the shares voted against the transaction by shareholders who have no personal interest in the transaction and who are present and voting at the meeting do not exceed 2% of the voting rights in the company.

To the extent that any such Transaction with a Controlling Shareholder is for a period extending beyond three years, approval is required once every three years, unless, with respect to certain transactions, the audit committee determines that the duration of the transaction is reasonable given the circumstances related thereto.

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Arrangements regarding the compensation, indemnification or insurance of a controlling shareholder in his or her capacity as an office holder require the approval of the compensation committee, board of directors and shareholders by a Special Majority and the terms thereof may not be inconsistent with the company’s stated compensation policy.

Pursuant to regulations promulgated under the Companies Law, certain transactions with a controlling shareholder, a relative of a controlling shareholder, or a director that would otherwise require approval of a company’s shareholders may be exempt from shareholder approval upon certain determinations of the audit committee and board of directors.

Shareholder Duties

Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power in the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters:

● an amendment to the company’s articles of association;

● an increase of the company’s authorized share capital;

● a merger; or

● the approval of related party transactions and acts of office holders that require shareholder approval.

In addition, a shareholder also has a general duty to refrain from discriminating against other shareholders.

Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder who knows that he or she has the power to determine the outcome of a shareholder vote at a general meeting or a shareholder class meeting and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or other power towards the company. The Companies Law does not define the substance of the duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness.

Exculpation, Insurance and Indemnification of Directors and Officers

Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such a provision. The company may not exculpate in advance a director from liability arising out of a prohibited dividend or distribution to shareholders.

Under the Companies Law, a company may indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:

● financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be reasonably foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria;

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● reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (i) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (A) no indictment was filed against such office holder as a result of such investigation or proceeding; and (B) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (ii) in connection with a monetary sanction; and

● reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party, or in connection with criminal proceedings in which the office holder was acquitted, or as a result of a conviction for an offense that does not require proof of criminal intent.

Under the Companies Law and the Israeli Securities Law 5728-1968 (the “Israeli Securities Law”), a company may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder if and to the extent provided in the company’s articles of association:

● a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;

● a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; and

● a financial liability imposed on the office holder in favor of a third party.

Under our articles of association, we may insure an office holder against the aforementioned liabilities as well as the following liabilities:

● a breach of duty of care to the company or to a third party.

● any other action against which we are permitted by law to insure an office holder;

● expenses incurred and/or paid by the office holder in connection with an administrative enforcement procedure under any applicable law including the Efficiency of Enforcement Procedures in the Securities Authority Law (legislation amendments), 5771-2011 and the Israeli Securities Law, which we refer to as an Administrative Enforcement Procedure, and including reasonable litigation expenses and attorney fees; and

● a financial liability in favor or a victim of a felony pursuant to Section 52ND of the Israeli Securities Law.

Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:

● a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;

● a breach of duty of care committed intentionally or recklessly, excluding a breach arising solely out of the negligent conduct of the office holder;

● an act or omission committed with intent to derive illegal personal benefit; or

● a fine, civil fine, administrative fine or ransom or levied against the office holder.

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Under the Companies Law, exculpation, indemnification and insurance of office holders in a public company must be approved by the compensation committee and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders. See “— Approval of Related Party Transactions under Israeli Law.”

Our articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent permitted or to be permitted by the Companies Law and the Israeli Securities Law, including expenses incurred and/or paid by the office holder in connection with an Administrative Enforcement Procedure.

We have entered into agreements with each of our directors and executive officers exculpating them, to the fullest extent permitted by law and our articles of association, and undertaking to indemnify them to the fullest extent permitted by law and our articles of association. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances.

The maximum indemnification amount set forth in such agreements is limited to an amount which shall not exceed 25% of our net assets based on our most recently audited or reviewed financial statements prior to actual payment of the indemnification amount. Such maximum amount is in addition to any amount paid (if paid) under insurance and/or by a third-party pursuant to an indemnification arrangement

In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act of 1933, however, is against public policy and therefore unenforceable.

We have obtained directors’ and officers’ liability insurance for the benefit of our office holders and intend to continue to maintain such coverage and pay all premiums thereunder to the fullest extent permitted by the Companies Law. In addition, we entered into agreements with each of our office holders undertaking to indemnify them to the fullest extent permitted by the Companies Law, including with respect to liabilities resulting from the initial public offering in the U.S., to the extent that these liabilities are not covered by insurance.

D. Employees

As of December 31, 2021, we had 15 employees, 5 of whom were employed in finance and administration and 10 of whom were employed in research and development. All Company employees are in Israel.

Israeli labor laws principally govern the length of the workday, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment. Subject to certain exceptions, Israeli law generally requires severance pay upon the retirement, death or dismissal of an employee, and requires us and our employees to make payments to the National Insurance Institute, which is similar to the U.S. Social Security Administration. Our employees have defined benefit pension plans that comply with applicable Israeli legal requirements, which also include the mandatory pension payments required by applicable law and allocations for severance pay.

While none of our employees are party to any collective bargaining agreements, certain provisions of the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations (including the Industrialists’ Associations) are applicable to our employees by extension orders issued by the Israel Ministry of Economy (previously the Israeli Ministry of Trade, Industry and Labor). These provisions primarily concern the length of the workweek, pension fund benefits for all employees and for employees in the industry section, insurance for work-related accidents, travel expenses reimbursement, holiday leave, convalescent payments and entitlement for vacation days. We generally provide our employees with benefits and working conditions beyond the required minimums. We have never experienced any employment-related work stoppages and believe our relationship with our employees is good.

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E. Share Ownership

For information regarding the share ownership of our directors and executive officers, see “Item 7.A. Major Shareholders.”

Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table and notes set forth information, as of March 1, 2022, concerning the beneficial ownership of our securities by:

● each of our directors and executive officers;

● all of our executive officers and directors as a group; and

● each person (or group of affiliated persons) known by us to be the beneficial owner of more than 5% of the outstanding ordinary shares.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to ordinary shares or Ordinary shares represented by the ADSs. Ordinary shares issuable under share options or other conversion rights that were exercisable within 60 days after March 1, 2022, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or other conversion rights but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The percentage of ordinary shares beneficially owned is based on 753,069,668 ordinary shares outstanding as of March 1, 2022.

None of our shareholders has different voting rights from other shareholders. To the best of our knowledge, we are not owned or controlled, directly or indirectly, by another corporation or by any foreign government. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

Except as otherwise indicated in the footnotes to this table, we believe the persons named in this table have sole voting and investment power with respect to all the ordinary shares indicated.

	Ordinary		Percent of
	Shares		Class%
Directors and Executive Officers
Avner Rotman (1)		1,105,567		*
George H. Lowell (2)		1,541,667		*
Uri Ben-Or (3)		-		*
Tamar Ben-Yedidia (4)		-		*
Elad Mark (5)		-		*
Mark Germain (6)		5,787,967		*
Morris Laster (7)		1,186,667		*
Adi Raviv (8)		946,667		*
Yael Margolin (9)		946,667		*
Sam Moed (10)		1,573,333		*
Amir Reichman  (11)		4,800,000		*
5% Shareholders
Angels Investments in Hi Tech Ltd.		170,961,770		29.7	%
All executive officers and directors as a group (11 people)		17,188,533		*	%

* Less than 1%.

(1) Consists of 158,900 shares, options to purchase 868,889 shares and 77,778 shares issuable upon settlement of vested RSUs. The options are comprised of options to purchase (i) 480,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 388,889 shares at an exercise price per share of $6.95 that expire in April 2031.

(2) Consists of 355,000 shares, options to purchase 1,108,889 shares and 77,778 shares issuable upon settlement of vested RSUs. The options are comprised of options to purchase (i) 720,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 388,889 shares at an exercise price per share of $6.95 that expire in April 2031.

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(3) Consists of 22,000 unvested RSUs.

(4) Consists of 78,500 unvested RSUs.

(5) Consists of 44,300 unvested RSUs.

(6) Consists of 1,466,666 shares and options to purchase 5,787,967 shares. The options are comprised of options to purchase (i) 3,921,300 shares at an exercise price per share of $8.58 that expire in May 2029 and (ii) 1,866,667 shares at an exercise price per share of $6.95 that expire in April 2031.

(7) Consists of options to purchase 1,108,889 shares and 77,778 shares issuable upon settlement of vested RSUs. The options are comprised of options to purchase (i) 720,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 388,889 shares at an exercise price per share of $6.95 that expire in April 2031.

(8) Consists of options to purchase 868,889 shares and 77,778 shares issuable upon settlement of vested RSUs. The options are comprised of options to purchase (i) 480,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 388,889 shares at an exercise price per share of $6.95 that expire in April 2031.

(9) Consists of options to purchase 868,889 shares and 77,778 shares issuable upon settlement of vested RSUs. The options are comprised of options to purchase (i) 480,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 388,889 shares at an exercise price per share of $6.95 that expire in April 2031.

(10) Consists of options to purchase 1,573,333 shares. The options are comprised of options to purchase (i) 480,000 shares at an exercise price per share of $7.28 that expire in March 2030 and (ii) 1,093,333 shares at an exercise price per share of $6.95 that expire in August 2030..

(11) Consists of 4,800,000 shares issuable upon settlement of vested RSUs.

B. Related Party Transactions

The following is a description of some of the transactions with related parties to which we are a party to, and which were in effect within the past three fiscal years. The descriptions provided below are summaries of the terms of such agreements and do not purport to be complete and are qualified in their entirety by the complete agreements.

We believe that we have executed all of our transactions with related parties on terms no less favorable to us than those we could have obtained from unaffiliated third parties. See “Approval of Related Party Transactions under Israeli Law.”

Indemnification Agreements

Our articles of association permit us to exculpate, indemnify and insure our directors and officeholders to the fullest extent permitted by the Companies Law. We have obtained directors’ and officers’ insurance for each of our officers and directors and have entered into indemnification agreements with all of our current officers and directors.

We have entered into indemnification and exculpation agreements with each of our current office holders and directors exculpating them to the fullest extent permitted by the law and our articles of association and undertaking to indemnify them to the fullest extent permitted by the law and our articles of association, including with respect to liabilities resulting from the initial public offering in the U.S., to the extent such liabilities are not covered by insurance. On March 1, 2015, our general shareholders meeting approved the grant of an indemnification and exculpation agreement under the same terms and conditions for each of our current office holders and directors.

Employment and Service Agreements

We have or have had employment, service or related agreements with each member of our senior management. See Item 6.

Family Relationships

There are no family relationships between any members of our executive management and our directors.

C. Interests of Experts and Counsel

Not applicable.

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Item 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

Consolidated Financial Statements

We have appended our consolidated financial statements at the end of this annual report, starting at page F-2, as part of this annual report.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Dividend Policy

We have never declared or paid cash dividends to our shareholders. Currently, we do not intend to pay cash dividends. We intend to reinvest any earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on a number of factors, including future earnings, our financial condition, operating results, contractual restrictions, capital requirements, business prospects, applicable Israeli law and other factors our board of directors may deem relevant. In addition, the distribution of dividends is limited by Israeli law, which permits the distribution of dividends only out of distributable profits. In addition, if we pay a dividend out of income attributed to our Benefited Enterprise during the tax exemption period, we may be subject to tax on the grossed-up amount of such income at the corporate tax rate which would have been applied to such Benefited Enterprise’s income had we not enjoyed the exemption for a Benefited Enterprise.

If we pay any dividends, we will also pay such dividends to the ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid to ADS holders in U.S. dollars.

B. Significant Changes

No significant changes have occurred since December 31, 2021, except as otherwise disclosed in this annual report.

Item 9. THE OFFER AND LISTING

A. Listing Details

Our Ordinary Shares were traded on the TASE under the symbol “BNDX” from June 18, 2007 and under the symbol “BVXV” from May 18, 2015 to February 2018 and were voluntarily delisted from trading on the TASE, effective February 2018. The ADSs have traded on the Nasdaq Capital Market under the symbol “BVXV” since May 11, 2015. The ADS warrants issued to investors in our initial public offering in the U.S. were traded on the Nasdaq Capital Market under the symbol “BVXVW” from May 11, 2015 until May 13, 2020.

B. Plan of Distribution

Not applicable.

C. Markets

The ADSs, each representing forty Ordinary Shares and evidenced by an American depositary receipt, or ADR, are traded on the Nasdaq Global Market under the symbol “BVXV.” The ADRs were issued pursuant to a Depositary Agreement entered into with The Bank of New York Mellon.

D. Selling Shareholders

Not applicable.

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E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

Item 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Articles of Association

Our number with the Israeli Registrar of Companies is 513436105. Our purpose is set forth in our Articles of Association is to engage in every lawful purpose in the field of biotechnology.

Our authorized share capital consists of 1,800,000,000 ordinary shares, no par value each. As of December 31, 2021, there were 573,285,824 ordinary shares issued and outstanding (including those represented by ADSs). All of our outstanding ordinary shares are validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any preemptive rights.

Voting Rights

Holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders at a shareholder meeting. Shareholders may vote at shareholder meetings either in person, by proxy or by written ballot. Israeli law does not allow public companies to adopt shareholder resolutions by means of written consent in lieu of a shareholder meeting. The board of directors shall determine and provide a record date for each shareholders meeting and all shareholders at such record date may vote. Unless stipulated differently in the Companies Law or in the articles of association, all shareholders’ resolutions shall be approved by a simple majority vote. Except as otherwise disclosed herein, an amendment to our articles of association requires the prior approval of the holders of at least 75% of our shares, represented and voting at a general meeting.

Our ordinary shares do not have cumulative voting rights for the election of directors. As a result, the holders of a majority of the voting power represented at a shareholders meeting have the power to elect all of our directors, subject to the special approval requirements for external directors under the Israeli Companies Law.

Transfer of Shares

Our ordinary shares that are fully paid for are issued in registered form and may be freely transferred under our articles of association, unless the transfer is restricted or prohibited by applicable law or the rules of a stock exchange on which the shares are traded. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our articles of association or Israeli law, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel.

The Powers of the Directors

Our board of directors shall direct the Company’s policy and shall supervise the performance of the Company’s Chief Executive Officer. Pursuant to the Companies Law and our articles of association, our board of directors may exercise all powers and take all actions that are not required under law or under our articles of association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.

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Amendment of share capital

Our articles of association enable us to increase or reduce our share capital. Any such changes are subject to the provisions of the Companies Law and must be approved by a resolution duly passed by our shareholders at a general or special meeting by voting on such change in the capital. In addition, transactions that have the effect of reducing capital, such as the declaration and payment of dividends in the absence of sufficient retained earnings and profits and an issuance of shares for less than their nominal value, require a resolution of our board of directors and court approval.

Dividends

Under Israeli law, we may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of distribution. In the event that we do not have retained earnings or earnings generated over the two most recent years legally available for distribution, we may seek the approval of the court in order to distribute a dividend. The court may approve our request if it is determined that there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.

Shareholder Meetings

Under Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year and in any event no later than 15 months after the date of the previous annual general meeting. All meetings other than the annual general meeting of shareholders are referred to as special meetings. Our board of directors may call special meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Companies Law and our articles of association provide that our board of directors is required to convene a special meeting upon the written request of (i) any two of our directors or one quarter of the directors then in office; or (ii) one or more shareholders holding, in the aggregate either (a) 5% of our issued share capital and 1% of our outstanding voting power, or (b) 5% of our outstanding voting power.

Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board of directors. Furthermore, the Companies Law and our articles of association require that resolutions regarding the following matters must be passed at a general meeting of our shareholders:

● amendments to our articles of association;

● appointment or termination of our auditors;

● appointment of directors and appointment and dismissal of external directors;

● approval of acts and transactions requiring general meeting approval pursuant to the Companies Law;

● director compensation, indemnification and change of the principal executive officer;

● increases or reductions of our authorized share capital;

● a merger;

● the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management; and

● authorizing the chairman of the board of directors or his relative to act as the company’s chief executive officer or act with such authority; or authorize the company’s chief executive officer or his relative to act as the chairman of the board of directors or act with such authority.

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The Companies Law requires that a notice of any annual or special shareholders meeting be provided at least 21 days prior to the meeting and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, or an approval of a merger, notice must be provided at least 35 days prior to the meeting.

Quorum

The quorum required for our general meetings of shareholders consists of one or more shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law who hold or represent, in the aggregate, at least 10% of the total outstanding voting rights, within half an hour from the appointed time.

A meeting adjourned for lack of a quorum is adjourned to the same day in the following week at the same time and place or on a later date if so specified in the summons or notice of the meeting. At the reconvened meeting, any number of our shareholders present in person or by proxy shall constitute a lawful quorum.

Resolutions

Our articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required by applicable law or by another provision of the articles of association.

Israeli law provides that a shareholder of a public company may vote in a meeting and in a class meeting by means of a written ballot in which the shareholder indicates how he or she votes on resolutions relating to the following matters:

● an appointment or removal of directors;

● an approval of transactions with office holders or interested or related parties, that require shareholder approval;

● an approval of a merger;

● authorizing the chairman of the board of directors or his relative to act as the company’s chief executive officer or act with such authority; or authorize the company’s chief executive officer or his relative to act as the chairman of the board of directors or act with such authority;

● any other matter that is determined in the articles of association to be voted on by way of a written ballot. Our articles of association do not stipulate any additional matters; and

● other matters which may be prescribed by Israel’s Minister of Justice.

The provision allowing the vote by written ballot does not apply where the voting power of the controlling shareholder is sufficient to determine the vote.

The Companies Law provides that a shareholder, in exercising his or her rights and performing his or her obligations toward the company and its other shareholders, must act in good faith and in a customary manner, and avoid abusing his or her power. This is required when voting at general meetings on matters such as changes to the articles of association, increasing the company’s registered capital, mergers and approval of certain interested or related party transactions. A shareholder also has a general duty to refrain from depriving any other shareholder of its rights as a shareholder. In addition, any controlling shareholder, any shareholder who knows that its vote can determine the outcome of a shareholder vote and any shareholder who, under such company’s articles of association, can appoint or prevent the appointment of an office holder or other power towards the company, is required to act with fairness towards the company. The Companies Law does not describe the substance of this duty except that the remedies generally available upon a breach of contract will also apply to a breach of the duty to act with fairness, and, to the best of our knowledge, there is no binding case law that addresses this subject directly.

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Under the Companies Law, unless provided otherwise in a company’s articles of association, a resolution at a shareholders meeting requires approval by a simple majority of the voting rights represented at the meeting, in person, by proxy or written ballot, and voting on the resolution. Generally, a resolution for the voluntary winding up of the company requires the approval of holders of 75% of the voting rights represented at the meeting, in person, by proxy or by written ballot and voting on the resolution.

In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.

Access to Corporate Records

Under the Companies Law, all shareholders of a company generally have the right to review minutes of the company’s general meetings, its shareholders register and principal shareholders register, articles of association, financial statements and any document it is required by law to file publicly with the Israeli Companies Registrar and the ISA. Any of our shareholders may request to review any document in our possession that relates to any action or transaction with a related party, interested party or office holder that requires shareholder approval under the Companies Law. We may deny a request to review a document if we determine that the request was not made in good faith, that the document contains a commercial secret or a patent or that the document’s disclosure may otherwise prejudice our interests. 

Acquisitions under Israeli Law

Full Tender Offer

A person wishing to acquire shares of a public Israeli company and who would as a result hold over 90% of the target company’s issued and outstanding share capital is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to acquire shares of a public Israeli company and who would as a result hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the same class for the purchase of all of the issued and outstanding shares of the same class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law (provided that a majority of the offerees that do not have a personal interest in such tender offer shall have approved the tender offer except that if the total votes to reject the tender offer represent less than 2% of the company’s issued and outstanding share capital, in the aggregate, approval by a majority of the offerees that do not have a personal interest in such tender offer is not required to complete the tender offer). However, a shareholder that had its shares so transferred may petition the court within six months from the date of acceptance of the full tender offer, whether or not such shareholder agreed to the tender or not, to determine whether the tender offer was for less than fair value and whether the fair value should be paid as determined by the court unless the acquirer stipulated in the tender offer that a shareholder that accepts the offer may not seek appraisal rights, so long as prior to the acceptance of the full tender offer, the acquirer and the company disclosed the information required by law in connection with the full tender offer. If the shareholders who did not accept the tender offer hold 5% or more of the issued and outstanding share capital of the company or of the applicable class, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted the tender offer.

Special Tender Offer

The Companies Law provides that an acquisition of shares of a public Israeli company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company, unless one of the exemptions in the Companies Law is met. This rule does not apply if there is already another holder of at least 25% of the voting rights in the company. Similarly, the Companies Law 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 holder of 45% or more of the voting rights in the company, if there is no other shareholder of the company who holds 45% or more of the voting rights in the company, unless one of the exemptions in the Companies Law is met.

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A special tender offer must be extended to all shareholders of a company, but the offeror is not required to purchase shares representing more than 5% of the voting power attached to the company’s outstanding shares, regardless of how many shares are tendered by shareholders. A special tender offer may be consummated only if (i) at least 5% of the voting power attached to 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 a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.

Under regulations enacted pursuant to the Companies Law, the above special tender offer requirements may not apply to companies whose shares are listed for trading on a foreign stock exchange if, among other things, the relevant foreign laws or the rules of the stock exchange, include provisions limiting the percentage of control which may be acquired or that the purchaser is required to make a tender offer to the public. However, the Israeli Securities Authority’s opinion is that such leniency does not apply with respect to companies whose shares are listed for trading on stock exchanges in the United States, including the NASDAQ Capital Market, which do not provide for sufficient legal restrictions on obtaining control or an obligation to make a tender offer to the public, therefore the special tender offer requirements shall apply to such companies.

Merger

The Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described under the Companies Law are met, a majority of each party’s shares voted on the proposed merger at a shareholders’ meeting called with at least 35 days’ prior notice.

For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of the other party, vote against the merger. If the transaction would have been approved but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders.

Upon the request of a creditor of either party to 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, and may further give instructions to secure the rights of creditors.

In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger was filed by each party with the Israeli Registrar of Companies and 30 days have passed from the date the merger was approved by the shareholders of each party.

Antitakeover Measures

The Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares providing certain preferred rights, distributions or other matters and shares having preemptive rights. As of the date of this annual report, we do not have any authorized or issued shares other than our ordinary shares. In the future, if we do create and issue a class of shares other than ordinary shares, such class of shares, depending on the specific rights that may be attached to them, may delay or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market value of their ordinary shares. The authorization of a new class of shares will require an amendment to our articles of association which requires the prior approval of the holders of at least 75% of our shares at a general meeting. Shareholders voting in such meeting will be subject to the restrictions provided in the Companies Law as described above.

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Transfer Agent and Depositary

The transfer agent and registrar for our ordinary shares is Vstock Transfer, LLC. The ADSs were issued pursuant to a Depositary Agreement entered into with The Bank of New York Mellon, which acts as depositary.

C. Material Contracts

Our material agreements are (i) the license agreement and research collaboration agreements with MPG, (ii) the finance agreement with EIB, and (iii) our lease agreement for our facility in Jerusalem, each of which is described elsewhere in this Annual Report. We have not entered into any other material agreements in the two years immediately preceding the date of this Annual report.

D. Exchange Controls

In 1998, Israeli currency control regulations were liberalized significantly, so that Israeli residents generally may freely deal in foreign currency and foreign assets, and non-residents may freely deal in Israeli currency and Israeli assets. There are currently no Israeli currency control restrictions on remittances of dividends on the ordinary shares or the proceeds from the sale of the shares provided that all taxes were paid or withheld; however, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.

Non-residents of Israel may freely hold and trade our securities. Neither our articles of association nor the laws of the State of Israel restrict in any way the ownership or voting of ordinary shares by non-residents, except that such restrictions may exist with respect to citizens of countries which are in a state of war with Israel. Israeli residents are allowed to purchase our ordinary shares.

E. Taxation

The following description is not intended to constitute a complete analysis of all tax consequences relating to the ownership or disposition of our ordinary shares or ADSs (both referred to below as the Shares). You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign, including Israeli, or other taxing jurisdiction.

Israeli Tax Considerations and Government Programs

The following is a summary of the material Israeli income tax laws applicable to us. This section also contains a discussion of material Israeli income tax consequences concerning the ownership and disposition of our Shares. This summary does not discuss all the aspects of Israeli income tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of this kind of investor include residents of Israel or traders in securities who are subject to special tax regimes not covered in this discussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. This summary is based on laws and regulations in effect as of the date of this annual report and does not take into account possible future amendments which may be under consideration.

General corporate tax structure in Israel

Taxable income of Israeli companies was subject to tax at the rate of 26.5% in 2015, 25% in 2016, 24% in 2017 and 23% in 2018 and thereafter. Capital gains derived by an Israeli resident company are generally subject to tax at the same rate as the corporate tax rate. Under Israeli tax legislation, a corporation will be considered as an “Israeli Resident” if it meets one of the following: (a) it was incorporated in Israel; or (b) the control and management of its business are exercised in Israel.

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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 assets located in Israel, including shares in Israeli companies, by both residents and 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 Tax Ordinance distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price attributable to an increase in the Israeli consumer price index, or 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.

The following discussion refers to the sale of our ordinary shares. However, the same tax treatment would apply to the sale of the ADSs.

Taxation of Israeli residents

As of January 1, 2012, the tax rate generally applicable to the capital gains derived from the sale of shares, whether listed on a stock market or not, is 25% for Israeli individuals, unless 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) in which case the tax rate will be 30%. Israeli companies are subject to the corporate tax rate on capital gains derived from the sale of listed shares. However, different tax rates may apply to dealers in securities and shareholders who acquired their shares prior to an initial public offering.

As of January 1, 2013, shareholders that are individuals who have taxable income that exceeds NIS 811,560 in a tax year (linked to the CPI each year), will be subject to an additional tax, referred to as Income Surtax, at the rate of 2% on their taxable income for such tax year which is in excess of such threshold. Under an amendment enacted in December 2016 to the Tax Ordinance, for tax year 2017 and thereafter the rate of High Income Tax was increased to 3% and will be applicable to annual income exceeding NIS 640,000 (linked to the CPI each year – NIS 663,240 as for 2022). For this purpose, taxable income will include taxable capital gains from the sale of our shares and taxable income from dividend distributions.

Taxation of Non-Israeli Residents

Non-Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the sale of shares publicly traded on the TASE provided such gains did not derive from a permanent establishment of such shareholders in Israel. Non-Israeli residents are also exempt from Israeli capital gains tax on any gains derived from the sale of shares of Israeli companies publicly traded on a recognized stock market outside of Israel, provided such shareholders did not acquire their shares prior to the issuer’s initial public offering (in which case a partial exemption may be available), and that the gains did not derive from a permanent establishment of such shareholders in Israel. However, non-Israeli corporations will not be entitled to such exemption if Israeli residents, whether directly or indirectly (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.

In addition, the sale, exchange or disposition of our ordinary shares by a shareholder who is a U.S. resident (for purposes of the U.S.-Israel Tax Treaty), and who holds ordinary shares as a capital asset, is also exempt from Israeli capital gains tax under the U.S.-Israel Tax Treaty unless either (i) the shareholder holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12-month period preceding such sale; (ii) the capital gains arising from such sale are attributable to a permanent establishment of the shareholder located in Israel or (iii) such U.S. resident is an individual and was present in Israel for 183 days or more during the relevant taxable year. If the above conditions are not met, the U.S. resident would be subject to Israeli tax, to the extent applicable. However, under the U.S.-Israel Tax Treaty, the gain would be treated as foreign source income for United States foreign tax credit purposes and such U.S. resident would be permitted to claim a credit for such taxes against the United States federal income tax imposed on such sale, exchange or disposition, subject to the limitations under the United States federal income tax laws applicable to foreign tax credits.

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Taxation of Dividends Paid on our Ordinary Shares

The following discussion refers to dividends paid on our ordinary shares. However, the same tax treatment would apply to dividends paid on the ADSs.

Taxation of Israeli Residents

Israeli resident individuals are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares, other than bonus shares (share dividends) or stock dividends. As of January 1, 2012, the tax rate applicable to such dividends is 25% or 30% for a shareholder that is considered a significant shareholder at any time during the 12-month period preceding such distribution. Dividends paid out of profits sourced from ordinary income are subject to withholding tax at the rate of 25% or 30%.

All dividend distributions to Israeli resident corporations are not subject to a withholding tax.

For information with respect to the applicability of Income Surtax on distribution of dividends, please see “Capital Gains Tax on Sales of Our Ordinary Shares” and “Taxation of Israeli Residents” above in this Item.

Taxation of Israeli Resident Corporations on Receipt of Dividends

Israeli resident corporations are generally exempt from Israeli corporate income tax with respect to dividends paid on our Shares.

Taxation of Non-Israeli Residents

Non-residents of Israel, both companies and individuals, are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares, at the aforementioned rates applicable to Israeli residents, which tax will be withheld at source, unless a different rate is provided in a treaty between Israel and the shareholder’s country of residence.

Under the U.S.-Israel Treaty, the maximum Israeli withholding tax on dividends paid by us is 25%. The U.S.-Israel Tax Treaty further provides for a 12.5% Israeli dividend withholding tax rate on dividends paid by an Israeli company to a U.S. corporation owning at least 10% or more of such Israeli company’s issued voting power for, in general, the part of the tax year which precedes the date of payment of the dividend and the entire preceding tax year. The lower 12.5% rate applies only to dividends paid from regular income (and not derived from an Approved, Privileged or Preferred Enterprise) in the applicable period and does not apply if the company has more than 25% of its gross income derived from certain types of passive income (if the conditions mentioned above are met, dividends from income of an Approved, Privileged or Preferred Enterprise are subject to a 15% withholding tax rate under the U.S.-Israel Tax Treaty). Residents of the United States generally will have withholding tax in Israel deducted at source. They may be entitled to a credit or deduction for United States federal income tax purposes in the amount of the taxes withheld, subject to detailed rules contained in United States tax legislation.

A non-resident of Israel who has dividend income derived from or accrued in Israel, from which tax was withheld at source, is generally exempt 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 that the taxpayer is not subject to Income Surtax.

Estate and gift tax

Israeli law presently does not impose estate or gift taxes.

EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR ISRAELI TAX CONSEQUENCES OF PURCHASING, HOLDING, AND DISPOSING OF OUR SHARES, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.

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U.S. Federal Income Tax Consequences

The following is a summary of the material U.S. Federal income tax consequences that apply to U.S. holders (defined below) who hold ADSs as capital assets for tax purposes. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing final, temporary and proposed regulations thereunder, judicial decisions and published positions of the Internal Revenue Service and the U.S.-Israel income tax treaty in effect as of the date of this annual report, all of which are subject to change at any time (including changes in interpretation), possibly with retroactive effect. On December 22, 2017, the United States enacted the U.S. Tax Reform which alters significantly the U.S. Federal income tax system, generally beginning in 2018. Given the complexity of this new law, U.S. holders should consult their own tax advisors regarding its potential impact on the U.S. Federal income tax consequences to them in light of their particular circumstances.

This summary does not address all U.S. Federal income tax matters that may be relevant to a particular prospective holder or all tax considerations that may be relevant with respect to an investment in ADSs.

This summary does not address tax considerations applicable to a holder of an ADS that may be subject to special tax rules including, without limitation, the following:

● dealers or traders in securities, currencies or notional principal contracts;

● financial institutions;

● insurance companies;

● real estate investment trusts;

● banks;

● investors subject to the alternative minimum tax;

● tax-exempt organizations;

● regulated investment companies;

● investors that actually or constructively own 10 percent or more of our voting shares;

● investors that will hold the ADSs as part of a hedging or conversion transaction or as a position in a straddle or a part of a synthetic security or other integrated transaction for U.S. Federal income tax purposes;

● investors that are treated as partnerships or other pass through entities for U.S. Federal income tax purposes and persons who hold the ADSs through partnerships or other pass through entities;

● investors whose functional currency is not the U.S. dollar; and

● expatriates or former long-term residents of the United States.

This summary does not address the effect of any U.S. Federal taxation other than U.S. Federal income taxation. In addition, this summary does not include any discussion of state, local or foreign taxation or the indirect effects on the holders of equity interests in a holder of an ADS.

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You are urged to consult your own tax advisor regarding the foreign and U.S. Federal, state and local and other tax consequences of an investment in ADSs.

For purposes of this summary, a “U.S. holder” is a beneficial owner of ADSs that is, for U.S. Federal income tax purposes:

● an individual who is a citizen or a resident of the United States;

● 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 United States or any political subdivision thereof;

● an estate whose income is subject to U.S. Federal income tax regardless of its source; or

● a trust if:

(a) a court within the United States is able to exercise primary supervision over administration of the trust; and

(b) one or more United States persons have the authority to control all substantial decisions of the trust.

If an entity that is classified as a partnership for U.S. federal tax purposes holds ADSs, the U.S. federal income tax treatment of its partners will generally depend upon the status of the partners and the activities of the partnership. Entities that are classified as partnerships for U.S. federal tax purposes and persons holding ADSs through such entities should consult their own tax advisors.

In general, if you hold ADSs, you will be treated as the holder of the underlying shares represented by those ADSs for U.S. Federal income tax purposes. Accordingly, no gain or loss will be recognized if you exchange ADSs for the underlying shares represented by those ADSs.

U.S. Taxation of ADSs

Distributions

Subject to the discussion under “Passive Foreign Investment Companies” below, the gross amount of any distribution, including the amount of any Israeli taxes withheld from these distributions (see “Israeli Tax Considerations”), actually or constructively received by a U.S. holder with respect to ADSs will be taxable to the U.S. holder as a dividend to the extent of our current and accumulated earnings and profits as determined under U.S. Federal income tax principles. Distributions in excess of earnings and profits will be non-taxable to the U.S. holder to the extent of, and will be applied against and reduce, the U.S. holder’s adjusted tax basis in the ADSs. Distributions in excess of earnings and profits and such adjusted tax basis will generally be taxable to the U.S. holder as a capital gain from the sale or exchange of property. We do not maintain calculations of our earnings and profits under U.S. Federal income tax principles. If we do not report to a U.S. holder the portion of a distribution that exceeds earnings and profits, the distribution will generally be taxable as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as a capital gain under the rules described above. The amount of any distribution of property other than cash will be the fair market value of that property on the date of distribution. The U.S. holder will not, except as provided by Section 245 of the Code, be eligible for any dividends received deduction in respect of the dividend otherwise allowable to corporations.

Under the Code, certain dividends received by non-corporate U.S. holders will be subject to a maximum income tax rate of 20%. This reduced income tax rate is only applicable to dividends paid by a “qualified foreign corporation” that is not a “passive foreign investment company” and only with respect to shares held by a qualified U.S. holder (i.e., a non-corporate holder) for a minimum holding period (generally 61 days during the 121-day period beginning 60 days before the ex-dividend date). We should be considered a qualified foreign corporation because (i) we are eligible for the benefits of a comprehensive tax treaty between Israel and the U.S., which includes an exchange of information program, and (ii) the ADSs are readily tradable on an established securities market in the U.S. In addition, based on our current business plans, we do not expect to be classified as a “passive foreign investment company” (see “Passive Foreign Investment Companies” below). Accordingly, dividends paid by us to individual U.S. holders on shares held for the minimum holding period should be eligible for the reduced income tax rate. In addition to the income tax on dividends discussed above, certain non-corporate U.S. holders will also be subject to the 3.8% Medicare tax on dividends as discussed below under “Medicare Tax on Unearned Income”.

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The amount of any distribution paid in a currency other than U.S. dollars (a “foreign currency”) including the amount of any withholding tax thereon, will be included in the gross income of a U.S. holder in an amount equal to the U.S. dollar value of the foreign currencies calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the foreign currencies are converted into U.S. dollars. If the foreign currencies are converted into U.S. dollars on the date of receipt, a U.S. holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend. If the foreign currencies received in the distribution are not converted into U.S. dollars on the date of receipt, a U.S. holder will have a basis in the foreign currencies equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the foreign currencies will be treated as ordinary income or loss.

Generally, dividends received by a U.S. holder with respect to ADSs will be treated as foreign source income for the purposes of calculating that holder’s foreign tax credit limitation. Subject to certain conditions and limitations, any Israeli taxes withheld on dividends at the rate provided by the U.S.-Israel tax treaty may be deducted from taxable income or credited against a U.S. holder’s U.S. Federal income tax liability. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to “passive” income and “general” income. The rules relating to foreign tax credits and the timing thereof are complex. U.S. holders should consult their own tax advisors regarding the availability of a foreign tax credit under their particular situation.

Sale or Other Disposition of ADSs

If a U.S. holder sells or otherwise disposes of its ADSs, gain or loss will be recognized for U.S. Federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other disposition and such holder’s adjusted tax basis in the ADSs. Subject to the discussion below under the heading “Passive Foreign Investment Companies,” such gain or loss generally will be a capital gain or loss, and will be long-term a capital gain or loss if the holder had held the ADSs for more than one year at the time of the sale or other disposition. Long-term capital gains realized by individual U.S. holders generally are subject to a lower marginal U.S. Federal income tax rate (currently up to 20%) than the marginal tax rate on ordinary income. In addition to the income tax on gains discussed above, certain non-corporate U.S. holders will also be subject to the 3.8% Medicare tax on net gains as discussed below under “Medicare Tax on Unearned Income”. Under most circumstances, any gain that a holder recognizes on the sale or other disposition of ADSs will be U.S. sourced for purposes of the foreign tax credit limitation and any recognized losses will be allocated against U.S. source income.

If a U.S. holder receives foreign currency upon a sale or exchange of ADSs, gain or loss, if any, recognized on the subsequent sale, conversion or disposition of such foreign currency will be ordinary income or loss, and will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. However, if such foreign currency is converted into U.S. dollars on the date received by the U.S. holder, the U.S. holder generally should not be required to recognize any gain or loss on such conversion.

A U.S. holder who holds shares through an Israeli stockbroker or other Israeli intermediary may be subject to Israeli withholding tax on any capital gain recognized if the U.S. holder does not obtain approval of an exemption from the Israeli Tax Authorities or claim any allowable refunds or reductions. U.S. holders are advised that any Israeli tax paid under circumstances in which an exemption from (or a refund of or a reduction in) such tax was available will not give rise to a deduction or credit for foreign taxes paid for U.S. federal income tax purposes. If applicable, U.S. holders are advised to consult their Israeli stockbroker or intermediary regarding the procedures for obtaining an exemption or reduction.

Medicare Tax on Unearned Income

Certain U.S. holders that are individuals, estates or trusts are required to pay an additional 3.8% tax on all or a portion of their “net investment income,” which includes dividends and net gains from the sale or other dispositions of ADSs (other than ADSs held in a trade or business).

Passive Foreign Investment Companies

For U.S. Federal income tax purposes, we will be considered a passive foreign investment company (“PFIC”) for any taxable year in which either 75% or more of our gross income is passive income, or at least 50% of the average value of all of our assets for the taxable year produce or are held for the production of passive income. For this purpose, passive income includes dividend, interest, royalty, rent, annuity and the excess of gain over losses from the disposition of assets which produce passive income. If we were determined to be a PFIC for U.S. Federal income tax purposes, highly complex rules would apply to U.S. holders owning ADSs.

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We have not determined whether we will be a PFIC this year or in future years. Because the PFIC determination is highly fact-intensive, there can be no assurance that we will not be a PFIC this year or in or any subsequent year.

Our status in any taxable year will depend on our assets and activities in each year and because this is a factual determination made annually at the end of each taxable year, there can be no assurance that we will not be considered a PFIC for any future taxable year. If we were treated as a PFIC in any year during which a U.S. holder owns ADSs, certain adverse tax consequences could apply.

You are urged to consult your own tax advisor regarding the possibility of us being classified as a PFIC and the potential tax consequences arising from the ownership and disposition (directly or indirectly) of an interest in a PFIC.

The U.S. federal income tax rules relating to PFICs, QEF elections, and mark-to market elections are complex. U.S. Investors are urged to consult their own tax advisors with respect to the purchase, ownership and disposition of our Shares, any elections available with respect to such Shares and the IRS information reporting obligations with respect to the purchase, ownership and disposition of our Shares.

Certain Reporting Requirements

Certain U.S. Investors are required to file IRS Form 926, Return by U.S. Transferor of Property to a Foreign Corporation, and certain U.S. Investors may be required to file IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, reporting transfers of cash or other property to us and information relating to the U.S. Investor and us. Substantial penalties may be imposed upon a U.S. Investor that fails to comply.

In addition, recently enacted legislation requires certain U.S. Investors to report information on IRS Form 8938 with respect to their investments in certain “foreign financial assets,” which would include an investment in our Shares, to the IRS.

Investors who fail to report required information could become subject to substantial civil and criminal penalties. U.S. Investors should consult their tax advisors regarding the possible implications of these reporting requirements on their investment in our Shares.

Disclosure of Reportable Transactions

If a U.S. Investor sells or disposes of the Shares at a loss or otherwise incurs certain losses that meet certain thresholds, such U.S. Investor may be required to file a disclosure statement with the IRS. Failure to comply with these and other reporting requirements could result in the imposition of significant penalties.

Backup Withholding Tax and Information Reporting Requirements

Generally, information reporting requirements will apply to distributions on our Shares or proceeds on the disposition of our Shares paid within the United States (and, in certain cases, outside the United States) to U.S. Investors other than certain exempt recipients, such as corporations. Furthermore, backup withholding (currently at 28%) may apply to such amounts if the U.S. Investor fails to (i) provide a correct taxpayer identification number, (ii) report interest and dividends required to be shown on its U.S. federal income tax return, or (iii) make other appropriate certifications in the required manner. U.S. Investors who are required to establish their exempt status generally must provide such certification on IRS Form W-9.

Backup withholding is not an additional tax. Amounts withheld as backup withholding from a payment may be credited against a U.S. Investor’s U.S. federal income tax liability and such U.S. Investor may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund with the IRS and furnishing any required information in a timely manner.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.

98

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements will file reports with the SEC through its electronic data gathering, analysis and retrieval (EDGAR) system. Our securities filings, including this Annual Report and the exhibits thereto, are available electronically through the SEC website (http://www.sec.gov).

As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, we will not be required under the Exchange Act to file annual or other reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We maintain a corporate website at www.biondvax.com. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report. We have included our website address in this annual report solely as an inactive textual reference.

I. Subsidiary Information

Not applicable.

Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in financial market prices and rates, including interest rates and foreign exchange rates, of financial instruments. Our market risk exposure is primarily a result of interest rates and foreign currency exchange rates.

99

Interest Rate Risk

Following the date of this annual report, we do not anticipate undertaking any significant long-term borrowings. At present, our investments consist primarily of cash and cash equivalents and financial assets at fair value.

Following the date of this annual report, we may invest in investment-grade marketable securities with maturities of up to three years, including commercial paper, money market funds, and government/non-government debt securities. The primary objective of our investment activities is to preserve principal while maximizing the income that we receive from our investments without significantly increasing risk and loss. Our investments are exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair market value of our investments, if any. We manage this exposure by performing ongoing evaluations of our investments. Due to the short-term maturities, if any, of our investments to date, their carrying value has always approximated their fair value. If we decide to invest in investments other than cash and cash equivalents, it will be our policy to hold such investments to maturity in order to limit our exposure to interest rate fluctuations.

Foreign Currency Exchange Risk

Our foreign currency exposures give rise to market risk associated with exchange rate movements of the NIS, our functional and reporting currency, mainly against the U.S. dollar and the Euro. Although the NIS is our functional currency, a portion of our expenses are denominated in both U.S. dollar and Euro. Our U.S. dollar and Euro expenses consist principally of payments made to our partners at MPG and UMG, sub-contractors and consultants for pre-clinical trials and other research and development activities as well as payments made to purchase new equipment. We anticipate that a sizable portion of our expenses will continue to be denominated in currencies other than the NIS. If the NIS fluctuates significantly against either the U.S. dollar or the Euro, it may have a negative impact on our results of operations. To date, fluctuations in the exchange rates have not materially affected our results of operations or financial condition for the periods under review.

Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable. 

C. Other Securities

Not applicable.

D. American Depositary Shares

The Bank of New York Mellon acts as depositary, for our American Depositary Shares, also referred to as ADSs which trade on the Nasdaq Capital Market. Each ADS represents forty (40) ordinary shares (or a right to receive forty (40) ordinary shares). Each ADS also represents any other securities, cash or other property which may be held by the depositary. The Bank of New York Mellon’s principal executive office is located at One Wall Street, New York, New York 10286.

100

Fees and Expenses

Persons depositing or withdrawing ordinary shares or ADS holders must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	●     Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$.05 (or less) per ADS	●     Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs	●     Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
$.05 (or less) per ADS per calendar year	●     Depositary services
Registration or transfer fees	●     Transfer and registration of ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw ordinary shares
Expenses of the depositary	●     Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes	●     As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	●     As necessary

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing ordinary shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse and/or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.

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PART II

Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable

Item 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021 (the “Evaluation Date”). Based on such evaluation, those officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

Management Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. Our internal control system was designed to provide reasonable assurance to our management and 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 assurance with respect to financial statement preparation and presentation and may not prevent or detect misstatements. 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 policies or procedures may deteriorate.

Our management, including the CEO and CFO, conducted an evaluation, pursuant to Rule 13a-15(c) promulgated under the Exchange Act, of the effectiveness, as of the end of the period covered by this Annual Report, of its internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on the results of this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the year ended December 31, 2021, we implemented certain internal control procedures to address the previously identified material weaknesses related to our control environment, risk assessment and monitoring as described in more detail under “Remediation Efforts” below.

102

Previously Identified Material Weaknesses in Internal Control Over Financial Reporting

We previously identified and disclosed in our Annual Report on Form 20-F for the period ended December 31, 2020, material weaknesses in our internal control over financial reporting relating to the following:

● Ineffective control activities due to the lack of sufficient documentation and timeliness in executing internal controls pursuant to company policies and procedures over financial reporting, including information technology controls and procedures; and

● Ineffective controls over management’s review procedures including maintaining sufficient evidence of such review procedures for processing, recording and reviewing transactions related to certain contracts and certain monthly closing procedures

Remediation Efforts

Our management, with oversight from our audit committee and assistance from third-party specialists and input from our internal auditor, has implemented the following remediation steps to address the previously disclosed material weaknesses and to improve our internal control over financial reporting:

● Performed a comprehensive risk assessment to identify, design, implement, and re-evaluate our control activities related to internal control over financial reporting;

● Enhanced the tone, communication and overall awareness of the importance of internal control over financial reporting from executive management;

● Strengthened the procedures regarding the documentation and controls of processes, especially with regard to the financial statement closing process; and

● Conducted comprehensive examinations in accordance with accepted methodology in order to ensure the effectiveness of controls.

During the quarter ended December 31, 2021, we completed the testing and evaluation of the operating effectiveness of our internal controls and concluded that the previously reported material weaknesses have been remediated as of December 31, 2021.

Item 16. [Reserved]

Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Adi Raviv, a member of our Audit Committee, is an audit committee financial expert, as defined under the rules under the Exchange Act, and is independent in accordance with applicable Exchange Act rules and NASDAQ rules.

Item 16B. CODE OF ETHICS

We have adopted a written code of ethics that applies to our officers and employees, including our principal executive officer, principal financial officer, principal controller and persons performing similar functions as well as our directors. Our Code of Business Conduct and Ethics is posted on our website at www.biondvax.com. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report on Form 20-F and is not incorporated by reference herein. If we make any amendment to the Code of Business Conduct and Ethics or grant any waivers, including any implicit waiver, from a provision of the code, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations of the SEC including the instructions to Item 16B of Form 20-F. We have not granted any waivers under our Code of Business Conduct and Ethics.

103

Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Principal Accountant Fees and Services

We paid the following fees for professional services rendered by Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, an independent registered public accounting firm, for the years ended December 31, 2021 and 2020:

	2021		2020
	(in thousands of U.S. dollars)
Audit Fees	$	100.5	$	75
Audit-Related Fees		-		-
Additional fees		-		4
Total	$	100.5	$	79

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

“Audit-related fees” are the aggregate fees paid for assurance and related services that are reasonably related to the performance of the audit and are not reported under audit fees. These fees primarily include accounting consultations regarding the accounting treatment of matters that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from time to time. 

“Additional fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance, transfer pricing, tax advice on actual or contemplated transactions and Israel innovation authority advisory.

Audit Committee’s Pre-approval Policies and Procedures

Our audit committee has a pre-approval policy for the engagement of our independent accountant to perform certain audit and non-audit services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit service, audit-related service and tax services that may be performed by our independent accountants.

Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

104

Item 16G. CORPORATE GOVERNANCE

Companies incorporated under the laws of the State of Israel whose shares are publicly traded, including companies with shares listed on the NASDAQ Capital Market, are considered public companies under Israeli law and are required to comply with various corporate governance requirements under Israeli law relating to such matters as external directors, the audit committee, the compensation committee and an internal auditor. These requirements are in addition to the corporate governance requirements imposed by the listing rules of the NASDAQ Capital Market and other applicable provisions of U.S. securities laws to which we are subject to (as a foreign private issuer) since the closing of the offering in the U.S. and the listing of the ADSs and warrants on the NASDAQ Capital Market. Under the listing rules of the NASDAQ Capital Market, a foreign private issuer, such as us, may generally follow its home country rules of corporate governance in lieu of the comparable requirements of the listing rules of the NASDAQ Capital Market, except for certain matters including (among others) the composition and responsibilities of the audit committee and the independence of its members within the meaning of the rules and regulations of the SEC.

NASDAQ Capital Market listing rules and Home Country Practices

In accordance with Israeli law and practice, and subject to the exemption set forth in Rule 5615 of the listing rules of the NASDAQ Capital Market, we intend to follow the provisions of the Companies Law, rather than the listing rules of the NASDAQ Capital Market, with respect to the following requirements:

Distribution of certain reports to shareholders. As opposed to the listing rules of the NASDAQ Capital Market, which require listed issuers to make certain reports, such as annual reports, interim reports and quarterly reports, available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders, but to make such reports available through a public website. In addition to making such reports available on a public website, we plan to make our audited financial statements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules.

Nomination of directors. With the exception of our external directors and directors elected by our board of directors due to vacancy, our directors are elected by an annual meeting of our shareholders to hold office until the next annual meeting following his or her election. On February 12, 2015, our annual general shareholders meeting approved the staggering and extension of the term of our board members in accordance with the Company’s articles of association and divided the members of our board of directors among the three classes, so that the term of office of only one class of directors will expire in each upcoming annual shareholders meeting. See “Management — Board Practices.” The nominations for directors, which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance with the provisions of our articles of association and the Companies Law. One or more shareholders of a company holding at least 1% of the voting power of the company may nominate a currently serving external director for an additional three year term. Nominations need not be made by a nominating committee of our board of directors consisting solely of independent directors or by independent directors constituting a majority of independent directors, as required under the listing rules of the NASDAQ Capital Market.

Compensation of officers. We follow the provisions of the Companies Law with respect to matters in connection with the composition and responsibilities of our compensation committee, office holder compensation and any required approval by the shareholders of such compensation. Israeli law and our articles of association do not require that the independent members of our board of directors, or a compensation committee composed solely of independent members of our board of directors, determine an executive officer’s compensation, as is generally required under the listing rules of the NASDAQ Capital Market with respect to the Chief Executive Officer and all other executive officers of a company. However, generally, Israeli law and our articles of association do require that our audit and compensation committee each contain two external directors (as defined in the Companies Law. A recent amendment to the Israeli law waives such requirement if there is no controlling shareholder in the company, as define in the Companies Law, and if such company complies with the NASDAQ Capital Market. We intend to apply such waiver, subject to the aforementioned conditions. (See “Management — Board Practices — External Directors.”). In addition, Israeli law requires that additional members of the compensation committee and the external directors be compensated equally. Our compensation committee has been established and conducts itself in accordance with the provisions governing the composition of and the responsibilities of a compensation committee as set forth in the Companies Law. Furthermore, compensation of office holders is determined and approved by our compensation committee, and in general, by our board of directors as well, and in certain circumstances by our shareholders, as detailed below under the caption “—Shareholder Approval.” Thus, we will seek shareholder approval for all corporate actions with respect to office holder compensation (including the compensation required to be approved for our Chief Executive Officer) requiring such approval under the requirements of the Companies Law, including seeking prior approval of the shareholders for the compensation policy and for certain office holder compensation, rather than seeking approval for such corporate actions in accordance with listing rules of the NASDAQ Capital Market. See “— Compensation Committee and Compensation Policy” below.

105

Compensation Committee. Pursuant to the Companies Law, we established a compensation committee as detailed below. Since the consummation of the offering, our board of directors has affirmatively determined that each member of our compensation committee qualifies as “independent” under applicable NASDAQ Capital Market and SEC rules.

Annual Shareholders Meeting. The Company shall convene an annual shareholders meeting under the requirements (including required dates) of the Companies Law, rather than as required under rule NASDAQ Capital Market Rule 5620(a).

Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than seeking approval for corporate actions in accordance with NASDAQ Capital Market Listing Rule 5635. In particular, under this NASDAQ Capital Market rule, shareholder approval is generally required for: (i) an acquisition of shares or assets of another company that involves the issuance of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption or amendment of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (or via sales by directors, officers or 5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required for, among other things: (a) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals of the compensation committee, board of directors and shareholders are all required, (b) extraordinary transactions with controlling shareholders of publicly held companies, which require the special approval described below under “Disclosure of personal interests of controlling shareholders and approval of certain transactions,” (c) terms of office and employment or other engagement of our controlling shareholder, if any, or such controlling shareholder’s relative, which require the special approval described below under “Disclosure of personal interests of controlling shareholders and approval of certain transactions, (d) approval of transactions with Company’s Chief Executive Officer with respect to his or hers compensation, whether in accordance with the approved compensation policy of the Company or not in accordance with the approved compensation policy of the Company, or transactions with officers of the Company not in accordance with the approved compensation policy, and (e) approval of the compensation policy of the Company for office holders. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies. See also “Description of Share Capital — Acquisitions under Israeli Law — Merger” below.

Quorum for shareholder meetings. As permitted under the Companies Law, pursuant to our articles of association, the quorum required for an ordinary meeting of shareholders will consist of one or more shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold, in the aggregate, at least 10% of the voting power of our shares (and in an adjourned meeting, any number of shareholders), instead of 33 1/3% of the issued share capital required under the NASDAQ Capital Market corporate governance rules.

Other than the foregoing home country practices, we otherwise intend to comply with the rules generally applicable to U.S. domestic companies listed on the NASDAQ Capital Market. We may in the future decide to use the foreign private issuer exemption with respect to some or all of the other NASDAQ Capital Market corporate governance rules. Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the NASDAQ Capital Market may provide less protection to you than what is accorded to investors under the listing rules of the NASDAQ Capital Market applicable to domestic U.S. issuers.

Item 16H. MINE SAFETY DISCLOSURE

Not applicable.

Item 16I. disclosure regarding foreign jurisdictions that prevent inspections

Not applicable.

106

PART III

Item 17. FINANCIAL STATEMENTS

The Registrant has responded to Item 18 in lieu of responding to this Item. 

Item 18. FINANCIAL STATEMENTS

See the financial statements beginning on page F-1. The following financial statements and financial statement schedules are filed as part of this Annual Report on Form 20-F together with the report of the independent registered public accounting firm:

Item 19. EXHIBITS

EXHIBIT INDEX

Exhibit No.	Exhibit Description
1.1	Articles of Association of BiondVax Pharmaceuticals Ltd., incorporated by reference to Exhibit 1.1 to the Annual Report on Form 20- filed with the SEC on May 13, 2021.
2.1	Form of Deposit Agreement between BiondVax Pharmaceuticals Ltd., The Bank of New York Mellon as Depositary, and owners and holders from time to time of ADSs issued thereunder, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-1 filed with the SEC on April 6, 2015.
2.2	Specimen American Depositary Receipt (included in Exhibit 2.1).
2.3	Description of Share Capital, incorporated by reference to Exhibit 2.3 to the Annual Report on Form 20-F filed with the SEC on May 13, 2021.
4.1	2005 Share Incentive Plan, incorporated by reference to Exhibit 4.1 to the Annual Report on Form 20-F filed with the SEC on June 12, 2019.
4.2	2018 Share Incentive Plan, incorporated by reference to Exhibit 4.2 to the Annual Report on Form 20-F filed with the SEC on June 12, 2019.
4.3	Compensation Policy, incorporated by reference to Appendix B to the Exhibit 99.1 to the Form 6-K filed with the SEC on November 22, 2021.
4.4*	Employment Agreement dated January 20, 2021, between BiondVax Pharmaceuticals Ltd. and Mr. Amir Reichman.
4.5	Employment Agreement dated March 15, 2005, between BiondVax Pharmaceuticals Ltd. and Dr. Tamar Ben-Yedidia, incorporated by reference to Exhibit 10.6 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.6	Addendum to Employment Agreement dated April 1, 2012, between BiondVax Pharmaceuticals Ltd. and Dr. Tamar-Ben Yedidia, incorporated by reference to Exhibit 10.11 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.7	Service Agreement dated June 20, 2007, between BiondVax Pharmaceuticals Ltd., CFO Direct and Uri Ben-Or, incorporated by reference to Exhibit 10.7 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.8	Addendum to Service Agreement dated August 31, 2014, between BiondVax Pharmaceuticals Ltd., CFO Direct and Uri Ben-Or, incorporated by reference to Exhibit 10.12 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.9	Employment Agreement dated August 31, 2014, between BiondVax Pharmaceuticals Ltd. and Uri Ben-Or, incorporated by reference to Exhibit 10.13 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.10	Form of Indemnification Letter (unofficial English translation from Hebrew original), incorporated by reference to Exhibit 10.9 to the Registration Statement on Form F-1 filed with the SEC on December 29, 2014.
4.11	Form of Indemnification and Exculpation Agreement, incorporated by reference to Exhibit 10.18 to the Registration Statement on Form F-1 filed with the SEC on April 6, 2015.
4.12	Finance Contract between BiondVax Pharmaceuticals Ltd. and the European Investment Bank, incorporated by reference to Exhibit 99.2 to Form 6-K filed with the SEC on June 19, 2017.
4.13	Amendment No. 1, dated January 11, 2021, to Finance Contract dated June 19, 2017, by and between BiondVax Pharmaceuticals Ltd. and the European Investment Bank, incorporated by reference to Exhibit 4.16 to the Annual Report on Form 20- filed with the SEC on May 13, 2021.
4.14	Lease agreement dated July 10, 2017 between BiondVax Pharmaceuticals Ltd. and Unihad BioPark Ltd., incorporated by reference to Exhibit 4.19 to the Form 20-F filed with the SEC on April 30, 2018.
4.15	Services Agreement between BiondVax Pharmaceuticals Ltd. and Mark Germain, incorporated by reference to Appendix C to the Form 6-K filed with the SEC on April 23, 2019.
4.16* +	License Agreement, dated December 11, 2021, between BiondVax Pharmaceuticals Ltd. and Max-Planck-Innovation GmbH.
4.17* +	Accompanying Research Collaboration Agreement, dated December 11, 2021, between BiondVax Pharmaceuticals Ltd., Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V and Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts Universitätsmedizin Göttingen.
4.18* +	Research Collaboration Agreement, dated March 23, 2022, between BiondVax Pharmaceuticals Ltd., Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V and Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts Universitätsmedizin Göttingen.
4.19* +	Form of License Agreement between BiondVax Pharmaceuticals Ltd., Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V and Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts Universitätsmedizin Göttingen.
10*	Consent of Kost Forer Gabbay & Kasierer, Certified Public Accountant (Isr.), a member of Ernst & Young Global, independent registered public accounting firm for the Registrant.
12.1*	Certification of the Chief Executive Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934.
12.2*	Certification of the Chief Financial Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934.
13.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, furnished herewith.
13.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, furnished herewith.

*	Filed herewith.
+	Certain confidential portions of this exhibit have been redacted from the publicly filed document because such portions are (i) not material and (ii) would be competitively harmful if publicly disclosed.

107

SIGNATURES

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.

	BiondVax Pharmaceuticals Ltd.
Date: March 28, 2022	By:	/s/ Amir Reichman
		Amir Reichman
		Chief Executive Officer

108

BIONDVAX PHARMACEUTICALS LTD.

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021

INDEX

	Page
Report of Independent Registered Public Accounting Firm	F-2 – F-3
Balance Sheets	F-4
Statements of Comprehensive Loss	F-5
Statements of Changes in Shareholders’ Equity	F-6
Statements of Cash Flows	F-7 - F-8
Notes to Financial Statements	F-9 - F-47

- - - - - - - - - - -

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

BIONDVAX PHARMACEUTICALS LTD.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of BiondVax Pharmaceuticals Ltd. (“the Company”) as of December 31, 2021 and 2020 and the related statements of comprehensive loss, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2021 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 as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

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. 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.

F-2

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Impairment - Long-Lived Assets

At December 31, 2021 the Company’s factory leasehold (within property, plant and equipment) had a net carrying value of NIS 37,977 thousand. As described in Note 2i of the financial statements, the Company evaluates the need to record an impairment of the carrying amount of non-financial assets, which includes factory leasehold, whenever events or changes in circumstances, or triggering events indicate that the carrying amount may not be recoverable. Triggering events include negative changes in technology, markets or economy. Upon identification of an indicator of impairment, the Company evaluates the recoverability of non-financial assets by comparing its carrying amount to the recoverable amount.

Auditing the Company’s determination of the recoverable amount was complex and highly judgmental due to the significant estimation uncertainty and judgment required to estimate future cash flows. In particular, the estimates are based on assumptions about future cash flow from alternative use of the factory leasehold following the Company Phase 3 clinical trial results of the universal vaccine product did not demonstrate an efficacy result. The significant assumption used in the estimate included discount rate that could be affected by future economic and market conditions.

To test management’s determination of recoverable amount, we evaluated the discount rate used in the determination of the recoverable amount and our procedures included, among others, comparing the significant assumptions used by management to available industry and historical trends and evaluated whether changes to the significant assumptions would impact the impairment conclusion. In addition, we reviewed the related disclosure in the financial statements.

KOST FORER GABBAY & KASIERER

A Member of Ernst & Young Global

We have served as the Company’s auditor since 2005.

Tel-Aviv, Israel

March 28, 2022

PCAOB ID # 1281

F-3

BIONDVAX PHARMACEUTICALS LTD.

BALANCE SHEETS

In thousands, except share and per share data

									Convenience
									translation
									(Note 2c)
			December 31,						December 31,
			2020			2021			2021
	Note		N I S						U.S. dollars
CURRENT ASSETS:
Cash and cash equivalents		4		9,421			54,036			17,375
Other receivables		5		1,204			1,012			325
				10,625			55,048			17,700
LONG-TERM ASSETS:
Property, plant and equipment		6		39,607			38,519			12,386
Right-of-use assets		7		6,206			5,588			1,797
Other long-term assets		8		473			444			143
				46,286			44,551			14,326
				56,911			99,599			32,026
CURRENT LIABILITIES:
Trade payables				1,868			3,107			999
Current maturities of lease liabilities		10		654			773			249
Loan from others		12d		60,421			-			-
Other payables		9		1,246			3,327			1,070
				64,189			7,207			2,318
LONG-TERM LIABILITIES:
Lease Liabilities		10		6,088			5,712			1,837
Loan from others		12d		-			63,252			20,338
Other payables				1,135			-			-
Severance pay liability, net		11		95			95			31
				7,318			69,059			22,206
SHAREHOLDERS’ EQUITY:		13
Ordinary shares of no par value: Authorized: 1,800,000,000 and 600,000,000 shares at December 31, 2021 and 2020, respectively; Issued and outstanding: 739,048,544 and 461,285,824 shares at December 31, 2021 and 2020, respectively				*	)-		*	)-		*	)-
Share premium				310,197			388,104			124,792
Accumulated deficit				(324,793	)		(364,771	)		(117,290	)
				(14,596	)		23,333			7,502
				56,911			99,599			32,026

*) Represents less than NIS\USD 1.

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

March 28, 2022	/s/ Mark Germain	/s/ Amir Reichman	/s/ Uri Ben-Or
Date of approval of the	Mark Germain	Amir Reichman	Uri Ben-Or
financial statements	Chairman of the Board	Chief Executive Officer	Chief Financial Officer

F-4

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF COMPREHENSIVE LOSS

In thousands, except share and per share data

											Convenience translation (Note 2c)
		Year ended December 31,									Year ended December 31,
		2019			2020			2021			2021
	Note	N I S									U.S. dollars
Operating expenses:
Research and development, net of participations	15a		68,645			51,463			10,341			3,325
Marketing, general and administrative	15b		9,706			16,687			24,528			7,887
Other income	12e		-			(75,484	)		(40	)		(13	)
Total operating expenses (income)			78,351			(7,334	)		34,829			11,199
Operating income (loss)			(78,351	)		7,334			(34,829	)		(11,199	)
Financial income	15c		4			3,843			5,716			1,838
Financial expense	15c		(30,847	)		(15,632	)		(10,865	)		(3,494	)
Net Loss			(109,194	)		(4,455	)		(39,978	)		(12,855	)
Total comprehensive loss			(109,194	)		(4,455	)		(39,978	)		(12,855	)
Basic and diluted loss per share			(0.33	)		(0.01	)		(0.07	)		(0.02	)
Weighted average number of shares outstanding used to compute basic and diluted loss per share			326,651,721			443,260,878			564,575,967			564,575,967

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

F-5

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

In thousands

	Share capital			Share premium		Accumulated deficit			Total
	N I S
Balance as of January 1, 2019		*	)-		179,929		(211,144	)		(31,215	)
Total comprehensive loss		-			-		(109,194	)		(109,194	)
Issuance of Ordinary shares, net of issuance costs		-			70,270		-			70,270
Exercise of options					1,402		-			1,402
Share-based compensation		-			3,684		-			3,684
Balance as of December 31, 2019		*	)-		255,285		(320,338	)		(65,053	)
Total comprehensive loss		-			-		(4,455	)		(4,455	)
Exercise of warrants		-			45,274		-			45,274
Exercise of options		-			166		-			166
Share-based compensation		-			9,472		-			9,472
Balance as of December 31, 2020		*	)-		310,197		(324,793	)		(14,596	)
Total comprehensive loss		-			-		(39,978	)		(39,978	)
Issuance of Ordinary shares, net of issuance costs		-			69,003		-			69,003
Share-based compensation		-			8,904		-			8,904
Balance as of December 31, 2021		*	)-		388,104		(364,771	)		23,333

	Convenience translation into U.S. dollars (Note 2c)
Balance as of December 31, 2021		*	)-	124,792	(117,290	)	7,502

*) Represents less than NIS\USD 1.

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

F-6

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CASH FLOWS

In thousands

										Convenience translation (Note 2c)
	Year ended December 31,									Year ended December 31,
	2019			2020			2021			2021
	N I S									U.S. dollars
Cash flows from operating activities:
Net loss		(109,194	)		(4,455	)		(39,978	)		(12,854	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to profit and loss items:
Depreciation of property, plant and equipment and right-of-use assets		1,645			2,436			2,415			777
Net financial expenses (income)		15,902			12,940			(930	)		(299	)
Capital gain		-			(160	)		(40	)		(13	)
Increase (decrease) in liability with respect to loans from others		14,083			(63,359	)		2,831			910
Increase (decrease) in liability with respect to Government grants		169			(14,812	)		-			-
Share-based compensation		3,684			9,472			8,904			2,863
Change in employee benefit liabilities, net		7			6			-			-
		35,490			(53,477	)		13,180			4,238
Changes in asset and liability items:
Decrease (increase) in other receivables		309			(548	)		162			52
Increase (decrease) in trade payables		(3,661	)		(15,194	)		1,239			398
Increase in short and long-term other payables		127			1,178			946			304
		(3,225	)		(14,564	)		2,347			754
Cash paid and received during the year for:
Interest paid		(131	)		(45	)		(33	)		(11	)
Interest received		2			2			-			-
		(129	)		(43	)		(33	)		(11	)
Net cash used in operating activities		(77,058	)		(72,539	)		(24,484	)		(7,873	)

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

F-7

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CASH FLOWS

In thousands

										Convenience translation (Note 2c)
	Year ended December 31,									Year ended December 31,
	2019			2020			2021			2021
	N I S									U.S. dollars
Cash flows from investing activities:
Purchase of property and equipment		(7,429	)		(6,132	)		(430	)		(138	)
Proceeds from sale of property and equipment		-			160			40			13
Decrease (increase) in other long-term assets		230			37			29			9
Net cash used in investing activities		(7,199	)		(5,935	)		(361	)		(116	)
Cash flows from financing activities:
Proceeds from loan from others		15,337			-			-			-
Proceeds from issuance of shares and options, net of issuance costs		70,270			-			69,003			22,187
Payment of lease liabilities		(581	)		(1,240	)		(1,220	)		(392	)
Proceeds from exercise of options to employees		-			166			-			-
Proceeds from exercise of warrants to public		188			14,790			-			-
Net cash provided by financing activities		85,214			13,716			67,783			21,795
Exchange differences on balances of cash and cash equivalents		(4,373	)		1,712			1,677			540
Increase (decrease) in cash and cash equivalents		(3,416	)		(63,046	)		44,615			14,346
Balance of cash and cash equivalents at the beginning of the year		75,883			72,467			9,421			3,029
Balance of cash and cash equivalents at the end of the year		72,467			9,421			54,036			17,375
Non-cash activities:
Right-of-use asset recognized with corresponding lease liability		-			-			249			80
Exercise of warrants to public		1,214			30,484			-			-

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

F-8

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 1: GENERAL

a. BiondVax Pharmaceuticals Ltd. (“the Company”) is focused on developing and ultimately commercializing products for prevention and treatment of infectious diseases and Other illnesses. The Company was incorporated on July 21, 2003 in Israel, and started its activity on March 31, 2005. The Company’s principal executive offices and main laboratory are located at Jerusalem BioPark, 2nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel, next to Hadassah University Hospitals and Hebrew University’s Medical School.

b. On May 15, 2015, the Company completed a public offering of securities in the United States.

c. On March 28, 2017, the Company received an approval from the Investment Center of the Ministry of Economy and Industry of the State of Israel, for a grant (“the Grant”) representing 20% of NIS 20,000 budget to be utilized towards the construction of a factory for the production of Phase 3 and commercial batches of the Company’s product. The receipt of the Grant is subject to certain terms and conditions, including those outlined under the Israeli Encouragement of Capital Investment Law, 1959. The terms and conditions include, inter alia, the following: (a) at least 24% of the investments in the planned manufacturing facility’s fixed assets will be financed by additional share capital; (b) the Company will maintain its intellectual property and manufacturing facility in Israel for a period of at least 10 years.

To the report date the Company did not meet all the terms and conditions set by the Investment Center of the Ministry of Economy and Industry of the State of Israel.

d. On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However, the study’s primary safety endpoint was met.

e. On January 26, 2021, the EIB notified the Company among other thing that they will not consider the failure of the Company’s pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the Finance Contract. However, the EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently. If some or all of the loans under the Finance Contract are accelerated by the EIB, or secured creditor remedies are exercised, the Company expect such events to adversely impact the Company’s ability to continue as a going concern. 

As of December 31, 2021, the EIB loan balance is $20,338 (approximately NIS 63,252) and presented as long term liability. Refer also to Note 18.

F-9

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 1: GENERAL (Cont.)

f. On October 19, 2021 the Company signed a term sheet that includes binding financial terms of contemplated definitive agreements with the Max Planck Society and the University Medical Center Göttingen in Germany, including an exclusive worldwide licensing of novel COVID-19 VHH antibody candidates. The parties intend to enter into a 5-year strategic research collaboration including an option for BiondVax to license innovative VHH antibodies. Frequently referred to as nanobodies, VHH antibodies have the potential to serve as therapeutics and diagnostics for many diseases. The transaction is subject to execution of definitive agreements.

On December 22, 2021, the Company signed definitive agreements with the Max Planck Society (“MPG”), the parent organization of the Max Planck Institute for Biophysical Chemistry, and the University Medical Center Göttingen (“UMG”), both in Germany, to enter into a strategic collaboration for the development and commercialization of innovative Covid-19 NanoAbs, effective from January 1, 2022. The agreements provide for an upfront payment, development and sales milestones and royalties based on sales and sharing of sublicense revenues.

On March 23, 2022, the Company executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions such as psoriasis, asthma, macular degeneration, and psoriatic arthritis.

g. During the year ended December 31, 2021, the Company incurred a loss of NIS 39,978 ($ 12,854) and negative cash flows from operating activities of NIS 24,484 ($ 7,873) and it has an accumulated deficit of NIS 364,771 ($ 117,290) as of that date.

To date the Company has not generated any revenues and may need additional funds to finance its operation in the future.

Furthermore, the Company’s ability to continue as a going concern and execute on its business plan is dependent upon its ability to raise capital through private or public financings, enter into a commercial agreement or engage in a strategic alternative, among others. The Company currently intend to finance its activities through any of the above. However, there are no assurances that the Company will be successful in raising such capital or, in the event of a capital raising, that such capital will be available on terms acceptable to the Company.

The Company’s management and Board of Directors are of the opinion that its current financial resources will be sufficient to continue the development of the Company’s products for at least the next twelve months.

F-10

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated.

a. Basis of presentation of the financial statements:

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The Company’s financial statements have been prepared on a cost basis, except for financial instruments which are measured at fair value through profit or loss.

The Company has elected to present profit or loss items using the “function of expense” method.

b. Functional currency, reporting currency and foreign currency:

1. Functional currency and reporting currency:

The functional currency and reporting currency of the financial statements is the NIS. The functional currency is the currency that best reflects the economic environment in which the Company operates and conducts its transactions. Most of the Company’s costs are incurred in NIS. In addition, the Company’s financing activities are incurred normally in NIS. The Company’s management believes, therefore, that the functional currency of the Company is the NIS.

2. Transactions, assets and liabilities in foreign currency:

Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss.

c. Convenience translation into U.S. dollars:

The financial statements as of December 31, 2021 and for the year then ended have been translated into U.S. dollars using the exchange rate of the U.S. dollar as of December 31, 2021 (U.S. $ 1.00 = NIS 3.11). The translation was made solely for convenience purposes.

The dollar amounts presented in these financial statements should not be construed as representing amounts that are receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

d. Cash equivalents:

Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition.

F-11

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

e. Restricted cash:

Restricted cash are bank deposits with an original maturity of more than one year from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit.

f. Property and equipment:

Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and excluding day-to-day servicing expenses.

Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:

	%
Laboratory equipment		15
Office furniture and equipment		6 - 33
Computers		33
Leasehold improvements		(*)

(*) Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement.

The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.

g. Research and development expenses, net of participations:

Research and development expenses are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the Company’s ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the Company’s ability to measure reliably the expenditure attributable to the intangible asset during its development. Since the Company’s research and development projects are often subject to regulatory approval procedures and other uncertainties, the conditions for the capitalization of costs incurred before receipt of approvals are not normally satisfied and, therefore, development expenditures are recognized in profit or loss when incurred.

F-12

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

h. Government investment grants:

Government grants are recognized when there is reasonable assurance that the grants will be received and the Company will comply with the attendant conditions.

Research and development grants received from the Israeli Innovation Authority (“IIA”) are recognized upon receipt as a liability only if future economic benefits are expected from the project that will result in royalty-bearing sales. A liability for the grant is first measured at fair value using a discount rate that reflects a market interest rate. The difference between the amount of the grant received and the fair value of the liability is accounted for as a Government grant and recognized as a reduction of research and development expenses. After initial recognition, the liability is measured at amortized cost using the effective interest method.

Future royalty payments will be treated as a reduction of the liability. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent Assets” (“IAS 37”).

At the end of each reporting period, the Company evaluates whether there is reasonable assurance that the received grants will not be repaid based on its best estimate of future sales and, if so, no liability is recognized and the grants are recorded against a corresponding reduction in research and development expenses.

Research and development grants received from the European Union are recorded against a corresponding reduction in research and development expenses since they are non-refundable and do not depend on the generation of future sales.

i. Impairment of non-financial assets:

The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs and is calculated based on the projected cash flows that will be generated by the cash generated unit. Impairment losses are recognized in profit or loss.

F-13

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

An impairment loss of an asset is reversed only if there have been changes in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years, and its recoverable amount.

The Company did not recognize any impairment of non-financial assets for any of the periods presented.

j. Financial instruments:

1. Financial assets:

Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.

The Company classifies and measures debt instruments in the financial statements based on the following criteria:

- The Company’s business model for managing financial assets; and

- The contractual cash flow terms of the financial asset.

Debt instruments are measured at fair value through profit or loss when:

A financial asset which is a debt instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or loss.

2. Derecognition of financial assets:

A financial asset is derecognized only when:

- The contractual rights to the cash flows from the financial asset have expired; or

- The Company has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or

- The Company has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party.

F-14

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

3. Financial liabilities:

a) Financial liabilities measured at amortized cost:

Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.

After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method, except for:

- Financial liabilities at fair value through profit or loss such as warrant liability.

b) Financial liabilities measured at fair value through profit or loss:

At initial recognition, the Company measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss.

After initial recognition, changes in fair value are recognized in profit or loss.

4. Derecognition of financial liabilities:

A financial liability is derecognized only when it is extinguished, that is when the obligation specified in the contract is discharged or cancelled or expires. A financial liability is extinguished when the debtor discharges the liability by paying in cash, other financial assets, goods or services; or is legally released from the liability.

5. Issue of a unit of securities:

The issue of a unit of securities involves the allocation of the proceeds received (before issue expenses) to the securities issued in the unit based on the following order: financial derivatives and other financial instruments measured at fair value in each period. Then fair value is determined for financial liabilities that are measured at amortized cost. The proceeds allocated to equity instruments are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the unit.

k. Fair value measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market.

F-15

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:

Level 1	-	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	-	inputs other than quoted prices included within Level 1 that are observable directly or indirectly.
Level 3	-	inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

l. Provisions:

A provision in accordance with IAS 37 is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is expected to require the use of economic resources to settle the obligation and a reliable estimate can be made of it.

m. Operating leases:

The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company as a lessee:

For leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract.

F-16

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of IAS 19 and not as subleases.

On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Company’s incremental borrowing rate. After the commencement date, the Company measures the lease liability using the effective interest rate method.

On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term.

Following are the amortization periods of the right-of-use assets by class of underlying asset:

	Years
Building		10
Motor vehicles		3

The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.

n. Employee benefit liabilities:

The Company has several employee benefit plans:

1. Short-term employee benefits:

Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered.

2. Post-employment benefits:

Post-employment benefit plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.

The Company has defined contribution plans pursuant to Section 14 of the Severance Pay Law into which the Company pays fixed contributions and has no legal or constructive obligation to pay further contributions on account of severance pay if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in current and prior periods.

F-17

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee’s services.

o. Share-based payment transactions:

From time to time, the Company grants to its employees and service providers remuneration in the form of equity-settled share-based instruments, such as options to purchase Ordinary shares.

Equity-settled transactions:

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. The fair value is determined using an acceptable option pricing model.

With respect to other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.

The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period which the performance or service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award (“the vesting period”).

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of whether the market condition is satisfied, provided that all other vesting conditions are satisfied.

p. Loss per share:

Loss per share is calculated by dividing the loss attributable to Company shareholders by the weighted number of outstanding Ordinary shares during the period. Potential Ordinary shares are only included in the computation of diluted loss per share when their conversion increases loss per share or decreases income per share. Potential Ordinary shares that are converted during the period are included in diluted loss per share only until the conversion date.

F-18

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

q. Disclosure of new standards in the period prior to their adoption:

1. Amendment to IAS 1, “Presentation of Financial Statements”:

In January 2020, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” (“the Amendment”) regarding the criteria for determining the classification of liabilities as current or non-current.

The Amendment includes the following clarifications:

● What is meant by a right to defer settlement.

● That a right to defer must exist at the end of the reporting period.

● That classification is unaffected by the likelihood that an entity will exercise its deferral right.

● That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The Amendment is effective for annual periods beginning on or after January 1, 2023 and must be applied retrospectively.

The Company is evaluating the possible impact of the Amendment on its current loan agreements.

2. Amendment to IAS 16, “Property, Plant and Equipment”:

In May 2020, the IASB issued an amendment to IAS 16, “Property, Plant and Equipment” (“the Amendment”). The Amendment prohibits a company from deducting from the cost of property, plant and equipment (“PP&E”) consideration received from the sales of items produced while the company is preparing the asset for its intended use. Instead, the company should recognize such consideration and related costs in profit or loss.

The Amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Amendment is to be applied retrospectively, but only to items of PP&E made available for use on or after the beginning of the earliest period presented in the financial statements in which the company first applies the Amendment. The company should recognize the cumulative effect of initially applying the Amendment as an adjustment to the opening balance of retained earnings at the beginning of the earliest period presented.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

F-19

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

3. Amendment to IAS 37, “Provisions, Contingent Liabilities and Contingent Assets”:

In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a company should include when assessing whether a contract is onerous (“the Amendment”). According to the Amendment, costs of fulfilling a contract include both the incremental costs (for example, raw materials and direct labor) and an allocation of other costs that relate directly to fulfilling a contract (for example, depreciation of an item of property, plant and equipment used in fulfilling the contract).

The Amendment is effective for annual periods beginning on or after January 1, 2022 and applies to contracts for which all obligations in respect thereof have not yet been fulfilled as of January 1, 2022. Early application is permitted.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

4. Amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors”:

In February 2021, the IASB issued an amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors” (“the Amendment”), in which it introduces a new definition of “accounting estimates”.

Accounting estimates are defined as “monetary amounts in financial statements that are subject to measurement uncertainty”. The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted.

The Company is evaluating the effects of the Amendment on its financial statements.

F-20

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 3:- SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS

The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities and expenses.

Discussed below are the key assumptions made in the financial statements concerning uncertainties at the end of the reporting period and the critical estimates computed by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

● Determining the fair value of share-based compensation to employees and directors:

The fair value of share-based compensation to employees and directors is determined using acceptable option pricing models.

The assumptions used in the models include the expected volatility, expected life, expected dividend and risk-free interest rate.

● Grants from the Israel Innovation Authority (“the IIA”):

Government grants received from the IIA are recognized as a liability if future economic benefits are expected from the research and development activity that will result in royalty-bearing sales. There is certainty regarding the estimated future economic benefits, therefore the liability was recorded with respect to the IIA grants.

● Discount rate for a lease liability: When the Company is unable to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. When there are no financing transactions that can serve as a basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from the lease contract’s conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert in determining the incremental borrowing rate.

F-21

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 4:- CASH AND CASH EQUIVALENTS

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Cash in NIS		1,150		5,579		1,794
Cash in USD		8,234		48,457		15,581
Cash in EURO		37		-		-
		9,421		54,036		17,375

NOTE 5:- OTHER RECEIVABLES

					Convenience
					Translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Government authorities		229		306		98
Prepaid expenses and other		975		706		227
		1,204		1,012		325

F-22

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 6:- PROPERTY, PLANT AND EQUIPMENT, NET

December 31, 2021:

	Laboratory equipment			Office furniture and  equipment		Computers		Cars		Factory leasehold		Total
Cost:
Balance at January 1, 2021		2,922			119		613		-		41,212		44,866
Additions		4			25		24		276		101		430
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,777			144		637		276		41,313		45,147
Accumulated depreciation:
Balance at January 1, 2021		2,707			105		486		-		1,961		5,259
Additions		47			7		79		10		1,375		1,518
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,605			112		565		10		3,336		6,628
Depreciated cost at December 31, 2021		172			32		72		266		37,977		38,519

	Convenience translation into U.S. dollars
Depreciated cost at December 31, 2021		55	10	23	87	12,211	12,386

F-23

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 6:- PROPERTY, PLANT AND EQUIPMENT, NET (Cont.)

December 31, 2020:

	Laboratory equipment			Office furniture and equipment		Computers		Factory leasehold		Total
Cost:
Balance at January 1, 2020		3,362			119		568		35,159		39,208
Additions		34			-		45		6,053		6,132
Deductions		(474	)		-				-		(474	)
Balance at December 31, 2020		2,922			119		613		41,212		44,866
Accumulated depreciation:
Balance at January 1, 2020		3,135			99		406		587		4,227
Additions		46			6		80		1,374		1,506
Deductions		(474	)		-		-		-		(474	)
Balance at December 31, 2020		2,707			105		486		1,961		5,259
Depreciated cost at December 31, 2020		215			14		127		39,251		39,607

NOTE 7:- LEASES

a. Information on leases:

The Company has lease agreements that include leases of buildings and vehicles that are used to maintain the Company’s ongoing operations. The leases of the buildings and vehicles are for a period of 10 and 3 years, respectively. Some of these lease agreements include extension options.

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Interest expense on lease liabilities		479		715		230
Total cash outflow for leases		1,240		1,220		392

F-24

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 7:- LEASES (Cont.)

b. Lease extension options:

The Company has leases that include extension options. These options provide flexibility in managing the leased assets and align with the Company’s business needs.

The Company exercises significant judgment in deciding whether it is reasonably certain that the extension options will be exercised.

In leases that contain noncancelable lease periods of 10 years, the Company does not generally include in the lease term the exercise of extension options since the Company believes it is not reasonably certain that the extension options will be exercised. Following are details of potential future undiscounted lease payments for periods covered by extension or termination options that were not included in the measurement of the Company’s lease liabilities:

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
More than 5 years
Lease payments applicable in extension option periods which as of the end of the reporting period are not reasonably certain to be exercised		5,889		5,889		1,894

c. Disclosures in respect of right-of-use assets:

December 31, 2021:

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2021		7,827		257		8,084
Additions during the year:
New leases		-		279		279
Balance as of December 31, 2021		7,827		536		8,363
Accumulated depreciation:
Balance as of January 1, 2021		1,648		230		1,878
Additions during the year:
Depreciation and amortization		824		73		897
Balance as of December 31, 2021		2,472		303		2,775
Depreciated cost at December 31, 2021		5,355		233		5,588

F-25

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 7:- LEASES (Cont.)

December 31, 2020:

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2020 and December 31, 2020		7,827		257		8,084
Accumulated depreciation:
Balance as of January 1, 2020		824		124		948
Additions during the year:
Depreciation and amortization		824		106		930
Balance as of December 31, 2020		1,648		230		1,878
Depreciated cost at December 31, 2020		6,179		27		6,206

d. For an analysis of maturity dates of lease liabilities, see Note 10.

NOTE 8:- OTHER LONG-TERM ASSETS

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Restricted cash		473		444		143
		473		444		143

NOTE 9:- OTHER PAYABLES

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Employees and payroll accruals		875		2,204		709
Accrued expenses		371		1,123		361
		1,246		3,327		1,070

F-26

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 10:- FINANCIAL INSTRUMENTS

a. Financial and lease liabilities:

	Effective interest			Maturity		December 31,
	rate			date		2020		2021
	%					NIS
Current liabilities:
Lease liabilities		8	%		2021		654		773
Loan from others		17.3	%		2023-2024		60,421		-
Total current liabilities							61,075		773
Non-current liabilities:
Loan from others		17.3	%		2023-2024		-		63,252
Lease liabilities		8	%		2028		6,088		5,712
Total non-current liabilities							6,088		68,964
Total financial and lease liabilities							67,163		69,737

	Carrying amount				Fair value
	December 31,				December 31,
	2020		2021		2020		2021
	NIS
Financial liabilities:
Loan from others		94,658		84,477		60,421		63,252
Total		94,658		84,477		60,421		63,252

F-27

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 10:- FINANCIAL INSTRUMENTS (Cont.)

b. Classification of financial liabilities:

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Financial liabilities at amortized costs:
Trade payables		1,868		3,107		999
Other payables		2,381		3,327		1,070
Lease Liabilities		6,742		6,485		2,085
Loan from others		60,421		63,252		20,338
Total financial liabilities		71,412		76,171		24,492
Total current		64,189		,207 7		2,317
Total non-current		7,223		68,964		22,175

c. Financial risk factors:

The Company’s activities expose it to various market risks (foreign currency risk, Israeli CPI risk and interest rate risk) and credit risk. The Company’s comprehensive risk management plan focuses on activities that reduce to a minimum any possible adverse effects on the Company’s financial performance.

Risk management is performed by the Company’s Board. The Board identifies, measures and manages financial risks in collaboration with the Company’s operating units. The Board establishes documented objectives for the overall risk management activities as well as specific policies with respect to certain exposures to risks such as exchange rate risk, interest rate risk, credit risk, the use of non-derivative financial instruments and the investments of excess liquid positions.

F-28

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 10:- FINANCIAL INSTRUMENTS (Cont.)

Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign currency exchange rates.

The Company has cash that is exposed to possible fluctuations in the U.S. dollar exchange rates. The currency exposure arising from current accounts managed in Dollars. As of December 31, 2021, the carrying amounts of USD were NIS 48,457.

Credit risk:

The Company has no significant concentrations of credit risk. All deposits are invested in financial institutions that are considered to be financially sound.

d. Liquidity risk:

The Company monitors the risk to a shortage of funds using a liquidity planning tool.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments (including interest payments):

December 31, 2021:

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		3,107		-		-		-		-		-		3,107
Other payables		3,327		-		-		-		-		-		3,327
Lease liabilities		552		885		845		904		977		1,901		6,064
Loans from others		-		70,398		14,079		-		-		-		84,477
		6,986		71,283		14,924		904		977		1,901		96,975

December 31, 2020:

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		1,868		-		-		-		-		-		1,868
Other payables		1,246		1,135										2,381
Lease liabilities		1,128		1,128		1,174		1,174		1,174		2,936		8,714
Loans from others		-		78,883		15,775		-		-		-		94,658
		4,242		81,146		16,949		1,174		1,174		2,936		107,621

F-29

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 10:- FINANCIAL INSTRUMENTS (Cont.)

e. Fair value:

The carrying amount of cash and cash equivalents, other receivables, other long-term assets, trade payables and other payables approximates their fair value due to the short-term maturities of such instruments.

f. Fair value measurement:

As of December 31, 2021, loans from others are classified as Level 2.

During 2021 there were no transfers in respect of fair value measurement of any financial instrument between Level 1 and Level 2, and there were no transfers into or out of Level 3 fair value measurements of any financial instrument.

g. Changes in liabilities arising from financing activities:

	Loans from others			Lease liabilities			Total liabilities arising from financing activities
	NIS
Balance as of January 1, 2020		123,780			7,503			131,283
Cash flows		-			(761	)		(761	)
Effect of changes in fair value		(63,359	)		-			(63,359	)
Balance as of December 31, 2020		60,421			6,742			67,163
New leases		-			249			249
Cash flows		-			(506	)		(506	)
Effect of changes in fair value		2,831			-			2,831
Balance as of December 31, 2021		63,252			6,485			69,737

F-30

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 11:- EMPLOYEE BENEFIT LIABILITIES

a. Post-employment benefits:

According to the labor laws and Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to section 14 to the Severance Pay Law, as specified below. The Company’s liability is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability is made according to the current employment contract based on the employee’s salary and employment term which establish the entitlement to receive the compensation.

The post-employment employee benefits are normally financed by contributions classified as defined benefit plan or as defined contribution plan, as detailed below.

b. Defined contribution plans:

Section 14 to the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Company into pension funds and/or policies of insurance companies release the Company from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Expenses - defined contribution plan		332		335		314		101

F-31

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS

a. On July 31, 2003, the Company signed a license agreement with Yeda Research and Development Company Ltd. (“Yeda”) according to which the Company acquired an exclusive worldwide license for the development, manufacturing, use, marketing, sale, distribution and importing of products based, directly or indirectly, on patents and patent applications to be approved or submitted pursuant to the invention titled “Peptide Based Vaccine for Influenza”, developed on the basis of the research conducted by Professor Ruth Arnon and her team at the Weizmann Institute. This agreement was amended in 2005. In exchange for the license grant, the Company or its future sublicensees will be obligated to pay royalties equaling 3% of the total amount invoiced by the Company or by a sublicensee in connection with the sale of products based on Yeda’s patents, or 2% of such amounts if they originated from a country which did not grant a patent in connection with such products. All sales of products in connection with the license agreement for any purpose other than for the purpose of clinical trials are required to be made for monetary consideration.

The Company has the option to enter into a sublicense agreement provided that Yeda gives its consent in writing and, in such case, the royalties to be paid by the Company to Yeda from the sublicense or from the option to sublicense will be (a) before the completion of Phase 1 clinical trials - 45% (b) after Phase 1 but before Phase 2 trials - 35% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option, or 25% of amounts exceeding such first $ 20,000 receivable from the sublicense or from a sublicense option; (c) after the completion of Phase 2 clinical trials the royalties will be 20% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option or 15% of amounts exceeding such first $ 20,000 receivable from a sublicense or a sublicense option.

This agreement terminates at the latest of (i) the expiration of the last patent licensed under the license agreement; or (ii) if only one product is developed or is commercialized by utilizing the licensed intellectual property, 15 years after the first commercial sale of such product in either the U.S or Europe, following receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product; or (iii) if more than one product is being developed or is commercialized by utilizing the licensed intellectual property, following the receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product, the expiry of a 20 year period during which no sales are made in the U.S. or Europe.

Yeda shall be entitled, at its option and without the Company’s consent, to modify the license so that it is non-exclusive or to terminate the license with 30 days prior written notice to the Company, if any of the following occurs:

(1) the Company fails to commence the commercial sale of at least one product based on the license’s intellectual property, in at least one country, within six months following receipt of an FDA or similar foreign regulatory approval for commercial marketing of such product and taking into account the seasonal nature of the products (except as a result of force majeure or other factors beyond the Company’s control); or

F-32

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)

(2) the Company fails to sell any product based on the license’s intellectual property, during a period of one year after commercial sale of a product has commenced, during which no sales of the product take place (except as a result of force majeure or other factors beyond the Company’s control).

In addition, Yeda is permitted to terminate the license agreement by written notice:

(a) in the event the Company materially breaches any of its obligations under the license agreement, provided that such material breach is uncurable or, if curable, is not cured by the Company within thirty days (or in the case of failure by the Company to make payments due to Yeda in connection with the license agreement, ten days) from receipt of notice of such breach; or

(b) in the event of the appointment of a temporary or permanent liquidator to the Company or a resolution is passed to voluntarily wind up the Company, or if an order or act is granted for the winding up of the Company, provided that if such order or act was initiated by any third party, such order or act is not cancelled within 120 days; or

(c) if the Company contests the validity of one of the patents registered by Yeda.

In the event that Yeda terminates the license agreement due to any reason other than termination in accordance with (1), (2) or (a) through (c) in the preceding two paragraphs above, the Company will be entitled to receive royalty payments equal to 25% of net proceeds received by Yeda from the grant to third parties, within the five years following the termination of the license agreement, of a license or other rights, which include the Company’s developments, up to the aggregate amount of research funds actually expended by the Company for development.

In light of the Phase 3 clinical trial results, the Company does expect any future revenues from M-001 and thus do not expect to make royalty payments to Yeda.

b. The Company obtained grants from the Government of Israel for the participation in research and development and, in return, undertook to pay royalties amounting to 3%-5% on the revenues derived from sales of products or services developed in whole or in part using these grants. The maximum aggregate royalties paid generally cannot exceed 100% of the grants received by the Company, plus annual interest generally equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar year. The maximum royalty amount payable by the Company as of December 31, 2021 is approximately $ 5,700 (NIS 17,727), which represents the total gross amount of grants actually received by the Company from the IIA including accrued interest. As of December 31, 2021, the Company had not paid any royalties to the IIA. (For further details see Note 12e)

F-33

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)

Regulators in many countries are in the process of replacing benchmark Interbank Offered Rates (IBORs), of which one of the most common is the LIBOR, with risk-free interest rate alternatives (RFRs). The replacement of IBORs with RFRs is expected to occur gradually until the end of 2021. The repayment of grants received by the Company have interest rates that reference LIBOR and are expected to be repaid after 2021. Since an alternative interest rate was not determined by the IIA yet, at this stage the Company is unable to determine the effects, if any, that the discontinuance of IBORs will have on its various financial instruments that reference the IBORs.

c. In October 2013, the Company signed an agreement for obtaining funding from the European Union which was approved for the UNISEC consortium of which the Company is a member for a period of three years. The Company’s expenses in respect of this project in 2013-2018 totaled € 1,028 ($ 1,231) which supported by the less than 75% or € 771 ($ 923). On October 10, 2018, the Company received the final part of the grant owed by UNISEC in the total of € 55 ( $62). The grant is non-refundable since the Company met the conditions of the consortium and are, therefore, recorded as a reduction of research and development expenses.

d. On June 19, 2017, the Company entered into a Finance Contract with the European Investment bank (EIB) for a total amount of € 20,000 (approximately $ 23,200) and up to 50% of the Company’s expected cost of developing and marketing the Company’s product candidate, M-001. In addition, as repayment features, EIB was entitled to receive the higher between 3% of any M-001 sales revenues for a period of ten years, or realizing a cash-on-cash multiple of 2.8 times

On April 22, 2019, the Committee of the European Investment Bank (“EIB”) agreed to expand the 2017 financing agreement to the Company by an additional € 4,000 to a total of € 24,000 (approximately $ 27,600). An amendment to that effect was signed in June 2019 (the “Amendment”). Those funds were received in October 2019 and will be used in support of the ongoing pivotal, clinical efficacy, Phase 3 trial of BiondVax’s M-001 Universal Flu Vaccine candidate in Europe.

According to the Amendment, as repayment features, EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a cash-on-cash multiple of 2.8 times

During 2018, the Company received the € 20,000 in two tranches of € 6,000 (approximately $ 7,000) and the third tranche of € 8,000 (approximately $ 9,200).

On October 7, 2019, the Company received the remaining € 4,000 (approximately $ 4,400).

F-34

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)

In the event the Company elects to prepay the EIB financing, or in the event the EIB shall demand prepayment following certain events, including a change of control, senior management changes or merger events, the Company shall be required to pay EIB the principal amount of the tranches already paid, or the Prepayment Amount, plus the greater of:

(i) the amount, as determined by EIB required in order for the EIB to realize an internal rate of return on the relevant amount prepaid of 20%; and

(ii) the Prepayment Amount.

The Finance Contract also stipulates that in the event the EIB demands prepayment of the loan due to any prepayment event to non-EIB lenders, the Company shall be obligated to pay the Prepayment Amount plus an additional reduced amount.

In addition, and as consideration for the EIB financing, the EIB shall be entitled to 3% of any annual M-001 sales revenues.

The Company performed a valuation of the financial liability for December 31, 2019 through an independent appraiser. According to the valuation, which was based on WACC (Weighted Average Cost of capital) of 17.3% and CAPM (Capital Asset Pricing Model), the value of the financial liability was estimated at NIS 123,780 ($ 38,500).

As a result of the valuation, the Company incurred a financial expense of NIS 14,083 ($ 4,380) for December 31, 2019.

e. On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However, the study’s primary safety endpoint was met.

As a result of the Phase 3 clinical trial failure, Company’s management estimates that there will be no future revenues from the M-001 product. Therefore, most likely, there will be no future royalty payments to the IIA and EIB.

Under the Finance Contract, the EIB may accelerate all loans extended thereunder if an event of default has occurred, which includes, amongst other things, an event of default arising from the occurrence of a material adverse change, defined as any event or change of condition, which in the opinion of the EIB, has a material adverse effect on: the Company’s ability to perform its obligations under the Finance Documents; the Company’s business, operations, property, condition (financial or otherwise) or prospects; or the rights or remedies of the EIB under the Finance Contract, amongst other things. If the EIB determines that an event of default has occurred, it could accelerate the amounts outstanding under the Finance Contract, making those amounts immediately due and payable.

F-35

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)

In accordance with the EIB loan agreement, and due to the said above, the Company is required to pay EIB the principal amount of the tranches already loaned by the EIB to the Company, within five years of the date of each tranche of the loan. On December 31, 2020, the Company re-evaluated the loan in the sum of NIS 60,421 ($ 18,793).

As a result, the Company recorded an amount of NIS 62,800 ($ 19,533) as revaluation income of the EIB loan and NIS 12,685 ($ 3,954) for the IIA liability and recorded them in 2020 under line item other income in the statement of other comprehensive loss.

As of December 31, 2021, the fair value regarding the EIB loan is NIS 63,252 ($20,338).

As of December 31, 2021, the outstanding principal amount regarding the EIB loan in nominal terms is NIS 84,477 ($27,163).

On January 26, 2021, the EIB notified the Company that they welcome the Company’s efforts to secure future equity financing in an amount not less than USD 2,000 in order to enable the Company to pursue new business opportunities, strengthen the Company balance sheet and invest in growth. Thus, within that context, the EIB wrote in their letter that they will not consider the failure of the Company’s pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the Finance Contract.  However, EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently. In addition, on December 24, 2020, the Company amended the Finance Contract in order to obtain the consent of EIB for the appointment of its new CEO Amir Reichman.

NOTE 13:- EQUITY

a. Rights attached to shares:

An Ordinary share confers upon its holder(s) a right to vote at the general meeting, a right to participate in distribution of dividends, and a right to participate in the distribution of surplus assets upon liquidation of the Company.

b. On May 15, 2015, the Company completed a public offering of securities in the United States of American Depositary Shares (ADSs) and warrants. Each ADS represents 40 Ordinary shares of the Company.

F-36

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 13:- EQUITY (Cont.)

Accordingly, on May 12, 2015, the Company allocated 76,400,000 Ordinary shares of the Company to the U.S. public. The Company also allocated 2,038,000 tradable warrants in the U.S., which were exercisable into ADSs for a five year period, until May 15, 2020 at an exercise price of $ 6.25 for each warrant. The immediate gross consideration for the offering amounted to a total of NIS 36,607 ($ 9,382). The offering expenses amounted to a total of NIS 5,576. In addition, in accordance with the underwriting agreement, the Company granted the underwriters 95,500 warrants, under the same terms and conditions as the warrants offered to the public.

At the time of the offering, the Company recorded an increase in equity in respect of shares, totaling NIS 26,417, net (after deduction of offering expenses totaling NIS 4,860) and liability related to the warrants in the amount of NIS 7,398 thousand (offering expenses for warrants totaling NIS 1,197 were recorded as financial expenses). On June 24, 2015, the Company issued an additional 110,000 ADSs to the underwriters in consideration of a total gross amount of NIS 2,069 ($ 530). Issuance expenses amounted to NIS 134. The warrants are measured at their fair value based on their quote price at the end of each reporting date. The Company recorded financial expenses in the amount NIS 11,400 and NIS 14,467 in 2019 and 2020, respectively, for revaluation of these warrants.

c. On June 13, 2019, the Company issued 334,520 Ordinary shares (equivalent to 8,363 NASDAQ listed ADSs) in consideration of NIS 188 (approximately $ 53).

d. On July 16, 2019, the Company closed a public offering and issued 3,057,466 NASDAQ listed ADSs (equivalent to 122,298,640 Ordinary shares) and 18,298,898 Ordinary shares (equivalent to 457,472 NASDAQ listed ADSs) in consideration of $ 20,000 (approximately NIS 71,300) to a number of investors.

As part of this public offering, Angels Investments in High Tech Ltd. (“AIHT”) exercised their option to purchase, under the same terms of the public offering, 2,203,640 ADSs and 141,538 Ordinary shares offered in the public offering that were not purchased by other shareholders. In total, the investment through AIHT in this offering was approximately $ 16,670, making AIHT a controlling shareholder (as defined under the Israeli Companies Law) with a holding of about 42% in BiondVax.

e. On May 15, 2020 540,639 NASDAQ listed warrants expired.

f. On July 8, 2020 6,000 ADS options were exercised into 240,000 Ordinary shares at an exercise price of $7.98 for a total consideration of NIS 166 (approximately $ 48).

g. During the year ended December 31, 2020, 676,118 NASDAQ listed warrants were exercised into 27,044,720 Ordinary shares at an exercise price of $6.25 for a total consideration of NIS 14,790 (approximately $ 4,298) and 611,565 NASDAQ listed warrants to purchase ADSs at an exercise price of $6.25 were exercised on a cashless basis into 24,462,600 Ordinary shares.

F-37

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 13:- EQUITY (Cont.)

h. On February 2, 2021, the Company closed an underwritten offering in which it sold 2,434,783 ADSs at a public offering price of $4.95 per ADS. On February 10, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 365,217 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $13,800. The Company received a net sum of $12,465 (approximately NIS 41,137) after deduction of issuance expenses of $371 (approximately NIS 1,155).

i. An amendment to the Company’s Articles of Association increasing the registered share capital of the Company by an additional 1,100,000,000 Ordinary Shares (the equivalent of 27,500,000 ADSs) such that the total registered share capital of the Company would consist of 1,800,000,000 Ordinary Shares, no par value (the equivalent of 45,000,000 ADSs).

j. On December 27, 2021, the Company closed an underwritten offering in which it sold 3,813,560 ADSs at a public offering price of $2.36 per ADS. On December 27, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 330, 508 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $9,780. The Company received a net sum of $8,817 (approximately NIS 27,866) after deduction of issuance expenses of $1,593 (approximately NIS 3,039).

NOTE 14:- SHARE-BASED COMPENSATION

a. Expense recognized in the financial statements:

The expense that was recognized for services received from employees, directors and service providers as equity-settled share-based payment is as follows:

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Research and development		1,907		2,056		1,045		336
Marketing, general and administrative		1,777		7,416		7,859		2,527
Total share-based compensation		3,684		9,472		8,904		2,863

F-38

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 14:- SHARE-BASED COMPENSATION (Cont.)

b. Share-based payment plan for employees and directors:

Options granted under the Company’s 2005 Israeli Share Option Plan (“Plan”) were exercisable in accordance with the terms of the Plan, within 10 years from the date of grant, against payment of an exercise price. The options generally vest over a period of three or four years.

In March 2018, the Company’s Board of Directors approved the adoption of the Company’s 2018 Israeli Share Option Plan (“2018 Plan”) for the grant of options and restricted shares (“RSU”) to employees, directors and service providers. The options are exercisable within 10 years from the date of grant, against payment of the exercise price, in accordance with the terms of the 2018 Plan. The options generally vest over a period of three or four years.

Option grants:

a. On April 30, 2019, the Company granted options to purchase 108,000 ADSs (4,320,000 options) to board members and officers which vest over a period of three years at an

b. exercise price of $ 7.976 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 1,414 ($ 391).

c. On April 30, 2019, the Company also granted 215,833 ADSs (8,633,310 RSU) to the CEO of which 60% vested immediately, 20% will be vested on March 2020 and the additional 20% will vest on March 2021. The fair value of the options as of the date of grant totaled approximately NIS 2,826 ($ 782).

d. On June 11, 2020, the Company’s Board of Directors ratified the grant of options to 23 employees to purchase an aggregate 141,400 ADS (5,656,000 Ordinary shares) at an exercise price of $7.28 – $8.076 per ADS. The options were originally approved pursuant to a delegation of authority granted by the Board of Directors to Company management in April 2018 to grant a pool of options with an exercise price of $7.98 and other terms approved by the Board of Directors at the time of delegation. The total value of the grant was NIS 4,190 ($ 1,218)

e. On the same day, the Company’s Board of Directors approved a grant to an advisor to purchase 72,000 ADS (2,880,000 Ordinary shares) at an exercise price of $18.06 per ADS in three tranches. The first tranche of 32,400 ADS’s was vested on May 31,2020, the second tranche of 25,200 ADS was vested on September 30, 2020 and the third tranche of 14,400 ADS’s will be vested on December 31, 2020. The options will expire four years from the commencement vesting date of each tranche. The total value of the grant was NIS 2,783 ($ 809).

f. On September 2, 2020 the Company granted fully vested 5,000 RSU representing 5,000 ADS’s to a board member. The total value of the grant was NIS 660 (approximately $ 196).

F-39

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 14:- SHARE BASED COMPENSATION (Cont.)

g. On September 2, 2020, the Company granted options to purchase 82,000 ADSs (3,280,000 options) to board member which vest over a period of three years at an exercise price of $ 48.04 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 6,662 ($ 1,979).

h. On September 2, 2020, the Company granted options to purchase 7,000 ADSs (280,000 options) to officer which vest over a period of three years at an exercise price of $ 41.08 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 571 ($ 170).

i. On September 2, 2020 the Company amended an option agreement with a board member dated as of May 28, 2019. The vesting date accelerated to September 2, 2020. The total value of the option acceleration was NIS 30 (approximately $ 9).

j. On April 6, 2021, the Company granted options to purchase 160,000 ADS (6,400,000 options) to the chairman of the board which vest in equal monthly installments over a period of three years at an exercise price of $ 6.95 per ADS. The fair value of the said ADS is approximately $614 (approximately NIS 1,909).

k. On April 6, 2021, the Company granted options to purchase 150,000 ADS (6,000,000 options) to board members which vest in equal monthly installments over a period of three years at an exercise price of $ 6.95 per ADS. The fair value of the said ADS is approximately $421 (approximately NIS 1,309).

l. On April 6, 2021, the Company granted 30,000 RSUs representing 30,000 ADS’s to board members. which vest in equal monthly installments over a period of three years. The fair value of the said RSUs is approximately $115 (approximately NIS 358).

m. On May 25, 2021 the Company granted 600,000 RSUs representing 600,000 ADS’s to the new CEO, which will vest over a period of five years. The fair value of the said RSUs was approximately $1,626 (approximately NIS 5,057).

n. On May 25, 2021, the shareholders approved the amendment to the following options held by directors of the Company, as follows: Mr. Mark Germain (130,710 options), Prof. Avner Rotman (20,000 options), Mr. Adi Raviv (18,000 options), Prof. George H. Lowell (20,000 options), Dr. Morris Laster (18,000 options), Dr. Yael Margolin (18,000 options) and Mr. Isaac Devash (18,000 options) as follows:

a. accelerated vesting and the ability to immediately exercise such options in the event of change of control; and

b. to the extent vested, allow the options to be exercised during the existing ten (10) year terms of the options in the event of the foregoing director’s termination of service to the Company without cause.

The fair value of the said changes was approximately $3 (approximately NIS 10).

F-40

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 14:- SHARE-BASED COMPENSATION (Cont.)

o. On October 17, 2021, the board approve the issuance of 124,600 RSUs representing 600,000 ADS’s to the Company employees in exchange of their options, in a way that for each option exchanged a new RSU will be issued. The fair value of the said issuance was $156 (approximately NIS 505).

On the same day the board approve the issuance of 10,000 RSUs representing 10,000 ADS’s to the Company employees. The fair value of the said issuance was $23 (approximately NIS 74).

The following table presents the number of share options, the weighted average exercise prices of share options and changes that were made in the option plan to employees and directors:

	2019					2020					2021
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding at beginning of year		16,647,903			0.75		14,213,400			0.75		24,869,400			0.69
Granted		4,320,000			0.69		12,096,000			1.87		12,400,000			0.54
Exercised		-			-		(240,000	)		0.68		-			-
Expired		(6,754,503	)		0.75		(1,200,000	)		0.68		(9,099,800	)		1.42
Outstanding at end of year		14,213,400			0.73		24,869,400			0.78		28,169,600			1.57
Exercisable at end of year		5,310,000			0.75		11,587,867			0.69		15,362,360			1.42

The weighted average share price on the date of exercise of the share options was NIS 0.78 in 2020. No share options exercised during 2021.

The weighted average remaining contractual life for the share options outstanding as of December 31, 2021 was 16.3 years (as of December 31, 2020: 6.1 years).

The range of exercise prices for share options outstanding as of December 31, 2021 was NIS 0.45 - NIS 1.325 (as of December 31, 2020 was NIS 0.45 - NIS 1.325)

c. The fair value of the Company’s share options granted to employees, directors and service providers for the years ended December 31, 2019, 2020 and 2021 was estimated using the binominal option pricing model using the following assumptions:

	Years ended December 31
	2019		2020		2021
Dividend yield (%)		-		-		-
Expected volatility of the share prices (%)		57		66		110
Risk-free interest rate (%)		2.3		0.7-0.8		1.7
Expected life of share options (years)		7.5		6-7		10
Share price (NIS)		24.07		7.05-18		0.3
ADS $		6.66		2.2-5.6		3.84

The expected life of the share options is based on the midpoints between the available exercise dates (the end of the vesting periods) and the last available exercise date (the contracted expiry date), as adequate historical experience is still not available to provide a reasonable estimate.

F-41

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE INCOME

								Convenience translation
		Year ended December 31,						Year ended December 31,
		2019		2020		2021		2021
		N I S						U.S. dollars
a.	Research and development expenses, net of participations:
	Clinical trial phase 3		52,825		31,519		1,340	431
	Materials and subcontractors		5,946		9,193		684	220
	Salaries and related expenses		5,384		5,532		4,551	1,462
	Share-based payment		1,907		2,056		1,045	336
	Patent registration fees		278		314		248	80
	Rentals and maintenance of laboratory		970		958		607	195
	Depreciation		1,293		1,887		1,866	601
	Other		42		2		-	-
			68,645		51,463		10,341	3,325
b.	Marketing, general and administrative expenses:
	Salaries and related expenses		3,216		2,569		7,376	2,372
	Share-based payment		1,777		7,416		7,859	2,527
	Professional services		3,582		3,645		5,682	1,827
	Rentals, office expenses and maintenance		323		313		314	101
	Depreciation		352		551		549	176
	Other		456		2,193		2,748	883
			9,706		16,687		24,528	7,887
c.	Financial income and expense:
	Financial income:
	Interest income on deposits		4		2		3	1
	Exchange differences, net		-		1,714		5,713	1,837
	Revaluation of IIA liability		-		2,127		-	-
			4		3,843		5,716	1,838

F-42

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE INCOME (Cont.)

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Financial expenses:
Exchange differences, net		4,373		-		-		-
Lease holding finance expense		666		479		715		230
Revaluation of warrants		11,400		14,467		-		-
Finance expenses in respect of loans from others		14,083		643		10,117		3,253
Finance expenses in respect of Government grants		169		-		-
Bank commissions and other financial expenses		156		43		33		11
		30,847		15,632		10,865		3,494

NOTE 16:- TAXES ON INCOME

a. Corporate tax rates in Israel:

The Israeli corporate tax rate in 2020 and 2021 was 23%.

b. Final tax assessments:

The Company received final tax assessments through 2016.

c. Net operating loss carryforwards for tax purposes and other temporary differences:

as of December 31, 2021, the Company had loss carryforwards and other temporary differences amounting to approximately NIS 311,625 ($ 100,201).

d. Deferred taxes:

The Company did not recognize deferred tax assets for loss carryforwards and other temporary differences because their utilization in the foreseeable future is not probable.

e. Current taxes:

The Company did not record any current taxes for the years ended December 31, 2019, 2020 and 2021 as it is still incurring losses on an ongoing basis.

F-43

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 16:- TAXES ON INCOME (Cont.)

f. Theoretical tax:

The reconciliation between the tax expense, assuming that all the income and expenses, gains and losses in the statement of income were taxed at the statutory tax rate and the taxes on income recorded in profit or loss (0%), relates to the creation of tax loss carryforwards and other temporary differences for which deferred tax assets were not recorded.

NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES

a. Related parties consist of nine directors (including the CEO) serving on the Company’s board of directors and three key officers.

b. Transactions with related parties:

1. In February 2012, the Company’s Board approved an amendment and extension of the agreement with the Company’s CEO Dr. Ron Babecoff, dated April 2007. Pursuant to the amendment, the monthly salary of the Company’s CEO was increased by 5% in each of the three years of the extension of the engagement to NIS 52.5 a month starting January 2012. In April 2012, the Company’s shareholders approved the agreement at a shareholders’ meeting. On January 18, 2015, the Company’s shareholders extended the agreement under the same terms for an additional five years.

In addition to an increase of salary, there was a provision for a payment in the event that a material agreement is signed between the Company and a third party during the term of the engagement or during a period of three years after the CEO’s termination by the Company. Pursuant to this provision, the CEO will be entitled to receive a bonus amounting to 1.75% of the monetary compensation payable to the Company under the material agreement.

On May 28, 2015, the Company’s Board of Directors approved an update of the terms and conditions of the Company’s CEO so that the monthly remuneration will be a total of NIS 80, and granted him options to purchase 2.5% of the Company’s issued and paid up capital on a fully diluted basis.

On March 2, 2021, Dr. Ron Babecoff has finished his duty as the Company’s CEO and continued as a Senior Advisor to the Company.

2. In August 2014, the Company signed an employment agreement with the CFO at a 60% employment capacity for a period of 5 years, according to which the CFO shall be entitled to a monthly salary of NIS 10, and accordingly updated the management agreement to fees at the amount of NIS 2.5 for a period of five years. In addition, the CFO is entitled to receive a one-time cash payment of NIS 192.5 for the services provided in connection with the preparation and submission of the prospectus in the US and, in the event that the Company should complete a successful capital raise in the U.S. t, the CFO shall be entitled to receive a one-time payment of NIS 87.5. Furthermore, from the consummation of the offering, the monthly compensation under the services agreement will be increased to NIS 15,000.

F-44

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

3. In August 2012, the Company approved the grant of future remuneration to four directors of the Company. The remuneration will be granted provided that a material agreement is signed between the Company and a third party during the director’s term with the Company that will entitle each of the four directors to receive a bonus of 0.5% of the monetary compensation that will be paid to the Company in the context of such material agreement. The bonus is not limited in amount and is not restricted to one material agreement.

4. On January 21, 2021, the Company announced the appointment of Amir Reichman as its new CEO. Mr. Reichman and Dr. Ron Babecoff, its founder and former CEO, shared duties during a transition period while Mr. Reichman completed his former work obligations. Effective March 2, 2021, Mr. Reichman assumed the CEO position full time.

Mr. Reichman is entitled to an annual gross salary of $ 350. During the transition period between January 20, 2021, the date the agreement was signed, and March 2, 2021, Mr. Reichman was entitled to a pro-rated portion of this amount equal to 20% of his monthly salary.

The agreement also provides that Mr. Reichman is entitled to a one-time signing bonus at the gross lump sum amount of $ 50 and is eligible to receive an annual cash bonus of a gross amount equal to three to six monthly salaries to the extent Mr. Reichman meets annual objectives that shall be approved by the board of directors and by the shareholders. It is currently contemplated that the annual bonus would be (i) three monthly salaries for meeting a set of baseline annual objectives, and (ii) four to six monthly salaries for achieving a higher level of annual objectives. Under extraordinary circumstances reflecting performance by Mr. Reichman significantly above all such annual objectives, the board of directors may, in its sole discretion, consider an additional cash bonus of not more than an additional three monthly salaries (up to nine monthly salaries in total). The bonus amounts and annual objectives shall be subject to the terms of the Company’s Compensation Policy from time to time.

F-45

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

Furthermore, under the agreement Mr. Reichman is entitled to receive 600,000 RSUs (see also note 14m.) The ADSs underlying the RSUs may not be sold by Mr. Reichman during the term of his employment except that, commencing on the third anniversary of the Commencement Date, sales may be made pursuant to a Rule 10b5-1 plan, with the number of RSUs sold during any one year period not exceeding five percent of the vested RSUs held by Mr. Reichman at the time of such sales (the “Resale Limits”). If Mr. Reichman’s employment agreement is terminated by the Company for no cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall terminate. If Mr. Reichman’s

employment agreement is terminated by Mr. Reichman or terminated by the Company for cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall continue until the earlier of (i) one year after such termination, or (ii) the fifth anniversary of the Commencement Date. The RSUs would be subject to accelerated vesting in the event of a change of control.

c. Balances with related parties:

	Payables
Key management personnel:
December 31, 2020		403
December 31, 2021		2,243
December 31, 2021 (convenience translation into U.S. dollars)		721

d. Transactions with related parties:

	Research and development		Marketing, general and administrative
Key management personnel:
2019		5,395		3,653
2020		1,800		5,100
2021		1,439		13,052
2021 (convenience translation into U.S. dollars)		463		4,197

F-46

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands, except share and per share data

NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

e. Compensation of key officers:

The following amounts disclosed in the table are recognized as an expense during the reporting period related to key officers.

Key officers employed by the Company:

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Salaries		1,399		3,790		4,732		1,521
Short-term employee benefits		1,855		824		1,655		532
Other employees’ benefits		110		161		155		50
Share-based compensation		3,684		2,125		7,949		2,556
		7,048		6,900		14,491		4,659
Number of key officers and directors		11		13		12		12

NOTE 18: - SUBSEQUENT EVENTS

On March 14, 2022 the Company announced that it had been negotiating with EIB the terms of restructuring of its outstanding €24,000 EIB loan. The parties have reached a commercial agreement, which is still subject to EIB’s formal approval of the new terms, that would entail the following:  

● An extension of the maturity dates from 2023 (€20,000) and 2024 (€4,000) until December 2027.

● Although the EIB loan has been outstanding since 2018, interest on the EIB loan will only begin to accrue starting January 1, 2022 at an annual rate of 7%. The interest payments will be deferred until the new maturity date and will be added to the principal balance at the end of each year during the EIB loan period. 

● $900 will be paid by the Company as a reduction of principal shortly after the new terms become effective, and going forward 10% of any capital raises by the Company until maturity will be used to further repay the EIB loan principal. 

Once the Company’s commercial sales exceed €5,000, 3% of the Company’s topline revenues will be paid to EIB as royalties up to a combined maximum of 2.8 times the original €24,000 principal.  

If the Company chooses to prepay any portion of the EIB loan (other than as required from future capital raises) the amount prepaid will be calculated such that the EIB realizes at least 20% IRR on its investment at the point of prepayment.

On March 23, 2022, the Company executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions such as psoriasis, asthma, macular degeneration, and psoriatic arthritis.

F-47

EX-4.4

Exhibit 4.4

EMPLOYMENT AGREEMENT

THIS PERSONAL EMPLOYMENT AGREEMENT (the “Agreement”) is made this 20th day of January 2021 by and between BiondVax Pharmaceuticals Ltd. registry number 51343610, a company having its principal place of business at Jerusalem BioPark, 2nd Floor, Hadassah Ein Kerem Campus, Jerusalem, Israel (the “Company”) and Amir Reichman (I.D. 032241911) Boomgaardlaan 29,1560 Hoeilaart, Belgium (the “Employee”).

WHEREAS, the Company wishes to employ an employee in the position set forth hereunder; and

WHEREAS, the Employee has declared that he has the required knowledge, experience and expertise to fulfill the said position under the terms set forth herein; and

WHEREAS, the Company wishes, based on the Employee’s aforementioned declaration, to employ the Employee, and the Employee wishes to be employed by the Company, as of the Commencement Date (as such term is defined hereunder); and

WHEREAS the parties desire to state the entire terms and conditions of the Employee’s employment by the Company, as set forth below.

NOW, THEREFORE, in consideration of the mutual premises, covenants and other agreements contained herein, the parties hereby agree as follows:

1. Contents of Agreement/Definitions

1.1. The preamble and the exhibits to this Agreement constitute an integral part hereof and are hereby incorporated by reference.

1.2. The headings in this Agreement are for the purpose of convenience only and shall not be used for the purposes of interpretation.

1.3. This Agreement also constitutes a notice pursuant to the Notice to Employee Law (Terms of Employment), 5762-2002, and it includes all the information which the Company is obligated by law to provide to the Employee.

1.4. The Employee represents that no provision of any law, regulation, agreement or other document prohibits him from entering into this Agreement.

1.5. References to the masculine gender shall include the feminine, unless the context otherwise requires.

2. Employment and Position

2.1. Employee’s employment with the Company shall commence as of the commencement date set forth in Exhibit A hereto (the “Commencement Date”) and shall continue for an unfixed period of time, unless terminated in accordance with the terms of this Agreement.

2.2. The Company hereby agrees to employ the Employee and the Employee hereby agrees to be employed by the Company in the position set forth in Exhibit A hereto (the “Position”).

2.3. Employee shall report regularly to the person set forth in Exhibit A hereto, or to any other person or position as Company, at its sole discretion, shall instruct in writing the Employee from time to time (the “Supervisor”).

3. Employee’s Duties

The Employee affirms and undertakes throughout the term of this Agreement:

3.1. Not to receive, at any time, whether during the term of this Agreement and/or at any time thereafter, directly or indirectly, any payment, benefit and/or other consideration, from any third party in connection with his employment with the Company, without the Company’s prior written authorization.

3.2. To travel abroad from time to time if and as may be required pursuant to his Position.

3.3. To immediately and without delay inform the Company of any affairs and/or matters that might constitute a conflict of interest with Employee’s Position and/or employment with Company and/or the interests of the Company.

3.4. Not, without the prior written consent of the Company, to undertake or accept any other paid or unpaid employment or occupation or engage in or be associated with, directly or indirectly, any other businesses, duties or pursuits except for de minimis non-commercial or non-business activities.

3.5. To adhere to any applicable law or provision and all disciplinary regulations, work rules, policies, procedures and objectives, as may be determined by the Company from time to time, pertaining to his employment including, without limitation, and HR policies.

3.6. Agrees to the transfer of any information concerning the Employee and held by the Company to a database (including a database located abroad) and to third parties in general, as reasonably relating to the business purposes or in pursuit of the Company’s business interests.

3.7. To keep the contents of this Agreement confidential and not to disclose the existence or contents of this Agreement to any third party without the prior written consent of the Company.

4. Time, Attention and Location

4.1. Location - The Employee will work at the Company’s executive offices, wherever they shall be located from time to time, or any other reasonable location, as decided by the Company in its sole discretion.

4.2. In general, work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company, as set forth hereunder. A regular workday with the Company shall consist of 9.6 hours, including a 60 minute daily break which shall be taken by the Employee on the Employee’s account. Notwithstanding, without derogating from the aforementioned, the Company’s official “Shortened Day” shall be Sunday and will include 8.6 hours including a 60 minute daily break, which shall be taken by the Employee on the Employee’s account (the “Shortened Day”). For the avoidance of doubt, the Company may from time to time, change the Shortened Day per the Company’s business needs. Saturday (Shabbat) shall be the Employee’s recognized and official rest day.

4.3. Hours of Work and Rest Law. Notwithstanding the provisions of Section 4..2, Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company and the special amount of trust involved in the Position in which the Employee shall be employed the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) does not apply to the Employee’s employment. Therefore, the Employee shall not be entitled to receive payments or any additional pay for overtime working hours, or work performed on Fridays, Saturdays or Jewish festival holidays and the Shortened Day shall not apply to the Employee. Notwithstanding the foregoing, the Employee shall not generally be required to work on Fridays, Saturdays or Jewish holidays.

4.4. Employment Scope – As of the Commencement Date until March 2, 2021 (the “First Period”) the Employee’s Employment Scope shall be 20% scope (one working day per week which shall be Sunday). As of March 2, 2021 onwards, the Employee’s employment scope shall be full time (as described in Section 4.2 above).

4.5. Recording of Hours: Per the requirements under applicable law, the Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the Company’s policy and instructions.

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5. Consideration, Benefits and Payments

5.1. Salary.

5.1.1. As payment for the fulfillment of the obligations set forth herein, the Company shall pay the Employee a gross monthly salary in the amount as set forth in Exhibit A hereto (hereinafter: “Monthly Salary”). During the First Period the Employee’s Monthly Salary shall be adjusted in accordance with First Period Monthly Salary as set forth in Exhibit A hereto.

5.1.2. The Monthly Salary shall be paid to the Employee no later than the 9^th day of the following month.

5.1.3. An amount equal to 10% of the Monthly Salary of the Employee shall be considered as a special compensation for the Employee’s obligations Section 6 herein and under the Confidentiality, Non-Compete and Proprietary Rights Agreement (the “Assignment Agreement”), attached hereto as Exhibit B, including without limitation, in connection with assignment of inventions and non-competition (the “Special Compensation”). The Employee shall be obligated to return all Special Compensation amounts received from the Company upon violation of any of the said obligations set forth therein. Company maintains the right to withhold and set off any amounts due to the Employee following such violation, and all such amounts owed to the Company shall bear interest and shall be linked to the Cost of Living Index in accordance with the law.

5.1.4. For the avoidance of doubt, the Monthly Salary shall be calculated based on an annual USD salary (set forth in Exhibit A hereto) divided by 12 months and shall be converted each month to NIS according to the applicable USD-NIS exchange rate at the last day of the relevant month. Therefore, the Employee’s Monthly Salary, which will be converted and paid in NIS, may change from one month to the other according to the then applicable USD-NIS exchange rate.

5.2. Pension Insurance.

5.2.1. It is hereby agreed and understood that the insured salary out of which the parties shall maintain and obtain Pension Insurance as set forth in Exhibit A hereto and will not exceed the limit recognized by the Income Tax Authority from time to time (the “Insured Salary”) and the Company will not gross up any tax payable in respect of such contributions. It is agreed and understood that during the First Period the insured salary shall be lower between the Insured Salary and the First Period Monthly Salary.

5.2.2. The Company and the Employee will obtain and/or continue to maintain Managers Insurance and/or Pension Fund according to the Employee’s choice (“Pension Insurance”). The contribution to the Pension Insurance shall be as follows: (i) the Company shall contribute an amount equal to 6.5% of the Insured Salary for premium payments (the “Company Contribution”) and an additional 8.33% of the Insured Salary for severance payments; and (ii) the Employee shall contribute 6% of the Insured Salary toward the premiums payable in respect of a Pension Insurance.

5.2.3. The Employee hereby instructs the Company to transfer to the Pension Insurance the amounts of the Employee’s and the Company’s contributions from the Insured Salary to the Pension Insurance.

5.2.4. In the event the Employee elects to obtain Managers Insurance as per Section 5.2.2, the Company Contribution shall include payments toward a Disability Insurance (“Ovdan Kosher Avoda”), which may be included within the Managers Insurance Policy, for the exclusive benefit of the Employee, provided that the Company’s contribution towards premium payments shall not be less than 5% of the Employee’s Insured Salary. For the removal of any doubt, it is hereby clarified that the Company Contribution together with any payments towards Disability Insurance shall not exceed 7.5% of the Employee’s Insured Salary.

5.2.5. It is hereby agreed that upon termination of employment under this Agreement, the Company shall release to the Employee all amounts accrued in the Pension Insurance Policy on account of both the Company’s and Employee’s Contributions. However, it is hereby agreed that if the Employee is dismissed under the circumstances defined in Section 16 and/or Section 17 of the Severance Pay Law or in the event that the Employee withdraws monies from the Pension Insurance in circumstances other than an “Entitling Event”, (i.e., death, disablement or retirement at the age of 60 or over) - the Employee shall not be entitled to any Severance Pay.

5.2.6. It is hereby clearly agreed and understood that Section 14 of the Severance Pay Law, and the General Approval of the Labor Minister, dated June 30, 1998, issued in accordance to the said Section 14, a copy of which is attached hereby as Exhibit C shall apply to the Insured Salary.

3

5.3. Advanced Study Fund - Keren Hishtalmut

5.3.1. The Company and the Employee shall open and maintain a Keren Hishtalmut (the “Fund”). Use of these funds shall be in accordance with the by-laws of the fund.

5.3.2. The Company shall contribute to the Fund an amount equal to seven and a half percent (7.5%) and the Employee shall contribute to such Fund an amount equal to two and a half percent (2.5%) of each Monthly Salary payment.

5.3.3. For the avoidance of any doubt, the sums contributed by the parties to the Fund will not exceed the limit recognized by the Income Tax Authority from time to time and the Company will not gross up any tax payable in respect of such contributions(the “Fund Insured Salary”). During the First Period the contributions towards the Fund shall be from the lowest between First Period Monthly Salary and the Fund Insured Salary.

5.4. Signing Bonus; Restricted Share Units - Together with the first Monthly Salary the Employee shall be entitled to a one-time signing bonus at the gross lump sum set forth in Exhibit A hereto (the “Signing Bonus”). The Signing Bonus shall not form as salary for any purpose and shall not be taken into account for the purpose of calculating any of the Employee’s rights.

In addition, effective upon the Commencement Date and subject to shareholder approval of an increased in the registered share capital of the Company and the grant of RSU’s (as defined below), the Company will issue to the Employee 600,000 restricted share units (the “RSU’s”). under the Company’s 2018 Israeli Share Option Plan which will vest over a period of five years, 20% to vest each year on the anniversary date of the Commencement Date. The Company will convene the shareholders meeting at the earliest practicable date. The American Depositary Shares underlying the RSU’s may not be sold by the Employee during the term of his employment other than sales under a 10b5-1 plan during any one year period of a number of American Depositary Shares (“ADSs”), each representing 40 ordinary shares of the Company, not exceeding five (5%) percent of the vested RSU’s held by the Employee at the time of such sale commencing on the third anniversary of the Commencement Date (called the “Resale Limits”). If this Agreement is terminated by the Company for no cause under Section 7 prior to the fifth anniversary of the Commencement Date, the Resale Limits shall terminate. If this Agreement is terminated by the Employee or terminated by the Company for cause under Section 7 prior to the fifth anniversary of the Commencement Date, the Resale Limits shall continue until the earlier of (i) one year after such termination or (ii) the fifth anniversary of the Commencement Date. The RSU’s will be granted pursuant to a separate grant letter (which will include all related documents customarily used by the Company for such purpose) to be entered into between the Employee and the Company. Any and all tax consequences arising from the grant or exercise of the RSU’s to the Employee, from the payment for, or the subsequent disposition of, ADSs covered thereby or from any other event or act of the Company (except for erroneous actions of the Company) or of the Employee hereunder, shall be borne solely by the Employee, and the Employee will indemnify the Company and hold it harmless against and from any and all liability for any such tax or interest or penalty thereon, including, without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax. The Employee hereby irrevocably authorizes the Company to deduct from any payment, which may be due to the Employee from the Company, any amount which the Employee may owe to the Company hereunder. The RSUs shall be subject to the terms of the Company’s compensation policy from time to time.

5.5. Annual Performance Bonus - The Employee shall be eligible to receive an annual cash bonus at the gross amount equal to three to six monthly salaries to the extent the Employee meet the annual objectives that shall be approved by the Company’s board of directors and shareholders under a specific plan which shall be provided to the Employee as a separate document. It is currently contemplated that the annual bonus would be (i) four monthly salaries for meeting such annual objectives and (ii) three monthly salaries in the case of underperforming compared to such annual objectives, provided the Employee meets the baseline objectives set by the board of directors Under extraordinary circumstances reflecting performance by the Employee significantly above all such annual objectives, the board of directors may, in its sole discretion, consider an additional cash bonus of not more than an additional 3 monthly salaries (up to nine monthly salaries in total). The bonus amounts and annual objectives shall be subject to the terms of the Company’s compensation policy from time to time.

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5.6. Company Car

5.6.1. The Company shall cover the monthly cost (the “Car Expenses”) of Employee’s use of a leased car (the “Company Car”) up to a monthly employer’s cost set in Exhibit A hereto (the “Car Expenses Limit”). The Car Expenses shall also include insurance, gas, maintenance and gross up on taxes payable by Employee which relates to the Company Car, all up to the monthly Car Expenses Limit. For the avoidance of doubt, the Company shall not bear any further cost above the Car Expenses Limit, and the Employee hereby agree and understand that any additional payment and/or cost above the Car Expenses Limit shall be beard solely by the Employee.

5.6.2. Car Expenses Limit paid pursuant to this paragraph will not form part of the Employee’s social benefits and will not be taken into account for the purpose of calculating the Employee’s social and/or other benefits of any kind, including severance pay.

5.6.3. The Employee understands and agree that the Company shall not bear any cost which relates to: (i) breach of the leasing agreement, (ii) damages to the Company Car or theft ; (iii) fines or parking tickets or payment of toll roads; and other expenses due to noncompliance by the Employee of any applicable law or any such other expenses as a result of unlawful conduct by the Employee, all which shall be borne by the Employee, and pursuant to which the Company may withhold and setoff any amounts to which the Employee may be entitled.

5.6.4. The Employee declares that at the event of fines or parking tickets or any other felony or damage, he will execute an assignment letter to be provided by the Company or the car leasing company. Furthermore, it is hereby agreed that the Company shall assign to the Employees responsibility any and all traffic tickets received. The Employee hereby confirms and declares that: (a) he shall inform the Company of such traffic tickets and/or fines within 48 hours from the day he received them, and (b) he shall participate in any court deliberation and perform any action required by the Company in respect of the said tickets and/or fines.

5.6.5. The Car Expenses Limit shall be calculated based on the Car Expenses Limit (set forth in Exhibit A hereto) divided by 12 months and shall be converted each month to NIS according to the applicable USD-NIS exchange rate of the last day of each month. Therefore, the monthly Car Expenses Limit, which will be converted and paid in NIS, may change from one month to the other according to the applicable USD-NIS exchange rate.

5.6.6. Receipt of Car Expenses shall be in lieu of travel expenses reimbursement to which the Employee entitled according to the applicable extension order (“Tsav Harchva”).

5.7. Cellular Phone Expenses - The Company shall cover Employee’s use of his personal cellular phone. For the avoidance of any doubt, Cell Phone Expenses paid pursuant to this paragraph will not form part of the Employee’s social benefits and will not be taken into account for the purpose of calculating the Employee’s social and/or other benefits of any kind, including severance pay.

5.8. Dmey Havra’ah (Convalescence Pay) - The employee shall be entitled to “Dmey Havra’ah” in accordance with any applicable law, which shall be included in the Monthly Salary.

5.9. Annual Vacation - Employee shall be entitled to paid vacation days during each year of Employee’s employment in the amount set forth in Exhibit A hereto (the “Annual Vacation Allowance”). Taking of vacation days shall be coordinated in advance with the Company. Employee shall be obligated to take at least five (5) paid vacation days during each year of Employee’s employment, as prescribed by law. Employee may accumulate vacation days and carry them forward provided that the Employee shall not be entitled to accrue and carry forward any more the Maximum Amount set forth in Exhibit A (including statutory vacation allowance) (the “Maximum Amount”). Notwithstanding, any unused vacation days exceeding the Maximum Amount shall be forfeited and are not redeemable in any event.

5.10. Sick Leave - The Employee shall be entitled to pay Sick Leave during each year of employment in accordance with any applicable law.

5.11. Shareholder Approval – It is understood that in accordance with the Israeli Companies Law, the compensation payable under this Agreement will be subject to, and paid following, the prior approval of the Company’s shareholders. The Company will convene the shareholders meeting at the earliest practicable date.

5

6. Confidentiality, Non-Compete and Proprietary Rights

6.1. The Employee shall, simultaneously herewith, execute the Confidentiality, Non-Compete and Proprietary Rights Agreement, attached hereto as Exhibit B. For the removal of any doubt, execution of such Confidential, Non-Compete and Proprietary Rights Undertaking Letter Agreement by the Employee - is a condition precedent to this Agreement becoming effective.

7. Term and Termination of Employment

7.1. Either party may terminate the Employee’s employment by providing prior written notice as set forth in Exhibit A hereto (the “Notice Period”).

7.2. Without derogating from the rights of the Company under this Agreement and/or any applicable law, the Company may terminate this Agreement forthwith with immediate effect, at any time, by paying to the Employee the legally required compensation in lieu of the Notice Period and to the extent applicable, the Termination Grant as defined above.

7.3. Notwithstanding the aforementioned, the Company shall be entitled to terminate this Agreement with immediate effect, at any time, where said termination is a termination for Cause (as defined below). In such event, without derogating from the rights of the Company under this Agreement and/or any applicable law, the Employee shall not be entitled to any Notice Period or any payment in lieu of any Notice Period.

7.4. The following reasons shall be deemed Cause:

(i) The Employee commits a fundamental breach of this Agreement or substantial lack of performance, including, without limitation, a breach of his covenants in Exhibit B and the above Sections 2, 3, 4 and 6;

(ii) The Employee performs any act that entitles the Company to dismiss him without paying him severance pay (in whole or in part) in connection with such dismissal;

(iii) The Employee breaches his duty of good faith to the Company;

(iv) The Employee’s conviction of a dishonorable criminal offense; or

(v) The Employee’s intentional gross misconduct in the performance of his obligations under this Agreement in a manner that causes (or is likely to cause) material harm to the Company

7.5. During the Notice Period, whether notice has been given by the Employee or by the Company, the Employee shall continue to render his services to the Company unless instructed otherwise by the Company and shall cooperate with the Company and use his best efforts to assist the integration into the Company organization of the person or persons who will assume the Employee’s responsibilities

6

8. Separation Grant

8.1. In the event of termination of Employee’s employment by the Company without Cause (as defined above), the Company shall pay to the Employee a special separation grant (the “Separation Grant”) under the following terms:

8.1.1. The Separation Grant shall be calculated as follows: nine monthly salaries minus the Statutory Severance Pay the Employee shall be entitled to at the termination date of his employment. “Statutory Severance Pay” shall mean the amount of accrued amounts in the Pension Insurance and supplemental severance pay required under law if any).

8.1.2. The definition of monthly salaries shall be either Monthly Salary or New Monthly Salary according to the Employees salary at the termination date.

8.1.3. The Termination Grant shall be paid as a one-time lump sum together with the account settlement and shall not be considered a salary component for any purpose including for calculating social rights such as severance pay.

8.1.4. Payment of the Separation Grant is subject to Employee’s execution of a waiver and release.

9. General Provisions

9.1. The Employee represents and warrants to the Company that the execution and delivery of this Agreement and the fulfillment of the terms hereof (i) will not constitute a default under or breach of any agreement or other instrument to which he is a party or by which he is bound, including without limitation, any confidentiality or non-competition agreement, (ii) do not require the consent of any person or entity, and (iii) shall not utilize during the term of Employee’s employment any proprietary information of any third party, including prior employers of the Employee.

9.2. Employee shall not be entitled to any additional bonus, payment or other compensation in connection with Employee’s employment with Company, other than as provided in this Agreement.

9.3. Company’s failure or delay in enforcing any of the provisions of this Agreement shall not, in any way, be construed as a waiver of any such provisions, or prevent Company thereafter from enforcing each and every other provision of this Agreement which were previously not enforced.

9.4. This Agreement constitutes the entire understanding and agreement between the parties hereto, supersedes any and all prior discussions, agreements and correspondence with regard to the subject matter hereof, and may not be amended, modified or supplemented in any respect, except by a subsequent writing executed by both parties hereto.

7

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first appearing above.

BiondVax Pharmaceuticals Ltd. Employee

By:	/s/ Ron Babecoff	/s/ Amir Reichman
Title:	Chief Executive Officer
By:	/s/ Mark Germain
Title:	Chairman of the Board

8

Exhibit A

to the Personal Employment Agreement by and between BiondVax Pharmaceuticals Ltd. and the Employee whose name is set forth herein subject to the provisions of the Agreement relating to the matters below

Agreement Date
Employee Personal Details	Full Name: Amir Reichman
Position in the Company	CEO
Commencement Date	March 2, 2021
Supervisor	Company’s Board of directors
Notice Period	60 days
Amount of vacation days per year:	21 working days and not less than applicable law (“Annual Allowance”)
Maximum Amount of accrued vacation days	40
Scope of Employment	Full time
Annual Salary	USD 350,000
Monthly Salary	USD 29,166.66 (gross) - NIS 91,408.31 (gross) (based on exchange rate of NIS 3.134 to 1US$). Employee’s Monthly Salary may change from one month to the other according to the applicable USD-NIS exchange rate at the last day of the month.
First Period Monthly Salary	Pro-rated portion of Monthly Salary (20% of Monthly Salary according to the then applicable USD-NIS exchange rate at the last day of the month)
Insured Salary (for pension fund)	NIS 26,378 (gross) [as may change from time to time in accordance with the then applicable tax ceiling regulations]
Fund Insured Salary (for Advanced Study Fund)	NIS 15,712 (gross) [as may change from time to time in accordance with the then applicable tax ceiling regulations]
Car Expenses Limit	Up to the Monthly Limit. Monthly Limit shall be calculated at the value of annual cost of USD 24,000 divided by 12 months (USD 2,000 per month) and shall be paid in NIS according to the applicable exchange rate of USD - NIS at the last day of each month
Signing Bonus	USD 50,000 (gross) which shall be paid in NIS, according to the official USD-NIS exchange rate in effect at the date of each payment
Sick days	Per applicable law
Convalescence Pay	Included in the Monthly Salary

BiondVax Pharmaceuticals Ltd. Employee

By:	/s/ Ron Babecoff	/s/ Amir Reichman
Title:	Chief Executive Officer

By:	/s/ Mark Germain
Title:	Chairman of the Board

9

EX-4.16

Exhibit 4.16

CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

EX-4.17

Exhibit 4.17

CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

EX-4.18

Exhibit 4.18

CERTAIN INFORMATION IDENTIFIED

BY BRACKETED ASTERISKS ([* * *])

HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE

IT IS BOTH NOT MATERIAL AND WOULD BE

COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

Research Collaboration Agreement

by and between

Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V.

a German non-profit research organization having its postal address at

Hofgartenstr. 8, 80539 München, Germany

represented for the purpose of this agreement by

Prof. Dr. Patrick Cramer, Managing Director at the

Max Planck Institute for Multidisciplinary Sciences in Göttingen, Germany

-hereinafter called “MPG”-

and

Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts

Universitätsmedizin Göttingen

a German university having its postal address at

Robert-Koch-Str. 40, 37075 Göttingen

-hereinafter called “UMG”-

and

BiondVax Pharmaceuticals Ltd.

an Israeli corporation having a principal place of business at

Jerusalem BioPark Building, 2nd Floor, Hadassah Ein Kerem Campus

Jerusalem, Israel

-hereinafter called “BiondVax”-

-MPG, UMG and BiondVax are hereinafter also individually called a “Party”,

and collectively called the “Parties”-

Recitals

0.1 MPG is a German non-profit scientific research organization. The Max Planck Institute for Multidisciplinary Sciences in Göttingen (the institute was named “Max Planck Institute for Biophysical Chemistry” until December 31, 2021, and is hereinafter referred to as “MPI-MS”) is a research institute of MPG, and is not a separate legal entity. At the MPI-MS, Prof. Dirk Görlich is a director and heads the department “Cellular Logistics” (the “Görlich Department”). The MPI-MS has its own alpaca herd used for its research activities.

0.2 UMG is one of the largest University hospitals in Germany and also a Medical Faculty of the Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts, and therefore a public teaching and research organization. At UMG, Prof. Matthias Dobbelstein heads the Institute of Molecular Oncology, and heads a research group within such institute (such research group, the “Dobbelstein Department”). The UMG has a S3 laboratory which is available for the Dobbelstein Department for its research activities.

0.3 The Görlich Department has, with support of the Dobbelstein Department, developed the General Nanobody Technology (as later defined herein) for the generation and initial validation and characterization of Nanobodies (as later defined herein).

0.4 By using the General Nanobody Technology, scientists of the Görlich Department have generated certain Nanobodies against the SARS-CoV-2 corona virus, and scientists of the Dobbelstein Department have validated such Nanobodies, thereby showing the general feasibility of the General Nanobody Technology for generating new Nanobodies which bind selectively and potently on specific molecular targets.

0.5 Max-Planck-Innovation GmbH, München, Germany (“MI”) is a 100% subsidiary of MPG, and acts as MPG’s technology transfer agency. MI is authorized by MPG to sign commercialization agreements concerning intellectual property owned and controlled by MPG in MI’s own name for the account of MPG. UMG, through involving MBM Science Bridge GmbH (“MBM”), its technology transfer organization, will commercialize intellectual property owned and controlled by UMG in UMG’s own name.

0.6 BiondVax is a NASDAQ-listed biopharmaceutical company that is currently seeking for business opportunities in the field of recombinant protein-based vaccines and antibodies, particularly Nanobodies, for medicinal use in prevention and treatment of various diseases.

0.7 The Parties intend to collaborate jointly on the generation and initial validation and characterization of new Nanobodies against various molecular targets listed in Appendix 0.7 (the “Target List”, which might be amended in accordance with this RCA, and each molecular target on the Target List (as might be amended) hereinafter a “Target”). The research activities relating to a specific Target pursued in said joint collaboration will form a respective Subproject (as further defined hereinafter), and all Subprojects together will form the Collaboration Project (as further defined hereinafter).

0.8 In light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, the Görlich Department (and/or the Dobbelstein Department, as applicable) have, before signing of this RCA, already started the generation of Nanobodies against some of the Targets (that were already contained in the target list attached to such term sheet). During the negotiations of this RCA, the Parties agreed that Nanobodies (and related Know-how) already generated by the Görlich Department (and/or the Dobbelstein Department, as applicable) through these works before signing of this RCA will be included in this RCA.

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0.9 In consideration of its collaborative efforts and the funding provided by BiondVax to MPG/MPI-MS and UMG in connection with the Collaboration Project, BiondVax shall, during the term of this RCA, enjoy exclusivity with respect to the research collaboration for Nanobodies against the Targets, and shall be granted on a Subproject-by-Subproject basis, an exclusive option to take a royalty-bearing, worldwide, sublicensable, transferable license, which shall be exclusive under the respective Target-specific Nanobody Technology, and non-exclusive, but exclusive with respect to the relevant Target pursued in the relevant Subproject, under the respective Enabling Nanobody Technology, according to the terms and conditions agreed herein and as set forth in the Sample License Agreement (as further defined herein).

Now, therefore, the Parties agree as follows:

1. DEFINITIONS

1.1 “Affiliates”

shall mean any legal entity (including, without limitation, a corporation, partnership, or limited liability company) that controls, is controlled by, or is under common control with, a Party. For the purpose of this definition, the term “control” means (i) direct or indirect ownership of more than fifty percent (50%) of the voting securities of a legal entity, or (ii) a greater than fifty percent (50%) interest in the net assets or profits of a legal entity, or (iii) possession, directly or indirectly, of the power to elect or direct the management of a legal entity.

1.2 “Background Technology MPG/UMG”

shall mean any Patent Rights and/or Know-how in the field of Nanobodies that

(a) has been generated by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) prior to the Effective Date, and

(b) is Controlled by MPG and/or by UMG, and

(c) is necessary or useful to perform the Collaboration Project.

The Background Technology MPG/UMG at the Effective Date consists of the General Nanobody Technology, and also includes Intellectual Property Rights Controlled by MPG and/or UMG generated as Enabling Nanobody Technology (as defined herein) under the Accompanying Research Collaboration Agreement between the Parties with effective date December 21, 2021 and/or included as Enabling Nanobody Technology (as defined herein) in the license agreement between BiondVax and MI regarding SARS-CoV-2 with effective date December 21, 2021.

1.3 “Background Technology BiondVax”

shall mean any Patent Rights and/or Know-how that

(a) has been generated by or on behalf of BiondVax (and/or its Affiliates) prior to the Effective Date, and

(b) is Controlled by BiondVax (and/or its Affiliates), and

(c) is necessary or useful to perform the Collaboration Project.

The Background Technology BiondVax at the Effective Date is described or listed in Appendix 1.3.

1.4 “Background Technology”

shall mean collectively the Background Technology MPG/UMG and the Background Technology BiondVax.

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1.5 “Collaboration Compounds”

shall mean any Nanobodies (e.g. as monomers or any other construct such as dimers, trimers etc., including any complementarity-determining regions, fragments, derivatives, modifications, complexes, or conjugates thereof) that

(a) selectively bind to a Target, and

(b) are generated in the course of this RCA by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable), and are Controlled by MPG (and/or UMG, as applicable)

For clarity, the Collaboration Compounds are part of the Collaboration Know-how, to the extent the Collaboration Compounds are not yet disclosed in any Collaboration Patent Rights.

For the avoidance of doubt, the term “in the course of the RCA” under (b) above shall include also those compounds fulfilling the requirement under (a) for which the activities for their generation have been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

1.6 “Collaboration Know-how”

shall mean collectively the Sole MPG/UMG Collaboration Know-how, the Joint Collaboration Know-how and the Sole BiondVax Collaboration Know-how. For clarity, Collaboration Know-how includes Collaboration Compounds, and excludes Background Technology and Sideground Technology.

1.7 “Collaboration Patent Rights”

shall mean collectively the Sole MPG/UMG Collaboration Patent Rights, the Joint Collaboration Patent Rights and the Sole BiondVax Collaboration Patent Rights. For clarity, Collaboration Patent Rights shall exclude Background Technology and Sideground Technology.

1.8 “Collaboration Project”

shall mean the research activities to be performed by or on behalf of the Görlich Department and/or the Dobbelstein Department and/or BiondVax (or its Affiliates), as the case may be, with respect to the generation and initial validation and characterization of new Nanobodies against the Targets on the Target List (as might be amended in accordance with this RCA) targeted for use in medicinal or diagnostic products for therapy and/or prevention (including companion diagnostics for such medicinal products) and/or diagnosis of various diseases in humans in the course of this RCA. For each Target, the Collaboration Project will from the Effective Date encompass a respective individual Subproject, and the general activities to be conducted and deliverables to be provided in each Subproject are set forth in the Project Plan (which might be amended on a Subproject-by-Subproject basis in accordance with this RCA).

1.9 “Collaboration Technology”

shall mean collectively the Collaboration Know-how and the Collaboration Patent Rights.

1.10 “Commencement Date”

shall mean the day after the Effective Date on which the research activities with respect to the first Subproject actually start and which the Parties aim to take place no later than [***] after the Effective Date. The Commencement Date will be agreed upon by the Parties and documented by the JSC.

1.11 “Complete Invention Disclosure”

shall have the meaning ascribed to it in Section 8.4.1.

1.12 “Compound Acceptance Criteria”

shall mean the properties and objectives to be fulfilled by the Collaboration Compounds generated and researched in the course of any individual Subproject according to the criteria list in Appendix 1.12, which may be further defined mutually by the Parties in accordance with this RCA for each Target pursued in the relevant Subproject.

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1.13 “Confidential Information”

(a) shall mean any information which is of a confidential and/or proprietary nature and not readily available to a Third Party (including, without limitation, information in relation to the business of a Party to which this RCA relates, and information in relation to Intellectual Property Rights Controlled by a Party), which is disclosed by a Party (the “Disclosing Party”) to another Party (the “Receiving Party”) under or in connection with this RCA.

(b) Confidential Information specifically excludes any information that the Receiving Party can prove by adequate proof (i) was known by the Receiving Party prior to the receipt of Confidential Information of the Disclosing Party (for the avoidance of doubt, any previous disclosure of Confidential Information by or on behalf of the Disclosing Party to the Receiving Party under any other research collaboration between the Parties shall not result in this exemption), (ii) was disclosed to the Receiving Party by a Third Party having the right to do so, (iii) was, or subsequently became, part of the public domain through no fault of the Receiving Party, or (iv) was subsequently and independently developed by or on behalf of the Receiving Party without having had access to, or making use of, the Disclosing Party’s Confidential Information.

(c) For the avoidance of doubt, the Background Technology MPG/UMG not yet disclosed shall constitute Confidential Information of MPG and/or UMG; Background Technology BiondVax not yet disclosed shall constitute Confidential Information of BiondVax; the Sole MPG/UMG Collaboration Technology shall constitute Confidential Information of MPG and/or UMG; the Joint Collaboration Technology shall constitute Confidential Information of MPG/UMG and BiondVax, and the Sole BiondVax Collaboration Technology shall constitute Confidential Information of BiondVax.

1.14 “Control” or “Controlled”

shall mean, with respect to any Intellectual Property Right, the legal authority or right of a Party (whether by full and unrestricted ownership, or by license other than pursuant to this RCA) to grant a license or sublicense under such Intellectual Property Right, without violating the rights of, or breaching the terms of any agreement or other arrangement with, any Third Party existing at the time such Party would be required hereunder to grant such license or sublicense.

1.15 “Disclosing Party”

shall have the meaning ascribed to it in Section 1.13(a).

1.16 “Dispute”

shall have the meaning ascribed to it in Section 11.1.

1.17 “Dobbelstein Department”

shall have the meaning ascribed to it in Recitals 0.2.

1.18 “Effective Date”

shall mean the date when this RCA comes into force and effect, which shall be March 21, 2022.

1.19 “Enabling Nanobody Know-how”

shall mean any Know-how in the field of Nanobodies that

(a) is not directly relating to the Collaboration Compounds generated in the relevant Subproject,

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(b) has been created before the Effective Date of this RCA, or will be created during the Term of this RCA, by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be),

(c) is necessary for the use of Collaboration Compounds generated in the relevant Subproject in the development or commercialization of medicinal or diagnostic products for the therapy and/or prevention and/or diagnosis of various diseases in humans, and

(d) is Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

The Enabling Nanobody Know-how will be identified and described for each relevant Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item of the Know-how which relates to the composition of matter of the Collaboration Compounds, or the use of the Collaboration Compounds in relation to the relevant Target pursued in the relevant Subproject, or otherwise addresses properties of the Collaboration Compounds specific for said Target (e.g. complementary-binding regions). An item of Know-how which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the relevant Target pursued in the relevant Subproject, and/or the generation, manufacture and use of such Nanobodies outside the field of prevention or therapy or diagnosis of human diseases related to the relevant Target pursued in the relevant Subproject, shall be regarded to “not directly relating to the Collaboration Compounds” in the meaning of (a).

1.20 Enabling Nanobody Patent Rights

shall mean any Patent Rights in the field of Nanobodies that

(a) are claiming inventions that (i) do not directly relate to the Collaboration Compounds generated in the relevant Subproject, and (ii) have been created before the Effective Date of this RCA, or will be created during the Term of this RCA, by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be),

(b) are necessary for the use of Collaboration Compounds generated in the relevant Subproject in the development or commercialization of medicinal or diagnostic products for the therapy and/or prevention and/or diagnosis of various diseases in humans, and

(c) are Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

The Enabling Nanobody Patent Rights will be listed for each relevant Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item protected under any patent claim of the relevant Patent Right which relates to the composition of matter of the Collaboration Compounds, or the use of the Collaboration Compounds in relation to the relevant Target pursued in the relevant Subproject, or otherwise addresses properties of the Collaboration Compounds specific for said Target (e.g. complementary-binding regions). An item covered by any patent claim of the relevant Patent Right which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the Target, and/or the generation, manufacture and use of such Nanobodies outside the field of prevention or therapy or diagnosis of human diseases related to the relevant Target pursued in the relevant Subproject, shall be regarded to “not directly relating to the Collaboration Compounds” in the meaning of (a).

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1.21 “Enabling Nanobody Technology”

shall mean, with respect to each relevant Subproject, collectively the Enabling Nanobody Know-how and the Enabling Nanobody Patent Rights.

1.22 “General Nanobody Technology”

shall mean all Patent Rights and Know-how that are Controlled by MPG and/or UMG that are necessary or useful for creating and researching any Nanobodies against various molecular targets. General Nanobody Technology shall include, without limitation, (i) the immunization of the alpacas, the generation of immune libraries, the phage display selection and purification of Nanobodies (each performed by the Görlich Department), and (ii) the development of cell-based assays for the testing and screening of Nanobodies for their initial validation and characterization (each performed by the Dobbelstein Department). For the avoidance of doubt, it shall not be excluded per se that any item of General Nanobody Technology might be qualified mutually by the Parties in accordance with this RCA as Enabling Nanobody Technology with respect to a Subproject.

1.23 “Görlich Department”

shall have the meaning ascribed to it in Recitals 0.1.

1.24 “Intellectual Property Rights”

shall mean all rights with respect to (i) Patent Rights, (ii) trademarks (all registrations and applications therefor), (iii) all copyrightable works of authorship (whether published or unpublished), all registered or unregistered copyrights, all copyright registrations, applications for registration and renewals, and all rights corresponding to the foregoing throughout the world; (iv) utility models, design rights, and (v) Know-how.

1.25 “Intended Publication”

shall have the meaning ascribed to it in Section 7.1.

1.26 “Joint Collaboration Know-how”

shall mean any Know-how that

(a) is generated in the course of this RCA jointly (i) by or on behalf of the Görlich Department and/or the Dobbelstein Department, and (ii) by or on behalf of BiondVax (or its Affiliates), and

(b) is Controlled jointly by (i) MPG and/or UMG, and (ii) BiondVax (or its Affiliates).

The Joint Collaboration Know-how will be identified and described for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, Joint Collaboration Know-how excludes Background Technology, Sideground Technology, Sole BiondVax Collaboration Know-how and Sole MPG/UMG Collaboration Know-how. For the avoidance of doubt, the term “in the course of the RCA” under (a) above shall include also Know-how fulfilling also the requirement under (b) for which the activities for its generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) and/or BiondVax before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

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1.27 “Joint Collaboration Patent Rights”

shall mean any Patent Rights that

(a) are claiming inventions that have been created in the course of this RCA jointly (i) by or on behalf of the Görlich Department and/or the Dobbelstein Department, and (ii) by or on behalf of BiondVax (or its Affiliates), and

(b) are Controlled jointly by (i) MPG and/or UMG, and (ii) BiondVax (or its Affiliates).

The Joint Collaboration Patent Rights will be listed for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, Joint Collaboration Patent Rights shall exclude Background Technology, Sideground Technology, Sole BiondVax Collaboration Patent Rights and Sole MPG/UMG Collaboration Patent Rights. For the avoidance of doubt, the term “in the course of the RCA” under (a) above shall include also inventions fulfilling also the requirement under (b) for which the activities for their generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) and/or BiondVax before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

1.28 “Joint Collaboration Technology”

shall mean collectively the Joint Collaboration Know-how and the Joint Collaboration Patent Rights.

1.29 “Joint Steering Committee” or “JSC”

shall have the meaning as ascribed to them in Section 3.1.

1.30 “Know-how”

shall mean collectively

(a) any scientific or technical information, results, data, experience and knowledge of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation discoveries, inventions not yet patented, trade secrets, databases, practices, protocols, regulatory filings, methods, processes, techniques, biological, chemical and other materials (including, without limitation, targets, hits and leads), reagents, specifications, formulations, formulae, data (including pharmacological, biological, chemical, medicinal chemistry, structural, toxicological and clinical information) analytical, quality control, and stability data, studies and procedures and development information, results and data not patentable, all to the extent not claimed or disclosed in a Patent Right, and

(b) that is secret (i.e., not generally known or easily accessible), substantial (i.e., significant and/or necessary for the development and/or commercialization of compounds or products) and identified (i.e., described in a sufficiently comprehensive manner so as to make it possible to verify that it fulfills the criteria of secrecy and substantiality).

For clarity, if clause (b) is no longer satisfied because any of the items in clause (a) are no longer secret due to a breach of the confidentiality and/or publication provisions of this RCA by any Party, then such items in clause (a) shall no longer be classified as Know-how, notwithstanding any potential legal (damages) claims and rights the non-breaching Party might have against the breaching Party based on any breach of contractual and/or statutory obligation of confidentiality.

1.31 “Material”

shall mean collectively (i) the Collaboration Compounds, and (ii) any other biological or chemical materials or other reagents, including related documentation, that is provided by a Party to another Party in the course of this RCA.

1.32 “Nanobodies”

shall mean VHH antibodies (i.e. the single domain variable region of the heavy chain of camelid-derived antibodies).

1.33 “Nomination Of Pre-clinical Development Candidate”

shall mean the decision of BiondVax or its Affiliates to nominate a Collaboration Compound as a candidate for toxicological pre-clinical studies in animals (also commonly referred to as “GLP TOX studies”) as required by competent Regulatory Authorities as pre-requisite for submission of an IND for such Collaboration Compound.

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1.34 “Option”

shall have the meaning ascribed to it in Section 9.1.

1.35 “Patent Rights”

shall mean collectively

(a) any national, regional and international patent application(s) filed in any jurisdiction of the world, including provisional patent applications, having a specific priority date and directed to a specific inventive subject matter, and the resulting issued patents,

(b) any subsequent patent application(s) in any jurisdiction claiming the same priority date and directed to the same inventive subject matter as the patent application(s) described in (a) above, and any divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent application(s) described in (a) above, and the resulting issued patents, and

(c) any patents resulting from reissues, re-examinations, or patent term extensions (including supplemental protection certificates) (and their relevant international equivalents) of the patents and patent application(s) described in (a) and (b) above.

1.36 “Project Plan”

shall mean the scientific and technical description of the research activities to be conducted by the Parties in performance of any Subproject in the course of the Collaboration Project. The general activities to be conducted and deliverables to be provided in each Subproject of the Collaboration Project are set forth Appendix 1.36. This general Project Plan will be refined and adapted for each individual Subproject in accordance with this RCA in order to determine inter alia, but not limited to, the individual work packages assigned to the respective Party, time frames and deadlines, responsibilities, deliverables, milestones, goals and the like specific for the relevant Subproject. In case of any discrepancies between the Project Plan as refined and adapted for each individual Subproject from time to time and any other provision of this RCA, this RCA shall prevail unless this is explicitly agreed otherwise by the Parties in accordance with this RCA.

1.37 “RCA”

shall mean this research collaboration agreement between MPG (acting through the Görlich Department at MPI-MS), UMG (acting through the Dobbelstein Department) and BiondVax (acting through its Affiliates, as the case may be), including all of its appendices. In case of any discrepancies between the main text of this RCA and its appendices, the main text shall prevail.

1.38 “Receiving Party”

shall have the meaning ascribed to it in Section 1.13(a).

1.39 “Regulatory Authority”

shall mean any local, state, federal, national, supranational or international regulatory agency, department, bureau or other governmental entity with authority over the clinical testing, manufacture, marketing, use, and/or sale of a medicinal product in a country, including, without limitation, the FDA and the EMA.

1.40 “Sample License Agreement”

shall mean the sample license agreement attached to this RCA as Appendix 1.40, that contains the pre-agreed terms and conditions of a license for the Target-specific Nanobody Technology and Enabling Nanobody Technology of a relevant Subproject in the event BiondVax exercises its Option for the relevant Subproject.

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1.41 “Sideground Technology BiondVax”

shall mean any Patent Rights and/or Know-how in the field of Nanobodies that

(a) will be generated by or on behalf of BiondVax or its Affiliates after the Effective Date during the Term of this RCA but outside of the Collaboration Project,

(b) is Controlled by BiondVax or its Affiliates, and

(c) is necessary to perform the Collaboration Project.

1.42 “Sideground Technology MPG/UMG”

shall mean any Patent Rights and/or Know-how in the field of Nanobodies that

(a) will be generated by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) after the Effective Date during the Term of this RCA but outside of the Collaboration Project,

(b) is Controlled by MPG and/or by UMG, and

(c) is necessary to perform the Collaboration Project.

1.43 “Sideground Technology”

shall mean collectively the Sideground Technology MPG/UMG and the Sideground Technology BiondVax.

1.44 “Sole BiondVax Collaboration Know-how”

shall mean any Know-how that is (i) generated in the course of this RCA solely by or on behalf of BiondVax or its Affiliates, and (ii) Controlled solely by BiondVax or its Affiliates. The Sole BiondVax Collaboration Know-how will be identified and described for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, Sole BiondVax Collaboration Know-how excludes Background Technology, Sideground Technology, Joint Collaboration Know-how and Sole MPG/UMG Collaboration Know-how.

1.45 “Sole BiondVax Collaboration Patent Rights”

shall mean any Patent Rights that (i) claim inventions made in the course of this RCA solely by or on behalf of BiondVax or its Affiliates, and (ii) are Controlled solely by BiondVax or its Affiliates.

The Sole BiondVax Collaboration Patent Rights will be listed for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, Sole BiondVax Collaboration Patent Rights shall exclude Background Technology, Sideground Technology, Joint Collaboration Patent Rights and Sole MPG/UMG Collaboration Patent Rights.

1.46 “Sole BiondVax Collaboration Technology”

shall mean collectively the Sole BiondVax Collaboration Know-how and the Sole BiondVax Collaboration Patent Rights.

1.47 “Sole MPG/UMG Collaboration Know-how”

shall mean any Know-how that (i) is generated in the course of this RCA solely by or on behalf of the Görlich Department and/or the Dobbelstein Department, and (ii) is Controlled solely by MPG and/or UMG.

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The Sole MPG/UMG Collaboration Know-how will be identified and described for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, the Sole MPG/UMG Collaboration Know-how excludes Background Technology, Sideground Technology, Joint Collaboration Know-how and Sole BiondVax Collaboration Know-how. For the avoidance of doubt, the term “in the course of the RCA” under (i) above shall include also Know-how for which the activities for its generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

1.48 “Sole MPG/UMG Collaboration Patent Rights”

shall mean any Patent Rights that (i) are claiming inventions that have been created in the course of this RCA solely by or on behalf of the Görlich Department and/or the Dobbelstein Department, and (ii) are Controlled solely by MPG and/or UMG.

The Sole MPG/UMG Collaboration Patent Rights will be listed for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

For clarity, Sole MPG/UMG Collaboration Patent Rights shall exclude Background Technology, Sideground Technology, Joint Collaboration Patent Rights and Sole BiondVax Collaboration Patent Rights. For the avoidance of doubt, the term “in the course of the RCA” under (i) above shall include also inventions for which the activities for their generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, , or after the exercise of the Option through supporting research activities as set forth in the RCA.

1.49 “Sole MPG/UMG Collaboration Technology”

shall mean collectively the Sole MPG/UMG Collaboration Know-how and the Sole MPG/UMG Collaboration Patent Rights.

1.50 “Subcontractors”

shall mean any Third Party contractor that is involved by a Party in the performance of the Collaboration Project, and that will perform certain work packages and/or activities on behalf of such Party, as set forth in Section 4.2.

1.51 “Subproject”

shall mean all research activities conducted with respect to the generation and initial validation and characterization of Nanobodies against 1 (one) Target of the Target List (as may be amended in accordance with this RCA). The Parties will in accordance with this RCA on an on-going basis refine and adapt the general Project Plan with respect to the specific requirements of each individual Subproject, in order to determine inter alia, but not limited to, the individual work packages assigned to the respective Party, time frames and deadlines, responsibilities, deliverables, milestones, goals and the like specifics for the relevant Subproject.

1.52 “Subproject Technology Compilation Document”

shall have the meaning as ascribed to it in Section 2.10.4.

1.53 “Target”

shall have the meaning as ascribed to it in Recitals 0.7.

1.54 “Target-specific Nanobody Know-how”

shall mean any Know-how that

(a) is directly relating to the Collaboration Compounds generated in the relevant Subproject,

(b) is created in the course of this RCA by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be), and

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(c) is Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

For clarity, the term “Target-specific Nanobody Know-how” includes the Collaboration Compounds generated in the relevant Subproject, to the extent the Collaboration Compounds are not yet disclosed in any Target-specific Nanobody Patent Rights at the relevant point in time. For the avoidance of doubt, the term “in the course of the RCA” under (b) above shall include also Know-how fulfilling the requirements under (a) for which the activities for its generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

The Target-specific Nanobody Know-how will be identified and described for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item of the Know-how which relates to the composition of matter of the Collaboration Compounds, or the use of the Collaboration Compounds in relation to the relevant Target pursued in the relevant Subproject, or otherwise addresses properties of Collaboration Compounds specific for said Target (e.g. complementary-binding regions). An item of Know-how which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the relevant Target pursued in the relevant Subproject, and/or the generation, manufacture and use of such Nanobodies outside the field of prevention or therapy or diagnosis of human diseases related to the relevant Target pursued in the relevant Subproject, shall be regarded to “not directly relating to the Collaboration Compounds” in the meaning of (a).

1.55 “Target-specific Nanobody Patent Rights”

shall mean any Patent Rights that

(a) are claiming inventions that (i) directly relate to the Collaboration Compounds generated in the relevant Subproject, and (ii) are created in the course of this RCA by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be), and

(b) are Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

For the avoidance of doubt, the term “in the course of the RCA” under (a) (ii) above shall include also inventions fulfilling the requirements under (a) (i) for which the activities for their generation has been already started by or on behalf of the Görlich Department (and/or the Dobbelstein Department (either solely, or jointly with BiondVax or its Affiliates, as the case may be), as applicable) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated October 19, 2021, or after the exercise of the Option through supporting research activities as set forth in the RCA.

The Target-specific Nanobody Patent Rights will be listed for each Subproject in a Subproject Technology Compilation Document in accordance with Section 2.10.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item protected under a patent claim of the relevant Patent Right which relates to the composition of matter of the Collaboration Compounds, or the use of the Collaboration Compounds in relation to the relevant Target pursued in the relevant Subproject, or otherwise addresses properties of the Collaboration Compounds specific for said Target (e.g. complementary-binding regions). An item covered by a patent claim of the relevant Patent Right which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the relevant Target pursued in the relevant Subproject, and/or the generation, manufacture and use of such Nanobodies outside the field of prevention or therapy or diagnosis of human diseases related to the relevant Target pursued in the relevant Subproject, shall be regarded to “not directly relating to the Collaboration Compounds” in the meaning of (a).

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1.56 “Target-specific Nanobody Technology”

shall mean collectively the Target-specific Nanobody Know-how and the Target-specific Nanobody Patent Rights.

1.57 “Term”

shall have the meaning ascribed to it in Section 12.1.

1.58 “Third Party”

shall mean any person or entity other than MPG, MI, UMG and BiondVax, and their respective Affiliates.

2. OBJECTIVES AND SCOPE OF THE COLLABORATION PROJECT

2.1 General Principles of the Collaboration Project. The Parties work jointly together to advance the Collaboration Project for each Subproject, and to perform research with the goal to generate and initially validate and characterize new Nanobodies against the Targets on the Target List (as might be amended in accordance with this RCA), in order to create Collaboration Compounds targeted for use in medicinal and/or diagnostic products for therapy and/or prevention and/or diagnosis of various diseases in humans. For each Target, the Collaboration Project will encompass an individual Subproject and the general activities to be conducted in each Subproject are set forth in the general Project Plan attached to this RCA as Appendix 1.36 (as might be amended in accordance with this RCA). BiondVax will fund the respective research work of the Görlich Department and the Dobbelstein Department. BiondVax acknowledges that (i) neither MPG/MPI-MS nor UMG is allowed to perform contract research for or on behalf of a company, (ii) MPG/MPI-MS and UMG always need to pursue their own scientific interests when collaborating with a company. The Parties further have the common understanding that (iii) the Parties will use reasonable efforts to perform their respective work packages, but are not obliged to achieve the intended specific goals set forth in the Project Plan for each individual Subproject, particularly MPG/MPI-MS and UMG do not warrant to deliver certain Nanobodies against the relevant Target pursued in any Subproject, (iv) the joint research of the Parties is subject to a performance risk, and (v) the responsibility for a successful pre-clinical and clinical development and commercialization of pharmaceutical products lies solely with BiondVax as licensee under the relevant license agreement, if BiondVax exercises the Option for the respective Target-specific Nanobody Technology and Enabling Nanobody Technology of a specific Subproject.

2.2 Scope of Subprojects. The scope of each individual Subproject pursued in the Collaboration Project is defined by the Project Plan for the relevant Subproject. The Parties will in accordance with this RCA refine and adapt on an on-going basis the general Project Plan attached to this RCA as Appendix 1.36 for each individual Subproject in order to determine inter alia, but not limited to, the individual work packages assigned to the respective Party, time frames and deadlines, responsibilities, deliverables, milestones, goals and the like specific for the relevant Subproject in accordance with Section 3.2 until the relevant Subproject is completed or terminated.

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2.3 Contributions to the Subprojects. The Parties agree to perform their respective research work diligently by state-of-the art research, in due time and by applying quality criteria and quality control in accordance with applicable standards. The research activities of MPG/MPI-MS will be conducted by or on behalf of the Görlich Department and the research activities of UMG will be conducted by or on behalf of the Dobbelstein Department. The Parties understand that the research activities of the Görlich Department and Dobbelstein Department are based on the General Nanobody Technology. It is the Parties’ further current understanding that the research activities in the Collaboration Project will be conducted initially solely by the Görlich Department and Dobbelstein Department, and that the Görlich Department will, as a first step, attempt to simultaneously generate Nanobodies for all Targets included in the Target List. BiondVax will support these research activities with its Know-how regarding conduct of pharmaceutical research and development programs and requirements for successful pre-clinical and clinical development for pharmaceutical product commercialization, including BiondVax’s state-of-the art documentation common and required in the pharmaceutical industry. The Parties may also discuss to reduce their joint research activities to 1 (one) Subproject for a specific period of the time during the conduct of the Collaboration Project if there are reasons to concentrate available resources.

2.4 Compound Acceptance Criteria. The Parties will jointly conduct the research work in each individual Subproject, and the Parties will use reasonable efforts to achieve the Compound Acceptance Criteria applicable for the relevant Subproject. The list of Compound Acceptance Criteria set forth in Appendix 1.12 may be further defined for each Target pursued in the relevant Subproject mutually by the Parties in accordance with this RCA.

2.5 Completion or Termination of Subprojects.

2.5.1 A Subproject will be completed (without any further action, e.g. a completion letter, required) upon the decision of the JSC that the Compound Acceptance Criteria applicable for the relevant Subproject have been achieved.

2.5.2 A Subproject will be terminated (without any further action, e.g. a termination letter, required) if:

2.5.2.1 the JSC decides to abandon a Subproject (i) because it has failed to achieve the Compound Acceptance Criteria applicable for the relevant Subproject within the agreed timelines (as may be extended from time to time in accordance with this RCA) or for other important reasons, or (ii) upon request of BiondVax, or

2.5.2.2 BiondVax exercises its Option for a Subproject prior to achieving the Compound Acceptance Criteria applicable for the relevant Subproject, or

2.5.2.3 Prof. Görlich and Prof. Dobbelstein recommend in writing to discontinue a Subproject prior to achieving the Compound Acceptance Criteria applicable for the relevant Subproject based on their written statement that the goals and/or objectives of the relevant Subproject cannot be achieved based on a reasonably detailed scientific and/or technical reasoning, but BiondVax disagrees and wishes to continue such Subproject on its own, or

2.5.2.4 this RCA expires or is terminated and the JSC has not made a decision that a Subproject has achieved the Compound Acceptance Criteria applicable for the relevant Subproject until expiry or termination of this RCA (without prejudice to BiondVax’s right to exercise its Option for any such Subproject at any time in accordance with Section 9).

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2.5.3 In any case of completion or termination of a Subproject, the joint research activities of the Parties in the course of the Collaboration Project with respect to such Subproject shall be terminated, and any funds provided by BiondVax for the Collaboration Project shall be used henceforth for the remaining Subprojects. The completion or termination of a Subproject shall have no impact on the term or termination of another Subproject.

2.5.4 In case of termination of a Subproject according to Section 2.5.2.1, or if BiondVax does not exercise its Option for a Subproject, Section 9.4 shall apply.

2.5.5 In case of termination of a Subproject according to Section 2.5.2.3, BiondVax may request from MPG and UMG (aa) the assignment of their ownership shares in any Target-specific Nanobody Technology within Sole MPG/UMG Collaboration Technology and Joint Collaboration Technology created in the relevant Subproject, and (bb) the grant of a non-exclusive license, which shall be exclusive for the Target pursued in the relevant Subproject, under any item of Enabling Nanobody Technology within the Background Technology MPG/UMG, the Sideground Technology MPG/UMG introduced for the relevant Subproject in accordance with Section 2.10.3, Sole MPG/UMG Collaboration Technology and Joint Collaboration Technology created in the relevant Subproject, both in return for a fair and reasonable participation of MPG and UMG in future revenues received by BiondVax from the commercialization of the relevant Subproject. For the avoidance of doubt, when determining the fair and reasonable participation of MPG and UMG, it shall be considered inter alia the importance of Intellectual Property Rights of MPG/UMG relative to Intellectual Property Rights of BiondVax as well as the activities, costs and expenses undertaken by BiondVax to achieve the level of maturity of the relevant Subproject at the time of commercialization of the relevant Subproject. The Parties understand that said participation of MPG and UMG shall not exceed [***]% of the payments received by BiondVax from the commercialization of the relevant Subproject in case BiondVax sublicenses the Product resulting from such Subproject, or [***]% of the royalties that should have been received by MPG and UMG under the Sample License Agreement in case BiondVax or its Affiliates commercializes a Product resulting from such Subproject by their own. Such request shall be made by BiondVax within [***] of receipt, in writing, by BiondVax of (i) the reasoning in reasonable detail by Prof. Görlich and Prof. Dobbelstein for the termination of the said Subproject as per Section 2.5.2.3, (ii) the complete Subproject Technology Compilation Document (including the “Tech File”) to be compiled together for such Subproject according to Section 2.10, and (iii) the complete Subproject documentation, all to the extent generated and/or available at the time of the respective written statement of Prof. Görlich and Prof. Dobbelstein pursuant to Section 2.5.2.3.

2.6 Amendment of Target List. If a Subproject fails to achieve the Compound Acceptance Criteria within the agreed timeline and/or is abandoned by the decision of the JSC, the Parties may, upon mutual written agreement, replace such Target by adding a new specific molecular target (which shall, upon such replacement, qualify as “Target” for the purpose of this RCA) to the Target List and by adding a respective Project Plan for such new Target. BiondVax is entitled to request a refill of the Target List by new specific molecular targets if less than 4 (four) Subprojects have achieved the Compound Acceptance Criteria applicable for the relevant Subprojects, provided, however, that a maximum of 3 (three) refills by new specific molecular targets shall apply. For the avoidance of doubt, any Subproject terminated in accordance with Section 2.5.2.3 shall qualify as a Subproject which has not achieved the Compound Acceptance Criteria irrespective if BiondVax makes or has made the request according to Section 2.5.5 for such Subproject. The Parties will discuss in good faith and agree on any reasonable adjustments of the funding amount caused by such refills, and if despite such good faith discussions, no agreement on funding is reached, the respective new specific molecular target in question may not be used as replacement or refill. In any case of such replacement of a Target by a new specific molecular target to be pursued in the course of the Collaboration Project, the Target List shall be updated in writing and the updated Target List (that contains such new specific molecular target) shall be added to this RCA.

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2.7 Exclusivity. During the term of this RCA, (i) MPG (only with respect to the Görlich Department) and UMG (only with respect to the Dobbelstein Department) grant BiondVax exclusivity with respect to the generation and initial validation and characterization of Nanobodies against/relating to all Targets on the Target List (as might be amended in accordance with this RCA), and (ii) the Görlich Department and the Dobbelstein Department will collaborate only with BiondVax regarding the generation, research and development of Nanobodies against/relating to the Targets on the Target List (as might be amended in accordance with this RCA). For the avoidance of doubt, if a Target is no longer covered by the Target List because it was replaced by a new specific molecular target according to Section 2.6, or the relevant Target is no longer pursued in the course of the Collaboration Project because of completion or termination of the relevant Subproject according to Section 2.5, BiondVax’s exclusivity shall end for such Target; provided, however, that in case of termination of a Subproject according to Section 2.5.2.3, the exclusivity for such Target shall continue to apply for 1 (one) year after receipt of the respective transfer and/or license request of BiondVax with respect to the respective Target-specific Nanobody Technology and respective Enabling Nanobody Technology of the relevant Subproject pursuant to Section 2.5.5. For the further avoidance of doubt, if any new specific molecular target is added to the Target List (as refill or replacement) according to Section 2.6, BiondVax’s exclusivity shall extend to such Target from the date of the respective decision/mutual agreement of the Parties to add it to the Target List until the completion or termination of the relevant Subproject in accordance with this RCA.

2.8 Mutual Noticing. The Parties agree to keep each other timely informed on any material information, issues, problems or other developments that they get aware of and that may have a material impact on the Collaboration Project and/or any Subproject.

2.9 Material Transfer. In the case that a Party provides to another Party Material under this RCA, the following shall apply:

2.9.1 Except to the extent otherwise provided for in this RCA, the receiving Party acknowledges and accepts that any Material is experimental in nature and may have hazardous properties, and is provided without warranty of merchantability or fitness for a particular purpose or any other warranty, express or implied, and without any guarantee that the use of such Material will not infringe any Intellectual Property Right of Third Parties, and, notwithstanding compliance with any obligation under this RCA (including under Section 2.8), agrees that in no event shall the providing Party be liable for any use of the Material or for any damages, of whatsoever kind or nature, which may arise from or in connection with receiving Party´s receipt, use, handling or storage of the Material, except to the extent that such damages are caused by the providing Party´s gross negligence or willful misconduct.

2.9.2 Except to the extent otherwise provided for in this RCA, the receiving Party shall keep the providing Party indemnified against any damages which might be incurred in the course of or as a result of the receipt, use, handling or storage of the Material by the receiving Party, except to the extent that such damages are caused by the providing Party´s gross negligence or willful misconduct.

2.9.3 The providing Party shall inform the receiving Party of any hazardous properties of the Material known to the providing Party at the date of the transfer of the Material.

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2.10 Identification and Qualification of Collaboration Technology, Background Technology MPG/UMG and Sideground Technology MPG/UMG in each Subproject.

2.10.1 Identification and Qualification of Collaboration Technology. The Parties shall for each Subproject, as a general rule on a quarterly basis, but at the latest within 60 (sixty) days after the completion or termination of the relevant Subproject, in good faith (i) identify and describe the respectively generated Sole MPG/UMG Collaboration Know-how, the respective Sole BiondVax Collaboration Know-how, and the respective Joint Collaboration Know-how, and (ii) list the respective Sole MPG/UMG Collaboration Patent Rights, the Sole BiondVax Collaboration Patent Rights and the respective Joint Collaboration Patent Rights in the Subproject Technology Compilation Document. The Parties shall agree in good faith on an on-going basis if and to what extent any such item of Collaboration Technology for the relevant Subproject qualifies as Target-specific Nanobody Technology or Enabling Nanobody Technology according to the criteria set forth in the respective definitions of these terms, and shall include it into the Subproject Technology Compilation Document for the relevant Subproject. Such Collaboration Technology that has been mutually qualified as Target-specific Nanobody Technology or Enabling Nanobody Technology will be included into the relevant license agreement upon BiondVax’s respective exercise of the Option in accordance with Section 9

2.10.2 Identification and Qualification of Background Technology. MPG and UMG shall, in in good faith and using reasonable efforts, during the conduct of each Subproject and at the latest upon the completion or termination of the relevant Subproject according to the relevant Project Plan, identify and describe items of Background Technology MPG/UMG that might, in their reasonable view, be qualified as Enabling Nanobody Technology for each relevant pursued Subproject according to the criteria set forth in the respective definition of this term. After such identification, the Parties shall agree in good faith if and to what extent such items of Background Technology MPG/UMG for the relevant Subproject qualifies as Enabling Nanobody Technology according to the criteria set forth in the respective definition of this term, and shall include it into the Subproject Technology Compilation Document for the relevant Subproject. The Subproject Technology Compilation Document for each Subproject shall be updated during the course of a Subproject if necessary, and shall be finalized, also with respect to such Background Technology MPG/UMG that has been mutually qualified as Enabling Nanobody Technology, at the latest within 60 (sixty) days after the completion or termination of the relevant Subproject. Such Background Technology MPG/UMG that has been mutually qualified as Enabling Nanobody Technology will be included into the relevant license agreement upon BiondVax’s respective exercise of the Option in accordance with Section 9.

2.10.3 Identification, Introduction and Qualification of Sideground Technology. As a general rule, MPG and/or UMG will not introduce Sideground Technology MPG/UMG into a Subproject. If MPG and/or UMG intend to introduce Sideground Technology MPG/UMG into a Subproject, during the term of the relevant Subproject, they shall identify and describe items of Sideground Technology MPG/UMG that might, in their reasonable view, be necessary for the performance of the relevant Subproject and that might, in their reasonable view, be qualified as Enabling Nanobody Technology according to the criteria set forth the respective definition of this term. Such Sideground Technology MPG/UMG may be introduced by MPG and UMG into the relevant Subproject, provided that BiondVax has not objected to such introduction within 60 (sixty) days after being notified in writing of such Sideground Technology MPG/UMG. During said 60 (sixty) days objection period, the Parties shall mutually agree in good faith on fair market terms (by adapting the license fees scheme contained in the Sample License Agreement) that shall apply in case BiondVax exercises its Option for such Sideground Technology MPG/UMG mutually qualified as Enabling Nanobody Technology. In case such agreement on fair market terms has been reached, such Sideground Technology MPG/UMG shall be introduced into the relevant Subproject and shall be included into the Subproject Technology Compilation Document for the relevant Subproject.

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The Subproject Technology Compilation Document for each relevant Subproject shall be updated within 60 (sixty) days after any Sideground Technology MPG/UMG has been introduced in accordance with this Section 2.10.3, and shall be finalized also with respect to such Sideground Technology MPG/UMG that has been mutually qualified as Enabling Nanobody Technology. Such Sideground Technology MPG/UMG that has been mutually qualified as Enabling Nanobody Technology will be included into the relevant license agreement upon BiondVax’s respective exercise of the Option in accordance with Section 9.

2.10.4 Documentation. The document containing the technology information compiled together for each Subproject according to this Section 2.10 (the “Subproject Technology Compilation Document”) shall have substantially the format as attached as Appendix 2.10, and shall also serve as basis for the respective appendices of the Sample License Agreement if BiondVax exercises its Option with respect to the relevant Subproject and the respective Target-specific Nanobody Technology and Enabling Nanobody Technology. As a general rule, the JSC shall compile an update of such Subproject Technology Compilation Document for each Subproject on a quarterly basis, even if it is still blank or unamended.

3. PROJECT GOVERNANCE

3.1 Joint Steering Committee / JSC. In due time after the Effective Date, the Parties will constitute a joint steering committee (the “Joint Steering Committee” or “JSC”). The JSC will have up to 6 (six) members, up to 3 (three) nominated by BiondVax, and up to 3 (three) nominated jointly by MPG and UMG.

The initial JSC members are:

● for MPG/UMG: Prof. Dr. Dirk Görlich (MPI-MS) and Prof. Dr. Matthias Dobbelstein (UMG), and, as they deem appropriate, a person from MPI-MS performing the Collaboration Project and

● for BiondVax: its CEO Mr. Amir Reichman, CSO Dr. Tammy Ben YedidyaYedidia and Chairman of the Board of Director Mark Germain

Each of BiondVax and MPG/UMG may, in its sole discretion and at any time, upon written notice to the other Parties, withdraw one or more of the JSC members nominated by it, and nominate new members as replacement. Upon mutual agreement, the JSC may invite additional representatives from each of the Parties, or external persons, to join the JSC meetings in accordance with the actual agenda and needs. In its first meeting, the JSC shall agree upon a member that chairs the JSC.

3.2 JSC Responsibilities. The JSC is responsible for the supervision of the conduct of the Collaboration Project, as well as for a coordinated communication between the Parties.

The JSC shall be responsible and competent for the following:

3.2.1 Exchange scientific and technical information relating to the Collaboration Project, and review and discuss research data for each Subproject;

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3.2.2 Approve the presentation of the results of the Collaboration Project per each Subproject for seeking the decision for the start of the next phase of the relevant Subproject according to the Project Plan for such Subproject;

3.2.3 Discuss the workflow and, in case a Subproject faces major obstacles, discuss in good faith an appropriate re-allocation of scientific resources for carrying out the Subprojects according to the Project Plan in the course of the Collaboration Project;

3.2.4 Ensure the timely execution of the Subprojects and the overall Collaboration Project;

3.2.5 Discuss and approve the outsourcing and/or subcontracting of any activity to be conducted in the relevant Subproject or the overall Collaboration Project to any Third Party as appropriate;

3.2.6 Advise and assist in the resolution of scientific or technical difficulties;

3.2.7 Compile and update on an on-going basis the Subproject Technology Compilation Document for each Subproject according to Section 2.10;

3.2.8 After successful completion or termination of a Subproject, compile the final Subproject Technology Compilation Document (including the “Tech File” as specified in Appendix 2.10) and the final report according to Section 4.5;

3.2.9 Discuss and make suggestions for amendments and further definition of the Compound Acceptance Criteria for any Subproject;

3.2.10 Discuss and decide on cost-neutral and lab resource-neutral changes or amendments of the Project Plan for any Subproject (for clarity, cost-bearing or lab resource changes or amendments of the Project Plan for any Subproject require the agreement of the Parties), and properly document the respective changes or amendments of the Project Plan for each Subproject;

3.2.11 Decide on achievement of the Compound Acceptance Criteria applicable to a Subproject;

3.2.12 Decide to abandon a Subproject (i) because it has failed to achieve the Compound Acceptance Criteria applicable for the relevant Subproject within the agreed timelines or for other important reasons, or (ii) upon request of BiondVax; and

3.2.13 Discuss and make suggestions for the patent filing and publication strategy for any Collaboration Technology in consultation with the Parties’ patent attorneys, unless a patent committee is formed by the Parties upon suggestion of the JSC.

The JSC shall have no authority to (i) amend this RCA; (ii) determine whether or not a breach of this RCA has occurred; (iii) alter the rights and obligations of the Parties as set out in this RCA; (iv) make decisions about cost-bearing or non-neutral lab resource changes or amendments of the Project Plan of any Subproject, which decisions require an amendment of the Project Plan of the relevant Subproject by approval of the Parties, (v) amend or further define the Compound Acceptance Criteria for any Subproject, or (vi) make decisions about the patent filing and publication strategy, which decisions are the sole right of the Parties in accordance with this RCA.

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3.3 Voting. The JSC members nominated by BiondVax shall together have 1 (one) vote, and the JSC members nominated by MPG/UMG shall together have 1 (one) vote. The JSC shall make its decisions unanimously. Decisions may be made in meetings, or outside of meetings in writing through circular procedure if no JSC member objects to such circular procedure. In case of disagreement between the JSC members nominated by BiondVax and the JSC members nominated by MPG/UMG on a certain topic, the matter shall be referred to the Parties for resolution in accordance with the dispute resolution mechanism under this RCA; provided, however, that BiondVax will have the final say regarding decisions that have an impact on the target product profile, and/or on the research funding to be provided by BiondVax under this RCA, ensuring that any such veto decision does not interfere with MPG’s and UMG’s academic freedom and ethical standards.

3.4 Meetings. The JSC shall meet 4 (four) times per calendar year, unless otherwise agreed by the Parties. Each JSC member may, in case of urgent matters, invite for an extra-ordinary JSC meeting. A JSC meeting may be held in person as well as by phone, internet-based conference systems or videoconference. The venue of the meeting shall be at the premises of MPI-MS/UMG, unless otherwise agreed on between the Parties. In case of unavailability, a Party shall nominate a member of his/her team, who is sufficiently qualified and experienced in the field of the Collaboration Project, to attend the JSC meeting as a one-time replacement, provided that this replacement person is bound to confidentiality and is sufficiently briefed before participation.

3.5 Organization of Meetings and Minutes. The chair of the JSC shall organize the JSC meetings and draft an agenda in due time in advance before the respective JSC meeting is scheduled, on the basis of topics proposed by JSC members. Such agenda shall include timely updates on the work being performed in the course of the Collaboration Project in each Subproject according to the Project Plan applicable to the relevant Subproject (as might be amended from time to time in accordance with this RCA). The chair shall circulate the agenda and slides containing such updates, including all relevant data, at least 48 (forty-eight) hours before each meeting of the JSC. The chair is also responsible to draft the minutes of the JSC meeting to be provided to the other JSC members within 1 (one) week after a JSC meeting has taken place, and the other JSC members may request changes or amendments to the draft minutes within 1 (one) week after receipt of the draft minutes. The draft minutes shall be supplemented by all presentations held at the meeting or other relevant documentation presented during the meeting. The minutes shall include a summary of the matters discussed, decisions made and actions/to-do’s agreed, and shall be considered final, once approved by the JSC, which approval shall be deemed to be given if no JSC member objects to the draft minutes within 1 (one) week after receipt. If changes or amendments to the Project Plan for a Subproject are approved by the JSC in accordance with this Section 3, such changed or amended Project Plan shall be signed by all members of the JSC, and shall be attached to the respective meeting minutes. For the avoidance of doubt, the chair of the JSC may, in its reasonable discretion, involve his/her personal assistant or secretary for the purpose of organizing and taking the minutes of JSC meetings.

4. COLLABORATION PERFORMANCE AND DOCUMENTATION

4.1 Performance of Work Packages. Each Party will perform its work packages in each Subproject in the course of the Collaboration Project in accordance with the Project Plan applicable to the relevant Subproject (which might be amended from time to time in accordance with this RCA) at its own responsibility using its resources. Each Party will use reasonable efforts to provide deliverables in the timeframes proposed in the Project Plan applicable to the relevant Subproject (which might be amended from time to time in accordance with this RCA). Each Party shall, in the performance of its obligations under this RCA, comply with all applicable legal provisions, especially safety regulations and laws for the protection of animals.

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4.2 Subcontractors. A Party may, in its reasonable discretion, have some of its allocated work packages performed by one or more Subcontractors (e.g. contract research organizations, service providers or collaboration partners), provided that (i) none of the rights of the Parties under this RCA are adversely affected as a result of such subcontracting, (ii) any Subcontractor to whom Confidential Information is disclosed shall be bound by confidentiality and restricted use obligations at least as restrictive as those contained in this RCA, (iii) the subcontracting Party (or its Affiliates) shall use reasonable efforts to achieve that (aa) the Subcontractor performs its respective services for the subcontracting Party (or its Affiliates) on a fee-for-service or substantially similar basis, and (bb) the Subcontractor is obliged, fully paid-up by the service fee or similar, to assign, or exclusively license, to the subcontracting Party (or its Affiliates), subject to customary retained rights for research purposes, any Patent Rights for inventions generated by the Subcontractor in performing its services for the subcontracting Party (or its Affiliates). If the subcontracting Party (or its Affiliates) is not able to achieve the requirements described in (iii), it shall first, before entering into any agreement with the Subcontractor, inform the other Parties hereof, and the Parties shall discuss in good faith if and under what terms such Subcontractor may be involved into the Collaboration Project. For clarity, any activity performed by Subcontractors shall, for the purpose of this RCA, be considered to have been performed by the subcontracting Party.

4.3 Documentation. The Parties will maintain appropriate documentation about their conduct of each Subproject in the course of the Collaboration Project, and shall comply with all applicable laws, rules and regulations in this respect. In particular, each Party shall ensure that on a Subproject-by-Subproject basis and relating to the generated Nanobodies, all data, results and tasks to be performed or procured by or on behalf of such Party in conduct of its activities in the course of the Collaboration Project are promptly documented in experimental lab-books in accordance with the applicable standards and in other form in order to ensure that the information required for the Compound Acceptance Criteria applicable for the relevant Subproject, and for the relevant Subproject Technology Compilation Document (including the “Tech File”) as specified in Appendix 2.10, can be compiled jointly by the JSC members in due time, and, upon reasonable request of the other Parties, such documentation shall be provided by such Party in due time.

4.4 Communication. The Parties shall use reasonable efforts to execute their tasks defined in the Project Plan applicable to the relevant Subproject (which might be amended from time to time in accordance with this RCA) within the timelines as indicated in the Project Plan. In case of necessary deviations from the Project Plan (including delays, if any), the JSC shall promptly inform the Parties accordingly, and provide suitable suggestions for solving these problems.

4.5 Reporting. The project teams of the Parties shall work together in good faith in order to, on a quarterly basis and on a Subproject-by-Subproject basis, provide to the JSC reports showing the research performed, the research results obtained (if any), the research goals achieved (if any), the deliverables (foreseen in the Project Plan applicable for the relevant Subproject) generated (if any), and any obstacles and roadblocks. The format and details of such research reports have to be agreed in good faith between the Parties. In due time, but at the latest 60 (sixty) days after the completion or termination of any Subproject according to Section 2.5, the JSC members shall jointly compile together (with assistance of the Parties’ project teams) and provide a final written report to the Parties summarizing in reasonable and meaningful detail the work packages performed in such Subproject under the applicable Project Plan and the results achieved (including a final version of the Subproject Technology Compilation Document for the Subproject compiled together and updated in accordance with Section 2.10).

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5. FINANCIAL FUNDING OF COLLABORATION PROJECT AND PAYMENT TERMS

5.1 Project Costs of BiondVax. During the Collaboration Project, BiondVax shall fully bear its own project costs for the activities performed by or on behalf of BiondVax as outlined in the Project Plan, including costs of BiondVax’ Affiliates and Subcontractors.

5.2 Funding of Project Costs of MPG and UMG. [***]

5.3 Payment Procedure. [***]

5.4 Value Added Tax. Any amounts mentioned under this RCA and to be paid by BiondVax to MPG/MPI-MS are net and exclusive of any value added tax (VAT) or similar tax. If any such tax is imposed upon any payments to be made by BiondVax to MPG/MPI-MS under this RCA, BiondVax shall pay such tax to MPG/MPI-MS in addition to the amount mentioned in this RCA, upon receipt of a proper tax invoice from MPG/MPI-MS where any value added tax (VAT) amount is shown separately in accordance with the requirements of applicable laws.

5.5 Audit. BiondVax shall have the right to arrange for an audit of the books and records of MPG (MPI-MS, Görlich Department), and MPG/MPI-MS shall have the right to arrange for an audit of the books and records of UMG (Dobbelstein Department), by an independent certified public accounting firm for purposes of confirming the appropriateness of the spending of the research funding provided by BiondVax for the Subprojects conducted in the course of the Collaboration Project. BiondVax acknowledges that certain resources already existing at MPI-MS and/or UMG may also be used for the Collaboration Project, that the funding provided by BiondVax will be used to expand the capacities of MPI-MS and UMG to allow the performance of the Collaboration Project, and that certain resources funded by BiondVax under this RCA may also be used by MPI-MS and/or UMG outside of the Collaboration Project; provided, however, that the aforementioned use of resources provided by MPG, by BiondVax and by Third Parties to MPI-MS will be in compliance with MPI-IS’ internal auditing rules. Any audit may only be made once per calendar year during normal business hours and upon mutually agreed dates. Any breach of MPG/MPI-MS or UMG in the relationship between MPG and UMG shall not give them a right to terminate this RCA. Any audit by BiondVax of MPG (MPI-MS, Görlich Department), and any audit by MPG/MPI-MS of UMG (Dobbelstein Department) requested by BiondVax, shall be at BiondVax’ expense; any audit by MPG of UMG (Dobbelstein Department) conducted by MPG on its own decision (i.e. without request of BiondVax) shall be at MPG’s expense. MPG (MPI-MS, Görlich Department) and UMG (Dobbelstein Department) are required to retain original invoices of Subcontractors for a period of 2 (two) years after the termination or expiration of this RCA.

6. CONFIDENTIALITY

6.1 Confidentiality Obligation. The Receiving Party shall treat confidential the Confidential Information of the Disclosing Party during the Term and for 5 (five) years thereafter. In maintaining in confidence the Confidential Information of the Disclosing Party, the Receiving Party shall use not less than the efforts it uses to maintain in confidence its own information of a confidential and/or proprietary nature of similar kind and value; however, the Receiving Party shall in no event use less than reasonable efforts. The Receiving Party may not disclose the Confidential Information of the Disclosing Party to any Third Party without the prior written consent of the Disclosing Party, except for expressly permitted disclosures as set forth in Section 6.3 below. The Receiving Party may not use the Confidential Information of the Disclosing Party for any purposes other than those necessary to directly further the purpose of this RCA. For the avoidance of doubt, any Confidential Information pertaining or relating to the Target-specific Nanobody Know-how or the Enabling Nanobody Know-how shall be solely and exclusively treated in accordance with the provisions of the relevant license agreement from the date of its conclusion after exercise of the Option for the relevant Subproject in accordance with Section 9.

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6.2 Appropriate Measures. The Receiving Party shall take all appropriate steps, and shall implement all appropriate safeguards, to prevent the unauthorized use or disclosure of any of the Disclosing Party’s Confidential Information. The Receiving Party shall furnish the Disclosing Party with immediate written notice of any unauthorized use or disclosure of any of the Disclosing Party’s Confidential Information and shall take all actions that the Disclosing Party reasonably requests in order to prevent any further unauthorized use or disclosure of the Disclosing Party’s Confidential Information.

6.3 Permitted Disclosures. The Receiving Party may disclose the Confidential Information of the Disclosing Party:

6.3.1 to its employees (including its members of the management or board) on a need-to-know basis, provided that such individuals are bound by confidentiality obligations at least as restrictive as those set forth in this RCA;

6.3.2 [***];

6.3.3 to regulatory authorities in connection with filings for regulatory approval, provided that such disclosures may be made only to the extent reasonably necessary to make such filings;

6.3.4 to Affiliates and Subcontractors on a need-to-know basis, provided that such Affiliates and Subcontractors are bound by confidentiality obligations at least as restrictive as those set forth in this RCA;

6.3.5 to Third Party individuals with a professional obligation of secrecy (e.g. patent attorneys, attorneys-at-law, certified public accountants);

6.3.6 [***];

6.3.7 if such disclosure is required by court order, order of competent authorities, law, rules or regulations (including, without limitation, by rules or regulations of any securities exchange); in such case and prior to such disclosure, the obligated Party promptly notifies the Disclosing Party of such requirement, and provided further that the obligated Receiving Party shall assist the Disclosing Party in any objection against and attempt to limit the relevant disclosure order and that the obligated Receiving Party will furnish only that portion of the Disclosing Party’s Confidential Information that Receiving Party’s legal counsel reasonably determines is legally required to furnish.

6.4 Terms of this RCA. The Parties acknowledge that the existence and all terms and conditions of this RCA shall be treated as Confidential Information of the Parties. Notwithstanding the foregoing, BiondVax may disclose this RCA on a confidential basis to its Affiliates and in accordance with Sections 6.3.5, 6.3.6 and 6.3.7, MPG may disclose this RCA on a confidential basis to MPI-MS and to MI, and UMG may disclose this RCA on a confidential basis to Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts and to MBM.

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6.5 Return of Confidential Information. After the termination or expiration of this RCA, each Party shall, upon request of the Disclosing Party, return or destroy all documents (including copies) of the Confidential Information received from the Disclosing Party, except that each Party may retain 1 (one) copy for legal and archiving purposes. For the avoidance of doubt, this return and destruction obligation shall not apply to BiondVax to the extent the documents (including copies thereof) contain information which are pertaining or relating to the Target-specific Nanobody Technology or the Enabling Nanobody Technology licensed to BiondVax under the relevant license agreement concluded after exercise of the Option for the relevant Subproject in accordance with Section 9 or transferred or licensed to BiondVax upon BiondVax’s request in accordance with Section 2.5.5. Each Party shall not be required to return or destroy any Confidential Information that is stored in any automatic electronic archiving or back-up system where it is not reasonably practicable to retrieve and delete the same, provided that such information is kept confidential in accordance with the terms of this RCA.

6.6 Use of Names. Except as expressly set forth otherwise by this RCA or necessary for the conduct of this RCA or the Collaboration Project (including any Subproject), respectively, no Party may use the other Party´s name, trademark, logo, or tradenames, or similar, in any press release or public announcement, or in promotion of any product or service, without prior written consent of the respective other Party. Either Party does not need to obtain explicit prior approval for each individual use of another Party’s name, trademark or logo if the Party uses the name, trademark or logo of such other Party substantially consistent with the presentation and format and in similar context as previously approved by such other Party. However, the other Party may reasonably object against such use for important reason and the relevant Parties shall discuss in good faith any amendment the using Party shall make.

6.7 Transparency. UMG intends to ensure transparency in the (clinical) research field. Therefore, UMG will publish the following information of this RCA on its homepage in the internet: 1. University (=University Medical Center Göttingen), 2. Participating Department/Institute, 3. Name of Contractor, 4. Project Title, 5. Term of this RCA, and 6. Transfer of Values in case of participation of UMG as trial site in clinical trials.

6.8 Press Release. Subject to the prior written approval of the other Parties, not to be unreasonably withheld or delayed, each Party may make public announcements with respect to the nature, the general subject matter and the general structure of this RCA (including the terms of the potential license agreement as well as the number of intended Subprojects). Each Party shall provide to the other Parties a copy of any such intended public announcement as soon as reasonably practicable under the circumstances, but not less than 2 (two) weeks, prior to its scheduled release. The other Parties may review and request changes to any announcement, and the Parties shall work together in good faith to come to a mutually acceptable version of such public announcement. Notwithstanding anything to the contrary herein, if the Parties do not agree on a mutually acceptable version of such public announcement, no public announcement may be made. However, MPG and UMG acknowledge that BiondVax as a company listed at the NASDAQ has to comply with certain publication, information and transparency obligations under the applicable laws and nothing herein shall prevent BiondVax from making any public announcement to the extent and at the time required under any publication, information or transparency obligation according to the applicable laws (e.g. public company obligations under U.S. SEC Rules) and such public announcement shall not be regarded a breach of this Agreement, even if BiondVax has not obtained explicit prior consent of MPG and/or UMG for such public announcements.

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7. PUBLICATIONS

With respect to any item of Collaboration Know-how pertaining or relating to the Target-specific Nanobody Know-how or the Enabling Nanobody Know-how which are licensed under the relevant license agreement concluded after exercise of the Option for the relevant Subproject in accordance with Section 9, the provisions relating to intended publications and presentations of such license agreement shall be solely and exclusively apply from the date of its conclusion. For all other items of Collaboration Know-how and after expiration or termination of the relevant license agreement also with respect to items of Collaboration Know-how previously licensed under such license agreement, the following shall apply:

7.1 Intended Publication. The Parties recognize that (i) MPG and/or UMG, as applicable, have a significant scientific interest in publishing the Sole MPG/UMG Collaboration Know-how and/or the Joint Collaboration Know-how, and (ii) BiondVax has a significant business interest in maintaining the confidentiality of the Sole MPG/UMG Collaboration Know-how and the Joint Collaboration Know-how as well its own Sole BiondVax Collaboration Know-how. In order to reasonably balance such interests, MPG and UMG acknowledge that it requires BiondVax’s prior review of publications that MPG (through the MPI-MS) and/or UMG, as applicable, intend to make that would include the Sole MPG/UMG Collaboration Know-how and/or the Joint Collaboration Know-how, and BiondVax acknowledges that it may delay only for good cause. MPG (through the MPI-MS) and/or UMG, as applicable, shall therefore make available to BiondVax a copy of any intended abstract, manuscript or presentation that would include any Sole MPG/UMG Collaboration Know-how and/or Joint Collaboration Know-how (the “Intended Publication”) no less than 12 (twelve) days prior to the intended submission of the manuscript or other draft of its Intended Publication to the relevant Third Party (e.g. editorial board or conference organizer).

7.2 Review. BiondVax shall have 10 (ten) days from its receipt of the Intended Publication to notify MPG (through the MPI-MS) and/or UMG, as applicable, in writing of any specific reasonable objections to the disclosure. In the event BiondVax makes such reasonable objections, MPG (through the MPI-MS) and/or UMG, as applicable, agrees to not submit and publish the Intended Publication, or to not submit and make the presentation containing the objected-to information, as applicable, for additional 30 (thirty) days from its receipt of BiondVax’s notice. During such 30-day-period, the Parties will agree in good faith on reasonable redactions and/or revisions to the Intended Publication to satisfy BiondVax’s reasonable concerns. Specifically, if the Intended Publication (i) would result in the disclosure of Confidential Information of BiondVax (including any item of Sole BiondVax Collaboration Know-how or any item of Know-how included in Background Technology BiondVax or Sideground Technology BiondVax), upon request of BiondVax, MPG (through the MPI-MS) and/or UMG, as applicable, shall modify the Intended Publication to avoid such disclosure, but the Parties shall use reasonable efforts to provide scientifically meaningful equivalent information in such Intended Publication, or (ii) would jeopardize the patentability of any inventions that may lead to Collaboration Patent Rights, upon request of BiondVax, MPG (through the MPI-MS) and/or UMG, as applicable, shall delay the Intended Publication for a period of 60 (sixty) instead of 30 (thirty) days, in order to allow BiondVax (and/or MPG and/or UMG, as applicable) to file a patent application.

7.3 Revised Intended Publication. MPG (through the MPI-MS) and/or UMG, as applicable, shall delete from the originally proposed Intended Publication any Confidential Information of BiondVax (including any item of Sole BiondVax Collaboration Know-how or any item of Know-how included in Background Technology BiondVax or Sideground Technology BiondVax), and any other reasonably objected-to information, and shall provide to BiondVax such revised Intended Publication in due time after the applicable delay periods as set forth in Section 7.2 for final review. BiondVax shall inform MPG (through the MPI-MS) and/or UMG, as applicable, in writing within 10 (ten) days after receipt of such revised Intended Publication whether or not BiondVax has further objections. If BiondVax does not object within such time period, MPG (through the MPI-MS) and/or UMG, as applicable, may submit such revised Intended Publication for publication, or present such revised Intended Publication. If BiondVax objects within such time period, BiondVax shall inform MPG (through the MPI-MS) and/or UMG, as applicable, in its objection notice of the good cause-reasons for objecting, and BiondVax and MPG (through the MPI-MS) and/or UMG, as applicable, shall discuss in good faith, within 10 (ten) days after such further objection notice, reasonable and meaningful redactions and/or revisions to the revised Intended Publication. MPG (through the MPI-MS) and/or UMG, as applicable, shall take into due consideration the redactions and/or revisions reasonably proposed by BiondVax. After such 10-day-period, MPG (through the MPI-MS) and/or UMG, as applicable, may submit and publish the revised Intended Publication (as further redacted or revised in MPI-MS’s and/or UMG’s, as applicable, reasonable discretion), provided that any Confidential Information of BiondVax (including any item of Sole BiondVax Collaboration Know-how or any item of Know-how included in Background Technology BiondVax or Sideground Technology BiondVax) is deleted from the submitted Intended Publication.

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7.4 Intended Publication by BiondVax. If BiondVax has a reasonable interest in publishing the Sole MPG/UMG Collaboration Know-how and/or the Joint Collaboration Know-how, BiondVax shall inform the Görlich Department and the Dobbelstein Department of such intent in due time. Sections 7.1 through 7.3 shall apply accordingly.

8. INTELLECTUAL PROPERTY RIGHTS AND COMMERCIAL EXPLOITATION

8.1 Background Technology.

8.1.1 Ownership of Background Technology. MPG and/or UMG, as applicable, is/are, and shall remain, the sole/joint owner of all right, title and interest in and to the Background Technology MPG/UMG, and BiondVax agrees that, except as explicitly set forth in this RCA (especially with respect to BiondVax’s Option covering any item of Background Technology MPG/UMG which is qualified mutually by the Parties in good faith as Enabling Nanobody Technology according to the criteria set forth in the respective definition), nothing contained in this RCA shall provide to BiondVax any right, title or interest in or to the Background Technology MPG/UMG. BiondVax is, and shall remain, the sole owner of all right, title and interest in and to the Background Technology BiondVax, and MPG and UMG agree that, except as explicitly set forth in this RCA, nothing contained in this RCA shall provide to MPG and UMG any right, title or interest in or to the Background Technology BiondVax.

8.1.2 Patenting of Background Technology. The Party/Parties owning the Background Technology shall be and remain solely entitled, in its/their sole discretion and on its/their own cost and expense, to file applications for Patent Rights for any inventions within its/their Background Technology, and to prosecute, maintain, abandon, defend and enforce such Patent Rights within the Background Technology. Upon and to the extent Background Technology MPG/UMG has been mutually qualified as Enabling Nanobody Technology in accordance with Section 2.10.2, MPG and UMG will inform BiondVax about any applications for Patent Rights within such Background Technology MPG/UMG. As a general rule, MPG and UMG will, to the extent reasonably practicable, file, prosecute and maintain the Patent Rights within such Background Technology MPG/UMG in the following countries: (i) United States of America, (ii) Japan, and (iii) Europe (with Italy, Spain, France, Germany and the United Kingdom). In case MPG and/or UMG decide (together or each of them separately) to abandon any Patent Rights within the Background Technology MPG/UMG that has been mutually qualified by the Parties as Enabling Nanobody Technology related to a Subproject, BiondVax shall, except for the case that MPG and/or UMG does not intend to validate a granted European patent for any country other than the countries mentioned before under (iii), be notified thereof in writing in a timely manner, and shall have the right to further prosecute, maintain and abandon such Patent Rights in such countries within the Background Technology MPG/UMG during the term of the relevant Subproject. If BiondVax exercises its Option for the relevant Subproject for which such Patent Rights of Background Technology MPG/UMG has been mutually qualified as Enabling Nanobody Technology, also such Patent Rights in countries for which BiondVax has assumed responsibility and patent costs shall become part of the respective Enabling Nanobody Technology of the respective license agreement.

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8.1.3 Mutual Project Licenses for Collaboration Project. During the Term, MPG and UMG herewith grant to BiondVax a non-exclusive, royalty-free, fully paid-up license under the Background Technology MPG/UMG for the purpose to perform BiondVax’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects. During the Term, BiondVax herewith grants to MPG and UMG a non-exclusive, royalty-free, fully paid-up license under the Background Technology BiondVax for the purpose of performing MPG’s/UMG’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects.

8.1.4 Option Exercise, Licensing. Upon and to the extent BiondVax exercises the Option for any Background Technology MPG/UMG, which is, upon such Option exercise, still qualified mutually by the Parties as Enabling Nanobody Technology in accordance with Section 2.10.2, it shall be included into the relevant license agreement, and the pre-agreed financial terms contained in the Sample License Agreement shall apply.

8.2 Sideground Technology

8.2.1 Ownership of Sideground Technology. MPG and/or UMG, as applicable, is/are, and shall remain, the sole/joint owner of all right, title and interest in and to the Sideground Technology MPG/UMG, and BiondVax agrees that, except as explicitly set forth in this RCA (especially with respect to BiondVax’s Option covering any item of Sideground Technology MPG/UMG which is qualified mutually by the Parties as Enabling Nanobody Technology according to the criteria set forth in the respective definition), nothing contained in this RCA shall provide to BiondVax any right, title or interest in or to the Sideground Technology MPG/UMG.

BiondVax is, and shall remain, the sole owner of all right, title and interest in and to the Sideground Technology BiondVax, and MPG and UMG agree that, except as explicitly set forth in this RCA, nothing contained in this RCA shall provide to MPG and UMG any right, title or interest in or to the Sideground Technology BiondVax.

8.2.2 Patenting of Sideground Technology. The Party/Parties owning the Sideground Technology shall be and remain solely entitled, in its/their sole discretion and on its/their own cost and expense, to file applications for Patent Rights for any inventions within its/their Sideground Technology, and to prosecute, maintain, abandon, defend and enforce such Patent Rights within the Sideground Technology. Upon and to the extent Sideground Technology MPG/UMG has been introduced to the Collaboration Project in accordance with the provisions in Section 2.10.3 and has been mutually qualified as Enabling Nanobody Technology in accordance with Section 2.10.3, MPG and UMG will inform BiondVax about any applications for Patent Rights within the Sideground Technology MPG/UMG. As a general rule, MPG and MPG will, to the extent reasonably practicable, file, prosecute and maintain the Patent Rights within such Sideground Technology MPG/UMG in the following countries: (i) United States of America, (ii) Japan, and (iii) Europe (with Italy, Spain, France, Germany and the United Kingdom). In case MPG and/or UMG decide (together or each of them separately) to abandon any Patent Rights within the Sideground Technology MPG/UMG that has been introduced to the Collaboration Project in accordance with the provisions in Section 2.10.3 and has been mutually qualified by the Parties as Enabling Nanobody Technology related to a Subproject, BiondVax shall, except for the case that MPG and/or UMG does not intend to validate a granted European patent for any country other than the countries mentioned before under (iii), be notified thereof in writing in a timely manner, and shall have the right to further prosecute, maintain and abandon such Patent Rights in such countries within the Sideground Technology MPG/UMG during the term of the relevant Subproject. If BiondVax exercises its Option for the relevant Subproject for which such Patent Right of Sideground Technology MPG/UMG has been mutually qualified as Enabling Nanobody Technology, also such Patent Rights in countries for which BiondVax has assumed responsibility and patent costs shall become part of the respective Enabling Nanobody Technology of the respective license agreement.

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8.2.3 Mutual Project Licenses for Collaboration Project. During the Term, MPG and UMG herewith grant to BiondVax a non-exclusive, royalty-free, fully paid-up license under the Sideground Technology MPG/UMG, which is introduced to the Collaboration Project in accordance with Section 2.10.3, for the purpose of performing BiondVax’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects. During the Term, BiondVax herewith grants to MPG and UMG a non-exclusive, royalty-free, fully paid-up license under the Background Technology BiondVax for the purpose to perform MPG’s/UMG’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects.

8.2.4 Option Exercise, Licensing. Upon and to the extent BiondVax exercises the Option for any Sideground Technology MPG/UMG, which has been introduced to the Collaboration Project in accordance with the provisions in Section 2.10.3 and is, upon such Option exercise, still qualified mutually by the Parties acting in good faith as Enabling Nanobody Technology according to the criteria set forth in the respective definition of this term, it shall be included into the relevant license agreement, and the financial terms pre-agreed mutually between the Parties for inclusion of the relevant Sideground Technology MPG/UMG into the license before introduction of the relevant Sideground Technology MPG/UMG in accordance with the provisions in Section 2.10.3 shall apply.

8.3 Collaboration Technology.

8.3.1 Ownership of Collaboration Technology. Ownership of Collaboration Technology shall be determined in accordance with the “ownership follows inventorship” rule. MPG and/or UMG, as applicable, shall own any Sole MPG/UMG Collaboration Technology. The Parties shall jointly own any Joint Collaboration Technology in accordance with their respective inventorship or intellectual contribution shares. BiondVax shall solely own any Sole BiondVax Collaboration Technology. In case a Party has / the Parties have generated Collaboration Know-how, or patentable inventions that may lead to Collaboration Patent Rights, such Party / Parties shall promptly disclose to the other Party / Parties in writing such Collaboration Know-how or inventions to determine inventorship thereof. The inventorship shall be determined in accordance with German patent law. For any invention within Joint Collaboration Technology the Parties shall facilitate the agreement of the inventors on their relevant co-inventor share; if neither the relevant inventors nor the relevant Parties can agree on the co-inventor shares, they shall be final and legally binding determined by a reputable patent attorney jointly appointed by the Parties in good faith.

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8.3.2 Claim and Remuneration of Employee Inventions. Each Party has to ensure that, to the extent legally possible, its employees, Subcontractors and Affiliates will assign any and all rights in and to the Collaboration Technology to such Party. Each Party will comply with all applicable procedures relating to such assignments mandated by applicable law (including, by way of example, the German Employees’ Invention Act (Arbeitnehmererfindungsgesetz – ArbErfG, as amended)). Each Party will be solely responsible for the remuneration of its employees with regard to any inventions made under this RCA.

8.3.3 Non-employed Participants. Each Party has to ensure that each person who performs work for, or is otherwise directly involved in, the Collaboration Project, is either an employee of such Party, or, if it is not an employee (a “Non-employed Participant”)

(a) follows such Party’s policies and procedures for reporting any Intellectual Property Rights generated in the course of the Collaboration Project (collectively, the “Non-employed Participant IP”);

(b) to the extent legally possible, assigns to such Party the Non-employed Participant’s right, title, and interest in and to all Non-employed Participant IP, in accordance with such Party’s policies and procedures;

(c) cooperates with such Party in the preparation, filing, prosecution and maintenance of any Patent Right or other rights in the Non-employed Participant IP; and

(d) is bound by obligations of confidentiality and non-use no less restrictive than those set out in this RCA.

Each Party shall be solely responsible for any inventor’s remuneration due to Non-employed Participants involved by such Party in the performance of the Collaboration Project.

8.3.4 Mutual Project Licenses for Collaboration Project. During the Term, MPG and UMG herewith grant to BiondVax a non-exclusive, royalty-free, fully paid-up license under the Sole MPG/UMG Collaboration Technology and its share in the Joint Collaboration Technology for the purpose of performing BiondVax’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects. During the Term, BiondVax herewith grants to MPG and UMG a non-exclusive, royalty-free, fully paid-up license under the Sole BiondVax Collaboration Technology and its share in the Joint Collaboration Technology for the purpose to perform MPG’s/UMG’s respective work packages under the Collaboration Project as set forth in the Project Plans applicable for the Subprojects.

8.3.5 Option Exercise, Licensing. Upon and to the extent BiondVax exercises the Option for any Sole MPG/UMG Collaboration Technology or any Joint Collaboration Technology, which is, upon such Option exercise, still qualified mutually by the Parties as Target-specific Nanobody Technology or as Enabling Nanobody Technology in accordance with Section 2.10.1, it shall be included into the relevant license agreement, and the pre-agreed financial terms contained in the Sample License Agreement shall apply.

8.3.6 Use and Exploitation of Sole MPG/UMG Collaboration Technology by MPG and UMG. During the Term and until BiondVax has exercised its Option, MPG and/or UMG must not grant any rights to the benefit of any Third Party with regard to any Sole MPG/UMG Collaboration Technology, which would adversely affect the use of such Sole MPG/UMG Collaboration Technology in the course of the Collaboration Project, or the license of such Sole MPG/UMG Collaboration Technology that qualifies as Target-specific Nanobody Technology or as Enabling Nanobody Technology to BiondVax upon exercise of the Option for a relevant Subproject.

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8.3.7 Use and Exploitation of Joint Collaboration Technology. During the Term and until BiondVax has exercised its Option:

(a) the relevant Parties shall be entitled to use the relevant item of Joint Collaboration Technology solely for internal research purposes;

(b) none of the relevant Parties may (i) sell or assign its share in the relevant item of Joint Collaboration Technology to any Third Party, or (ii) grant any licenses under the relevant item of Joint Collaboration Technology to any Third Party; and

(c) each relevant Party is entitled to grant licenses to its Affiliates and to transfer its share in any invention of the Joint Collaboration Technology or Joint Collaboration Patent Right to any of its Affiliates, provided that such Affiliate is bound on the same terms as set forth herein.

Without prejudice to either Party’s right to request the assignment of the other Party/Parties share in any Target-specific Nanobody Technology and grant of a license with respect to the other Party/Parties share in Enabling Nanobody Technology with respect to a relevant Subproject as set forth in this RCA for specific scenarios, the Parties having a co-ownership share in any Joint Collaboration Technology may enter into an assignment agreement with respect to the co-ownership share(s) to 1 (one) Party, in return for a fair and reasonable participation of the assignor Party/Parties in future licensing revenues received by the assignee Party from the commercialization of such Joint Collaboration Technology.

8.3.8 Retained Use Rights for MPG/UMG. Without prejudice to the exclusivity granted to BiondVax according to Section 2.7, each of MPG (including, without limitation, MPI-MS) and UMG retain the cost-free right to use the Collaboration Technology (i) for internal scientific research, teaching, education and publication purposes (subject to compliance with the confidentiality and publication provisions of this RCA), (ii) for scientific research collaboration purposes with academic Third Parties (subject to compliance with the confidentiality provisions of this Agreement); provided that in case of an intended research collaboration with a non-for-profit organization aiming to develop and manufacture a medicinal product in the field of any Target within the Target List (as might be amended in accordance with this RCA), BiondVax has not objected to such research collaboration for good reason within 1 (one) month after receipt of a notice from MPG or UMG, as applicable, and (iii) for patient care within the facilities of UMG (subject to compliance with the confidentiality provisions of this Agreement). If BiondVax has notified MPG and UMG that a Collaboration Compound has successfully passed the Nomination Of Pre-clinical Development Candidate, including up to 2 (two) Collaboration Compounds nominated as pre-clinical development back-up candidates, the use rights of MPG and UMG in accordance with (i) shall remain unaffected, and MPG and UMG (as applicable) shall, prior to any use of such Collaboration Compounds in accordance with (ii), discuss with BiondVax in good faith reasonable limitations, e.g. discussion of results related to such Compounds before disclosure to academic Third Parties and/or blinding of the structure of such nominated compounds (to the extent such structures are not already publicly available, e.g. through the public disclosure of Collaboration Patent Rights, or in accordance with the publication provisions of this RCA) towards academic Third Parties. For the avoidance of doubt, any retained rights for MPG and/or UMG with respect to Collaboration Technology licensed to BiondVax under the relevant license agreement concluded after exercise of the Option for the relevant Subproject by BiondVax in accordance with Section 9 shall be solely and exclusively granted according to the respective provisions in such license agreement.

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8.4 Patenting of Collaboration Patent Rights.

8.4.1 General. The Parties shall agree in good faith on an appropriate patent strategy for the Collaboration Patent Rights; as a general rule, if reasonably practicable, the Parties shall separate the patent proceedings for Collaboration Patent Rights that qualify as Target-specific Nanobody Patent Rights and that qualify as Enabling Nanobody Patent Rights, by filing separate priority applications. The Parties shall inform each other without undue delay upon receipt of the respective notice from their inventors of any invention made in the course of this RCA within the Collaboration Technology, if reasonably practicable by providing a Complete Invention Disclosure. For the purpose of this RCA the term “Complete Invention Disclosure” shall mean a description of the invention which shall include (i) the names of the inventors and, if applicable, the inventive contribution shares of the Parties to the invention, (ii) the identification of new features that may be patentable, and (iii) a reasonably detailed description of experiments made and of materials and methods used in connection with the generation of the invention. All applications for Collaboration Patent Rights shall be filed in the name and on behalf of the Party/ Parties who own the underlying invention. The Parties will consider and discuss in good faith whether such notified invention fulfills the requirements of a patentable invention, and whether and where and when an application for a Collaboration Patent Right shall be filed. To the extent Joint Collaboration Patent Rights are mutually qualified as Target-specific Nanobody Technology, BiondVax shall have the final say. In all other cases of Collaboration Patent Rights, MPG and UMG shall not unreasonably withhold their timely consent to a reasonable proposal of BiondVax after its discussion in good faith, if such proposal by BiondVax is reasonable in order to preserve MPG’s and UMG’s interests, and BiondVax’s commercial interests in the envisaged product development and commercialization under the license agreement to be concluded after BiondVax has exercised the Option. In the case the Parties have decided to apply for Collaboration Patent Rights for a notified invention, a priority patent application shall be filed at the European Patent Office, unless the Parties agree on a different patent office. Unless the Parties agree on a different patent strategy, in due time prior to the expiration of the priority year, a PCT-filing at the European Patent Office shall be made in the name of all relevant Parties designating all PCT member states using the priority of the priority European patent application, and the Parties shall further discuss in good faith on the patent strategy and subsequent patent applications arising from the PCT-filing. In light of BiondVax’s Option and of BiondVax’s payment of respective patent costs, BiondVax is entitled to request that applications for Collaboration Patent Rights are filed in specific jurisdictions.

8.4.2 Patent Drafting, Filing, Prosecution and Defense. BiondVax shall be primarily responsible, in close coordination with the Party/Parties owning the underlying invention, to prepare and draft patent applications for inventions within the Collaboration Patent Rights. Such applications for Collaboration Patent Rights will be filed and prosecuted, and granted Collaboration Patent Rights will be maintained and defended, through an external reputable patent attorney firm who will be mutually agreed upon by BiondVax and the Party/Parties owning the underlying invention, and will be retained and paid solely by BiondVax. To the extent Joint Collaboration Patent Rights are mutually qualified as Target-specific Nanobody Technology, if the Parties cannot agree in good faith discussions on such external reputable patent attorney firm within a reasonable time, BiondVax shall choose and retain the external reputable patent law firm in its reasonable discretion. In all other cases of Collaboration Patent Rights, MPG and UMG shall not unreasonably withhold their timely consent to a reasonable proposal of BiondVax after its discussion in good faith, if such proposal by BiondVax is reasonable in order to preserve MPG’s and UMG’s interests, and BiondVax’s commercial interests in the envisaged product development and commercialization under the license agreement to be concluded after BiondVax has exercised the Option. BiondVax shall procure that such external patent attorney firm provides the other Party/Parties in due time with copies of all material correspondence with the patent offices in relation with the preparation, filing, prosecution, maintenance and defense of any Collaboration Patent Right. BiondVax shall bear all costs arising from the preparing, drafting, filing, prosecution, maintenance and defense of any Collaboration Patent Right, regardless of whether such Collaboration Patent Rights comprise Sole MPG/UMG Collaboration Patent Rights or Joint Collaboration Patent Rights or Sole BiondVax Collaboration Patent Rights. In the event that any Collaboration Patent Right would cover or would disclose any Collaboration Know-how or Know-how within the Background Technology or Know-how within the Sideground Technology, prior written approval of the Party Controlling such Collaboration Know-how or Know-how within the Background Technology or Know-how within the Sideground Technology is required for filing such Collaboration Patent Right, such approval not to be unreasonably withheld by the respective Party.

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8.4.3 Cooperation. MPG and UMG on the one side, and BiondVax on the other side, will consult and cooperate with each other in the process of the preparation, drafting, prosecution, maintenance and defending of Collaboration Patent Rights, including without limitation, through the following:

(d) Providing to the other Party a Complete Invention Disclosure without undue delay after it has received an appropriate invention disclosure from its inventors;

(e) Claiming or undertaking within the timelines any act required under applicable laws which is necessary to acquire complete right and interest in any invention, and executing all papers and instruments, or requiring its employees or agents, to execute such papers and instruments, so as to effectuate the ownership of the Collaboration Patent Rights, and to enable the filing and prosecution of applications for Collaboration Patent Rights in any country;

(f) Providing copies of any applications and papers filed in connection with any Collaboration Patent Right;

(g) Promptly informing each other of any matters coming to their attention that may adversely affect the preparation, filing, prosecution or maintenance of any Collaboration Patent Right, including office actions which seem to make a grant of the claims covering other Party’s interests unlikely;

(h) Providing any and all information to aid the drafting of Collaboration Patent Right applications, the prosecution of such Collaboration Patent Right applications to patent grant and the defense of granted Collaboration Patent Rights;

(i) Completion, as necessary, of the inventorship documentation;

(j) Discussing and cooperating, as far as possible, on the obtaining of patent term extensions in all possible jurisdictions;

(k) Promptly informing the other Parties of any Third Party rights which may adversely affect the use of any Collaboration Patent Right.

8.4.4 Duty to Offer and Transfer Collaboration Patent Rights. In the event that during the Term either Party decides to not file, or to abandon, any Collaboration Patent Right owned or co-owned by such Party, this Party shall promptly inform the other Party/Parties in writing thereof, and shall, upon written request of such other Party/Parties to be delivered within sixty (60) days of receipt of such notice from such other Party/Parties, assign and transfer all of its rights and title in and to such Collaboration Patent Right) to the Party/Parties requesting the transfer. If BiondVax notifies MPG and UMG according to the foregoing sentence, BiondVax shall also transfer the prosecution to MPG and/or UMG, as applicable, if any of them requests the assignment of BiondVax’s ownership share in such Collaboration Patent Right, and upon such transfer, BiondVax’s obligation to bear the patent costs shall end. The assignor Party shall assist the assignee Party/Parties in the record of such assignment in the patent registers, including without limitation, shall execute all necessary documents to record the assignment at the patent offices. The assignor Party shall provide the assignee Party/Parties with all documents relating to the invention subject matter of the assigned Collaboration Patent Right, unless such assignee Party is not already in possession of such documents. The assignee Party/Parties shall bear all costs and expenses of the record of such assignment and shall solely bear all future patent costs becoming due and payable after such assignment.

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8.4.5 Enforcement of Collaboration Patent Rights. The Parties shall inform each other immediately and in reasonable detail about any infringement or reasonably expected infringement of a Collaboration Patent Right they become aware of. The Parties shall immediately consult and discuss in good faith the actions to be taken against the infringer. The Party/Parties solely owning the relevant infringed Collaboration Patent Right shall have the final say if an infringement action shall be initiated on its/their sole costs and expenses, while all monetary awards or settlement payments will be to the sole benefit of such Party/Parties; if MPG and/or UMG are the Party/Parties solely owning the relevant infringed Collaboration Patent Right and do not intend to initiate an infringement action, BiondVax may request to initiate such infringement action on its sole costs and expenses, subject to the approval of MPG and/or UMG (as applicable) which shall not be unreasonably withheld. In case of Joint Collaboration Patent Rights, the Parties shall discuss and agree in good faith on a joint strategy, the allocation of responsibilities, the bearing of costs, settlements, and the allocation and distribution of damages; after such agreement is reached, BiondVax may initiate an infringement action. In case of Joint Collaboration Patent Rights that are mutually qualified as Target-specific Nanobody Patent Rights, BiondVax shall have the final say if an infringement action shall be initiated on its sole costs and expenses.

8.5 Prevailing of Provisions of License Agreement. Provided that any item of Background Technology MPG/UMG, Sideground Technology MPG/UMG, Sole MPG/UMG Collaboration Technology or Joint Collaboration Technology fulfils the applicable criteria of Target-specific Nanobody Technology or Enabling Nanobody Technology according to the criteria set forth in the respective definition, and is licensed to BiondVax under a license agreement concluded after BiondVax has exercised the Option for the relevant Subproject in accordance with Section 9, the relevant provisions regarding use rights, patenting, filing, prosecution, maintenance, abandonment, defense and enforcement in the relevant license agreement shall solely and exclusively govern such licensed items of Background Technology MPG/UMG, Sideground Technology MPG/UMG, Sole MPG/UMG Collaboration Technology and Joint Collaboration Technology during the term of the relevant license agreement.

9. EXCLUSIVE OPTION FOR BIONDVAX

9.1 Option Grant. MPG and UMG hereby grant to BiondVax on a Subproject-by-Subproject basis the exclusive option to take a royalty-bearing, worldwide, sublicensable, transferable license, which shall be (i) exclusive under all right, title and share in the respective Target-specific Nanobody Technology Controlled by MPG and/or UMG at the time of option exercise, and (ii) non-exclusive, but exclusive with respect to the relevant Target pursued in the relevant Subproject, under all right, title and share in the respective Enabling Nanobody Technology Controlled by MPG and/or UMG at the time of option exercise (the “Option”).

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9.2 Option Exercise. BiondVax may, in its sole discretion, exercise the Option on a Subproject-by-Subproject basis for the relevant Background Technology MPG/UMG, the relevant Sideground Technology MPG/UMG, the relevant Sole MPG/UMG Collaboration Technology and the relevant Joint Collaboration Technology Controlled by MPG and/or UMG, each to the extent mutually qualified as Target-specific Nanobody Technology or Enabling Nanobody Technology at the time of Option exercise. BiondVax shall exercise the Option by written notice to MPG and UMG at any time during the conduct of a relevant Subproject until the expiry of the 6^th (sixth) month following the completion of the relevant Subproject according to Section 2.5.1 (i.e. decision of the JSC that the Compound Acceptance Criteria for the relevant Subproject have been achieved; for clarity, BiondVax may exercise its Option for a Subproject prior to achieving the Compound Acceptance Criteria applicable for the relevant Subproject). In the case of termination of a Subproject according to Section 2.5.2.4, BiondVax shall remain entitled to exercise the Option within 6 (six) months of receipt by BiondVax of (i) the final version of the relevant Subproject Technology Compilation Document (including the “Tech File”) to be compiled together for such Subproject according to Section 2.10, (ii) the final report to be compiled together according to Section 4.5, and (iii) the information to be provided as deliverable according to the Project Plan (as might be amended for the relevant Subproject) to the extent generated and/or available at the time of expiry or termination of this RCA.

9.3 Consequences of Option Exercise. Upon exercise of the Option by BiondVax in accordance with Section 9.2, MPG and UMG on the one side, and BiondVax on the other side, shall conclude a license agreement with the content and format as the Sample License Agreement attached as Appendix 1.40 for (and only adapted to specifics of) the relevant Subproject within sixty (60) days starting from the receipt by MPG and UMG of the Option exercise notice. The Parties agree and acknowledge that, in accordance with the qualifications pursuant to Section 2.10, the relevant Background Technology MPG/UMG, the relevant Sideground Technology MPG/UMG, which has been introduced to the Collaboration Project in accordance with the provisions in Section 2.10.3, the relevant Sole MPG/UMG Collaboration Technology and the relevant Joint Collaboration Technology Controlled by MPG and/or UMG, each to the extent mutually qualified by the Parties in good faith as Target-specific Nanobody Technology or Enabling Nanobody Technology at the time of Option exercise for the relevant Subproject, shall be defined with more particularity in said license agreement based on the respective Subproject Technology Compilation Document compiled together for the relevant Subproject in accordance with Section 2.10. In order to enable the preparation of the execution version of said license agreement for the relevant Subproject, MPG and/or UMG shall provide BiondVax with draft schedules/appendixes to said license agreement for identification of the relevant licensed Target-specific Nanobody Technology or Enabling Nanobody Technology for the relevant Subproject within forty-five (45) days after receipt of the Option exercise notice. For the avoidance of doubt, the pre-agreed financial terms and conditions contained in the Sample License Agreement attached Appendix 1.40 shall apply to all Subprojects for which BiondVax exercises the Option in accordance with Section 9.2, and irrespective of the point in time BiondVax exercises the Option in accordance with Section 9.2. Notwithstanding the foregoing, in the event that BiondVax has exercised the Option for Sideground Technology MPG/UMG, which has been introduced to the Collaboration Project in accordance with the provisions in Section 2.10.3 and has, in accordance with Section 2.10.3, been mutually qualified as Enabling Nanobody Technology, any such Sideground Technology MPG/UMG may only be included as Enabling Nanobody Technology into the relevant license agreement subject to the financial terms pre-agreed by the Parties in good faith before introduction of such Sideground Technology MPG/UMG as set forth in Section 2.10.3.

If BiondVax has exercised its Option for a Subproject before the Compound Acceptance Criteria applicable for the relevant Subproject have been achieved, BiondVax is, during the Term of this RCA, entitled to request from MPG and/or UMG follow-up research activities with respect to generation, initial validation and characterization of Nanobodies against the relevant Target under this RCA, to the extent such research activities would be reasonably required to achieve the Compound Acceptance Criteria applicable for the relevant Subproject, considering the scientific and technical capabilities and resources of the Görlich Department and/or the Dobbelstein Department, without additional funding for such follow-up research activities. Upon such request of BiondVax, BiondVax is not entitled to request a refill for such Subproject, although it would formally be regarded as terminated.

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If BiondVax has exercised its Option for a Subproject after the Compound Acceptance Criteria have been achieved, BiondVax may request, in addition to the license agreement, the conclusion of an accompanying research collaboration agreement for specific follow-up research activities to be conducted by the Görlich Department and/or the Dobbelstein Department with respect to generation, initial validation and characterization of Nanobodies against the relevant Target. Such agreement should have, except for research funding amounts, UMG having and retaining its ownership position in any Intellectual Property Right generated in the course of such accompanying research collaboration, and other relevant topics to be reasonably discussed, substantially the terms and conditions as the Accompanying Research Collaboration Agreement (aRCA) concluded between the Parties with effective date December 21, 2021, which shall be adapted by the Parties in good faith to the specifics of the relevant Target, considering the scientific and technical capabilities and resources of the Görlich Department and/or the Dobbelstein Department, and MPG and UMG shall not unreasonably withhold its consent to such accompanying research collaboration agreement.

9.4 Consequences of Non-Exercise of the Option. In case the JSC decides to discontinue a Subproject in accordance with Section 2.5.2.1, or BiondVax does not exercise the Option for any Subproject in accordance with Section 9.2, MPG and UMG (i) shall be free to decide to further develop and commercialize the Collaboration Compounds as well as the Sole MPG/UMG Collaboration Technology and their share in Joint Collaboration Technology with respect to such Subproject and (ii) are entitled to request from BiondVax (aa) the assignment of its ownership share in any Target-specific Nanobody Technology within Sole BiondVax Collaboration Technology and Joint Collaboration Technology created in the relevant Subproject, and (bb) grant of a non-exclusive license, which shall be exclusive for the Target pursued in the relevant Subproject, under any item of Enabling Nanobody Technology within the Sole BiondVax Collaboration Technology and Joint Collaboration Technology created in the relevant Subproject, both in return for a fair and reasonable participation of BiondVax in any future licensing revenues received by MPG and/or UMG from the commercialization of the relevant Subproject.

10. REPRESENTATIONS AND WARRANTIES / LIABILITY

10.1 No Representation and Warranties.

10.1.1 OTHER THAN AS EXPRESSLY PROVIDED IN THIS RCA, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED.

10.1.2 Specifically, and not to limit Section 10.1.1, neither Party makes any representations or warranties (i) that the intended goals or results of the Collaboration Project can be achieved, (ii) that Nanobodies against the Targets can be delivered or, if delivered, will meet certain criteria, (iii) regarding the merchantability or fitness for a particular purpose of the Collaboration Technology, (iv) regarding the patentability, scope, validity or enforceability of the Collaboration Patent Rights, (v) that products based on or using the Collaboration Technology can be developed or commercialized, (vi) that the use of the Background Technology, the Sideground Technology or the Collaboration Technology will not infringe any Intellectual Property Rights of any Third Party, and (vii) that the use of the Background Technology, the Sideground Technology or the Collaboration Technology will not cause any damages of any kind to a Party or to any Third Party.

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10.2 Limitation of Liabilities

10.2.1 Limited Liability. Each Party shall be solely responsible and liable for any loss incurred by, or damage or injury to any Third Party, resulting from the carrying out by it or on its behalf of the Collaboration Project, and/or from its use of the Background Technology or the Collaboration Technology under this RCA, unless any other Party has an indemnification obligation pursuant to Section 2.9 or applicable law. No Party shall have any liability towards any other Party in respect of infringement of any Intellectual Property Rights of any Third Party resulting from said other Party’s use of the Background Technology or the Collaboration Technology under this RCA. However, either Party shall promptly inform the other Parties if it becomes aware that use of any Background Technology or any Collaboration Technology would infringe any Intellectual Property Rights of any Third Party.

10.2.2 Exclusion. TO THE EXTENT LEGALLY PERMISSIBLE, IN NO EVENT SHALL EITHER PARTY (OR THEIR TRUSTEES, DIRECTORS, OFFICERS AND EMPLOYEES) BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, MULTIPLE OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ECONOMIC DAMAGES CONSISTING OF LOST PROFITS, LOSS OF USE, DAMAGE TO GOODWILL, OR LOSS OF BUSINESS), REGARDLESS OF WHETHER ANY OF THE AFOREMENTIONED PERSONS OR ENTITIES SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

10.2.3 Limitation. To the extent legally permissible, the aggregate liability for all claims of a Party against another Party arising out of or under this RCA shall not exceed EUR [***].

10.2.4 Unlimited Liability. The exclusions and limitations of Sections 10.2.1, 10.2.2 and 10.2.3 shall not apply:

(a) to cases of mandatory statutory liability (e.g. under the Produkthaftungsgesetz);

(b) to damages to the life or health of human beings;

(c) to damages caused by gross negligence or willful intent of a Party or its Affiliates; and

(d) to the indemnification obligations pursuant to Section 2.9 or applicable law.

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11. APPLICABLE LAW / DISPUTE RESOLUTION

11.1 Applicable Law / Dispute. This RCA, and any dispute, controversy or claim arising under, out of or relating to this RCA (and any subsequent amendments of this RCA), including, without limitation, its formation, validity, binding effect, interpretation, performance, breach, termination or enforcement, and any remedies relating thereto, as well as non-contractual claims (collectively, a “Dispute”) shall be governed by the laws of the Federal Republic of Germany, without regard to conflict of law principles, except that questions affecting the construction and effect of any Patent Rights shall be determined by the law of the country in which such Patent Right shall have been granted.

11.2 Dispute Resolution by Management. The Parties recognize that a Dispute may from time to time arise between the Parties during the Term. In the event of a Dispute, a Party, by written notice to the other Parties, may have such Dispute referred to the Parties’ respective officers or directors designated below or their successors, for attempted resolution by good faith negotiations within 60 (sixty) days after such notice is received. Said designated officers or directors are as follows:

For MPG:	Managing Director at MPI-MS
For UMG:	Head of Stabsstelle Recht
For BiondVax:	Chair of the Board of Directors

MI may, in its sole discretion, nominate 1 (one) person as observer to the resolution by good faith negotiations. Such observer shall receive the agenda and other material provided to the designated officers or directors, may attend meetings and speak, but have no right to vote or decide.

11.3 Mediation. In the event the designated officers or directors are not able to resolve such Dispute as set forth in Section 11.2 within 60 (sixty) days following the notice, then each Party may submit such Dispute to mediation in accordance with the Deutsche Institution für Schiedsgerichtsbarkeit (DIS) Mediation Rules. The number of mediators shall be 1 (one), appointed in accordance with such mediation rules, the place of mediation shall be Göttingen, Germany, and the language of the mediation shall be English.

11.4 Jurisdiction. If and to the extent the Dispute has not been settled pursuant to mediation as set forth in Section 11.3 within 60 (sixty) days following the commencement of the mediation, then each Party may initiate court proceedings; to the extent legally permissible, the district court of Göttingen, Germany (Landgericht Göttingen) shall have exclusive jurisdiction over such Dispute. To the extent the Dispute relates specifically to questions of technology, intellectual property and/or inventions/patents, the Parties will use reasonable efforts to have heard the case in the competent chamber for patent disputes (Patentstreitkammer) and to the extent Know-how and/or other trade secrets are concerned to exclude the public and/or have ordered secrecy measures.

12. TERM AND TERMINATION

12.1 Term. This RCA shall enter into force and effect on the Effective Date and, unless terminated earlier in accordance with its termination provisions, shall continue to be in full force and effect until the expiry of the 5^th (fifth) year starting from the Commencement Date (the “Term”). The Parties may agree on a mutual prolongation of the Term for 2 (two) times 1 (one) year, it being understood that the annual funding amount to be provided by BiondVax for the research activities to be conducted by MPG/MPI-MS (Görlich Department) and UMG (Dobbelstein Department) for each prolongation year shall be [***] (or such other amount as agreed between the Parties in case of a refill or replacement of Targets in accordance with this RCA), increased by an amount equal to the inflation occurred between the Effective Date and the start of the relevant prolongation year according to official annual inflation rate documented and announced for Germany by the Statistisches Bundesamt plus VAT (if applicable). MPG and UMG shall not unreasonably withhold their consent to a prolongation of the Term requested by BiondVax in light of a refill or replacement of Targets in accordance with this RCA close to the end of the regular Term of this RCA.

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12.2 Termination for Failure of Collaboration Project. In case that after 3 (three) years from the Commencement Date, all Subprojects failed to generate a Collaboration Compound which meet the Compound Acceptance Criteria applicable for the relevant Subproject, and the Parties have not mutually agreed on refill Targets in accordance with Section 2.6, then MPG and UMG together on the one side, and BiondVax on the other side, are each entitled to terminate this RCA by 3 (three) months prior written notice to be sent within the 3 (three) months following the 3^rd (third) anniversary of the Commencement Date.

12.3 Termination for Cause. Each Party may terminate this RCA for good cause, upon 30 (thirty) days prior written notice to the other Parties.

Such good cause shall be, but is not limited to,

(a) if another Party is in breach of its material obligations under this RCA, and does not remedy such breach within 90 (ninety) days after having received notice from the Party requiring remedying such breach and complying with the obligations under this RCA. A breach of a material obligation includes, but is not limited to, the inability of a Party to carry out the work packages allocated to it under the Project Plans for all Subprojects. If a Party reasonably disputes the existence or materiality of a breach specified in a notice pursuant to this Section 12.3, and the breaching Party provides notice to the non-breaching Party of such dispute within the applicable 90 (ninety) days cure period, the non-breaching Party may not terminate this RCA unless and until the existence or materiality of such breach has been determined in accordance with Section 11, and the breaching Party fails to cure such determined breach within 90 (ninety) days following such determination. It is understood and agreed that during the pendency of such Dispute, all of the terms and conditions of this RCA shall remain in effect, and the Parties shall continue to perform all of their respective obligations hereunder; or

(b) if any approvals by competent authorities that are required by a Party to perform the Collaboration Project are finally and legally binding revoked or withdrawn.

12.4 Consequences of Termination and Expiration. In the event of termination or expiration of this RCA, the final report shall be provided at the latest within 60 (sixty) days after the termination or expiration of this RCA in accordance with Section 4.5 (which shall remain in force for this purpose). In the event of an early termination of this RCA (regardless of whether by MPG, UMG or by BiondVax) pursuant to Sections 12.2 or 12.3, upon the effective date of such termination, each Party may immediately cease to carry out its respective research work in the Collaboration Project without prejudice to any obligation regarding documentation and reporting accruing with respect to termination or expiry. In the case of early termination by BiondVax pursuant to Section 12.3(a), MPG shall pay-back to BiondVax the pro rata amount of the last annual tranche of the funding equivalent to the complete months remaining in the then running contract year, but only to the extent such pro rata amount has not been already used or undertaken as financial obligations specifically with respect to the performance of the Collaboration Project in the then running contract year, which cannot be cancelled prior to the date of receipt of the termination notice (e.g. labor costs for lab personnel that has been hired for the Term of this RCA, costs relating to lab or general infrastructure leased or acquired for the Term of this RCA). The expiration or termination of this RCA shall not release a Party from any liability or obligation that became due on or before the effective date of expiration or termination, nor shall it preclude a Party from pursuing all rights and remedies it may have under or arising out of this RCA with respect to any breach, nor shall it prejudice a Party’s right to obtain specific performance of any obligation and/or damages. Further, in the event of termination or expiration of this RCA, the last paragraph of Section 8.3.7 shall apply.

12.5 Survival. Termination or expiration of this RCA shall not affect the provisions of Sections 1, 2.5, 2.10, 4.5, 6, 7, 8, 9, 10, 11, 12.4, 12.5 and 13 and to the extent the aforementioned provisions refer to another provision of this RCA such referred provision shall continue in full force and apply in accordance with their terms.

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13. MISCELLANEOUS

13.1 Headings. All headings are for convenience only and shall not affect the meaning, and shall not be used in the interpretation, of any provision of this RCA.

13.2 Amendment and Waiver. This RCA may be amended, supplemented, or otherwise modified (including a waiver of performance of any obligation under this RCA) only by means of a written document signed by the Parties. Any waiver of any rights, or failure to act in a specific instance, shall relate only to such instance and shall not be construed as an agreement to waive any rights, or fail to act in any other instance, whether or not similar.

13.3 Assignment. This RCA is personal to the Parties, and neither this RCA, nor any rights and/or obligations under this RCA, may be assigned or otherwise transferred by a Party to a Third Party without the prior written consent of the other Parties, such consent not to be unreasonably withheld or delayed. For the avoidance of doubt, Affiliates are not considered Third Parties under this RCA.

13.4 Relationship of the Parties. It is expressly agreed that MPG, UMG and BiondVax will each be an independent contractor, and that the relationship among the Parties will not constitute a partnership (specifically, no Gesellschaft des bürgerlichen Rechts or similar), joint venture or agency. Notwithstanding any of the provisions of this RCA, neither Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Parties.

13.5 Severability. Should one or more of the provisions of this RCA be void, invalid or unenforceable under applicable law, the remaining provisions of this RCA will not cease to be effective. In case the void, invalid or unenforceable provision does not qualify as general term (Allgemeine Geschäftsbedingung) according to §§ 305 et seq. German Civil Code (Bürgerliches Gesetzbuch – BGB), the Parties shall negotiate in good faith to replace such void, invalid or unenforceable provision by a new provision that reflects, to the extent possible, the original intent of the Parties.

13.6 Notices. All notices and other communications provided for under this RCA will be addressed to the Parties at the following addresses:

If to BiondVax:	Attn.: Chief Executive Officer
	BiondVax Pharmaceuticals Ltd.
	Jerusalem BioPark Building, 2nd Floor
	Hadassah Ein Kerem Campus
	Jerusalem, Israel
	Email: [***]
	With copy to
	CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern mbB
	Attn.: Dr. Thomas Hirse
	Kasernenstraße 43-45
	40213 Düsseldorf
	Germany
	Email: [***]
If to MPG:	Attn: Prof. Dr. Dirk Görlich
	Director
	Max Planck Institute for Multidisciplinary Sciences
	Am Faßberg 11, 37077 Göttingen, Germany
	Email: [***]
If to UMG:	Attn.: Prof. Dr. Matthias Dobbelstein
	Department Head
	Universitätsmedizin Göttingen
	Robert-Koch-Str. 40, 37075 Göttingen, Germany
	Email: [***]

Either Party may by written notice specify or change an address to which notices and communications will thereafter be sent. Notices sent by e-mail, mail or overnight delivery will be effective on receipt, and notices given personally will be effective when handed-over.

[Remainder of this page intentionally left blank / signatures follow on next page]

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In witness whereof, the Parties have caused this RCA to be executed by their duly authorized representatives.

Max-Planck-Gesellschaft zur
Förderung der Wissenschaften e.V.
By:
Name:	Prof. Dr. Patrick Cramer
Title:	Managing Director at the Max Planck Institute
	for Biophysical Chemistry
Date:
Georg-August-Universität Göttingen
Stiftung Öffentlichen Rechts
Universitätsmedizin Göttingen
Göttingen, Datum
Prof. Dr. Wolfgang Brück, Dekan der
Medizinischen Fakultät und Vorstand
für Forschung und Lehre
Jens Finke, Leiter Finanzen
Vorstand für
Wirtschaftsführung und Administration

ACKNOWLEDGED & AGREED by UMG Project Leader:

Regarding Section 7, signing this RCA renounces my right to remain silent about any of my employee´s inventions within the Collaboration Project according to § 42 Nr. 2 ArbNErfG towards UMG, MPG and BiondVax:

By:
Name:	Prof. Dr. Matthias Dobbelstein
Title:	Department Head
Date:
BiondVax Pharmaceuticals Ltd.
By:
Name:	Amir Reichman
Title:	Chief Executive Officer
Date:

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List of Appendices:

Appendix 0.7 (Target List)

Appendix 1.3 (Background Technology BiondVax)

Appendix 1.12 (Compound Acceptance Criteria)

Appendix 1.36 (Project Plan)

Appendix 1.40 (Sample License Agreement)

Appendix 2.10 (Sample Subproject Technology Compilation Document)

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Appendix 0.7

Target List

[***]

Page 42/47

Appendix 1.3

Background Technology BiondVax

[***]

Page 43/47

Appendix 1.12

Compound Acceptance Criteria

[***]

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Appendix 1.36

Project Plan
(general plan applicable to all Subprojects of the Target List)

In general, the works in the course of each Subproject conducted under the RCA will be as follows:

[***]

The Parties of the RCA may, on a per Subproject basis, mutually agree on further details of the Project Plan for the respective Subproject.

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Appendix 1.40

Sample License Agreement

(separate document)

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Appendix 2.10

Sample Subproject Technology Compilation Document
for Subproject [Name of pursued Target]

(to be filled by the Parties in accordance with Section 2.10 after the conclusion of the RCA) 2.10.22.10.3[***]

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EX-4.19

Exhibit 4.19 

CERTAIN INFORMATION IDENTIFIED

BY BRACKETED ASTERISKS ([* * *])

HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE

IT IS BOTH NOT MATERIAL AND WOULD BE

COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

LICENSE AGREEMENT

by and between

Max-Planck-Innovation GmbH

a German corporation having a principal place of business at

Amalienstraße 33, 80799 München, Germany

-hereinafter called “MI”-

and

Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts

Universitätsmedizin Göttingen

a German university having its postal address at

Robert-Koch-Str. 40, 37075 Göttingen

-hereinafter called “UMG”-

and

BiondVax Pharmaceuticals Ltd.

an Israeli corporation having a principal place of business at

Jerusalem BioPark Building, 2nd Floor, Hadassah Ein Kerem Campus

Jerusalem, Israel

-hereinafter called “BiondVax”-

-MI and UMG are hereinafter also called together the “Licensors”, and

MI, UMG and BiondVax are hereinafter also individually called a “Party”,

and collectively called the “Parties”-

NOTE: All provisions regarding the aRCA in italics and brackets throughout this template shall be included if the Parties mutually agree on and enter into such aRCA (including, without limitation, agreement on project plan and project funding), and shall be deleted if the Parties do not agree on such aRCA.

Recitals

0.1 The Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V. (“MPG”) is a German non-profit scientific research organization. The Max Planck Institute for Multidisciplinary Sciences in Göttingen (the institute was named “Max Planck Institute for Biophysical Chemistry” until December 31, 2021, and is hereinafter referred to as “MPI-MS”) is a research institute of MPG, and is not a separate legal entity. At the MPI-MS, Prof. Dirk Görlich is a director and heads the department “Cellular Logistics” (the “Görlich Department”). The MPI-MS has its own alpaca herd used for its research activities.

0.2 Max-Planck-Innovation GmbH, München, Germany (“MI”) is a 100% subsidiary of MPG, and acts as MPG’s technology transfer agency. MI is authorized by MPG to sign commercialization agreements concerning intellectual property owned and controlled by MPG in MI’s own name for the account of MPG. A respective confirmation of MPG is attached to this Agreement as Appendix 0.2. Further, MI is authorized to act as first point of contact towards UMG, and to collect any payments and other proceeds owed by BiondVax under this Agreement on behalf of both Licensors together.

0.3 UMG is one of the largest University hospitals in Germany and also a Medical Faculty of the Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts, and therefore a public teaching and research organization. At UMG, Prof. Matthias Dobbelstein heads the Institute of Molecular Oncology, and heads a research group within such institute (such research group, the “Dobbelstein Department”). The UMG has a S3 laboratory which is available for the Dobbelstein Department for its research activities.

MBM Science Bridge GmbH, Göttingen, Germany (“MBM”) is the technology transfer organization of UMG, and is in charge of this Agreement. All correspondence to UMG needs to be directed solely to MBM via MI as BiondVax’s first point of contact (as mentioned above), and will be further processed by MBM. For the purpose of this Agreement, receipt of such correspondence by MBM via MI as BiondVax’s first point of contact (as mentioned above) shall be deemed receipt by UMG.

0.4 The Görlich Department has, with support of the Dobbelstein Department, developed the General Nanobody Technology (as later defined herein) for the generation and initial validation of Nanobodies (as later defined herein).

0.5 BiondVax is a NASDAQ-listed biopharmaceutical company that is currently seeking for business opportunities in the field of, among other fields, recombinant protein-based vaccines and antibodies, particularly Nanobodies, for medicinal use in prevention, diagnosis, detection, analytics and treatment of various diseases.

0.6 MPG (through MPI-MS), UMG and BiondVax concluded a multi-target Research Collaboration Agreement effective as of March 21, 2022 (the “RCA”, a copy of which is attached as Appendix 0.6). Under the RCA, said parties conducted collaborative research to generate and initially validate Nanobodies inter alia against the Target (as later defined herein). BiondVax has exercised its exclusive option for an exclusive license with respect to the subproject pursuing the Target in accordance with the RCA. The RCA provided for conclusion of a separate license agreement with pre-defined terms and conditions (particularly as regards financial provisions), which shall be and is adapted only for the identification of the Target, the licensed Compounds, the licensed Target-specific Nanobody Technology and Enabling Nanobody Technology, and an initial Development Plan (as each term is defined later herein), and the Parties have in good faith made the required adaptions.

0.7 [In connection with this Agreement, MPG (through the MPI-MS, Görlich Department), UMG (through the Dobbelstein Department) and BiondVax intend to enter into an accompanying research collaboration agreement in the field of Nanobodies against the Target (the “aRCA”). The aRCA sets forth, among other things, that (i) Patent Rights and Know-how generated in the course of the aRCA by or on behalf of MPG (through MPI-MS, Görlich Department) and/or by or on behalf of UMG (through the Dobbelstein Department) and/or by or on behalf of BiondVax (collectively, the “aRCA IP”) shall be owned by the respective party or parties of the aRCA in accordance with the “ownership follows inventorship” rule, and (ii) provided that the aRCA IP fulfils the other applicable criteria of the Target-specific Nanobody Technology or the Enabling Nanobody Technology (as those terms are defined herein later), as applicable, such aRCA IP shall be automatically be included into, and be an integral part of, the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, and the share of MPG and/or UMG in such aRCA IP will be included into the license granted to BiondVax under this Agreement, without any additional payment due for such inclusion; provided, however, that, upon such inclusion, the financial terms and conditions (and, for clarity, all other terms and conditions) of this Agreement shall apply to such included aRCA IP.

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NOTE: Section 0.7 shall be deleted if no aRCA will be concluded.]

Now, therefore, the Parties agree as follows:

1. DEFINITIONS

1.1 “Abandoned Patent Rights”

shall have the meaning ascribed to it in Section 6.4.

1.2 “Affiliates”

shall mean any legal entity (including, without limitation, a corporation, partnership, or limited liability company) that controls, is controlled by, or is under common control with, a Party. For the purpose of this definition, the term “control” means (i) direct or indirect ownership of more than fifty percent (50%) of the voting securities of a legal entity, or (ii) a greater than fifty percent (50%) interest in the net assets or profits of a legal entity, or (iii) possession, directly or indirectly, of the power to elect or direct the management of a legal entity.

1.3 “Agreement”

shall mean this license agreement between the Licensors and BiondVax, including all of its Appendices.

1.4 [“aRCA”

shall have the meaning ascribed to it in Recitals 0.7. A copy of the execution version of the aRCA is attached to this Agreement as Appendix 1.4.

NOTE:The aRCA shall have substantially the same terms and conditions as the aRCA for the Covid-19 Project, but be adapted to the relevant Target and the respective work packages to be mutually agreed upon. A copy of the actually concluded aRCA for the licensed Target shall be attached to the concluded License Agreement.

1.5 “aRCA IP”

shall have the meaning ascribed to it in Recitals 0.7.]

1.6 “BiondVax ADS Shares”

shall mean [***] American Depository Shares (ADS) of BiondVax (NASDAQ: BVXV).

1.7 “BiondVax Project”

shall have the meaning ascribed to it in Section 2.1.3.

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1.8 “Biosimilar Product”

shall mean, on a Product-by-Product and country-by-country basis and with respect to a Pharmaceutical Product that has received Regulatory Approval of a BLA in a country and that is no longer covered by a Valid Claim of the Licensed Patent Rights in such country, a pharmaceutical product that:

(a) has received all necessary approvals by applicable Regulatory Authorities in such country to market or sell such product as a biological or medicinal product;

(b) is marketed or sold by a Third Party that is not authorized by BiondVax, its Affiliates or Sublicensees with respect to such product;

(c) binds to the Target, and

(d) is approved by a Regulatory Authority (i) as a “biosimilar” (in the USA) of such Pharmaceutical Product, (ii) as a “similar biological medicinal product” (in the EU) with respect to which such Pharmaceutical Product is the “reference product”, or (iii) if not the USA or EU, as a foreign equivalent of a “biosimilar” or “similar biological medicinal product” of such Pharmaceutical Product.

1.9 “BLA”

shall mean an application submitted to a Regulatory Authority for marketing approval of a biological or medicinal product after conducting the required Clinical Studies for such biological or medicinal product, including, without limitation (i) a Biologics License Application (as defined in 21 C.F.R. 600 et seq., as amended) filed with the FDA, or any successor applications or procedures, (ii) a marketing authorization application filed with the EMA, or any successor applications or procedures, and (iii) any national, supranational or international equivalents of (i) or (ii).

1.10 “Claims”

shall have the meaning ascribed to it in Section 7.1.

1.11 “Clinical Studies”

shall mean collectively Phase I Clinical Studies, Phase II Clinical Studies and Phase III Clinical Studies (or a combination thereof, e.g. Phase I/IIa Clinical Studies or Phase IIb/III Clinical Studies). The term “Clinical Study” shall mean any of a Phase I Clinical Study, a Phase II Clinical Study, or a Phase III Clinical Study, as applicable.

1.12 “Combination Product”

shall mean a Pharmaceutical Product containing, as its pharmaceutically active ingredients, (i) a Pharmaceutical Product, and (ii) one or more other pharmaceutically active ingredients.

For the avoidance of doubt, drug delivery technologies, adjuvants, excipients and the like shall not be deemed to be “active ingredients”, except in the case where a Regulatory Authority recognizes such delivery technologies, adjuvant, excipients or the like as an active ingredient.

1.13 “Commercial Sale”

shall mean, on a Product-by-Product and country-by-country basis, the sale or other disposition of a Product in an arm’s length transaction by or on behalf of BiondVax, its Affiliates or Sublicensees to an independent Third Party distributor or end user customer in exchange for cash, or cash equivalent to which monetary value can be readily assigned, in such country, after applicable Regulatory Approval for a BLA for such Product, and after all other applicable approvals required to market and sell such Product, including pricing and reimbursement approvals, have been granted, or otherwise permitted, by governmental or other responsible authorities in such country.

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1.14 “Commercialization” or “Commercialize”

shall mean, with respect to a Product, any and all activities undertaken usually after obtaining Regulatory Approval for such Product that relate to the pre-marketing, marketing, promoting, distributing, importing or exporting for sale, offering for sale, and selling of such Product, including, without limitation, (i) conducting clinical trials conducted after Regulatory Approval for a BLA of a Pharmaceutical Product, so-called phase IV clinical trials, (ii) interactions with governmental or other responsible authorities regarding all other applicable approvals required to market and sell such Product, including pricing and reimbursement approvals, (iii) manufacturing for selling purposes, handling, storing and shipping of Products, (iv) following receipt, on a country-by-country basis, of all required Regulatory Approvals and all other applicable approvals required to market and sell such Product, effecting the Commercial Sale of such Product in the respective country, and keeping such Products reasonably available to the public, and (v) modification, enhancement, improvement, and optimization of such Products.

1.15 “Commercially Reasonable Efforts”

shall mean, with respect to the Development or Commercialization of Products and on a Product-by-Product basis, the efforts and resources commonly used in the pharmaceutical industry by companies similar in size and operations to BiondVax (and consistent with the reasonable practices of BiondVax) for compounds of a similar nature, resulting from own development efforts or in-licensed from a Third Party, with a similar commercial potential and at a similar stage in the research or clinical development process, taking into consideration the safety and efficacy of such compound, its costs to develop, the competitiveness of alternative or competing compounds in the same indication(s), the anticipated or, if applicable, actual patent claim structure and the nature and extent of the market exclusivity in the indication(s) for which the respective compound is developed (including patent coverage and regulatory exclusivity), the likelihood of regulatory approval, the expected coverage and reimbursement by payers in those territories (health funds, private health insurance and government health insurance such as Medicaid and Medicare in the USA) its expected profitability, competing product opportunities in the same field, and all other similarly relevant factors.

1.16 “Companion Diagnostic Product”

shall mean a Diagnostic Product that provides information that is essential for the safe and effective use of a Pharmaceutical Product for which it is sold, i.e. that is used to determine whether a particular Pharmaceutical Product’s benefits to patients will outweigh any potential serious side effects or risks. For the avoidance of doubt, when the use of a Diagnostic Product is required by a Regulatory Authority in the labeling of a Pharmaceutical Product, e.g. for selection of appropriate patients for therapy, or to select patients who should not use the Pharmaceutical Product, or for monitoring patients to achieve safety or effectiveness, use of the Diagnostic Product is considered “essential” for the purposes of this definition. Uses of Diagnostic Products that are suggested but not required in Pharmaceutical Product labeling are not considered “essential”.

1.17 “Compounds”

shall mean Nanobodies (e.g. as monomers or any other construct such as dimers, trimers etc., including any complementarity-determining regions, fragments, derivatives, modifications, complexes, or conjugates thereof) that

(a) selectively bind to the Target, and

(b) have been created in the course of the RCA [or will be created in the course of the aRCA] by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable), and are Controlled by MPG (and/or UMG, as applicable).

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For the avoidance of doubt, the term “in the course of the RCA” under (b) above shall include also those compounds fulfilling the requirement under (a) for which the activities for the generation have been started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (i) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated 19 October 2021, or (ii) after the Effective Date through supporting research activities in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) as set forth in the RCA. The Compounds at the Effective Date are identified and described in Appendix 1.17.

The Compounds generated after the Effective Date under the RCA, if any, shall be added to Appendix 1.17 by the Parties in good faith [and if created in the course of the aRCA such Compounds will be added to Appendix 1.17 in accordance with Section 2.1.6].

1.18 “Confidential Information”

(a) shall mean any information which is of a confidential and/or proprietary nature and not readily available to a Third Party (including, without limitation, information in relation to the business of a Party to which this Agreement relates, and information in relation to Intellectual Property Rights Controlled by a Party), which information is disclosed by a Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) under, or in connection with, this Agreement. For the avoidance of doubt, disclosure of any such information relating to the Target or the Compounds or the Licensed Technology disclosed under the RCA shall be treated as disclosure under or in connection with this Agreement and the provisions of this Agreement shall solely and exclusively apply to them for the Term.

(b) Confidential Information specifically excludes any information that the Receiving Party can prove by adequate proof (i) was known by the Receiving Party prior to the receipt of Confidential Information from the Disclosing Party, (ii) was disclosed to the Receiving Party by a Third Party having the right to do so, (iii) was, or subsequently became, part of the public domain through no fault of the Receiving Party, or (iv) was subsequently and independently developed by or on behalf of the Receiving Party without having had access to, or making use of, the Disclosing Party’s Confidential Information.

(c) For the avoidance of doubt, the Licensed Technology owned by MPG and/or UMG not yet disclosed to the public shall constitute Confidential Information of the Licensors, and any item of Licensed Technology which is jointly owned by BiondVax on the one side, and MPG and/or UMG on the other side, shall be jointly owned Confidential Information of the Parties. For the further avoidance of doubt, if MI, MPG, MPI-MS, MBM and/or UMG disclose or receive Confidential Information under or in connection with this Agreement, it shall, for the purpose of this Agreement, constitute disclosure to or receipt by the Licensors.

1.19 “Control” or “Controlled”

shall mean, with respect to any Intellectual Property Right, the legal authority or right of a Party (whether by full and unrestricted ownership, or by license other than pursuant to this Agreement) to grant a license or sublicense under such Intellectual Property Right, without violating the rights of, or breaching the terms of any agreement or other arrangement with, any Third Party existing at the time such Party would be required hereunder to grant such license or sublicense.

1.20 “CPA”

shall have the meaning ascribed to it in Section 5.9.

1.21 “Development” or “Develop”

shall mean, with respect to a Product, the performance of any and all activities undertaken regarding research, pre-clinical and clinical development (including, without limitation, toxicology, pharmacology, test method development and stability testing, process development, formulation development, quality control development, statistical analysis), Clinical Studies (but excluding clinical trials conducted after Regulatory Approval for a BLA of a Pharmaceutical Product, so-called phase IV clinical trials), manufacturing for pre-clinical, clinical and regulatory purposes, and regulatory affairs (including, without limitation, the determination of the nature and content of any submissions to Regulatory Authorities) that are required to obtain Regulatory Approval for such Product.

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1.22 “Development Plan”

shall have the meaning ascribed to it in Section 4.1.2. The initial Development Plan is attached to this Agreement as Appendix 1.22.

1.23 “Diagnostic Product”

shall mean any product that is used or intended for use in the diagnosis and/or prognosis of any disease or clinical condition

(a) that is Developed or Commercialized by or on behalf of BiondVax or its Affiliates or Sublicensees, and

(b) that contains one or more Compounds as binding agent for identification and antigenic characterization of pathogens for diagnostic purposes, and/or

(c) the manufacture, use or sale of which is covered by at least 1 (one) Valid Claim of the Licensed Patent Rights.

For any Diagnostic Product that also falls within the definition of a Pharmaceutical Product, such Diagnostic Product shall be considered a Pharmaceutical Product for the purposes of this Agreement.

1.24 “Disclosing Party”

shall have the meaning ascribed to it in Section 1.18(a).

1.25 “Dispute”

shall have the meaning ascribed to it in Section 10.2.

1.26 “Effective Date”

shall mean the date when this Agreement comes into force and effect, which shall be [date to be inserted].

1.27 “EMA”

shall mean the European Medicines Agency, or any successor agency thereto.

1.28 “Enabling Nanobody Know-how”

shall mean any Know-how in the field of Nanobodies that

(a) is not directly relating to the Compounds,

(b) has been created before the Effective Date and/or in the course of the RCA [or will be created in the course of the aRCA,] by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be),

(c) is necessary for the Development or Commercialization of Products, and

(d) is Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

The Enabling Nanobody Know-how at the Effective Date is identified and described in Appendix 1.28.

The Enabling Nanobody Know-how generated after the Effective Date through supporting research activities in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) under the RCA, if any, shall be added to Appendix 1.28 by the Parties in good faith [and if created in the course of the aRCA will be added to Appendix 1.28 in accordance with Section 2.1.6.].

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For clarity, the term “Enabling Nanobody Know-how” shall encompass Background Technology MPG/UMG and/or Sideground Technology MPG/UMG (both as defined in the RCA), to the extent (i) the parties of the RCA have mutually qualified it as Enabling Nanobody Know-how pursuant to the RCA, (ii) in addition for Sideground Technology MPG/UMG, BiondVax has approved introduction into the relevant subproject relating to the Target pursuant to the RCA, and the Parties have agreed on specific additional financial terms in accordance with the provisions of the RCA, and (iii) BiondVax has exercised its respective option.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item of the Know-how which relates to the composition of matter of the Compounds, or the use of Compounds in relation to the Target, or otherwise addresses properties of Compounds specific for the Target (e.g. complementary-binding regions). An item of Know-how which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the Target, and/or the generation, manufacture and use of such Nanobodies outside the Field, shall be regarded to “not directly relating to the Compounds” in the meaning of (a).

1.29 Enabling Nanobody Patent Rights

shall mean any Patent Rights in the field of Nanobodies that

(a) are claiming inventions that (i) do not directly relate to the Compounds, and (ii) have been created before the Effective Date and/or in the course of the RCA [, or will be created in the course of the aRCA,] by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be),

(b) are necessary for the Development or Commercialization of Products, and

(c) are Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

The Enabling Nanobody Patent Rights at the Effective Date are listed in Appendix 1.29.

The Enabling Nanobody Patent Rights generated after the Effective Date through supporting research activities in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) under the RCA, if any, shall be added to Appendix 1.29 by the Parties in good faith [and if created in the course of the aRCA will be added to Appendix 1.29 in accordance with Section 2.1.6].

For clarity, the term “Enabling Nanobody Patent Rights” shall encompass Background Technology MPG/UMG and/or Sideground Technology MPG/UMG (both as defined in the RCA), to the extent (i) the parties of the RCA have mutually qualified it as Enabling Nanobody Patent Rights pursuant to the RCA, (ii) in addition for Sideground Technology MPG/UMG, BiondVax has approved introduction into the relevant subproject relating to the Target pursuant to the RCA and the Parties have agreed on specific additional financial terms according to the provisions of the RCA, and (iii) BiondVax has exercised its respective option.

It is the common understanding of the Parties that “directly relating” as used under (a) means any item protected under any patent claim of the relevant Patent Right which relates to the composition of matter of the Compounds, or the use of Compounds in relation to the Target, or otherwise addresses properties of Compounds specific for the Target (e.g. complementary-binding regions). An item covered by any patent claim of the relevant Patent Right which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the Target, and/or the generation, manufacture and use of such Nanobodies outside the Field, shall be regarded to “not directly relating to the Compounds” in the meaning of (a).

1.30 “Enabling Nanobody Technology”

shall mean collectively the Enabling Nanobody Know-how and the Enabling Nanobody Patent Rights.

1.31 “FDA”

shall mean the United States Food and Drug Administration, or any successor agency thereto.

1.32 “Field”

shall mean the diagnosis and medicinal treatment of diseases in humans related to the Target (including therapeutic purposes to treat and/or relieve the symptoms of human diseases, or prophylactic purposes to prevent the cause of human diseases, or diagnostic purposes of any kind, including, but not limited to, for selection of appropriate patients for and/or monitoring a therapy and/or prophylaxis).

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1.33 “General Nanobody Technology”

shall mean all Patent Rights and Know-how that are Controlled by MPG and/or UMG that are necessary or useful for creating and researching any Nanobodies against various molecular targets. General Nanobody Technology shall include, without limitation, (i) the immunization of the alpacas, the generation of immune libraries, the phage display selection and purification of Nanobodies (each performed by the Görlich Department), and (ii) the development of cell-based assays for the testing and screening of Nanobodies for their initial validation and characterization (each performed by the Dobbelstein Department).

1.34 “IND”

shall mean an application submitted to a Regulatory Authority for approval to conduct Clinical Studies for a Product, including (i) an investigational new drug application or any successor application or procedure filed with the FDA, (ii) an investigational medicinal product dossier filed with the EMA, and (iii) any national, supranational or international equivalents of (i) or (ii).

1.35 “Indemnifying Party”

shall have the meaning ascribed to it in Section 7.2.1.

1.36 “Indemnitees”

shall have the meaning ascribed to it in Section 7.1.

1.37 “Indication”

shall mean any disease, disorder, syndrome or other medical condition in humans for which a Product can be used to treat or prevent, which use is the subject of a separate Regulatory Approval process. However, it shall be still the same Indication if a new BLA must be filed and/or if a reasonable modifications to a Pharmaceutical Product as part of the general product life-cycle management, or line extensions of a Pharmaceutical Product, or the route of administration for a Pharmaceutical Product is changed (e.g. from intravenous to inhalation), and such modifications and/or change of route of administration require a new Regulatory Approval process, but such Pharmaceutical Product still addresses the same Indication, such Pharmaceutical Product shall qualify as being in the same Indication. For the sake of clarity, each sub-class having the same combination of two letters and two digits at the beginning of its associated ICD-11 code of a main class of disease with associated code combined of two letters and two digits (as described in the International Statistical Classification of Diseases and Related Health Problems (ICD) provided by the World Health Organization (WHO), as amended or revised from time to time; currently, ICD-11: Version in effect from January 2022) shall be treated only as one and the same Indication, irrespective whether the Pharmaceutical Products containing the same or a different Compound as a single active pharmaceutical ingredient or in combination with one or more further active pharmaceutical ingredients are subject of a separate BLA and/or of a separate Regulatory Approval process. For example, Psoriasis (ICD-11 code EA90) shall be the same Indication, irrespective if one Pharmaceutical Product is targeting the therapy of Gutatte Psoriasis (ICD-11 code EA90.1) and a second Pharmaceutical Product is targeting the therapy of Erythrodermic Psoriasis (ICD-11 code EA90.3). Furthermore, it shall be the same Indication even if a sub-class of disease does not have the same combination of two letters and two digits at the beginning of its associated ICD-11 code, but the Parties agree after good faith discussion that such sub-class addresses a minor group of patients within the main class of disease; as example: Asthma as main class diseases has the ICD-11 code CA23 while the sub-class Coal-worker pneumoconiosis Asthma has the ICD-11 code CA60.1 and addresses only a minor group of potential patients.

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1.38 “Intellectual Property Rights”

shall mean all rights with respect to (i) Patent Rights, (ii) trademarks (all registrations and applications therefor), (iii) all copyrightable works of authorship (whether published or unpublished), all registered or unregistered copyrights, all copyright registrations, applications for registration and renewals, and all rights corresponding to the foregoing throughout the world; (iv) utility models, design rights, and (v) Know-how.

1.39 “Intended Publication”

shall have the meaning ascribed to it in Section 2.6.1.

1.40 “Know-how”

shall mean

(a) any scientific or technical information, results, data, experience and knowledge of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation discoveries, inventions not yet patented, trade secrets, databases, practices, protocols, regulatory filings, methods, processes, techniques, biological, chemical and other materials (including lead compounds), reagents, specifications, formulations, formulae, data (including pharmacological, biological, chemical, medicinal chemistry, structural, toxicological and clinical information) analytical, quality control, and stability data, studies and procedures and development information, results and data not patentable,

(b) that is secret (i.e. not generally known or easily accessible, particularly not disclosed in any Patent Rights), substantial (i.e. significant and/or necessary for the Development and/or Commercialization of Products) and identified (i.e. described in a sufficiently comprehensive manner so as to make it possible to verify that it fulfills the criteria of secrecy and substantiality).

1.41 “Licensed Know-how”

shall mean collectively the Target-specific Nanobody Know-how and the Enabling Nanobody Know-how. For clarity, if for any item of Licensed Know-how the requirement of secrecy is no longer satisfied due to a breach of the confidentiality provisions of this Agreement by Licensors, MPG, MPI-MS or MBM or due to any relevant disclosure or publication allowed under this Agreement, then the relevant items shall no longer be classified as Licensed Know-how. For clarity, if for any item of Licensed Know-how the requirement of secrecy is no longer satisfied due to a breach of the confidentiality provisions of this Agreement by BiondVax or its Affiliates, then the relevant items shall remain to be classified as Licensed Know-how.

1.42 “Licensed Patent Rights”

shall mean collectively the Target-specific Nanobody Patent Rights and the Enabling Nanobody Patent Rights.

1.43 “Licensed Technology”

shall mean collectively the Licensed Know-how and the Licensed Patent Rights.

1.44 “Major Market Country”

shall mean individually any of the following countries or group of related countries: (i) United States of America, (ii) Japan, (iii) China, (iv) Israel, (v) Brazil, (vi) Russia, (vii) any of Italy, Spain, France, Germany and the United Kingdom (the “EU5”), or (viii) any country or group of related countries whose population exceeds 60 million. The term “Major Market Countries” shall mean collectively all countries or group of related countries mentioned in (i) through (viii).

1.45 “Nanobodies”

shall mean VHH antibodies (i.e. the single domain variable region of the heavy chain of camelid-derived antibodies).

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1.46 “Net Sales”

(a) shall mean, on a Product-by-Product and country-by-country basis, the gross amounts invoiced by or on behalf of each of BiondVax or its Affiliates for the Commercial Sale of a Product, less the following: (i) to the extent separately stated on the document of sale, any trade, cash and quantity discounts, bonuses, credits, chargebacks, premiums, rebates and allowances actually granted or allowed and taken specifically with respect to sales or other dispositions of the Product (including, without limitation, discounts actually granted or allowed for Products sold in connection with patient assistance programs designed to aid in patient compliance with medication schedules), (ii) any tariffs, duties, excises, sales, value-added and other taxes imposed upon and paid directly with respect to such Commercial Sale of Products which are actually paid and can be proved by written records, (iii) amounts repaid or credited by reason of rejections, damaged or expired goods, recalls, returns, or billing errors, (iv) government mandated rebates (such as those granted pursuant to programs similar to any state or federal Medicare, Medicaid or similar program), (v) amounts invoiced for freight, shipping, insurance and other transportation expenses, including distribution, packing and handling charges for the Product, (vi) with respect to bad debts, which have actually occurred with respect to the Commercial Sale of a Product, the gross amount invoiced, but actually not received for such Product due to bad debts; and (vii) any item substantially similar in character or substance to the above. Each of the foregoing deductions shall be determined as incurred in the ordinary course of business in type and amount consistent with good industry practice and in accordance with generally accepted accounting principles.

(b) BiondVax and its Affiliates will not be treated as having sold Products if (i) Products are used by or on behalf of each of BiondVax or its Affiliates for the sole purpose of performing Development, or (ii) Products are provided to a Third Party by each of BiondVax or its Affiliates, and used by such Third Party solely to conduct Clinical Studies for Products, or (iii) reasonable amounts of Products are used as promotional free samples, free goods, or other marketing programs to induce sales, or for compassionate or similar uses or donations to non-profit organizations, in connection with which Products are supplied without charge.

(c) Net Sales shall not include internal distributions, transfers or “sales” of Products by or among BiondVax and its Affiliates and/or its Sublicensees for a subsequent resale of such Products by such Affiliate or Sublicensee to a Third Party. In the case of internal sales of a Product to an Affiliate, Net Sales shall be calculated on the amount invoiced by such Affiliate to a Third Party upon resale in a Commercial Sale to such Third Party, and in case of internal sales of a Product by BiondVax or its Affiliates to a Sublicensee for resale by such Sublicensee, the resale by the Sublicensee to such Third Party shall be regarded as Commercial Sale, and the Licensors shall participate in the respective Sublicensee Consideration as set forth in this Agreement.

(d) In the event that a Product is sold as Combination Product, then Net Sales, for purposes of determining royalty payments on the Combination Product, shall be calculated as follows: (i) In the event the Product and the other pharmaceutically active ingredient(s) are sold separately during the royalty period in question in the country in question, then Net Sales shall be calculated by multiplying the Net Sales of the Combination Product in such country by the fraction A/(A+B), where A is the average gross selling price of the Product sold separately in the country in question during the royalty period in question, and B is the average gross selling price of the other pharmaceutically active ingredient(s) sold separately in the country in question during the royalty period in question; (ii) if, on a country-by-country basis, the other pharmaceutically active ingredient or ingredients in the Combination Product are not sold separately in that country, Net Sales shall be calculated by multiplying the actual Net Sales of such Combination Product by the fraction A/C, where A is the invoice price of the Product if sold separately, and C is the invoice price of the Combination Product. If, on a country-by-country basis, neither the Product nor the other pharmaceutically active ingredient(s) of the Combination Product is sold separately in a country, the value of the pharmaceutically active ingredient(s) for the purpose of determining Net Sales shall be determined between the Parties in good faith.

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1.47 “Nomination Of Pre-clinical Development Candidate”

shall mean the decision of BiondVax or its Affiliates to nominate a Compound as a candidate for toxicological pre-clinical studies in animals (also commonly referred to as “GLP TOX studies”) as required by competent Regulatory Authorities as pre-requisite for submission of an IND for such Compound.

1.48 “Patent Rights”

shall mean collectively

(a) any national, supranational and international patent application(s) filed in any jurisdiction of the world, including provisional patent applications, having a specific priority date and directed to a specific inventive subject matter, and the resulting issued patents,

(b) any subsequent patent application(s) in any jurisdiction claiming the same priority date and directed to the same inventive subject matter as the patent application(s) described in (a) above, and any divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent application(s) described in (a) above, and the resulting issued patents, and

(c) any patents resulting from reissues, re-examinations, or patent term extensions (including supplementary protection certificates) (and their relevant international equivalents) of the patents and patent application(s) described in (a) and (b) above.

1.49 “Phase I Clinical Study”

shall mean a clinical investigation of a pharmaceutical product in humans, the principal purpose of which is preliminary determination of safety and/or tolerability (which may include, without limitation, studies to determine absorption, distribution, metabolism, excretion and/or toxicity, structure-activity relationship, mechanism of action, dosing regimen, pharmacokinetics and pharmacological effects), conducted in healthy volunteers or patients and for which there are no primary endpoints (as understood by a Regulatory Authority) in the protocol relating to efficacy, as described in 21 C.F.R. §312.21(a), or a similar clinical study in a country other than the United States of America.

1.50 “Phase II Clinical Study”

shall mean a clinical investigation of a pharmaceutical product in humans (usually the target human patient population), the principal purpose of which is a determination of the safety, dose ranging or efficacy, as described in 21 C.F.R. §312.21(b), or a similar clinical study in a country other than the United States of America, by, for example, (a) a dose exploration, dose response, duration of effect, kinetics, dynamic relationship and/or preliminary efficacy and safety study of a product, or (b) a controlled dose ranging study to evaluate further the efficacy and safety of a product, and to define the optimal dosing regimen.

1.51 “Phase III Clinical Study”

shall mean a randomized and controlled expanded clinical investigation of a pharmaceutical product in humans (usually the target human patient population) on a sufficient number of patients that is designed to demonstrate whether such product is efficacious and safe for use in a particular indication being studied, with the purpose of filing a BLA for Regulatory Approval for such product, as described in 21 C.F.R. §312.21(c), or a similar clinical study in a country other than the United States of America.

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1.52 “Pharmaceutical Product”

shall mean any pharmaceutical product (in any dosage form, formulation, presentation or package configuration, if any) for human use in the Field

(a) that is Developed or Commercialized by or on behalf of BiondVax or its Affiliates or Sublicensees, and

(b) that contains one or more Compounds as active pharmaceutical ingredient (e.g. for use as therapeutic agent), and/or

(c) the manufacture, use or sale of which is covered by at least 1 (one) Valid Claim of the Licensed Patent Rights.

For clarity, if the term “on a Product-by-Product basis” is used in this Agreement, it shall mean that the respective provision shall apply in each case to different Pharmaceutical Products that require either a new Regulatory Approval process or address a different Indication.

For further clarity, if a pharmaceutical product does not meet Subsection (b) (e.g. Nanobodies that have not been generated by the Görlich Department and the Dobbelstein Department, but are generated by BiondVax, or in-licensed or acquired by BiondVax from a Third Party), but meets Subsection (c), such pharmaceutical product still qualifies as “Pharmaceutical Product” under this Agreement.

1.53 “Product”

shall mean a Pharmaceutical Product or a Diagnostic Product.

1.54 “Receiving Party”

shall have the meaning ascribed to it in Section 1.18(a).

1.55 “Regulatory Approval”

shall mean any and all approvals, licenses, registrations or authorizations of any Regulatory Authority necessary for the clinical testing, manufacture, marketing, use and/or sale of a Product in a country, including without limitation the acceptance of INDs and BLAs.

1.56 “Regulatory Authority”

shall mean any local, state, federal, national, supranational or international regulatory agency, department, bureau or other governmental entity with authority over the clinical testing, manufacture, marketing, use, and/or sale of a Product in a country, including, without limitation, the FDA and the EMA.

1.57 “Royalty Term”

shall mean, on a Product-by-Product and country-by-country basis, the term during which royalties on Net Sales are due and payable for a Product, which term shall commence on the first Commercial Sale of a Product in a country, and shall end on the later of (i) the expiration or abandonment of the last Valid Claim within the Licensed Patent Rights that cover the manufacture, use or sale of such Product in such country, or (ii) the 10th (tenth) anniversary date of the first Commercial Sale of such Product in such country.

1.58 “Subcontractors”

shall have the meaning ascribed to it in Section 2.8.

1.59 “Sublicense Consideration”

shall mean any consideration, whether (i) in cash (e.g. initial or upfront payments, technology access fees, annual fixed payments, development and sales milestone payments, royalties on sales of products), less value added tax, and/or (ii) in non-cash as in kind (e.g. devices, services, licenses or any other use rights) and/or as financial securities (e.g. shares, options, warrants or any other kind of financial securities), in each case received by BiondVax (or its Affiliates) from Sublicensees as consideration for or otherwise in connection with a sublicense, or an option to obtain a sublicense, under the Licensed Technology.

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For clarity, any payments specifically committed and allocated by the Sublicensee to reimburse BiondVax (or its Affiliates) for costs of Development activities (including allocable overhead costs) to be performed by or on behalf of BiondVax (or its Affiliates) in the course of the sublicense, or option to obtain a sublicense, with respect to the sublicensed Product, as documented in the agreement between BiondVax and the Sublicensee, in accordance with industry practice and at arm’s length terms, shall not be considered as Sublicense Consideration.

For further clarity, payments of a Sublicensee to BiondVax (or its Affiliates) as consideration for an (internal) sale of Products by BiondVax or its Affiliates to a Sublicensee for the purpose of further resale of such Products by the Sublicensee to Third Parties shall not be regarded Sublicense Consideration, to the extent the payments for such (internal) sales do not include any consideration for the grant of the sublicense to the Sublicensee with respect to the relevant Product.

1.60 “Sublicensee”

shall have the meaning ascribed to it in Section 2.2.1.

1.61 “Surviving Sublicensee”

shall have the meaning ascribed to it in Section 9.7.4.

1.62 “Target”

shall mean the molecular target [insert Target specification].

1.63 “Target-specific Nanobody Know-how”

shall mean any Know-how that

(a) is directly relating to the Compounds,

(b) has been created in the course of the RCA [or will be created in the course of the aRCA], by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or behalf of BiondVax or its Affiliates, as the case may be), and

(c) is Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

For clarity, the term “Target-specific Nanobody Know-how” includes the Compounds, to the extent the Compounds are not yet disclosed in any Target-specific Nanobody Patent Rights.

For the avoidance of doubt, the term “in the course of the RCA” under (b) above shall include also the Know-how fulfilling the requirement under (a) for which the activities for the generation have been started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (i) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated 19 October 2021, or (ii) after the Effective Date through supporting research activities in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) as set forth in the RCA.

The Target-specific Nanobody Know-how at the Effective Date is identified and described in Appendix 1.63.

The Target-specific Nanobody Know-how generated after the Effective Date under the RCA, if any, shall be added to Appendix 1.63 by the Parties in good faith [and if generated in the course of the aRCA will be added to Appendix 1.63 in accordance with Section 2.1.6].

It is the common understanding of the Parties that “directly relating” as used under (a) means any item of the Know-how which relates to the composition of matter of the Compounds, or the use of Compounds in relation to the Target, or otherwise addresses properties of Compounds specific for the Target (e.g. complementary-binding regions). An item of Know-how which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the Target, and/or the generation, manufacture and use of such Nanobodies outside the Field, shall be regarded to “not directly relating to the Compounds” in the meaning of (a).

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1.64 Target-specific Nanobody Patent Rights

shall mean any Patent Rights that

(a) are claiming inventions that (i) directly relate to the Compounds, and (ii) have been created in the course of the RCA, [or will be created in the course of the aRCA], by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (either solely, or jointly with and by or on behalf of BiondVax or its Affiliates, as the case may be), and

(b) are Controlled by MPG (and/or UMG, as applicable) (either solely, or jointly with BiondVax or its Affiliates, as the case may be).

For the avoidance of doubt, the term “in the course of the RCA” under (a) (ii) above shall include also the inventions fulfilling the requirement under (a) (i), for which the activities for the generation have been started by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) (i) before signing of the RCA in light of the negotiations after conclusion of the term sheet between the Parties dated 19 October 2021, or (ii) after the Effective Date through supporting research activities in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) as set forth in the RCA. The Target-specific Nanobody Patent Rights at the Effective Date are listed in Appendix 1.64.

The Target-specific Nanobody Patent Rights generated after the Effective Date under the RCA, if any, shall be added to Appendix 1.64 by the Parties in good faith [and if generated in the course of the aRCA will be added to Appendix 1.64 in accordance with Section 2.1.6].

It is the common understanding of the Parties that “directly relating” as used under (a) (i) means any item protected under a patent claim of the relevant Patent Right which relates to the composition of matter of the Compounds, or the use of Compounds in relation to the Target, or otherwise addresses properties of Compounds specific for the Target (e.g. complementary-binding regions). An item covered by a patent claim of the relevant Patent Right which is reasonably to be expected to also address properties of Nanobodies (e.g. backbone structure) that are designed to bind to targets other than the Target, and/or the generation, manufacture and use of such Nanobodies outside the Field, shall be regarded to “not directly relating to the Compounds” in the meaning of (a) (i).

1.65 “Target-specific Nanobody Technology”

shall mean collectively the Target-specific Nanobody Know-how and the Target-specific Nanobody Patent Rights.

1.66 “Term”

shall have the meaning ascribed to it in Section 9.1.

1.67 “Third Party”

shall mean any person or entity other than MI, MPG, MBM, UMG, and BiondVax, and their respective Affiliates.

1.68 “Third Party Blocking Patent Rights”

shall mean any Patent Rights (i) Controlled by a Third Party, (ii) that cover a Product as a substance/composition of matter, or its production process or its formulation or its route of administration, and (iii) that would, in absence of a license, be infringed by the Development or Commercialization of such Product. For clarity, any Patent Rights Controlled by a Third Party that do not cover a Product as described in (ii), e.g. packaging of a Product, do not qualify as Third Party Blocking Patent Rights. For further clarity, any Patent Rights Controlled by a Third Party that cover a device shall qualify as Third Party Blocking Patent Rights, if the Product is regarded as “drug/device combination product” by the relevant competent Regulatory Authority in the procedures for Regulatory Approval according to the applicable laws.

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1.69 “Valid Claim”

shall mean any claim of

(a) an issued patent within the Licensed Patent Rights which has not (i) expired or been revoked, abandoned, disclaimed, or cancelled, or (ii) been declared invalid by a decision of a court or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, or (iii) been admitted to be invalid or unenforceable through reissue, reexamination or disclaimer or otherwise, or

(b) a pending patent application within the Licensed Patent Rights that was filed and has been prosecuted in good faith and has not been (i) cancelled, withdrawn, abandoned or disclaimed, or (ii) finally determined to be unallowable by the applicable governmental authority (from which no appeal is or can be taken); provided, however, that, if a claim of a patent application has been pending for more than 7 (seven) years, such claim will not constitute a Valid Claim unless and until a patent issues with such claim, provided, further, that, for purposes of the foregoing proviso, any newly filed claim which claims essentially or substantially the same subject matter as any earlier filed claim shall be considered pending for the same period of time as such earlier filed claim has been pending.

2. GRANT OF RIGHTS

2.1 License Grant

2.1.1 License Grant. The Licensors grant to BiondVax and its Affiliates

(a) an exclusive, worldwide, royalty-bearing, transferable (in accordance with Section 10.4), sublicensable (in accordance with Section 2.2) license under all right, title and share Controlled by MPG and/or UMG with respect to the Target-specific Nanobody Know-how and the Target-specific Nanobody Patent Rights, to Develop, have Developed, use, have used, Commercialize and have Commercialized, Products in the Field; and

(b) a non-exclusive, worldwide, royalty-bearing, transferable (in accordance with Section 10.4), sublicensable (in accordance with Section 2.2) license under all right, title and share Controlled by MPG and/or UMG with respect to the Enabling Nanobody Know-how and the Enabling Nanobody Patent Rights, which license shall be exclusive for the Target, to Develop, have Developed, use, have used, Commercialize and have Commercialized, Products in the Field.

2.1.2 Subcontractors / Sublicensees. BiondVax and its Affiliates may, in their sole discretion, have Developed or have Commercialized Products by Subcontractors on behalf of BiondVax or its Affiliates pursuant to Section 2.8, or grant sublicenses to Third Parties to Develop and/or to Commercialize Products pursuant to Section 2.2.

2.1.3 Partnering / Sale of BiondVax Project. In case BiondVax (or its Affiliates) partners with a Third Party its project relating to Development and Commercialization of Nanobodies against the Target with respect to 1 (one) or several Indications, and this project to the extent partnered includes some or all of the Licensed Technology (the “BiondVax Project”), such Third Party partner of BiondVax (or its Affiliates) will be granted a sublicense by BiondVax (or its Affiliates) to the respectively concerned Licensed Technology (as the case may be for 1 (one) or several Indications), and accordingly, the payments of the Third Party partner to BiondVax (or its Affiliates) will be regarded and treated as Sublicense Consideration of BiondVax (or its Affiliates) in accordance with this Agreement to the extent the Licensed Technology is sublicensed. The Parties shall in good faith determine a reasonable weighting of the concerned Licensed Technology to the respective other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target that are licensed by BiondVax to such Third Party partner, and Licensors’ participation in Sublicense Consideration according to Section 5.4 shall only apply to the share reasonably allocated to the Licensed Technology. In case BiondVax (or its Affiliates) sells the BiondVax Project to a Third Party with respect to all Indications, this Agreement (for the respectively concerned Licensed Technology) will be transferred to such Third Party acquirer in accordance with Section 10.4 of this Agreement.

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2.1.4 Inclusion of additional Intellectual Property Rights. If BiondVax at any time during the Term reasonably believes that any Intellectual Property Right generated by or on behalf of the Görlich Department (and/or the Dobbelstein Department, as applicable) prior to the Effective Date (or thereafter in the course of supportive research in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) under the RCA, if applicable) and Controlled by MPG and/or UMG, which fulfils the other applicable criteria of the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, was mistakenly not explicitly addressed in the relevant appendix of this Agreement, but should have been listed, upon written request of BiondVax, the Parties shall discuss in due time and in good faith if and to what extent such Intellectual Property Right shall be included into, and be an integral part of, the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, under this Agreement with effect as of the Effective Date (or such later day of generation in case of generation in the course of supportive research in case that BiondVax has exercised its option prior to fulfilment of the Compound Acceptance Criteria (as such term is defined in the RCA) under the RCA, if applicable), and the share of MPG and/or UMG in such Intellectual Property Right will be included into the license granted to BiondVax under this Agreement, without any additional payment due by BiondVax for such inclusion (except for Sideground Technology MPG/UMG (as this term is defined in the RCA), which was introduced to the subproject related to the Target under the RCA, and for which specific additional financial terms mutually pre-agreed in accordance with the provisions of the RCA shall apply); provided, however, that, upon such inclusion, the financial terms and conditions of this Agreement shall apply also to such included Intellectual Property Right. The relevant Appendices of the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, attached to this Agreement shall be updated accordingly upon such inclusion.

2.1.5 [Inclusion of aRCA IP. Provided that the aRCA IP fulfils the other applicable criteria of the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, such aRCA IP shall be automatically included into, and be an integral part of, the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, under this Agreement, and the share of MPG and/or UMG in such aRCA IP will be included into the license granted to BiondVax under this Agreement, without any additional payment due by BiondVax for such inclusion; provided, however, that, upon such inclusion, the financial terms and conditions of this Agreement shall apply to such included aRCA IP.

2.1.6 Appendices for Included aRCA IP. The Parties shall, in accordance with the terms of the aRCA but at the latest within 60 (sixty) days after the expiration or termination of the aRCA, in good faith jointly identify and describe the aRCA IP to be included pursuant to Section 2.1.5 by adding such aRCA IP to the respective Appendices of the Target-specific Nanobody Technology or the Enabling Nanobody Technology, as applicable, under this Agreement. If, after such inclusion, a Party reasonably believes that additional aRCA IP should be included into this Agreement, such Party shall inform the other Party thereof no later than 12 (twelve) months after the expiration or termination of the aRCA, and the Parties shall discuss in due time and in good faith if and to what extent such additional aRCA IP will be included into this Agreement.]

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2.2 Sublicenses

2.2.1 Sublicensee. BiondVax and its Affiliates may grant sublicenses, and authorize the grant of further sublicenses through multiple tiers, to the rights granted to them under Section 2.1.1 to one or more Third Parties (each, a “Sublicensee”), subject to the terms and conditions of this Section 2.2, and provided that sublicences with respect to the Enabling Nanobody Know-how and Enabling Nanobody Patent Rights shall be only made for the Target, and only together with a sublicense to the Target-specific Nanobody Know-how and the Target-specific Nanobody Patent Rights.

2.2.2 Consistency with this Agreement. Each sublicense granted under this Agreement shall be subject and subordinate to, and be consistent with, the terms and conditions of this Agreement. Any sublicense granted by BiondVax under this Agreement will not relieve BiondVax of its obligations, and shall not limit BiondVax’s ability, to fully comply with all of its obligations under this Agreement.

2.2.3 Copy of Sublicense Agreement. Within 30 (thirty) days after the signature of each sublicense granted under this Agreement to a Third Party, BiondVax shall provide the Licensors with a reasonably redacted copy of the signed sublicense agreement. The sublicense agreement shall be the Confidential Information of BiondVax, and the Licensors may use such sublicense agreement solely for the purpose of monitoring BiondVax’s compliance with its obligations under this Agreement, and the Sublicensee’s compliance with its obligations under the sublicense agreement.

2.2.4 Insolvency. Notwithstanding Sections 2.2.1 through 2.2.3 above, if an insolvency event according to Section 9.8 occurs, and this Agreement is not terminated pursuant to Section 9.8, each sublicense that BiondVax or the insolvency administrator intends to grant to a Third Party shall be subject to the prior written approval of the Licensors.

2.3 Retained Rights for MI, MPG and UMG.

2.3.1 Retained Research Rights. Each of MPG and UMG retains the cost-free right to use the Licensed Technology (i) for internal scientific research, teaching, education and publication purposes (subject to compliance with the confidentiality and publication provisions of this Agreement), (ii) for scientific research collaboration purposes with academic Third Parties (subject to compliance with the confidentiality provisions of this Agreement); provided that in case of an intended research collaboration with a non-for-profit organization aiming to develop and manufacture a medicinal product in the Field, BiondVax has not objected to such research collaboration for good reason within 1 (one) month after receipt of a notice from MPG or UMG, as applicable, and (iii) for patient care within the facilities of UMG (subject to compliance with the confidentiality provisions of this Agreement). If BiondVax has notified MPG, through MI, and UMG that a Compound has successfully passed the Nomination Of Pre-clinical Development Candidate, including up to 2 (two) Compounds nominated as pre-clinical development back-up candidates, the use rights of MPG and UMG in accordance with (i) shall remain unaffected, and MPG and/or UMG (as applicable) shall, prior to any use of such Compounds in accordance with (ii), discuss with BiondVax in good faith reasonable limitations, e.g. discussion of results related to such Compounds before disclosure to academic Third Parties, and/or blinding of the structure of such nominated Compounds towards academic Third Parties.

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2.3.2 Retained License Rights. The Licensors may, in their sole discretion, grant further non-exclusive licenses to the Enabling Nanobody Technology (specifically excluding Enabling Nanobody Technology jointly owned by BiondVax on the one side and MPG and/or UMG on the other side, for which any licensing requires BiondVax’s prior written consent, which shall not be unreasonably withheld) to Third Parties for targets other than the Target, and such further licenses may be exclusive for the respective target other than the Target. The Licensors may, in their sole discretion, provide the Enabling Nanobody Know-how (specifically excluding Enabling Nanobody Know-how jointly owned by BiondVax on the one side and MPG and/or UMG on the other side, for which any disclosure requires BiondVax’s prior written consent, which shall not be unreasonably withheld) to any Third Party interested in the aforementioned license, and such provision of such Enabling Nanobody Know-how shall be deemed to be in compliance with the provisions of this Agreement.

2.4 No Additional Rights.

Nothing in this Agreement shall be construed to confer any rights upon BiondVax, by implication or otherwise, as to any Intellectual Property Rights of MPG or UMG, other than the Licensed Technology.

2.5 Transfer of Licensed Know-how

2.5.1 Transfer. Within 60 (sixty) days after the Effective Date, MPI-MS (with the support of UMG, as applicable) and BiondVax shall negotiate in good faith the details (including, without limitation, the content and timelines) for the transfer of the Licensed Know-how (including, for clarity, all Compounds which were generated in the course of the subproject conducted related to the Target under the RCA) to BiondVax, to the extent the Licensed Know-how is not yet available at BiondVax in a comprehensible manner in light of the previous research collaboration with MPG and UMG under the RCA. In the course of such agreed-upon transfer, MPI-MS (with the support of UMG, as applicable) shall provide to BiondVax in suitable form the documents, data and technical information in the possession of MPI-MS (and of UMG, as applicable) at the Effective Date and pertaining to the Licensed Know-how, which documents, data and technical information are reasonably available to the MPI-MS (and to UMG, as applicable) without undue searching. Each Party shall bear its own costs and expenses arising in connection with or in relation to the transfer of the Licensed Know-how pursuant to this Section 2.5.1.

2.5.2 Use of Documentation. BiondVax may not use the documentation it receives under this Section 2.5 for any purposes other than as permitted by this Agreement, and such documentation shall be treated as Confidential Information of the Licensors, except to the extent such documentation contains and/or refers to Licensed Technology which is jointly owned by BiondVax on the one side and MPG and/or UMG on the other side. The MPI-MS (and UMG, as applicable) provides such documentation “as is”. The MPI-MS (and UMG, as applicable) shall use reasonable efforts to provide the documentation to BiondVax in a suitable form; provided, however, that the MPI-MS (and UMG, as applicable) shall have no obligation to reformat or otherwise alter or modify any such documentation, or to create documentation in electronic form, in order to provide it to BiondVax. Any and all such documentation delivered to BiondVax under this Section 2.5 is and shall remain the sole property of MPG (and/or UMG, as applicable), except to the extent that BiondVax has contributed to such documentation and provided that such documentation shall be subject to BiondVax’s rights as set forth in this Agreement.

2.5.3 Filing of Patent Rights for Licensed Know-how. If BiondVax, upon its reasonable judgement, believes that some or all of the Licensed Know-how should be patented, BiondVax shall inform the Licensors thereof. The Parties shall discuss in due time and in good faith if and to what extent Patent Rights will be filed for such Licensed Know-how. If such Patent Rights are filed, they shall qualify and be deemed part of the Target-specific Nanobody Patent Rights or the Enabling Nanobody Patent Rights, as applicable.

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2.5.4 Disclosure of Licensed Know-how to support Licensed Patent Rights. Each Party responsible for or entitled to prosecute, enforce or defend any of the Licensed Patent Rights shall inform and discuss in good faith the necessity and extent of disclosure of any item of Licensed Know-how for the purpose of supporting any relevant proceedings relating to a Licensed Patent Right. The other Party will not unreasonably withhold its consent to such necessary disclosures of Licensed Know-how.

2.6 Publication of Licensed Know-how

2.6.1 Intended Publication by MPI-MS/UMG. The Parties recognize that (i) the Görlich Department and the Dobbelstein Department have a significant scientific interest in publishing the Licensed Know-how, and (ii) BiondVax has a significant business interest in maintaining the confidentiality of the Licensed Know-how. In order to reasonably balance such interests, the Licensors acknowledge that it requires BiondVax’s prior review of publications that the Görlich Department and/or the Dobbelstein Department intend to make that include the Licensed Know-how, and BiondVax acknowledges that it may delay any requested approval only for good cause. The Görlich Department and/or the Dobbelstein Department shall therefore make available to BiondVax a copy of any intended abstract, manuscript or presentation that would include any Licensed Know-how (the “Intended Publication”) no less than 12 (twelve) days prior to the intended submission of the manuscript or other draft of its Intended Publication to the relevant Third Party (e.g. the editorial board or conference organizer). The Licensors will use reasonable efforts that the Görlich Department and the Dobbelstein Department will comply with the provisions of this Section 2.6.

2.6.2 Review by BiondVax. BiondVax shall have 10 (ten) days from its receipt of the Intended Publication to notify the Görlich Department and/or the Dobbelstein Department in writing of any specific reasonable objections to the disclosure. In the event BiondVax makes such reasonable objections, the Görlich Department and/or the Dobbelstein Department agrees to not submit and publish the Intended Publication, or to not submit and make the presentation containing the objected-to information, as applicable, for additional 30 (thirty) days from its receipt of BiondVax’s notice. During such 30-day-period, they will discuss in good faith reasonable redactions and/or revisions to the Intended Publication to satisfy BiondVax’s reasonable concerns. Specifically, if the Intended Publication (i) would result in the disclosure of Confidential Information of BiondVax, upon request of BiondVax, the Görlich Department and/or the Dobbelstein Department shall modify the Intended Publication to avoid such disclosure, but the Parties shall use reasonable efforts to provide scientifically meaningful equivalent information in such Intended Publication, or (ii) would jeopardize the patentability of any inventions based on the Licensed Know-how that may lead to Patent Rights, upon request of BiondVax, the Görlich Department and/or the Dobbelstein Department shall delay the Intended Publication for a period of 60 (sixty) instead of 30 (thirty) days, in order to allow BiondVax (and/or MPG and/or UMG, as applicable) to file a patent application.

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2.6.3 Revised Intended Publication. The Görlich Department and/or the Dobbelstein Department shall delete from the originally proposed Intended Publication any Confidential Information of BiondVax, and any other reasonably objected-to information as agreed between the Görlich Department and/or the Dobbelstein Department and BiondVax, and shall provide to BiondVax such revised Intended Publication in due time after the applicable delay periods as set forth in Section 2.6.2 for final review. BiondVax shall inform the Görlich Department and/or the Dobbelstein Department in writing within 10 (ten) days after receipt of such revised Intended Publication whether or not BiondVax has any further reasonable objections to it. If BiondVax informs the Görlich Department and/or the Dobbelstein Department within such 10 (ten) days of its further reasonable objections, BiondVax and the Görlich Department and/or the Dobbelstein Department shall discuss in good faith, within further 10 (ten) days after such notice, reasonable redactions and/or revisions to the revised Intended Publication. The Görlich Department and/or the Dobbelstein Department shall take into due consideration the redactions and/or revisions reasonably proposed by BiondVax. After such 10-day-period, the Görlich Department and/or the Dobbelstein Department may submit the revised Intended Publication (as further redacted or revised in the Görlich Department’s and/or the Dobbelstein Department’s reasonable discretion).

2.6.4 Intended Publication by BiondVax. If BiondVax has a reasonable interest in publishing the Licensed Know-how, BiondVax shall inform the Görlich Department and the Dobbelstein Department of such intent in due time. Sections 2.6.1 through 2.6.3 shall apply accordingly.

2.7 No Further Support.

Except as expressly set forth in this Agreement, neither MI nor MPG nor UMG shall have any obligation under this Agreement to provide support or advice to BiondVax or its Affiliates (or to any of their customers) in connection with the Development and Commercialization of Products. [The Parties acknowledge that they have certain rights and obligations as set forth in the aRCA, which is separate from this Agreement.]

2.8 Subcontracting

BiondVax (and its Affiliates) may subcontract to one or more Third Parties (each, a “Subcontractor”) as follows:

2.8.1 Subcontracting for Development. BiondVax (and its Affiliates) may subcontract to Subcontractors the performance of the Development of Products on behalf of BiondVax or its Affiliates (e.g. contract research organizations, contract manufacturing organization, consultants or development collaboration partners), without granting a sublicense to such Subcontractors, provided that (i) none of the rights of the Licensors under this Agreement are adversely affected as a result of such subcontracting, (ii) any Subcontractor to whom BiondVax discloses Confidential Information of the Licensors shall be bound by confidentiality and restricted use obligations at least as restrictive as those contained in this Agreement, (iii) BiondVax (or its Affiliates) shall use reasonable efforts to achieve that (aa) the Subcontractor performs its respective services for BiondVax on a fee-for-service or substantially similar basis, and (bb) the Subcontractor is obliged, fully paid-up by the service fee or similar, to assign, or exclusively license, to BiondVax (or its Affiliates), subject to customary retained rights for research purposes, any Patent Rights for inventions generated by the Subcontractor in performing its services for BiondVax (or its Affiliates). If BiondVax (or its Affiliates) is not able to achieve the requirements described in (iii), it shall first, before entering into any agreement with the Subcontractor, inform the Licensors hereof, and the Parties shall discuss in good faith if and under what terms, taking into account the last sentence of Section 5.3.5.1, such Subcontractor may be engaged by BiondVax. For clarity, any Development performed by Subcontractors shall, for the purpose of this Agreement, be considered to have been performed by BiondVax.

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2.8.2 Subcontracting for Commercialization. BiondVax (and its Affiliates) may subcontract to Subcontractors the performance of the Commercialization of Products on behalf of BiondVax or its Affiliates (e.g. distributors or other sales partners in certain countries or regions), without granting a sublicense to such Subcontractors, provided that any Commercialization performed by such Subcontractors shall, for the purpose of this Agreement, be deemed to be performed on behalf of BiondVax, and sales of Products by such Subcontractor shall qualify and be deemed as Commercial Sales made on behalf of BiondVax under this Agreement.

2.9 Formal License Requirements

The Licensors shall execute all documents for formal licenses and give all required declarations regarding the licenses granted under this Agreement, and shall reasonably cooperate with BiondVax to the extent such documents and declarations are required for the record or registration of the licenses granted under this Agreement at the various patent offices and other relevant governmental authorities for the benefit of BiondVax. Upon request, the Licensors shall reasonably assist BiondVax in effecting such registration by delivering all necessary documents and declarations to BiondVax. BiondVax shall bear all reasonable expenses incurred by the Licensors in connection with this Section 2.9.

2.10 Equitable Licenses

2.10.1 Least Developed Countries. BiondVax shall comply, and shall ensure that its Affiliates and Sublicensees comply, with the concept of “equitable licenses”, in order to ensure that patients in the “least developed countries” (which countries are classified in the respective list of the United Nations, Department of Economic and Social Affairs, as amended from time to time) get access to Products at affordable costs, as follows: BiondVax shall in its reasonable discretion and after a commercially reasonable time after Regulatory Approval for a BLA for Products, and any other required pricing and/or reimbursement approvals, (i) work in good faith to grant licenses to commercially reasonable Sublicensees at fair, reasonable and non-discriminatory terms for the manufacture and sale of Products to patients in at least one or more of the least developed countries at affordable costs, (ii) sell Products subject to the required Regulatory Approvals in the concerned country at affordable costs to patients in the least developed countries, or (iii) declare a non-assert regarding the use of Licensed Patent Rights for the manufacture and sale of Products in the least developed countries at affordable costs.

2.10.2 Developing Countries. BiondVax (and its Affiliates and Sublicensees) may decide, in its reasonable discretion, to extend the concept of equitable licenses set forth in Section 2.10.1 to one or more countries that can be reasonably qualified as “developing countries” (for the purpose of this Agreement, the countries contained in the list of “least developed countries” shall be excluded from the “developing countries”).

2.10.3 Access to Products in the EU. BiondVax shall use commercially reasonable efforts to ensure, and shall use commercially reasonable efforts to ensure that its Affiliates and Sublicensees ensure, that the countries of the European Union have fair and reasonable access to Products.

2.10.4 Costs. BiondVax shall bear all expenses incurred in connection with this Section 2.10.

2.10.5 Consequences of Breach. In the event that BiondVax (or its Affiliates or Sublicensees) has materially breached one or more of the obligations contained in this Section 2.10, the Licensors (only together) may terminate this Agreement with respect to the concerned Product only for the concerned country in accordance with Section 9.6.2 which shall apply accordingly.

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3. REPRESENTATIONS AND WARRANTIES / LIABILITIES

3.1 Limited Representations and Warranties

3.1.1 Limited Representations and Warranties by the Licensors. The Licensors represent and warrant that, at the Effective Date, (i) the Licensors have the right to enter into this Agreement, and to grant all rights and licenses contained herein, in the Lincensor’s own name regarding MPG’s and UMG’s, as applicable, rights in the Licensed Technology, (ii) the Licensors have not granted any licenses under, assigned, transferred, conveyed or otherwise encumbered MPG’s and UMG’s, as applicable, right, title and ownership interest in the Licensed Technology to Third Parties prior to the Effective Date, (iii) to the best of each Licensor’s knowledge at the Effective Date, after conducting reasonable inquiries as is common practice for academic research institutions, MPG Controls MPG’s share and UMG Controls UMG’s share in the Licensed Technology.

3.1.2 Further Limited Representations and Warranties by the Licensors. The Licensors represent and warrant that, at the Effective Date, (i) the Licensed Patent Rights validly exist, the necessary documents have been filed with the relevant patent offices, and the necessary fees have been paid in, (ii) the Licensors have no actual knowledge of any claims, judgments or settlements pending with respect to the Licensed Patent Rights, and the Licensors have not received notice (and MI is not aware that MPG has received notice) that any such claims, judgments or settlements are threatened, and (iii) the Licensors have no actual knowledge of any actual litigation, and the Licensors have not received notice (and MI is not aware that MPG has received notice) that any such litigation is threatened) that may adversely affect the patentability, validity or scope of the Licensed Patent Rights.

3.1.3 Limited Representations and Warranties by BiondVax. BiondVax represents and warrants that, at the Effective Date, (i) BiondVax has the right to enter into this Agreement and to perform its obligations under this Agreement, and (ii) the performance of this Agreement by BiondVax does not create a breach or default under any other agreement to which BiondVax is a party.

3.1.4 Acknowledgements by BiondVax. BiondVax acknowledges that (i) the Licensors have informed BiondVax prior to the Effective Date that the Licensors have not performed a patent due diligence for the Licensed Patent Rights, in particular no patentability search or freedom to operate analysis has been made either by MI or be UMG, and (ii) it is in BiondVax’s sole discretion to perform its own patent due diligence at its own expense.

3.1.5 Covenant of the Licensors. The Licensors hereby covenant (i) that each of the Licensors will not, and MI will procure that MPG will not, grant any security interest in a Licensed Patent Right and/or Licensed Know-how in favor of any creditor without BiondVax’s prior written consent; and (ii) to provide BiondVax with written notice if anytime during the Term either of the Licensors becomes aware that any of the events that are subject matter of the warranties given under Sections 3.1.1 or 3.1.2 occurs.

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3.2 No Further Representations and Warranties

3.2.1 No Further Representations and Warranties.

3.2.1.1 OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 3.1, MI, MPG, MBM AND UMG MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, AND THE ABSENCE OF ANY LEGAL OR ACTUAL DEFECTS, WHETHER OR NOT DISCOVERABLE.

3.2.1.2 OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 3.1, BIONDVAX MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, AND THE ABSENCE OF ANY LEGAL OR ACTUAL DEFECTS, WHETHER OR NOT DISCOVERABLE.

3.2.2 No Further Specific Representations and Warranties. Specifically, and not to limit Section 3.2.1 and except as and to the extent provided in Section 3.1, MI, MPG, MBM and UMG make no representation or warranty (i) regarding the merchantability or fitness for a particular purpose of the Licensed Technology, (ii) regarding the patentability, scope, validity, or enforceability of the Licensed Patent Rights, (iii) that the use of the Licensed Technology, or the Development and Commercialization of any Product, will not infringe any Intellectual Property Rights of any Third Party, and (iv) that the use of the Licensed Technology, or the Development and Commercialization of any Product, will not cause any damages of any kind to BiondVax or to any Third Party.

3.3 Limitation of Liabilities

3.3.1 Exclusion. TO THE EXTENT LEGALLY PERMISSIBLE, IN NO EVENT SHALL EITHER PARTY OR MPG OR MBM (OR THEIR TRUSTEES, DIRECTORS, OFFICERS AND EMPLOYEES) BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, MULTIPLE OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ECONOMIC DAMAGES CONSISTING OF LOST PROFITS, LOSS OF USE, DAMAGE TO GOODWILL, OR LOSS OF BUSINESS), REGARDLESS OF WHETHER ANY OF THE AFOREMENTIONED PERSONS OR ENTITIES SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

3.3.2 Limitation. To the extent legally permissible, the aggregate liability for all claims arising out of or under this Agreement between the Parties shall not exceed the greater of (a) [***], or (b) the amounts actually paid in cash by BiondVax to the Licensors under Section 5.

3.3.3 Unlimited Liability. The exclusions and limitations of Sections 3.3.1 and 3.3.2 shall not apply:

(a) to cases of mandatory statutory liability;

(b) to damages to the life or health of human beings;

(c) to damages caused by gross negligence or willful intent of a Party or its Affiliates; and

(d) to the indemnification obligations as per Section 7.

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4. BiondVax DILIGENCE OBLIGATIONS AND REPORTS

4.1 Product Development Responsibilities and Diligence Obligations

4.1.1 Product Development. BiondVax shall use Commercially Reasonable Efforts, or shall cause one or more of its Affiliates or Sublicensees to use Commercially Reasonable Efforts, to Develop at least 1 (one) Pharmaceutical Product in at least 2 (two) of the Major Market Countries. BiondVax shall fund, or cause to be funded, the costs of conducting all Development activities with respect to Products pursuant to this Section 4.1. Developing a Product in the abovementioned countries through sublicensing shall be regarded as Commercially Reasonable Efforts.

4.1.2 Development Plan. Attached to this Agreement as Appendix 1.22 is a reasonable and meaningful initial development plan of BiondVax that meets industry standards applicable to BiondVax (the “Development Plan”), showing as of the Effective Date on a Product-by-Product basis the reasonably anticipated multi-year plan for the Development of Products, specifying the type of activities, timelines anticipated, a reasonably detailed budget, the tasks and Development work planned by BiondVax and its Affiliates, and any further relevant details. At the Effective Date, the Development Plan will cover, on a Product-by-Product basis, the proposed Development activities from the Effective Date until the first filing of an IND in case of Pharmaceutical Products. At the first filing of an IND, the Development Plan will cover the proposed Development activities until achievement of proof of concept in humans (usually achieved upon completion of a Phase II Clinical Study). At achievement of proof of concept in humans, the Development Plan will cover the proposed Development activities until receipt of Regulatory Approval for a BLA. For the avoidance of doubt, the Development Plan is subject to continuous review and reasonable and necessary adaptions by BiondVax as the Development of Products proceed. BiondVax will report to the Licensors material changes of the Development Plan in writing in accordance with Section 4.3. BiondVax is committed to ensure sufficient financial resources timely available in accordance with the Development Plan as part of applying Commercially Reasonable Efforts. All reports, updates and information with respect to the Development Plan furnished to each Licensor under this Section 4.1.2 shall constitute Confidential Information of BiondVax, and shall be treated by the Licensors in accordance with Section 8.

4.1.3 Clinical Studies. Any Clinical Studies for Products will be made by BiondVax under its own responsibility. For each Clinical Study to be performed (also) in Germany, UMG gets the option to participate as trial site, under the same terms offered by BiondVax to other trial sites in Germany; any such participation of UMG requires a separate clinical trial agreement between BiondVax and UMG. For each clinical trial, UMG (through Prof. Dobbelstein) gets the option to participate within an advisory board.

4.2 Product Commercialization Responsibilities and Diligence Obligations

BiondVax shall use Commercially Reasonable Efforts, or shall cause one or more of its Affiliates or Sublicensees to use Commercially Reasonable Efforts, to Commercialize at least 1 (one) Pharmaceutical Product in at least 2 (two) of the Major Market Countries. BiondVax shall fund, or cause to be funded, the costs of conducting all Commercialization activities with respect to Products pursuant to this Section 4.2. Commercializing a Product in the abovementioned countries through sublicensing shall be regarded as Commercially Reasonable Efforts.

4.3 Development Reports and Records

4.3.1 Development Reports. BiondVax shall furnish to the Licensors, and shall oblige its Affiliates and Sublicensees to furnish to BiondVax for inclusion in its reports to the Licensors, in writing quarterly, within 45 (forty-five) days after the end of each calendar quarter, with a written report regarding the Development of Products. Such report shall present, on a Product-by-Product basis, a reasonable and meaningful summary of the Development activities performed, the progress made and the results achieved by BiondVax, its Affiliates and Sublicensees through the end of the reporting period to which such report pertains, regarding the Development of Products. The report shall also contain upcoming Development milestones and a discussion of intended Development efforts for the immediately following reporting period. The first report shall be provided to the Licensors within 45 (forty-five) days after the end of the first complete calendar quarter after the Effective Date. Additionally, the Licensors may, only together, reasonably request that BiondVax, at the end of each reporting period or within 30 (thirty) days after receiving the respective development report, presents and comments on the status and progress of the Development in a joint meeting (either via telephone, internet-based or face-to-face).

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4.3.2 Record Keeping. BiondVax shall maintain complete and accurate records of all Development and Commercialization activities for Products conducted in accordance with this Section 4, and of all results achieved in conducting such activities. BiondVax shall maintain such records in sufficient detail and in good scientific manner appropriate for auditing, patent and regulatory purposes.

4.3.3 Confidentiality. All reports furnished to each Licensor under this Section 4.3 shall constitute Confidential Information of BiondVax, and shall be treated by the Licensors in accordance with Section 8.

4.4 Compliance with Laws

BiondVax shall, on a Product-by-Product and country-by-country basis, comply with, and shall oblige its Affiliates and Sublicensees to comply with, all mandatory local, regional, state, federal, national, supranational and international laws, regulations and rules applicable to the Development and Commercialization of Products.

4.5 Non-Use of Names

Except as explicitly permitted pursuant to this Agreement, neither Party may use the name, trademark or logo of the other Parties, including for MI: “Max Planck Institute”, “Max Planck Society”, “Max Planck Innovation”, for UMG: “Georg-August-Universität Göttingen”, “Universitätsmedizin Göttingen”, “MBM Science Bridge”, and for BiondVax: “BiondVax”, or any other name of an entity within the BiondVax group of companies; or any variation, adaptation, or abbreviation thereof, or the name of any individual of a Party, in any promotional material or other public announcement or disclosure without the prior written consent of the affected Party or, in the case of an individual, the consent of that individual, except in reference to already publicly available information thereof. Either Party does not need to obtain explicit prior approval for each individual use of another Party’s name, trademark or logo if the Party uses the name, trademark or logo of such other Party substantially consistent with the presentation and format and in similar context as previously approved by such other Party, However, the other Party may reasonably object against such use for important reason and the relevant Parties shall discuss in good faith any amendment the using Party shall make.

4.6 Liability for Affiliates and Sublicensees

If Affiliates or Sublicensees of BiondVax Develop and/or Commercialize Products, BiondVax is responsible and liable towards the Licensors that such Affiliates and Sublicensees perform their obligations in accordance with the terms and conditions of this Agreement.

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4.7 Effect of Failure

4.7.1 Breach of Sections 4.1 through 4.4. In the event that BiondVax (or its Affiliates) has materially breached any of the obligations under Sections 4.1 through 4.3, the Licensors (only together) may terminate this Agreement in accordance with Section 9.6.2. In the event that BiondVax (or its Affiliates or Sublicensees) has materially breached with respect to 1 (one) Product in 1 (one) country the obligation set forth in Section 4.4, the Licensors (only together) may terminate this Agreement with respect to the concerned Product only for the concerned country in accordance with Section 9.6.2 which shall apply accordingly.

4.7.2 Breach of Section 4.5. In the event that BiondVax (or its Affiliates) has materially breached Section 4.5, the Licensors (only together) may terminate this Agreement as a whole in accordance with Section 9.6.2. In the event that the Licensors or MPG or MBM have materially breached Section 4.5, BiondVax may terminate this Agreement as a whole in accordance with Section 9.6.2. For the avoidance of doubt, any use of the name, trademark or logo of the other Party to the extent required under any information or transparency obligation according to the applicable laws (e.g. public company obligations under U.S. SEC Rules) shall not be regarded a breach of Section 4.5.

4.7.3 Breach by Sublicensee. In the event that a Sublicensee has materially breached any of the obligations under Section 4.1 through Section 4.5 as imposed by BiondVax on such Sublicensee, BiondVax shall use reasonable efforts to cause the Sublicensee to cease and cure such breach. If the Sublicensee does not cease and cure its breach within the applicable cure period set forth in the applicable sublicense agreement, BiondVax shall inform the Licensors hereof immediately. Upon reasonable request of the Licensors (to be made only together), provided that the Licensor’s interests are materially adversely affected by such Sublicensee’s breach, BiondVax may terminate the sublicense agreement with such Sublicensee in accordance with the applicable terms thereof, or decide to compensate the Licensors for any damages arising from such Sublicensee’s breach; provided, however, that in case of a breach of Section 4.5 (while the last sentence of Section 4.7.2 shall apply accordingly), BiondVax shall terminate the sublicense agreement.

5. FINANCIAL PROVISIONS

5.1 ADS of BiondVax as Upfront Payment (Option Exercise Fee)

5.1.1 ADS Transfer. Within 45 (forty-five) days after the Effective Date, BiondVax shall instruct the competent transfer agent to issue, at no cost for the Licensors, the BiondVax ADS Shares to BNY Mellon. BNY Mellon will issue said ADSs representing the BiondVax ADS Shares at a ratio to be notified by MI to BiondVax (i) to MPG (who shall hold the respective portion of the BiondVax ADS Shares in its own name and for its own account), and (ii) to MBM (who shall hold the respective portion of the BiondVax ADS Shares as trustee for UMG), and these shares will be marked with a restrictive legend with respect to the lock-up according to Section 5.1.2. The Licensors understand and acknowledge that BiondVax shall not have any responsibility and liability towards MI, MPG, MBM and/or UMG regarding their internal relationship and allocation of costs and benefits with respect to the BiondVax ADS Shares, except for taking care of the issuance of the BiondVax ADS Shares to MPG and MBM pursuant to this Section 5.1.1.

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5.1.2 Lock-Up. Until the 1st (first) anniversary date of the Effective Date, MPG and MBM/UMG are not allowed to sell the BiondVax ADS Shares. Thereafter, MPG and MBM/UMG may, in their sole discretion and at any time, sell one, more or all of the BiondVax ADS Shares.

5.1.3 No Impact. For the avoidance of doubt, (i) the termination or expiration of this Agreement shall have no impact on any of the BiondVax ADS Shares, and (ii) the sale of any of the BiondVax ADS Shares by MPG and/or MBM/UMG shall have no impact on this Agreement.

5.2 Milestones in case of Pharmaceutical Products

5.2.1 Milestone Events / Milestone Payments. BiondVax shall pay to the Licensors the respective milestone payments upon achievement of the respective milestone events by the relevant Pharmaceutical Product of BiondVax or its Affiliates, each as set forth in the table below and as further described in this Section 5.2.1:

Milestone Event	Milestone Payment (in EUR)
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]

5.2.1 [***].

5.2.2 One-time Milestone Payments. Each respective milestone payment shall become due and payable only once upon achievement of the respective milestone event by the relevant Pharmaceutical Product.

5.2.3 [***].

5.2.4 Method of Milestone Payment. BiondVax shall inform the Licensors through MI of the achievement of the respective milestone event within 45 (forty-five) days after the respective achievement, and BiondVax shall pay to the Licensors solely through MI the respective milestone payment within 45 (forty-five) days after receipt of the respective proper invoice from MI. The Licensors understand and acknowledge that it shall be MI’s sole responsibility to forward to UMG (through MBM) the relevant portion of any milestone payment made by BiondVax according to this Agreement as agreed between MI, MBM and UMG. BiondVax shall not have any responsibility and liability towards MI, MPG, MBM and/or UMG regarding their internal relationship and allocation of costs and benefits with respect to any milestone payment made to MI hereunder, especially shall not have the obligation to pay directly to UMG with regard to the milestone payments, and shall have performed its relevant payment obligation if the relevant milestone payment due and payable has been received by MI.

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5.3 Royalties on Net Sales of Pharmaceutical Products

5.3.1 Royalty Rates. During the Royalty Term, BiondVax shall pay to the Licensors, on a Product-by-Product and calendar year-by-calendar year basis, running royalties on incremental Net Sales for each Pharmaceutical Product in a tiered model at the royalty rates set forth in the table below:

Aggregate worldwide Net Sales of a Product in a calendar year amount to:	Royalty Rate
[***]	[***]
[***]	[***]
[***]	[***]

Example: [***].

BiondVax agrees to pay royalties on Net Sales of Pharmaceutical Products for all countries that are member states of the European Patent Organization, if the Licensed Patent Rights are active in all countries of the EU5.

5.3.2 No Royalties on Equitable Licenses. If BiondVax or its Affiliates or its Sublicensees have complied with the concept of equitable licenses for the least developed countries as set forth in Section 2.10.1, any Commercial Sale of Pharmaceutical Products by BiondVax or its Affiliates to patients in the least developed countries shall not be royalty-bearing towards the Licensors under this Section 5.3. If BiondVax or its Affiliates or its Sublicensees have decided to extend the concept of equitable licenses to the developing countries as set forth in Section 2.10.2, the Licensors will reasonably reduce, or waive, the royalty obligations under this Section 5.3 for any Commercial Sale of Pharmaceutical Products by BiondVax or its Affiliates to patients in the developing countries.

5.3.3 Reductions due to Biosimilar Product Launch. If a Biosimilar Product relating to a certain Pharmaceutical Product is launched in a certain country during the Royalty Term, and Net Sales of such Pharmaceutical Product in any calendar quarter following such Biosimilar Product launch decrease by a certain percentage as compared to the average calendar quarter amount of Net Sales accounted by BiondVax for such Pharmaceutical Product in such country during the calendar quarter preceding the first launch of the Biosimilar Product, then the applicable royalty rate shall be reduced, on a calendar quarter-by-calendar quarter basis, by the same respective percentage for as long as the Biosimilar Product is sold in such country and Net Sales of such Pharmaceutical Product in any calendar quarter following the launch of the Biosimilar Product remain respectively decreased.

Example: [***].

5.3.4 No Patent Abuse / No Anti-competition Violation. The Parties understand that pursuant to the definition of the Royalty Term, BiondVax and its Affiliates are obliged to pay royalties on Net Sales of Pharmaceutical Products during a term of 10 (ten) years after the first Commercial Sale of a Pharmaceutical Product in a country, and that such term could end later than the term during which such Pharmaceutical Product is covered by a Licensed Patent Right in such country (i.e. BiondVax and its Affiliates have to pay royalties for a Pharmaceutical Product in a country even after the Licensed Patent Rights have expired for such Pharmaceutical Product in such country). The Parties agree that this consequence would be regarded from a reasonable businessman perspective as fair consideration for the license granted under this Agreement. BiondVax hereby stipulates to the fairness and reasonableness of such post-patent royalty obligations; specifically, and not to limit the foregoing, BiondVax hereby agrees that such post-patent royalty payments do not constitute an abuse of the Licensed Patent Rights or a violation of anti-competition rules.

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5.3.5 Anti-Stacking Regarding Third Party Royalties

5.3.5.1 Anti-Stacking Mechanism. If, after the Effective Date, BiondVax is, upon its reasonable judgment, required to obtain a license from one or more Third Parties to Third Party Blocking Patent Rights (e.g. such Third Party Blocking Patent Rights are necessary to meet requirements of Regulatory Authorities for a Pharmaceutical Product, e.g. a required target-product profile), then the applicable royalty rate pursuant to Section 5.3.1 will be reduced, on a country-by-country and Product-by-Product basis, from the date running royalties on sales of such Pharmaceutical Product have to be actually paid to such Third Party, by 50% (fifty percent) of any royalty rate applicable for such Third Party for the license to the Third Party Blocking Patent Rights; provided, however, that the applicable royalty rate pursuant to Section 5.3.1 will be reduced to not less than 75% after the first of such anti-stacking deduction, and will in no event (e.g. by the repeated application of the anti-stacking mechanism for additional licenses to Third Party Blocking Patent Rights) be reduced to less than a minimum floor of 50% of the applicable royalty rate pursuant to Section 5.3.1. Notwithstanding the foregoing, any Third Party Blocking Patent Right licensed by BiondVax from a Subcontractor shall be treated as follows: if such Third Party Blocking Patent Right pre-existed at the time of signature of the subcontract agreement or was generated by the Subcontractor outside the relevant subcontract, the foregoing provision of this Section 5.3.5.1 shall apply; if the invention covered by such Third Party Blocking Patent Right was generated newly by the Subcontractor during and in performance of the subcontract, the Parties shall negotiate in good faith, taking into account, among other things, the reasonable expectation to increase Net Sales for Pharmaceutical Products by engaging with such Subcontractor, the application of this Section 5.3.5.1 or an alternative reduction mechanism with respect to the royalties owed to the Licensors under this Agreement (e.g. including potential implementation of an increased minimum floor).

Example: [***].

5.3.5.2 No Carry Forward. Any amount that is not deductible under Section 5.3.5.1 above in a given calendar year (e.g. due to the fact that the minimum floor has been reached) cannot be carried forward to the following calendar year(s).

5.3.5.3 BiondVax Responsibility. BiondVax shall be responsible for paying any and all payments that may be due and payable to any Third Party arising out of BiondVax’s license to Third Party Blocking Patent Rights. BiondVax shall inform the Licensors through MI of any licenses to Third Party Blocking Patent Rights that lead to the application of the anti-stacking mechanism.

5.3.6 Royalty Reports. Starting with the first Commercial Sale of the first Pharmaceutical Product and during the Royalty Term, BiondVax shall deliver to the Licensors through MI, within 45 (forty-five) days of the end of each calendar quarter, a detailed written royalty report for the reporting period to which such report pertains, showing at least, on a Product-by-Product and country-by-country basis, (i) the kind and quantity of Pharmaceutical Products sold by or on behalf of BiondVax and its Affiliates, (ii) the gross prices charged, (iii) the calculation of Net Sales from such gross sales, (iv) the exchange rates used in determining the amount of EUR payable, (v) the resulting royalties due to the Licensors according to those figures, and (vi) any withholding taxes required to be deducted in respect of such royalties. If no royalties are due to the Licensors for a certain reporting period, the royalty report shall so state. The reports and records provided by BiondVax hereunder shall be BiondVax’s Confidential Information, and the Licensors hereby covenant that they shall not use or disclose any information included in such reports for any purpose other than determining whether BiondVax and its Affiliates have complied with their obligations under this Agreement.

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5.3.7 Accounting Period and Payment of Royalties. Royalties shall be payable for each calendar quarter, and shall be due and payable to the Licensors solely through MI within 45 (forty-five) days after receipt of the respective proper invoice from MI. The Licensors understand and acknowledge that it shall be MI’s sole responsibility to forward to UMG (though MBM) the relevant portion of any royalties paid by BiondVax according to this Agreement as agreed between MI, MBM and UMG. BiondVax shall not have any responsibility and liability towards MI, MPG and/or UMG regarding their internal relationship and allocation of costs and benefits with respect to any royalty payment made to MI hereunder, especially shall not have the obligation to pay directly to UMG with regard to the royalties, and shall have performed its relevant payment obligation if the relevant royalty payment due and payable has been received by MI.

5.4 Participation in Sublicense Consideration with respect to Pharmaceutical Products

5.4.1 Participation in Sublicense Consideration. In the event that BiondVax (or its Affiliates) grants a sublicense pursuant to Section 2.2, BiondVax shall pay to the Licensors the following percentages of the respective Sublicense Consideration received by BiondVax (or its Affiliates):

Sublicense agreement with the Sublicensee signed	Participation ratio of MI in Sublicense Consideration
[***]	[***]
[***]	[***]
[***]	[***]

[***].

If, in connection with a sublicense to some or all of the Licensed Technology, BiondVax (or its Affiliates) grants in the same agreement a license to other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target, the Parties shall in good faith determine a reasonable weighting of the Licensors’ share in the concerned Licensed Technology to the respective other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target, and this Section 5.4 shall only apply to the share reasonably allocated to the Licensed Technology.

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5.4.2 Allocation and Distribution of Sublicense Consideration

5.4.2.1 In Cash. If BiondVax (or its Affiliates) receives any Sublicense Consideration in cash, BiondVax shall provide to the Licensors solely through MI a cash payment equal to the Licensors’ participation ratio in such cash Sublicense Consideration.

5.4.2.2 Non-cash Financial Security. If BiondVax (or its Affiliates) receives any Sublicense Consideration in non-cash as financial security, BiondVax shall provide to the Licensors solely through MI, at BiondVax’s reasonable election, regarding the respective participation of the Licensors in such Sublicense Consideration, either (i) a cash payment equal to the Licensors’ participation ratio in the fair market value of such non-cash as financial security Sublicense Consideration, or (ii) a portion equal to the Licensors’ participation ratio of the non-cash as financial security Sublicense Consideration.

5.4.2.3 Non-cash In-Kind. If BiondVax (or its Affiliates) receives any Sublicense Consideration in non-cash as in-kind, BiondVax shall provide to the Licensors solely through MI reasonable and meaningful information about such non-cash in-kind Sublicense Consideration, and the Parties shall discuss in due time and in good faith how to implement the Licensors’ participation in the fair market value of such non-cash as in-kind Sublicense Consideration.

5.4.3 Method of Participation Payment. BiondVax shall inform the Licensors solely through MI without undue delay of the receipt of the respective Sublicense Consideration, and BiondVax shall provide to the Licensors solely through MI the respective participation within 45 (forty-five) days after receipt of a respective proper invoice from MI. The Licensors understand and acknowledge that it shall be MI’s sole responsibility to forward to UMG (through MBM) the relevant portion of any milestone payment made by BiondVax according to this Agreement as agreed between MI, MBM and UMG. BiondVax shall not have any responsibility and liability towards MI, MPG and/or UMG regarding their internal relationship and allocation of costs and benefits with respect to any payment made to MI hereunder, especially shall not have the obligation to directly pay to UMG with regard to the Licensors’ participation in any Sublicense Consideration, and shall have performed its relevant payment obligation if the relevant payment due and payable with respect to the Licensors’ participation in any Sublicense Consideration has been received by MI.

5.5 Minimum Floor for Milestones and Royalties

5.5.1 Minimum Floor for Milestones. If a Sublicensee achieves a milestone event pursuant to Section 5.2.1 above, and if the Licensors’ participation in the relevant milestone payment actually made by the Sublicensee to BiondVax as Sublicense Consideration for the achievement of such milestone event calculated pursuant to Section 5.4.1 above would be lower than what the Licensors would receive on a “pass-through” basis (i.e. as if BiondVax would have achieved the respective milestone event), then BiondVax shall pay to the Licensors solely through MI as minimum floor the respective milestone payment pursuant to Section 5.2.1 above, if such milestone event is achieved by a Sublicensee. For clarity, if BiondVax actually receives from its Sublicensees milestone payments for milestone events achieved by the Sublicensee other than the specific milestone events set forth in Section 5.2.1 above, such milestone payments shall, as Sublicense Consideration, only be subject to the percentage participation of the Licensors as set forth in Section 5.4.1 above. For clarity, this Section 5.5.1 shall apply irrespective of the tiers of sublicensing.

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5.5.2 Minimum Floor for Royalties. BiondVax shall pay to MI as minimum floor a royalty rate of [***] on net sales of the Commercial Sale of Pharmaceutical Products sold by a Sublicensee, less anti-stacking and Biosimilar Product entry deductions (i.e. the Licensor will receive the royalties on a “pass-through” basis as if BiondVax would have sold such Pharmaceutical Products), if the Licensors’ participation in the relevant royalty payment actually made by a Sublicensee to BiondVax as Sublicense Consideration for the sale of Pharmaceutical Products by such Sublicensee calculated pursuant to Section 5.4.1 would be lower. For clarity, for determination of net sales of the Commercial Sale of Pharmaceutical Products sold by a Sublicensee, the definition of “Net Sales” shall apply mutatis mutandis, but also taking in consideration how net sales of the relevant Sublicensee are calculated and accounted to BiondVax.

5.5.3 No Floor in Case of Equitable Licenses. The provisions set forth under this Section 5.5 shall not apply if BiondVax grants the sublicense to comply with the concept of equitable licenses according to Section 2.10.

5.5.4 Compulsory Licenses. If a competent court or governmental authority grants or orders the grant or orders that BiondVax grants a compulsory license to a Third Party under or with respect to any Licensed Patent Right and/or the Licensed Know-how, the Parties shall discuss in good faith whether or not the provisions of this Section 5.5 shall apply.

5.6 Royalties for Diagnostic Products

5.6.1 Information of Development of Diagnostic Products. In the event BiondVax intends to Develop Diagnostic Products (including Companion Diagnostic Products), BiondVax shall inform MI of such Development according to the reporting obligations under Section 4.3.

5.6.2 Royalties for Companion Diagnostic Products. Any Net Sales resulting from the Commercial Sale of a Companion Diagnostic Product shall be added to the Net Sales with the respective Pharmaceutical Product, and royalties shall accrue on the Net Sales of such Companion Diagnostic Product according to the provisions and applicable royalty rates for the respective Pharmaceutical Product as set forth in this Agreement. The Net Sales and the royalty due and payable shall be reported together with the royalty report for the respective Pharmaceutical Product.

5.6.3 Royalties for other Diagnostic Products. Diagnostic Products other than Companion Diagnostics Products shall trigger a flat royalty rate of [***] on Net Sales. The corresponding anti-stacking, payments and reporting provisions set forth for Pharmaceutical Products in this Agreement shall apply mutatis mutandis. In the event that BiondVax (or its Affiliates) grants a sublicense for Development and/or Commercialization of Diagnostic Products pursuant to Section 2.2, BiondVax shall pay to the Licensors the following percentage of the respective Sublicense Consideration received by BiondVax (or its Affiliates): [***], and Sections 5.5.2 through 5.5.4 shall apply mutatis mutandis for such minimum flooring.

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5.7 Fair Market Value / Fair Market Terms Determination

In the event that, according to this Agreement, a “fair market value” or a “fair market term” has to be determined, the Party obliged to suggest such fair market value or fair market term shall provide the other Party in due time with a good faith determination of the fair market value or fair market term, together with any information necessary or useful to support such determination. The other Party may provide the suggesting Party within 30 (thirty) days with a counter-determination of the fair market value or fair market term, which shall include any information necessary or useful to support such counter-determination. If the Parties are unable to agree on a fair market value or fair market term determination within 30 (thirty) days after receipt of such counter-determination, the expert determination as set forth in Section 10.3.4 applies.

5.8 General Payment Terms

5.8.1 Payment Periods. BiondVax shall pay all amounts due and payable under this Agreement within the periods allowed for payment as set forth in this Agreement.

5.8.2 Method of Payment. All payments due under this Agreement shall be made solely to MI by wire transfer in immediately available funds to the following account of MI:

[***]

Each payment shall reference this Agreement, and the obligation under this Agreement that the payment satisfies.

MI is solely responsible for the allocation and distribution of amounts received under this Agreement to UMG in accordance with the respective agreement between MI, MBM and UMG. For clarity, BiondVax does not assume and hereby disclaims any obligation to directly pay to UMG (through MBM) and MPG as well as direct or indirect obligation towards UMG’s or MPG’s inventors for payments resulting directly or indirectly in connection with this Agreement and its performance. BiondVax shall have performed its relevant payment obligation if the relevant payment due and payable has been received by MI.

5.8.3 Payments in EUR; Tax Withholding. Unless expressly stated otherwise in this Agreement, all payments due under this Agreement shall be payable in EUR and, if legally required, shall be paid with the additional value added tax. Conversion of foreign currency to EUR shall be made at the average exchange rate for the relevant accounting period which is calculated on the basis of the official exchange rates in the relevant reporting period as reported daily by Reuters. Such payments shall be without deduction of exchange, collection, or other charges, except for deduction of withholding or similar taxes. The Parties shall use all reasonable and legal efforts to avoid any double taxation on payments made by BiondVax to the Licensors hereunder. If BiondVax concludes that tax withholdings under the laws of any country are required with respect to payments to the Licensors, BiondVax shall withhold the required amount and pay it to the appropriate governmental authority. In such a case, BiondVax will promptly provide the Licensors solely through MI with original receipts or other evidence reasonably desirable and sufficient to allow the Licensors to document such tax withholdings adequately for purposes of claiming foreign tax credits, tax returns and similar benefits.

5.8.4 Late Payments. Any payments that are not paid on or before the date such payments are due under this Agreement shall bear interest on arrears at an interest rate of 9% points (nine percentage points) above base rate (as determined by the Deutsche Bundesbank) per year. Calculation of interest will be made for the exact number of days in the interest period based on a year of 365 days (actual/365).

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5.9 Bookkeeping and Auditing

BiondVax is obliged to keep, and shall oblige its Subcontractors that sell Products, and its Affiliates and Sublicensees, to keep complete and accurate books on any reports and payments due to the Licensors under this Agreement, which books shall contain sufficient information to permit an independent certified public accountant (the “CPA”) appointed by the Licensors only together and reasonably acceptable to BiondVax to confirm the accuracy of any reports and payments made to the Licensors. The CPA is authorized to audit the books (and corresponding royalty reports and payments) of BiondVax not more than once per reporting period (i.e. no double review of any reporting period). The Licensors shall provide at least 7 (seven) days prior joint notice to BiondVax of such audits, and such audits shall be conducted during normal business hours and in such a manner as to not unnecessarily interfere with BiondVax’s normal business activities. BiondVax shall provide records of its Subcontractors who sell Products, and of its Affiliates and Sublicensees in BiondVax’s possession as part of such audit. The charges for such audit shall be borne by the Licensors (according to their internal agreement); provided, however, that in the event such audit reveals an underpayment in excess of [***], BiondVax shall reimburse to the Licensors solely through MI the full costs of such audit. In any event, BiondVax shall remit any amounts due to the Licensors according to the audit within 45 (forty-five) days of receiving notice thereof from MI, together with interest calculated in the manner provided in Section 5.8.4. In the event the audit reveals an overpayment, BiondVax may credit such overpaid amounts against future payments owed to the Licensors. The right of auditing by the Licensors under this Section 5.9 shall expire 7 (seven) years after each report or payment has been made. The Licensors shall request an audit only jointly together and only once per calendar year.

5.10 No Refund

All payments made by BiondVax under this Agreement are non-refundable, and, except as set forth in Section 5.9 in case of overpayments, non-creditable against each other. This Section 5.10 shall apply, without limitation, in the event of an early termination of this Agreement in accordance with its termination provisions.

6. PATENT OWNERSHIP, PROSECUTION AND INFRINGEMENT

6.1 Ownership

6.1.1 Ownership of Licensed Technology. MPG and/or UMG, as applicable, shall own and retain their right, title and interest in the Licensed Technology, without prejudice to any right, title and interest BiondVax has with respect to items of Licensed Technology jointly generated by MPG/MPI-MS and/or UMG on the one side and BiondVax on the other side under the RCA. For clarity, to the extent rights with respect to such items of Licensed Technology jointly generated and owned by MPG/MPI-MS and/or UMG on the one side and BiondVax on the other side are not provided in this Agreement, the terms and conditions of the RCA (including any joint ownership agreement concluded under the RCA) shall apply.

6.1.2 Ownership of Intellectual Property Rights resulting from Development and Commercialization. BiondVax shall own any Intellectual Property Rights generated by or on behalf of BiondVax or any of its Affiliates and (subject to the terms and conditions of the relevant sublicense agreement) of its Sublicensee in the course of the Development and Commercialization of any Products in connection with exercising its rights granted under this Agreement.

6.1.3 [Ownership of aRCA IP. Ownership of aRCA IP shall be governed by the aRCA, in accordance with the “ownership follows inventorship” rule. This may lead to sole ownership of MPG or UMG, joint ownership of MPG and/or UMG and/or BiondVax, or sole ownership of BiondVax, as applicable. For clarity, to the extent rights with respect to any joint aRCA IP are not provided in this Agreement, the terms and conditions of the aRCA shall apply. For the avoidance of doubt, MPG and UMG shall own any Intellectual Property Rights generated by or on behalf of MPG and UMG not in the course of the aRCA.]

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6.2 Responsibility for Target-specific Nanobody Patent Rights

6.2.1 Management of Target-specific Nanobody Patent Rights

6.2.1.1  Primary Responsibility of BiondVax. Unless the Parties agree otherwise, the Target-specific Nanobody Patent Rights will be handled by a reputable patent law firm chosen by BiondVax in its reasonable discretion. BiondVax will inform the Licensors at least 2 (two) weeks before the chosen patent law firm should take over responsibility for the Target-specific Patent Rights and the Licensors (only together) may object against such patent law firm chosen by BiondVax only for important reason by written notice to BiondVax within 1 (one) week after receipt of BiondVax’s notice. Upon receipt of such notice by BiondVax, the Parties shall immediately discuss in good faith the reasons of the objection and alternative patent law firms. Until a new patent law firm is chosen by BiondVax and not reasonably objected by the Licensors together, the patent law firm(s) previously instructed in accordance with the provisions of the RCA, shall further handle the Target-specific Nanobody Patent Rights, and said patent law firm(s) shall follow BiondVax’s reasonable instructions regarding actions towards the patent offices from the Effective Date. BiondVax shall reasonably decide on an appropriate patent strategy regarding the Target-specific Nanobody Patent Rights. BiondVax shall be primarily responsible to prepare, file, prosecute, maintain and defend the Target-specific Nanobody Patent Rights, including, without limitation, that BiondVax is entitled to manage post-grant proceedings, including, without limitation, decide on route of validation of European patents (EP bundle or unitary effect, opt-in/opt-out under the UPC Agreement, reissue or limitation proceedings) regarding the Target-specific Nanobody Patent Rights, each in close coordination with the Licensors as set forth in Sections 6.2.1.2 and 6.2.1.3.

6.2.1.2  Coordination with the Licensors. BiondVax shall (i) keep the Licensors (through the chosen patent law firm) reasonably and timely (if reasonably possible not less than 3 (three) months prior to any deadline) informed as to the intended filing, prosecution, maintenance and defense of the Target-specific Nanobody Patent Rights, (ii) furnish to the Licensors (through the chosen patent law firm) copies of documents substantially relevant to any such filing, prosecution and maintenance, (iii) allow the Licensors reasonable opportunity to timely comment and advise on documents to be filed with any patent office which would substantially affect the Target-specific Nanobody Patent Rights, (iv) closely coordinate its activities regarding the filing, prosecution, maintenance and defense of the Target-specific Nanobody Patent Rights with the Licensors and the patent law firm chosen for handling the Enabling Nanobody Patent Rights, and (v) give good faith consideration to the comments and advice of the Licensors. In case of Target-specific Nanobody Patent Rights jointly owned by MPG, UMG and BiondVax, in the event the Licensors (only together) object for good cause to the intended actions proposed by BiondVax, and if the Parties are unable to resolve such dispute in good faith within the 3-(three) months period mentioned under (i) above, then BiondVax shall, in its reasonable discretion, have the final decision-making authority regarding such action. In all other cases of Target-specific Nanobody Patent Rights (i.e. where BiondVax is not co-owner), the Licensors shall not unreasonably withhold their timely consent to the intended actions proposed by BiondVax after discussion in good faith if the intended actions proposed by BiondVax are reasonable in order to preserve MPG’s and UMG’s interests, and BiondVax’s commercial interests in the exclusive license granted hereunder and the Product Development and Commercialization.

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6.2.1.3  Decisions by BiondVax. BiondVax (i) shall (through the chosen patent law firm) file, prosecute, maintain and defend the Target-specific Nanobody Patent Rights in the Major Market Countries referenced in Section 1.44(i) through (vii), and (ii) may decide, in its reasonable discretion, in which countries that are not Major Market Countries referenced in Section  1.44(i) through (vii) the Target-specific Nanobody Patent Rights shall (through the chosen patent law firm) be filed, prosecuted, maintained and defended, without prejudice to BiondVax’s right according to Section 6.4. The Licensors shall, in accordance with BiondVax’s decision, assist BiondVax and the chosen patent law firm in connection with filing, prosecuting, maintaining and defending the Target-specific Nanobody Patent Rights in such countries, provided that BiondVax pays all respective fees and expenses incurred with respect to such countries in accordance with Section 6.3.

6.2.2 Patent Term Extensions. If elections with respect to obtaining patent term extensions (including, without limitation, any available pediatric extensions) or supplementary protection certificates or their equivalents in any country with respect to Target-specific Nanobody Patent Rights are available, BiondVax shall have the right, at its sole expense, to make, upon its reasonable judgment, such elections for Products. With respect to all of the rights and activities identified in this Section 6.2.2, the Licensors shall reasonably assist BiondVax, at the expense of BiondVax.

6.3 Patent Costs for Target-specific Nanobody Patent Rights

During the Term, BiondVax shall in due time pay all external fees and costs, including reasonable attorney’s fees, relating to the preparation, filing, prosecution, maintenance, defense and extension of the Target-specific Nanobody Patent Rights that occur in accordance with Section 6.2 above. The amounts due pursuant to this Section 6.3 shall, as a general rule, be paid directly by BiondVax to the respective patent law firms.

6.4 Non-Filing or Abandonment or Non-Defense of Target-specific Nanobody Patent Rights

6.4.1 Abandoned Patent Rights. In the event that BiondVax intends not to have filed, or intends to have abandoned (e.g. by non-payment of fees), or intends not to defend against an opposition or invalidity action of any Third Party, any patent or patent application within the Target-specific Nanobody Patent Rights in a certain country or region (each, an “Abandoned Patent Right”), BiondVax shall inform the relevant Licensor(s) in writing of this intent in due time, if reasonably possible 4 (four) months prior to any deadline. MI (through MPG) and/or UMG, as the case may be, may, without being obliged to, file or maintain or defend the Abandoned Patent Right in such country or region in their sole discretion and at MPG’s and/or UMG’s sole or joint expense, as the case may be. In any event, BiondVax shall remain obliged to pay the respective patent costs that incur during the date of such notice to the relevant Licensor(s) and the respective date in the future upon which such abandonment by BiondVax regarding the respective Abandoned Patent Right will become effective. Upon such abandonment effective date, the exclusive license of BiondVax under the respective Abandoned Patent Right shall (a) terminate (and for clarity, all payment obligations of BiondVax for the relevant country or region shall terminate), if the respective country or region of the Abandoned Patent Right is one of the Major Market Countries referenced in Section  1.44(i) through (vii), and (b) be converted into a non-exclusive license, if the respective country or region of the Abandoned Patent Right is not one of the Major Market Countries referenced in Section  1.44(i) through (vii) (and for clarity, BiondVax shall remain obliged to pay milestones and royalties pursuant to this Agreement for the relevant country or region where the respective Abandoned Patent Right is still in force).

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6.4.2 Settlements. Any grant of a sublicense by BiondVax in the course of any defense of a Target-specific Patent Right requires the prior written consent of the relevant Licensor(s), not to be unreasonably withheld or delayed. BiondVax shall not require the Licensors’ prior written consent, if BiondVax grants such sublicense in compliance with the provisions of Section 2.2. With respect to such sublicense granted in the course of a settlement, only Section 5.4 shall apply with respect to the participation of the Licensors in the Sublicense Consideration paid by such Sublicensee, provided, however, that BiondVax may first deduct from any settlement payments, including Sublicense Consideration, as the case may be, its respective defense costs and expenses actually borne and not otherwise reimbursed to BiondVax with respect to such defense.

6.5 Enforcement of Target-specific Nanobody Patent Rights

6.5.1 Information. The Parties shall promptly inform each other in writing once either becomes aware of any suspected, threatened or actual infringement of the Target-specific Nanobody Patent Rights by any Third Party, and of any available evidence thereof.

6.5.2 Procedures. BiondVax shall have the first and exclusive right, but not the obligation, to enforce the Target-specific Nanobody Patent Rights against any Third Party in its sole discretion and at its sole risk, cost and expense, taking the lead in the control and conduct of such enforcement action, in coordination with the relevant Licensor(s) (but leaving control and final say with BiondVax). The Licensors shall reasonably assist BiondVax in any such enforcement action prosecuted by BiondVax, particularly provide without undue delay any declaration and/or document in order to enable BiondVax to undertake such enforcement action, at BiondVax’s expense. In the event that BiondVax does not intend to enforce the Target-specific Nanobody Patent Rights, neither solely nor jointly with the relevant Licensor(s), then BiondVax shall inform the relevant Licensor(s) owning the relevant Target-specific Nanobody Patent Right(s) of this intent in writing in due time, and MPG and/or UMG, as the case may be, have the right, but not the obligation, to enforce the relevant Target-specific Nanobody Patent Right(s) against such Third Party in MPG’s and/or UMG’s sole discretion and at MPG’s and/or UMG’s sole (or as the case may be joint) cost and expense, unless BiondVax objects against such enforcement and provides reasonable commercial reasons for its objection and reasonably considers the interests of MPG and UMG. Each Party agrees to reasonably cooperate in any action under this Section 6.5 which is controlled by the other Party/Parties, including, without limitation, joining such action as a party plaintiff, if legally necessary for the initiation or continuation of such action; provided that the controlling Party indemnifies and reimburses the cooperating Party promptly for any reasonable costs and expenses incurred by or imposed upon the cooperating Party in connection with providing such assistance.

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6.5.3 Allocation of Proceeds. The proceeds (e.g. damages or other compensation) of any enforcement action pursued solely by BiondVax, or jointly by BiondVax and the relevant Licensor(s), with respect to Target-specific Nanobody Patent Rights shall remain with BiondVax, but the Licensors shall participate according to the following principle: (i) the proceeds shall be deemed Sublicense Consideration, and shall be subject to the payment obligations in accordance with Section 5.4 if the damages or other monetary award are calculated according to the license analogy method (Lizenzanalogie) based on turnovers of the infringer specifically attributed to and covering the past use of the Licensed Technology by the infringer; (ii) if any damages or other monetary awards that are specifically attributed to and cover the past use of the Licensed Technology by the infringer and are calculated on the basis of the infringer’s profit (Verletzergewinn), the net sales of the infringer shall qualify as Net Sales, and shall be royalty-bearing according to Section 5.3; (iii) if the damages or other monetary awards that are specifically attributed to and cover the past use of the Licensed Technology by the infringer and are determined on the basis of BiondVax’s loss of turnovers/profits (entgangener Gewinn), BiondVax’s lost turnover shall form basis to calculate the lost net sales of BiondVax which shall then qualify as Net Sales, and shall be royalty-bearing according to Section  5.3; provided, however, that in each of the foregoing scenarios BiondVax may first deduct from such damages or other monetary awards its respective enforcement costs and expenses actually borne and not otherwise reimbursed to BiondVax with respect to such sole or joint enforcement action. The proceeds of any enforcement action pursued solely by MPG and/or UMG, as the case may be, with respect to Target-specific Nanobody Patent Rights shall be reasonably shared by the Licensors on the one side and BiondVax on the other side, provided that the enforcing Licensor(s) may first deduct from such proceeds its/their respective enforcement costs and expenses actually borne and not otherwise reimbursed to them with respect to such enforcement action.

6.5.4 Settlements. In the event BiondVax, solely or jointly with the relevant Licensor(s), enforces any Target-specific Patent Right(s), and BiondVax intends to settle with a (potential) infringer of the respective Target-specific Nanobody Patent Right(s), BiondVax shall inform the relevant Licensor(s) thereof, together with the terms and conditions of such intended settlement. Any grant of a sublicense by BiondVax to the (potential) infringer requires the prior written consent of the relevant Licensor(s) owning the relevant Target-specific Nanobody Patent Right(s), not to be unreasonably withheld or delayed. BiondVax shall not require the Licensors’ prior written consent if BiondVax grants such sublicense in compliance with the provisions of Section  2.2. With respect to such sublicense granted in the course of a settlement, only Section 5.4 shall apply with respect to participation of the Licensors in the Sublicense Consideration paid by such Sublicensee, provided, however, that BiondVax may first deduct from any settlement payments, including Sublicense Consideration, as the case may be, its respective enforcement costs and expenses actually borne and not otherwise reimbursed to BiondVax with respect to such enforcement action. In the event solely the relevant Licensor(s) enforce(s) any Target-specific Patent Right(s) owned by the relevant Licensor(s), and intend(s) to settle with the (potential) infringer, the enforcing Licensor(s) shall inform BiondVax thereof, together with the terms and conditions of such intended settlement, and may conclude the settlement with BiondVax’s prior written consent, not to be unreasonably withheld or delayed.

6.6 Responsibility for Enabling Nanobody Patent Rights; Patent Costs

6.6.1 Responsibility. The Licensor(s) owning the Enabling Nanobody Patent Right(s) shall be primarily responsible, through a reputable patent law firm chosen by them, to prepare, file, prosecute, maintain, abandon and defend the relevant Enabling Nanobody Patent Right(s), except for Enabling Nanobody Patent Rights which are jointly owned by MPG and/or UMG on the one side and BiondVax on the other side, for which such responsibility shall be with BiondVax, and the provisions of Sections 6.2 and 6.4 shall apply mutatis mutandis, unless specifically provided differently in this Section 6.6.

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6.6.2 Coordination Target-concerned. To the extent the Target is concerned, the relevant Licensor(s) shall closely align with BiondVax the filing, prosecution, maintenance, abandonment and defense. In case of Enabling Nanobody Patent Rights jointly owned by MPG, UMG and BiondVax, in any case of disagreement, BiondVax shall, in its reasonable discretion, have the final decision making authority. In all other cases of Enabling Nanobody Patent Rights (i.e. where BiondVax is not co-owner), the Licensors shall not unreasonably withhold their timely consent to the intended actions proposed by BiondVax after discussion in good faith if the intended actions proposed by BiondVax are reasonable in order to preserve the interests of MPG and UMG, and BiondVax’s commercial interests in the exclusive license for the Target granted hereunder and the Product Development and Commercialization.

6.6.3 Defense/ Abandonment. To the extent the Target is concerned or the relevant Licensor(s) inform(s) BiondVax that the relevant Licensor(s) does/do not intend to defend or maintain the respective Enabling Nanobody Patent Right(s), such notice to be sent if reasonably possible 2 (two) months before any defensive or maintenance action must be taken, or earlier if necessary or useful for efficient defense or maintenance, BiondVax shall have the right, but not the obligation to take control over defense or further maintenance on its own costs.

6.6.4 Coordination not Target-concerned. To the extent the Target is not concerned, the relevant Licensor(s) responsible according to Section 6.6.1 shall manage the filing, prosecution, maintenance, abandonment and defense in its reasonable discretion (including, without limitation, filing of divisional applications to the extent the Target is not concerned), reasonably taking into account the interests of BiondVax regarding a reasonable protection of the Products Developed and/or Commercialized by BiondVax.

6.6.5 Patent Costs. Until the relevant Licensor(s) owning the Enabling Nanobody Patent Right(s) has/have granted one or more additional non-exclusive licenses to the relevant Enabling Nanobody Patent Right(s) to one or more Third Parties for one or more targets other than the Target in accordance with the provisions of this Agreement, BiondVax shall in due time pay all external fees and costs, including reasonable attorney’s fees, relating to the preparation, filing, prosecution, maintenance and defense of the relevant Enabling Nanobody Patent Right(s) that occur during such term. Upon the relevant Licensor(s) has/have granted one or more additional non-exclusive licenses to the relevant Enabling Nanobody Patent Right(s) to one or more Third Parties for one or more targets other than the Target in accordance with the foregoing sentence, BiondVax and such Third Party/Parties shall pay the respective patent costs on a pro rata basis. The amounts due pursuant to this Section 6.6.5 shall, as a general rule, be paid directly by BiondVax to the respective patent law firm(s). The Licensors shall instruct the relevant patent law firm(s) to make and submit to BiondVax yearly forecasts of expected costs and expenses during the respective calendar year. For the avoidance of doubt, with respect to any Enabling Nanobody Patent Right which is jointly owned by MPG and/or UMG on the one side and BiondVax on the other side, any grant of a license to a Third Party shall be made by the Licensors only after the prior written approval of BiondVax, not to be unreasonably withheld or delayed.

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6.6.6 Enforcement. To the extent the Target is concerned, BiondVax shall have the first and exclusive right to enforce the Enabling Nanobody Patent Rights against any Third Party by applying Section 6.5 accordingly. To the extent the Target is not concerned, MI through MPG and/or UMG, as the case may be, shall have the right, but not the obligation, to enforce the respective Enabling Nanobody Patent Right(s) against any Third Party in its/their sole discretion and at its/their sole (or, as the case may be, joint) cost and expense, reasonably taking into account the interests of BiondVax and of any other non-exclusive licensees, as the case may be. If an invalidity action results as reaction to an enforcement of the respective Enabling Nanobody Patent Right(s) by BiondVax, BiondVax shall have the right, but not the obligation, to take control over the defense of such Enabling Nanobody Patent Right(s). With respect to settlements, the provisions in Section 6.5 shall apply accordingly.

6.6.7 Exclusion of Enabling Nanobody Patent Rights by BiondVax. BiondVax may, in its sole discretion, exclude on a country-by-country basis any specific Enabling Nanobody Patent Right from this Agreement by [***] prior written notice to the relevant Licensor(s) owning the relevant Enabling Nanobody Patent Right. In case of such notice, upon expiration of said [***]period after receipt by the relevant Licensor(s), (i) the relevant Enabling Nanobody Patent Right shall be excluded from this Agreement, (ii) the relevant Licensor(s) shall not be obliged to align the filing, prosecution, maintenance, abandonment and defense for such excluded Enabling Nanobody Patent Right with BiondVax according to the provisions in this Section 6.6, (iii) BiondVax shall not be obliged to pay the patent costs for such excluded Enabling Nanobody Patent Right in the relevant country according to Section 6.6.5, (iv) BiondVax shall not have the right to enforce such excluded Enabling Nanobody Patent Right in the relevant country according to Section 6.6.6, and (v) the Parties shall closely align in good faith with respect to prosecution, maintenance, defense and enforcement of such excluded Enabling Nanobody Patent Right and Enabling Nanobody Patent Rights of the same patent family in the countries still licensed to BiondVax. If BiondVax is responsible for administration and prosecution of the relevant Enabling Nanobody Patent Right pursuant to Section 6.6.1, this responsibility shall be shifted to the relevant Licensor(s), and the Parties shall use reasonable efforts to ensure swift shifting (e.g. by instructing the relevant patent attorneys and provision of documentation). For the avoidance of doubt, notwithstanding the foregoing, if the relevant Enabling Nanobody Patent Right is jointly owned by MPG and/or UMG on the one side and BiondVax on the other side, the respective provisions of the RCA [or the aRCA], or, if applicable, the relevant joint ownership agreement concluded for such Enabling Nanobody Patent Right under the RCA [or the aRCA] shall apply upon expiration of said [***] period after receipt of such exclusion notice by the relevant Licensor(s).

6.7 Patent Listings

With respect to the filing of patent listing information (such as patent listings in the FDA Orange Book, and its national, supranational and international equivalents, for issued patents for a Product), BiondVax may, in its reasonable discretion and at its sole expense, seek and maintain all such patent listings available for Products. With respect to all of the rights and activities identified in this Section 6.7, the Licensors shall reasonably assist BiondVax, at BiondVax’s expense.

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7. INDEMNIFICATION AND INSURANCE

7.1 Indemnification

BiondVax shall indemnify, defend, and hold harmless MI, MPG, UMG, and their Affiliates, and their respective officers, directors, employees and agents, and their respective successors, heirs and assigns (collectively, the “Indemnitees”) from and against any and all claims, suits, actions (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any factual basis), demands, judgments, liabilities, losses, costs, fees or expenses (including without limitation reasonable legal expenses, cost of litigation and attorney’s fees) and damages (collectively, the “Claims”) incurred by or imposed upon any of the Indemnitees by a Third Party, to the extent resulting from or arising out of (i) any use or practice of the Licensed Technology by or on behalf of BiondVax, its Affiliates or Sublicensees, or (ii) any Product that is Developed, used or Commercialized by or on behalf of BiondVax, its Affiliates or Sublicensees pursuant to any right or license granted under this Agreement, or (iii) any use by a Third Party of any such Product; provided that BiondVax’s indemnity obligations hereunder shall not apply to the extent Claims are arising from (a) the gross negligence, willful intent or fraudulent acts of the Indemnitees, or (b) a material breach of the Licensors’ representation and warranties under this Agreement, or (c) any licensing of the Enabling Nanobody Technology by the Licensors to Third Parties, or the enforcement of the Enabling Nanobody Patent Rights by the Licensors against Third Parties.

7.2 Procedures

7.2.1 Notice. The Indemnitees agree to provide BiondVax (the “Indemnifying Party”) with written notice of any Claims for which indemnification is sought under this Agreement within 30 (thirty) days after the Indemnitees have knowledge of such Claims; it being understood and agreed, however, that the failure by an Indemnitee to give such notice shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement, except and only to the extent that the Indemnifying Party is actually prejudiced as a result of such failure to give notice.

7.2.2 Defense. The Indemnifying Party shall assume the defense of the Claims at its own expense, with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitees; provided, however, that the Indemnitees may retain its own counsel, at its own expense, if representation of the Indemnitees by the counsel retained by the Indemnifying Party would be inappropriate because of actual or potential differences in the interests of the Indemnitees and any other party represented by such counsel.

7.2.3 Responsibility. The Indemnitees shall (i) permit the Indemnifying Party to assume full responsibility to investigate, prepare for and defend against any Claims (including litigation, appeal, and settlement), (ii) assist the Indemnifying Party, at the request and expense of the Indemnifying Party, in the investigation, preparation and defense of any Claims, and (iii) not compromise or settle such Claims without the prior consent of the Indemnifying Party, not to be unreasonably withheld or delayed.

7.2.4 Information. The Indemnifying Party shall keep the Indemnitees informed of the progress in the defense of Claims, and the Indemnifying Party shall consult with the Indemnitees with regard to any proposed settlement. The Indemnifying Party shall not compromise or settle such Claims without the prior written consent of the Indemnitees, not to be unreasonably withheld or delayed, if such settlement would create an obligation for or adversely affect the Indemnitee.

7.3 Insurance

7.3.1 General Liability Insurance. BiondVax shall maintain, at its sole cost and expense, general liability insurance coverage with a recognized, creditworthy insurance company in an amount usual and customary for companies engaged in activities as contemplated by this Agreement; such insurance shall be in place upon the Effective Date.

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7.3.2 Specific Insurances. Without limiting the generality of Section 7.3.1, BiondVax shall obtain and carry in full force and effect from a recognized, creditworthy insurance company (a) a clinical trials insurance, commencing upon the initiation of any Clinical Study of a Product and continuing during the whole term of any Clinical Study initiated by or on behalf of BiondVax, with minimal limits as required by applicable law or Regulatory Authorities, and (b) a product liability insurance for the Commercial Sale of a Product during the Term and for 3 (three) years thereafter, with a limit (i) usual and customary for companies engaged in activities as contemplated by this Agreement, and (ii) reasonably available at the time on the insurance market, but as a general rule not less than [***] per incident.

8. CONFIDENTIALITY

8.1 Confidentiality Obligation

8.1.1 Confidentiality Obligation. The Receiving Party shall treat confidential the Confidential Information of the Disclosing Party during the Term and for 5 (five) years thereafter. In maintaining confidential the Confidential Information of the Disclosing Party, the Receiving Party shall use not less than the efforts it uses to maintain in confidence its own information of a confidential and/or proprietary nature of similar kind and value; however, the Receiving Party shall in no event use less than reasonable efforts. The Receiving Party may not disclose the Confidential Information of the Disclosing Party to any Third Party without the prior written consent of the Disclosing Party, except for expressly permitted disclosures as set forth in Section 8.2 below or in accordance with Sections 2.5.3, 2.5.4 or 2.6. The Receiving Party may not use the Confidential Information of the Disclosing Party for any purposes other than those necessary to directly further the purpose of this Agreement. For the avoidance of doubt, MI, MPG/MPI-MS and UMG shall treat the Licensed Know-how confidential (and in this respect should be bound as Receiving Party), subject to the exemptions provided in this Section 8 and the disclosure by Intended Publications permitted according to Section 2.6.

8.1.2 Appropriate Measures. The Receiving Party shall take all appropriate steps, and shall implement all appropriate safeguards, to prevent the unauthorized use or disclosure of any of the Disclosing Party’s Confidential Information. The Receiving Party shall furnish the Disclosing Party with immediate written notice of any unauthorized use or disclosure of any of the Disclosing Party’s Confidential Information, and shall take all actions that the Disclosing Party reasonably requests in order to prevent any further unauthorized use or disclosure of the Disclosing Party’s Confidential Information.

8.2 Permitted Disclosures

The Receiving Party may disclose Confidential Information of the Disclosing Party:

(a) to Regulatory Authorities in connection with filings for Regulatory Approval, provided that such disclosures may be made only to the extent reasonably necessary to make such filings;

(b) [***];

(c) if MI is the Receiving Party: to MPG and MPI-MS, and if UMG is the Receiving Party to MBM, in each case subject to and provided that the recipients are bound by confidentiality obligations at least as restrictive as those set forth in this Agreement;

(d) to Third Party individuals with a professional obligation of secrecy (e.g. patent attorneys, attorneys-at-law, certified public accountants);

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(e) to Third Parties if required or reasonably useful for the Development and/or Commercialization of Products (or for such parties to determine their interest in performing such activities) in accordance with this Agreement, provided that such Third Parties are bound by confidentiality obligations at least as restrictive as those set forth in this Agreement;

(f) [***];

(g) if such disclosure is required by court order, order of competent authorities, law or regulation (including without limitation by rules or regulations of any securities exchange), provided that prior to such disclosure, the obligated Party promptly notifies the Disclosing Party of such requirement, and provided further that the obligated Party shall assist the Disclosing Party in any objection against and attempt to limit the relevant disclosure order and that the obligated Receiving Party will furnish only that portion of the Disclosing Party’s Confidential Information that Receiving Party’s legal counsel reasonably determines is legally required to furnish.

8.3 Terms of this Agreement

The Parties acknowledge that the existence and all terms and conditions of this Agreement shall be treated as Confidential Information of the Parties. Notwithstanding the foregoing, MI may disclose this Agreement on a confidential basis to MPG and MPI-MS, and UMG may disclose this Agreement on a confidential basis to MBM and Georg-August-Universität Göttingen Stiftung Öffentlichen Rechts, and in each case also to said recipients funding and auditing authorities on a confidential basis. BiondVax may disclose this Agreement on a confidential basis to its Affiliates and Sublicensees, and in accordance with Section 8.2(d), (e), (f) and (g). Further, each Party may disclose Section 2.10 of this Agreement to any Third Party.

8.4 Return of Confidential Information

After the termination or expiration of this Agreement, each Party shall return or, upon request of the Disclosing Party, destroy all documents (including copies) of the Confidential Information received from the Disclosing Party, except that each Party may retain 1 (one) copy for archiving purposes and except for jointly owned Confidential Information which, however, shall remain subject to relevant mutual confidentiality undertakings. Each Party shall not be required to return or destroy any Confidential Information that is stored in any automatic electronic archiving or back-up system where it is not reasonably practicable to retrieve and delete the same, provided that such information is kept confidential in accordance with the terms of this Agreement.

9. TERM AND TERMINATION

9.1 Term

This Agreement shall come into force and effect on the Effective Date. Unless earlier terminated in accordance with the termination provisions of this Agreement, this Agreement shall continue in force and effect, on a Product-by-Product and country-by-country basis, until the end of the Royalty Term with respect to such Product in such country (collectively, the “Term”). Upon the end of the Royalty Term, the license granted pursuant to Section 2.1.1 shall, with respect to such Product in such country, be deemed irrevocable, perpetual, royalty-free and fully paid-up.

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9.2 Special Termination Rights.

9.2.1 Non-Achievement of IND Filing. If BiondVax cannot prove to the Licensors at the latest on [***] by appropriate written documentation that BiondVax (or its Affiliates or Sublicensees) has submitted an IND to a Regulatory Authority of a Major Market Country for a first Product on or before [***], then the Licensors (through MI) shall first send a written notice to BiondVax and give BiondVax 45 (forty-five) days to present a revised Development Plan to achieve the respective IND submission by [***]. If BiondVax cannot prove to the Licensors at the latest on [***] by appropriate written documentation that BiondVax (or its Affiliates or Sublicensees) has submitted an IND to a Regulatory Authority of a Major Market Country for a first Product on or before [***], then each Party may terminate this Agreement immediately, but at the latest within the following [***], by 30 (thirty) days prior written notice to the other Party. [The aforementioned dates shall be shifted by the time period equivalent to the time the performance of any research activity that is necessary for the Nomination Of Pre-Clinical Candidate by BiondVax to be conducted by MPI-BPC and/or UMG under the aRCA is delayed, provided that such delay is not resulting from BiondVax’s gross negligence or willful misconduct.] BiondVax may avoid termination by the Licensors (only jointly together) pursuant to this Section 9.2.1, if BiondVax informs the Licensors (through MI), within 30 (thirty) days after it has not met the applicable date for IND filing, that BiondVax will pay, and actually pays to the Licensors (through MI) within further 30 (thirty) days, a prolongation fee of [***], which prolongs the applicable date for IND filing by [***].

NOTE: The Parties will discuss in good faith and mutually agree on the realistic dates on the basis of the proposed Development Plan of BiondVax. The sentence in italics might be adapted according to the specific situation considering potential supporting research activities under the RCA in case of BiondVax exercising the option before fulfilment of the applicable Compound Acceptance Criteria.

9.2.2 Patent Infringement / Patent Invalidation. If (i) all Licensed Patent Rights are finally and legally bindingly invalidated by a decision of a court or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, in all of the Major Market Countries referenced in Section 1.44 (i) through (vii), or (ii) BiondVax is blocked from the Development and Commercialization of Products under this Agreement due to a finally and legally binding decision of a court or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, in all of the Major Market Countries referenced in Section  1.44 (i) through (vii) resulting from infringement proceedings regarding any Third Party Patent Rights, BiondVax may terminate this Agreement upon 30 (thirty) days prior written notice to the Licensors.

9.3 Cessation of Product Development by BiondVax

If BiondVax (or its Affiliates or Sublicensees) ceases to carry on the Development and Commercialization of all Products in or for all countries (e.g. by cessation of its business related to this Agreement), BiondVax shall inform the Licensors thereof in due time. In such event, MI and UMG (only jointly together) on the one side and BiondVax on the other side shall have the right to terminate this Agreement upon at least 3 (three) months’ prior written notice to the other side.

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9.4 Change of Control

In the event that a Third Party acquires, by a single transaction or a series of related transactions, more than 50% (fifty percent) of the securities or voting rights of BiondVax, BiondVax shall provide the Licensors, upon the Licensors’ request to be made only jointly together by the Licensors and within 2 (two) months after such change of control event, within a reasonable period of time, which should not exceed 2 (two) months, with 1 (one) special written report in reasonable detail on the actual and intended future activities of BiondVax to Develop and Commercialize Products. If BiondVax cannot reasonably demonstrate to maintain, after the change of control event, a program to Develop and Commercialize one or more Products that is at least substantially similar in scope to the program of BiondVax prior to the change of control event, then the Licensors may terminate (only jointly together) this Agreement upon 30 (thirty) days prior written notice to BiondVax, provided that the following procedure is followed: The Licensors shall inform BiondVax by joint written notice within 2 (two) weeks after receipt of said written report if they have good reason to doubt or to question maintenance of such program by BiondVax and that this lack of program maintenance would give reason for the Licensors to assume that BiondVax would materially breach its Development and Commercialization obligations according to Sections 4.1 and 4.2 and shall specifically name such reasons and give BiondVax 2 (two) weeks to come back with further explanations. The Licensors shall inform BiondVax by joint written notice within another 2 (two) weeks after receipt of such further explanations from BiondVax if the Licensors still think that their already addressed good reasons have not been cleared and may exercise their termination right then by joint written notice within 2 (two) weeks after receipt of said further notice by BiondVax. If the Parties are in disagreement if BiondVax has reasonably demonstrated maintenance of the program as required herein, the Licensors shall not be entitled to terminate this Agreement unless and until non-demonstration by BiondVax have been determined finally in accordance with Section 10.3. BiondVax shall inform the Licensors immediately of the implementation of any such change of control event, it being understood that in case of change of control by a series of related transactions BiondVax shall send such notice to the Licensors only for the last transaction resulting in the change of control.

9.5 Challenge of Licensed Patent Rights

The Licensor may (only together) terminate this Agreement upon 30 (thirty) days prior joint written notice to BiondVax, if BiondVax (or any of its Affiliates) (i) challenges (e.g. by opposition proceedings or nullity suits) any of the Licensed Patent Rights, or (ii) in any way encourages or supports any Third Party to challenge any of the Licensed Patent Rights.

9.6 Termination for Breach

9.6.1 Payment Failure. In the event BiondVax fails to pay any undisputed amounts due and payable to the Licensors hereunder, and fails to make such payments within 45 (forty-five) days after receiving a joint written notice of the Licensors through MI of such payment failure, the Licensors (only together) may terminate this Agreement upon 30 (thirty) days prior joint written notice to BiondVax.

9.6.2 Material Breach

9.6.2.1  Breach. In the event MI and/or UMG on the one side or BiondVax on the other side commits a material breach of its obligations under this Agreement (other than a failure by BiondVax to make payments, which breach is covered by Section 9.6.1 above), and fails to cure such material breach within 90 (ninety) days after receiving written notice thereof from the other side specifying the nature of the breach and requiring its cure, the non-breaching side may terminate this Agreement (as a whole) upon 30 (thirty) days’ prior written notice to the breaching side, which for clarity must be a joint written notice in case of termination for breach by the Licensors. Notwithstanding the foregoing, if the breach is not reasonably capable to be cured within the 90 (ninety) days cure period by the breaching side and the breaching side is making good faith efforts to cure such breach (e.g. by providing a redacted Development Plan in order to overcome e.g. scientific and/or regulatory challenges and/or substantial changes in the competitive environment), the Parties shall negotiate in good faith on a prolongation of the cure period.

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9.6.2.2  Dispute about Material Breach. If a Party reasonably disputes the existence or materiality of a breach specified in a notice pursuant to Section 9.6.2, and the side notified to be in breach provides notice to the non-breaching side of such dispute within the applicable 90 (ninety) days cure period, the non-breaching side may not terminate this Agreement unless and until the existence or materiality of such breach has been determined in accordance with Section 10.3, and the breaching side fails to cure such determined breach within 90 (ninety) days or such other cure period according to Section 9.6.2.1 following such determination. It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect, and the Parties shall continue to perform all of their respective obligations hereunder.

9.6.2.3  Delays. For the avoidance of any doubt, delays caused by Regulatory Authorities, changes in regulations and scientific issues out of reasonable control of BiondVax[, or delays caused by the performance of the aRCA, unless such delay results from BiondVax’s gross negligence or willful misconduct,] will not be considered as a valid reason for termination for material breach, as long as BiondVax upon request of the Licensor, which has to be made in writing by the Licensors jointly together, within a reasonable period of time set by the Licensors can prove by written documentation that it is diligently attempting to resolve the aforementioned issues or delays.

9.7 Scope and Effect of Termination; Survival; Sublicenses

9.7.1 General. Except as expressly provided otherwise in this Agreement (i.e. in Section 2.10.5 and in the last sentence of Section  4.7.1), termination of this Agreement shall be in its entirety (including as to all countries and all Products). The Parties shall cooperate in good faith to permit an orderly termination and winding-up of this Agreement.

9.7.2 Survival. The following provisions shall survive the expiration or termination of this Agreement: Sections 1, 3, 5.1, 7, 8, the last sentence of 9.1 (in the event of expiration), 9.7, and 10. The expiration or termination of this Agreement shall not release a Party (or its Affiliates and Sublicensees) from any liability or obligation (including without limitation any payment and reporting obligation) that became due on or before the effective date of expiration or termination, nor shall it preclude a Party from pursuing all rights and remedies it may have under or arising out of this Agreement with respect to any breach of this Agreement, nor shall it prejudice a Party’s right to obtain specific performance of any obligation and/or damages.

9.7.3 Sell-off of Products. In the event BiondVax has, as of the effective date of termination, any Products in stock for which Regulatory Approval of a BLA has been obtained, this Agreement shall survive for a period of 9 (nine) months after the effective date of termination solely for the purpose of selling off such Products (subject to the payment obligations under Section 5 of this Agreement which shall continue to apply for this purpose), provided, however, that such limited survival shall not prevent the Licensors from granting (also for and during such limited survival period) a license to any Third Party for the sale of Products.

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9.7.4 Surviving Sublicensee. In the event that BiondVax has, prior to the effective date of termination of this Agreement, granted any sublicenses under this Agreement that have not expired or terminated as of the effective date of termination of this Agreement, the Licensors shall, upon request of such Sublicensee (the “Surviving Sublicensee”), negotiate in good faith the step-in of the Licensors into the respective sublicense agreement, thereby replacing BiondVax as licensor with respect to MPG’s and UMG’s share in the Licensed Technology, provided that (i) such step-in into the sublicense agreement by the Licensors is legally possible for the Licensors, and does not exceed the Licensors’ obligations as set forth in this Agreement, (ii) the Licensors shall have no obligation under the sublicense agreement other than to leave the sublicense granted to the Licensed Technology in place if this is required for the Development and Commercialization of the Products, (iii) the Surviving Sublicensee is not in material breach of its obligations under the sublicense agreement, and (iv) the Sublicensee confirms in writing towards the Licensors to be bound by such sublicense agreement. If, in connection with a sublicense to some or all of the Licensed Technology, BiondVax (or its Affiliates) has, as licensor, granted in the same sublicense agreement a license to its own ownership share in the Licensed Technology and/or other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target, the Parties shall in good faith determine a reasonable weighting of their ownership shares in the concerned Licensed Technology (for which the Licensors replace BiondVax as licensor) to the respective other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target (for which BiondVax remains licensor), and the Licensors shall receive payments from the Surviving Sublicensee that are reasonably allocated to their share in the Licensed Technology.

9.7.5 Access to BiondVax’s Share in Target-specific Nanobody Technology and Enabling Nanobody Technology in Case of Termination. Upon termination of this Agreement (as a whole) by the Licensors in accordance with Section 9.2.1, or by BiondVax in accordance with Section 9.2.2, or by either BiondVax or the Licensors in accordance with Section 9.3, or by the Licensors in accordance with Section 9.4 or 9.5, BiondVax shall, upon request of the Licensors (through MI) to be made within 90 (ninety) days after the effective date of termination of this Agreement, (i) assign and transfer to MPG and/or UMG BiondVax’s ownership share in any Target-specific Nanobody Technology created under the RCA[ or the aRCA] and (ii) grant a non-exclusive license, which shall be exclusive for the Target, under BiondVax’s share in any Enabling Nanobody Technology created under the RCA[ or the aRCA], both in return for a fair and reasonable participation of BiondVax in any future licensing revenues received by MI and/or MPG and/or UMG from the commercialization of said Licensed Technology.

9.8 Insolvency

9.8.1 Termination by the Licensors. The Licensors (only together) may terminate this Agreement upon 30 (thirty) days prior joint written notice to BiondVax, if (i) a petition in insolvency or for reorganization or similar arrangement for the benefit of creditors is filed by or against BiondVax in any court or agency, (ii) the commencement of bankruptcy or insolvency proceedings has been declined by the court or agency for insufficiency of assets, (iii) BiondVax has assigned all or substantially all of its assets for the benefit of its creditors, or (iv) BiondVax is in liquidation for other reasons.

9.8.2 Election of Insolvency Administrator. If the Licensors do not terminate this Agreement in accordance with Section 9.8.1, and if the insolvency administrator of BiondVax notifies the Licensors that he elects

(a) to not continue this Agreement, the rights licensed under this Agreement shall automatically fall back to the Licensors, and this Agreement shall automatically terminate upon the Licensors’ receipt of such notice;

(b) to continue this Agreement, any intended transfer of rights and/or obligations of this Agreement to any Third Party, as well as the granting of any sublicense to any Third Party, requires the prior written approval of the Licensors, which approval shall not be unreasonably withheld or delayed.

page 48

10. MISCELLANEOUS

10.1 Notice

10.1.1 Contact Information. Any notices required or permitted under this Agreement shall be in English and in writing, shall specifically refer to this Agreement, and shall be sent to the following postal addresses or e-mail addresses of the Parties:

If to MI:	Attn.: Managing Director
	Max-Planck-Innovation GmbH
	Amalienstrasse 8
	80799 Muenchen
	Germany
	Email: [***]
If to UMG:	Attn.: Chief Executiver Officer
	MBM Science Bridge GmbH
	Hans-Adolf-Krebs-Weg 1, 37077 Göttingen, Germany
	Email: [***]
If to BiondVax:	Attn.: Chief Executive Officer
	BiondVax Pharmaceuticals Ltd.
	Jerusalem BioPark Building, 2nd Floor
	Hadassah Ein Kerem Campus
	Jerusalem
	Israel
	Email: [***]
	With copy to
	CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern mbB
	Attn.: Dr. Thomas Hirse
	Kasernenstraße 43-45
	40213 Düsseldorf
	Germany
	Email: [***]

10.1.2 Notice of Termination. Notwithstanding the foregoing, any notice of termination may only be sent by a Party by internationally recognized courier in order to be deemed to be effectively given to the other Party.

10.1.3 Change of Contact Information. Each Party shall immediately notify the other Party about any change of its contact information.

page 49

10.2 Governing Law

This Agreement, and any dispute, controversy or claim arising under, out of or relating to this Agreement (and any subsequent amendments of this Agreement), including, without limitation, its formation, validity, binding effect, interpretation, performance, breach, termination or enforcement, and any remedies relating thereto, as well as non-contractual claims (collectively, a “Dispute”) shall be governed by the laws of the Federal Republic of Germany, without regard to conflict of law principles, except that questions affecting the construction and effect of any Patent Rights shall be determined by the law of the country in which such Patent Right shall have been granted.

10.3 Dispute Resolution

10.3.1 Resolution by Management. The Parties recognize that a Dispute may from time to time arise between the Parties during the Term. In the event of a Dispute, a Party, by written notice to the other Party, may have such Dispute referred to the Parties’ respective officers or directors designated below, for attempted resolution by good faith negotiations within 60 (sixty) days after such notice is received. Said designated officers or directors are as follows:

For MI: Geschäftsführer / Managing Director

For UMG: Chief Executive Officer of MBM Science Bridge GmbH

For BiondVax: Chief Executive Officer

10.3.2 Mediation. In the event the designated officers or directors are not able to resolve such Dispute as set forth in Section 10.3.1 within 60 (sixty) days following the notice, then each Party may submit such Dispute to mediation in accordance with the World Intellectual Property Organization (WIPO) Mediation Rules. The number of mediators shall be 1 (one), appointed in accordance with such mediation rules, the place of mediation shall be Frankfurt am Main, Germany, and the language of the mediation shall be English.

10.3.3 Arbitration. If and to the extent the Dispute has not been settled pursuant to mediation as set forth in Section 10.3.2 within 60 (sixty) days following the commencement of the mediation, it shall, upon the filing of a Request for Arbitration by either Party, exclusively be governed and referred to, and finally determined by, arbitration in accordance with the WIPO Arbitration Rules.

Alternatively, if, before the expiration of the said period of 60 (sixty) days, either Party fails to participate or to continue to participate in the mediation, the Dispute shall, upon the filing of a Request for Arbitration by the other Party, exclusively be governed and referred to, and finally determined by, arbitration in accordance with the WIPO Arbitration Rules.

The arbitral tribunal shall consist of 3 (three) arbitrators, appointed in accordance with such arbitration rules. The place of arbitration shall be Frankfurt am Main, Germany. The language to be used in the arbitral proceedings shall be English. The Dispute referred to arbitration shall be decided in accordance with the substantive laws of the Federal Republic of Germany, including for the avoidance of doubt only the rules of the German Civil Procedure Code (Zivilprozeßordnung) on the taking of evidence shall apply. The award of the arbitrators (including any emergency relief under such arbitration rules) shall be the sole and exclusive remedy between the Parties regarding any such Dispute. An award rendered in connection with arbitration pursuant to this Section 10.3.3 shall be final and binding upon the Parties.

page 50

10.3.4 Expert Determination.

Any Dispute between the Parties arising under, out of or relating to a matter specifically referred to expert determination under this Agreement (and any subsequent amendments of this Agreement) shall be referred to expert determination in accordance with the WIPO Expert Determination Rules. The determination made by the expert shall be final and binding upon the Parties. The language to be used in the expert determination shall be English. Specifically, and not to limit the foregoing, the following Disputes shall be subject to expert determination: (i) qualification of further Intellectual Property Rights of MPG and/or UMG as Target-specific Nanobody Technology or Enabling Nanobody Technology to be included according to Sections 1.28, 1.29, 1.63, 1.64, 2.1.4[, 2.1.5 or 2.1.6], (ii) technical necessity for BiondVax to obtain a license to Third Party Blocking Patent Rights (Sections 1.68) while any Dispute regarding the further requirements under Section 5.3.5 shall be subject to dispute resolution according to Sections 10.3.1 through 10.3.3, and (iii) weighting of the Licensors’ share in the Licensed Technology to BiondVax’s share in the Licensed Technology and/or other Intellectual Property Rights Controlled by BiondVax (or its Affiliates) relating to Nanobodies against the Target (Sections 2.1.3, 5.4.1, 9.7.4).

10.4 Assignment and Transfer

10.4.1 Assignment With / Without Approval. This Agreement is personal to the Parties, and neither this Agreement, nor any rights and/or obligations under this Agreement, may be assigned or otherwise transferred by a Party to a Third Party without the prior written consent of the other Parties, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, a Party may assign this Agreement (as a whole) to an Affiliate, or to a Third Party in connection with the merger or consolidation, or sale of all or substantially all of its assets or that portion of its business to which this Agreement relates; if BiondVax is the assignor (i) and the Affiliate or Third Party as assignee pursues on its own or through Sublicensees the Development and Commercialization of Products, such assignment shall not require the consent of the Licensors, provided, however, that BiondVax as assignor, the Affiliate or Third Party as assignee, and the Licensors shall sign a written document stating that the Affiliate or Third Party fully replaces BiondVax as contractual party of this Agreement, and (ii) and the Affiliate or Third Party as assignee does not pursue on its own or through Sublicensees the Development and Commercialization of Products, such assignment requires, in addition to the document mentioned in (i), the prior approval of the Licensors, not to be unreasonably withheld or delayed.

10.4.2 Special Report. In case of an assignment of this Agreement by BiondVax in accordance with Section 10.4.1, upon the Licensors’ request to be made by joint written notice within 6 (six) months after the effective date of assignment, the Affiliate or Third Party assignee shall provide the Licensors with 1 (one) special written report in reasonable detail on the actual and intended future activities and business strategy of the Affiliate or Third Party assignee to Develop and Commercialize Products. If the Affiliate or Third Party assignee, after reasonable good faith discussions with the Licensors also giving said Affiliate or Third Party assignee opportunity to address the Licensors’ reasonable critics, cannot demonstrate to maintain, after the effective date of assignment, a program to Develop and Commercialize Products that is at least substantially similar in scope to the program of BiondVax prior the effective date of assignment and this would give reason for the Licensors to assume that the Affiliate or Third Party assignee would materially breach its Development and Commercialization obligations according to Sections  4.1 and 4.2, then the Licensors within 2 (two) weeks after the end of said discussions may terminate (only together) this Agreement upon 30 (thirty) days prior joint written notice to the Affiliate or Third Party assignee. If the Licensors and said Affiliate or Third Party assignee are in disagreement if said Affiliate or Third Party assignee has reasonably demonstrated maintenance of the program as required herein, the Licensors shall not be entitled to terminate this Agreement unless and until non-demonstration by said Affiliate or Third Party assignee have been determined finally in accordance with Section  10.3.

page 51

10.5 Amendment and Waiver

This Agreement may be amended, supplemented, or otherwise modified (including a waiver of performance of any obligation under this Agreement) only by means of a written document signed by all Parties. Any waiver of any rights, or failure to act in a specific instance, shall relate only to such instance and shall not be construed as an agreement to waive any rights, or fail to act in any other instance, whether or not similar.

10.6 Severability

Should one or more of the provisions of this Agreement be void, invalid or unenforceable under applicable law, the remaining provisions of this Agreement will not cease to be effective. The Parties shall negotiate in good faith to replace such void, invalid or unenforceable provision by a new provision that reflects, to the extent possible, the original intent of the Parties.

10.7 Headings

All headings are for convenience only and shall not affect the meaning, and shall not be used in the interpretation of any provision of this Agreement.

10.8 Entire Agreement

This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof, and any previous agreements and understandings, whether oral or written, made by the Parties on the same subject matter are expressly superseded by this Agreement.

10.9 Force Majeure

Neither Party will be deemed to be in default of this Agreement for failure or delay of the performance of its obligations or attempts to cure any breach of this Agreement, when such failure or delay is caused by or results from causes beyond the reasonable control of, or not reasonably avoidable by, the affected Party, including, without limitation, embargoes, acts of war, pandemics, quarantines, strikes, lockouts or other labor unrests. The affected Party will notify the other Party of such force majeure circumstances as soon as reasonably practicable, and will make every reasonable effort to avoid or remove such causes, and to mitigate the effects of such force majeure circumstances. In case of such a force majeure event, the time for performance or cure will be extended for the period equal to the duration of such force majeure event. Should the duration of the force majeure event exceed more than 3 (three) consecutive months, each Party may terminate this Agreement upon 3 (three) months prior written notice, provided that such termination must be made by the Licensors only together and by joint written notice.

10.10 Press Release

Subject to the prior written approval of the other Parties, not to be unreasonably withheld or delayed, each Party may make public announcements with respect to the existence, the nature, the general subject matter and the general structure of the financial terms of this Agreement. Each Party shall provide to the other Parties a copy of any such intended public announcement as soon as reasonably practicable under the circumstances, but not less than 1 (one) week, prior to its scheduled release. The other Parties may review and request changes to any announcement, and the Parties shall work together in good faith to come to a mutually acceptable version of such public announcement. If the Parties do not agree on a mutually acceptable version of such public announcement, no public announcement may be made. However, the Licensors acknowledge that BiondVax as a company listed at the NASDAQ has to comply with certain publication, information and transparency obligations under the applicable laws, and nothing herein shall prevent BiondVax from making any public announcement to the extent and at the time required under any publication, information or transparency obligation according to the applicable laws (e.g. public company obligations under U.S. SEC Rules), and such public announcement shall not be regarded a breach of this Section 10.10.

[Remainder of this page intentionally left blank / signatures follow on next page]

page 52

In witness whereof, the Parties have caused this Agreement to be executed by their duly authorized representatives.

Max-Planck-Innovation GmbH
By:
Name:	Dr. Jörn Erselius
Title:	Geschäftsführer /
	Managing Director
BiondVax Pharmaceuticals Ltd.
By:
Name:	Amir Reichman
Title:	Chief Executive Officer
Georg-August-Universität Göttingen
Stiftung Öffentlichen Rechts,
Universitätsmedizin
By:
Name:	Jens Finke
Title:	Board Member
By:
Name:	Prof. Dr. Wolfgang Brück
Title:	Board Member

page 53

List of Appendices:

Appendix 0.2 (MPG Confirmation)

Appendix 0.6 (RCA)

Appendix 1.17 (Compounds)

Appendix 1.22 (Development Plan)

Appendix 1.28 (Enabling Nanobody Know-how)

Appendix 1.29 (Enabling Nanobody Patent Rights)

Appendix 1.63 (Target-specific Nanobody Know-how)

Appendix 1.64 (Target-specific Nanobody Patent Rights)

page 54

Appendix 0.2

MPG Confirmation

(separate document)

page 55

Appendix 0.6

RCA

(separate document)

page 56

Appendix 1.17

Compounds

[to be filled with the Compounds after exercise of the option by BiondVax under the RCA]

A) Created in the course of the RCA

[B) Created in the course of the aRCA]

(note to draft: to be added to this Agreement as set forth in Sections 2.1.5 and 2.1.6)]

page 57

Appendix 1.22

Development Plan

[to be filled after exercise of the option by BiondVax under the RCA]

page 58

Appendix 1.28

Enabling Nanobody Know-how

[to be filled initially after exercise of the option by BiondVax under the RCA]

A) Know-how created in the course of the RCA

[B) Know-how created in the course of the aRCA]

(note to draft: to be added to this Agreement as set forth in Section 2.1.5 and 2.1.6)]

page 59

Appendix 1.29

Enabling Nanobody Patent Rights

[to be filled initially after exercise of the option by BiondVax under the RCA]

A) Inventions created in the course of the RCA

[B) Inventions created in the course of the aRCA]

(note to draft: to be added to this Agreement as set forth in Section 2.1.5 and 2.1.6)]

page 60

Appendix 1.63

Target-specific Nanobody Know-how

[to be filled initially after exercise of the option by BiondVax under the RCA]

A) Know-how created in the course of the RCA

[B) Know-how created in the course of the aRCA]

(note to draft: to be added to this Agreement as set forth in Sections 2.1.5 and 2.1.6)]

page 61

Appendix 1.64

Target-specific Nanobody Patent Rights

[to be filled initially after exercise of the option by BiondVax under the RCA]

A) Inventions created in the course of the RCA

[B) Inventions created in the course of the aRCA]

(note to draft: to be added to this Agreement as set forth in Sections 2.1.5 and 2.1.6)]

page 62

EX-10

Exhibit 10

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registrant Statement on Form S-8 and Registration Statement on Form F-3 and related Prospectuses of Biondvax Pharmaceuticals Ltd. of our report dated March 28, 2022 with respect to the financial statements of Biondvax Pharmaceuticals Ltd., included in this Annual Report of 20-F for the year ended December 31, 2021.

Tel-Aviv, Israel	/s/ KOST FORER GABBAY & KASIERER
March 28, 2022	A Member of Ernst & Young Global

EX-12.1

Exhibit 12.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Amir Reichman, certify that:

1. I have reviewed this annual report on Form 20-F of BiondVax Pharmaceuticals 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. The company’s other certifying officer(s) and I are 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 our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us 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 our 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;

5. The company’s other certifying officer(s) and I have disclosed, based on our 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: March 28, 2022

/s/ Amir Reichman

Amir Reichman

Chief Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Uri Ben-Or, certify that:

1. I have reviewed this annual report on Form 20-F of BiondVax Pharmaceuticals 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. The company’s other certifying officer(s) and I are 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:

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

f) 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;

g) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our 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

h) 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;

5. The company’s other certifying officer(s) and I have disclosed, based on our 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):

c) 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

d) 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: March 28, 2022

/s/ Uri Ben-Or

Uri Ben-Or

Chief Financial Officer

EX-13.1

Exhibit 13.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUAN TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of BiondVax Pharmaceuticals Ltd. (the “Company”) on Form 20-F for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to such officer's knowledge:

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

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

Dated: March 28, 2022

/s/ Amir Reichman

Amir Reichman

Chief Executive Officer

EX-13.2

Exhibit 13.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUAN TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of BiondVax Pharmaceuticals Ltd. (the “Company”) on Form 20-F for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to such officer's knowledge:

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

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

Dated: March 28, 2022

/s/ Uri Ben-Or

Uri Ben-Or

Chief Financial Officer

XML

Document And Entity Information	12 Months Ended
	Dec. 31, 2021 shares
Document Information Line Items
Entity Registrant Name	BiondVax Pharmaceuticals Ltd.
Trading Symbol	BVXV
Document Type	20-F
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	573,285,824
Amendment Flag	false
Entity Central Index Key	0001611747
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-37353
Entity Address, Address Line One	Jerusalem BioPark
Entity Address, Address Line Two	2nd floorHadassah Ein Kerem Campus
Entity Address, City or Town	Jerusalem
Entity Incorporation, State or Country Code	L3
Entity Address, Country	IL
Title of 12(b) Security	Ordinary Shares, no par value
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Document Accounting Standard	International Financial Reporting Standards
Auditor Name	KOST FORER GABBAY & KASIERER
Auditor Location	Tel-Aviv, Israel
Auditor Firm ID	1281
Entity Address, Postal Zip Code	00000
Business Contact
Document Information Line Items
Entity Address, Address Line One	Jerusalem BioPark
Entity Address, Address Line Two	2nd floorHadassah Ein Kerem Campus
Entity Address, City or Town	Jerusalem
Entity Address, Country	IL
Contact Personnel Name	Amir Reichman
City Area Code	(+972)
Local Phone Number	8-930-2529
Entity Address, Postal Zip Code	00000

XML

Balance Sheets ₪ in Thousands, $ in Thousands		Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
CURRENT ASSETS:
Cash and cash equivalents		₪ 54,036	$ 17,375	₪ 9,421
Other receivables		1,012	325	1,204
Current assets		55,048	17,700	10,625
LONG-TERM ASSETS:
Property, plant and equipment		38,519	12,386	39,607
Right-of-use assets		5,588	1,797	6,206
Other long-term assets		444	143	473
Long-term assets		44,551	14,326	46,286
Non-current assets		99,599	32,026	56,911
CURRENT LIABILITIES:
Trade payables		3,107	999	1,868
Current maturities of lease liabilities		773	249	654
Loan from others				60,421
Other payables		3,327	1,070	1,246
Current liabilities		7,207	2,318	64,189
LONG-TERM LIABILITIES:
Lease Liabilities		5,712	1,837	6,088
Loan from others		63,252	20,338
Other payables				1,135
Severance pay liability, net		95	31	95
Long-Term Liabilities		69,059	22,206	7,318
SHAREHOLDERS’ EQUITY:
Ordinary shares of no par value: Authorized: 1,800,000,000 and 600,000,000 shares at December 31, 2021 and 2020, respectively; Issued and outstanding: 739,048,544 and 461,285,824 shares at December 31, 2021 and 2020, respectively	[1]
Share premium		388,104	124,792	310,197
Accumulated deficit		(364,771)	(117,290)	(324,793)
Equity		23,333	7,502	(14,596)
Equity and liabilities		₪ 99,599	$ 32,026	₪ 56,911

[1] Represents less than NIS\USD 1.

XML

Balance Sheets (Parentheticals) - ₪ / shares	Dec. 31, 2021	Dec. 31, 2020
Statement of financial position [abstract]
Ordinary shares, par value (in New Shekels per share and Dollars per share)
Ordinary shares, authorized	1,800,000,000	600,000,000
Ordinary shares, issued	739,048,544	461,285,824
Ordinary shares, outstanding	739,048,544	461,285,824

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Statements of Comprehensive Loss ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪) ₪ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 ILS (₪) ₪ / shares shares	Dec. 31, 2019 ILS (₪) ₪ / shares shares
Operating expenses:
Research and development, net of participations	₪ 10,341	$ 3,325	₪ 51,463	₪ 68,645
Marketing, general and administrative	24,528	7,887	16,687	9,706
Other income	(40)	(13)	(75,484)
Total operating expenses (income)	34,829	11,199	(7,334)	78,351
Operating income (loss)	(34,829)	(11,199)	7,334	(78,351)
Financial income	5,716	1,838	3,843	4
Financial expense	(10,865)	(3,494)	(15,632)	(30,847)
Net Loss	(39,978)	(12,855)	(4,455)	(109,194)
Total comprehensive loss	₪ (39,978)	$ (12,855)	₪ (4,455)	₪ (109,194)
Basic and diluted loss per share (in New Shekels per share and Dollars per share) | (per share)	₪ (0.07)	$ (0.02)	₪ (0.01)	₪ (0.33)
Weighted average number of shares outstanding used to compute basic and diluted loss per share (in Shares)	564,575,967	564,575,967	443,260,878	326,651,721

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Statements of Changes in Shareholders’ Equity ₪ in Thousands, $ in Thousands	Share capital ILS (₪)		Share capital USD ($)	Share premium ILS (₪)	Share premium USD ($)	Accumulated deficit ILS (₪)	Accumulated deficit USD ($)	ILS (₪)
Balance at Jan. 01, 2019		[1]		₪ 179,929		₪ (211,144)		₪ (31,215)
Total comprehensive loss						(109,194)		(109,194)
Issuance of Ordinary shares, net of issuance costs				70,270				70,270
Exercise of options				1,402				1,402
Share-based compensation				3,684				3,684
Balance at Dec. 31, 2019				255,285		(320,338)		(65,053)
Total comprehensive loss						(4,455)		(4,455)
Exercise of warrants				45,274				45,274
Exercise of options				166				166
Share-based compensation				9,472				9,472
Balance at Dec. 31, 2020				310,197		(324,793)		(14,596)
Total comprehensive loss						(39,978)		(39,978)
Issuance of Ordinary shares, net of issuance costs				69,003				69,003
Share-based compensation				8,904				8,904
Balance at Dec. 31, 2021				₪ 388,104		₪ (364,771)		₪ 23,333
Balance (in Dollars) at Dec. 31, 2021 | $			$ 124,792		$ (117,290)		$ 7,502

[1] Represents less than NIS\USD 1.

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Statements of Cash Flows ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Cash flows from operating activities:
Net loss	₪ (39,978)	$ (12,854)	₪ (4,455)	₪ (109,194)
Adjustments to profit and loss items:
Depreciation of property, plant and equipment and right-of-use assets	2,415	777	2,436	1,645
Net financial expenses (income)	(930)	(299)	12,940	15,902
Capital gain	(40)	(13)	(160)
Increase (decrease) in liability with respect to loans from others	2,831	910	(63,359)	14,083
Increase (decrease) in liability with respect to Government grants			(14,812)	169
Share-based compensation	8,904	2,863	9,472	3,684
Change in employee benefit liabilities, net			6	7
Total adjustments to profit and loss	13,180	4,238	(53,477)	35,490
Changes in asset and liability items:
Decrease (increase) in other receivables	162	52	(548)	309
Increase (decrease) in trade payables	1,239	398	(15,194)	(3,661)
Increase in short and long-term other payables	946	304	1,178	127
Changes in asset and liability items total	2,347	754	(14,564)	(3,225)
Cash paid and received during the year for:
Interest paid	(33)	(11)	(45)	(131)
Interest received			2	2
Total cash paid and received	(33)	(11)	(43)	(129)
Net cash used in operating activities	(24,484)	(7,873)	(72,539)	(77,058)
Cash flows from investing activities:
Purchase of property and equipment	(430)	(138)	(6,132)	(7,429)
Proceeds from sale of property and equipment	40	13	160
Decrease (increase) in other long-term assets	29	9	37	230
Net cash used in investing activities	(361)	(116)	(5,935)	(7,199)
Cash flows from financing activities:
Proceeds from loan from others				15,337
Proceeds from issuance of shares and options, net of issuance costs	69,003	22,187		70,270
Payment of lease liabilities	(1,220)	(392)	(1,240)	(581)
Proceeds from exercise of options to employees			166
Proceeds from exercise of warrants to public			14,790	188
Net cash provided by financing activities	67,783	21,795	13,716	85,214
Exchange differences on balances of cash and cash equivalents	1,677	540	1,712	(4,373)
Increase (decrease) in cash and cash equivalents	44,615	14,346	(63,046)	(3,416)
Balance of cash and cash equivalents at the beginning of the year	9,421	3,029	72,467	75,883
Balance of cash and cash equivalents at the end of the year	54,036	17,375	9,421	72,467
Non-cash activities:
Right-of-use asset recognized with corresponding lease liability	249	80
Exercise of warrants to public			₪ 30,484	₪ 1,214

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General

12 Months Ended

Dec. 31, 2021

General [Abstract]

GENERAL

NOTE 1: GENERAL

a. BiondVax Pharmaceuticals Ltd. (“the Company”) is focused on developing and ultimately commercializing products for prevention and treatment of infectious diseases and Other illnesses. The Company was incorporated on July 21, 2003 in Israel, and started its activity on March 31, 2005. The Company’s principal executive offices and main laboratory are located at Jerusalem BioPark, 2nd floor, Hadassah Ein Kerem Campus, Jerusalem, Israel, next to Hadassah University Hospitals and Hebrew University’s Medical School.

b. On May 15, 2015, the Company completed a public offering of securities in the United States.

c. On March 28, 2017, the Company received an approval from the Investment Center of the Ministry of Economy and Industry of the State of Israel, for a grant (“the Grant”) representing 20% of NIS 20,000 budget to be utilized towards the construction of a factory for the production of Phase 3 and commercial batches of the Company’s product. The receipt of the Grant is subject to certain terms and conditions, including those outlined under the Israeli Encouragement of Capital Investment Law, 1959. The terms and conditions include, inter alia, the following: (a) at least 24% of the investments in the planned manufacturing facility’s fixed assets will be financed by additional share capital; (b) the Company will maintain its intellectual property and manufacturing facility in Israel for a period of at least 10 years.

To the report date the Company did not meet all the terms and conditions set by the Investment Center of the Ministry of Economy and Industry of the State of Israel.

d. On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However, the study’s primary safety endpoint was met.

e. On January 26, 2021, the EIB notified the Company among other thing that they will not consider the failure of the Company’s pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the Finance Contract. However, the EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently. If some or all of the loans under the Finance Contract are accelerated by the EIB, or secured creditor remedies are exercised, the Company expect such events to adversely impact the Company’s ability to continue as a going concern. 

As of December 31, 2021, the EIB loan balance is $20,338 (approximately NIS 63,252) and presented as long term liability. Refer also to Note 18.

f. On October 19, 2021 the Company signed a term sheet that includes binding financial terms of contemplated definitive agreements with the Max Planck Society and the University Medical Center Göttingen in Germany, including an exclusive worldwide licensing of novel COVID-19 VHH antibody candidates. The parties intend to enter into a 5-year strategic research collaboration including an option for BiondVax to license innovative VHH antibodies. Frequently referred to as nanobodies, VHH antibodies have the potential to serve as therapeutics and diagnostics for many diseases. The transaction is subject to execution of definitive agreements.

On December 22, 2021, the Company signed definitive agreements with the Max Planck Society (“MPG”), the parent organization of the Max Planck Institute for Biophysical Chemistry, and the University Medical Center Göttingen (“UMG”), both in Germany, to enter into a strategic collaboration for the development and commercialization of innovative Covid-19 NanoAbs, effective from January 1, 2022. The agreements provide for an upfront payment, development and sales milestones and royalties based on sales and sharing of sublicense revenues.

On March 23, 2022, the Company executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions such as psoriasis, asthma, macular degeneration, and psoriatic arthritis.

g. During the year ended December 31, 2021, the Company incurred a loss of NIS 39,978 ($ 12,854) and negative cash flows from operating activities of NIS 24,484 ($ 7,873) and it has an accumulated deficit of NIS 364,771 ($ 117,290) as of that date.

To date the Company has not generated any revenues and may need additional funds to finance its operation in the future.

Furthermore, the Company’s ability to continue as a going concern and execute on its business plan is dependent upon its ability to raise capital through private or public financings, enter into a commercial agreement or engage in a strategic alternative, among others. The Company currently intend to finance its activities through any of the above. However, there are no assurances that the Company will be successful in raising such capital or, in the event of a capital raising, that such capital will be available on terms acceptable to the Company.

The Company’s management and Board of Directors are of the opinion that its current financial resources will be sufficient to continue the development of the Company’s products for at least the next twelve months.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated.

a. Basis of presentation of the financial statements:

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The Company’s financial statements have been prepared on a cost basis, except for financial instruments which are measured at fair value through profit or loss.

The Company has elected to present profit or loss items using the “function of expense” method.

b. Functional currency, reporting currency and foreign currency:

1. Functional currency and reporting currency:

The functional currency and reporting currency of the financial statements is the NIS. The functional currency is the currency that best reflects the economic environment in which the Company operates and conducts its transactions. Most of the Company’s costs are incurred in NIS. In addition, the Company’s financing activities are incurred normally in NIS. The Company’s management believes, therefore, that the functional currency of the Company is the NIS.

2. Transactions, assets and liabilities in foreign currency:

Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss.

c. Convenience translation into U.S. dollars:

The financial statements as of December 31, 2021 and for the year then ended have been translated into U.S. dollars using the exchange rate of the U.S. dollar as of December 31, 2021 (U.S. $ 1.00 = NIS 3.11). The translation was made solely for convenience purposes.

The dollar amounts presented in these financial statements should not be construed as representing amounts that are receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

d. Cash equivalents:

Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition.

e. Restricted cash:

Restricted cash are bank deposits with an original maturity of more than one year from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit.

f. Property and equipment:

Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and excluding day-to-day servicing expenses.

Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:

	%
Laboratory equipment		15
Office furniture and equipment		6 - 33
Computers		33
Leasehold improvements		(*)

(*) Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement.

The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.

g. Research and development expenses, net of participations:

Research and development expenses are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the Company’s ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the Company’s ability to measure reliably the expenditure attributable to the intangible asset during its development. Since the Company’s research and development projects are often subject to regulatory approval procedures and other uncertainties, the conditions for the capitalization of costs incurred before receipt of approvals are not normally satisfied and, therefore, development expenditures are recognized in profit or loss when incurred.

h. Government investment grants:

Government grants are recognized when there is reasonable assurance that the grants will be received and the Company will comply with the attendant conditions.

Research and development grants received from the Israeli Innovation Authority (“IIA”) are recognized upon receipt as a liability only if future economic benefits are expected from the project that will result in royalty-bearing sales. A liability for the grant is first measured at fair value using a discount rate that reflects a market interest rate. The difference between the amount of the grant received and the fair value of the liability is accounted for as a Government grant and recognized as a reduction of research and development expenses. After initial recognition, the liability is measured at amortized cost using the effective interest method.

Future royalty payments will be treated as a reduction of the liability. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent Assets” (“IAS 37”).

At the end of each reporting period, the Company evaluates whether there is reasonable assurance that the received grants will not be repaid based on its best estimate of future sales and, if so, no liability is recognized and the grants are recorded against a corresponding reduction in research and development expenses.

Research and development grants received from the European Union are recorded against a corresponding reduction in research and development expenses since they are non-refundable and do not depend on the generation of future sales.

i. Impairment of non-financial assets:

The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs and is calculated based on the projected cash flows that will be generated by the cash generated unit. Impairment losses are recognized in profit or loss.

An impairment loss of an asset is reversed only if there have been changes in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years, and its recoverable amount.

The Company did not recognize any impairment of non-financial assets for any of the periods presented.

j. Financial instruments:

1. Financial assets:

Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.

The Company classifies and measures debt instruments in the financial statements based on the following criteria:

- The Company’s business model for managing financial assets; and

- The contractual cash flow terms of the financial asset.

Debt instruments are measured at fair value through profit or loss when:

A financial asset which is a debt instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or loss.

2. Derecognition of financial assets:

A financial asset is derecognized only when:

- The contractual rights to the cash flows from the financial asset have expired; or

- The Company has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or

- The Company has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party.

3. Financial liabilities:

a) Financial liabilities measured at amortized cost:

Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.

After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method, except for:

- Financial liabilities at fair value through profit or loss such as warrant liability.

b) Financial liabilities measured at fair value through profit or loss:

At initial recognition, the Company measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss.

After initial recognition, changes in fair value are recognized in profit or loss.

4. Derecognition of financial liabilities:

A financial liability is derecognized only when it is extinguished, that is when the obligation specified in the contract is discharged or cancelled or expires. A financial liability is extinguished when the debtor discharges the liability by paying in cash, other financial assets, goods or services; or is legally released from the liability.

5. Issue of a unit of securities:

The issue of a unit of securities involves the allocation of the proceeds received (before issue expenses) to the securities issued in the unit based on the following order: financial derivatives and other financial instruments measured at fair value in each period. Then fair value is determined for financial liabilities that are measured at amortized cost. The proceeds allocated to equity instruments are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the unit.

k. Fair value measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:

Level 1	-	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	-	inputs other than quoted prices included within Level 1 that are observable directly or indirectly.
Level 3	-	inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

l. Provisions:

A provision in accordance with IAS 37 is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is expected to require the use of economic resources to settle the obligation and a reliable estimate can be made of it.

m. Operating leases:

The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company as a lessee:

For leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract.

Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of IAS 19 and not as subleases.

On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Company’s incremental borrowing rate. After the commencement date, the Company measures the lease liability using the effective interest rate method.

On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term.

Following are the amortization periods of the right-of-use assets by class of underlying asset:

	Years
Building		10
Motor vehicles		3

The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.

n. Employee benefit liabilities:

The Company has several employee benefit plans:

1. Short-term employee benefits:

Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered.

2. Post-employment benefits:

Post-employment benefit plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.

The Company has defined contribution plans pursuant to Section 14 of the Severance Pay Law into which the Company pays fixed contributions and has no legal or constructive obligation to pay further contributions on account of severance pay if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in current and prior periods.

Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee’s services.

o. Share-based payment transactions:

From time to time, the Company grants to its employees and service providers remuneration in the form of equity-settled share-based instruments, such as options to purchase Ordinary shares.

Equity-settled transactions:

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. The fair value is determined using an acceptable option pricing model.

With respect to other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.

The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period which the performance or service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award (“the vesting period”).

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of whether the market condition is satisfied, provided that all other vesting conditions are satisfied.

p. Loss per share:

Loss per share is calculated by dividing the loss attributable to Company shareholders by the weighted number of outstanding Ordinary shares during the period. Potential Ordinary shares are only included in the computation of diluted loss per share when their conversion increases loss per share or decreases income per share. Potential Ordinary shares that are converted during the period are included in diluted loss per share only until the conversion date.

q. Disclosure of new standards in the period prior to their adoption:

1. Amendment to IAS 1, “Presentation of Financial Statements”:

In January 2020, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” (“the Amendment”) regarding the criteria for determining the classification of liabilities as current or non-current.

The Amendment includes the following clarifications:

● What is meant by a right to defer settlement.

● That a right to defer must exist at the end of the reporting period.

● That classification is unaffected by the likelihood that an entity will exercise its deferral right.

● That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The Amendment is effective for annual periods beginning on or after January 1, 2023 and must be applied retrospectively.

The Company is evaluating the possible impact of the Amendment on its current loan agreements.

2. Amendment to IAS 16, “Property, Plant and Equipment”:

In May 2020, the IASB issued an amendment to IAS 16, “Property, Plant and Equipment” (“the Amendment”). The Amendment prohibits a company from deducting from the cost of property, plant and equipment (“PP&E”) consideration received from the sales of items produced while the company is preparing the asset for its intended use. Instead, the company should recognize such consideration and related costs in profit or loss.

The Amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Amendment is to be applied retrospectively, but only to items of PP&E made available for use on or after the beginning of the earliest period presented in the financial statements in which the company first applies the Amendment. The company should recognize the cumulative effect of initially applying the Amendment as an adjustment to the opening balance of retained earnings at the beginning of the earliest period presented.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

3. Amendment to IAS 37, “Provisions, Contingent Liabilities and Contingent Assets”:

In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a company should include when assessing whether a contract is onerous (“the Amendment”). According to the Amendment, costs of fulfilling a contract include both the incremental costs (for example, raw materials and direct labor) and an allocation of other costs that relate directly to fulfilling a contract (for example, depreciation of an item of property, plant and equipment used in fulfilling the contract).

The Amendment is effective for annual periods beginning on or after January 1, 2022 and applies to contracts for which all obligations in respect thereof have not yet been fulfilled as of January 1, 2022. Early application is permitted.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

4. Amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors”:

In February 2021, the IASB issued an amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors” (“the Amendment”), in which it introduces a new definition of “accounting estimates”.

Accounting estimates are defined as “monetary amounts in financial statements that are subject to measurement uncertainty”. The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted.

The Company is evaluating the effects of the Amendment on its financial statements.

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Significant Accounting Judgments, Estimates and Assumptions Used in the Preparation of the Financial Statements

12 Months Ended

Dec. 31, 2021

Significant Accounting Judgments, Estimates and Assumptions Used in the Preparation of the Financial Statements [Abstract]

SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS

NOTE 3:- SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS

The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities and expenses.

Discussed below are the key assumptions made in the financial statements concerning uncertainties at the end of the reporting period and the critical estimates computed by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

● Determining the fair value of share-based compensation to employees and directors:

The fair value of share-based compensation to employees and directors is determined using acceptable option pricing models.

The assumptions used in the models include the expected volatility, expected life, expected dividend and risk-free interest rate.

● Grants from the Israel Innovation Authority (“the IIA”):

Government grants received from the IIA are recognized as a liability if future economic benefits are expected from the research and development activity that will result in royalty-bearing sales. There is certainty regarding the estimated future economic benefits, therefore the liability was recorded with respect to the IIA grants.

● Discount rate for a lease liability: When the Company is unable to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. When there are no financing transactions that can serve as a basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from the lease contract’s conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert in determining the incremental borrowing rate.

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2021

Disclosure of cash and cash equivalents [text block] [Abstract]

CASH AND CASH EQUIVALENTS

NOTE 4:- CASH AND CASH EQUIVALENTS

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Cash in NIS		1,150		5,579		1,794
Cash in USD		8,234		48,457		15,581
Cash in EURO		37		-		-
		9,421		54,036		17,375

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Other Receivables

12 Months Ended

Dec. 31, 2021

Disclosure of trade and other receivables [text block] [Abstract]

OTHER RECEIVABLES

NOTE 5:- OTHER RECEIVABLES

					Convenience
					Translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Government authorities		229		306		98
Prepaid expenses and other		975		706		227
		1,204		1,012		325

XML

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2021

Disclosure of property, plant and equipment [text block] [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 6:- PROPERTY, PLANT AND EQUIPMENT, NET

December 31, 2021:

	Laboratory equipment			Office furniture and  equipment		Computers		Cars		Factory leasehold		Total
Cost:
Balance at January 1, 2021		2,922			119		613		-		41,212		44,866
Additions		4			25		24		276		101		430
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,777			144		637		276		41,313		45,147
Accumulated depreciation:
Balance at January 1, 2021		2,707			105		486		-		1,961		5,259
Additions		47			7		79		10		1,375		1,518
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,605			112		565		10		3,336		6,628
Depreciated cost at December 31, 2021		172			32		72		266		37,977		38,519

	Convenience translation into U.S. dollars
Depreciated cost at December 31, 2021		55	10	23	87	12,211	12,386

December 31, 2020:

	Laboratory equipment			Office furniture and equipment		Computers		Factory leasehold		Total
Cost:
Balance at January 1, 2020		3,362			119		568		35,159		39,208
Additions		34			-		45		6,053		6,132
Deductions		(474	)		-				-		(474	)
Balance at December 31, 2020		2,922			119		613		41,212		44,866
Accumulated depreciation:
Balance at January 1, 2020		3,135			99		406		587		4,227
Additions		46			6		80		1,374		1,506
Deductions		(474	)		-		-		-		(474	)
Balance at December 31, 2020		2,707			105		486		1,961		5,259
Depreciated cost at December 31, 2020		215			14		127		39,251		39,607

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Leases

12 Months Ended

Dec. 31, 2021

Disclosure of leases [text block] [Abstract]

LEASES

NOTE 7:- LEASES

a. Information on leases:

The Company has lease agreements that include leases of buildings and vehicles that are used to maintain the Company’s ongoing operations. The leases of the buildings and vehicles are for a period of 10 and 3 years, respectively. Some of these lease agreements include extension options.

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Interest expense on lease liabilities		479		715		230
Total cash outflow for leases		1,240		1,220		392

b. Lease extension options:

The Company has leases that include extension options. These options provide flexibility in managing the leased assets and align with the Company’s business needs.

The Company exercises significant judgment in deciding whether it is reasonably certain that the extension options will be exercised.

In leases that contain noncancelable lease periods of 10 years, the Company does not generally include in the lease term the exercise of extension options since the Company believes it is not reasonably certain that the extension options will be exercised. Following are details of potential future undiscounted lease payments for periods covered by extension or termination options that were not included in the measurement of the Company’s lease liabilities:

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
More than 5 years
Lease payments applicable in extension option periods which as of the end of the reporting period are not reasonably certain to be exercised		5,889		5,889		1,894

c. Disclosures in respect of right-of-use assets:

December 31, 2021:

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2021		7,827		257		8,084
Additions during the year:
New leases		-		279		279
Balance as of December 31, 2021		7,827		536		8,363
Accumulated depreciation:
Balance as of January 1, 2021		1,648		230		1,878
Additions during the year:
Depreciation and amortization		824		73		897
Balance as of December 31, 2021		2,472		303		2,775
Depreciated cost at December 31, 2021		5,355		233		5,588

December 31, 2020:

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2020 and December 31, 2020		7,827		257		8,084
Accumulated depreciation:
Balance as of January 1, 2020		824		124		948
Additions during the year:
Depreciation and amortization		824		106		930
Balance as of December 31, 2020		1,648		230		1,878
Depreciated cost at December 31, 2020		6,179		27		6,206

d. For an analysis of maturity dates of lease liabilities, see Note 10.

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Other Long-Term Assets

12 Months Ended

Dec. 31, 2021

Other Long-Term Assets [Abstract]

OTHER LONG-TERM ASSETS

NOTE 8:- OTHER LONG-TERM ASSETS

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Restricted cash		473		444		143
		473		444		143

XML

Other Payables

12 Months Ended

Dec. 31, 2021

Other Payables [Abstract]

OTHER PAYABLES

NOTE 9:- OTHER PAYABLES

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Employees and payroll accruals		875		2,204		709
Accrued expenses		371		1,123		361
		1,246		3,327		1,070

XML

Financial Instruments

12 Months Ended

Dec. 31, 2021

Financial Instruments [Abstract]

FINANCIAL INSTRUMENTS

NOTE 10:- FINANCIAL INSTRUMENTS

a. Financial and lease liabilities:

	Effective interest			Maturity		December 31,
	rate			date		2020		2021
	%					NIS
Current liabilities:
Lease liabilities		8	%		2021		654		773
Loan from others		17.3	%		2023-2024		60,421		-
Total current liabilities							61,075		773
Non-current liabilities:
Loan from others		17.3	%		2023-2024		-		63,252
Lease liabilities		8	%		2028		6,088		5,712
Total non-current liabilities							6,088		68,964
Total financial and lease liabilities							67,163		69,737

	Carrying amount				Fair value
	December 31,				December 31,
	2020		2021		2020		2021
	NIS
Financial liabilities:
Loan from others		94,658		84,477		60,421		63,252
Total		94,658		84,477		60,421		63,252

b. Classification of financial liabilities:

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Financial liabilities at amortized costs:
Trade payables		1,868		3,107		999
Other payables		2,381		3,327		1,070
Lease Liabilities		6,742		6,485		2,085
Loan from others		60,421		63,252		20,338
Total financial liabilities		71,412		76,171		24,492
Total current		64,189		,207 7		2,317
Total non-current		7,223		68,964		22,175

c. Financial risk factors:

The Company’s activities expose it to various market risks (foreign currency risk, Israeli CPI risk and interest rate risk) and credit risk. The Company’s comprehensive risk management plan focuses on activities that reduce to a minimum any possible adverse effects on the Company’s financial performance.

Risk management is performed by the Company’s Board. The Board identifies, measures and manages financial risks in collaboration with the Company’s operating units. The Board establishes documented objectives for the overall risk management activities as well as specific policies with respect to certain exposures to risks such as exchange rate risk, interest rate risk, credit risk, the use of non-derivative financial instruments and the investments of excess liquid positions.

Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign currency exchange rates.

The Company has cash that is exposed to possible fluctuations in the U.S. dollar exchange rates. The currency exposure arising from current accounts managed in Dollars. As of December 31, 2021, the carrying amounts of USD were NIS 48,457.

Credit risk:

The Company has no significant concentrations of credit risk. All deposits are invested in financial institutions that are considered to be financially sound.

d. Liquidity risk:

The Company monitors the risk to a shortage of funds using a liquidity planning tool.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments (including interest payments):

December 31, 2021:

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		3,107		-		-		-		-		-		3,107
Other payables		3,327		-		-		-		-		-		3,327
Lease liabilities		552		885		845		904		977		1,901		6,064
Loans from others		-		70,398		14,079		-		-		-		84,477
		6,986		71,283		14,924		904		977		1,901		96,975

December 31, 2020:

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		1,868		-		-		-		-		-		1,868
Other payables		1,246		1,135										2,381
Lease liabilities		1,128		1,128		1,174		1,174		1,174		2,936		8,714
Loans from others		-		78,883		15,775		-		-		-		94,658
		4,242		81,146		16,949		1,174		1,174		2,936		107,621

e. Fair value:

The carrying amount of cash and cash equivalents, other receivables, other long-term assets, trade payables and other payables approximates their fair value due to the short-term maturities of such instruments.

f. Fair value measurement:

As of December 31, 2021, loans from others are classified as Level 2.

During 2021 there were no transfers in respect of fair value measurement of any financial instrument between Level 1 and Level 2, and there were no transfers into or out of Level 3 fair value measurements of any financial instrument.

g. Changes in liabilities arising from financing activities:

	Loans from others			Lease liabilities			Total liabilities arising from financing activities
	NIS
Balance as of January 1, 2020		123,780			7,503			131,283
Cash flows		-			(761	)		(761	)
Effect of changes in fair value		(63,359	)		-			(63,359	)
Balance as of December 31, 2020		60,421			6,742			67,163
New leases		-			249			249
Cash flows		-			(506	)		(506	)
Effect of changes in fair value		2,831			-			2,831
Balance as of December 31, 2021		63,252			6,485			69,737

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Employee Benefit Liabilities

12 Months Ended

Dec. 31, 2021

Employee Benefit Liabilities [Abstract]

EMPLOYEE BENEFIT LIABILITIES

NOTE 11:- EMPLOYEE BENEFIT LIABILITIES

a. Post-employment benefits:

According to the labor laws and Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to section 14 to the Severance Pay Law, as specified below. The Company’s liability is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability is made according to the current employment contract based on the employee’s salary and employment term which establish the entitlement to receive the compensation.

The post-employment employee benefits are normally financed by contributions classified as defined benefit plan or as defined contribution plan, as detailed below.

b. Defined contribution plans:

Section 14 to the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Company into pension funds and/or policies of insurance companies release the Company from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Expenses - defined contribution plan		332		335		314		101

XML

Contingent Liabilities and Commitments

12 Months Ended

Dec. 31, 2021

Contingent Liabilities and Commitments [Abstract]

CONTINGENT LIABILITIES AND COMMITMENTS

NOTE 12:- CONTINGENT LIABILITIES AND COMMITMENTS

a. On July 31, 2003, the Company signed a license agreement with Yeda Research and Development Company Ltd. (“Yeda”) according to which the Company acquired an exclusive worldwide license for the development, manufacturing, use, marketing, sale, distribution and importing of products based, directly or indirectly, on patents and patent applications to be approved or submitted pursuant to the invention titled “Peptide Based Vaccine for Influenza”, developed on the basis of the research conducted by Professor Ruth Arnon and her team at the Weizmann Institute. This agreement was amended in 2005. In exchange for the license grant, the Company or its future sublicensees will be obligated to pay royalties equaling 3% of the total amount invoiced by the Company or by a sublicensee in connection with the sale of products based on Yeda’s patents, or 2% of such amounts if they originated from a country which did not grant a patent in connection with such products. All sales of products in connection with the license agreement for any purpose other than for the purpose of clinical trials are required to be made for monetary consideration.

The Company has the option to enter into a sublicense agreement provided that Yeda gives its consent in writing and, in such case, the royalties to be paid by the Company to Yeda from the sublicense or from the option to sublicense will be (a) before the completion of Phase 1 clinical trials - 45% (b) after Phase 1 but before Phase 2 trials - 35% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option, or 25% of amounts exceeding such first $ 20,000 receivable from the sublicense or from a sublicense option; (c) after the completion of Phase 2 clinical trials the royalties will be 20% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option or 15% of amounts exceeding such first $ 20,000 receivable from a sublicense or a sublicense option.

This agreement terminates at the latest of (i) the expiration of the last patent licensed under the license agreement; or (ii) if only one product is developed or is commercialized by utilizing the licensed intellectual property, 15 years after the first commercial sale of such product in either the U.S or Europe, following receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product; or (iii) if more than one product is being developed or is commercialized by utilizing the licensed intellectual property, following the receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product, the expiry of a 20 year period during which no sales are made in the U.S. or Europe.

Yeda shall be entitled, at its option and without the Company’s consent, to modify the license so that it is non-exclusive or to terminate the license with 30 days prior written notice to the Company, if any of the following occurs:

(1) the Company fails to commence the commercial sale of at least one product based on the license’s intellectual property, in at least one country, within six months following receipt of an FDA or similar foreign regulatory approval for commercial marketing of such product and taking into account the seasonal nature of the products (except as a result of force majeure or other factors beyond the Company’s control); or

(2) the Company fails to sell any product based on the license’s intellectual property, during a period of one year after commercial sale of a product has commenced, during which no sales of the product take place (except as a result of force majeure or other factors beyond the Company’s control).

In addition, Yeda is permitted to terminate the license agreement by written notice:

(a) in the event the Company materially breaches any of its obligations under the license agreement, provided that such material breach is uncurable or, if curable, is not cured by the Company within thirty days (or in the case of failure by the Company to make payments due to Yeda in connection with the license agreement, ten days) from receipt of notice of such breach; or

(b) in the event of the appointment of a temporary or permanent liquidator to the Company or a resolution is passed to voluntarily wind up the Company, or if an order or act is granted for the winding up of the Company, provided that if such order or act was initiated by any third party, such order or act is not cancelled within 120 days; or

(c) if the Company contests the validity of one of the patents registered by Yeda.

In the event that Yeda terminates the license agreement due to any reason other than termination in accordance with (1), (2) or (a) through (c) in the preceding two paragraphs above, the Company will be entitled to receive royalty payments equal to 25% of net proceeds received by Yeda from the grant to third parties, within the five years following the termination of the license agreement, of a license or other rights, which include the Company’s developments, up to the aggregate amount of research funds actually expended by the Company for development.

In light of the Phase 3 clinical trial results, the Company does expect any future revenues from M-001 and thus do not expect to make royalty payments to Yeda.

b. The Company obtained grants from the Government of Israel for the participation in research and development and, in return, undertook to pay royalties amounting to 3%-5% on the revenues derived from sales of products or services developed in whole or in part using these grants. The maximum aggregate royalties paid generally cannot exceed 100% of the grants received by the Company, plus annual interest generally equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar year. The maximum royalty amount payable by the Company as of December 31, 2021 is approximately $ 5,700 (NIS 17,727), which represents the total gross amount of grants actually received by the Company from the IIA including accrued interest. As of December 31, 2021, the Company had not paid any royalties to the IIA. (For further details see Note 12e)

Regulators in many countries are in the process of replacing benchmark Interbank Offered Rates (IBORs), of which one of the most common is the LIBOR, with risk-free interest rate alternatives (RFRs). The replacement of IBORs with RFRs is expected to occur gradually until the end of 2021. The repayment of grants received by the Company have interest rates that reference LIBOR and are expected to be repaid after 2021. Since an alternative interest rate was not determined by the IIA yet, at this stage the Company is unable to determine the effects, if any, that the discontinuance of IBORs will have on its various financial instruments that reference the IBORs.

c. In October 2013, the Company signed an agreement for obtaining funding from the European Union which was approved for the UNISEC consortium of which the Company is a member for a period of three years. The Company’s expenses in respect of this project in 2013-2018 totaled € 1,028 ($ 1,231) which supported by the less than 75% or € 771 ($ 923). On October 10, 2018, the Company received the final part of the grant owed by UNISEC in the total of € 55 ( $62). The grant is non-refundable since the Company met the conditions of the consortium and are, therefore, recorded as a reduction of research and development expenses.

d. On June 19, 2017, the Company entered into a Finance Contract with the European Investment bank (EIB) for a total amount of € 20,000 (approximately $ 23,200) and up to 50% of the Company’s expected cost of developing and marketing the Company’s product candidate, M-001. In addition, as repayment features, EIB was entitled to receive the higher between 3% of any M-001 sales revenues for a period of ten years, or realizing a cash-on-cash multiple of 2.8 times

On April 22, 2019, the Committee of the European Investment Bank (“EIB”) agreed to expand the 2017 financing agreement to the Company by an additional € 4,000 to a total of € 24,000 (approximately $ 27,600). An amendment to that effect was signed in June 2019 (the “Amendment”). Those funds were received in October 2019 and will be used in support of the ongoing pivotal, clinical efficacy, Phase 3 trial of BiondVax’s M-001 Universal Flu Vaccine candidate in Europe.

According to the Amendment, as repayment features, EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a cash-on-cash multiple of 2.8 times

During 2018, the Company received the € 20,000 in two tranches of € 6,000 (approximately $ 7,000) and the third tranche of € 8,000 (approximately $ 9,200).

On October 7, 2019, the Company received the remaining € 4,000 (approximately $ 4,400).

In the event the Company elects to prepay the EIB financing, or in the event the EIB shall demand prepayment following certain events, including a change of control, senior management changes or merger events, the Company shall be required to pay EIB the principal amount of the tranches already paid, or the Prepayment Amount, plus the greater of:

(i) the amount, as determined by EIB required in order for the EIB to realize an internal rate of return on the relevant amount prepaid of 20%; and

(ii) the Prepayment Amount.

The Finance Contract also stipulates that in the event the EIB demands prepayment of the loan due to any prepayment event to non-EIB lenders, the Company shall be obligated to pay the Prepayment Amount plus an additional reduced amount.

In addition, and as consideration for the EIB financing, the EIB shall be entitled to 3% of any annual M-001 sales revenues.

The Company performed a valuation of the financial liability for December 31, 2019 through an independent appraiser. According to the valuation, which was based on WACC (Weighted Average Cost of capital) of 17.3% and CAPM (Capital Asset Pricing Model), the value of the financial liability was estimated at NIS 123,780 ($ 38,500).

As a result of the valuation, the Company incurred a financial expense of NIS 14,083 ($ 4,380) for December 31, 2019.

e. On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However, the study’s primary safety endpoint was met.

As a result of the Phase 3 clinical trial failure, Company’s management estimates that there will be no future revenues from the M-001 product. Therefore, most likely, there will be no future royalty payments to the IIA and EIB.

Under the Finance Contract, the EIB may accelerate all loans extended thereunder if an event of default has occurred, which includes, amongst other things, an event of default arising from the occurrence of a material adverse change, defined as any event or change of condition, which in the opinion of the EIB, has a material adverse effect on: the Company’s ability to perform its obligations under the Finance Documents; the Company’s business, operations, property, condition (financial or otherwise) or prospects; or the rights or remedies of the EIB under the Finance Contract, amongst other things. If the EIB determines that an event of default has occurred, it could accelerate the amounts outstanding under the Finance Contract, making those amounts immediately due and payable.

In accordance with the EIB loan agreement, and due to the said above, the Company is required to pay EIB the principal amount of the tranches already loaned by the EIB to the Company, within five years of the date of each tranche of the loan. On December 31, 2020, the Company re-evaluated the loan in the sum of NIS 60,421 ($ 18,793).

As a result, the Company recorded an amount of NIS 62,800 ($ 19,533) as revaluation income of the EIB loan and NIS 12,685 ($ 3,954) for the IIA liability and recorded them in 2020 under line item other income in the statement of other comprehensive loss.

As of December 31, 2021, the fair value regarding the EIB loan is NIS 63,252 ($20,338).

As of December 31, 2021, the outstanding principal amount regarding the EIB loan in nominal terms is NIS 84,477 ($27,163).

On January 26, 2021, the EIB notified the Company that they welcome the Company’s efforts to secure future equity financing in an amount not less than USD 2,000 in order to enable the Company to pursue new business opportunities, strengthen the Company balance sheet and invest in growth. Thus, within that context, the EIB wrote in their letter that they will not consider the failure of the Company’s pivotal phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the Finance Contract.  However, EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently. In addition, on December 24, 2020, the Company amended the Finance Contract in order to obtain the consent of EIB for the appointment of its new CEO Amir Reichman.

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Equity

12 Months Ended

Dec. 31, 2021

Disclosure Of Stockholders Equity Note Explanatory [Abstract]

EQUITY

NOTE 13:- EQUITY

a. Rights attached to shares:

An Ordinary share confers upon its holder(s) a right to vote at the general meeting, a right to participate in distribution of dividends, and a right to participate in the distribution of surplus assets upon liquidation of the Company.

b. On May 15, 2015, the Company completed a public offering of securities in the United States of American Depositary Shares (ADSs) and warrants. Each ADS represents 40 Ordinary shares of the Company.

Accordingly, on May 12, 2015, the Company allocated 76,400,000 Ordinary shares of the Company to the U.S. public. The Company also allocated 2,038,000 tradable warrants in the U.S., which were exercisable into ADSs for a five year period, until May 15, 2020 at an exercise price of $ 6.25 for each warrant. The immediate gross consideration for the offering amounted to a total of NIS 36,607 ($ 9,382). The offering expenses amounted to a total of NIS 5,576. In addition, in accordance with the underwriting agreement, the Company granted the underwriters 95,500 warrants, under the same terms and conditions as the warrants offered to the public.

At the time of the offering, the Company recorded an increase in equity in respect of shares, totaling NIS 26,417, net (after deduction of offering expenses totaling NIS 4,860) and liability related to the warrants in the amount of NIS 7,398 thousand (offering expenses for warrants totaling NIS 1,197 were recorded as financial expenses). On June 24, 2015, the Company issued an additional 110,000 ADSs to the underwriters in consideration of a total gross amount of NIS 2,069 ($ 530). Issuance expenses amounted to NIS 134. The warrants are measured at their fair value based on their quote price at the end of each reporting date. The Company recorded financial expenses in the amount NIS 11,400 and NIS 14,467 in 2019 and 2020, respectively, for revaluation of these warrants.

c. On June 13, 2019, the Company issued 334,520 Ordinary shares (equivalent to 8,363 NASDAQ listed ADSs) in consideration of NIS 188 (approximately $ 53).

d. On July 16, 2019, the Company closed a public offering and issued 3,057,466 NASDAQ listed ADSs (equivalent to 122,298,640 Ordinary shares) and 18,298,898 Ordinary shares (equivalent to 457,472 NASDAQ listed ADSs) in consideration of $ 20,000 (approximately NIS 71,300) to a number of investors.

As part of this public offering, Angels Investments in High Tech Ltd. (“AIHT”) exercised their option to purchase, under the same terms of the public offering, 2,203,640 ADSs and 141,538 Ordinary shares offered in the public offering that were not purchased by other shareholders. In total, the investment through AIHT in this offering was approximately $ 16,670, making AIHT a controlling shareholder (as defined under the Israeli Companies Law) with a holding of about 42% in BiondVax.

e. On May 15, 2020 540,639 NASDAQ listed warrants expired.

f. On July 8, 2020 6,000 ADS options were exercised into 240,000 Ordinary shares at an exercise price of $7.98 for a total consideration of NIS 166 (approximately $ 48).

g. During the year ended December 31, 2020, 676,118 NASDAQ listed warrants were exercised into 27,044,720 Ordinary shares at an exercise price of $6.25 for a total consideration of NIS 14,790 (approximately $ 4,298) and 611,565 NASDAQ listed warrants to purchase ADSs at an exercise price of $6.25 were exercised on a cashless basis into 24,462,600 Ordinary shares.

h. On February 2, 2021, the Company closed an underwritten offering in which it sold 2,434,783 ADSs at a public offering price of $4.95 per ADS. On February 10, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 365,217 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $13,800. The Company received a net sum of $12,465 (approximately NIS 41,137) after deduction of issuance expenses of $371 (approximately NIS 1,155).

i. An amendment to the Company’s Articles of Association increasing the registered share capital of the Company by an additional 1,100,000,000 Ordinary Shares (the equivalent of 27,500,000 ADSs) such that the total registered share capital of the Company would consist of 1,800,000,000 Ordinary Shares, no par value (the equivalent of 45,000,000 ADSs).

j. On December 27, 2021, the Company closed an underwritten offering in which it sold 3,813,560 ADSs at a public offering price of $2.36 per ADS. On December 27, 2021, Aegis Capital Corp., the sole bookrunning manager for the underwritten offering, fully exercised its over-allotment option to purchase an additional 330, 508 ADSs, bringing total gross proceeds to the Company from the offering including exercise of the over-allotment option of approximately $9,780. The Company received a net sum of $8,817 (approximately NIS 27,866) after deduction of issuance expenses of $1,593 (approximately NIS 3,039).

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Share-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-Based Compensation [Abstract]

SHARE-BASED COMPENSATION

NOTE 14:- SHARE-BASED COMPENSATION

a. Expense recognized in the financial statements:

The expense that was recognized for services received from employees, directors and service providers as equity-settled share-based payment is as follows:

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Research and development		1,907		2,056		1,045		336
Marketing, general and administrative		1,777		7,416		7,859		2,527
Total share-based compensation		3,684		9,472		8,904		2,863

b. Share-based payment plan for employees and directors:

Options granted under the Company’s 2005 Israeli Share Option Plan (“Plan”) were exercisable in accordance with the terms of the Plan, within 10 years from the date of grant, against payment of an exercise price. The options generally vest over a period of three or four years.

In March 2018, the Company’s Board of Directors approved the adoption of the Company’s 2018 Israeli Share Option Plan (“2018 Plan”) for the grant of options and restricted shares (“RSU”) to employees, directors and service providers. The options are exercisable within 10 years from the date of grant, against payment of the exercise price, in accordance with the terms of the 2018 Plan. The options generally vest over a period of three or four years.

Option grants:

a. On April 30, 2019, the Company granted options to purchase 108,000 ADSs (4,320,000 options) to board members and officers which vest over a period of three years at an

b. exercise price of $ 7.976 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 1,414 ($ 391).

c. On April 30, 2019, the Company also granted 215,833 ADSs (8,633,310 RSU) to the CEO of which 60% vested immediately, 20% will be vested on March 2020 and the additional 20% will vest on March 2021. The fair value of the options as of the date of grant totaled approximately NIS 2,826 ($ 782).

d. On June 11, 2020, the Company’s Board of Directors ratified the grant of options to 23 employees to purchase an aggregate 141,400 ADS (5,656,000 Ordinary shares) at an exercise price of $7.28 – $8.076 per ADS. The options were originally approved pursuant to a delegation of authority granted by the Board of Directors to Company management in April 2018 to grant a pool of options with an exercise price of $7.98 and other terms approved by the Board of Directors at the time of delegation. The total value of the grant was NIS 4,190 ($ 1,218)

e. On the same day, the Company’s Board of Directors approved a grant to an advisor to purchase 72,000 ADS (2,880,000 Ordinary shares) at an exercise price of $18.06 per ADS in three tranches. The first tranche of 32,400 ADS’s was vested on May 31,2020, the second tranche of 25,200 ADS was vested on September 30, 2020 and the third tranche of 14,400 ADS’s will be vested on December 31, 2020. The options will expire four years from the commencement vesting date of each tranche. The total value of the grant was NIS 2,783 ($ 809).

f. On September 2, 2020 the Company granted fully vested 5,000 RSU representing 5,000 ADS’s to a board member. The total value of the grant was NIS 660 (approximately $ 196).

g. On September 2, 2020, the Company granted options to purchase 82,000 ADSs (3,280,000 options) to board member which vest over a period of three years at an exercise price of $ 48.04 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 6,662 ($ 1,979).

h. On September 2, 2020, the Company granted options to purchase 7,000 ADSs (280,000 options) to officer which vest over a period of three years at an exercise price of $ 41.08 per ADS. The fair value of the options as of the date of grant totaled approximately NIS 571 ($ 170).

i. On September 2, 2020 the Company amended an option agreement with a board member dated as of May 28, 2019. The vesting date accelerated to September 2, 2020. The total value of the option acceleration was NIS 30 (approximately $ 9).

j. On April 6, 2021, the Company granted options to purchase 160,000 ADS (6,400,000 options) to the chairman of the board which vest in equal monthly installments over a period of three years at an exercise price of $ 6.95 per ADS. The fair value of the said ADS is approximately $614 (approximately NIS 1,909).

k. On April 6, 2021, the Company granted options to purchase 150,000 ADS (6,000,000 options) to board members which vest in equal monthly installments over a period of three years at an exercise price of $ 6.95 per ADS. The fair value of the said ADS is approximately $421 (approximately NIS 1,309).

l. On April 6, 2021, the Company granted 30,000 RSUs representing 30,000 ADS’s to board members. which vest in equal monthly installments over a period of three years. The fair value of the said RSUs is approximately $115 (approximately NIS 358).

m. On May 25, 2021 the Company granted 600,000 RSUs representing 600,000 ADS’s to the new CEO, which will vest over a period of five years. The fair value of the said RSUs was approximately $1,626 (approximately NIS 5,057).

n. On May 25, 2021, the shareholders approved the amendment to the following options held by directors of the Company, as follows: Mr. Mark Germain (130,710 options), Prof. Avner Rotman (20,000 options), Mr. Adi Raviv (18,000 options), Prof. George H. Lowell (20,000 options), Dr. Morris Laster (18,000 options), Dr. Yael Margolin (18,000 options) and Mr. Isaac Devash (18,000 options) as follows:

a. accelerated vesting and the ability to immediately exercise such options in the event of change of control; and

b. to the extent vested, allow the options to be exercised during the existing ten (10) year terms of the options in the event of the foregoing director’s termination of service to the Company without cause.

The fair value of the said changes was approximately $3 (approximately NIS 10).

o. On October 17, 2021, the board approve the issuance of 124,600 RSUs representing 600,000 ADS’s to the Company employees in exchange of their options, in a way that for each option exchanged a new RSU will be issued. The fair value of the said issuance was $156 (approximately NIS 505).

On the same day the board approve the issuance of 10,000 RSUs representing 10,000 ADS’s to the Company employees. The fair value of the said issuance was $23 (approximately NIS 74).

The following table presents the number of share options, the weighted average exercise prices of share options and changes that were made in the option plan to employees and directors:

	2019					2020					2021
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding at beginning of year		16,647,903			0.75		14,213,400			0.75		24,869,400			0.69
Granted		4,320,000			0.69		12,096,000			1.87		12,400,000			0.54
Exercised		-			-		(240,000	)		0.68		-			-
Expired		(6,754,503	)		0.75		(1,200,000	)		0.68		(9,099,800	)		1.42
Outstanding at end of year		14,213,400			0.73		24,869,400			0.78		28,169,600			1.57
Exercisable at end of year		5,310,000			0.75		11,587,867			0.69		15,362,360			1.42

The weighted average share price on the date of exercise of the share options was NIS 0.78 in 2020. No share options exercised during 2021.

The weighted average remaining contractual life for the share options outstanding as of December 31, 2021 was 16.3 years (as of December 31, 2020: 6.1 years).

The range of exercise prices for share options outstanding as of December 31, 2021 was NIS 0.45 - NIS 1.325 (as of December 31, 2020 was NIS 0.45 - NIS 1.325)

c. The fair value of the Company’s share options granted to employees, directors and service providers for the years ended December 31, 2019, 2020 and 2021 was estimated using the binominal option pricing model using the following assumptions:

	Years ended December 31
	2019		2020		2021
Dividend yield (%)		-		-		-
Expected volatility of the share prices (%)		57		66		110
Risk-free interest rate (%)		2.3		0.7-0.8		1.7
Expected life of share options (years)		7.5		6-7		10
Share price (NIS)		24.07		7.05-18		0.3
ADS $		6.66		2.2-5.6		3.84

The expected life of the share options is based on the midpoints between the available exercise dates (the end of the vesting periods) and the last available exercise date (the contracted expiry date), as adequate historical experience is still not available to provide a reasonable estimate.

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Supplementary Information to the Statements of Comprehensive Income

12 Months Ended

Dec. 31, 2021

Disclosure of analysis of other comprehensive income by item [text block] [Abstract]

SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE INCOME

NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE INCOME

								Convenience translation
		Year ended December 31,						Year ended December 31,
		2019		2020		2021		2021
		N I S						U.S. dollars
a.	Research and development expenses, net of participations:
	Clinical trial phase 3		52,825		31,519		1,340	431
	Materials and subcontractors		5,946		9,193		684	220
	Salaries and related expenses		5,384		5,532		4,551	1,462
	Share-based payment		1,907		2,056		1,045	336
	Patent registration fees		278		314		248	80
	Rentals and maintenance of laboratory		970		958		607	195
	Depreciation		1,293		1,887		1,866	601
	Other		42		2		-	-
			68,645		51,463		10,341	3,325
b.	Marketing, general and administrative expenses:
	Salaries and related expenses		3,216		2,569		7,376	2,372
	Share-based payment		1,777		7,416		7,859	2,527
	Professional services		3,582		3,645		5,682	1,827
	Rentals, office expenses and maintenance		323		313		314	101
	Depreciation		352		551		549	176
	Other		456		2,193		2,748	883
			9,706		16,687		24,528	7,887
c.	Financial income and expense:
	Financial income:
	Interest income on deposits		4		2		3	1
	Exchange differences, net		-		1,714		5,713	1,837
	Revaluation of IIA liability		-		2,127		-	-
			4		3,843		5,716	1,838

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Financial expenses:
Exchange differences, net		4,373		-		-		-
Lease holding finance expense		666		479		715		230
Revaluation of warrants		11,400		14,467		-		-
Finance expenses in respect of loans from others		14,083		643		10,117		3,253
Finance expenses in respect of Government grants		169		-		-
Bank commissions and other financial expenses		156		43		33		11
		30,847		15,632		10,865		3,494

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Taxes on Income

12 Months Ended

Dec. 31, 2021

Disclosure of income tax [text block] [Abstract]

TAXES ON INCOME

NOTE 16:- TAXES ON INCOME

a. Corporate tax rates in Israel:

The Israeli corporate tax rate in 2020 and 2021 was 23%.

b. Final tax assessments:

The Company received final tax assessments through 2016.

c. Net operating loss carryforwards for tax purposes and other temporary differences:

as of December 31, 2021, the Company had loss carryforwards and other temporary differences amounting to approximately NIS 311,625 ($ 100,201).

d. Deferred taxes:

The Company did not recognize deferred tax assets for loss carryforwards and other temporary differences because their utilization in the foreseeable future is not probable.

e. Current taxes:

The Company did not record any current taxes for the years ended December 31, 2019, 2020 and 2021 as it is still incurring losses on an ongoing basis.

f. Theoretical tax:

The reconciliation between the tax expense, assuming that all the income and expenses, gains and losses in the statement of income were taxed at the statutory tax rate and the taxes on income recorded in profit or loss (0%), relates to the creation of tax loss carryforwards and other temporary differences for which deferred tax assets were not recorded.

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Balances and Transactions with Related Parties

12 Months Ended

Dec. 31, 2021

Disclosure of transactions between related parties [text block] [Abstract]

BALANCES AND TRANSACTIONS WITH RELATED PARTIES

NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES

a. Related parties consist of nine directors (including the CEO) serving on the Company’s board of directors and three key officers.

b. Transactions with related parties:

1. In February 2012, the Company’s Board approved an amendment and extension of the agreement with the Company’s CEO Dr. Ron Babecoff, dated April 2007. Pursuant to the amendment, the monthly salary of the Company’s CEO was increased by 5% in each of the three years of the extension of the engagement to NIS 52.5 a month starting January 2012. In April 2012, the Company’s shareholders approved the agreement at a shareholders’ meeting. On January 18, 2015, the Company’s shareholders extended the agreement under the same terms for an additional five years.

In addition to an increase of salary, there was a provision for a payment in the event that a material agreement is signed between the Company and a third party during the term of the engagement or during a period of three years after the CEO’s termination by the Company. Pursuant to this provision, the CEO will be entitled to receive a bonus amounting to 1.75% of the monetary compensation payable to the Company under the material agreement.

On May 28, 2015, the Company’s Board of Directors approved an update of the terms and conditions of the Company’s CEO so that the monthly remuneration will be a total of NIS 80, and granted him options to purchase 2.5% of the Company’s issued and paid up capital on a fully diluted basis.

On March 2, 2021, Dr. Ron Babecoff has finished his duty as the Company’s CEO and continued as a Senior Advisor to the Company.

2. In August 2014, the Company signed an employment agreement with the CFO at a 60% employment capacity for a period of 5 years, according to which the CFO shall be entitled to a monthly salary of NIS 10, and accordingly updated the management agreement to fees at the amount of NIS 2.5 for a period of five years. In addition, the CFO is entitled to receive a one-time cash payment of NIS 192.5 for the services provided in connection with the preparation and submission of the prospectus in the US and, in the event that the Company should complete a successful capital raise in the U.S. t, the CFO shall be entitled to receive a one-time payment of NIS 87.5. Furthermore, from the consummation of the offering, the monthly compensation under the services agreement will be increased to NIS 15,000.

3. In August 2012, the Company approved the grant of future remuneration to four directors of the Company. The remuneration will be granted provided that a material agreement is signed between the Company and a third party during the director’s term with the Company that will entitle each of the four directors to receive a bonus of 0.5% of the monetary compensation that will be paid to the Company in the context of such material agreement. The bonus is not limited in amount and is not restricted to one material agreement.

4. On January 21, 2021, the Company announced the appointment of Amir Reichman as its new CEO. Mr. Reichman and Dr. Ron Babecoff, its founder and former CEO, shared duties during a transition period while Mr. Reichman completed his former work obligations. Effective March 2, 2021, Mr. Reichman assumed the CEO position full time.

Mr. Reichman is entitled to an annual gross salary of $ 350. During the transition period between January 20, 2021, the date the agreement was signed, and March 2, 2021, Mr. Reichman was entitled to a pro-rated portion of this amount equal to 20% of his monthly salary.

The agreement also provides that Mr. Reichman is entitled to a one-time signing bonus at the gross lump sum amount of $ 50 and is eligible to receive an annual cash bonus of a gross amount equal to three to six monthly salaries to the extent Mr. Reichman meets annual objectives that shall be approved by the board of directors and by the shareholders. It is currently contemplated that the annual bonus would be (i) three monthly salaries for meeting a set of baseline annual objectives, and (ii) four to six monthly salaries for achieving a higher level of annual objectives. Under extraordinary circumstances reflecting performance by Mr. Reichman significantly above all such annual objectives, the board of directors may, in its sole discretion, consider an additional cash bonus of not more than an additional three monthly salaries (up to nine monthly salaries in total). The bonus amounts and annual objectives shall be subject to the terms of the Company’s Compensation Policy from time to time.

Furthermore, under the agreement Mr. Reichman is entitled to receive 600,000 RSUs (see also note 14m.) The ADSs underlying the RSUs may not be sold by Mr. Reichman during the term of his employment except that, commencing on the third anniversary of the Commencement Date, sales may be made pursuant to a Rule 10b5-1 plan, with the number of RSUs sold during any one year period not exceeding five percent of the vested RSUs held by Mr. Reichman at the time of such sales (the “Resale Limits”). If Mr. Reichman’s employment agreement is terminated by the Company for no cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall terminate. If Mr. Reichman’s

employment agreement is terminated by Mr. Reichman or terminated by the Company for cause prior to the fifth anniversary of the Commencement Date, the Resale Limits shall continue until the earlier of (i) one year after such termination, or (ii) the fifth anniversary of the Commencement Date. The RSUs would be subject to accelerated vesting in the event of a change of control.

c. Balances with related parties:

	Payables
Key management personnel:
December 31, 2020		403
December 31, 2021		2,243
December 31, 2021 (convenience translation into U.S. dollars)		721

d. Transactions with related parties:

	Research and development		Marketing, general and administrative
Key management personnel:
2019		5,395		3,653
2020		1,800		5,100
2021		1,439		13,052
2021 (convenience translation into U.S. dollars)		463		4,197

e. Compensation of key officers:

The following amounts disclosed in the table are recognized as an expense during the reporting period related to key officers.

Key officers employed by the Company:

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Salaries		1,399		3,790		4,732		1,521
Short-term employee benefits		1,855		824		1,655		532
Other employees’ benefits		110		161		155		50
Share-based compensation		3,684		2,125		7,949		2,556
		7,048		6,900		14,491		4,659
Number of key officers and directors		11		13		12		12

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Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 18: - SUBSEQUENT EVENTS

On March 14, 2022 the Company announced that it had been negotiating with EIB the terms of restructuring of its outstanding €24,000 EIB loan. The parties have reached a commercial agreement, which is still subject to EIB’s formal approval of the new terms, that would entail the following:  

● An extension of the maturity dates from 2023 (€20,000) and 2024 (€4,000) until December 2027.

● Although the EIB loan has been outstanding since 2018, interest on the EIB loan will only begin to accrue starting January 1, 2022 at an annual rate of 7%. The interest payments will be deferred until the new maturity date and will be added to the principal balance at the end of each year during the EIB loan period. 

● $900 will be paid by the Company as a reduction of principal shortly after the new terms become effective, and going forward 10% of any capital raises by the Company until maturity will be used to further repay the EIB loan principal. 

Once the Company’s commercial sales exceed €5,000, 3% of the Company’s topline revenues will be paid to EIB as royalties up to a combined maximum of 2.8 times the original €24,000 principal.  

If the Company chooses to prepay any portion of the EIB loan (other than as required from future capital raises) the amount prepaid will be calculated such that the EIB realizes at least 20% IRR on its investment at the point of prepayment.

On March 23, 2022, the Company executed an additional research collaboration agreement with MPG and UMG covering development and commercialization of NanoAbs for several other disease indications with large market sizes that leverage their unique binding affinity, stability at high temperatures, and potential for more effective and convenient routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions such as psoriasis, asthma, macular degeneration, and psoriatic arthritis.

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of presentation of the financial statements

a. Basis of presentation of the financial statements:

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The Company’s financial statements have been prepared on a cost basis, except for financial instruments which are measured at fair value through profit or loss.

The Company has elected to present profit or loss items using the “function of expense” method.

Functional currency, reporting currency and foreign currency

b. Functional currency, reporting currency and foreign currency:

1. Functional currency and reporting currency:

The functional currency and reporting currency of the financial statements is the NIS. The functional currency is the currency that best reflects the economic environment in which the Company operates and conducts its transactions. Most of the Company’s costs are incurred in NIS. In addition, the Company’s financing activities are incurred normally in NIS. The Company’s management believes, therefore, that the functional currency of the Company is the NIS.

2. Transactions, assets and liabilities in foreign currency:

Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss.

Convenience translation into U.S. dollars

c. Convenience translation into U.S. dollars:

The financial statements as of December 31, 2021 and for the year then ended have been translated into U.S. dollars using the exchange rate of the U.S. dollar as of December 31, 2021 (U.S. $ 1.00 = NIS 3.11). The translation was made solely for convenience purposes.

The dollar amounts presented in these financial statements should not be construed as representing amounts that are receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

Cash equivalents

d. Cash equivalents:

Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition.

Restricted cash

e. Restricted cash:

Restricted cash are bank deposits with an original maturity of more than one year from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit.

Property and equipment

f. Property and equipment:

Property, plant and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and excluding day-to-day servicing expenses.

Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:

	%
Laboratory equipment		15
Office furniture and equipment		6 - 33
Computers		33
Leasehold improvements		(*)

(*) Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement.

The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.

Research and development expenses, net of participations

g. Research and development expenses, net of participations:

Research and development expenses are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the Company’s ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the Company’s ability to measure reliably the expenditure attributable to the intangible asset during its development. Since the Company’s research and development projects are often subject to regulatory approval procedures and other uncertainties, the conditions for the capitalization of costs incurred before receipt of approvals are not normally satisfied and, therefore, development expenditures are recognized in profit or loss when incurred.

Government investment grants

h. Government investment grants:

Government grants are recognized when there is reasonable assurance that the grants will be received and the Company will comply with the attendant conditions.

Research and development grants received from the Israeli Innovation Authority (“IIA”) are recognized upon receipt as a liability only if future economic benefits are expected from the project that will result in royalty-bearing sales. A liability for the grant is first measured at fair value using a discount rate that reflects a market interest rate. The difference between the amount of the grant received and the fair value of the liability is accounted for as a Government grant and recognized as a reduction of research and development expenses. After initial recognition, the liability is measured at amortized cost using the effective interest method.

Future royalty payments will be treated as a reduction of the liability. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent Assets” (“IAS 37”).

At the end of each reporting period, the Company evaluates whether there is reasonable assurance that the received grants will not be repaid based on its best estimate of future sales and, if so, no liability is recognized and the grants are recorded against a corresponding reduction in research and development expenses.

Research and development grants received from the European Union are recorded against a corresponding reduction in research and development expenses since they are non-refundable and do not depend on the generation of future sales.

Impairment of non-financial assets

i. Impairment of non-financial assets:

The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs and is calculated based on the projected cash flows that will be generated by the cash generated unit. Impairment losses are recognized in profit or loss.

An impairment loss of an asset is reversed only if there have been changes in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years, and its recoverable amount.

The Company did not recognize any impairment of non-financial assets for any of the periods presented.

Financial instruments

j. Financial instruments:

1. Financial assets:

Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.

The Company classifies and measures debt instruments in the financial statements based on the following criteria:

- The Company’s business model for managing financial assets; and

- The contractual cash flow terms of the financial asset.

Debt instruments are measured at fair value through profit or loss when:

A financial asset which is a debt instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or loss.

2. Derecognition of financial assets:

A financial asset is derecognized only when:

- The contractual rights to the cash flows from the financial asset have expired; or

- The Company has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or

- The Company has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party.

3. Financial liabilities:

a) Financial liabilities measured at amortized cost:

Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.

After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method, except for:

- Financial liabilities at fair value through profit or loss such as warrant liability.

b) Financial liabilities measured at fair value through profit or loss:

At initial recognition, the Company measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss.

After initial recognition, changes in fair value are recognized in profit or loss.

4. Derecognition of financial liabilities:

A financial liability is derecognized only when it is extinguished, that is when the obligation specified in the contract is discharged or cancelled or expires. A financial liability is extinguished when the debtor discharges the liability by paying in cash, other financial assets, goods or services; or is legally released from the liability.

5. Issue of a unit of securities:

The issue of a unit of securities involves the allocation of the proceeds received (before issue expenses) to the securities issued in the unit based on the following order: financial derivatives and other financial instruments measured at fair value in each period. Then fair value is determined for financial liabilities that are measured at amortized cost. The proceeds allocated to equity instruments are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the unit.

Fair value measurement

k. Fair value measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:

Level 1	-	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	-	inputs other than quoted prices included within Level 1 that are observable directly or indirectly.
Level 3	-	inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

Provisions

l. Provisions:

A provision in accordance with IAS 37 is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is expected to require the use of economic resources to settle the obligation and a reliable estimate can be made of it.

Operating leases

m. Operating leases:

The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company as a lessee:

For leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract.

Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of IAS 19 and not as subleases.

On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Company’s incremental borrowing rate. After the commencement date, the Company measures the lease liability using the effective interest rate method.

On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term.

Following are the amortization periods of the right-of-use assets by class of underlying asset:

	Years
Building		10
Motor vehicles		3

The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.

Employee benefit liabilities

n. Employee benefit liabilities:

The Company has several employee benefit plans:

1. Short-term employee benefits:

Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered.

2. Post-employment benefits:

Post-employment benefit plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.

The Company has defined contribution plans pursuant to Section 14 of the Severance Pay Law into which the Company pays fixed contributions and has no legal or constructive obligation to pay further contributions on account of severance pay if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in current and prior periods.

Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee’s services.

Share-based payment transactions

o. Share-based payment transactions:

From time to time, the Company grants to its employees and service providers remuneration in the form of equity-settled share-based instruments, such as options to purchase Ordinary shares.

Equity-settled transactions:

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. The fair value is determined using an acceptable option pricing model.

With respect to other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.

The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period which the performance or service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award (“the vesting period”).

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of whether the market condition is satisfied, provided that all other vesting conditions are satisfied.

Loss per share

p. Loss per share:

Loss per share is calculated by dividing the loss attributable to Company shareholders by the weighted number of outstanding Ordinary shares during the period. Potential Ordinary shares are only included in the computation of diluted loss per share when their conversion increases loss per share or decreases income per share. Potential Ordinary shares that are converted during the period are included in diluted loss per share only until the conversion date.

Disclosure of new standards in the period prior to their adoption

q. Disclosure of new standards in the period prior to their adoption:

1. Amendment to IAS 1, “Presentation of Financial Statements”:

In January 2020, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” (“the Amendment”) regarding the criteria for determining the classification of liabilities as current or non-current.

The Amendment includes the following clarifications:

● What is meant by a right to defer settlement.

● That a right to defer must exist at the end of the reporting period.

● That classification is unaffected by the likelihood that an entity will exercise its deferral right.

● That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The Amendment is effective for annual periods beginning on or after January 1, 2023 and must be applied retrospectively.

The Company is evaluating the possible impact of the Amendment on its current loan agreements.

2. Amendment to IAS 16, “Property, Plant and Equipment”:

In May 2020, the IASB issued an amendment to IAS 16, “Property, Plant and Equipment” (“the Amendment”). The Amendment prohibits a company from deducting from the cost of property, plant and equipment (“PP&E”) consideration received from the sales of items produced while the company is preparing the asset for its intended use. Instead, the company should recognize such consideration and related costs in profit or loss.

The Amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Amendment is to be applied retrospectively, but only to items of PP&E made available for use on or after the beginning of the earliest period presented in the financial statements in which the company first applies the Amendment. The company should recognize the cumulative effect of initially applying the Amendment as an adjustment to the opening balance of retained earnings at the beginning of the earliest period presented.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

3. Amendment to IAS 37, “Provisions, Contingent Liabilities and Contingent Assets”:

In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a company should include when assessing whether a contract is onerous (“the Amendment”). According to the Amendment, costs of fulfilling a contract include both the incremental costs (for example, raw materials and direct labor) and an allocation of other costs that relate directly to fulfilling a contract (for example, depreciation of an item of property, plant and equipment used in fulfilling the contract).

The Amendment is effective for annual periods beginning on or after January 1, 2022 and applies to contracts for which all obligations in respect thereof have not yet been fulfilled as of January 1, 2022. Early application is permitted.

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

4. Amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors”:

In February 2021, the IASB issued an amendment to IAS 8, “Accounting Policies, Changes to Accounting Estimates and Errors” (“the Amendment”), in which it introduces a new definition of “accounting estimates”.

Accounting estimates are defined as “monetary amounts in financial statements that are subject to measurement uncertainty”. The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted.

The Company is evaluating the effects of the Amendment on its financial statements.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies [Abstract]

Schedule of amortization periods of the right-of-use assets

	%
Laboratory equipment		15
Office furniture and equipment		6 - 33
Computers		33
Leasehold improvements		(*)

(*) Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement.

Schedule of amortization periods of the right-of-use assets

	Years
Building		10
Motor vehicles		3

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of cash and cash equivalents [text block] [Abstract]

Schedule of cash and cash equivalents

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Cash in NIS		1,150		5,579		1,794
Cash in USD		8,234		48,457		15,581
Cash in EURO		37		-		-
		9,421		54,036		17,375

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Other Receivables (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of trade and other receivables [text block] [Abstract]

Schedule of other receivables

					Convenience
					Translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Government authorities		229		306		98
Prepaid expenses and other		975		706		227
		1,204		1,012		325

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Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of property, plant and equipment [text block] [Abstract]

Schedule of property, plant and equipment, net

	Laboratory equipment			Office furniture and  equipment		Computers		Cars		Factory leasehold		Total
Cost:
Balance at January 1, 2021		2,922			119		613		-		41,212		44,866
Additions		4			25		24		276		101		430
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,777			144		637		276		41,313		45,147
Accumulated depreciation:
Balance at January 1, 2021		2,707			105		486		-		1,961		5,259
Additions		47			7		79		10		1,375		1,518
Deductions		(149	)		-		-		-		-		(149	)
Balance at December 31, 2021		2,605			112		565		10		3,336		6,628
Depreciated cost at December 31, 2021		172			32		72		266		37,977		38,519

	Convenience translation into U.S. dollars
Depreciated cost at December 31, 2021		55	10	23	87	12,211	12,386

	Laboratory equipment			Office furniture and equipment		Computers		Factory leasehold		Total
Cost:
Balance at January 1, 2020		3,362			119		568		35,159		39,208
Additions		34			-		45		6,053		6,132
Deductions		(474	)		-				-		(474	)
Balance at December 31, 2020		2,922			119		613		41,212		44,866
Accumulated depreciation:
Balance at January 1, 2020		3,135			99		406		587		4,227
Additions		46			6		80		1,374		1,506
Deductions		(474	)		-		-		-		(474	)
Balance at December 31, 2020		2,707			105		486		1,961		5,259
Depreciated cost at December 31, 2020		215			14		127		39,251		39,607

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Leases (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of leases [text block] [Abstract]

Schedule of information on leases

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Interest expense on lease liabilities		479		715		230
Total cash outflow for leases		1,240		1,220		392

Schedule of lease extension options

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
More than 5 years
Lease payments applicable in extension option periods which as of the end of the reporting period are not reasonably certain to be exercised		5,889		5,889		1,894

Schedule of right-of-use assets

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2021		7,827		257		8,084
Additions during the year:
New leases		-		279		279
Balance as of December 31, 2021		7,827		536		8,363
Accumulated depreciation:
Balance as of January 1, 2021		1,648		230		1,878
Additions during the year:
Depreciation and amortization		824		73		897
Balance as of December 31, 2021		2,472		303		2,775
Depreciated cost at December 31, 2021		5,355		233		5,588

	Buildings		Motor vehicles		Total
Cost:
Balance as of January 1, 2020 and December 31, 2020		7,827		257		8,084
Accumulated depreciation:
Balance as of January 1, 2020		824		124		948
Additions during the year:
Depreciation and amortization		824		106		930
Balance as of December 31, 2020		1,648		230		1,878
Depreciated cost at December 31, 2020		6,179		27		6,206

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Other Long-Term Assets (Tables)

12 Months Ended

Dec. 31, 2021

Other Long-Term Assets [Abstract]

Schedule of other long term assets

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Restricted cash		473		444		143
		473		444		143

XML

Other Payables (Tables)

12 Months Ended

Dec. 31, 2021

Other Payables [Abstract]

Schedule of other payables

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Employees and payroll accruals		875		2,204		709
Accrued expenses		371		1,123		361
		1,246		3,327		1,070

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Financial Instruments [Abstract]

Schedule of financial and lease liabilities

	Effective interest			Maturity		December 31,
	rate			date		2020		2021
	%					NIS
Current liabilities:
Lease liabilities		8	%		2021		654		773
Loan from others		17.3	%		2023-2024		60,421		-
Total current liabilities							61,075		773
Non-current liabilities:
Loan from others		17.3	%		2023-2024		-		63,252
Lease liabilities		8	%		2028		6,088		5,712
Total non-current liabilities							6,088		68,964
Total financial and lease liabilities							67,163		69,737

Schedule of financial liabilities

	Carrying amount				Fair value
	December 31,				December 31,
	2020		2021		2020		2021
	NIS
Financial liabilities:
Loan from others		94,658		84,477		60,421		63,252
Total		94,658		84,477		60,421		63,252

Schedule of financial and lease liabilities

					Convenience
					translation
	December 31,				December 31,
	2020		2021		2021
	N I S				U.S. dollars
Financial liabilities at amortized costs:
Trade payables		1,868		3,107		999
Other payables		2,381		3,327		1,070
Lease Liabilities		6,742		6,485		2,085
Loan from others		60,421		63,252		20,338
Total financial liabilities		71,412		76,171		24,492
Total current		64,189		,207 7		2,317
Total non-current		7,223		68,964		22,175

Schedule of maturity profile of financial liabilities based on contractual undiscounted payments

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		3,107		-		-		-		-		-		3,107
Other payables		3,327		-		-		-		-		-		3,327
Lease liabilities		552		885		845		904		977		1,901		6,064
Loans from others		-		70,398		14,079		-		-		-		84,477
		6,986		71,283		14,924		904		977		1,901		96,975

	Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
	NIS
Trade payables		1,868		-		-		-		-		-		1,868
Other payables		1,246		1,135										2,381
Lease liabilities		1,128		1,128		1,174		1,174		1,174		2,936		8,714
Loans from others		-		78,883		15,775		-		-		-		94,658
		4,242		81,146		16,949		1,174		1,174		2,936		107,621

Schedule of changes in liabilities arising from financing activities

	Loans from others			Lease liabilities			Total liabilities arising from financing activities
	NIS
Balance as of January 1, 2020		123,780			7,503			131,283
Cash flows		-			(761	)		(761	)
Effect of changes in fair value		(63,359	)		-			(63,359	)
Balance as of December 31, 2020		60,421			6,742			67,163
New leases		-			249			249
Cash flows		-			(506	)		(506	)
Effect of changes in fair value		2,831			-			2,831
Balance as of December 31, 2021		63,252			6,485			69,737

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Employee Benefit Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Employee Benefit Liabilities [Abstract]

Schedule of defined contribution plans

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Expenses - defined contribution plan		332		335		314		101

XML

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-Based Compensation [Abstract]

Schedule of services received from employees, directors and service providers as equity-settled share-based payment

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Research and development		1,907		2,056		1,045		336
Marketing, general and administrative		1,777		7,416		7,859		2,527
Total share-based compensation		3,684		9,472		8,904		2,863

Schedule of option plan to employees and directors

	2019					2020					2021
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding at beginning of year		16,647,903			0.75		14,213,400			0.75		24,869,400			0.69
Granted		4,320,000			0.69		12,096,000			1.87		12,400,000			0.54
Exercised		-			-		(240,000	)		0.68		-			-
Expired		(6,754,503	)		0.75		(1,200,000	)		0.68		(9,099,800	)		1.42
Outstanding at end of year		14,213,400			0.73		24,869,400			0.78		28,169,600			1.57
Exercisable at end of year		5,310,000			0.75		11,587,867			0.69		15,362,360			1.42

Schedule of estimated option pricing model using assumptions

	Years ended December 31
	2019		2020		2021
Dividend yield (%)		-		-		-
Expected volatility of the share prices (%)		57		66		110
Risk-free interest rate (%)		2.3		0.7-0.8		1.7
Expected life of share options (years)		7.5		6-7		10
Share price (NIS)		24.07		7.05-18		0.3
ADS $		6.66		2.2-5.6		3.84

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Supplementary Information to the Statements of Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of analysis of other comprehensive income by item [text block] [Abstract]

Schedule of expenses and income

								Convenience translation
		Year ended December 31,						Year ended December 31,
		2019		2020		2021		2021
		N I S						U.S. dollars
a.	Research and development expenses, net of participations:
	Clinical trial phase 3		52,825		31,519		1,340	431
	Materials and subcontractors		5,946		9,193		684	220
	Salaries and related expenses		5,384		5,532		4,551	1,462
	Share-based payment		1,907		2,056		1,045	336
	Patent registration fees		278		314		248	80
	Rentals and maintenance of laboratory		970		958		607	195
	Depreciation		1,293		1,887		1,866	601
	Other		42		2		-	-
			68,645		51,463		10,341	3,325
b.	Marketing, general and administrative expenses:
	Salaries and related expenses		3,216		2,569		7,376	2,372
	Share-based payment		1,777		7,416		7,859	2,527
	Professional services		3,582		3,645		5,682	1,827
	Rentals, office expenses and maintenance		323		313		314	101
	Depreciation		352		551		549	176
	Other		456		2,193		2,748	883
			9,706		16,687		24,528	7,887
c.	Financial income and expense:
	Financial income:
	Interest income on deposits		4		2		3	1
	Exchange differences, net		-		1,714		5,713	1,837
	Revaluation of IIA liability		-		2,127		-	-
			4		3,843		5,716	1,838

Schedule of financial income and expense

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Financial expenses:
Exchange differences, net		4,373		-		-		-
Lease holding finance expense		666		479		715		230
Revaluation of warrants		11,400		14,467		-		-
Finance expenses in respect of loans from others		14,083		643		10,117		3,253
Finance expenses in respect of Government grants		169		-		-
Bank commissions and other financial expenses		156		43		33		11
		30,847		15,632		10,865		3,494

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Balances and Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of transactions between related parties [text block] [Abstract]

Schedule of balances with related parties

	Payables
Key management personnel:
December 31, 2020		403
December 31, 2021		2,243
December 31, 2021 (convenience translation into U.S. dollars)		721

Schedule of transactions with related parties

	Research and development		Marketing, general and administrative
Key management personnel:
2019		5,395		3,653
2020		1,800		5,100
2021		1,439		13,052
2021 (convenience translation into U.S. dollars)		463		4,197

Schedule of key officers employed

							Convenience translation
	Year ended December 31,						Year ended December 31,
	2019		2020		2021		2021
	N I S						U.S. dollars
Salaries		1,399		3,790		4,732		1,521
Short-term employee benefits		1,855		824		1,655		532
Other employees’ benefits		110		161		155		50
Share-based compensation		3,684		2,125		7,949		2,556
		7,048		6,900		14,491		4,659
Number of key officers and directors		11		13		12		12

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General (Details) ₪ in Thousands, $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 28, 2017 ILS (₪)	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)
General [Abstract]
Budget utilized towards the construction of factory	₪ 20,000
Percentage of grant	20.00%
Terms and conditions for receipt of the grant, description	The receipt of the Grant is subject to certain terms and conditions, including those outlined under the Israeli Encouragement of Capital Investment Law, 1959. The terms and conditions include, inter alia, the following: (a) at least 24% of the investments in the planned manufacturing facility’s fixed assets will be financed by additional share capital; (b) the Company will maintain its intellectual property and manufacturing facility in Israel for a period of at least 10 years.
EIB loan		₪ 63,252	$ 20,338
Description of financial information		During the year ended December 31, 2021, the Company incurred a loss of NIS 39,978 ($ 12,854) and negative cash flows from operating activities of NIS 24,484 ($ 7,873) and it has an accumulated deficit of NIS 364,771 ($ 117,290) as of that date.

XML

Significant Accounting Policies (Details) - Dec. 31, 2021	₪ / shares	$ / shares
Significant Accounting Policies [Abstract]
Translation exchange rate | (per share)	₪ 3.11	$ 1.00

XML

Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates	12 Months Ended
	Dec. 31, 2021
Laboratory equipment [Member]
Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates [Line Items]
% of straight-line basis over the useful life of the assets at annual rates	15.00%
Office furniture and equipment [Member] | Minimum [Member]
Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates [Line Items]
% of straight-line basis over the useful life of the assets at annual rates	6.00%
Office furniture and equipment [Member] | Maximum [Member]
Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates [Line Items]
% of straight-line basis over the useful life of the assets at annual rates	33.00%
Computers [Member]
Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates [Line Items]
% of straight-line basis over the useful life of the assets at annual rates	33.00%
Leasehold improvements [Member]
Significant Accounting Policies (Details) - Schedule of Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates [Line Items]
% of straight-line basis over the useful life of the assets at annual rates		[1]

[1] Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement.

XML

Significant Accounting Policies (Details) - Schedule of amortization periods of the right-of-use assets	Dec. 31, 2021
Buildings [member]
Significant Accounting Policies (Details) - Schedule of amortization periods of the right-of-use assets [Line Items]
Amortization periods	10 years
Motor vehicles [member]
Significant Accounting Policies (Details) - Schedule of amortization periods of the right-of-use assets [Line Items]
Amortization periods	3 years

XML

Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents [Line Items]
Cash and cash equivalents	₪ 54,036	$ 17,375	₪ 9,421
Cash in NIS [Member]
Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents [Line Items]
Cash and cash equivalents	5,579	1,794	1,150
Cash in USD [Member]
Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents [Line Items]
Cash and cash equivalents	48,457	15,581	8,234
Cash in EURO [Member]
Cash and Cash Equivalents (Details) - Schedule of cash and cash equivalents [Line Items]
Cash and cash equivalents			₪ 37

XML

Other Receivables (Details) - Schedule of other receivables ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Schedule of other receivables [Abstract]
Government authorities	₪ 306	$ 98	₪ 229
Prepaid expenses and other	706	227	975
Total	₪ 1,012	$ 325	₪ 1,204

XML

Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	₪ 38,519		₪ 39,607
Depreciated cost at December 31 (in Dollars) | $		$ 12,386
Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	44,866		39,208
Additions	430		6,132
Deductions	(149)		(474)
Balance at Ending	45,147		44,866
Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	5,259		4,227
Additions	1,518		1,506
Deductions	(149)		(474)
Balance at Ending	6,628		5,259
Laboratory equipment [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	172		215
Depreciated cost at December 31 (in Dollars) | $		55
Laboratory equipment [Member] | Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	2,922		3,362
Additions	4		34
Deductions	(149)		(474)
Balance at Ending	2,777		2,922
Laboratory equipment [Member] | Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	2,707		3,135
Additions	47		46
Deductions	(149)		(474)
Balance at Ending	2,605		2,707
Office furniture and equipment [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	32		14
Depreciated cost at December 31 (in Dollars) | $		10
Office furniture and equipment [Member] | Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	119		119
Additions	25
Deductions
Balance at Ending	144		119
Office furniture and equipment [Member] | Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	105		99
Additions	7		6
Deductions
Balance at Ending	112		105
Computers [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	72		127
Depreciated cost at December 31 (in Dollars) | $		23
Computers [Member] | Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	613		568
Additions	24		45
Deductions
Balance at Ending	637		613
Computers [Member] | Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	486		406
Additions	79		80
Deductions
Balance at Ending	565		486
Cars [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	266
Depreciated cost at December 31 (in Dollars) | $		87
Cars [Member] | Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning
Additions	276
Deductions
Balance at Ending	276
Cars [Member] | Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning
Additions	10
Deductions
Balance at Ending	10
Factory leasehold [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Depreciated cost at December 31	37,977		39,251
Depreciated cost at December 31 (in Dollars) | $		$ 12,211
Factory leasehold [Member] | Cost [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	41,212		35,159
Additions	101		6,053
Deductions
Balance at Ending	41,313		41,212
Factory leasehold [Member] | Accumulated Depreciation [Member]
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net [Line Items]
Balance at Beginning	1,961		587
Additions	1,375		1,374
Deductions
Balance at Ending	₪ 3,336		₪ 1,961

XML

Leases (Details)	12 Months Ended
	Dec. 31, 2021
Disclosure of leases [text block] [Abstract]
Leases, terms	The leases of the buildings and vehicles are for a period of 10 and 3 years, respectively.
Noncancelable lease periods	10 years

XML

Leases (Details) - Schedule of information on leases ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Schedule of information on leases [Abstract]
Interest expense on lease liabilities	₪ 715	$ 230	₪ 479
Total cash outflow for leases	₪ 1,220	$ 392	₪ 1,240

XML

Leases (Details) - Schedule of lease extension options ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Schedule of lease extension options [Abstract]
Lease payments applicable in extension option periods which as of the end of the reporting period are not reasonably certain to be exercised	₪ 5,889	$ 1,894	₪ 5,889

XML

Leases (Details) - Schedule of right-of-use assets - ILS (₪) ₪ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Buildings [Member]
Cost:
Balance at beginning	₪ 7,827
Additions during the year:
New leases
Balance at ending	7,827	₪ 7,827
Accumulated depreciation:
Balance at beginning	1,648	824
Additions during the year:
Depreciation and amortization	824	824
Balance at ending	2,472	1,648
Depreciated cost	5,355	6,179
Cost:
Balance at beginning and ending		7,827
Motor vehicles [Member]
Cost:
Balance at beginning	257
Additions during the year:
New leases	279
Balance at ending	536	257
Accumulated depreciation:
Balance at beginning	230	124
Additions during the year:
Depreciation and amortization	73	106
Balance at ending	303	230
Depreciated cost	233	27
Cost:
Balance at beginning and ending		257
Total [Member]
Cost:
Balance at beginning	8,084
Additions during the year:
New leases	279
Balance at ending	8,363	8,084
Accumulated depreciation:
Balance at beginning	1,878	948
Additions during the year:
Depreciation and amortization	897	930
Balance at ending	2,775	1,878
Depreciated cost	₪ 5,588	6,206
Cost:
Balance at beginning and ending		₪ 8,084

XML

Other Long-Term Assets (Details) - Schedule of other long term assets ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Schedule of other long term assets [Abstract]
Restricted cash	₪ 444	$ 143	₪ 473
Other long-term assets, total	₪ 444	$ 143	₪ 473

XML

Other Payables (Details) - Schedule of other payables ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Schedule of other payables [Abstract]
Employees and payroll accruals	₪ 2,204	$ 709	₪ 875
Accrued expenses	1,123	361	371
Other payables, total	₪ 3,327	$ 1,070	₪ 1,246

XML

Financial Instruments (Details) - Schedule of financial and lease liabilities - Lease liabilities [member] - ILS (₪) ₪ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Financial Instruments (Details) - Schedule of financial and lease liabilities [Line Items]
Effective interest rate, Lease liabilities	8.00%
Maturity date, Lease liabilities	2021
Lease liabilities	₪ 773	₪ 654
Effective interest rate, Loan from others	17.30%
Loan from others		60,421
Total current liabilities	₪ 773	61,075
Effective interest rate, Loan from others	17.30%
Loan from others	₪ 63,252
Effective interest rate, Lease liabilities	8.00%
Maturity date, Lease liabilities	2028
Lease liabilities	₪ 5,712	6,088
Total non-current liabilities	68,964	6,088
Total financial and lease liabilities	₪ 69,737	₪ 67,163
Bottom of range [member]
Financial Instruments (Details) - Schedule of financial and lease liabilities [Line Items]
Maturity date, Loan from others	2023
Maturity date, Loan from others	2023
Top of range [member]
Financial Instruments (Details) - Schedule of financial and lease liabilities [Line Items]
Maturity date, Loan from others	2024
Maturity date, Loan from others	2024

XML

Financial Instruments (Details) - Schedule of financial liabilities - ILS (₪) ₪ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Schedule of financial liabilities [Abstract]
Loan from others, Carrying amount	₪ 84,477	₪ 94,658
Loan from others, Fair value	63,252	60,421
Total, Carrying amount	84,477	94,658
Total, Fair value	₪ 63,252	₪ 60,421

XML

Financial Instruments (Details) - Schedule of financial assets and liabilities ₪ in Thousands, $ in Thousands	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)
Financial liabilities at amortized costs:
Trade payables	₪ 3,107	$ 999	₪ 1,868
Other payables	3,327	1,070	2,381
Lease Liabilities	6,485	2,085	6,742
Loan from others	63,252	20,338	60,421
Total financial liabilities	76,171	24,492	71,412
Total current	2,077	2,317	64,189
Total non-current	₪ 68,964	$ 22,175	₪ 7,223

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Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments - ILS (₪) ₪ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables	₪ 3,107	₪ 1,868
Other payables	3,327	2,381
Lease liabilities	6,064	8,714
Loans from others	84,477	94,658
Total	96,975	107,621
Less than one year [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables	3,107	1,868
Other payables	3,327	1,246
Lease liabilities	552	1,128
Loans from others
Total	6,986	4,242
1 to 2 years [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables
Other payables		1,135
Lease liabilities	885	1,128
Loans from others	70,398	78,883
Total	71,283	81,146
2 to 3 years [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables
Other payables
Lease liabilities	845	1,174
Loans from others	14,079	15,775
Total	14,924	16,949
3 to 4 years [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables
Other payables
Lease liabilities	904	1,174
Loans from others
Total	904	1,174
4 to 5 years [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables
Other payables
Lease liabilities	977	1,174
Loans from others
Total	977	1,174
> 5 years [Member]
Financial Instruments (Details) - Schedule of maturity profile of financial liabilities based on contractual undiscounted payments [Line Items]
Trade payables
Other payables
Lease liabilities	1,901	2,936
Loans from others
Total	₪ 1,901	₪ 2,936

XML

Financial Instruments (Details) - Schedule of changes in liabilities arising from financing activities - ILS (₪) ₪ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Financial Instruments (Details) - Schedule of changes in liabilities arising from financing activities [Line Items]
Beginning Balance	₪ 67,163	₪ 131,283
Cash flows	(506)	(761)
Effect of changes in fair value	2,831	(63,359)
Ending Balance	69,737	67,163
New leases	249
Loans from others [Member]
Financial Instruments (Details) - Schedule of changes in liabilities arising from financing activities [Line Items]
Beginning Balance	60,421	123,780
Cash flows
Effect of changes in fair value	2,831	(63,359)
Ending Balance	63,252	60,421
New leases
Lease liabilities [Member]
Financial Instruments (Details) - Schedule of changes in liabilities arising from financing activities [Line Items]
Beginning Balance	6,742	7,503
Cash flows	(506)	(761)
Effect of changes in fair value
Ending Balance	6,485	₪ 6,742
New leases	₪ 249

XML

Employee Benefit Liabilities (Details) - Schedule of defined contribution plans ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Schedule of defined contribution plans [Abstract]
Expenses - defined contribution plan	₪ 314	$ 101	₪ 335	₪ 332

XML

Contingent Liabilities and Commitments (Details) € in Thousands, ₪ in Thousands, $ in Thousands					1 Months Ended						12 Months Ended
	Oct. 07, 2019 USD ($)	Oct. 07, 2019 EUR (€)	Oct. 10, 2018 USD ($)	Oct. 10, 2018 EUR (€)	Jan. 26, 2021 USD ($)	Apr. 22, 2019 USD ($)	Apr. 22, 2019 EUR (€)	Jun. 19, 2017 USD ($)	Oct. 31, 2013	Jul. 31, 2003	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 ILS (₪)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Dec. 31, 2021 USD ($)	Jun. 19, 2017 EUR (€)
Contingent Liabilities and Commitments (Details) [Line Items]
License agreement, description										In exchange for the license grant, the Company or its future sublicensees will be obligated to pay royalties equaling 3% of the total amount invoiced by the Company or by a sublicensee in connection with the sale of products based on Yeda’s patents, or 2% of such amounts if they originated from a country which did not grant a patent in connection with such products.
Payment of royalties, description										The Company has the option to enter into a sublicense agreement provided that Yeda gives its consent in writing and, in such case, the royalties to be paid by the Company to Yeda from the sublicense or from the option to sublicense will be (a) before the completion of Phase 1 clinical trials - 45% (b) after Phase 1 but before Phase 2 trials - 35% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option, or 25% of amounts exceeding such first $ 20,000 receivable from the sublicense or from a sublicense option; (c) after the completion of Phase 2 clinical trials the royalties will be 20% of amounts up to the first $ 20,000 receivable from a sublicense or a sublicense option or 15% of amounts exceeding such first $ 20,000 receivable from a sublicense or a sublicense option.	The Company performed a valuation of the financial liability for December 31, 2019 through an independent appraiser. According to the valuation, which was based on WACC (Weighted Average Cost of capital) of 17.3% and CAPM (Capital Asset Pricing Model), the value of the financial liability was estimated at NIS 123,780 ($ 38,500).	The Company performed a valuation of the financial liability for December 31, 2019 through an independent appraiser. According to the valuation, which was based on WACC (Weighted Average Cost of capital) of 17.3% and CAPM (Capital Asset Pricing Model), the value of the financial liability was estimated at NIS 123,780 ($ 38,500).
Description of expiration of agreement										(i) the expiration of the last patent licensed under the license agreement; or (ii) if only one product is developed or is commercialized by utilizing the licensed intellectual property, 15 years after the first commercial sale of such product in either the U.S or Europe, following receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product; or (iii) if more than one product is being developed or is commercialized by utilizing the licensed intellectual property, following the receipt of New Drug Approval from the FDA or equivalent approval in any European country for such product, the expiry of a 20 year period during which no sales are made in the U.S. or Europe.
Percentage of royalties										25.00%
Description of grants received										The Company obtained grants from the Government of Israel for the participation in research and development and, in return, undertook to pay royalties amounting to 3%-5% on the revenues derived from sales of products or services developed in whole or in part using these grants. The maximum aggregate royalties paid generally cannot exceed 100% of the grants received by the Company, plus annual interest generally equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar year. The maximum royalty amount payable by the Company as of December 31, 2021 is approximately $ 5,700 (NIS 17,727), which represents the total gross amount of grants actually received by the Company from the IIA including accrued interest. As of December 31, 2021, the Company had not paid any royalties to the IIA.
Loan agreement amount											₪ 84,477								$ (27,163)
Cost of developing percentage								50.00%
EIB financing, description								In addition, as repayment features, EIB was entitled to receive the higher between 3% of any M-001 sales revenues for a period of ten years, or realizing a cash-on-cash multiple of 2.8 times
Internal rate											20.00%								20.00%
Percentage of sales revenue											3.00%								3.00%
Financial expense															₪ 14,083	$ (4,380)
Re-evaluated the loan													₪ 60,421	$ (18,793)
Revaluation income											₪ 62,800	$ (19,533)
Amount of liability													₪ 12,685	$ (3,954)
Fair value											₪ 63,252	$ (20,338)
Second Tranche [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent | $																	$ 7,000
Third Tranche [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent | $																	$ 9,200
Euro [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Expenses respect of project, description									The Company’s expenses in respect of this project in 2013-2018 totaled € 1,028 ($ 1,231) which supported by the less than 75% or € 771 ($ 923).
Outstanding amount grants receivables				€ 55
Loan agreement amount																				€ 20,000
Total finance contract existent		€ 4,000
Euro [Member] | First Tranche [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent																		€ 20,000
Euro [Member] | Second Tranche [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent																		6,000
Euro [Member] | Third Tranche [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent																		€ 8,000
USD [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Outstanding amount grants receivables | $			$ (62)
Loan agreement amount | $								$ 23,200
EIB financing, description						According to the Amendment, as repayment features, EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a cash-on-cash multiple of 2.8 times	According to the Amendment, as repayment features, EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a cash-on-cash multiple of 2.8 times
Total finance contract existent | $	$ 4,400
EIB Financing [Member] | Euro [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Finance contract existent (in Euro)							€ 4,000
Total finance contract existent							€ 24,000
EIB Financing [Member] | USD [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Total finance contract existent | $						$ 27,600
Major ordinary share transactions [Member]
Contingent Liabilities and Commitments (Details) [Line Items]
Equity financing value | $					$ 2,000

XML

Equity (Details) $ / shares in Units, $ in Thousands															1 Months Ended			12 Months Ended
	Feb. 10, 2021 ILS (₪) shares	Feb. 10, 2021 USD ($) shares	Jul. 08, 2020 $ / shares shares	Jul. 08, 2020 ILS (₪)	Jul. 08, 2020 USD ($) $ / shares	May 15, 2020 shares	Jul. 16, 2019	Jun. 13, 2019 ILS (₪) shares	Jun. 13, 2019 USD ($) shares	Jun. 24, 2015 ILS (₪) shares	Jun. 24, 2015 USD ($) shares	May 12, 2015 ILS (₪) shares	May 12, 2015 USD ($) $ / shares shares	May 12, 2015 ILS (₪)	Dec. 27, 2021 ILS (₪) shares	Dec. 27, 2021 USD ($) $ / shares shares	Feb. 02, 2021 $ / shares shares	Dec. 31, 2021 shares	Dec. 31, 2020 ILS (₪) shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 ILS (₪)	Jun. 11, 2020 $ / shares	Apr. 30, 2018 $ / shares
Equity (Details) [Line Items]
Ordinary shares												40	40
Number of shares issued								334,520	334,520				76,400,000
Warrants exercised												2,038,000	2,038,000					1,100,000,000	27,044,720	27,044,720
Warrants exercisable term												5 years	5 years
Exercise price per share (in Dollars per share) | $ / shares													$ 6.25
Total consideration								₪ 188,000	$ 53			₪ 36,607,000	$ (9,382)						₪ 14,790,000
Offering expenses (in New Shekels) | ₪												₪ 5,576,000
Underwriters warrants granted												95,500	95,500
Increase in equity shares (in New Shekels) | ₪														₪ 26,417,000
Offering expenses totaling (in New Shekels) | ₪														4,860,000
Warrants amount (in New Shekels) | ₪														7,398,000
Financial expense (in New Shekels) | ₪														₪ 1,197,000
Issuance expenses (in New Shekels) | ₪	₪ 1,155									₪ 134,000
Revaluation of warrants (in New Shekels) | ₪																			₪ 14,467,000		₪ 11,400,000
Public offering, description							the Company closed a public offering and issued 3,057,466 NASDAQ listed ADSs (equivalent to 122,298,640 Ordinary shares) and 18,298,898 Ordinary shares (equivalent to 457,472 NASDAQ listed ADSs) in consideration of $ 20,000 (approximately NIS 71,300) to a number of investors.
Warrants expired shares						540,639,000
Exercise price per share (in Dollars per share) | $ / shares																				$ 6.25		$ 7.28	$ 7.98
Warrant shares																			676,118	676,118
Number of shares															3,813,560	3,813,560
Price per share (in Dollars per share) | $ / shares																$ 2.36
Purchase of additional shares															330,508	330,508
Total gross proceeds (in Dollars) | $																$ 9,780
Received amount	₪ 41,137,000	$ 12,465													₪ 27,866,000	8,817
Issuance expenses		$ 371													₪ 3,039,000	$ 1,593
Ordinary shares equivalent																		27,500,000
Registered share capital																		1,800,000,000
Share capital equivalent																		45,000,000
Angels Investments in High Tech Ltd. [Member]
Equity (Details) [Line Items]
Public offering, description							As part of this public offering, Angels Investments in High Tech Ltd. (“AIHT”) exercised their option to purchase, under the same terms of the public offering, 2,203,640 ADSs and 141,538 Ordinary shares offered in the public offering that were not purchased by other shareholders. In total, the investment through AIHT in this offering was approximately $ 16,670, making AIHT a controlling shareholder (as defined under the Israeli Companies Law) with a holding of about 42% in BiondVax.
American Depository Shares [Member]
Equity (Details) [Line Items]
Number of shares issued								8,363	8,363
Warrants exercised			240,000																24,462,600	24,462,600
Total consideration				₪ 166,000	$ 48															$ 4,298
Additional shares issued										110,000	110,000
Gross consideration offering amount										₪ 2,069,000	$ (530)
Number of options issued			6,000
Exercise price per share (in Dollars per share) | $ / shares			$ 7.98		$ 7.98															$ 6.25		$ 8.076
Warrant shares																			611,565	611,565
Public offering [Member]
Equity (Details) [Line Items]
Number of shares																	2,434,783
Price per share (in Dollars per share) | $ / shares																	$ 4.95
Purchase of additional shares	365,217	365,217
Total gross proceeds (in Dollars) | $		$ 13,800

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Share-Based Compensation (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands, $ in Thousands										1 Months Ended			12 Months Ended
	Oct. 17, 2021	May 25, 2021 ILS (₪) shares	May 25, 2021 USD ($) shares	Apr. 06, 2021 ILS (₪) shares	Apr. 06, 2021 USD ($) $ / shares shares	Sep. 02, 2020 ILS (₪) shares	Sep. 02, 2020 USD ($) $ / shares shares	Jun. 11, 2020 ILS (₪) shares	Jun. 11, 2020 USD ($) $ / shares shares	Apr. 30, 2019 ILS (₪) shares	Apr. 30, 2019 USD ($) $ / shares shares	Mar. 31, 2018	Dec. 31, 2021 ₪ / shares	Dec. 31, 2020 ₪ / shares	Dec. 31, 2020 $ / shares	Jul. 08, 2020 $ / shares	Apr. 30, 2018 $ / shares
Share-Based Compensation (Details) [Line Items]
Description of share-based payment arrangement								the Company’s Board of Directors approved a grant to an advisor to purchase 72,000 ADS (2,880,000 Ordinary shares) at an exercise price of $18.06 per ADS in three tranches. The first tranche of 32,400 ADS’s was vested on May 31,2020, the second tranche of 25,200 ADS was vested on September 30, 2020 and the third tranche of 14,400 ADS’s will be vested on December 31, 2020. The options will expire four years from the commencement vesting date of each tranche. The total value of the grant was NIS 2,783 ($ 809).	the Company’s Board of Directors approved a grant to an advisor to purchase 72,000 ADS (2,880,000 Ordinary shares) at an exercise price of $18.06 per ADS in three tranches. The first tranche of 32,400 ADS’s was vested on May 31,2020, the second tranche of 25,200 ADS was vested on September 30, 2020 and the third tranche of 14,400 ADS’s will be vested on December 31, 2020. The options will expire four years from the commencement vesting date of each tranche. The total value of the grant was NIS 2,783 ($ 809).
Number of share options granted in share based payment arrangement		600,000	600,000					141,400	141,400
Exercise price per share | $ / shares									$ 7.28						$ 6.25		$ 7.98
Fair value of options granted		₪ 5,057	$ 1,626	₪ 358		₪ 30	$ 9	₪ 4,190	$ (1,218)
Shareholders approved amendment description		On May 25, 2021, the shareholders approved the amendment to the following options held by directors of the Company, as follows: Mr. Mark Germain (130,710 options), Prof. Avner Rotman (20,000 options), Mr. Adi Raviv (18,000 options), Prof. George H. Lowell (20,000 options), Dr. Morris Laster (18,000 options), Dr. Yael Margolin (18,000 options) and Mr. Isaac Devash (18,000 options) as follows: a. accelerated vesting and the ability to immediately exercise such options in the event of change of control; and   b. to the extent vested, allow the options to be exercised during the existing ten (10) year terms of the options in the event of the foregoing director’s termination of service to the Company without cause. The fair value of the said changes was approximately $3 (approximately NIS 10).	On May 25, 2021, the shareholders approved the amendment to the following options held by directors of the Company, as follows: Mr. Mark Germain (130,710 options), Prof. Avner Rotman (20,000 options), Mr. Adi Raviv (18,000 options), Prof. George H. Lowell (20,000 options), Dr. Morris Laster (18,000 options), Dr. Yael Margolin (18,000 options) and Mr. Isaac Devash (18,000 options) as follows: a. accelerated vesting and the ability to immediately exercise such options in the event of change of control; and   b. to the extent vested, allow the options to be exercised during the existing ten (10) year terms of the options in the event of the foregoing director’s termination of service to the Company without cause. The fair value of the said changes was approximately $3 (approximately NIS 10).
Board approve issuance description	On October 17, 2021, the board approve the issuance of 124,600 RSUs representing 600,000 ADS’s to the Company employees in exchange of their options, in a way that for each option exchanged a new RSU will be issued. The fair value of the said issuance was $156 (approximately NIS 505).On the same day the board approve the issuance of 10,000 RSUs representing 10,000 ADS’s to the Company employees. The fair value of the said issuance was $23 (approximately NIS 74).
Share option (in New Shekels per share) | ₪ / shares														₪ 0.78
Share options outstanding weighted average remaining contractual life													16 years 3 months 18 days	6 years 1 month 6 days
Bottom of range [member]
Share-Based Compensation (Details) [Line Items]
Exercise price per share | ₪ / shares													₪ 0.45	₪ 0.45
Top of range [member]
Share-Based Compensation (Details) [Line Items]
Exercise price per share | ₪ / shares													₪ 1.325	₪ 1.325
Plan [Member]
Share-Based Compensation (Details) [Line Items]
Share-based payment of option vested period												10 years	10 years
Description of share-based payment arrangement												The options generally vest over a period of three or four years.	The options generally vest over a period of three or four years.
Board Member [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						5,000	5,000			108,000	108,000
Exercise price per share | $ / shares											$ 7.976
Fair value of options granted						₪ 660	$ 196			₪ 1,414	$ (391)
Board Member 1 [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						82,000	82,000
Exercise price per share | $ / shares							$ 48.04
Fair value of options granted						₪ 6,662	$ (1,979)
Officer [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						7,000	7,000
Exercise price per share | $ / shares							$ 41.08
Fair value of options granted						₪ 571	$ (170)
Granted Options [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				160,000	160,000
Exercise price per share | $ / shares					$ 6.95
Fair value of options granted				₪ 1,909	$ 614
Board Members 2 [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				150,000	150,000
Exercise price per share | $ / shares					$ 6.95
Fair value of options granted				₪ 1,309	$ 421
RSUs [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				30,000	30,000
Fair value of options granted | $					$ 115
American Depository Shares [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement		600,000	600,000					5,656,000	5,656,000
Exercise price per share | $ / shares									$ 8.076						$ 6.25	$ 7.98
American Depository Shares [Member] | Board Member [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						5,000	5,000
American Depository Shares [Member] | CEO [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement										4,320,000	4,320,000
American Depository Shares [Member] | Board Member 1 [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						3,280,000	3,280,000
American Depository Shares [Member] | Officer [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement						280,000	280,000
American Depository Shares [Member] | Granted Options [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				6,400,000	6,400,000
American Depository Shares [Member] | Board Members 2 [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				6,000,000	6,000,000
American Depository Shares [Member] | RSUs [Member]
Share-Based Compensation (Details) [Line Items]
Number of share options granted in share based payment arrangement				30,000	30,000
CEO [Member]
Share-Based Compensation (Details) [Line Items]
Description of share-based payment arrangement										the Company also granted 215,833 ADSs (8,633,310 RSU) to the CEO of which 60% vested immediately, 20% will be vested on March 2020 and the additional 20% will vest on March 2021. The fair value of the options as of the date of grant totaled approximately NIS 2,826 ($ 782).	the Company also granted 215,833 ADSs (8,633,310 RSU) to the CEO of which 60% vested immediately, 20% will be vested on March 2020 and the additional 20% will vest on March 2021. The fair value of the options as of the date of grant totaled approximately NIS 2,826 ($ 782).

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Share-Based Compensation (Details) - Schedule of services received from employees, directors and service providers as equity-settled share-based payment - Directors And Service Providers [Member] ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Share-Based Compensation (Details) - Schedule of services received from employees, directors and service providers as equity-settled share-based payment [Line Items]
Research and development	₪ 1,045	$ 336	₪ 2,056	₪ 1,907
Marketing, general and administrative	7,859	2,527	7,416	1,777
Total share-based compensation	₪ 8,904	$ 2,863	₪ 9,472	₪ 3,684

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Share-Based Compensation (Details) - Schedule of option plan to employees and directors	12 Months Ended
	Dec. 31, 2021 $ / shares	Dec. 31, 2020 $ / shares	Dec. 31, 2019 $ / shares
Schedule of option plan to employees and directors [Abstract]
Number of options, Outstanding at beginning of year	24,869,400	14,213,400	16,647,903
Weighted average exercise price, Outstanding at beginning of year	$ 0.69	$ 0.75	$ 0.75
Number of options, Granted	12,400,000	12,096,000	4,320,000
Weighted average exercise price, Granted	$ 0.54	$ 1.87	$ 0.69
Number of options, Exercised		(240,000)
Weighted average exercise price, Exercised		$ 0.68
Number of options, Expired	(9,099,800)	(1,200,000)	(6,754,503)
Weighted average exercise price, Expired	$ 1.42	$ 0.68	$ 0.75
Number of options, Outstanding at end of year	28,169,600	24,869,400	14,213,400
Weighted average exercise price, Outstanding at end of year	$ 1.57	$ 0.78	$ 0.73
Number of options, Exercisable at end of year	15,362,360	11,587,867	5,310,000
Weighted average exercise price, Exercisable at end of year	$ 1.42	$ 0.69	$ 0.75

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Share-Based Compensation (Details) - Schedule of estimated option pricing model using assumptions	12 Months Ended
	Dec. 31, 2021 ₪ / shares	Dec. 31, 2021 $ / shares	Dec. 31, 2020 ₪ / shares	Dec. 31, 2020 $ / shares	Dec. 31, 2019 ₪ / shares	Dec. 31, 2019 $ / shares
Share-Based Compensation (Details) - Schedule of estimated option pricing model using assumptions [Line Items]
Dividend yield (%)
Expected volatility of the share prices (%)	110.00%	110.00%	66.00%	66.00%	57.00%	57.00%
Risk-free interest rate (%)	1.70%	1.70%			2.30%	2.30%
Expected life of share options (years)	10 years	10 years			7 years 6 months	7 years 6 months
Share price (NIS) (in New Shekels per share) | ₪ / shares	₪ 0.3				₪ 24.07
ADS $ (in Dollars per share) | $ / shares		$ 3.84				$ 6.66
Bottom of range [member]
Share-Based Compensation (Details) - Schedule of estimated option pricing model using assumptions [Line Items]
Risk-free interest rate (%)			0.70%	0.70%
Expected life of share options (years)			6 years	6 years
Share price (NIS) (in New Shekels per share) | ₪ / shares			₪ 7.05
ADS $ (in Dollars per share) | $ / shares				$ 2.2
Top of range [member]
Share-Based Compensation (Details) - Schedule of estimated option pricing model using assumptions [Line Items]
Risk-free interest rate (%)			0.80%	0.80%
Expected life of share options (years)			7 years	7 years
Share price (NIS) (in New Shekels per share) | ₪ / shares			₪ 18
ADS $ (in Dollars per share) | $ / shares				$ 5.6

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Supplementary Information to the Statements of Comprehensive Income (Details) - Schedule of expenses and income ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Research and Development Expenses, Net of Participations [Member]
Supplementary Information to the Statements of Comprehensive Income (Details) - Schedule of expenses and income [Line Items]
Clinical trial phase 3	₪ 1,340	$ 431	₪ 31,519	₪ 52,825
Materials and subcontractors	684	220	9,193	5,946
Salaries and related expenses	4,551	1,462	5,532	5,384
Share-based payment	1,045	336	2,056	1,907
Patent registration fees	248	80	314	278
Rentals and maintenance of laboratory	607	195	958	970
Depreciation	1,866	601	1,887	1,293
Other			2	42
Financial income:
Total gross	10,341	3,325	51,463	68,645
Marketing, General and Administrative Expenses [Member]
Supplementary Information to the Statements of Comprehensive Income (Details) - Schedule of expenses and income [Line Items]
Salaries and related expenses	7,376	2,372	2,569	3,216
Share-based payment	7,859	2,527	7,416	1,777
Professional services	5,682	1,827	3,645	3,582
Rentals, office expenses and maintenance	314	101	313	323
Depreciation	549	176	551	352
Other	2,748	883	2,193	456
Marketing, general and administrative	24,528	7,887	16,687	9,706
Financial Income and Expense [Member]
Financial income:
Interest income on deposits	3	1	2	4
Exchange differences, net	5,713	1,837	1,714
Revaluation of IIA liability			2,127
Finance income	₪ 5,716	$ 1,838	₪ 3,843	₪ 4

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Supplementary Information to the Statements of Comprehensive Income (Details) - Schedule of financial income and expense - Financial income and expense [Member] ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Financial expenses:
Exchange differences, net				₪ 4,373
Lease holding finance expense	715	230	479	666
Revaluation of warrants			14,467	11,400
Finance expenses in respect of loans from others	10,117	3,253	643	14,083
Finance expenses in respect of Government grants				169
Bank commissions and other financial expenses	33	11	43	156
Financial expense	₪ 10,865	$ 3,494	₪ 15,632	₪ 30,847

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Taxes on Income (Details)	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2020	Dec. 31, 2021 USD ($)
Taxes on Income (Details) [Line Items]
Carryforwards losses and other temporary differences amount	₪ 311,625		$ (100,201)
Statutory tax rate and the taxes on income	0.00%
Israeli [Member]
Taxes on Income (Details) [Line Items]
Corporate tax rate	23.00%	23.00%

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Balances and Transactions with Related Parties (Details)		1 Months Ended					12 Months Ended
	Aug. 31, 2014 ILS (₪)	Mar. 02, 2021	May 28, 2015 ILS (₪)	Jan. 18, 2015	Aug. 31, 2014 ILS (₪)	Aug. 31, 2012	Dec. 31, 2021 USD ($) shares
Balances and Transactions with Related Parties (Details) [Line Items]
Number of directors						4
Description of transactions with related party							Pursuant to the amendment, the monthly salary of the Company’s CEO was increased by 5% in each of the three years of the extension of the engagement to NIS 52.5 a month starting January 2012.
Shareholders agreement term				5 years
Remuneration total (in New Shekels)			₪ 80
Option granted, percentage			2.50%
One-time cash payment (in New Shekels)	₪ 87.5
Compensation under the services agreement (in New Shekels)					₪ 15,000
Percentage of compensation paid						0.50%
Annual gross salary (in Dollars) | $							$ 350
Percentage of monthly salary		20.00%
Gross lump sum amount (in Dollars) | $							$ 50
Entitled to receive RSUs (in Shares) | shares							600,000
Number of RSUs sold period							1 year
Percentage of vested RSUs							5.00%
CEO [Member]
Balances and Transactions with Related Parties (Details) [Line Items]
Number of directors							9
Termination period							3 years
Compensation payable							1.75%
Board of Directors [Member]
Balances and Transactions with Related Parties (Details) [Line Items]
Number of key officers							3
CFO [Member]
Balances and Transactions with Related Parties (Details) [Line Items]
Employment agreement, description					In August 2014, the Company signed an employment agreement with the CFO at a 60% employment capacity for a period of 5 years, according to which the CFO shall be entitled to a monthly salary of NIS 10, and accordingly updated the management agreement to fees at the amount of NIS 2.5 for a period of five years.
One-time cash payment (in New Shekels)	₪ 192.5
Third Party [Member]
Balances and Transactions with Related Parties (Details) [Line Items]
Number of directors						4
Mr. Reichman [Member]
Balances and Transactions with Related Parties (Details) [Line Items]
Termination period							1 year

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Balances and Transactions with Related Parties (Details) - Schedule of balances with related parties - Dec. 31, 2021 ₪ in Thousands, $ in Thousands	ILS (₪)	USD ($)
2020 [Member]
Key management personnel:
Payables	₪ 403
Payables (in Dollars)	403
2021 [Member]
Key management personnel:
Payables	2,243
Payables (in Dollars)	₪ 2,243
2021 [Member] | USD [Member]
Key management personnel:
Payables | $		$ 721
Payables (in Dollars) | $		$ 721

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Balances and Transactions with Related Parties (Details) - Schedule of transactions with related parties - 12 months ended Dec. 31, 2021 ₪ in Thousands, $ in Thousands	ILS (₪)	USD ($)
2019 [Member]
Key management personnel:
Research and development	₪ 5,395
Marketing, general and administrative	3,653
2020 [Member]
Key management personnel:
Research and development	1,800
Marketing, general and administrative	5,100
2021 [Member]
Key management personnel:
Research and development	1,439
Marketing, general and administrative	13,052
2021 [Member] | USD [Member]
Key management personnel:
Research and development | $		$ 463
Marketing, general and administrative	₪ 4,197

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Balances and Transactions with Related Parties (Details) - Schedule of key officers employed ₪ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 ILS (₪)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 ILS (₪)	Dec. 31, 2019 ILS (₪)
Schedule of key officers employed [Abstract]
Salaries	₪ 4,732	$ 1,521	₪ 3,790	₪ 1,399
Short-term employee benefits	1,655	532	824	1,855
Other employees’ benefits	155	50	161	110
Share-based compensation	7,949	2,556	2,125	3,684
Total	₪ 14,491	$ 4,659	₪ 6,900	₪ 7,048
Number of key officers and directors	12	12	13	11

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Subsequent Events (Details)	12 Months Ended
	Dec. 31, 2024 EUR (€)	Dec. 31, 2023 EUR (€)	Dec. 31, 2021 EUR (€)	Mar. 14, 2022 EUR (€)	Jan. 01, 2022	Dec. 31, 2021 USD ($)
Subsequent Events (Details) [Line Items]
EIB loan				€ 24,000
Reduction of principal (in Dollars) | $						$ 900
Capital raises percentage			10.00%
Sales exceed			€ 5,000
Sales exceed, percentage			3.00%
Description of royalties			the Company’s topline revenues will be paid to EIB as royalties up to a combined maximum of 2.8 times
Principal			€ 24,000
Subsequent events, description			the Company chooses to prepay any portion of the EIB loan (other than as required from future capital raises) the amount prepaid will be calculated such that the EIB realizes at least 20% IRR on its investment at the point of prepayment.
Non-adjusting events after reporting period [Member]
Subsequent Events (Details) [Line Items]
Loan maturity	€ 4,000	€ 20,000
Annual rate					7.00%