CREMA TRATTAMENTO PSORIASI OFFERTA -50% !

Home Blog Page 17

Psorilax:Ristrutturato |crema decortil e psoriasi

0

Psorilax: prezzo, funziona, recensioni, opinioni, composizione

Registration No. 333-

Washington, D.C. 20549

P.O. Box 7537,

(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and
telephone number, including area code, of agent for service)

Approximate date
of commencement of proposed sale to the public:
As soon as practicable after this registration statement is declared effective.

If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. ☒

If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a
post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a
post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check
mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

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 7(a)(2)(B) of the Securities Act. ☐



The Offering

Units
offered by us
We are
offering up to                                          Units.
Each Unit will consist of (i) one American Depositary Share, or ADS, and (ii) a warrant to purchase one ADS, or Warrant. The
Units will not be issued or certificated and the ADSs and the Warrants part of such Units are immediately separable and will
be issued separately, but will be purchased together in this offering.
Pre-funded Units
offered by us

We are also offering to those
purchasers, if any, whose purchase of Units in this offering would result in the purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or at the election of the purchaser, 9.99%) of our outstanding
ordinary shares immediately following the consummation of this offering, the opportunity to purchase, if they so choose,
up to                   Pre-funded
Units, in lieu of the Units that would otherwise result in ownership in excess of 4.99% (or 9.99%, as applicable) of our
outstanding ordinary shares.

Each Pre-funded Unit will consist
of (i) a pre-funded warrant to purchase one ADS, or a Pre-funded Warrant, and (ii) and one Warrant. The purchase price
of each Pre-funded Unit will equal the price per Unit being sold to the public in this offering, minus $0.01, and the
exercise price of each Pre-funded Warrant included in the Pre-funded Unit will be $0.01 per share.

For each Pre-funded Unit we sell,
the number of Units we are offering will be decreased on a one-for-one basis. Because we will issue a Warrant as part
of each Unit or Pre-funded Unit, the number of Warrants sold in this offering will not change as a result of a change
in the mix of the Units and Pre-funded Units sold.

The Pre-funded Units will not
be issued or certificated, and the Pre-funded Warrants and the Warrants part of such Pre-funded Units are immediately
separable and will be issued separately in this offering.

This prospectus also relates to
the offering of ADSs issuable upon exercise of the Pre-funded Warrants and the Warrants part of the Pre-funded Units and
the ordinary shares underlying the ADSs and ADSs issuable upon exercise of the Warrants and the Pre-funded Warrants.

The Warrants Each Warrant will
have an exercise price of $                  
per full ADS (representing up to                  
% of the public offering price per Unit to be sold in this offering), will be immediately exercisable and will expire                              years
from the date of issuance. To better understand the terms of the Warrants, you should carefully read the “Description
of the Offered Securities” section of this prospectus. You should also read the form of Warrant, which is filed as an
exhibit to the registration statement that includes this prospectus.
Pre-funded Warrants Each Pre-funded
Warrant will be immediately exercisable and may be exercised at any time exercisable until exercised in full. To better understand
the terms of the Pre-funded Warrants, you should carefully read the “Description of the Offered Securities” section
of this prospectus. You should also read the form of Pre-funded Warrant, which is filed as an exhibit to the registration
statement that includes this prospectus.
Total ordinary shares outstanding immediately
before this offering

142,931,223 ordinary shares.

Total ordinary shares outstanding immediately
after this offering
ordinary
shares, assuming no sale of any Pre-Funded Units and assuming none of the Warrants issued in this offering are exercised.
Offering Price

The assumed offering price is $                        
 per Unit, the last reported sales price of our ADSs on the NYSE American on          , 2020
and $         per Pre-funded Unit. The actual offering price per each Unit and Pre-funded Unit will be negotiated between us and the placement
agent based on the trading of our ADSs prior to the offering, among other things, and may be at a discount to the current market
price.

Use of proceeds We estimate the
net proceeds from this offering will be approximately $                 million,
based upon an assumed public offering price of $      per Unit, the last reported sales price
of our ADSs on the NYSE American on        , 2020 after deducting the estimated placement
agent’s fees and estimated offering expenses payable by us, and assuming no sale of Pre-funded Units and excluding any
proceeds from the exercise of Warrants. We currently intend to use the net proceeds from this offering for working capital
and general corporate purposes, including research and development, clinical trials and general and administrative expenses.
See “Use of Proceeds” on page 33 of this prospectus.



Risk factors Before deciding
to invest in our securities, you should carefully consider the risks related to this offering and ownership of our securities.
See “Risk Factors” and other information included elsewhere in this prospectus for a discussion of factors you
should carefully consider before investing in our securities.
Dividend Policy We have never declared
or paid any cash dividends to our shareholders, and we currently do not expect to declare or pay any cash dividends in the
foreseeable future. See “Dividend Policy.”
Listings Our ADSs are listed
on the NYSE American under the symbol “CANF”. We do not intend to apply for listing of the Warrants or Pre-funded
Warrants on any securities exchange or other nationally recognized trading system. There is no established public trading
market for the Warrants or Pre-funded Warrants, and we do not expect a market to develop. Without an active trading market,
the liquidity of the Warrants or Pre-funded Warrants will be limited.  Our ordinary shares are traded on the TASE
under the symbol “CFBI”.
Depositary The Bank of New
York Mellon.

Unless otherwise indicated,
the number of ordinary shares outstanding prior to and after this offering is based on 142,931,223 ordinary shares outstanding
as of January 23, 2020 and excludes as of such date:

2,673,400 ordinary
shares issuable upon the exercise of stock options outstanding at a weighted-average exercise price of $0.89 per ordinary
share (based on the exchange rate reported by the Bank of Israel on such date) equivalent to 89,113 ADSs at a weighted average
exercise price of $26.70 per ADS; and

75,205,306 ordinary
shares represented by 2,506,844 ADSs issuable upon the exercise of warrants outstanding at a weighted-average exercise price
of $4.35 per ADS.

Unless otherwise
stated, all information in this prospectus assumes (i) no exercise of the outstanding options or warrants into ordinary shares
or ADSs as described above, (ii) no sale of Pre-funded Units, (iii) no exercise of the Warrants or warrants to purchase up to                        
ADSs issued to the placement agent, or the Placement Agent Warrants, and (iv) gives retroactive effect to the adjustment to the
ratio of ADSs to ordinary shares from one ADS representing two ordinary shares to one ADS representing 30 ordinary shares effected
on May 10, 2019.


Summary
Financial Data

The following tables
summarize our financial data. We have derived the summary statements of comprehensive loss data for the years ended 2018, 2017
and 2016 and the statement of financial position as of December 31, 2018 and 2017 from our audited financial statements contained
herein. The summary financial statement data as of September 30, 2019 and for the nine months ended September 30, 2019 are derived
from our unaudited interim financial statements that are also contained herein. In the opinion of management, these unaudited
interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation
of our financial position and operating results for these periods. Results from interim periods are not necessarily indicative
of results that may be expected for the entire year.

Our historical results
are not necessarily indicative of the results that may be expected in the future. Our consolidated financial statements contained
herein were prepared in accordance with IFRS, as issued by the International Accounting Standards Board.

The following summary
financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and our financial statements and related notes contained herein.

Statement of comprehensive loss data(1)


Year ended December 31,

Nine months ended

September 30,

(Unaudited)

2016

2017

2018

2019

2018

USD In Thousands except share and per share data

Revenues

165

789

3,820

1,840

3,531

Research and development expenses

6,115

5,106

6,075

(7,016

)

(4,056

)

General and administrative expenses

2,733

2,868

3,159

(2,220

)

(2,386

)

Operating loss

8,683

7,185

5,414

(7,396

)

(2,911

)

Other Income

(769

)

Financial income

(374

)

(633

)

(51

)

63

197

Financial expenses

55

621

1,204

(508

)

(428

)

Taxes on income

29

29

4

Net loss

8,393

6,433

6,571

(7,841

)

(3,142

)

Total other comprehensive loss

(119

)

(636

)

Total Comprehensive loss

8,274

5,797

6,571

(7,841

)

(3,142

)

Loss per share

Basic and diluted loss per share

0.3

0.19

0.17

0.11

(0.08

)

Weighted average number of shares outstanding used to compute basic and diluted loss per share(1)

27,692,668

32,525,138

38,902,214

72,985,993

38,405,916

Statement of financial position


December 31,

Nine months ended

September 30,

(Unaudited)

2017

2018

2019

2018

USD In Thousands

Cash and cash equivalents

3,505

3,615

4,682

5,728

Marketable securities

917

273

111

1,077

Other receivables and prepaid expenses

3,159

4,015

6,910

3,977

Other long term receivables

5

2

11

2

Property, plant and equipment

28

47

37

41

Total assets

7,614

7,952

11,751

10,825

Trade payable

427

1,071

1,364

828

Deferred revenues

1,176

2,744

2,980

2,934

Other payables

997

1,122

351

676

Total liabilities

2,600

4,937

4,695

4,438

Total shareholders’ equity

5,014

3,015

7,056

6,387

(1)

Data on diluted loss per share were not presented in
the financial statements because the effect of the exercise of the options and warrants is anti-dilutive.


RISK FACTORS

An investment in
our securities involves a high degree of risk. You should carefully consider the risk factors set forth below before making an
investment decision. The risks and uncertainties not presently known to us or that we currently deem immaterial may also materially
harm our business, operating results and financial condition and could result in a complete loss of your investment.

Risks Related to Our Financial Position
and Capital Requirements

We have incurred
operating losses since our inception and anticipate that we will continue to incur substantial operating losses for the foreseeable
future.

We are a clinical
stage biopharmaceutical company that develops orally bioavailable small molecule therapeutic products for the treatment of cancer,
liver and inflammatory diseases and erectile dysfunction. We also co-develop specific formulations of cannabis components for
the treatment of cancer, inflammatory, autoimmune, and metabolic diseases. Since our incorporation in 1994, we have been focused
on research and development activities with a view to developing our product candidates, CF101, also known as Piclidenoson, CF102,
also known as Namodenoson, and CF602. We have financed our operations primarily through the sale of equity securities (both in
private placements and in public offerings on the TASE and NYSE American) and payments received under out-licensing agreements
and have incurred losses in each year since our inception in 1994. We have historically incurred substantial net losses, including
net losses of approximately $7.8 million in the nine months ended December 31, 2019, $6.5 million in 2018, and $6.4 million in
2017. As of September 30, 2019, we had an accumulated deficit of approximately $108.5 million. We do not know whether or when
we will become profitable. To date, we have not commercialized any products or generated any revenues from product sales and accordingly
we do not have a revenue stream to support our cost structure. Our losses have resulted principally from costs incurred in development
and discovery activities. We expect to continue to incur losses for the foreseeable future, and these losses will likely increase
as we:

initiate and manage
pre-clinical development and clinical trials for our current and new product candidates;

seek regulatory
approvals for our product candidates;

implement internal
systems and infrastructures;

seek to license
additional technologies to develop;

hire management
and other personnel; and

move towards commercialization.

If our product candidates
fail in clinical trials or do not gain regulatory clearance or approval, or if our product candidates do not achieve market acceptance,
we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on
a quarterly or annual basis. Our inability to achieve and then maintain profitability would negatively affect our business, financial
condition, results of operations and cash flows. Moreover, our prospects must be considered in light of the risks and uncertainties
encountered by an early-stage company and in highly regulated and competitive markets, such as the biopharmaceutical market, where
regulatory approval and market acceptance of our products are uncertain. There can be no assurance that our efforts will ultimately
be successful or result in revenues or profits.

We will need
to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult
to obtain and will dilute current shareholders’ ownership interests.

As of September 30,
2019, we had cash and cash equivalents of $4.7 million. In January 2020, we raised approximately $2.4 million from the exercise
of certain outstanding warrants following their repricing. We believe that our existing financial resources will be sufficient to meet our requirements for the next
twelve months from the date of this prospectus. We have expended and believe that we will continue
to expend substantial resources for the foreseeable future developing our product candidates. These expenditures will include
costs associated with research and development, manufacturing, conducting preclinical experiments and clinical trials and obtaining
regulatory approvals, as well as commercializing any products approved for sale. Because the outcome of our planned and anticipated
clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development
and commercialization of our product candidates. In addition, other unanticipated costs may arise. 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 other
sources, such as strategic partnerships and alliances and licensing arrangements. In addition, we may seek additional capital
due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or
future operating plans.

Our future capital
requirements will depend on many factors, including the progress and results of our clinical trials, the duration and cost of
discovery and preclinical development, and laboratory testing and clinical trials for our product candidates, the timing and outcome
of regulatory review of our product candidates, the number and development requirements of other product candidates that we pursue,
and the costs of activities, such as product marketing, sales, and distribution. Because of the numerous risks and uncertainties
associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased
capital outlays and operating expenditures associated with our anticipated clinical trials.

Our future capital requirements depend
on many factors, including:

the level of research
and development investment required to develop our product candidates;
the failure to obtain
regulatory approval or achieve commercial success of our product candidates, including Piclidenoson, Namodenoson and CF602;

the results of our
preclinical studies and clinical trials for our earlier stage product candidates, and any decisions to initiate clinical trials
if supported by the preclinical results;

the costs, timing and outcome of regulatory review of
our product candidates that progress to clinical trials;

our ability to partner or sub-license any of our product
candicates;

the costs of preparing,
filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related
claims;

the cost of commercialization
activities if any of our product candidates are approved for sale, including marketing, sales and distribution costs;

the cost of manufacturing
our product candidates and any products we successfully commercialize;

the timing, receipt
and amount of sales of, or royalties on, our future products, if any;

the expenses needed
to attract and retain skilled personnel;

any product liability
or other lawsuits related to our products;

the extent to which
we acquire or invest in businesses, products or technologies and other strategic relationships;

the costs of financing
unanticipated working capital requirements and responding to competitive pressures; and
maintaining minimum
shareholders’ equity requirements and complying with other continue listing standards under the NYSE American Company
Guide.

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 preclinical studies, clinical trials or other research
and development activities for one or more of our product candidates or delay, limit, reduce or terminate our establishment of
sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.

We may incur substantial
costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance
fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection
with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.

Raising additional
capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies
or product candidates.

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 debt, making capital expenditures or declaring dividends. If we raise additional
funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable
rights to our technologies or product candidates, 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 our
product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise
prefer to develop and market ourselves.

Risks Related to Our Business and Regulatory
Matters

We have not
yet commercialized any products or technologies, and we may never become profitable.

We have not yet commercialized
any products or technologies, and we may never be able to do so. We do not know when or if we will complete any of our product
development efforts, obtain regulatory approval for any product candidates incorporating our technologies or successfully commercialize
any approved products. Even if we are successful in developing products that are approved for marketing, we will not be successful
unless these products gain market acceptance for appropriate indications at favorable reimbursement rates. The degree of market
acceptance of these products will depend on a number of factors, including:

the timing of regulatory
approvals in the countries, and for the uses, we seek;

the competitive
environment;

the establishment
and demonstration in the medical community of the safety and clinical efficacy of our products and their potential advantages
over existing therapeutic products;

our ability to enter
into distribution and other strategic agreements with pharmaceutical and biotechnology companies with strong marketing and
sales capabilities;

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

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

Physicians, patients,
thirty-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 any of our products or products incorporating our technologies. As a result, we are unable to predict the extent
of future losses or the time required to achieve profitability, if at all. Even if we successfully develop one or more products
that incorporate our technologies, we may not become profitable.

Our product
candidates are at various stages of clinical and preclinical development and may never be commercialized.

Our product candidates
are at various stages of clinical development and may never be commercialized. The progress and results of any future pre-clinical
testing or future clinical trials are uncertain, and the failure of our product candidates to receive regulatory approvals will
have a material adverse effect on our business, operating results and financial condition to the extent we are unable to commercialize
any products. None of our product candidates has received regulatory approval for commercial sale. In addition, we face the risks
of failure inherent in developing therapeutic products. Our product candidates are not expected to be commercially available for
several years, if at all.

In addition, our product
candidates must satisfy rigorous standards of safety and efficacy before they can be approved by the U.S. Food and Drug Administration,
or the FDA, the European Medicines Agency, or the EMA, and foreign regulatory authorities for commercial use. The FDA, the EMA
and foreign regulatory authorities have full discretion over this approval process. We will need to conduct significant additional
research, involving testing in animals and in humans, before we can file applications for product approval. Typically, in the
pharmaceutical industry, there is a high rate of attrition for product candidates in pre-clinical testing and clinical trials.
Also, satisfying regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the
product and requires the expenditure of substantial resources. In addition, delays or rejections may be encountered based upon
additional government regulation, including any changes in FDA policy, during the process of product development, clinical trials
and regulatory reviews.

In order to receive
FDA approval or approval from foreign regulatory authorities to market a product candidate or to distribute our products, we must
demonstrate thorough pre-clinical testing and thorough human clinical trials that the product candidate is safe and effective
for its intended uses (e.g., treatment of a specific condition in a specific way subject to contradictions and other limitations).
Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our New Drug Applications, or NDA, or grant
approval for a narrowly intended use that is not commercially feasible. We might not obtain regulatory approval for our drug candidates
in a timely manner, if at all. Failure to obtain FDA approval of any of our drug candidates in a timely manner or at all will
severely undermine our business by reducing the number of salable products and, therefore, corresponding product revenues.

Results of earlier
clinical trials may not be predictive of the results of later-stage clinical trials.

The results of preclinical
studies and early clinical trials of product candidates may not be predictive of the results of later-stage clinical trials. Also,
interim results, if at all, during a clinical trial do not necessarily predict final results. Product candidates in later stages
of clinical trials may fail to show the desired safety and efficacy results despite having progressed through preclinical studies
and initial clinical trials. For example, our former subsidiary OphthaliX Inc. (since renamed Wize Pharma, Inc.), or OphthaliX,
announced top-line results of a Phase III study with Piclidenoson for dry-eye syndrome in which Piclidenoson did not meet the
primary efficacy endpoint of complete clearing of corneal staining, nor the secondary efficacy endpoints, OphthaliX released top-line
results from its Phase II clinical trial of Piclidenoson for the treatment of glaucoma in which no statistically significant differences
were found between the Piclidenoson treated group and the placebo group in the primary endpoint of lowering intraocular pressure,
or IOP. In addition, two Phase IIb studies in rheumatoid arthritis, or rheumatoid arthritis, utilizing Piclidenoson in combination
with methotrexate, a generic drug commonly used for treating rheumatoid arthritis patients, or MTX, failed to reach their primary
endpoints. A Phase II/III study of Piclidenoson for psoriasis did not meet its primary endpoint although positive data from further
analysis of the Phase II/III study suggests Piclidenoson as a potential systemic therapy for patients with moderate-severe psoriasis.
Furthermore, a Phase II study for advanced HCC in subjects with Child-Pugh B who failed Nexavar as a first line treatment did
not meet its primary endpoint although it showed superiority in overall survival in the largest study subpopulation.

Many companies in
the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to adverse safety profiles or lack
of efficacy, notwithstanding promising results in earlier studies. Any delay in, or termination or suspension of, our clinical
trials will delay the requisite filings with the FDA, the EMA or other foreign regulatory authorities and, ultimately, our ability
to commercialize our product candidates and generate product revenues. If the clinical trials do not support our product claims,
the completion of development of such product candidates may be significantly delayed or abandoned, which will significantly impair
our ability to generate product revenues and will materially adversely affect our results of operations.

This drug candidate
development risk is heightened by any changes in the planned clinical trials compared to the completed clinical trials. As product
candidates are developed from preclinical through early to late stage clinical trials towards approval and commercialization,
it is customary that various aspects of the development program, such as manufacturing and methods of administration, are altered
along the way in an effort to optimize processes and results. While these types of changes are common and are intended to optimize
the product candidates for late stage clinical trials, approval and commercialization, such changes do carry the risk that they
will not achieve these intended objectives.

Changes in our planned
clinical trials or future clinical trials could cause our product candidates to perform differently, including causing toxicities,
which could delay completion of our clinical trials, delay approval of our product candidates, and/or jeopardize our ability to
commence product sales and generate revenues.

We might be
unable to develop product candidates that will achieve commercial success in a timely and cost-effective manner, or ever.

Even if regulatory
authorities approve our product candidates, they may not be commercially successful. Our product candidates may not be commercially
successful because government agencies and other third-party payors may not cover the product or the coverage may be too limited
to be commercially successful; physicians and others may not use or recommend our products, even following regulatory approval.
A product approval, assuming one issues, may limit the uses for which the product may be distributed thereby adversely affecting
the commercial viability of the product. Third parties may develop superior products or have proprietary rights that preclude
us from marketing our products. We also expect that at least some of our product candidates will be expensive, if approved. Patient
acceptance of and demand for any product candidates for which we obtain regulatory approval or license will depend largely on
many factors, including but not limited to the extent, if any, of reimbursement of costs by government agencies and other third-party
payors, pricing, the effectiveness of our marketing and distribution efforts, the safety and effectiveness of alternative products,
and the prevalence and severity of side effects associated with our products. If physicians, government agencies and other third-party
payors do not accept our products, we will not be able to generate significant revenue. In addition, government regulators and
legislative bodies in the U.S. are considering numerous proposals that may result in limitations on the prices at which we could
charge customers for our products if we have products that are ultimately approved for sale. At this time, we are unable to predict
how these potential legislative changes might affect our business.

Our current
pipeline is based on our platform technology utilizing the Gi protein associated A3AR, as a potent therapeutic target and currently
includes three molecules, Piclidenoson, Namodenoson and CF602 product candidates, of which Piclidenoson is the most advanced.
Failure to develop these molecules will have a material adverse effect on us.

Our current pipeline
is based on a platform technology where we target the A3AR with highly selective ligands, or small signal triggering molecules
that bind to specific cell surface receptors, such as the A3AR, including Piclidenoson, Namodenoson and CF602. A3Ars are structures
found in cell surfaces that record and transfer messages from small molecules or ligands, such as Piclidenoson, Namodenoson and
CF602 to the rest of the cell. Piclidenoson is the most advanced of our drug candidates. As such, we are currently dependent on
only three molecules for our potential commercial success, and any safety or efficacy concerns related to such molecules would
have a significant impact on our business. Failure to develop our drug candidates, in whole or in part, will have a material adverse
effect on us.

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 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
dosing issues;

lack of effectiveness
or efficacy during clinical trials;

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

slower than expected
rates of patient recruitment and enrollment;

lack of healthy
volunteers and patients to conduct trials;

inability to monitor
patients adequately during or after treatment;

failure of third-party
contract research organizations to properly implement or monitor the clinical trial protocols;

failure of institutional
review boards to approve our clinical trial protocols;

inability or unwillingness
of medical investigators and institutional review boards to follow our clinical trial protocols; and

lack of sufficient
funding to finance the clinical trials.

We have experienced
the risks involved with conducting clinical trials, including but not limited to, increased expense and delay and failure to meet
end points of the trial. For example, OphthaliX, announced top-line results of a Phase III study with CF101 for dry-eye syndrome
in which Piclidenoson did not meet the primary efficacy endpoint of complete clearing of corneal staining, nor the secondary efficacy
endpoints and OphthaliX released top-line results from its Phase II clinical trial of Piclidenoson for the treatment of glaucoma
in which no statistically significant differences were found between the Piclidenoson treated group and the placebo group in the
primary endpoint of lowering IOP. In addition, two Phase Iib studies in rheumatoid arthritis, utilizing Piclidenoson in combination
with MTX failed to reach their primary end points. A Phase II/III study of Piclidenoson for psoriasis did not meet its primary
endpoint although positive data from further analysis of the Phase II/III study suggests Piclidenoson as a potential systemic
therapy for patients with moderate-severe psoriasis. Furthermore, a Phase II study for advanced HCC in subjects with Child-Pugh
B who failed Nexavar as a first line treatment did not meet its primary endpoint although it showed superiority in overall survival
in the largest study subpopulation.

In addition, we or
regulatory authorities may suspend our clinical trials at any time if it appears that we are exposing participants to unacceptable
health risks or if the regulatory authorities find deficiencies in our regulatory submissions or the conduct of these trials.
Any suspension of clinical trials will delay possible regulatory approval, if any, and adversely impact our ability to develop
products and generate revenue.

If we acquire
or license additional technology or product candidates, we may incur a number of costs, may have integration difficulties and
may experience other risks that could harm our business and results of operations.

We may acquire and
license additional product candidates and technologies. Any product candidate or technology we license from others or acquire
will likely require additional development efforts prior to commercial sale, including extensive pre-clinical 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 or product developed
based on 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 product candidate 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 in the marketplace.
Moreover, integrating any newly acquired product candidates could be expensive and time-consuming. If we cannot effectively manage
these aspects of our business strategy, our business may not succeed.

The manufacture
of our product candidates is a chemical synthesis process and if one of our materials suppliers encounters problems manufacturing
our products, our business could suffer.

The FDA and foreign
regulators require manufacturers to register manufacturing facilities. The FDA and foreign regulators also inspect these facilities
to confirm compliance with requirements that the FDA or foreign regulators establish. We do not intend to engage in the manufacture
of our products other than for pre-clinical and clinical studies, but we or our materials suppliers may face manufacturing or
quality control problems causing product production and shipment delays or a situation where we or the supplier may not be able
to maintain compliance with the FDA’s or foreign regulators’ requirements necessary to continue manufacturing our
drug substance. Drug manufacturers are subject to ongoing periodic unannounced inspections by the FDA, the U.S. Drug Enforcement
Agency, or DEA, and corresponding foreign regulators to ensure strict compliance with requirements and other governmental regulations
and corresponding foreign standards. Any failure to comply with DEA requirements or FDA or foreign regulatory requirements could
adversely affect our clinical research activities and our ability to market and develop our product candidates.

We do not currently
have sales, marketing or distribution capabilities or experience, and we are unable to effectively sell, market or distribute
our product candidates now and we do not expect to be able to do so in the future. The failure to enter into agreements with third
parties that are capable of performing these functions would have a material adverse effect on our business and results of operations.

We do not currently
have and we do not expect to develop sales, marketing and distribution capabilities. If we are unable to enter into agreements
with third parties to perform these functions, we will not be able to successfully market any of our platforms or product candidates.
In order to successfully market any of our platform or product candidates, we must make arrangements with third parties to perform
these services.

As we do not intend
to develop a marketing and sales force with technical expertise and supporting distribution capabilities, we will be unable to
market any of our product candidates directly. To promote any of our potential products through third parties, we will have to
locate acceptable third parties for these functions and enter into agreements with them on acceptable terms, and we may not be
able to do so. Any third-party arrangements we are able to enter into may result in lower revenues than we could achieve by directly
marketing and selling our potential products. In addition, to the extent that we depend on third parties for marketing and distribution,
any revenues we receive will depend upon the efforts of such third parties, as well as the terms of our agreements with such third
parties, which cannot be predicted in most cases at this time. As a result, we might not be able to market and sell our products
in the United States or overseas, which would have a material adverse effect on us.

We will to some
extent rely on third parties to implement our manufacturing and supply strategies. Failure of these third parties in any respect
could have a material adverse effect on our business, results of operations and financial condition.

If our current and
future manufacturing and supply strategies are unsuccessful, then we may be unable to conduct and complete any future pre-clinical
or clinical trials or commercialize our product candidates in a timely manner, if at all. Completion of any potential future pre-clinical
or clinical trials and commercialization of our product candidates will require access to, or development of, facilities to manufacture
a sufficient supply of our product candidates. We do not have the resources, facilities or experience to manufacture our product
candidates for commercial purposes on our own and do not intend to develop or acquire facilities for the manufacture of product
candidates for commercial purposes in the foreseeable future. We may rely on contract manufacturers to produce sufficient quantities
of our product candidates necessary for any pre-clinical or clinical testing we undertake in the future. Such contract manufacturers
may be the sole source of production and they may have limited experience at manufacturing, formulating, analyzing, filling and
finishing our types of product candidates.

We also intend to
rely on third parties to supply the requisite materials needed for the manufacturing of our active pharmaceutical ingredients,
or API. There may be a limited supply of these requisite materials. We might not be able to enter into agreements that provide
us assurance of availability of such components in the future from any supplier. Our potential suppliers may not be able to adequately
supply us with the components necessary to successfully conduct our pre-clinical and clinical trials or to commercialize our product
candidates. If we cannot acquire an acceptable supply of the requisite materials to produce our product candidates, we will not
be able to complete pre-clinical and clinical trials and will not be able to market or commercialize our product candidates.

We depend on
key members of our management and key consultants and will need to add and retain additional leading experts. Failure to retain
our management and consulting team and add additional leading experts could have a material adverse effect on our business, results
of operations or financial condition.

We are highly dependent
on our executive officers and other key management and technical personnel. Our failure to retain our Chief Executive Officer,
Pnina Fishman, Ph.D., who has developed much of the technology we utilize today, or any other key management and technical personnel,
could have a material adverse effect on our future operations. Our success is also dependent on our ability to attract, retain
and motivate highly trained technical, and management personnel, among others, to continue the development and commercialization
of our current and future products.

Our success also depends
on our ability to attract, retain and motivate personnel required for the development, maintenance and expansion of our activities.
There can be no assurance that we will be able to retain our existing personnel or attract additional qualified employees or consultants.
The loss of key personnel or the inability to hire and retain additional qualified personnel in the future could have a material
adverse effect on our business, financial condition and results of operation.

We face significant
competition and continuous technological change, and developments by competitors may render our products or technologies obsolete
or non-competitive. If we cannot successfully compete with new or existing products, our marketing and sales will suffer and we
may not ever be profitable.

We will compete against
fully integrated pharmaceutical and biotechnology companies and smaller companies that are collaborating with larger 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 collaborative 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:

undertaking pre-clinical
testing and human clinical trials;

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

formulating and
manufacturing drugs; and

launching, marketing
and selling drugs.

If our competitors
develop and commercialize products faster than we do, or develop and commercialize products that are superior to our product candidates,
our commercial opportunities will be reduced or eliminated. The extent to which any of our product candidates achieve 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 include large integrated
pharmaceutical companies, biotechnology companies that currently have drug and target discovery efforts, universities, and public
and private research institutions. Almost all of these entities have substantially greater research and development capabilities
and financial, scientific, manufacturing, marketing and sales resources than we do. These organizations also compete with us to:

attract parties
for acquisitions, joint ventures or other collaborations;

license proprietary
technology that is competitive with the technology we are developing;

attract funding;
and

attract and hire
scientific talent and other qualified personnel.

Our competitors may
succeed in developing and commercializing products earlier and obtaining regulatory approvals from the FDA or foreign regulators
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 candidates or technologies obsolete or non-competitive. If we cannot successfully compete with new or existing
products, our marketing and sales will suffer and we may not ever be profitable.

Our competitors currently
include companies with marketed products and/or an advanced research and development pipeline. The major competitors in the arthritis
and psoriasis therapeutic field include Amgen, J&J, Pfizer, Novartis, Abbvie, Eli Lilly, Bristol-Myers, and more. Competitors
in the HCC field include companies such as Bayer, Exelixis, Merck, and Bristol-Myers. Competitors in the NASH field include companies
such as Gilead, Genfit, Galmed, Allergan, Intercept, and Madrigal. Competitors in the erectile dysfunction field include Pfizer,
Eli Lilly and Bayer.

Moreover, several
companies have reported the commencement of research projects related to the A3AR. Such companies include CV Therapeutics Inc.
(which was acquired by Gilead), King Pharmaceuticals R&D Inv. (which was acquired by Pfizer), Hoechst Marion Roussel Inc.
(which was acquired by Aventis), Novo Nordisk A/S and Inotek Pharmaceuticals. However, to the best of our knowledge, there is
no approved drug currently on the market, which is similar to our A3AR agonists, nor are we aware of any allosteric modulator
in the A3AR product pipeline similar to our allosteric modulator with respect to chemical profile and mechanism of action.

We may suffer
losses from product liability claims if our product candidates cause harm to patients.

Any of our product
candidates could cause adverse events. Although data from clinical trials to date encompassing more than 1,200 humans dosed with
piclidenoson indicate that Piclidenoson has a good safety profile and is well tolerated at doses up to 4.0 mg administered twice
daily for up to 12-48 weeks, there were incidences (albeit less than or equal to 5%) of adverse events in eight completed and
fully analyzed trials in inflammatory disease. Such adverse events included nausea, diarrhea, abdominal pain, vomiting, constipation,
common bacterial and viral syndromes (such as tonsillitis, otitis and respiratory and urinary tract infections), abdominal pain,
vomiting, myalgia, arthralgia, dizziness, headache and pruritus. We observed an even lower incidence (less than or equal to 2%)
of serious adverse events, although only one type of event was reported in more than a single Piclidenoson-treated subject, which
was exacerbation of chronic obstructive lung disease reported in two subjects. Notwithstanding the foregoing, the placebo group
in such studies had a higher incidence of overall adverse events than the pooled Piclidenoson groups. In addition, in normal volunteers,
Piclidenoson at doses 3-4-fold higher than those to be used in therapeutic trials, but not at therapeutic doses, was associated
with prolongation of the electrocardiographic QT intervals. No new safety concerns have been identified and no novel or unexpected
safety concerns have appeared over 48 weeks of treatment in more recent trials.

There is also a risk
that certain 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 our product candidates ineffective or harmful in some patients, and our sales would suffer, materially
adversely affecting our business, financial condition and results of operations.

In addition, potential
adverse events caused by our 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 our
product candidates. 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. 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 our product candidates. 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.

Our product
candidates will remain subject to ongoing regulatory requirements even if they receive marketing approval, and if we fail to comply
with these requirements, we could lose these approvals, and the sales of any approved commercial products could be suspended.

Even if we receive
regulatory approval to market a particular product candidate, the product will remain subject to extensive regulatory requirements,
including requirements relating to manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion,
distribution and recordkeeping. Even if regulatory approval of a product is granted, the approval may be subject to limitations
on the uses for which the product 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, which could negatively impact us or our collaboration
partners by reducing revenues or increasing expenses, and cause the approved product candidate 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 patients after approval than during clinical trials, side effects and other problems may be observed 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 could result in limitations on the use of or withdrawal of any approved products
from the marketplace. Absence of long-term safety data may also limit the approved uses of our products, if any. If we fail to
comply with the regulatory requirements of the FDA and other applicable U.S. and foreign regulatory authorities, or previously
unknown problems with any approved commercial products, manufacturers or manufacturing processes are discovered, we could be subject
to administrative or judicially imposed sanctions or other setbacks, including the following:

Restrictions on
the products, manufacturers or manufacturing process;

Civil or criminal
penalties, fines and 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 products or supplements to approved applications.

If we or our collaborators
are slow or unable to adapt to changes in existing regulatory requirements or adoption of new regulatory requirements or policies,
marketing approval for our product candidates may be lost or cease to be achievable, resulting in decreased revenue from milestones,
product sales or royalties, which would have a material adverse effect on our results of operations.

We deal with
hazardous materials and must comply with environmental, health and safety laws and regulations, which can be expensive and restrict
how we do business.

Our activities and
those of our third-party manufacturers on our behalf involve the controlled storage, use and disposal of hazardous materials,
including corrosive, explosive and flammable chemicals and other hazardous compounds. We and our manufacturers are subject to
U.S. federal, state, and local, and Israeli and other foreign laws and regulations governing the use, manufacture, storage, handling
and disposal of these hazardous materials. Although we believe that our safety procedures for handling and disposing of these
materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination
or injury from these materials. In addition, if we develop a manufacturing capacity, we may incur substantial costs to comply
with environmental regulations and would be subject to the risk of accidental contamination or injury from the use of hazardous
materials in our manufacturing process.

In the event of an
accident, government authorities may curtail our use of these materials and interrupt our business operations. In addition, we
could be liable for any civil damages that result, which may exceed our financial resources and may seriously harm our business.
Although our Israeli insurance program covers certain unforeseen sudden pollutions, we do not maintain a separate insurance policy
for any of the foregoing types of risks. In addition, although the general liability section of our life sciences policy covers
certain unforeseen, sudden environmental issues, pollution in the United States and Canada is excluded from the policy. In the
event of environmental discharge or contamination or an accident, we may be held liable for any resulting damages, and any liability
could exceed our resources. In addition, we may be subject to liability and may be required to comply with new or existing environmental
laws regulating pharmaceuticals or other medical products in the environment.

Our business
and operations may be materially adversely affected in the event of computer system failures or security breaches.

Despite the implementation
of security measures, our internal computer systems, and those of our contract research organizations, or CROs, and other third
parties on which we rely, are vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, natural disasters,
fire, terrorism, war, and telecommunication and electrical failures.  If such an event were to occur and interrupt our
operations, it could result in a material disruption of our drug development programs.  For example, the loss of clinical
trial data from ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly
increase our costs to recover or reproduce the data.  To the extent that any disruption or security breach results in
a loss of or damage to our data or applications, loss of trade secrets or inappropriate disclosure of confidential or proprietary
information, including protected health information or personal data of employees or former employees, access to our clinical
data, or disruption of the manufacturing process, we could incur liability and the further development of our drug candidates
could be delayed.  We may also be vulnerable to cyber-attacks by hackers or other malfeasance.  This type
of breach of our cybersecurity may compromise our confidential information and/or our financial information and adversely affect
our business or result in legal proceedings.  Further, these cybersecurity breaches may inflict reputational harm upon
us that may result in decreased market value and erode public trust.

We may not be
able to successfully grow and expand our business. 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 our 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 requires us to continue to expend funds to enhance our operational, financial and management controls,
reporting systems and procedures and to attract and retain sufficient numbers of 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 make available the products required to successfully commercialize our technology.
Failure to attract and retain sufficient numbers of 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 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.

We may not be able
to obtain insurance policies on terms affordable to us that would adequately insure our business and property against damage,
loss or claims by third parties. To the extent our business or property suffers any damages, losses or claims by third parties,
which are not covered or adequately covered by insurance, our financial condition may be materially adversely affected.

We may be unable to
maintain sufficient insurance as a public company to cover liability claims made against our officers and directors. Our insurance
costs have increased for directors’ and officers’ liability insurance, and we may be required to incur further substantial
increased costs to maintain the same or similar coverage or be forced to accept reduced coverage in future. 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
us.

Our cannabinoid
initiative is uncertain and may not yield commercial results and is subject to significant regulatory risks.

On September 10, 2019, we entered into a collaboration agreement with Univo, to identify and co-develop
specific formulations of cannabis components for the treatment of cancer, inflammatory, autoimmune, and metabolic diseases. While
we believe there are substantial business opportunities for us in this field, there can be no assurance that our activities will
be successful, or that any research and development and product testing efforts will result in commercially saleable products,
or that the market will accept or respond positively to our products. In addition, our current and potential involvement in
cannabis-related activity, as a result of our collaboration with Univo, may expose us to legal and reputational risks. Such risks
include:

Medical-use cannabis
remains illegal under U.S. federal law, and therefore, strict enforcement of federal laws regarding medical-use cannabis would
likely result in our inability to market any products resulting from the co-development agreement with Univo;
FDA has not approved
a marketing application for the treatment of any disease or condition;
Changes in laws,
regulations and guidelines related to cannabis may result in significant additional compliance costs for us or limit our ability
to operate in certain jurisdictions;

Certain banks will
not accept deposits from or provide other bank services to businesses involved with cannabis and U.S. federal money
laundering laws make it a federal crime to engage in financial transactions involving the proceeds of some form of
unlawful activity; and

Third parties with
whom we do business may perceive that they are exposed to reputational risk as a result of our cannabis-related business activities
and may ultimately elect not to do business with us.

Complying with laws
and regulations relating to cannabinoids is evolving, complex and expensive, and may divert management’s attention and resources
from other aspects of our business. Failure to maintain compliance with such laws and regulations may result in regulatory action
that could have a material adverse effect on our business, results of operations and financial condition. The DEA, FDA or state
agencies may seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to revoke those registrations.
In certain circumstances, violations could lead to criminal proceedings.

Risks Related to Our Intellectual Property

The termination
of the National Institute of Health, or NIH, license agreement between us and NIH due to patent expiration may diminish our proprietary
position.

As a result of the
termination of the NIH license agreement between us and NIH in June 2015 due to patent expiration, we no longer hold rights to
a family of composition of matter patents relating to Piclidenoson that were licensed from NIH. Nevertheless, because Piclidenoson
may be a new chemical entity, or NCE, following approval of an NDA, we, if we are the first applicant to obtain NDA approval,
may be entitled to five years of data exclusivity in the United States with respect to such NCEs. Analogous data and market exclusivity
provisions, of varying duration, may be available in Europe and other foreign jurisdictions. We also have rights under our pharmaceutical
use issued patents with respect to Piclidenoson and Namodenoson, which provide patent exclusivity within our field of activity
until the mid- to late-2020s. While we believe that we may be able to protect our exclusivity through such use patent portfolio
and such period of exclusivity, the lack of composition of matter patent protection may diminish our ability to maintain a proprietary
position for our intended uses of Piclidenoson. Moreover, we cannot be certain that we will be the first applicant to obtain an
FDA approval for any indication of Piclidenoson and we cannot be certain that we will be entitled to NCE exclusivity. In addition,
we have discontinued the prosecution of a family of pending patent applications under joint ownership of us and NIH pertaining
to the use of A3AR agonists for the treatment of uveitis. Such diminution of our proprietary position could have a material adverse
effect on our business, results of operation and financial condition.

We license from
Leiden University intellectual property, which protects certain small molecules which target the A3AR, in furtherance of our platform
technology, and we could lose our rights to this license if a dispute with Leiden University arises or if we fail to comply with
the financial and other terms of the license.

We have licensed intellectual
property from Leiden University pursuant to a license agreement. The license agreement imposes certain payment, reporting, confidentiality
and other obligations on us. In the event that we were to breach any of the obligations and fail to cure, Leiden University would
have the right to terminate the license agreement. In addition, Leiden University has the right to terminate the license agreement
upon our bankruptcy, insolvency, or receivership. If any dispute arises with respect to our arrangements with Leiden University,
such dispute may disrupt our operations and may have a material adverse impact on us if resolved in a manner that is unfavorable
to us.

The failure
to obtain or maintain patents, licensing agreements, including our current licensing agreements, and other intellectual property
could impact our ability to compete effectively.

To compete effectively,
we need to develop and maintain a proprietary position with regard to our own technologies, intellectual property, licensing agreements,
product candidates and business. Legal standards relating to the validity and scope of claims in the biotechnology and biopharmaceutical
fields are still evolving. Therefore, the degree of future protection for our proprietary rights in our core technologies and
any products that might be made using these technologies is also uncertain. The risks and uncertainties that we face with respect
to our patents and other proprietary rights include the following:

while the patents
we license have been issued, the pending patent applications we have filed may not result in issued patents or may take longer
than we expect to result in issued patents;

we may be subject
to interference proceedings;

we may be subject
to opposition 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;

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

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

enforcement of patents
is complex, uncertain and expensive.

If patent rights covering
our products 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, or the USPTO, or foreign patent officers
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. Thus, any patents we own or license from or to third parties may not provide any protection
against our competitors.

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 will
give us adequate protection from competing products. For example, issued patents, including the patents licensed by us, may be
circumvented or challenged, declared invalid or unenforceable, or narrowed in scope. 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.

It is also possible
that others may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses
requiring the payment of significant fees or royalties in order to enable us to conduct our business. 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.

In addition to patents
and patent applications, we depend upon trade secrets and proprietary know-how to protect our proprietary technology. We require
our employees, consultants, advisors and collaborators to enter into confidentiality agreements that prohibit the disclosure of
confidential information to any other parties. We 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 trade secrets,
know-how or other proprietary information in the event of any unauthorized use or disclosure.

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 were 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. Our ability to enforce our patent protection could be limited by our financial resources, and may be subject
to lengthy delays. If we are unable to effectively enforce our proprietary rights, or if we are found to infringe the rights of
others, we may be in breach of our License Agreement.

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 future products. Such lawsuits are expensive and would consume
time and other resources. There is a risk that the court will decide that we are infringing the third party’s patents and
will order us to stop the activities claimed by the patents, redesign our products or processes to avoid infringement or obtain
licenses (which may not be available on commercially reasonable terms). In addition, there is a risk that a court will order us
to pay the other party damages for having infringed their patents.

Moreover, 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. In addition,
third parties may, in the future, assert other intellectual property infringement claims against us with respect to our product
candidates, technologies or other matters.

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 obtain these types of agreements from our contractors,
consultants, advisors and research collaborators, 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 our products. 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. 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 trade secrets
or proprietary know-how will otherwise become known; or

our competitors
will independently develop similar technology or proprietary information.

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 is different than in the United States. Further, the laws of some foreign countries 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.

Although most jurisdictions
in which we have applied for, intend to apply for, or have been issued patents have patent protection laws similar to those of
the United States, some of them do not. For example, we expect to do business in Brazil and India in the future. However, the
Brazilian drug regulatory agency, ENVISA, has the authority to nullify patents on the basis of its perceived public interest and
the Indian patent law does not allow patent protection for new uses of pharmaceuticals (many of our current patent applications
are of such nature). Additionally, due to uncertainty in patent protection law, we have not filed applications in many countries
where significant markets exist, including Indonesia, Pakistan, Russia, African countries and Taiwan.

We may be unable
to protect the intellectual property rights of the third parties from whom we license certain of our intellectual property or
with whom we have entered into other strategic relationships.

Certain of our intellectual
property rights are currently licensed from Leiden University, and, in the future, we intend to continue to license intellectual
property from Leiden University and/or other universities and/or strategic partners. Such third parties may determine not to protect
the intellectual property rights that we license from them and we may be unable to defend such intellectual property rights on
our own or we may have to undertake costly litigation to defend the intellectual property rights of such third parties. There
can be no assurances that we will continue to have proprietary rights to any of the intellectual property that we license from
such third parties or otherwise have the right to use through similar strategic relationships. Any loss or limitations on use
with respect to our right to use such intellectual property licensed from third parties or otherwise obtained from third parties
with whom we have entered into strategic relationships could have a material adverse effect on our business, results of operations
and financial condition.

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 certain key consultants, or our employment and consulting agreements contain
non-competition provisions. These agreements, to the extent they are in place and in effect, prohibit our employees and certain
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.

In addition, Chapter
8 to the Israeli Patents Law, 5727-1967, or the Patents Law, deals with inventions made in the course of an employee’s service
and during his or her term of employment, whether or not the invention is patentable, or service inventions. Section 134 of the
Patents Law provides that if there is no agreement that explicitly determines whether the employee is entitled to compensation
for the service inventions and the extent and terms of such compensation, such determination will be made by the Compensation
and Rewards Committee, a statutory committee of the Israeli Patents Office. Although our employees have agreed to assign to us
service invention rights, we may face claims demanding remuneration in consideration for assigned inventions. As a consequence
of such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be
forced to litigate such claims, which could negatively affect our business.

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 our 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; and

We may not develop
additional proprietary technologies that are patentable.

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

We may be subject
to claims that former employees, collaborators or other third parties 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 are involved in developing our product candidates. 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.

Risks Related to Our Industry

We are subject
to government regulations and we may experience delays in obtaining required regulatory approvals in the United States to market
our proposed product candidates.

Various aspects of
our operations are subject to federal, state or local laws, and rules and regulations, any of which may change from time to time.
Costs arising out of any regulatory developments could be time-consuming and expensive and could divert management resources and
attention and, consequently, could adversely affect our business operations and financial performance.

Delays in regulatory
approval, limitations in regulatory approval and withdrawals of regulatory approval may have a material adverse effect on us.
If we experience significant delays in testing or receiving approvals or sign-offs to conduct clinical trials, our product development
costs, or our ability to license product candidates, will increase. If the FDA grants regulatory approval to market a product,
this approval will be limited to those disease states and conditions and populations for which the product has demonstrated, through
clinical trials, to be safe and effective. Any product approvals that we receive in the future could also include significant
restrictions on the use or marketing of our products. Product approvals, if granted, can be withdrawn for failure to comply with
regulatory requirements or upon the occurrence of adverse events following commercial introduction of the products. Failure to
comply with applicable FDA or other applicable regulatory requirements may result in criminal prosecution, civil penalties, recall
or seizure of products, total or partial suspension of production or injunction, as well as other regulatory action against our
product candidates or us. If approval is withdrawn for a product, or if a product were seized or recalled, we would be unable
to sell or license that product and our revenues would suffer. In addition, outside the United States, our ability to market any
of our potential products is contingent upon receiving market application authorizations from the appropriate regulatory authorities
and these foreign regulatory approval processes include all of the risks associated with the FDA approval process described above.

We expect the
healthcare industry to face increased limitations on reimbursement as a result of healthcare reform, which could adversely affect
third-party coverage of our products and how much or under what circumstances healthcare providers will prescribe or administer
our products.

In both the United
States and other countries, sales of our products will depend in part upon the availability of reimbursement from third-party
payors, which include governmental authorities, managed-care organizations and other private-health insurers. Third-party payors
are increasingly challenging the price and examining the cost effectiveness of medical products and services.

Increasing expenditures
for healthcare have been the subject of considerable public attention in the United States. Both private and government entities
are seeking ways to reduce or contain healthcare costs. Numerous proposals that would effect changes in the U.S. healthcare system
have been introduced or proposed in Congress and in some state legislatures, including reducing reimbursement for prescription
products and reducing the levels at which consumers and healthcare providers are reimbursed for purchases of pharmaceutical products.

In 2010, the U.S.
Congress enacted the Patient Protection and Affordable Care Act of 2010, or the Affordable Care Act. The Affordable Care Act seeks
to reduce the federal deficit and the rate of growth in healthcare spending through, among other things, stronger prevention and
wellness measures, increased access to primary care, changes in healthcare delivery systems and the creation of health insurance
exchanges. Enrollment in the health insurance exchanges began in October 2013. The Affordable Care Act requires the pharmaceutical
industry to share in the costs of reform, by, among other things, increasing Medicaid rebates and expanding Medicaid rebates to
cover Medicaid managed-care programs. Other components of healthcare reform include funding of pharmaceutical costs for Medicare
patients in excess of the prescription drug coverage limit and below the catastrophic coverage threshold. Under the Affordable
Care Act, pharmaceutical companies are now obligated to fund 50% of the patient obligation for branded prescription pharmaceuticals
in this gap, or “donut hole.”

There have been judicial
and congressional challenges to the Affordable Care Act, as well as efforts by the Trump Administration to repeal or replace certain
aspects of the Affordable Care Act. Since January 2017, President Trump has signed two Executive Orders and other directives designed
to delay the implementation of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements
for health insurance mandated by the Affordable Care Act. However, to date, the Executive Orders have had limited effect and the
Congressional activities have not resulted in the passage of a law. If a law is enacted, many if not all of the provisions of
the Affordable Care Act may no longer apply to prescription drugs. While we are unable to predict what changes may ultimately
be enacted, to the extent that future changes affect how any future products are paid for and reimbursed by government and private
payers, our business could be adversely impacted. On December 14, 2018, a federal district court in Texas ruled that the Affordable
Care Act is unconstitutional as a result of the Tax Cuts and Jobs Act and the federal income tax reform legislation previously
passed by Congress and signed by President Trump on December 22, 2017, that eliminated the individual mandate portion of the Affordable
Care Act. The case, Texas, et al, v. United States of America, et al., (N.D. Texas), is an outlier, but in 2019, the Fifth Circuit
Court of Appeals subsequently upheld the lower court decision, which was then appealed to the U.S. Supreme Court. The
U.S. Supreme Court declined to hear the appeal on an expedited basis and so no decision will be forthcoming until the next Supreme
Court term in late 2020 or early 2021. We are not able to state with any certainty what will be the impact of this court decision
on our business pending further court action and possible appeals.

In addition, other
legislative changes have been proposed and adopted since the Affordable Care Act was enacted. In August 2011, President Obama
signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction
to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction
of an amount greater than $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction
to several government programs. This includes aggregate reductions to Medicare payments to healthcare providers of up to 2.0%
per fiscal year, starting in 2013. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012,
which, among other things, reduced Medicare payments to several categories of healthcare providers and increased the statute of
limitations period for the government to recover overpayments to providers from three to five years. If we ever obtain regulatory
approval and commercialization of our products, these laws may result in additional reductions in Medicare and other healthcare
funding, which could have a material adverse effect on our customers and accordingly, our financial operations. Legislative and
regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical
products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or
interpretations will be changed, or what the impact of such changes on the marketing approvals of our products may be. Further,
the Deficit Reduction Act of 2010, directed Centers for Medicare & Medicaid Services, or CMS to contract a vendor to determine
“retail survey prices for covered outpatient drugs that represent a nationwide average of consumer purchase prices for such
drugs, net of all discounts and rebates (to the extent any information with respect to such discounts and rebates is available).”
This survey information can be used to determine the National Average Drug Acquisition Cost, or NADAC. Some states have indicated
that they will reimburse based on the NADAC and this can result in further reductions in the prices paid for various outpatient
drugs.

In the fourth quarter
of 2018, the Trump Administration announced initiatives that it asserted are intended to result in purportedly lower drug prices.
The first initiative, announced on October 15, 2018, involved the plan to a new federal regulation that would require pharmaceutical
manufacturers to disclose the list prices of their respective prescription drugs in their television advertisements for their
products if the list price is greater than $35. With respect to the second initiative, on October 25, 2018, the Centers for Medicaid
and Medicare Services gave Advance Notice of Proposed Rulemaking to propose the implementation of an “International Pricing
Index” model for Medicare Part B drugs and biologicals (single source drugs, biologicals and biosimilars). The Trump Administration
and the U.S. Congress have continued deliberations throughout 2019 and into 2020 on whether to implement the proposed rule which
has been subject to additional revisions to potentially increase the scope of its reach While these initiatives have not been
put into effect, we are not in a position to know at this time whether they will ever become law or what impact the enactment
either of these proposals would have on our business.

As part of its reform
of the 340B discount drug program, on October 31, 2018, the Health Resources and Services Administration, or HRSA, at the HHS,
issued a notice of proposed rulemaking to move up the effective date of a final rule that would give HHS authority to impose Civil
Monetary Penalties on pharmaceutical manufacturers who knowingly and intentionally charged a covered entity more than the statutorily
allowed ceiling price for a covered outpatient drug. The final rule is intended to encourage compliance by manufacturers in offering
the mandatory 340B ceiling purchase price to eligible purchasers, such as certain qualified health systems or individual hospitals.

Various states, such
as California, have also taken steps to consider and enact laws or regulations that are intended to increase the visibility of
the pricing of pharmaceutical products with the goal of reducing the prices at which we are able to sell our products. Because
these various actual and proposed legislative changes are intended to operate on a state-by-state level rather than a national
one, we cannot predict what the full effect of these legislative activities may be on our business in the future.

Although we cannot
predict the full effect on our business of the implementation of existing legislation, including the Affordable Care Act or the
enactment of additional legislation, we believe that legislation or regulations that reduce reimbursement for or restrict coverage
of our products could adversely affect how much or under what circumstances healthcare providers will prescribe or administer
our products. This could materially and adversely affect our business by reducing our ability to generate revenue, raise capital,
obtain additional collaborators and market our products, following marketing approval. In addition, we believe the increasing
emphasis on managed care in the United States has and will continue to put pressure on the price and usage of pharmaceutical products,
which may adversely impact any future product sales.

If we or any
of our independent contractors, consultants, collaborators, manufacturers, or service providers fail to comply with healthcare
and data privacy laws and regulations, we or they could be subject to enforcement actions, which could result in penalties and
affect our ability to develop, market and sell our product candidates and may harm our reputation.

We are or may in the
future be subject to federal, state, and foreign healthcare and data privacy laws and regulations pertaining to, among other things,
fraud and abuse of patients’ rights. These laws and regulations include:

The federal Anti-Kickback
Statute prohibits, among other things, knowingly and willfully soliciting, offering, receiving, or paying any remuneration,
directly or indirectly, in cash or in kind, to induce or reward purchasing, ordering or arranging for or recommending the
purchase or order of any item or service for which payment may be made, in whole or in part, under a federal healthcare program
such as Medicare and Medicaid. Liability may be established without a person or entity having actual knowledge of the federal
Anti-Kickback Statute or specific intent to violate it. This statute has been interpreted to apply broadly to arrangements
between pharmaceutical manufacturers on the one hand and prescribers, patients, purchasers and formulary managers on the other.
In addition, the Affordable Care Act amended the Social Security Act to provide that the U.S. 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 civil False Claims Act, or the FCA. A conviction for violation of the Anti-Kickback Statute
requires mandatory exclusion from participation in federal healthcare programs. Although there are a number of statutory exemptions
and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn
narrowly, and those activities may be subject to scrutiny or penalty if they do not qualify for an exemption or safe harbor;

The FCA prohibits,
among other things, knowingly presenting, or causing to be presented claims for payment of government funds that are false
or fraudulent, or knowingly making, using or causing to be made or used a false record or statement material to such a false
or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation
to pay money to the federal government. This statute also permits a private individual acting as a “whistleblower”
to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery.
The FCA prohibits anyone from knowingly presenting, conspiring to present, making a false statement in order to present, or
causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including
drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary
items or services.  This law also prohibits anyone from knowingly underpaying an obligation owed to a federal program.
Increasingly, U.S. federal agencies are requiring nonmonetary remedial measures, such as corporate integrity agreements in
FCA settlements. The U.S. Department of Justice announced in 2016 its intent to follow the “Yates Memo,” taking
a far more aggressive approach in pursuing individuals as FCA defendants in addition to the corporations. FCA liability is
potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties
of $5,500 to $11,000 per false claim or statement ($10,781 to $21,563 per false claim or statement for penalties assessed
after August 1, 2016 for violations occurring after November 2, 2015, and $10,957 to $21,916 per false claim or statement
for penalties assessed after February 3, 2017 for violations occurring after November 2, 2015). Government enforcement agencies
and private whistleblowers have investigated pharmaceutical companies for or asserted liability under the FCA for a variety
of alleged promotional and marketing activities, such as providing free product to customers with the expectation that the
customers would bill federal programs for the product; providing consulting fees and other benefits to physicians to induce
them to prescribe products; engaging in promotion for “off-label” uses; and submitting inflated best price information
to the Medicaid Rebate Program;

The federal False
Statements Statute prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any
materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing
the same to contain any materially false, fictitious or fraudulent statement or entry, in connection with the delivery of
or payment for healthcare benefits, items, or services;

The federal Civil
Monetary Penalties Law authorizes the imposition of substantial civil monetary penalties against an entity, such as a pharmaceutical
manufacturer, that engages in activities including, among others (1) knowingly presenting, or causing to be presented, a claim
for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) 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; (3) violations of the federal Anti-Kickback Statute; or (4) failing to report
and return a known overpayment;

The federal Health
Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for knowingly and willfully
executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying,
concealing or covering up a material fact or making any materially false statement 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;

HIPAA, as amended
by the Health Information Technology for Economic and Clinical Health Act, which imposes requirements on certain types of
people and entities relating to the privacy, security, and transmission of individually identifiable health information, and
requires notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable
health information;

The federal Physician
Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment
is available under Medicare, Medicaid, or the Children’s Health Insurance Program, to report annually to the Centers
for Medicare & Medicaid Services information related to payments and other transfers of value to physicians, other
healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and other healthcare
providers and their immediate family members, which is published in a searchable form on an annual basis;

State laws comparable
to each of the above federal laws, such as, for example, anti-kickback and false claims laws that may be broader in scope
and also apply to commercial insurers and other non-federal;

Payors requirements
for mandatory corporate regulatory compliance programs, and laws relating to patient data privacy and security. Other state
laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and
the relevant compliance guidance promulgated by the federal government; require drug manufacturers to report information related
to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state
and foreign laws govern the privacy and security of health information in some circumstances, many of which differ from each
other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and

In the European
Union, the General Data Protection Regulation, or the GDPR—Regulation EU 2016/679—which was adopted in May 2016
and has become applicable on May 25, 2018. The GDPR is further intended to harmonize data protection requirements across the
European Union member states by establishing new and expanded operational requirements for entities that collect, process
or use personal data generated in the European Union, including consent requirements for disclosing the way personal information
will be used, information retention requirements, and notification requirements in the event of a data breach.

If our operations
are found to be in violation of any such healthcare laws and regulations, we may be subject to penalties, including administrative,
civil and criminal penalties, monetary damages, disgorgement, imprisonment, the curtailment or restructuring of our operations,
loss of eligibility to obtain approvals from the FDA or foreign regulatory authorities, or exclusion from participation in government
contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, any of which could adversely
our financial results. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses
and could divert our management’s attention from the operation of our business, even if our defense is successful. In addition,
achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time and resources.

Our employees,
principal investigators, consultants, commercial partners or vendors may engage in misconduct or other improper activities, including
non-compliance with regulatory standards.

We are also exposed
to the risk of employees, independent contractors, principal investigators, consultants, commercial partners or vendors engaging
in fraud or other misconduct. Misconduct by employees, independent contractors, principal investigators, consultants, commercial
partners and vendors could include intentional failures to comply with EU regulations, to provide accurate information to the
EMA or EU Member States authorities or to comply with manufacturing or quality standards we have or will have established. In
particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations
intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices such as promotion of products by medical
practitioners. The EU Member States in which we operate have different statutory provisions regulating the cooperation of pharmaceutical
companies with healthcare professionals. In addition to these statutory provisions, codes of conduct issued by business associations
or other non-statutory standards may be applicable to our activities. Both statutory provisions and non-statutory codes or standards
restrict payments or other benefits provided to healthcare professionals, and in case of non-compliance, may result in severe
sanctions such as bans, administrative fines, criminal fines or even imprisonment. The advertising of medicinal products for human
use in the EU is regulated by Title VIII of European Directive 2001/83/EC. These provisions have been implemented into the law
of the EU member States. Such laws inter alia restrict or prohibit a wide range of pricing, discounting, marketing and promotion,
sales commission, customer incentive programs and other business arrangements. Misconduct could also involve the improper use
of information obtained in the course of clinical studies, which could result in regulatory sanctions and serious and irreparable
harm to our reputation.

This could also apply
with respect to data privacy. In the EU, the EU Directive 95/46/EEC was replaced by the GDPR on May 25, 2018. The GDPR as an EU
regulation does not have to be implemented into Member States’ national law, but applies directly in all Member States since
May 25, 2018. It applies to companies with an establishment in the European Economic Area (EEA) and to certain other companies
not in the EEA that offer or provide goods or services to individuals located in the EEA or monitor individuals located in the
EEA. The GDPR implements more stringent operational requirements for controllers of personal data, including, for example, expanded
disclosures about how personal information is to be used, limitations on retention of information, increased requirements pertaining
to health data and pseudonymized (i.e., key-coded) data, increased cyber security requirements, mandatory data breach notification
requirements and higher standards for controllers to demonstrate that they have obtained a valid legal basis for certain data
processing activities. The GDPR provides that EU Member States may continue to make their own further laws and regulations in
relation to the processing of genetic, biometric or health data, which could result in continued or new differences between Member
States, limit our ability to use and share personal data or could cause our costs to increase, and harm our business and financial
condition. We are also subject to evolving and strict rules on the transfer of personal data out of the European Union to the
United States. Further prospective revision of the Directive on privacy and electronic communications (Directive 2002/58/EC),
or ePrivacy Directive, may affect our marketing communications.

Our actual or alleged
failure to comply with this regulation, or to protect personal data, could result in enforcement actions and significant penalties
against us, which could result in negative publicity, increase our operating costs, subject us to claims or other remedies and
have a material adverse effect on our business, financial condition, and results of operations. It is not always possible to identify
and deter misconduct by employees or other parties. The precautions we take to detect and prevent such activity may not protect
us from legal or regulatory action resulting from a failure to comply with applicable laws or regulations. Misconduct by our employees,
principal investigators, consultants, commercial partners or vendors could result in significant financial penalties, criminal
sanctions, civil law claims and/or negative media coverage, and thus have a material adverse effect on our business, including
through the imposition of significant fines or other sanctions, and our reputation. In particular, failure to comply with EU laws,
including failure under the GDPR, ePrivacy Directive and other laws relating to the security of personal data may result in fines
up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, if greater, and other
administrative penalties including criminal liability, which may be onerous and adversely affect our business, financial condition,
results of operations and prospects. Failure to comply with the GDPR and related laws may also give risk to increase risk of private
actions, including a new form of class action that is available under the GDPR.

Risks Related to Our Operations in Israel

We conduct our
operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel
and its region.

Our headquarters,
all of our operations and some of our suppliers and third party contractors are located in central Israel and our key employees,
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. Since the establishment of the State of Israel in 1948, a number
of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption
or curtailment of trade within Israel or between Israel and its trading partners could adversely affect our operations and results
of operations and could make it more difficult for us to raise capital. During the winter of 2008, winter of 2012 and the summer
of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political party operating in the Gaza Strip,
and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group
and political party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor
countries. In addition, recent conflicts involved missile strikes against civilian targets in various parts of Israel, and negatively
affected business conditions in Israel. Recent political uprisings and social unrest in various countries in the Middle East and
North Africa are affecting the political stability of those countries. This instability may lead to deterioration of the political
relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the
potential for armed conflict. Any armed conflicts, terrorist activities or political instability in the region could adversely
affect business conditions and could harm our results of operations. For example, any major escalation in hostilities in the region
could result in a portion of our employees and service providers being called up to perform military duty for an extended period
of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension,
forcing us to make alternative arrangements when necessary. 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. Any future deterioration in the political
and security situation in Israel will negatively impact our business.

Our commercial insurance
does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Although
the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts
of war, we cannot assure you that this government coverage will be maintained. Any losses or damages incurred by us could have
a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively
affect business conditions and could harm our results of operations.

Further, in the past,
the State of Israel and Israeli companies have been subjected to an economic boycott. 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,
including Motti Farbstein, our Chief Operating and Financial Officer, are obligated to perform one month, and in some cases more,
of annual military reserve duty until they reach the age of 40 (or older, for reservists with 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 Motti Farbstein. Such disruption could materially
adversely affect our business, financial condition and results of operations.

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

From our inception
through January 1, 2018, our functional and presentation currency was the NIS. Management conducted a review of the functional
currency and decided to change its functional and presentation currency to U.S. dollars from the NIS effective January 1, 2018.
These changes were based on an assessment by our management that U.S. dollars is the primary currency of the economic environment
in which we operate. Part of our expenses are payable in U.S. dollars or in Euros as well as the revenues from our licensing arrangements
that are payable in U.S. dollars and Canadian dollars, we expect our revenues from future licensing arrangements to be denominated
in U.S. dollars or in Euros. To date, we have not engaged in hedging transactions. Although the Israeli rate of inflation has
not had a material adverse effect on our financial condition during 2017, 2018, or 2019 to date, we may, in the future, decide
to enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates
of the currencies mentioned above in relation to U.S. dollars. These measures, however, may not adequately protect us from material
adverse effects.

It may be difficult
to enforce a U.S. judgment against us and our officers and directors named in this prospectus in Israel or the United States,
or to serve process on our officers and directors.

We are incorporated
in Israel. All of our executive officers and directors listed in this prospectus reside outside of the United States, and all
of our assets and most of the assets of our executive officers and directors are located outside of the United States. Therefore,
a judgment obtained against us or most of our executive officers and all of our directors 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. It also may be difficult for you 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.

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

We are incorporated
under Israeli law. The rights and responsibilities of the holders of our shareholders are governed by our Amended and Restated
Articles of Association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities
of shareholders in typical U.S.-based corporations. In particular, a shareholder of an Israeli company has a duty to act in good
faith toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things,
in voting at the general meeting of shareholders on matters such as amendments to a company’s articles of association, increases
in a company’s authorized share capital, mergers and acquisitions and interested party transactions requiring shareholder
approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or to
appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company.
There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders’
actions. These provisions may be interpreted to impose additional obligations and liabilities of our shareholders that are not
typically imposed on shareholders of U.S. corporations.

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, 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, pursuant to an amendment to the Companies Law, 5759-1999, as amended, or the Israeli
Companies Law, effective as of May 15, 2011, 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 our
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).

Furthermore, Israeli
tax considerations may make potential transactions unappealing to us or to 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. See “Description of the Offered Securities—Articles of Association.”

Risks Related to
this Offering and Ownership of Our ADSs or Warrants

Our management
team will have immediate and broad discretion over the use of the net proceeds from this offering and may not use them effectively.

We currently intend
to use the net proceeds from this offering for working capital and general corporate purposes, including research and development,
clinical trials and general and administrative expenses. See “Use of Proceeds.” However, our management will have
broad discretion in the application of the net proceeds. Our shareholders may not agree with the manner in which our management
chooses to allocate the net proceeds from this offering. The failure by our management to apply these funds effectively could
have a material adverse effect on our business, financial condition and results of operation. Pending their use, we may invest
the net proceeds from this offering in a manner that does not produce income. The decisions made by our management may not result
in positive returns on your investment and you will not have an opportunity to evaluate the economic, financial or other information
upon which our management bases its decisions.

You will experience
immediate dilution in book value of any ADSs you purchase
.

Because the price
per ADS being offered is substantially higher than our net tangible book value per ADS, you will suffer substantial dilution in
the net tangible book value of any ADSs you purchase in this offering. Therefore, if you purchase ADSs in this offering, you will
suffer immediate and substantial dilution of our as adjusted net tangible book value. To the extent outstanding options, warrants
or offered warrants are exercised, you will incur further dilution. See “Dilution” on page 34 for a more detailed
discussion of the dilution you will incur in connection with this offering.

ADSs and Warrants
representing a substantial percentage of our outstanding shares may be sold in this offering, which could cause the price of our
ADSs and ordinary shares
to decline.

Pursuant to this offering,
we may sell                   ADSs representing                        ordinary
shares (assuming no sale of Pre-funded Units), or approximately                  
%, of our outstanding ordinary shares as of                  ,
2020. A 100,000 Unit increase (decrease) in the number of Units offered by us would increase (decrease) the percentage of shares
outstanding after this offering by approximately                  %. In addition, the investors in this offering will be issued Warrants to purchase
up to            ADSs representing                  ordinary
shares. This sale and any future sales of a substantial number of ADSs in the public market, or the perception that such sales
may occur, could materially adversely affect the price of our ADSs and ordinary shares. We cannot predict the effect, if any,
that market sales of those ADSs or the availability of those ADSs for sale will have on the market price of our ADSs and ordinary
shares.

There is no
public market for the Warrants and Pre-Funded Warrants being offered by us in this offering.

We do not intend to
apply to list the Warrants and Pre-funded Warrants on any national securities exchange or other nationally recognized trading
system, including NYSE American. Without an active market, the liquidity of the Warrants and Pre-funded Warrants will be limited.

We do not know
whether a market for our securities will be sustained or what the trading price of our securities will be and as a result it may
be difficult for you to sell our securities held by you.

Although our ADSs
now trade on NYSE American, an active trading market for the ADSs may not be sustained. It may be difficult for you to sell your
ADSs, Pre-funded Warrants or Warrants without depressing the market price for the ADSs. As a result of these and other factors,
you may not be able to sell your ADSs, Pre-funded Warrants or Warrants. Further, an inactive market may also impair our ability
to raise capital by issuing securities and may impair our ability to enter into strategic partnerships or acquire companies or
products by using our equity as consideration.

The Warrants
and Pre-funded Warrants are speculative in nature.

The Warrants and Pre-funded
Warrants offered by us in this offering do not confer any rights of ownership of ordinary shares or ADSs on their holders, such
as voting rights or the right to receive dividends, but only represent the right to acquire ADSs at a fixed price, and in the
case of the Warrants, for a limited period of time. Specifically, commencing on the date of issuance, holders of the Warrants
may exercise their right to acquire ADSs and pay an assumed exercise price per ADS of $ ,
equal to up to                   % of
the per ADS public offering price of the ADSs, subject to adjustment upon certain events, prior to            years
from the date of issuance, after which date any unexercised warrants will expire and have no further value. Specifically, commencing
on the date of issuance, holders of the Pre-funded Warrants may exercise their right to acquire ADSs and pay an exercise price
per ADS of $0.01, subject to adjustment upon certain events.

Holders of our
Warrants or Pre-funded Warrants will have no rights as shareholders until such holders exercise their Warrants or Pre-funded Warrants
and acquire our ADSs.

Until holders of the
Warrants or Pre-funded Warrants acquire our ADSs upon exercise of the Warrants or Pre-funded Warrants, holders of the Warrants
or Pre-funded Warrants will have no rights with respect to our ADSs or ordinary shares underlying such warrants. Upon exercise
of the Warrants or Pre-funded Warrants, the holders thereof will be entitled to exercise the rights of a holder of ADSs only as
to matters for which the record date occurs after the exercise date.

There can be
no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes in 2020 or
in any subsequent year. If we are a PFIC, there may be negative tax consequences for U.S. taxpayers that are holders of our ordinary
shares, ADSs, Warrants, or Pre-funded Warrants.

We will be treated
as a PFIC for U.S. federal income tax purposes in any taxable year in which either (i) at least 75% of our gross income is “passive
income” or (ii) on average at least 50% of our assets by value produce passive income or are held for the production of
passive income. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties,
rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive
income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in
a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of
each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

Based on our analysis
of our income, assets, and operations, we do not believe that we were a PFIC for 2019. Because the PFIC determination is highly
fact intensive, there can be no assurance that we will not be a PFIC in 2020 or in any other taxable year. If we were to be characterized
as a PFIC for U.S. federal income tax purposes in any taxable year during which a U.S. shareholder owns our ordinary shares,ADSs,
Warrants, or Pre-funded Warrants, then “excess distributions” to such U.S. shareholder, and any gain realized on the
sale or other disposition of our ordinary shares,ADSs, Warrants, or Pre-funded Warrants, as applicable, will be subject to special
rules. Under these rules: (i) the excess distribution or gain would be allocated ratably over the U.S. shareholder’s holding
period for the ordinary shares (or ADSs, Warrants, or Pre-funded Warrants, as the case may be); (ii) the amount allocated to the
current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as
ordinary income; and (iii) the amount allocated to each of the other taxable years would be subject to tax at the highest rate
of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would
be imposed with respect to the resulting tax attributable to each such other taxable year. Certain of the adverse consequences
of PFIC status can be mitigated if a U.S. shareholder makes an election to treat us as a “qualified electing fund,”
or QEF, or makes a “mark-to-market” election. A QEF election is unavailable with respect to our Warrants, and a mark-to-market
election is unavailable with respect to our Warrants and Pre-funded Warrants. In addition, if the U.S. Internal Revenue Service,
or IRS, determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too
late for a U.S. shareholder to make a timely QEF or mark-to-market election. U.S. shareholders who hold our ordinary shares,ADSs,
Warrants or Pre-funded Warrants during a period when we are a PFIC will be subject to the foregoing rules, even if we cease to
be a PFIC in subsequent years, subject to exceptions for U.S. shareholders who made a timely QEF or mark-to-market election (to
the extent available). A U.S. shareholder can make a QEF election by completing the relevant portions of and filing IRS Form 8621
in accordance with the instructions thereto. Upon request, we intend to annually furnish U.S. shareholders with information needed
in order to complete IRS Form 8621 (which form would be required to be filed with the IRS on an annual basis by the U.S. shareholder)
and to make and maintain a valid QEF election for any year in which we or any of our subsidiaries that we control is a PFIC.

Provisions of
our charter documents and Israeli law may discourage, 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.

Provisions
in articles of association may discourage, delay, prevent or otherwise impede a merger, acquisition or other change in control
of us that shareholders may consider favorable, including transactions in which they might otherwise receive a premium for their
ADSs. We propose at a special meeting of shareholders to be held on February 13, 2020 to amend our articles of association to
establish a staggered Board of Directors, which will divide the board into three groups, with directors in each group
serving a three-year term. The existence of a staggered board can make it more difficult for shareholders to replace
or remove incumbent members of our Board of Directors. As such, these provisions could also limit the price that investors might
be willing to pay in the future for our ADSs, thereby depressing the market price of our ADSs. In addition, because our Board
of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts
by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members
of our Board of Directors.

In addition, 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, 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, pursuant to an amendment to the Companies Law, 5759-1999, as amended, or the Israeli
Companies Law, effective as of May 15, 2011, 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 our
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).

Furthermore, Israeli
tax considerations may make potential transactions unappealing to us or to 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.

Our business could be negatively
impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election of directors
or other matters.

Our business could
be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2019,
an activist shareholder sought to make changes to our Board of Directors, among other matters, which ultimately resulted in us
entering into a settlement agreement with the shareholder, and for which considerable costs were incurred and absorbed significant
time and attention by management and the Board of Directors. See “Prospectus Summary – Recent Developments”. A future proxy
contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matters would
most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention
by management and our Board of Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder
activism could interfere with our ability to execute our strategic plan, give rise to perceived uncertainties as to our future
direction, result in the loss of potential business opportunities or make it more difficult to attract and retain qualified personnel,
any of which could materially and adversely affect our business and operating results.

Issuance of
additional equity securities may adversely affect the market price of our ADSs or ordinary shares.

We are currently authorized
to issue 500,000,000 ordinary shares. As of January 23, 2020, we had 142,931,223 ordinary shares issued and outstanding and we
had no preferred shares outstanding. As of January 23, 2020, we also had warrants to purchase 75,205,306 ordinary shares and options
to purchase 2,673,400 ordinary shares outstanding, of which options to purchase 1,338,090 ordinary shares are currently fully
vested or vest within the next 60 days.

To the extent that
ADSs or ordinary shares are issued or options and warrants are exercised, holders of our ADSs and our ordinary shares will experience
dilution. In addition, in the event of any future issuances of equity securities or securities convertible into or exchangeable
for ADSs or ordinary shares, holders of our ADSs or our ordinary shares may experience dilution. We also consider from time to
time various strategic alternatives that could involve issuances of additional ADSs or ordinary shares, including but not limited
to acquisitions and business combinations, but do not currently have any definitive plans to enter into any of these transactions.

In addition, immediately
following consummation of this offering, any additional equity financing in order to fund our operations will require us to increase
our authorized share capital prior to initiating any such financing transaction. Increasing our share capital is subject to the
approval of our shareholders. In the event we fail to obtain the approval of our shareholders to such increase in our authorized
share capital, our ability to raise sufficient funds, if at all, might be adversely effected.

We have no plans
to pay dividends on our ordinary shares, and you may not receive funds without selling our ADSs or ordinary shares.

We have not declared
or paid any cash dividends on our ordinary shares, nor do we expect to pay any cash dividends on our ordinary shares for the foreseeable
future. We currently intend to retain any additional future earnings to finance our operations and growth and for future stock
repurchases and, therefore, we have no plans to pay cash dividends on our ordinary shares at this time. Any future determination
to pay cash dividends on our ordinary shares will be at the discretion of our Board of Directors and will be dependent on our
earnings, financial condition, operating results, capital requirements, any contractual restrictions, and other factors that our
Board of Directors deems relevant. Accordingly, you may have to sell some or all of our ADSs or ordinary shares in order to generate
cash from your investment. You may not receive a gain on your investment when you sell our ADSs or ordinary shares and may lose
the entire amount of your investment.

The market price
of our ordinary shares and ADSs is subject to fluctuation, which could result in substantial losses by our investors.

The stock market in
general and the market price of our ordinary shares on the TASE and our ADSs on the NYSE American is subject to fluctuation, and
changes in our share price may be unrelated to our operating performance. The market price of our ordinary shares and ADSs are
and will be subject to a number of factors, including:

announcements of
technological innovations or new products by us or others;
announcements by
us 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 drugs we, our licensees or others develop;
general market conditions;
the volatility of
market prices for shares of biotechnology companies generally;
success of research
and development projects;
success in clinical
and preclinical studies;
departure of key
personnel;
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 our ordinary shares or ADSs are covered by analysts;
changes in government
regulations or patent decisions;
developments by
our licensees; and
general market conditions
and other factors, including factors unrelated to our operating performance.

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

Additionally, market
prices for securities of biotechnology and pharmaceutical companies historically have been very volatile. The market for these
securities has from time to time experienced significant price and volume fluctuations for reasons unrelated to the operating
performance of any one company. In the past, following periods of market volatility, shareholders have often instituted securities
class action litigation and we have been named in the past in a lawsuit requesting recognition as a class action, in which we
ultimately prevailed. If we were involved in securities litigation, it could have a substantial cost and divert resources and
attention of management from our business, even if we are successful.

Future sales of our ordinary shares or
ADSs could reduce the market price of our ordinary shares and ADSs.

Substantial
sales of our ordinary shares or our ADSs either on the TASE or on the NYSE American, as applicable, may cause the market price
of our ordinary shares or our ADSs to decline.

Sales by us or our
security-holders of substantial amounts of our ordinary shares or our ADSs, or the perception that these sales may occur in the
future, could cause a reduction in the market price of our ordinary shares or our ADSs. The issuance of any additional ordinary
shares or ADSs, or any securities that are exercisable for or convertible into our ordinary shares or our ADSs, may have an adverse
effect on the market price of our ordinary shares or our ADSs, as applicable, and will have a dilutive effect on our shareholders.

We
may not satisfy the NYSE American requirements for continued listing. If we cannot satisfy these requirements, the NYSE American
could delist our securities.

Our
ADSs are listed on the NYSE American under the symbol “CANF.” To continue to be listed on the NYSE American, we are
required to satisfy a number of conditions, including maintaining a share price and shareholders’ equity above certain thresholds. 
If we are delisted from the NYSE American, trading in our securities may be conducted, if available, on the OTC Markets or, if
available, via another market. In the event of such delisting, our shareholders would likely find it significantly more
difficult to dispose of, or to obtain accurate quotations as to the value of our securities, and our ability to raise future capital
through the sale of our securities could be severely limited. In addition, if our securities were delisted from the NYSE American,
our ADSs could be considered a “penny stock” under the U.S. federal securities laws. Additional regulatory requirements
apply to trading by broker-dealers of penny stocks that could result in the loss of an effective trading market for our securities.
Moreover, if our ADSs were delisted from the NYSE American, we will no longer be exempt from certain provisions of the Israeli
Securities Law, and therefore will have increased disclosure requirements.

ADS holders
are not shareholders and do not have shareholder rights.

The Bank of New York
Mellon, as Depositary, delivers our ADSs. Each ADS represents two of our ordinary shares. ADS holders will not be treated as shareholders
and do not have the rights of shareholders. The Depositary will be the holder of the shares underlying our ADSs. Holders of ADSs
will have ADS holder rights. A deposit agreement among us, the Depositary, ADS holders and the beneficial owners of ADSs sets
out ADS holder rights as well as the rights and obligations of the Depositary. New York law governs the deposit agreement and
our ADSs. Our shareholders have shareholder rights. Israeli law and our Amended and Restated Articles of Association govern shareholder
rights. ADS holders do not have the same voting rights as our shareholders. Shareholders are entitled to our notices of general
meetings and to attend and vote at our general meetings of shareholders. At a general meeting, every shareholder present (in person
or by proxy, attorney or representative) and entitled to vote has one vote. This is subject to any other rights or restrictions
which may be attached to any shares. ADS holders may instruct the Depositary how to vote the number of deposited shares their
ADSs represent. Otherwise, you won’t be able to exercise your right to vote unless you withdraw the shares. However,
you may not know about the meeting enough in advance to withdraw the shares.
The Depositary will notify ADS holders of shareholders’
meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be
voted on and explain how ADS holders may instruct the Depositary how to vote. For instructions to be valid, they must reach the
Depositary by a date set by the Depositary. The Depositary will try, as far as practical, subject to the laws of Israel and our
Amended and Restated Articles of Association or similar documents, to vote or to have its agents vote the shares or other deposited
securities as instructed by ADS holders. The Depositary will only vote or attempt to vote as instructed. We cannot assure you
that you will receive the voting materials in time to ensure that you can instruct the Depositary to vote your shares. In addition,
the Depositary and its agents are not responsible for failing to carry out voting instructions or for the matter of carrying out
voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do
if your shares are not voted as requested.

ADS holders do not
have the same rights to receive dividends or other distributions as our shareholders. Subject to any special rights or restrictions
attached to a share, the directors may determine that a dividend will be payable on a share and fix the amount, the time for payment
and the method for payment (although we have never declared or paid any cash dividends on our ordinary shares and we do not anticipate
paying any cash dividends in the foreseeable future). Dividends and other distributions payable to our shareholders with respect
to our ordinary shares generally will be payable directly to them. Any dividends or distributions payable with respect to ordinary
shares deposited in the ADS facility will be paid to the Depositary, which has agreed to pay to ADS holders the cash dividends
or other distributions it or the custodian receives on shares or other deposited securities, after deducting its fees and expenses.
ADS holders will receive these distributions in proportion to the number of ordinary shares their ADSs represent. In addition,
there may be certain circumstances in which the Depositary may not pay ADS holder’s amounts distributed by us as a dividend
or distribution.

Our ordinary
shares and our ADSs are traded on different markets and this may result in price variations.

Our ordinary shares
have traded on the TASE since October 2005 and our ADSs have been listed on the NYSE American since November 2013. Trading on
these markets will take place in different currencies (U.S. dollars on the NYSE American and NIS on the TASE), and at different
times (resulting from different time zones, different trading days and different public holidays in the United States and Israel).
The trading prices of our securities on these two markets may differ due to these and other factors. Any decrease in the price
of our securities on one of these markets could cause a decrease in the trading price of our securities on the other market.

We have incurred
significant additional increased costs as a result of the listing of our ADSs for trading on the NYSE American, and our management
is required to devote substantial time to new compliance initiatives as well as to compliance with ongoing U.S. and Israeli reporting
requirements.

As a public company
in the United States, we incur additional significant accounting, legal and other expenses that we did not incur before becoming
a reporting company in the United States. We also incur costs associated with corporate governance requirements of the SEC and
the NYSE American Company Guide, as well as requirements under Section 404 and other provisions of the Sarbanes-Oxley Act of 2002,
or the Sarbanes-Oxley Act as a result of our ADSs being listed on the NYSE American. These rules and regulations have increased
our legal and financial compliance costs, introduced new costs such as investor relations, stock exchange listing fees and shareholder
reporting, and made some activities more time consuming and costly. Since we are no longer an “emerging growth company,”
as defined in the Jumpstart Our Business Startups Act of 2012, and are no longer able to take advantage of certain exemptions
from various reporting requirements that are applicable to public companies that are “emerging growth companies” and
that were applicable to us prior to January 1, 2020, we may incur additional compliance costs in the future. 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 and Israel, including Section 404 and other
provisions of the Sarbanes-Oxley Act, the rules and regulations adopted by the SEC and the NYSE American Company Guide, as well
as applicable Israeli reporting requirements, for so long as they apply to us, may 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 or as executive
officers.

As a foreign
private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable SEC and NYSE
American requirements, which may result in less protection than is accorded to investors under rules applicable to domestic issuers.

As a foreign private
issuer, we will be permitted to follow certain home country corporate governance practices instead of those otherwise required
under the NYSE American Company Guide for domestic issuers. For instance, we may follow home country practice in Israel with regard
to, among other things, composition and function of the audit committee and other committees of our Board of Directors and certain
general corporate governance matters. In addition, in certain instances we will follow our home country law, instead of the NYSE
American Company Guide, which requires that we obtain shareholder approval for certain dilutive events, such as an issuance that
will result in a change of control of the company, certain transactions other than a public offering, involving issuances of a
20% or more interest in the company and certain acquisitions of the stock or assets of another company. We comply with the director
independence requirements of the NYSE American Company Guide, including the requirement that a majority of the Board of Directors
be independent. Following our home country governance practices as opposed to the requirements that would otherwise apply to a
U.S. company listed on the NYSE American may provide less protection than is accorded to investors under the NYSE American Company
Guide applicable to domestic issuers.

In addition, as a
foreign private issuer, we are exempt from the rules and regulations under the U.S. Securities Exchange Act of 1934, as amended,
or the Exchange Act, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders
are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition,
we will not be required under the Exchange Act to file annual, quarterly and current reports and financial statements with the
SEC as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act.

Because we became
a reporting company under the Exchange Act by means of filing a Form 20-F, we may have difficulty attracting the attention of
research analysts at major brokerage firms.

Because we did not
become a reporting company by conducting an underwritten initial public offering in the United States, we may have difficulty
attracting the attention of security analysts at major brokerage firms in order for them to provide coverage of our company. The
failure to receive research coverage or support in the market for our shares will have an adverse effect on our ability to develop
a liquid market for our ADSs.

If we are unable
to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act as they apply to a foreign private issuer that is listed
on a U.S. exchange, or our internal control over financial reporting is not effective, the reliability of our financial statements
may be questioned and our share price and the ADS price may suffer.

We are subject to
the requirements of the Sarbanes-Oxley Act. Section 404 of the Sarbanes-Oxley Act requires companies subject to the reporting
requirements of the U.S. securities laws to do a comprehensive evaluation of its and its subsidiaries’ internal control
over financial reporting. To comply with this statute, we must document and test our internal control procedures and our management
and issue a report concerning our internal control over financial reporting. In addition, as long as we do not become an accelerated
or large accelerated filer, we are exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
Under this exemption, our auditor will not be required to attest to and report on our management’s assessment of our internal
control over financial reporting until the date we are no longer a non-accelerated filer. We will need to prepare for compliance
with Section 404 by strengthening, assessing and testing our system of internal controls to provide the basis for our report.
However, the continuous process of strengthening our internal controls and complying with Section 404 is complicated and time-consuming.
Furthermore, as our business continues to grow both domestically and internationally, our internal controls will become more complex
and will require significantly more resources and attention to ensure our internal controls remain effective overall. During the
course of the testing, our management may identify material weaknesses or significant deficiencies, which may not be remedied
in a timely manner to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness
of our internal control over financial reporting, or our independent registered public accounting firm identifies material weaknesses
in our internal controls, investor confidence in our financial results may weaken, and the market price of our securities may
suffer.


SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS

This prospectus contains
forward-looking statements, about our expectations, beliefs or intentions regarding, among other things, our product development
efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, we or
our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be
identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,”
“may,” “should” or “anticipate” or their negatives or other variations of these words or other
comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking
statements may be included in, but are not limited to, various filings made by us with the SEC, press releases or oral statements
made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or
expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters
that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results
to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause
our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements,
including, but not limited to, the factors summarized below.

This prospectus identifies
important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements,
particularly those set forth under the heading “Risk Factors.” The risk factors included in this prospectus are not
necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our
forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking
statements include, but are not limited to:

our history of losses
and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms,
or at all;

uncertainties of
cash flows and inability to meet working capital needs;

the initiation,
timing, progress and results of our preclinical studies, clinical trials and other product candidate development efforts;

our ability to advance
our product candidates into clinical trials or to successfully complete our preclinical studies or clinical trials;

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

the clinical development,
commercialization and market acceptance of our product candidates;

our ability to establish
and maintain strategic partnerships and other corporate collaborations;

the implementation
of our business model and strategic plans for our business and product candidates;

the scope of protection
we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to
operate our business without infringing the intellectual property rights of others;

competitive companies,
technologies and our industry; and

statements as to
the impact of the political and security situation in Israel on our business.

All forward-looking
statements attributable to us or persons acting on our behalf speak only as of the date of this prospectus and are expressly qualified
in their entirety by the cautionary statements included in this prospectus. We undertake no obligations to update or revise forward-looking
statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
In evaluating forward-looking statements, you should consider these risks and uncertainties.

PRINCIPAL MARKET

Our ordinary shares
have been trading on the TASE under the symbol “CFBI” since October 2005. On October 2, 2012, our ADSs began
trading over the counter, or OTC, in the United States under the symbol “CANFY” and on November 19, 2013, our ADSs
began trading on the NYSE American under the symbol “CANF.”



USE OF PROCEEDS

We estimate that we
will receive net proceeds from this offering of approximately $                  million
from the sale of our securities in this offering, based upon an assumed public offering price of $                  per
Unit, the last reported sale price of our ADSs on the NYSE American on                        
, 2020, assuming the sale of Units and no sale of any Pre-Funded Units in this offering and after deducting the estimated placement
agent’s fees and estimated offering expenses payable by us. The actual public offering price per Unit or Pre-Funded Unit
will be negotiated between us and the placement agent based on the trading of our ADSs prior to the offering, among other things,
and may be at a discount to the current market price. These estimates exclude the proceeds, if any, from the exercise of Warrants
sold in this offering. If all of the Warrants sold in this offering were to be exercised in cash at an assumed exercise price
of $                  per ADS, we would
receive additional net proceeds of approximately $                 .
We cannot predict when or if these Warrants will be exercised. It is possible that these Warrants may expire and may never be
exercised.

A $0.10 increase (decrease)
in the assumed aggregate public offering price of $                per Unit would increase (decrease) the net proceeds we receive from this offering
by $                   million, assuming
that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting
the estimated placement agent’s fees and estimated offering expenses payable by us.

A 100,000 increase
(decrease) in the number of Units offered by us would increase (decrease) the net proceeds we receive from this offering by $               million,
assuming that the assumed offering price of $        per Unit remains the same, and after deducting estimated estimated placement
agent’s fees and estimated offering expenses payable by us.

We intend to use the
net proceeds from the sale of our securities in this offering for working capital and general corporate purposes, including research
and development, clinical trials and general and administrative expenses. However, we have no present binding commitments or agreements
to enter into any acquisitions. The amounts and timing of our actual expenditures will depend upon numerous factors, including
the progress of our development and commercialization efforts, whether or not we enter into strategic collaborations or partnerships,
and our operating costs and expenditures. Accordingly, our management will have significant flexibility in applying the net proceeds
of this offering. Pending application of the net proceeds for the purposes as described above, we expect to invest the net proceeds
in short-term, interest-bearing securities, investment grade securities, certificates of deposit or direct or guaranteed obligations
of the U.S. government.


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 Companies Law and other factors our Board
of Directors may deem relevant.


CAPITALIZATION

The following table
sets forth our capitalization:

on an actual basis as of September 30, 2019;

on a pro forma basis to reflect the sale of 22,278,540
ordinary shares represented by 742,618 ADSs subsequent to September 30, 2019 as a result of the exercise of certain outstanding
warrants pursuant to the Exercise Agreements; and

on a pro forma as
adjusted basis, giving effect to the sale by us of               Units
in this offering at an assumed public offering price of $            per
Unit, which is the last reported sale price of our ADSs on the NYSE American on                        
, 2020, assuming no sale of any Pre-Funded Units in this offering and after deducting the estimated placement agent’s
fees and estimated offering expenses, and excluding the proceeds, if any, from the exercise of Warrants issued in this offering.

The pro forma as adjusted
information below is illustrative only and our capitalization following the completion of this offering is subject to various
adjustments. The pro forma as adjusted amounts shown below are unaudited and represent management’s estimate. The information
in this table should be read in conjunction with and is qualified by reference to the financial statements and notes thereto and
other financial information contained in this prospectus.


As of

September 30,

2019

(Actual)

(Pro Forma)

(Pro Forma As Adjusted)

(U.S.$ in thousands)

Long-term liabilities:

1,570

1,570

Shareholders’ equity:

Share capital

8,153

9,765

Share Premium

100,225

100,654

Capital reserve

6,015

6,015

Accumulated other comprehensive loss

1,127

1,127

Accumulated deficit

(108,464

)

(108,464

)

Total shareholder’s equity

7,056

9,097

Total capitalization (long-term liabilities and equity)

8,626

10,667

A $0.10 increase (decrease)
in the assumed public offering price of $                  
per Unit, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents by approximately $                  million
and increase (decrease) total shareholders’ equity by approximately $                  million,
assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after
deducting the estimated placement agent’s fees and estimated offering expenses payable by us. A 100,000 Unit increase (decrease)
in the number of Units offered by us would increase (decrease) our pro forma as adjusted cash and cash equivalents by approximately
$               million and increase (decrease) total
shareholders’ equity by approximately $                  million,
assuming that the assumed public offering price of $            per
Unit remains the same, after deducting the estimated placement agent’s fees and estimated offering expenses payable by us.

The above table is
based on 119,655,993 ordinary shares outstanding as of September 30, 2019 and excludes the following as of such date:

2,173,400 ordinary
shares issuable upon the exercise of stock options outstanding at a weighted-average exercise price of $0.87 per ordinary
share (based on the exchange rate reported by the Bank of Israel on such date) equivalent to 72,447 ADSs at a weighted average
exercise price of $26.10 per ADS;

75,623,470 ordinary
shares represented by 2,520,782 ADSs issuable upon the exercise of warrants outstanding at a weighted-average exercise price
of $13.972 per ADS; and

475,000 additional
ordinary shares available for future issuance under our 2013 Share Option Plan equivalent to 15,833 ADSs.


DILUTION

If you invest in our
securities in this offering, your ownership interest will be immediately diluted to the extent of the difference between the effective
public offering price per ADS included in the Units or issuable upon exercise of the Pre-funded Warrants and the pro forma as
adjusted net tangible book value per ADS after this offering.

Our net tangible book
value as of September 30, 2019, was approximately $7 million, or approximately $1.77 per ADS. Net tangible book value per ADS
represents the amount of our total tangible assets less total liabilities divided by the total number of our ADSs outstanding
as of September 30, 2019, and multiplying such amount by 30 (one ADS represents 30 ordinary shares). Pro forma net tangible book
value at September 30, 2019 was $                  million or $                  per share, after giving effect to the sale of 22,278,540 ordinary shares represented
by 742,618 ADSs subsequent to September 30, 2019 as a result of the exercise of certain outstanding warrants, pursuant to the
Exercise Agreements after deducting the estimated placement agent’s fees and estimated offering expenses payable by us.

After giving effect
to the issuance and sale in this offering of                 Units
at an assumed public offering price of $                  per
Unit, the last reported sales price of our ADSs on the NYSE American on                  ,
2020, assuming no sale of any Pre-Funded Units in this offering and after deducting the estimated placement agent’s fees
and estimated offering expenses payable by us, and excluding the proceeds, if any, from the exercise of the Warrants issued in
this offering, our pro forma as adjusted net tangible book value on September 30, 2019, would have been approximately $                  million,
or $                        
per ADS. This represents an immediate dilution in the pro-forma as adjusted net tangible book value of $                        per
ADS to investors purchasing Units in this offering.

The following table
illustrates this dilution on a per share basis:

Assumed
public offering price per Unit
$
Pro
forma net tangible book value per ADS as of September 30, 2019
$
Increase
in pro forma as adjusted net tangible book value per ADS attributable to new investors in this offering
$
Pro
forma as adjusted net tangible book value per ADS as of September 30, 2019 after giving effect to this offering
$
Dilution
in net tangible book value per ADS to new investors in this offering
$

A $0.10 increase
(decrease) in the assumed public offering price of
$                per Unit, the last reported sales
price of our ADSs on the NYSE American
on                              
, 2020, would increase or decrease our pro forma as adjusted net tangible book value per ADS after this offering by
approximately $               and increase or
decrease dilution per ADS to new investors by approximately
$               , assuming the number of Units
offered by us, as set forth on the cover page of this prospectus and further assuming the sale of Units and no sale of any
Pre-Funded Units in this offering and after deducting the estimated placement agent’s fees and estimated offering
expenses payable by us, and excluding the proceeds, if any, from the exercise of the Warrants issued in this offering.

The above table is
based on 119,655,993 ordinary shares outstanding as of September 30, 2019 and excludes the following as of such date:

2,173,400 ordinary
shares issuable upon the exercise of stock options outstanding at a weighted-average exercise price of $0.87 per ordinary
share (based on the exchange rate reported by the Bank of Israel on such date) equivalent to 72,447 ADSs at a weighted average
exercise price of $26.1 per ADS;

75,623,470 ordinary
shares represented by 2,520,782 ADSs issuable upon the exercise of warrants outstanding at a weighted-average exercise price
of $13.972 per ADS; and

475,000 additional
ordinary shares available for future issuance under our 2013 Share Option Plan equivalent to 15,833 ADSs.

To the extent that
any of our options or warrants listed above are exercised, new options are issued under our equity incentive plans and subsequently
exercised or we issue additional ordinary shares or ADSs in the future, there will be further dilution to new investors participating
in this offering.


MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information
in this section should be read in conjunction with our consolidated financial statements and related notes beginning on page F-1
and the related information included elsewhere in this prospectus. Our financial statements are prepared in accordance with IFRS
as issued by the International Accounting Standards Board, and reported in U.S. dollars. We maintain our accounting books and
records in U.S. dollars and our functional currency is the U.S. dollar. Certain amounts presented herein may not sum due to rounding.

Overview

We are a clinical-stage
biopharmaceutical company focused on developing orally bioavailable small molecule therapeutic products for the treatment of cancer,
liver and inflammatory diseases and erectile dysfunction. We also co-develop specific formulations of cannabis components for
the treatment of cancer, inflammatory, autoimmune, and metabolic diseases. Our platform technology utilizes the Gi protein associated
A3AR as a therapeutic target. A3AR is highly expressed in inflammatory and cancer cells, and not significantly expressed in normal
cells, suggesting that the receptor could be a unique target for pharmacological intervention. Our pipeline of drug candidates
are synthetic, highly specific agonists and allosteric modulators, or ligands or molecules that initiate molecular events when
binding with target proteins, targeting the A3AR.

Our product pipeline
is based on the research of Dr. Pnina Fishman, who investigated a clinical observation that tumor metastasis can be found in most
body tissues, but are rarely found in muscle tissue, which constitutes approximately 60% of human body weight. Dr. Fishman’s
research revealed that one reason that striated muscle tissue is resistant to tumor metastasis is that muscle cells release small
molecules which bind with high selectivity to the A3AR. As part of her research, Dr. Fishman also discovered that A3ARs have significant
expression in tumor and inflammatory cells, whereas normal cells have low or no expression of this receptor. The A3AR agonists
and allosteric modulators, currently our pipeline of drug candidates, bind with high selectivity and affinity to the A3ARs and
upon binding to the receptor initiate down-stream signal transduction pathways resulting in apoptosis, or programmed cell death,
of tumors and inflammatory cells and to the inhibition of inflammatory cytokines. Cytokines are proteins produced by cells that
interact with cells of the immune system in order to regulate the body’s response to disease and infection. Overproduction
or inappropriate production of certain cytokines by the body can result in disease.

Our product candidates,
CF101, CF102 and CF602, are being developed to treat autoimmune inflammatory indications, oncology and liver diseases as well
as erectile dysfunction. CF101, also known as Piclidenoson, is in an advance stage of clinical development for the treatment of
autoimmune-inflammatory diseases, including rheumatoid arthritis and psoriasis. CF102, also known as Namodenoson, is being developed
for the treatment of HCC and has orphan drug designation for the treatment of HCC in the United States and Europe. Namodenoson
was granted Fast Track designation by the FDA as a second line treatment to improve survival for patients with advanced HCC who
have previously received Nexavar (sorafenib). Namodenoson is also being developed for the treatment of NASH, following our study
which revealed compelling pre-clinical data on Namodenoson in the treatment of NASH, a disease for which no FDA approved therapies
currently exist. CF602 is our second generation allosteric drug candidate for the treatment of erectile dysfunction, which has
shown efficacy in the treatment of erectile dysfunction in preclinical studies and we are investigating additional compounds,
targeting A3AR, for the treatment of erectile dysfunction. Preclinical studies revealed that our drug candidates have potential
to treat additional inflammatory diseases, such as Crohn’s disease, oncological diseases, viral diseases, such as the JC
virus, and obesity.

We believe our pipeline
of drug candidates represent a significant market opportunity. For instance, according to iHealthcareAnalyst, the world rheumatoid
arthritis market size is predicted to generate revenues of $50.5 billion by 2025 and the psoriasis drug market is forecasted to
be worth $11.3 billion by 2025. According to DelveInsight, the HCC drug market in the G8 countries (U.S., Germany, France, Italy,
Spain, UK, Japan and China) is expected to reach $3.8 billion by 2027.

We have in-licensed
an allosteric modulator of the A3AR, CF602 from Leiden University. In addition, we have out-licensed the following:

Piclidenoson for
the treatment of (i) rheumatoid arthritis to Kwang Dong for South Korea, (ii) psoriasis and rheumatoid arthritis to Cipher
for Canada, (iii) rheumatoid arthritis and psoriasis to Gebro for Spain, Switzerland and Austria, (iv) rheumatoid arthritis
and psoriasis to CMS Medical for China (including Hong Kong, Macao and Taiwan), and (v) for the treatment of psoriasis to
Kyongbo for South Korea; and

Namodenoson for
the treatment of liver cancer in South Korea to CKD, and (ii) advanced liver cancer and NAFLD/NASH to CMS Medical for China
(including Hong Kong, Macao and Taiwan).

On September 10, 2019,
we entered into a collaboration agreement with Univo, a medical cannabis company, to identify and co-develop specific formulations
of cannabis components for the treatment of cancer, inflammatory, autoimmune, and metabolic diseases. Under the collaboration agreement,
Univo will provide us with cannabis and cannabis components, as well as full access to its laboratories for both research and manufacturing.
We agreed to pay Univo a total of $500,000 through two installments and issued to Univo 19,934,355 ordinary shares through a private
placement, representing approximately 16.6% of Can-Fite’s ordinary shares outstanding after giving effect to the issuance.
In addition, in connection therewith, we issued 996,690 ordinary shares to a consultant. The companies will initially share ownership
of intellectual property developed in this collaboration. Revenues derived from the collaboration will generally be shared between
us and Univo on the basis of each party’s contribution. Golan Bitton, Univo’s CEO was appointed to our Board in December
2019.

We are currently:
(i) conducting a Phase III trial for Piclidenoson in the treatment of rheumatoid arthritis, (ii) conducting a Phase III trial
for Piclidenoson in the treatment of psoriasis, (iii) preparing for a planned Phase III trial for Namodenoson in the treatment
of liver cancer, (iv) conducting a Phase II trial of Namodenoson in the treatment of NASH with data release expected in the first
quarter of 2020, and (v) investigating additional compounds, targeting the A3 adenosine receptor, for the treatment of erectile
dysfunction.

Since inception, we
have incurred significant losses in connection with our research and development. As of September 30, 2019, we had an accumulated
deficit of approximately $108.5 million. Although we have recognized revenues in connection with our existing out-licensing agreements
with Kwang Dong, Cipher, CKD, Gebro, CMS Medical and Kyongbo and our historic out-licensing agreement with SKK, we expect to generate
losses in connection with the research and development activities relating to our pipeline of drug candidates. Such research and
development activities are budgeted to expand over time and will require further resources if we are to be successful. As a result,
we expect to incur operating losses, which may be substantial over the next several years, and we will need to obtain additional
funds to further develop or research and development programs.

We have funded our
operations primarily through the sale of equity securities (both in private placements and in public offerings) and payments received
under our existing out-licensing agreements with Kwang Dong, Cipher, CKD Gebro, CMS Medical, and Kyongbo, and our historic out-licensing
agreement with SKK. We expect to continue to fund our operations over the next several years through our existing cash resources,
potential future milestone payments that we expect to receive from our licensees, interest earned on our investments, if any,
and additional capital to be raised through public or private equity offerings or debt financings. As of September 30, 2019, we
had approximately $4.7 million of cash and cash equivalents. A substantial part of this amount is designated for payments to be
made in relation to the ongoing treatment of patients who are currently enrolled in the Company’s on-going trials.

Revenues

Our revenues to date
have been generated primarily from payments under our existing out-licensing agreements with Kwang Dong, Cipher, CKD, Gebro, CMS
Medical and Kyongbo, and our historic out-licensing agreement with SKK.

Under the Kwang Dong
License Agreement, we are entitled to up-front and milestone payments of up to $1.5 million. In accordance with the Kwang Dong
License Agreement, we received an up-front payment of $0.3 million and a payment of $0.048 million as consideration for Kwang
Dong’s purchase of our ordinary shares in 2009 and a milestone payment of $0.2 million in 2010. Under the terms of the Kwang
Dong License Agreement, in addition to the payments mentioned above, we are entitled to certain additional payments based on the
sale of raw materials, subject to the terms and conditions of the respective agreements. To date, we have received a total of
$500,000 from Kwang Dong in an upfront payment. See “Business—Business Overview—Out-Licensing and Distribution
Agreements”.

Under the Distribution
and Supply Agreement with Cipher we received CAD 1.65 million upon execution of the agreement and are entitled to milestone payments
upon receipt of regulatory approval by Health Canada for Piclidenoson and the first delivery of commercial launch quantities as
follows (i) CAD 1 million upon the first approved indication for either psoriasis or rheumatoid arthritis, and (ii) CAD 1 million
upon the second approved indication for either psoriasis or rheumatoid arthritis. In addition, following regulatory approval,
we shall be entitled to a royalty of 16.5% of net sales of Piclidenoson in Canada and reimbursement for the cost of manufacturing
Piclidenoson. We are also entitled to a royalty payment for any authorized generic of Piclidenoson that Cipher distributes in
Canada. To date, we have received a total of $1.3 million from Cipher in an upfront payment. See “Business—Business
Overview—Out-Licensing and Distribution Agreements”.

The Distribution Agreement
with CKD provides for up to $3,000,000 in upfront and milestone payments payable with respect to the liver cancer indication and
up to $3,000,000 with respect to the NASH indication. In addition, we are entitled to a transfer price of the higher of (a) the
manufacturing cost plus 10% or (b) 23% of net sales of Namodenoson following commercial launch in South Korea. To date, we have
received a total of $2,000,000 from CKD, comprising $1,500,000 in upfront payments for the expansion of CKD’s existing agreement
with us to include the rights to distribute Namodenoson for the treatment of NASH in South Korea, and a further $500,000 for a
milestone payment received in the third quarter of 2017 upon receipt by CKD of a positive result from the preliminary review by
the Ministry of Food and Drug Safety of Korea, or MFDS, on obtaining orphan drug designation in South Korea. See “Business—Business
Overview—Out-Licensing and Distribution Agreements”.

In January 2018, we
entered into a Distribution and Supply Agreement with Gebro. The Distribution and Supply Agreement with Gebro provides that we
are entitled to €1,500,000 upon execution of the agreement plus milestone payments upon achieving certain clinical, launch
and sales milestones, as follows: (i) €300,000 upon initiation of the ACRobat Phase III clinical trial for the treatment
of rheumatoid arthritis and €300,000 upon the initiation of the COMFORT Phase III clinical trial for the treatment of psoriasis,
(ii) between €750,000 and €1,600,000 following first delivery of commercial launch quantities of Piclidenson for either
the treatment of rheumatoid arthritis or psoriasis, and (iii) between €300,000 and up to €4,025,000 upon meeting certain
net sales. In addition, following regulatory approval, we shall be entitled to double digit percentage royalties on net sales
of Piclidenoson in the territories and payment for the manufacturing Piclidenoson. To date, we have received a total of €2,100,000
from Gebro in upfront and milestone payments. See “Business—Business Overview—Out-Licensing and Distribution
Agreements”.

In August 2018, we
entered into a License, Collaboration and Distribution Agreement with CMS Medical. Under the License, Collaboration and Distribution
Agreement, we are entitled to $2,000,000 upon execution of the agreement plus milestone payments of up to $14,000,000 upon achieving
certain regulatory milestones and payments of up to $58,500,000 upon achieving certain sales milestones. In addition, following
regulatory approval, we shall be entitled to double-digit percentage royalties on net sales of Piclidenoson and Namodenoson in
the licensed territories. To date, we have received a total of $2,000,000 from CMS Medical in upfront and milestone payments.
See “Business—Business Overview—Out-Licensing and Distribution Agreements”.

In August 2019, we
entered into a License and Distribution Agreement with Kyongbo. Under the terms of agreement, Kyongbo Pharm, in exchange for exclusive
distribution rights to sell Piclidenoson in the treatment of psoriasis in South Korea, made a total upfront payment of $750,000
to us, with additional payments of up to $3,250,000 upon achievement of certain milestones. We will also be entitled to a transfer
price for delivering finished product to Kyongbo.

Under the terminated
SKK license agreement we received an aggregate of approximately $8.5 million from SKK. See “Business—B. Business—Out-Licensing
and Distribution Agreements”.

Certain payments we
have received from SKK and Kwang Dong have been subject to a 10% and 5% withholding tax in Japan and Korea, respectively, and
certain payments we may receive in the future, if at all, may also be subject to the same withholding tax in Korea. Receipt of
any milestone payment under our out-licensing agreements depends on many factors, some of which are beyond our control. We cannot
assure you that we will receive any of these future payments. We expect our revenues for the next several years, if any, to be
derived primarily from payments under our current out-license agreements and our public capital raising activities, as well as
additional collaborations that we may enter into in the future with respect to our drug candidates.

Research and Development

Our research and development
expenses consist primarily of salaries and related personnel expenses, fees paid to external service providers, up-front and milestone
payments under our license agreements, patent-related legal fees, costs of preclinical studies and clinical trials, 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 expense to remain our primary expense in the near future as we continue to develop our
products. Increases or decreases in research and development expenditures are attributable to the number and/or duration of the
pre-clinical and clinical studies that we conduct.

The following table
identifies our current major research and development projects:


Project Status Expected
or Recent Near Term Milestone
Piclidenoson ACRobat Phase III study in rheumatoid arthritis Enrolling patients
to the study
COMFORT Phase III study in psoriasis Enrolling patients
to the study
Namodenoson Phase III in HCC Preparing to commence
trial
Phase II study in NASH Top-line results
expected in first quarter of 2020

We record certain
costs for each development project on a “direct cost” basis, as they are recorded to the project for which such costs
are incurred. Such costs include, but are not limited to, CRO expenses, drug production for pre-clinical and clinical studies
and other pre-clinical and clinical expenses. However, certain other costs, including but not limited to, salary expenses (including
salaries for research and development personnel), facilities, depreciation, share-based compensation and other overhead costs
are recorded on an “indirect cost” basis, i.e., they are shared among all of our projects and are not recorded to
the project for which such costs are incurred. We do not allocate direct salaries to projects due to the fact that our project
managers are generally involved in several projects at different stages of development, and the related salary expense is not
significant to the overall cost of the applicable projects. In addition, indirect labor costs relating to our support of the research
and development process, such as manufacturing, controls, pre-clinical analysis, laboratory testing and initial drug sample production,
as well as rent and other administrative overhead costs, are shared by many different projects and have never been considered
by management to be of significance in its decision-making process with respect to any specific project. Accordingly, such costs
have not been specifically allocated to individual projects.

Set forth below is
a summary of the gross direct costs allocated to our main projects on an individual basis, as well as the gross direct costs allocated
to our less significant projects on an aggregate basis, for the years ended December 31, 2016, 2017 and 2018 and for the nine
months ended September 30, 2019; and on an aggregate basis since project inception:


(USD in thousands)

Year Ended December 31,

Nine Months Ended September 30,

2016

2017

2018

2019

Piclidenoson

1,946

1,894

2,987

4,592

Namodenoson

1,907

1,827

1,103

1,635

CF602

1,126

15

276

20

Other projects

Total gross direct project costs (1)

4,979

3,736

4,366

6,247

(1) Does
not include indirect project costs and overhead, such as payroll and related expenses (including stock-based compensation), facilities,
depreciation and impairment of intellectual property, which are included in total research and development expenses in our financial
statements.

From our inception
through September 30, 2019, we have incurred research and development expenses of approximately $106.8 million. We expect that
a large percentage of our research and development expense in the future will be incurred in support of our current and future
preclinical and clinical development projects. Due to the inherently unpredictable nature of preclinical and clinical development
processes and given the early stage of our preclinical product development projects, we are unable to estimate with any certainty
the costs we will incur in the continued development of the product candidates in our pipeline for potential commercialization.
Clinical development timelines, the probability of success and development costs can differ materially from expectations. We expect
to continue to test our product candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional
clinical trials for each product candidate. If we are not able to enter into an out-licensing arrangement with respect to any
product candidate prior to the commencement of later stage clinical trials, we may fund the trials for the product candidates
ourselves.

While we are currently
focused on advancing each of our product development projects, our future research and development expenses will depend on the
clinical success of each product candidate, as well as ongoing assessments of each product candidate’s commercial potential.
In addition, we cannot forecast with any degree of certainty which product candidates may be subject to future out-licensing arrangements,
when such out-licensing arrangements will be secured, if at all, and to what degree such arrangements would affect our development
plans and capital requirements.

As we obtain results
from clinical trials, we may elect to discontinue or delay clinical trials for certain product candidates or projects in order
to focus our resources on more promising product candidates or projects. Completion of clinical trials by us or our licensees
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 cost of clinical
trials may vary significantly over the life of a project as a result of differences arising during clinical development, including,
among others:

the number of sites
included in the clinical trials;

the length of time
required to enroll suitable patients;

the number of patients
that participate in the clinical trials;

the duration of
patient follow-up;

the development
stage of the product candidate; and

the efficacy and
safety profile of the product candidate.

We expect our research
and development expenses to increase in the future from current levels as we continue the advancement of our clinical trials and
preclinical product development and to the extent we in-license new product candidates. The lengthy process of completing clinical
trials and seeking regulatory approval for our product candidates requires expenditure of substantial resources. Any failure or
delay in completing clinical trials, 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.

General and Administrative Expenses

General and administrative
expenses consist primarily of compensation for employees in executive and operational functions, including accounting, finance,
legal, business development, investor relations, information technology and human resources. Other significant general and administration
costs include facilities costs, professional fees for outside accounting and legal services, travel costs, insurance premiums
and depreciation.

Financial Expense and Income

Financial expense
and income consists of interest earned on our cash and cash equivalents; bank fees and other transactional costs; expense or income
resulting from fluctuations of the NIS and other currencies, in which a portion of our assets and liabilities are denominated,
against the U.S. dollar (our functional currency).

Critical Accounting Policies and Estimates

Our accounting policies
and their effect on our financial condition and results of operations are more fully described in our audited consolidated financial
statements included elsewhere in this prospectus. The preparation of financial statements in conformity with IFRS as issued by
the IASB requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets
and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. These estimates are prepared using
our best judgment, after considering past and current events and economic conditions. While management believes the factors evaluated
provide a meaningful basis for establishing and applying sound accounting policies, management cannot guarantee that the estimates
will always be consistent with actual results. In addition, certain information relied upon by us in preparing such estimates
includes internally generated financial and operating information, external market information, when available, and when necessary,
information obtained from consultations with third party experts. Actual results could differ from these estimates and could have
a material adverse effect on our reported results.

We believe that the
accounting policies discussed below are critical to our financial results and to the understanding of our past and future performance,
as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an
accounting estimate to be critical if: (1) it requires us to make assumptions because information was not available at the time
or it included matters that were highly uncertain at the time we were making our estimate; and (2) changes in the estimate could
have a material impact on our financial condition or results of operations.

Functional and Presentation Currency

From our inception
through January 1, 2018, our functional and presentation currency was the NIS. Management conducted a review of our functional
currency and decided to change our functional and presentation currency to the U.S. dollar from the NIS effective January 1, 2018.
These changes were based on an assessment by our management that the U.S. dollar is the primary currency of the economic environment
in which we operate.

In determining the
appropriate functional currency to be used, we followed the guidance in International Accounting Standard 21 – The Effects of
Changes in Foreign Exchange Rates, or IAS 21, which states that factors relating to sales, costs and expenses, financing activities
and cash flows, as well as other potential factors, should be considered. In this regard, we are incurring and expect to continue
to incur a majority of our expenses in U.S. dollars as a result of our expanded clinical trials including Phase III trials. These
changes, as well as the fact that the majority of our available funds are in U.S. dollars, our principal source of financing is
the U.S. capital market, and all of our budgeting is conducted solely in U.S. dollars, led to the decision to make the change
in functional currency as of January 1, 2018, as indicated above.

At the date of change
of functional currency, we also changed the presentation currency of our financial statements. This change was retrospectively
implemented. In accordance with IAS 21, since our presentation currency was different than our functional currency our results
and financial position were translated using the following principles: (i) all assets and liabilities were translated using the
current exchange rates, (ii) equity accounts were translated using the historical rates, and (iii) income and expenses for each
statement of comprehensive income or separate income statement presented were translated at exchange rates at the dates of the
transactions.

Principles of Consolidation

Our
financial statements reflect the consolidation of the financial statements of companies that we control based on legal control
or effective control. We fully consolidate into our financial statements the results of operations of companies that we control.
Legal control exists when we have the power, directly or indirectly, to govern the financial and operating policies of an entity.
The effect of potential voting rights that are exercisable at the balance sheet date are considered when assessing whether we
have legal control. In addition, we consolidate on the basis of effective control even if we do not have voting control. The determination
that effective control exists involves significant judgment.

In
evaluating the effective control on our investees we consider the following criteria to determine if effective control exists:

whether we hold
a significant voting interest (but less than half the voting rights);
whether there is
a wide diversity of public holdings of the remaining shares conferring voting rights;
whether in the past
we had the majority of the voting power participating in the general meetings of shareholders and, therefore, have in fact
had the right to nominate the majority of the board members;
the absence of a
single entity that holds a significant portion of the investee’s shares;
our ability to establish
policies and guide operations by appointing the remainder of the investee’s senior management; and
whether the minority
shareholders have participation rights or other preferential rights, excluding traditional shareholder protective rights.

Entities
we control are fully consolidated in our financial statements. All significant intercompany balances and transactions are eliminated
in consolidation. Non-controlling interests of subsidiaries represent the non-controlling shareholders’ proportionate interest
in the comprehensive income (loss) of the subsidiaries and fair value of the net assets or the net identifiable assets upon the
acquisition of the subsidiaries.

Revenue Recognition

We generate income
from distribution agreements. See “Business—B. Business—Out-Licensing and Distribution Agreements”. Such
income comprises of upfront license fees, milestone payments and potential royalty payments.

We identified four
components in the agreements: (i) performing the research and development services through regulatory approval; (ii) exclusive
license to distribute; (iii) participation in joint steering committee; and, (iv) royalties resulting from future sales of the
product.

We recognize revenue
in accordance with IFRS 15, “Revenue” pursuant to which each required deliverable is evaluated to determine whether
it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer.
The arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based
on the relative selling price of each deliverable which is based on the Estimated Selling Price.

Components (i) –
(iii) were analyzed as one unit of accounting. Consequently, revenue from these components is recorded based on the term of the
research and development services (which is the last deliverable in the arrangement). We estimate these services will spread over
a period of 24 quarters.

Revenues from milestone payments:

Contingent payments
related to milestones will be recognized immediately upon satisfaction of the milestone and contingent payments related to royalties
will be recognized in the period that the related sales have occurred.

Revenues from royalties:

Revenues
from royalties will be recognized as they accrue in accordance with the terms of the relevant agreement.

Share-based Compensation

We account for share-based
compensation arrangements in accordance with the provisions of IFRS 2. IFRS 2 requires companies to recognize share-based compensation
expense for awards of equity instruments based on the grant-date fair value of those awards. The cost is recognized as compensation
expense over the vesting period, based upon the grant-date fair value of the equity or liability instruments issued. We selected
the binomial option pricing model as the most appropriate method for determining the estimated fair value of our share-based awards
without market conditions. The determination of the grant date fair value of options using an option pricing model is affected
by estimates and assumptions regarding a number of complex and subjective variables. These variables include the expected volatility
of our share price over the expected term of the options, share option exercise and forfeiture rate, risk-free interest rates,
expected dividends and the price of our ordinary shares on the TASE. As our ordinary shares are publicly traded on the TASE, we
do not need to estimate the fair value of our ordinary shares. Rather, we use the actual closing market price of our ordinary
shares on the date of grant, as reported by the TASE although in the future may use the closing market price of our ADSs on the
date of grant, as reported by the NYSE American.

If any of the assumptions
used in the binomial option pricing model change significantly, share-based compensation for future awards may differ materially
compared with the awards previously granted.

As for 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 service
are to be satisfied, ending on the date on which the relevant employees or other service providers become fully entitled to the
award.

If we modify the conditions
on which equity-instruments are granted, an additional expense is recognized for any modification that increases the total fair
value of the share-based payment arrangement or is otherwise beneficial to the employee or other service provider at the modification
date.

Liability Related to Certain Warrants

The fair value of
the liability for warrants exercisable into shares issued to investors in connection with our financings to date was calculated
using the Black-Scholes-Merton option-pricing model. We accounted for these warrants as liabilities due to the dollar exercise
price terms and in accordance with IAS 39, measured at fair value each reporting period until they will be exercised or expired,
with changes in the fair values being recognized in our statement of comprehensive loss as financial income or expense.

Fair value for each
reporting period was calculated based on the following assumptions:

1. Risk-free
interest rate – based on yield rate of non-index linked U.S. Federal Reserve treasury bonds.
2. Expected
volatility – was calculated based on our actual historical stock price movements over a term that is equivalent to the expected
term of the option.
3. Expected
life – the expected life was based on the expiration date of the warrants.
4. Expected
dividend yield – was based on the fact that we have not paid dividends to our shareholders in the past and do not expect to
pay dividends to our shareholders in the future.

Our net loss for the
year ended December 31, 2018 and 2017 included finance income in the amount of $0 and $564,000, respectively, in connection with
the above-mentioned warrants.

Recently Issued Accounting Pronouncements

In January 2016, the
IASB issued IFRS 16, “Leases”, or IFRS 16. According to IFRS 16, a lease is a contract, or part of a contract, that
conveys the right to use an asset for a period of time in exchange for consideration.

The effects of the
adoption of the new standard are as follows:

According to IFRS
16, lessees are required to recognize all leases in the statement of financial position (excluding certain exceptions, see
below). Lessees will recognize a liability for lease payments with a corresponding right-of-use asset, similar to the accounting
treatment for finance leases under the existing standard, IAS 17, “Leases”. Lessees will also recognize interest
expense and depreciation expense separately.

Variable lease payments
that are not dependent on changes in the Consumer Price Index, or CPI, or interest rates, but are based on performance or
use are recognized as an expense by the lessees as incurred and recognized as income by the lessors as earned.

In the event of
change in variable lease payments that are CPI-linked, lessees are required to remeasure the lease liability and record the
effect of the remeasurement as an adjustment to the carrying amount of the right-of-use asset.

The accounting treatment
by lessors remains substantially unchanged from the existing standard, namely classification of a lease as a finance lease
or an operating lease.

IFRS 16 includes
two exceptions which allow lessees to account for leases based on the existing accounting treatment for operating leases –
leases for which the underlying asset is of low financial value and short-term leases (up to one year).

IFRS 16 is effective
for annual periods beginning on or after January 1, 2019.

IFRS 16 permits lessees
to use one of the following approaches:

1. Full retrospective
approach – according to this approach, a right-of-use asset and the corresponding liability will be presented in the statement
of financial position as if they had always been measured according to the provisions of IFRS 16. Accordingly, the effect
of the adoption of IFRS 16 at the beginning of the earliest period presented will be recorded in equity. Also, we will restate
the comparative data in its financial statements. Under this approach, the balance of the liability as of the date of initial
application of IFRS 16 will be calculated using the interest rate implicit in the lease, unless this rate cannot be easily
determined in which case the lessee’s incremental borrowing rate of interest on the commencement date of the lease will
be used.

2. Modified retrospective
approach – this approach does not require restatement of comparative data. The balance of the liability as of the date of
initial application of IFRS 16 will be calculated using the lessee’s incremental borrowing rate of interest on the date
of initial application of IFRS 16. As for the measurement of the right-of-use asset, we may choose, on a lease-by-lease basis,
to apply one of the two following alternatives:

Recognize an asset
in an amount equal to the lease liability, with certain adjustments.

Recognize an asset
as if the new standard had always been applied.

Any difference arising
on the date of first-time is recorded in equity.

The new standard is
effective for annual periods beginning on or after January 1, 2019.

The impact of the
adoption of the new standard, does not have a material effect on the financial statements.

Recent Offerings

On January 24, 2017,
we sold to certain institutional investors providing for the issuance of an aggregate of 166,667 ADSs in a registered direct offering
at $30.00 per ADS resulting in gross proceeds of $5,000,000. In addition, we issued to the investors unregistered warrants to
purchase 83,333 ADSs in a private placement. The warrants may be exercised after six months from issuance for a period of five
and a half years from issuance and have an exercise price of $33.75 per ADS, subject to adjustment as set forth therein. The warrants
may be exercised on a cashless basis if six months after issuance there is no effective registration statement registering our
ADSs underlying the warrants. We paid an aggregate of $360,000 in placement agent fees and expenses and issued unregistered placement
agent warrants to purchase 8,333 ADS on the same terms as the warrants except they have a term of five years.

On March 13, 2018,
we sold to certain institutional investors providing for the issuance of an aggregate of 222,222 ADSs in a registered direct offering
at $22.50 per ADS resulting in gross proceeds of approximately $5,000,000. In addition, we issued to the investors unregistered
warrants to purchase 166,667 ADSs in a private placement. The warrants may be exercised after six months from issuance for a period
of five and a half years from issuance and have an exercise price of $30.00 per ADS, subject to adjustment as set forth therein.
The warrants may be exercised on a cashless basis if six months after issuance there is no effective registration statement registering
our ADSs underlying the warrants. We paid an aggregate of $350,000 in placement agent fees and expenses and issued unregistered
placement agent warrants to purchase 11,111 ADS on the same terms as the warrants except they have a term of five years.

On January 18, 2019,
we sold to a single institutional investor an aggregate 149,206 ADSs in a registered direct offering at $15.75 per ADS, resulting
in gross proceeds of $2,350,000. In addition, we issued to the investor unregistered warrants to purchase 149,206 ADSs in a private
placement. The warrants are immediately exercisable from the date of issuance for a period of five and a half years and have an
exercise price of $19.50 per ADS, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis
if six months after issuance there is no effective registration statement registering the ADSs underlying the warrants. We paid
an aggregate of $191,000 in placement agent fees and expenses and issued unregistered placement agent warrants to purchase 7,460
ADS on the same terms as the warrants except they have a term of five years.

On April 4, 2019,
we sold to certain institutional investors an aggregate 328,205 ADSs in a registered direct offering at $9.75 per ADS, resulting
in gross proceeds of $3,200,001. In addition, we issued to the investors unregistered warrants to purchase 328,205 ADSs in a private
placement. The warrants are immediately exercisable and will expire five years from issuance at an exercise price of $12.90 per
ADS, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis if six months after issuance
there is no effective registration statement registering the ADSs underlying the warrants. We paid an aggregate of $242,000 in
placement agent fees and expenses and issued unregistered placement agent warrants to purchase 16,410 ADS on the same terms as
the warrants except they have a term of five years.

On May 22, 2019, we
sold to certain institutional investors an aggregate 1,500,000 ADSs in a registered direct offering at $4.00 per ADS, resulting
in gross proceeds of $6,000,000. In addition, we issued to the investors unregistered warrants to purchase an aggregate of 1,500,000
ADSs in a private placement. The warrants are immediately exercisable and will expire five and one-half years from issuance at
an exercise price of $4.00 per ADS, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis
if six months after issuance there is no effective registration statement registering the ADSs underlying the warrants. We paid
an aggregate of $410,000 in placement agent fees and expenses and issued unregistered placement agent warrants to purchase 75,000
ADS on the same terms as the warrants except they have a term of five years.

On January 9, 2020,
we entered into warrant exercise agreements, or the Exercise Agreements, with several accredited investors who are the holders,
or the Holders, of warrants issued in September 2015, October 2015, March 2018, January 2019, and April 2019 or the Public Warrants,
to purchase our ordinary shares, represented by ADS, pursuant to which the Holders agreed to exercise in cash their Public Warrants
to purchase up to an aggregate of 22,278,540 ordinary shares represented by 742,618 ADSs having exercise prices ranging from $12.90
to $78.75 per ADS issued by us, at a reduced exercise price of $3.25 per ADS, resulting in gross proceeds of approximately $2.4
million. Closing occurred on January 13, 2020. Under the Exercise Agreements, we also issued to the Holders new unregistered warrants
to purchase up to 22,278,540 ordinary shares represented by 742,618 ADSs, or the Private Placement Warrants. The Private Placement
Warrants are immediately exercisable, expire five and one-half years from issuance date and have an exercise price of $3.45 per
ADS, subject to adjustment as set forth therein. The Private Placement Warrants may be exercised on a cashless basis if six months
after issuance there is no effective registration statement registering the ADSs underlying the warrants.

Results of Operations

Comparison of the Nine Months Ended September 30, 2019 to
Nine Months Ended September 30, 2018

Revenues

Revenues
for the nine months ended September 30, 2019 were $1.84 million, a decrease of $1.69 million, or 47.8%, compared with $3.53 million
for the same period of 2018. The decrease in revenues was mainly due to the recognition of a $2.0 million advance payment
received in August 2018 under the distribution agreement with CMS Medical.

Research
and development expenses

Research
and development expenses for the nine months ended September 30, 2019 were $7.01 million, an increase of $2.96 million, or
73%, compared with $4.05 million for the same period of 2018.

Research
and development expenses for the nine months of 2019 comprised primarily of expenses associated with the Phase II studies for
Namodenoson in the treatment of NASH and HCC, as well as expenses for ongoing Phase III studies of Piclidenoson in the treatment
of rheumatoid arthritis and psoriasis. The increase is primarily due to increased costs associated with the initiation of the
Phase III clinical trial of Piclidenoson for the treatment of rheumatoid arthritis.

General
and administrative expenses

General
and administrative expenses were $2.22 million for the nine months ended September 30, 2019, a decrease of $0.16 million, or
6.7%, compared to $2.38 million for the same period in 2018. The decrease is primarily due to a decrease in professional
services and investor relations, an expense which was partly offset by an increase in insurance expenses.

Financial
expenses, net

Financial
income, net for the nine months ended September 30, 2019 was $0.44 million, an increase of $0.21 million, or 91.3%, compared
to financial income, net of $0.23 million for the same period in 2018. The increase in financial income, net is mainly due to
fair value revaluation of the investment in Wize Pharma Inc’s shares, which is classified under short term
investment.

Comparison of the Six Months Ended June 30, 2019 to Six Months
Ended June 30, 2018

Revenues

Revenues for the
six months ended June 30, 2019 were $0.7 million a decrease of $0.2 million, or 22.2%, compared to revenues of $0.9 million
during the first six months of 2018. The decrease in revenues was mainly due to recognition of a higher portion of the $2.2
million advance payment received in January 2018 under the distribution agreement with Gebro in the six month period ended
June 30, 2018.

Research and development expenses

Research and
development expenses for the six months ended June 30, 2019 were $3.9 million, an increase of $1.3 million, or 50%, compared
with $2.6 million for the same period of 2018. Research and development expenses for the first six months of 2019 comprised
primarily of expenses associated with the Phase II studies for Namodenoson in the treatment of NASH and HCC, as well as
expenses for ongoing Phase III studies of Piclidenoson in the treatment of rheumatoid arthritis and psoriasis. The increase
is primarily due to increased costs associated with the initiation of the Phase III clinical trial of Piclidenoson for the
treatment of rheumatoid arthritis.

General and administrative expenses

General and
administrative expenses were $1.3 million for the six months ended June 30, 2019, a decrease of $0.5 million, or 27.7%,
compared to $1.8 million for the same period in 2018. The decrease is primarily due to a decrease in professional services
and investor relations expenses.

Financial expense, net

Financial
expense, net for the six months ended June 30, 2019 was $0.3 million, a decrease of $0.3 million, or 50%, compared to
financial income, net of $0.6 million for the same period in 2018. The increase in financial expense, net in the first six
months of 2019 is mainly due to fair value revaluation of the investment in Wize Pharma Inc’s shares, which is
classified under short term investment.

Comparison of the Year Ended December 31, 2018 to Year Ended
December 31, 2017

Revenues

Revenues
for the year ended December 31, 2018 were $3.8 million, an increase of $3.0 million, or 384%, compared to $0.8 million for the
year ended December 31, 2017. The increase in revenue was mainly due to the recognition of a $2 million advance payment received
in August 2018 under the Distribution Agreement with CMS Medical and from the recognition of a portion of the $2.2 million advance
payment received in January 2018 under the Distribution and Supply Agreement with Gebro.

Research
and development expenses

Research
and development expenses for the year ended December 31, 2018 were $6.0 million, an increase of $0.9 million, or 19%, compared
to $5.1 million for the year ended December 31, 2017. Research and developments expenses for the year ended 2018 comprised primarily
of expenses associated with the Phase II studies for Namodenoson as well as expenses for ongoing studies of Piclidenoson. The
increase is primarily due to increased costs associated with the initiation of the Phase III clinical trial of Piclidenoson for
the treatment of rheumatoid arthritis. We expect that the research and development expenses will increase through 2020 and beyond.

General
and administrative expenses

General
and administrative expenses were $3.1 million for the year ended December 31, 2018 an increase of $0.3 million, or 10%, compared
to $2.8 million for the year ended December 31, 2017. The increase is primarily due to an increase in professional services and
investor relations expenses. We expect that general and administrative expenses will remain at the same level through 2019.

Financial
expenses, net

Financial
expenses, net for the year ended December 31, 2018 aggregated $1.1 million compared to immaterial financial income, net for the
same period in 2017. The increase in financial expense, net was mainly due to a loss from long-term investment revaluation and
from recognition of interest expenses related to implementation of revenue recognition accounting standard IFRS 15, while in the
same period in 2017, financial income was mainly due to fair value revaluation of warrants which were offset by financial expenses
from exchange rate differences.

Comparison of the Year Ended December 31, 2017 to Year Ended
December 31, 2016

Revenues

Revenues
for the year ended December 31, 2017 were $0.8 million, an increase of $0.6 million, or 300%, compared to $0.2 million for the
year ended December 31, 2016. The revenues during 2017 were mainly due to recognition of a portion of the $0.2 million advance
payment received in March 2015 under the Distribution and Supply Agreement with Cipher and from the recognition of the milestone
payment of $0.5 million and a portion of the $0.1 million advance payment received in December 2016 under the Distribution Agreement
with CKD.

Research
and development expenses

Research
and development expenses for the year ended December 31, 2017 were $5.1 million, a decrease of $1.0 million, or 16%, compared
to $6.1 million for the year ended December 31, 2016. Research and developments expenses for the year ended 2017 comprised primarily
of expenses associated with the Phase II studies for Namodenoson as well as expenses for ongoing studies of Piclidenoson. The
decrease is primarily due to costs associated with CF602 expenses that decreased since the postponement of a planned IND submission
for this indication and a decrease in costs associated with the ongoing clinical trial of Namodenoson for treatment in liver cancer.

General
and administrative expenses

General
and administrative expenses were $2.8 million for the year ended December 31, 2017, an increase of $0.1 million, or 4.5%, compared
to $2.7 million for the year ended December 31, 2016. The minor increase is primarily due to an increase in salary and related
expenses.

Financial
expenses, net

Financial
income, net for the year ended December 31, 2017 aggregated $0.01 million compared to financial income, net of $0.3 million for
the same period in 2016. The decrease in financial income, net was mainly due to an increase in financial expenses from exchange
rate offset by a decrease in fair value revaluation of warrants.


Liquidity and Capital Resources

Since inception, we
have funded our operations primarily through public (in Israel and the United States) and private offerings of our equity securities
and payments received under our strategic licensing arrangements. As of September 30, 2019, we had approximately $4.7 million
in cash and cash equivalents, and have invested most of our available cash funds in ongoing cash accounts. In January 2020, we
raised approximately $2.4 million from the exercise of certain outstanding warrants following their repricing.

We may be able to
use U.S. taxes withheld as credits against Israeli corporate income tax when we have income, if at all, but there can be no assurance
that we will be able to realize the credits. In addition, we believe that we may be entitled to a refund of such withholding tax
from the U.S. government but there can be no assurance that we will be entitled to such a refund. For information regarding the
revenues and expenses associated with our licensing agreements, see “Business—Business Overview—Out-Licensing
and Distribution Agreements”, “Business—Business Overview—In-Licensing Agreements” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operation—Revenues.”

Net cash used in operating
activities was $7.3 million for the nine months ended September 30, 2019, compared with net cash used in operating activities
of $4.1 million and $8.79 million for the years ended December 31, 2018 and 2019, respectively. The $3.2 million decrease in the
net cash used in operating activities during the nine months ended September 30, 2019, compared to 2018, was primarily the result
of an increase in net loss, a decrease in deferred revenues, decrease in other account payables, a change in fair value of short-term
investment, decrease in trade payables and a decrease in other receivable and prepaid expenses. The $4.8 million decrease in the
net cash used in operating activities during 2018, compared to 2017, was primarily the result of an increase in accounts receivable,
prepaid expenses and lease deposit, an increase in deferred revenues and a change in fair value of short-term investment.

Net cash used in investing
activities for the nine months ended September 30, 2019 was $1.75 million compared to net cash used in investing activities of
$0.03 million for the years ended December 31, 2018 and December 31, 2017. The changes in cash flows from investing activities
were due to increase in other receivables of $1.75 million in the nine month ended period September 30, 2019.

Net cash provided
by financing activities for the nine months ended September 30, 2019 was $10.1 million, compared to $4.4 million for the year
ended December 31, 2018 and $4.5 million of net cash provided by financing activities for the year ended December 31, 2017. Net
cash provided by financing activities during the nine months ended September 30, 2019 and for the year ended 2018 and 2017 was
due to issuance of shares and warrants, net of issuance expenses. In January 2017, we raised gross proceeds of $5.0 million in
a registered direct offering, in March 2018, we raised gross proceeds of approximately $5 million in a registered direct offering,
and in January, April and May 2019, we raised gross proceeds of approximate $10.1 million in registered direct offerings.

Developing drugs,
conducting clinical trials and commercializing products is expensive and we will need to raise substantial additional funds to
achieve our strategic objectives. Although we believe our existing financial resources as of the date of issuance of this prospectus,
will be sufficient to fund our projected cash requirements at least through the end of the next twelve months, we will require
significant additional financing to fund our operations. Additional financing may not be available on acceptable terms, if at
all. Our future capital requirements will depend on many factors, including:

the level of research
and development investment required to develop our product candidates;
the failure to obtain
regulatory approval or achieve commercial success of our product candidates, including Piclidenoson, Namodenoson and CF602;

the results of our
preclinical studies and clinical trials for our earlier stage product candidates, and any decisions to initiate clinical trials
if supported by the preclinical results;

the costs, timing
and outcome of regulatory review of our product candidates that progress to clinical trials;

the costs of preparing,
filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related
claims;

the cost of commercialization
activities if any of our product candidates are approved for sale, including marketing, sales and distribution costs;

the cost of manufacturing
our product candidates and any products we successfully commercialize;

the timing, receipt
and amount of sales of, or royalties on, our future products, if any;

the expenses needed
to attract and retain skilled personnel;

any product liability
or other lawsuits related to our products;

the extent to which
we acquire or invest in businesses, products or technologies and other strategic relationships;

the costs of financing
unanticipated working capital requirements and responding to competitive pressures; and
maintaining minimum
shareholders’ equity requirements under the NYSE American Company Guide.

Until we can generate
significant continuing revenues, we expect to satisfy our future cash needs through payments received under our license agreements,
debt or equity financings, or by out-licensing other product candidates. We cannot be certain that additional funding will be
available to us on acceptable terms, or at all. If funds are not available, we may be required to delay, reduce the scope of,
or eliminate one or more of our research or development programs or our commercialization efforts.

Research and Development, Patents and Licenses, Etc.

For information concerning
our research and development policies and a description of the amount spent during each of the last three fiscal years on company-sponsored
research and development activities, see “Management’s Discussion and Analysis of Financial Condition and Results
of Operation — Results of Operation.”

Trend Information.

We are a development
stage company and it is not possible for us to predict with any degree of accuracy the outcome of our research, development or
commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties,
demands, commitments or events that are reasonably likely to have a material effect on our net sales or revenues, income from
continuing operations, profitability, liquidity or capital resources, or that would cause financial information to not necessarily
be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties,
demands, commitments and events are identified in the preceding subsections of this Management’s Discussion and Analysis
of Financial Condition and Results of Operation.

Off-Balance Sheet Arrangements.

We have no off-balance
sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that
are material to investors.


Contractual Obligations.

The following table
summarizes our significant contractual obligations in U.S. dollars as of September 30, 2019:

Total

Less than 1 year

1-3 years

3-5 years

More than 5 years

Contractual Obligations

Leiden University milestones(2)

100,994

11,221

89,773

Car lease obligations

91,210

37,840

53,370

Total

192,204

49,061

143,143

(2) Includes
a €10,000 annual royalty and €50,000 upon the initiation of a Phase I study. We will update our milestone payment obligations
upon releasing the Phase I data from such study. As such, the obligations above do not include a potential milestone payment of
€100,000 upon the initiation of a Phase II study, €200,000 upon the initiation of a Phase III study or €500,000
upon marketing approval by any regulatory authority.

Other than as described
above, we did not have any material commitments for capital expenditures, including any anticipated material acquisition of plant
and equipment or interests in other companies, as of September 30, 2019.




BUSINESS

History and Development of the Company

Our legal name is
Can-Fite BioPharma Ltd. and our commercial name is “Can-Fite.” We are a company limited by shares organized under
the laws of the State of Israel. Our principal executive offices are located at 10 Bareket Street, Kiryat Matalon, Petah-Tikva
4951778 Israel. Our telephone number is +972 (3) 924-1114.

We were founded on
September 11, 1994 by Pnina Fishman, Ph.D., our Chief Executive Officer and a director, and Ilan Cohn, Ph.D., our Chairman of
the Board of Directors, under the name Can-Fite Technologies Ltd. On January 7, 2001, we changed our name to Can-Fite BioPharma
Ltd. We completed our initial public offering in Israel in October 2005 and our ordinary shares are traded on the TASE under the
symbol “CFBI.” On October 2, 2012, our ADSs began trading over the counter in the United States under the symbol “CANFY”
and on November 19, 2013, our ADSs began trading on the NYSE American under the symbol “CANF.”

In November 2011,
through a series of transactions, we spun-off our activity in the ophthalmic field to our now former subsidiary, OphthaliX, a
Delaware corporation and successor-in-interest to Denali Concrete Management, Inc., a Nevada corporation, whose common shares
were traded in the United States on OTC under the symbol “OPLI.” In the spin-off transactions, we granted an exclusive
license for the use of our Piclidenoson drug candidate in the ophthalmic field, or the License Agreement, to Eye-Fite Ltd., an
Israel limited company, or Eye-Fite, and transferred our issued and outstanding ordinary shares in Eye-Fite to OphthaliX in exchange
for an 86.7% interest in OphthaliX. In connection with the spin-off transactions, OphthaliX completed a series of private placement
financing transactions. Following the spin-off transactions and the private placement financing transactions, we held approximately
82% interest in OphthaliX. In July 2016, OphthaliX released top-line results from its Phase II clinical trial of Piclidenoson
for the treatment of glaucoma. In this trial, no statistically significant differences were found between the Piclidenoson treated
group and the placebo group in the primary endpoint of lowering IOP. High IOP is a characteristic of glaucoma. Piclidenoson was
found to have a favorable safety profile and was well tolerated. Based on these overall results, OphthaliX saw no immediate path
forward in glaucoma and ceased active business operations. Subsequently, on May 21, 2017, OphthaliX and a wholly owned private
Israeli subsidiary of OphthaliX, Bufiduck Ltd, or the Merger Sub, and Wize Pharma Ltd., or Wize Israel, an Israeli company formerly
listed on the TASE entered into an Agreement and Plan of Merger, or the Merger Agreement, providing for the merger of the Merger
Sub with and into Wize Israel, with Wize Israel becoming a wholly-owned subsidiary of OphthaliX and the surviving corporation
of the merger, or the Merger. On November 16, 2017, the Merger was completed. As a result of the Merger, our ownership of OphthaliX,
immediately post-Merger, became approximately 8% of the outstanding shares of common stock. In addition, immediately prior to
the Merger, OphthaliX sold on an “as is” basis to us all the ordinary shares of Eye-Fite in exchange for the irrevocable
cancellation and waiver of all indebtedness owed by OphthaliX and Eye-Fite to us, including approximately $5 million of deferred
payments owed by OphthaliX and Eye-Fite to us and, as part of the purchase of Eye-Fite, we also assumed certain accrued milestone
payments in the amount of $175,000 under a license agreement previously entered into with NIH. In addition, that certain License
Agreement granted to OphthaliX by us and a related services agreement was terminated. See “Related Party Transactions.”

Our capital expenditures
for the years ended December 31, 2018, 2017 and 2016 were $33,000, $7,000, and $10,000, respectively. Our current capital expenditures
are made solely within Israel and primarily consist of the acquisition of computers and related communications equipment. Such
capital expenditures are financed internally.

Business Overview

We are a clinical-stage
biopharmaceutical company focused on developing orally bioavailable small molecule therapeutic products for the treatment of cancer,
liver and inflammatory diseases and erectile dysfunction. We also co-develop specific formulations of cannabis components for the
treatment of cancer, inflammatory, autoimmune, and metabolic diseases. Our platform technology utilizes the Gi protein associated
A3AR as a therapeutic target. A3AR is highly expressed in inflammatory and cancer cells, and not significantly expressed in normal
cells, suggesting that the receptor could be a unique target for pharmacological intervention. Our pipeline of drug candidates
are synthetic, highly specific agonists and allosteric modulators, or ligands or molecules that initiate molecular events when
binding with target proteins, targeting the A3AR.

Our product pipeline
is based on the research of Dr. Pnina Fishman, who investigated a clinical observation that tumor metastasis can be found in most
body tissues, but are rarely found in muscle tissue, which constitutes approximately 60% of human body weight. Dr. Fishman’s
research revealed that one reason that striated muscle tissue is resistant to tumor metastasis is that muscle cells release small
molecules which bind with high selectivity to the A3AR. As part of her research, Dr. Fishman also discovered that A3ARs have significant
expression in tumor and inflammatory cells, whereas normal cells have low or no expression of this receptor. The A3AR agonists
and allosteric modulators, currently our pipeline of drug candidates, bind with high selectivity and affinity to the A3ARs and
upon binding to the receptor initiate down-stream signal transduction pathways resulting in apoptosis, or programmed cell death,
of tumors and inflammatory cells and to the inhibition of inflammatory cytokines. Cytokines are proteins produced by cells that
interact with cells of the immune system in order to regulate the body’s response to disease and infection. Overproduction
or inappropriate production of certain cytokines by the body can result in disease.

Our product candidates,
CF101, CF102 and CF602, are being developed to treat autoimmune inflammatory indications, oncology and liver diseases as well
as erectile dysfunction. CF101, also known as Piclidenoson, is in an advance stage of clinical development for the treatment of
autoimmune-inflammatory diseases, including rheumatoid arthritis and psoriasis. CF102, also known as Namodenoson, is being developed
for the treatment of HCC and has orphan drug designation for the treatment of HCC in the United States and Europe. Namodenoson
was granted Fast Track designation by the FDA as a second line treatment to improve survival for patients with advanced HCC who
have previously received Nexavar (sorafenib). Namodenoson is also being developed for the treatment of NASH, following our study
which revealed compelling pre-clinical data on Namodenoson in the treatment of NASH, a disease for which no FDA approved therapies
currently exist. CF602 is our second generation allosteric drug candidate for the treatment of erectile dysfunction, which has
shown efficacy in the treatment of erectile dysfunction in preclinical studies and we are investigating additional compounds,
targeting A3AR, for the treatment of erectile dysfunction. Preclinical studies revealed that our drug candidates have potential
to treat additional inflammatory diseases, such as Crohn’s disease, oncological diseases, viral diseases, such as the JC
virus, and obesity.

We believe our pipeline
of drug candidates represent a significant market opportunity. For instance, according to iHealthcareAnalyst, the world rheumatoid
arthritis market size is predicted to generate revenues of $50.5 billion by 2025 and the psoriasis drug market is forecasted to
be worth $11.3 billion by 2025. According to DelveInsight, the HCC drug market in the G8 countries (U.S., Germany, France, Italy,
Spain, UK, Japan and China) is expected to reach $3.8 billion by 2027.

We have in-licensed
an allosteric modulator of the A3AR, CF602 from Leiden University. In addition, we have out-licensed the following:

Piclidenoson for
the treatment of (i) rheumatoid arthritis to Kwang Dong for South Korea, (ii) psoriasis and rheumatoid arthritis to Cipher,
for Canada, (iii) rheumatoid arthritis and psoriasis to Gebro or Spain, Switzerland and Austria, (iv) rheumatoid arthritis
and psoriasis to CMS Medical for China (including Hong Kong, Macao and Taiwan), and (v) psoriasis to Kyongbo for South Korea;
and

Namodenoson for
the treatment of (i) liver cancer and NASH to CKD for South Korea, and (ii) advanced liver cancer and NAFLD/NASH to CMS Medical
for China (including Hong Kong, Macao and Taiwan).

On September 10, 2019,
we entered into a collaboration agreement with Univo, a medical cannabis company, to identify and co-develop specific formulations
of cannabis components for the treatment of cancer, inflammatory, autoimmune, and metabolic diseases. Under the collaboration
agreement, Univo will provide us with cannabis and cannabis components, as well as full access to its laboratories for both research
and manufacturing. We agreed to pay Univo a total of $500,000 through two installments and issued to Univo 19,934,355 ordinary
shares through a private placement, representing approximately 16.6% of Can-Fite’s ordinary shares outstanding after giving
effect to the issuance. The companies will initially share ownership of intellectual property developed in this collaboration.
Revenues derived from the collaboration will generally be shared between us and Univo on the basis of each party’s contribution.
Golan Bitton, Univo’s CEO was appointed to our Board in December 2019.

We are currently:
(i) conducting a Phase III trial for Piclidenoson in the treatment of rheumatoid arthritis, (ii) conducting a Phase III trial
for Piclidenoson in the treatment of psoriasis, (iii) preparing to commence a Phase III trial for Namodenoson in the treatment
of liver cancer, (iv) conducting a Phase II trial of Namodenoson in the treatment of NASH with data release expected in the first
quarter of 2020, and (v) investigating additional compounds, targeting the A3 adenosine receptor, for the treatment of erectile
dysfunction.

We believe that our
drug candidates have certain unique characteristics and advantages over drugs currently available on the market and under development
to treat these indications. To date, we have generated our pipeline by in-licensing, researching and developing two synthetic
A3AR agonists, Piclidenoson and Namodenoson, and an allosteric modulator, CF602. For example, our technology platform is based
on the finding that the A3AR is highly expressed in pathological cells, such as various tumor cell types and inflammatory cells.
High A3AR expression levels are also found in peripheral blood mononuclear cells, or PBMCs, of patients with cancer, inflammatory
and viral diseases. PBMCs are a critical part of the immune system required to fight infection. We believe that targeting the
A3AR with synthetic and highly selective A3AR agonists, such as Piclidenoson and Namodenoson, and allosteric modulators, such
as CF602, induces anti-cancer and anti-inflammatory effects. In addition, our human clinical data suggests that the A3AR is a
biological marker and that high A3AR expression prior to treatment may be predictive of good patient response to our drug treatment.
In fact, as a result of our research we have developed a simple blood assay to test for A3AR expression as a predictive biological
marker. We have been granted a U.S. patent with respect to the intellectual property related to such assay and utilized this assay
in our Phase IIb study of Piclidenoson for the treatment of rheumatoid arthritis.

Moreover, we believe
characteristics of Piclidenoson, as exhibited in our clinical studies to date, including its good safety profile, clinical activity,
simple and less frequent delivery through oral administration and its low cost of production, position it well against the competition
in the autoimmune-inflammatory markets, including the rheumatoid arthritis and psoriasis markets, where treatments, when available,
often include injectable drugs, many of which can be highly toxic, expensive and not always effective. Furthermore, pre-clinical
pharmacology studies in different experimental animal models of arthritis revealed that Piclidenoson acts as a disease modifying
anti-rheumatic drug, or a DMARD, which, when coupled with its good safety profile, makes it competitive in the psoriasis and rheumatoid
arthritis markets. Our recent findings also demonstrate that a biological predictive marker can be utilized prior to treatment
with Piclidenoson, which may allow it to be used as a personalized medicine therapeutic approach for the treatment of rheumatoid
arthritis.

Like Piclidenoson,
Namodenoson has a good safety profile, is orally administered and has a low cost of production, which we believe positions it
well in the HCC market, where only one drug, Nexavar, has been approved by the FDA. In addition, pre-clinical studies show Namodenoson’s
novel mechanism of action which entails de-regulation of three key signaling pathways which mediate the etiology and pathology
of NAFLD/NASH and are responsible for the anti-inflammatory and anti-fibrogenic effect in the liver. Most recently, pre-clinical
data support Namodenoson’s potential utilization as an anti-obesity drug.

Nevertheless, other
drugs on the market, new drugs under development (including drugs that are in more advanced stages of development in comparison
to our drug candidates) and additional drugs that were originally intended for other purposes, but were found effective for purposes
targeted by us, may all be competitive to the current drugs in our pipeline. In fact, some of these drugs are well established
and accepted among patients and physicians in their respective markets, are orally bioavailable, can be efficiently produced and
marketed, and are relatively safe. None of our product candidates have been approved for sale or marketing and, to date, there
have been no commercial sales of any of our product candidates.

Our research further
suggests that A3AR affects pathological and normal cells differently. While specific A3AR agonists, such as Piclidenoson and Namodenoson,
and allosteric modulators, such as CF602, appear to inhibit growth and induce apoptosis of cancer and inflammatory cells, normal
cells are refractory, or unresponsive to the effects of these drugs. To date, the A3AR agonists have had a positive safety profile
as a result of this differential effect.

Our Strategy

Our strategy is to
build a fully integrated biotechnology company that discovers, in-licenses and develops an innovative and effective small molecule
drug portfolio of ligands that bind to a specific therapeutic target for the treatment of cancer, liver and inflammatory diseases
and erectile dysfunction. We continue to develop and test our existing pipeline, while also testing other indications for our
existing drugs and examining, from time to time, the potential of other small molecules that may fit our platform technology of
utilizing small molecules to target the A3AR. We generally focus on drugs with global market potential and we seek to create global
partnerships to effectively assist us in developing our portfolio and to market our products. Our approach allows us to:

continue to advance
our clinical and preclinical pipeline;

test our products
for additional indications which fit our molecules’ mechanism of action;

identify other small
molecule drugs or ligands;

focus on our product
candidates closest to realizing their potential; and

avoid dependency
on a small number of small molecules and indications.

Using this approach,
we have successfully advanced our product candidates for a number of indications into various stages of clinical development.
Specific elements of our current strategy include the following:

Successful development
of our existing portfolio of small molecule orally bioavailable drugs for the treatment of various diseases
. We intend to
continue to develop our existing portfolio of small molecule orally bioavailable drugs, both for existing targeted diseases, as
well as other potential indications. Our drug development will continue to focus on cancer, liver and inflammatory diseases and
erectile dysfunction. We intend to focus most prominently on advancing our product candidates that are in the most advanced stages,
i.e., rheumatoid arthritis and psoriasis with respect to Piclidenoson, and HCC and NASH with respect to Namodenoson.

Use our expertise
with our platform technology to evaluate in-licensing opportunities
. We continuously seek attractive product candidates and
innovative technologies to in-license or acquire. We intend to focus on product candidates that would be synergistic with our
A3AR expertise. We believe that by pursuing selective acquisitions of technologies in businesses that complement our own, we will
be able to enhance our competitiveness and strengthen our market position. We intend to utilize our expertise in A3AR and our
pharmacological expertise to validate new classes of small molecule orally bioavailable drugs. We will then seek to grow our product
candidate portfolio by attempting to in-license those various candidates and to develop them for a variety of indications.

Primarily develop
products that target major global markets
. Our existing product candidates are almost all directed at diseases that have major
global markets. Our intent is to continue to develop products that target diseases that affect significant populations using our
platform technology. We believe these arrangements will allow us to share the high development cost, minimize the risk of failure
and enjoy our partners’ marketing capabilities, while also enabling us to treat a more significant number of persons. We
believe further that this strategy will increase the likelihood of advancing clinical development and potential commercialization
of our product candidates.

Commercialize our
product candidates through out-licensing arrangements
. We have entered into several out-licensing arrangements with leading
pharmaceutical companies in the Far East, Canada and Europe. We intend to continue to commercialize our product candidates through
out-licensing arrangements with third parties who may perform any or all of the following tasks: completing development, securing
regulatory approvals, manufacturing, marketing and sales. We do not intend to develop our own manufacturing facilities or sales
forces. If appropriate, we may enter into co-development and similar arrangements with respect to any product candidate with third
parties or commercialize a product candidate ourselves. We believe these arrangements will allow us to share the high development
cost, minimize the risk of failure and enjoy our partners’ marketing capabilities. We believe further that this strategy
will increase the likelihood of advancing clinical development and potential commercialization of our product candidates.


Our Product Pipeline

The table below sets forth our current
pipeline of product candidates, including the target indication and status of each.

Clinical
Application/Drug
Pre-Clinical Phase I Phase
II
Phase III
Autoimmune-Inflammatory
Rheumatoid Arthritis
–  Piclidenoson (1)
Psoriasis –  Piclidenoson
(2)
Oncology/Liver
diseases
HCC – Namodenoson
(3)
NASH – Namodenoson
(4)
Erectile
Dysfunction
– CF602 (5)
Completed
On-going
Preparatory
work

(1) We are conducting
a Phase III trial for Piclidenoson in the treatment of rheumatoid arthritis.
(2) We are conducting
a Phase III trial for Piclidenoson in the treatment of psoriasis.
(3) We are preparing
to commence a Phase III trial for Namodenoson in the treatment of liver cancer.
(4) We have completed
patient enrollment for a Phase II trial of Namodenoson in the treatment of NASH. Top-line results are expected in the first
quarter of 2020.
(5) We are investigating
additional compounds, targeting the A3AR, for the treatment of erectile dysfunction.

Piclidenoson (CF101)

Piclidenoson, our
lead therapeutic product candidate, is in development for the treatment of autoimmune-inflammatory diseases. In certain of our
pharmacological studies, Piclidenoson has also shown potential for development for the treatment of Crohn’s disease. Piclidenoson
is a highly-selective, orally bioavailable small molecule synthetic drug, which targets the A3AR. Based on our clinical studies
to date, we believe that Piclidenoson has a favorable safety profile and significant anti-inflammatory effects as a result of
its capability to inhibit the production of inflammatory cytokines, such as TNF-α, IL-6 and IL-1, and chemokines, or small
cytokines, such as MMPs, by signaling key proteins such as NF-кB and PKB/AKT. Overall, these up-stream events result in
apoptosis of inflammatory cells. See Figure 1 below. Piclidenoson’s anti-inflammatory effect is mediated via the A3AR, which
is highly expressed in inflammatory cells.


Click to enlarge

Figure 1: Piclidenoson anti-inflammatory
mechanism of action

Set forth below are
general descriptions of the inflammatory diseases with respect to which Piclidenoson is currently undergoing, or is in preparation
for clinical trials.

Rheumatoid Arthritis:
Rheumatoid arthritis is a chronic, systemic autoimmune-inflammatory disease that may affect many tissues and organs, but principally
attacks flexible synovial, or joints, on both sides of the body. This symmetry helps distinguish rheumatoid arthritis from other
types of arthritis, which is the general term for joint inflammation. Although the cause of rheumatoid arthritis is unknown, autoimmunity
plays a pivotal role in both its chronicity and progression. The disease involves abnormal B cell–T cell interaction, which
results in the release of cytokines. The cytokines signal the release of inflammatory cells. The inflammatory cells migrate from
the blood into the joints and joint-lining tissue. There, the cells produce inflammatory substances that cause irritation, wearing
down of cartilage, or the cushioning material at the end of bones, swelling and inflammation of the joint lining, which is caused
by excess synovial fluid, the development of pannus, or fibrous tissue, in the joint, and ankylosis, or fusion of the joints.
Joint inflammation is characterized by redness, warmth, swelling and pain within the joint. As the cartilage wears down, the space
between the bones narrows. If the condition worsens, the bones could rub against each other. As the lining expands due to inflammation
from excess fluid, it may erode the adjacent bone, resulting in bone damage. Rheumatoid arthritis can also produce diffuse inflammation
in the lungs, membrane around the heart, the membranes of the lungs, and white of the eye, and also nodular lesions, most common
in subcutaneous tissue.

Psoriasis:
Psoriasis is an autoimmune hereditary disease that affects the skin. In psoriasis, immune cells move from the dermis to the epidermis,
where they stimulate keratinocytes, or skin cells, to proliferate. DNA acts as an inflammatory stimulus to stimulate receptors
which produce cytokines, such as IL-1, IL-6, and TNF-α, and antimicrobial peptides. These cytokines and antimicrobial peptides
signal more inflammatory cells to arrive and produce further inflammation. In other words, psoriasis occurs when the immune system
overreacts and mistakes the skin cells as a pathogen, and sends out faulty signals that speed up the growth cycle of skin cells.
Normally, skin cells grow gradually and flake off approximately every four weeks. New skin cells grow to replace the outer layers
of the skin as they shed. But in psoriasis, new skin cells move rapidly to the surface of the skin in days rather than weeks.
They build up and form thick patches called plaques.

There are five types
of psoriasis: plaque, guttate, inverse, pustular and erythrodermic. The most common form, plaque psoriasis, is commonly seen as
red and white hues of scaly patches appearing on the top first layer of the epidermis, or skin. In plaque psoriasis, skin rapidly
accumulates at these sites, which gives it a silvery-white appearance. Plaques frequently occur on the skin of the lower back,
elbows and knees, but can affect any area, including the scalp, palms of hands, soles of feet and genitals. The plaques range
in size from small to large. In contrast to eczema, psoriasis is more likely to be found on the outer side of the joint. Some
patients, though, have no dermatological symptoms.

Psoriasis is a chronic
recurring condition that varies in severity from minor localized patches to complete body coverage. Fingernails and toenails are
frequently affected, known as psoriatic nail dystrophy, and can be seen as an isolated symptom. Psoriasis can also cause inflammation
of the joints, which is known as psoriatic arthritis.

Pre-Clinical Studies of Piclidenoson

The information below
is based on the various studies conducted with Piclidenoson, including preclinical studies. All of the studies were conducted
by Can-Fite and/or by Can-Fite’s partners or affiliates.

Pre-clinical studies
are a set of experiments carried out in animals to show that a certain drug does not evoke toxicity. Based on the animal studies
and safety data, one can approach the FDA and request permission to conduct a Phase I study in human beings.

The toxicity of Piclidenoson
has been evaluated following 28-day, 90-day, six-month and nine-month good laboratory practice repeated-dose toxicity studies
in male and female mice (28-day, 90-day and six-month), dogs (single-dose only), and monkeys (28-day, 90-day and nine-month).
Even though the dose of Piclidenoson in these studies was escalated to an exposure that is many folds higher than the dose used
in human clinical studies, no toxic side effects were identified.

Effects on cardiovascular
parameters were evaluated in conscious instrumented monkeys and anesthetized dogs. These studies demonstrated no significant cardiovascular
risk.

Genotoxicity studies
were conducted in bacterial and mammalian mutation assays in vitro (i.e., laboratory) and in an in vivo (i.e., animal)
mouse micronucleus assay. These studies were all negative, indicating no deleterious action on cellular genetic material.

Reproductive toxicology
studies that we completed in mice and rabbits did not reveal evidence of negative effects on male or female fertility. In mouse
teratology studies, or studies for abnormalities of physiological developments, craniofacial and skeletal abnormalities were observed
at doses greater than 10 mg/kg; however, no such effects were observed at 3 mg/kg demonstrating the safety of the drug in this
concentration range. Teratogenicity, or any developmental anomaly in a fetus, was not observed in rabbits given doses (greater
than 13 mg/kg) that induced severe maternal toxicity in such rabbits.

Studies of P450 enzymes,
or enzymes that participate in the metabolism of drugs, showed that Piclidenoson caused no P450 enzyme inhibition, or increased
drug activity, or induction, or reduced drug activity. Studies carried out with radiolabeled (C14) Piclidenoson in
rats showed that the drug is excreted essentially unchanged. These studies also showed that the drug is widely distributed in
all body parts, except the central nervous system.

Clinical Studies of Piclidenoson

The information below
is based on the various studies conducted with Piclidenoson, including clinical studies in patients with autoimmune-inflammatory
and ophthalmic diseases. All of the studies were conducted by Can-Fite and/or by Can-Fite’s partners or affiliates.

Phase I Clinical Studies of Piclidenoson

Piclidenoson has been
studied comprehensively in normal volunteer trials to assess safety, pharmacokinetic metabolism and food interaction. Two Phase
I studies in 40 healthy volunteers, single dose and repeated dose, indicated that Piclidenoson is rapidly absorbed (reaching a
maximal concentration within one to two hours) with a half-life of eight to nine hours. Some mild adverse events (principally,
increased heart rate) were observed at doses higher than single doses of 10.0 mg and twice-daily doses of 5.0 mg. Such increase
in heart rate was not accompanied by any change in QT intervals. The drug showed linear kinetics, in that the concentration that
results from the dose is proportional to the dose and the rate of elimination of the drug is proportional to the concentration,
and low inter-subject variability, meaning that the same dose of the drug does not produce large differences in pharmacological
responses in different individuals. A fed-fast Phase I study (with and without food) demonstrated that food causes some attenuation
in Piclidenoson absorption; accordingly, Piclidenoson is administered to patients on an empty stomach in our trials. An additional
Phase I study of the absorption, metabolism, excretion and mass balance of 4.0 mg (C14) Piclidenoson was conducted
in six healthy male subjects and demonstrated that Piclidenoson was generally well-tolerated in this group.

Based on the findings
from Phase I clinical studies, 4.0 mg twice daily, or BID, was selected as the upper limit for initial Phase II clinical trials.

Additionally, in preparation
for Phase III studies of Piclidenoson to establish cardiac safety in humans prior to registration for marketing approval, we conducted
a cardiodynamic trial that was a placebo-controlled crossover study using precise methodology to determine the effect of Piclidenoson
on electrocardiograms of healthy volunteers. The primary objective of the trial was to assess whether Piclidenoson causes a delay
in cardiac repolarization, as manifested by prolongation of the QT interval of the electrocardiogram. A drug-induced delay in
cardiac repolarization creates an electrophysiological environment that can lead to the development of ventricular cardiac arrhythmias.
In this study, Piclidenoson doses were up to 3-fold higher than the highest dose expected to be used in our registration-directed
clinical trials. Trial results showed that our highest projected Piclidenoson dose had no clinically significant adverse electrocardiographic
effects.

Phase II, Phase II/III and Phase
III Clinical Studies of Piclidenoson

Piclidenoson has completed
eleven Phase II studies, one Phase II/III study and one Phase III study in different clinical indications including psoriasis,
rheumatoid arthritis, glaucoma and dry eye syndrome, or DES, in approximately 1,500 patients. These studies indicate that Piclidenoson
has a favorable safety profile at doses up to 4.0 mg BID for up to 48 weeks. In these studies, we did not observe a dose-response
relationship between Piclidenoson and adverse events. Moreover, we did not observe any clinically significant changes in vital
signs, electrocardiograms, blood chemistry or hematology.

Piclidenoson given
as a standalone therapy reached the primary endpoint in Phase II clinical studies in DES; however, a Phase III study of Piclidenoson
for DES failed to reach the primary endpoint. We have observed positive data utilizing Piclidenoson as a standalone drug in a
Phase IIa clinical study in rheumatoid arthritis. In this study, we also observed a significant direct correlation between A3AR
expression prior to treatment and the patients’ responses to Piclidenoson. However, we did not fully attain the primary
endpoint in this study as we did not observe a significant difference in responses between Piclidenoson and the placebo (which
for this study was 0.1 mg of Piclidenoson). Moreover, two Phase IIb studies in rheumatoid arthritis utilizing Piclidenoson in
combination with MTX, also failed to reach the primary endpoints. Based on this data, we believe that the failures in the Phase
IIb studies in rheumatoid arthritis may have been due to low A3AR expression in the MTX-treated patients. A Phase IIb of Piclidenoson
given as a standalone therapy in patients with A3AR expression levels above a certain threshold reached the primary endpoint in
rheumatoid arthritis in December 2013. Piclidenoson has been tested in Phase II trials to establish dose and activity (first,
orally administered capsules and then tablets in formulations of 1.0, 2.0 and 4.0 mg of Piclidenoson BID) in psoriasis (moderate
to severe plaque psoriasis), rheumatoid arthritis and DES (moderate to severe). A Phase II/III study of Piclidenoson for psoriasis
did not meet its primary endpoint although positive data from further analysis of the Phase II/III study suggests Piclidenoson
as a potential systemic therapy for patients with moderate-severe psoriasis. In addition, a Phase II study of Piclidenoson for
glaucoma showed no statistically significant differences between the Piclidenoson treated group and the placebo group in the primary
endpoint of lowering IOP.

Psoriasis:
The rationale for utilizing Piclidenoson to treat psoriasis stems from our pre-clinical pharmacology studies showing that Piclidenoson
acts as an anti-inflammatory agent via the inhibition of inflammatory cytokines, including TNF-α, which plays a major role
in the pathogenesis of psoriasis. In addition, the A3AR is over-expressed in the tissue and PBMCs of patients with psoriasis.

We completed an exploratory
Phase II trial in ten European and Israeli medical centers involving 76 patients. This study was a randomized, double-blind, placebo
controlled and included four cohorts of 1.0, 2.0, and 4.0 mg of Piclidenoson and a placebo for a 12-week period. The study objectives
were efficacy and safety of daily doses of Piclidenoson administered orally in patients with moderate-to-severe plaque-type psoriasis
and the efficacy endpoints were improvements in both the Psoriasis Area Sensitivity Index score, or PASI score, and the Physicians’
Global Assessment score, or PGA score. We concluded that Piclidenoson met such efficacy endpoints and was well tolerated and effective
in ameliorating disease manifestations in these patients. The patient group receiving 2.0 mg Piclidenoson BID showed progressive
improvement over the course of the 12-week study in the PGA and PASI scores. Analysis of the mean change from baseline in the
PASI score at week 12 revealed a statistically significant difference between the 2.0 mg Piclidenoson BID treated group and the
placebo group (p<0.001 versus baseline and p=0.031 versus placebo). Analysis of the PGA score revealed that 23.5% of the patients treated with the 2.0 mg Piclidenoson BID achieved a score of 0 or 1, in comparison to 0% in the placebo group (p<0.05). The study also demonstrated linear improvement in patients in both PASI and PGA. See Figure 2. No drug-related serious adverse events were evident during the study.


Click to enlarge

Figure 2: Psoriasis efficacy by PGA
and PASI

Set forth below are
representative pictures of a patient with plaque-type psoriasis on the upper and lower back treated with 2.0 mg Piclidenoson BID,
both baseline and week 12.


Click to enlarge

A comparison between baseline and week
12 of a patient treated with 2.0 mg CF101

In February 2015,
we completed a Phase II/III randomized, double-blind, placebo-controlled, dose-finding study of the efficacy and safety of Piclidenoson
administered daily orally in patients with moderate-to-severe plaque psoriasis. This clinical trial enrolled 326 patients in 17
clinical centers in the United States, Europe and Israel, of which 103 patients were enrolled in the first study cohort and were
treated for 6 months and 223 patients were enrolled in the second study cohort and were treated for 8 months. The first study
cohort was comprised of three arms with patients receiving: 1.0 mg of Piclidenoson; 2.0 mg of Piclidenoson; and placebo. All patients
receiving placebo were switched to either 1.0 mg or 2.0 mg of Piclidenoson after 12 weeks. Based on a positive safety and efficacy
interim analysis of the first 103 patients who completed 24 weeks of treatment in the trial, we decided to continue patient enrollment
for the second stage of the study and the study protocol was amended to extend the Piclidenoson 2.0 mg BID and placebo administration
for a period of 32 weeks. The positive clinical effects of the Piclidenoson 2.0 mg BID dose relative to a placebo were observed
in a variety of standard psoriasis assessment parameters, including PASI 75 and PGA scores, with the responses accumulating steadily
over the 24-week treatment period.

In March 2015, we
announced the study did not meet its primary endpoint of a statistically significant improvement in the PASI 75 score relative
to placebo after 12 weeks of treatment. Further analysis of the entire study period revealed that by 32 weeks of treatment with
Piclidenoson, 33% of the patients achieved PASI 75 while the mean percent of improvement in PASI score was 57% (p<0.001). This was a statistically significant cumulative and linear improvement during weeks 16 to 32. Most significantly, by week 32 of the study, 20% of the study patients reached PASI 90, a result demonstrating a response rate of 90% clearing of skin lesions. PASI 90 is one of the most stringent and difficult to meet clinical endpoints for measuring responses to psoriasis treatments. Moreover, the PASI 90 subset analysis further suggests a higher and significant (p=0.026) Piclidenoson response rate of 27% among patients previously untreated with systemic psoriasis therapy compared to patients pre-treated with systemic drugs. We believe this presents the opportunity that Piclidenoson can be developed as a first-line systemic therapy for patients with moderate-severe psoriasis and for patients who do not want to be treated with the current systemic drugs due to safety issues.


Click to enlarge

Figure 3: Linear Effect of Piclidenoson
on PASI Scores through 32 Weeks of Treatment

We are currently conducting
our pivotal COMFORT Phase III trial for Piclidenoson for the treatment of psoriasis. The trial is a randomized, double-blind,
placebo- and active-controlled study that is investigating the efficacy and safety of daily Piclidenoson 2.0 mg or 3.0 mg administered
twice daily orally as compared to placebo as its primary endpoint and as compared to apremilast (Otezla®) as a secondary endpoint
in approximately 400 patients with moderate-to-severe plaque psoriasis. Medication is to be taken orally twice daily for 32 weeks
in a double-blinded fashion. The primary end point is the proportion of subjects who achieve a PASI score response of ≥75%
(PASI 75) vs. placebo at week 16. The secondary endpoints include non-inferiority to Otezla® on weeks 16 and 32, achievement
of PASI 50 at week 16 and efficacy and safety data for Piclidenoson through the extension period of up to 48 weeks of treatment.
Patients are being selected to the study based on over expression of the A3AR biomarker. In August 2018, we announced enrollment
of the first patient and in December 2019, we announced completion of at least 50% of enrollment. We expect COMFORT will serve
as the first of two pivotal studies required for EMA-drug approval.

Rheumatoid Arthritis:
We conducted a Phase IIa blinded to dose study in 74 patients with rheumatoid arthritis, randomized to receive Piclidenoson
as a monotherapy in one of three doses—0.1 mg, 1.0 mg and 4.0 mg. The primary efficacy endpoint was ACR20 response at week
12, a criterion determined by the American College of Rheumatology that reflects 20% improvement in inflammation parameters. The
study data revealed maximal response at the 1.0 mg group, showing 55.6% with ACR20, 33.3% with 50% improvement, or ACR50, and
11.5% with 70% improvement, or ACR70. Piclidenoson administered BID for 12 weeks resulted in improvement in signs and symptoms
of rheumatoid arthritis and was well-tolerated. See Figure 4. Studies in the United States were conducted pursuant to an open
IND, which was received by the FDA in 2005.


Click to enlarge

Figure 4: Rheumatoid Arthritis efficacy
by ACR

Subsequently, two
Phase IIb studies with Piclidenoson in combination with MTX were conducted. The study protocols were multicenter, randomized,
double-blind, placebo-controlled, parallel-group and dose-finding to determine the safety and efficacy of daily Piclidenoson administered
orally when added to weekly MTX in patients with active rheumatoid arthritis. The objectives of both studies were improvement
in ACR20, ACR50, ACR70 and DAS28, or the Disease Activity Score of 28 Joints, and EULAR, or the European League Against Rheumatism,
response criteria, as well as a positive safety profile. The trials’ primary endpoints were both ACR20.

The first Phase IIb
trial showed that the combined treatment had an excellent safety profile, but no significant ACR20 response was observed between
the rheumatoid arthritis group treated with Piclidenoson and MTX and the group treated with MTX alone (the placebo group). However,
the ACR50, ACR70 and the EULAR Good Values in the combined treatment group were higher than those of the MTX placebo group. The
study also indicated that the 1.0 mg Piclidenoson dose was the most favorable dose, i.e., the dose yielded the highest ACR50 and
EULAR Good Values as compared to the MTX placebo group. The most commonly reported adverse events in this study included nausea,
dizziness, headache and common bacterial and viral infections and infestations.

Following a decision
of our Clinical Advisory Board in October 2007, an additional Phase IIb study was initiated. This study was conducted in medical
centers in Europe and Israel and included 230 patients who received the drug orally BID (0.1 and 1.0 mg Piclidenoson tablets plus
MTX versus a placebo, which was MTX alone) for 12 weeks. On April 30, 2009, we published preliminary results of the Phase IIb
study, which were later confirmed as the final results, also indicating that the study’s objectives were not achieved. The
most commonly reported adverse events in this study included nausea, myalgia and dizziness.

The two Phase IIb
studies failed to achieve the primary endpoint of ACR20. A cross study analysis of the three rheumatoid arthritis clinical studies
revealed that in the first Phase IIa study, where Piclidenoson had been administered as a standalone drug, A3AR had been over-expressed
in the patients’ PBMCs prior to Piclidenoson treatment, whereas A3AR had not been over-expressed in the Phase IIb patient
population. We believe, based on the foregoing data, that there may be a direct and statistically significant correlation between
A3AR over-expression at baseline and patients’ response to Piclidenoson, and that Piclidenoson should be administered as
a standalone drug and not in combination with MTX. Furthermore, the correlation between A3AR expression levels prior to treatment
and patients’ response to the drug suggest that the A3AR may be a predictive biomarker to be analyzed prior to Piclidenoson
treatment. See Figures 5 and 6.

Click to enlarge

Figure 5: Direct correlation between
A3AR at baseline and response to Piclidenoson


Click to enlarge

Figure 6: Direct correlation between
A3AR at baseline and response to Piclidenoson

Based on the results
of the two Phase IIb studies, we conducted an additional Phase IIb clinical study with Piclidenoson as a stand-alone, monotherapy
treatment and not in combination with MTX. The trial was a 12-week multicenter, randomized, double-blind, placebo-controlled,
parallel-group study involving 79 patients to determine the safety and efficacy of Piclidenoson administered orally daily in patients
with active rheumatoid arthritis and elevated baseline expression levels of the A3AR in PBMCs. Enrolled patients had high baseline
A3AR biomarker expression (determined at 1.5-fold over a predetermined age-matched standard). This selection criteria was made
following the findings during previous Phase IIa and IIb rheumatoid arthritis studies showing a positive correlation between A3AR
expression at baseline and patients’ response to the drug, potentially rendering A3AR expression as a predictive biomarker.
The primary objectives of this study were to determine the efficacy of oral Piclidenoson when administered daily as a standalone
treatment for 12 weeks to patients with active rheumatoid arthritis and elevated baseline expression levels of the A3AR in the
patients’ PBMCs, in comparison to a placebo treatment, and to assess the safety of daily oral Piclidenoson under the circumstances
of the trial. In December 2013, we announced the results of the study in which Piclidenoson met all primary efficacy endpoints,
showing statistically significant superiority over placebo in reducing signs and symptoms of rheumatoid arthritis as compared
to the placebo. The treatment had an ACR20 response rate of 49% for Piclidenoson compared to 25% for placebo (p=0.035), an ACR50
response rate of 19% for Piclidenoson compared to 9% for placebo, and an ACR70 response rate of 11% for Piclidenoson compared
to 3% for placebo. See Figure 7. Similar to our observations in the previously reported Piclidenoson psoriasis trials, the response
of patients with rheumatoid arthritis was cumulative over time, suggesting a consistent anti-inflammatory effect of Piclidenoson.
Moreover, half of the rheumatoid arthritis patients treated with Piclidenoson showed clinically meaningful improvement. Piclidenoson
was very well-tolerated and showed no evidence of immunosuppression, and there were no severe treatment-emergent adverse events
during the study. A subgroup analysis of 16 patients with no prior systemic therapy showed a dramatic increase in the response
showing ACR20 of 75%, ACR50 of 50%, and ACR70 of 50%. See Figure 7. We believe this may be related to the fact that in this patient
population there is a full receptor expression since they had not been treated earlier with any systemic drugs.


Click to enlarge

Click to enlarge

Figure 7: ACR response data –
Rheumatoid Arthritis phase IIb

We are currently conducting
our pivotal ACRobat Phase III trial of Piclidenoson to evaluate Piclidenoson as a first line treatment and replacement for
MTX. The trial is a randomized, double-blind, active and placebo-controlled, parallel-group study in approximately 500 patients
in Europe, Israel and Canada. The primary endpoint of ACRobat is low disease activity after 12 weeks of treatment in patients
dosed with Piclidenoson compared to those dosed with MTX. Piclidenoson at 1.0 mg and 2.0 mg, or placebo, will be administered
twice daily, and MTX or placebo will be administered once weekly. Secondary endpoints include disease activity remission at week
24, ACR 20/50/70 response rates, European League Against Rheumatism good and moderate response rates and change from baseline
for disease activity and ACR responses. The total study duration will be 24 weeks in order to provide more data on long term efficacy
and safety. In the fourth quarter of 2017, we announced the enrollment and dosing of the first patient in the trial. We expect
ACRobat will serve as the first of two pivotal studies required for EMA-drug approval.

DES: DES is
an eye disease caused by eye dryness, which, in turn, is caused by either decreased tear production or increased tear film evaporation.
A Phase II study in DES was conducted by Can-Fite after discovering that patients in the Phase IIa study for another condition
also experienced improvement in DES symptoms. The results of the Phase II trial demonstrated the ability of Piclidenoson to improve
signs of ocular surface inflammation of the patients studied. Following positive results in the Phase II study, we initiated a
Phase III DES trial, under an IND with the FDA, which was conducted by OphthaliX in the United States, Europe and Israel. The
randomized, double-masked Phase III clinical trial enrolled 237 patients with moderate-to-severe DES who were randomized to receive
two oral doses of Piclidenoson (0.1 and 1.0 mg) and a placebo, for a period of 24 weeks. The primary efficacy endpoint was complete
clearing of corneal staining. In December 2013, we announced the results of this Phase III study of Piclidenoson for the treatment
of DES. In the study, Piclidenoson did not meet the primary efficacy endpoint of complete clearing of corneal staining, nor the
secondary efficacy endpoints. Nonetheless, Piclidenoson was found to be well tolerated. In 2014, we decided to end the development
of Piclidenoson for the DES indication. This decision was based on a lack of correlation between patients’ response to Piclidenoson
and over-expression of the drug target, the A3AR in this patient population.

Glaucoma: Glaucoma
is an eye disease in which the optic nerve is damaged.  This optic nerve damage involves loss of retinal ganglion cells,
or neurons located near the inner surface of the retina, in a characteristic pattern. There are many different subtypes of glaucoma,
but they can all be considered to be a type of optic neuropathy. Raised IOP is the most important and only modifiable risk factor
for glaucoma. However, some individuals may have high IOP for years and never develop optic nerve damage. This is known as ocular
hypertension. Others may develop optic nerve damage at a relatively low IOP, and, thus, glaucoma. Untreated glaucoma can lead
to permanent damage of the optic nerve and resultant visual field loss, which over time can progress to blindness. A Phase II
clinical trial of Piclidenoson for the treatment of glaucoma was conducted by OphthaliX. The randomized, double-masked, placebo-controlled,
parallel-group Phase II clinical trial was designed to evaluate the safety and efficacy of Piclidenoson when administered
orally twice daily for up to 16 weeks in patients with elevated IOP. A total of 89 patients were enrolled in the study. The study
was conducted with two cohorts. In the first cohort, treatment was randomized in a 3:1 ratio of 1.0 mg Piclidenoson to placebo.
In the second cohort, which was also randomized in a 3:1 Piclidenoson to placebo ratio, the Piclidenoson dose was increased to
2.0 mg. In July 2016, top line results were announced. In this trial, no statistically significant differences were found between
the Piclidenoson treated group and the placebo group in the primary endpoint of lowering IOP. Piclidenoson was found to have a
favorable safety profile and was well tolerated. Based on these overall results, OphthaliX saw no immediate path forward in glaucoma
and we have since terminated the License Agreement that we granted to OphthaliX, following the Merger with Wize Pharma. See “Business—History
and Development of the Company.”

Additional Developments with Piclidenoson

Osteoarthritis

According to the Arthritis
Foundation, osteoarthritis, or OA, is the most common arthritic disease. Currently, there is a shortage of effective drugs for
treating OA patients. Piclidenoson has induced a significant anti-inflammatory effect in experimental animal models with respect
to the treatment of OA and, as such, we are currently preparing for a Phase II study. We have not yet filed an IND for this indication
as Piclidenoson for the treatment of OA is not currently being clinically tested in the United States and there are no near-term
plans to do so.

In November 2019,
we announced that the U.S. Patent and Trademark Office has issued to us Patent #10,265,337 titled “Use of A3 Adenosine
Receptor Agonist in Osteoarthritis Treatment” for Piclidenoson for the treatment of osteoarthritis in mammals. We are evaluating
potential partnerships with companies in the animal health pharmaceutical market that may in-license and develop Piclidenoson
for the companion animal market, a substantial and rapidly growing global market.

Crohn’s Disease

Crohn’s disease
is an inflammatory bowel disease that may affect any portion of the gastrointestinal tract, causing a wide variety of symptoms.
It primarily causes abdominal pain, diarrhea, vomiting and weight loss; however, it may also cause complications outside the gastrointestinal
tract, such as skin rashes, arthritis, inflammation of the eye, tiredness and lack of concentration. Pre-clinical pharmacology
studies that we have conducted demonstrated the efficacy of Piclidenoson for the treatment of Crohn’s disease. We do not
presently have plans for the treatment of Crohn’s disease.

Namodenoson (CF102)

Namodenoson is our
second drug candidate and is under development for the treatment of HCC, hepatitis C virus, or HCV, or NAFLD, the precursor to
NASH. Namodenoson is also a small, orally bioavailable molecule, and an A3AR agonist, with high affinity and selectivity to the
A3AR. In comparison to the expression in adjacent normal liver tissue, the A3AR is over-expressed in tumor tissues of patients
with HCC, and the over-expression is also reflected in the patients’ PBMCs. A3AR over-expression in the patients’
tumor cells and PBMCs is attributed to high expression of certain A3AR transcription factors. The binding of Namodenoson to the
A3AR results in down-regulation, or a decrease in the quantity of a cellular component, such as the number of receptors on a cell’s
surface, of certain A3AR transcription factors. Our studies have shown that this down-regulation leads to apoptosis of HCC cells.
In our pre-clinical and clinical studies, Namodenoson demonstrated anti-cancer, anti-viral and liver protective effects. As a
result, we believe that Namodenoson can be used to treat a variety of oncological and liver-related diseases and viruses.

In February 2012,
the FDA granted an orphan drug status for the active moiety, or the part of the drug that is responsible for the physiological
or pharmacological action of the drug substance, of Namodenoson for the treatment of HCC. Subsequently, in October 2015, the EMA
granted Namodenoson orphan drug designation for the treatment of HCC.

An orphan drug designation
is a special designation for drug approval and marketing. The special designation is granted to companies that develop a given
drug for unique populations and for incurable and relatively rare diseases. The FDA orphan drug designation program provides orphan
status to drugs and biologics, which are intended for the safe and effective treatment, diagnosis or prevention of rare diseases
or disorders that affect fewer than 200,000 people in the United States and in the EU not more than 5 per 10,000. Orphan drug
designations have enabled companies to achieve medical breakthroughs that may not have otherwise been achieved due to the economics
of drug research and development as this status lessens some of the regulatory burdens, for approval, including statistical requirements
for efficacy, safety and stability, in an effort to maintain development momentum. Orphan drug designation also results in additional
marketing exclusivity and could result in certain financial incentives.

In September 2015,
the FDA granted Fast Track designation to Namodenoson as a second line treatment to improve survival for patients with advanced
HCC who have previously received Nexavar (sorafenib). Fast Track, aimed at getting important new drugs that meet an unmet need
to patients earlier, is expected to expedite the development of Namodenoson. Drugs that receive Fast Track designation benefit
from more frequent meetings and communications with the FDA to review the drug’s development plan to support approval. It
also allows us to submit parts of the NDA on a rolling basis for review as data becomes available.

Israel’s Ministry
of Health has previously approved Namodenoson for Compassionate Use for HCC.

Set forth below are
general descriptions of the diseases with respect to which Namodenoson has underwent or is currently undergoing or being prepared
for clinical trials.

HCC: HCC is
an oncological disease characterized by malignant tumors that grow on the surface or inside of the liver. This type of tumor is
refractory to chemotherapy and to other anti-cancer agents. HCC, like any other cancer, develops when there is a mutation to the
cellular machinery that causes the cell to replicate at a higher rate and/or results in the cell avoiding apoptosis. Chronic infections
of Hepatitis B and/or C can aid the development of HCC by repeatedly causing the body’s own immune system to attack the
liver cells, some of which are infected by the virus. While this constant cycle of damage followed by repair can lead to mistakes
during repair which in turn lead to carcinogenesis, this hypothesis is more applicable, at present, to HCV. Chronic HCV causes
HCC through cirrhosis. In chronic Hepatitis B, however, the integration of the virus into infected cells can directly induce a
non-cirrhotic liver to develop HCC. Alternatively, repeated consumption of large amounts of ethanol can have a similar effect.

Hepatitis C:
HCV is an infectious disease affecting primarily the liver, caused by the Hepatitis C virus. The infection is often asymptomatic,
but chronic infection can lead to scarring of the liver and ultimately to cirrhosis, which is generally apparent after many years,
and chronic liver disease. The virus also increases the chance for HCC development. In some cases, those with cirrhosis will develop
liver failure, liver cancer or life-threatening esophageal and gastric varices, or dilated submucosal veins, which can be life-threatening.
HCV is spread primarily by blood-to-blood contact often associated with intravenous drug use, poorly sterilized medical equipment,
transfusions, and erectile intercourse.

NAFLD/NASH:
NASH, also called “fatty liver,” is a condition in which fat builds up inside the liver causing inflammation. Prior
to the presence of inflammation, the disease is simply referred to as NAFLD, the most common form of liver disorder in the United
States. The accumulation of macroglobular fat inside the liver causes oxidative stress that reduces the efficiency of the liver
and can lead to increased liver enzymes such as alanine aminotransferase and aspartate aminotransferase. Loss of liver efficiency
and oxidative stress leads to inflammation, liver cell ballooning, and the development of NASH. Prolonged inflammation results
in cirrhosis (scar tissue), liver failure, or liver cancer. There are currently no drugs approved for the treatment of NASH.

Pre-Clinical Studies with Namodenoson

In pre-clinical pharmacology
studies, Namodenoson inhibited the growth of HCC via the induction of tumor cell apoptosis. In addition, in collaboration with
leading virology labs, we observed that Namodenoson inhibited viral replication of HCV through the down-regulation of viral proteins.
Both of these findings served as a basis to further explore development of this drug for HCC.

We conducted several
pre-clinical studies demonstrating robust anti-inflammatory, anti-fibrogenic and anti-steatotic effects, supporting the development
of Namodenoson for the NAFLD/NASH indication. Furthermore, the results indicated that Namodenoson was very well tolerated.

In pre-clinical studies,
we evaluated the toxicity, stability, metabolism and other safety parameters of Namodenoson at doses much higher than the doses
that we currently administer to humans in our clinical trials of Namodenoson.

In preclinical studies,
Namodenoson revealed its capability to act as an anti NAFLD/NASH agent and data has shown as follows:

· In
the STAM model, Namodenoson significantly decreased the non-alcoholic fatty liver disease
(NAFLd) activity score, NAS, demonstrating anti inflammatory and anti steatotic effects.

· In
the carbon tetrachloride (ccl4) model, Namodenoson reversed alanine aminotransferase
(ALT) to normal values and signifi-cantly improved liver inflammation and fibrosis, as
well as the adiponectin and leptin levels; and

· Namodenoson
mechanism of action entailed de-regulation of the Wnt/β-catenin pathway in the liver
extracts of the ccl4 model mice and in the LX2 HScs, manifested by a decreaseing the
expression of phosphoinositide 3-kinase (PI3K), NF-κB.

Clinical Studies of Namodenoson

The information discussed
below is based on the various studies conducted by Can-Fite with Namodenoson, including clinical studies in patients with oncological
and liver-related diseases and viruses.

Phase I Clinical Study

Namodenoson completed
a Phase I double-blind, randomized, placebo-controlled, ascending single dose trial to evaluate the safety, tolerability, and
pharmacokinetics of orally administered Namodenoson in healthy volunteers. The study was conducted in the United States under
an open IND. Namodenoson was found to be safe and well-tolerated with a half-life time of 12 hours. See Figure 8.


Click to enlarge

Figure 8: Half-life of orally administered
Namodenoson – Phase I Clinical Study

Phase I/II and Phase II Clinical Studies

HCC/HCV

Namodenoson completed
two Phase I/II studies in Israel, one in patients with HCC and another in patients with HCV. The HCC Phase I/II study was an open-label,
dose-escalation study evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of orally administered Namodenoson
in patients with advanced HCC. The primary objectives of the study were to determine the safety and tolerability, dose-limiting
toxicities, maximum tolerated dose, and recommended Phase II dose of orally administered Namodenoson in patients with advanced
HCC; and to assess the repeat-dose pharmacokinetics behavior of Namodenoson in those patients. The secondary objectives were to
document any observed therapeutic effect of Namodenoson in patients with HCC and to evaluate the relationship between PBMCs and
the A3AR expression at baseline, as a biomarker, and the effects of Namodenoson in patients with HCC. The study included 18 patients,
nine of which were also carriers of HCV. The initial dose of Namodenoson was 1.0 mg BID, with planned dose escalations in subsequent
cohorts to 5.0 and 25.0 mg BID. This Phase I/II study achieved its objectives, showing a good safety profile, or no material differences
versus a placebo with respect to observed and patient-indicated side effects, for Namodenoson and a linear pharmacokinetic drug
profile, with no dose-limiting toxicities at any dose level. The median overall survival time for the patients in this study was
7.8 months, which is encouraging data considering that (i) 67% of the patient population in the study had previously progressed
on Nexavar, produced by Onyx Pharmaceuticals and Bayer, and that Namodenoson was a second line therapy for these patients and
(ii) 28% of the patient population were Child-Pugh Class B patients (patients classified on the Child Pugh scoring system for
chronic liver disease as having significantly impaired liver function) whose overall survival time is usually 3.5 to 5.5 months.
Accordingly, we may also consider Namodenoson as a drug to be developed for this patient sub-population of Child-Pugh Class B
patients. Namodenoson had no adverse effect on routine measures of liver function over a six-month period in 12 patients treated
for at least that duration. These findings are consistent with our pre-clinical Namodenoson data which demonstrated a protective
effect on normal liver tissue in an experimental model of liver inflammation. As such, Namodenoson may potentially be a safer
alternative to patients with cirrhosis and/or hepatic impairment. The study also demonstrated a direct relationship between A3AR
expression at baseline and patients’ response to Namodenoson, suggesting A3AR as a predictive biological marker. We also
observed a decrease in the viral load of seven out of nine patients who were also carriers of HCV. The most commonly reported
adverse events included loss of appetite, ascites, nausea, diarrhea, constipation and pain. However, many of these events are
expected in a population of patients with advanced HCC. The most frequently reported drug-related adverse events included diarrhea,
fatigue, loss of appetite, pain and weakness.

Our second Phase I/II
study was a randomized, double-blind, placebo-controlled, dose-escalation study evaluating the safety, tolerability, biological
activity, and pharmacokinetics of orally administered Namodenoson in 32 subjects with chronic HCV genotype 1. Eligible subjects
were assigned in a 3:1 ratio (eight subjects in each cohort) to receive QD or BID treatment (1.0, 5.0 and 25.0 mg of Namodenoson)
for 15 days with oral Namodenoson or with a placebo. Dose escalation occurred in four sequential cohorts. The study’s primary
objectives were to determine the safety and tolerability of orally administered Namodenoson in patients with chronic HCV genotype
1, to assess the effects on HCV load during 15 days of treatment with Namodenoson and to assess the repeat-dose pharmacokinetic
behavior of Namodenoson under the conditions of this trial. The secondary objective of this trial was to perform an exploratory
evaluation of the relationship between A3AR in PBMCs at baseline and the clinical effects of Namodenoson on the study’s
patients. Following the decrease in HCV load that had been observed in HCV patients treated with Namodenoson in the parallel HCC
study and the good safety profile of Namodenoson, we received Israeli Institutional Review Board, or IRB, approval to extend the
treatment period of the Phase I/II in patients with HCV to four months with the 1.0 mg dose vs. the placebo. The results of this
Phase I/II HCV study demonstrated a good safety profile and a linear pharmacokinetic drug profile, however, no significant decrease
in the viral load was observed. Notwithstanding, we did observe in the parallel HCC study that seven out of the nine patients
with both HCC and HCV experienced a decrease in viral load and that these seven patients were treated with higher Namodenoson
dosages than what was administered to the patients with chronic HCV genotype 1 only, and not HCC, possibly explaining the difference
in results. The most commonly reported adverse events included loss of appetite, ascites, nausea, diarrhea, constipation and pain.
However, many of these events are expected in a population of patients with advanced HCV. The most frequently reported drug-related
adverse events included diarrhea, fatigue, loss of appetite, pain and weakness.

In 2019, we completed
a Phase II study in HCC patients. In January 2013, as part of our preparatory work for such study, we announced that we believe
that the optimal drug dose for the upcoming study is Namodenoson 25.0 mg. This dose was found to be the most effective dose out
of the three dosages tested (1.0 mg, 5.0 mg and 25.0 mg) in the previous Phase I/II study. We filed a patent application protecting
such optimal dose of Namodenoson for HCC. A publication summarizing the results of the Phase I/II study was published in “The
Oncologist,” a leading oncology scientific journal. We also highlighted that one patient has been treated with Namodenoson
for over five years.

The Phase II study
was a randomized, double-blind, placebo controlled trial conducted in the United States, Europe and Israel to evaluate the efficacy
and safety of Namodenoson as a second-line treatment for advanced HCC in subjects with Child-Pugh B who failed Nexavar as a first
line treatment. Advanced HCC in patients with underlying cirrhosis is categorized into three subclasses based on the severity
of cirrhosis, starting with Child Pugh A, or CPA, mostly treated with Nexavar and progressing to Child Pugh B, or CPB, and Child
Pugh C, or CPC, for which there are no drugs on market with proven efficacy. In the study, we enrolled only patients with CPB
stage liver cancer with CBP stage patients being further divided into three categories of increasing severity, namely CPB7, CPB8,
and CPB9. These patients already failed first line Nexavar and were treated with Namodenoson (25mg), or placebo, as a second line
treatment, twice daily, using a 2:1 randomization. The primary endpoint of the study was median overall survival. Secondary endpoints
included progression free survival, partial response, and disease control rate. In March 2014, the study protocol was approved
by the IRB at the Rabin Medical Center in Israel and in December 2014, we dosed the first patient at the study’s Israeli
site. In the third quarter of 2017, we announced that we completed enrollment and randomization of all 78 patients and in March
2019, we announced top-line results.

While the study did
not achieve the primary end point of overall survival in the whole population (n=78), superiority in overall survival was found
in the largest study subpopulation of CPB7 (n=56) and in secondary end points in the whole population, including objective response
measured by CT or MRI. Findings from the study include the following: (i) for the whole population (n=78), median overall survival
was 4.1 months for Namodenoson vs. 4.3 months for placebo (HR: 0.82), (ii) pre-planned subpopulation analysis of the CPB7 patients
(n=56), revealed that the Namodenoson treated group (n=34) showed median overall survival of 6.8 months vs 4.3 months in placebo
(n=22) (HR: 0.77 (95% CI 0.49-1.40)); similarly, for this subgroup of patients, progression free survival was 3.5 months for the
Namodenoson treated group vs 1.9 (HR: 0.87) in the placebo group; (iv) 1-year survival in the CPB7 population was 44% for the
Namodenoson treated group, as compared to 18% for patients dosed with placebo (p=0.028); (v) objective response in the whole patient
population measured by CT or MRI, demonstrated that 9% treated by Namodenoson achieved partial response vs 0% in the placebo group,
(vi) consistent with safety results from previously completed clinical trials, Namodenoson was generally well-tolerated, with
no treated patients being withdrawn for toxicity and no cases of treatment-related deaths, (vii) disease control rate was 18.0%
in the Namodenoson group vs 7.1% in the placebo group (p=0.013) after four months of treatment, (viii) 32.0% of patients treated
with Namodenoson completed at least 12 months of treatment vs 14.3% who were treated with placebo (p=0.058), (vii) as of March
26, 2019, two patients in the Namodenoson group are ongoing after 30 months of treatment; these patients will continue to receive
Namodenoson, and (ix) all nine patients with CBP9 cirrhosis, the most severe grade allowed into the trial, were randomly assigned
to the Namodenoson treatment group (OS=3.5 months), a fact which has distorted the results in the whole population. Subgroup analyses
using a variety of demographic and baseline disease characteristics, such as sex, performance status, and HCC disease status indicate
the overall survival advantage of Namodenoson over placebo persists in the vast majority of the subgroups.

In October 2019, we
held an End-of-Phase II Meeting with the FDA regarding our Phase II study of Namodenoson in the treatment of HCC. The purpose
of the meeting was to review the Phase II study data with the FDA and to present our proposed Phase III study design to the regulatory
agency. The FDA agreed with our proposed pivotal Phase III trial design to support an NDA submission and approval. The planned
Phase III study will enroll patients with advanced HCC, with underlying CPB7 cirrhosis, whose cancer has progressed on first line
therapy. The FDA’s guidance will be incorporated into the Phase III study’s final protocol.

In November 2019,
we initiated a compassionate use program for Namodenoson in the treatment of HCC, the most common form of liver cancer. Our compassionate
use program has enrolled and started treating patients. The compassionate use program, which enables liver cancer patients not
enrolled in our clinical study to be treated with Namodenoson, is being administered by Dr. Salomon Stemmer, the Principal Investigator
of the Company’s prior Phase II liver cancer study, and Professor at the Institute of Oncology, Rabin Medical Center, Israel.

NAFLD/NASH

We are conducting
a Phase II multicenter, randomized, double-blind, placebo-controlled, dose-finding study of the efficacy and safety of Namodenoson
in the treatment of NAFLD and NASH. We plan to enroll approximately 60 patients with NAFLD, with or without NASH, in three arms,
including two different dosages of Namodenoson (12.5 mg and 25 mg) and a placebo, given via oral tablets twice daily.

The study’s
primary endpoints are the mean percent change from baseline in ALT levels and safety. The secondary endpoint includes percent
change from baseline in hepatic steatosis measured by magnetic resonance imaging determined by proton-density fat-fraction and
additional metabolic parameters. In addition, an assessment of the pharmacokinetics of Namodenoson and the A3AR biomarker will
be evaluated prior to treatment and its correlation to patients’ response to the drug will be analyzed upon study conclusion.
Furthermore, the exploratory objective of this study is to evaluate the effects of Namodenoson on relevant biomarkers, such as
adiponectin, leptin, C-reactive protein, and liver stiffness as determined by Fibroscan. The study is being conducted at the Hadassah
Medical Center and Rabin Medical Center. In October 2019, we announced completion of patient enrollment in our and we aim to report
our topline results in the first quarter of 2020.

Additional Developments with Namodenoson

Anti-Obesity

In January 2019, we
announced new pre-clinical findings demonstrating that Namodenoson, inhibits lipid production and fat accumulation in adipocytes
(lipid producing cells). More specifically, Namodenoson showed a significant decrease in lipid production and fat accumulation
utilizing 3T3-L1 adipocytes, functioning as lipid producing cells and are also responsible for fat storage. Namodenoson was also
shown to inhibit the proliferation of adipocytes, further hampering the expansion of fat producing cells. These findings, together
with the excellent safety profile of Namodenoson, support its potential utilization as an anti-obesity drug. A patent application
for the utilization of Namodenoson as an anti-obesity drug has been filed. In January 2020, we announced further pre-clinical
data generated at the Hadassah Medical Center by Dr. Rifaat Safadi’s lab that demonstrated that Namodenoson induces weight
loss in experimental models and normalizes glucose levels.

JC Virus

In April 2011, we
announced that, in laboratory study, Namodenoson inhibited the reproduction of the JC virus, a type of polyomavirus, which is
dormant in approximately 70% to 90% of the world population. However, in patients treated with biological drugs, including monoclonal
antibody therapeutics, such as anti-TNFs or anti-CD20, JC virus replication may occur, resulting in development of progressive
multifocal leukoencephalopathy, or PML, which is characterized by progressive damage or inflammation of the white matter of the
brain and, eventually, death. The ability of Namodenoson to suppress the JC virus culture, as indicated in the laboratory study,
may indicate that it may be used for the treatment of PML as a combination therapy with biological drugs. As Namodenoson is already
in various stages of clinical development for other indications, its efficacy for this new application may be tested in clinical
trials.

CF602

The allosteric modulator,
CF602, is our third drug candidate in its pipeline. CF602 is an orally bioavailable small molecule, which enhances the affinity
of the natural ligand, adenosine, to its A3AR. The advantage of this molecule is its capability to target specific areas where
adenosine levels are increased. Normal body cells and tissues are refractory to allosteric modulators. This approach complements
the basic platform technology of Can-Fite, utilizing the Gi coupled protein A3AR as a potent target in inflammatory diseases.
CF602 has demonstrated proof of concept for anti-inflammatory activity in in vitro and in vivo studies performed
by us.

During clinical studies
conducted with our product candidates, other than CF602, patients suffering from erectile dysfunction reported that they returned
to normal functioning following the treatment with such drugs. We believe that these findings are correlated with our platform
technology, which is the targeting of the A3AR. Adenosine, like nitric oxide, is a potent and short-lived vaso-relaxant that functions
via intracellular signaling (in particular, through cAMP) to promote smooth muscle relaxation. Recent studies conducted by others
show that adenosine functions to relax the corpus cavernosum and thereby promote penile erection.

CF602 was tested in
an experimental animal model of diabetic rats, which similar to diabetic patients, suffer from erectile dysfunction. Erectile
dysfunction was assessed by monitoring the ratio between intra-cavernosal pressure, or ICP, and mean arterial pressure, or MAP,
as a physiological index of erectile function. The ICP/MAP for the CF602 treated group improved by 118% over the placebo group.
This data is similar to that achieved earlier by sildenafil (Viagra) in preclinical studies. In addition, treatment with CF602
reversed smooth muscle and endothelial damage, in a dose dependent manner, leading to the improvement in erectile dysfunction.

Further studies of
CF602 have revealed that CF602 restores the impaired vascular endothelial growth factor system in the penis of diabetes mellitus
rats, thereby inducing an increase in nitric oxide resulting in significant improvement of penile erection compared to placebo.
This mechanism of action is similar to that of sildenafil, with CF602 demonstrating effects on erection superior to that demonstrated
by sildenafil in animal studies. Among the most important factors to affect erectile function is nitric oxide, which is released
by endothelial cells that line the corpus cavernosum and control smooth muscle relaxation and vascular inflow. It has been well
established that release of nitric oxide is diminished in diabetes.

In addition, CF602
induced a dose-dependent, linear effect in a diabetic mellitus rat model after treatment with one single dose of CF602. One hour
after dosing, erectile function was measured. Statistically significant full recovery from erectile dysfunction took place in
rats treated with a 500 µ/kg dose.

According to the American
Diabetes Association, approximately 30 million children and adults have diabetes mellitus in the United States. It is estimated
that 35-75% of men with diabetes mellitus suffer from erectile dysfunction.

In November 2016,
a Notice of Allowance was granted to us by the USPTO for our patent covering A3AR ligands for use in the treatment of erectile
dysfunction. The patent addresses methods for treating erectile dysfunction with different A3AR ligands including our erectile
dysfunction drug candidate, CF602. With this new broader patent protection, we made a strategic decision to investigate additional
compounds, owned by us, for the most effective and safest profile in this indication and we are seeking to partner development
of CF602.

Commercial Biomarker Test

In March 2015, we
completed the development of a commercial predictive biomarker blood test kit for A3AR. The biomarker test can be used at any
molecular biology lab, where a small blood sample from a prospective patient would be tested and within just a few hours, results
indicate if the patient would benefit from treatment with our drugs, which are currently in clinical trials for rheumatoid arthritis,
psoriasis, and liver cancer.

The USPTO previously
issued to us a patent for the utilization of A3AR as a biomarker to predict patient response to our drug Piclidenoson in autoimmune
inflammatory indications.

In-Licensing Agreements

The following is a
summary description of our in-licensing agreement with Leiden University. Our previously granted license with NIH expired in June
2015 with the expiration of certain patents. The description provided below does not purport to be complete and is qualified in
its entirety by the complete agreement, which is attached as an exhibit to this prospectus.

Leiden University Agreements

On November 2, 2009,
we entered into a license agreement, or the Leiden University Agreement, with Leiden University. Leiden University is affiliated
with NIH and is the joint owner with NIH of the patents licensed pursuant to the Leiden University Agreement. The Leiden University
Agreement grants an exclusive license for the use of the patents of several compounds, including CF602, that comprise certain
allosteric compound drugs, and for the use, sale, production and distribution of products derived from such patents in the territory,
i.e., China and certain countries in Europe (Austria, Belgium, Denmark, France, Germany, Italy, Spain, Sweden, Switzerland, Holland
and England). Subject to certain conditions, we may sublicense the Leiden University Agreement. However, the U.S. government has
an irrevocable, royalty-free, paid-up right to practice the patent rights throughout the territory on behalf of itself or any
foreign government or international organization pursuant to any existing or future treaty or agreement to which the U.S. government
is a signatory and the U.S. government may require us to grant sublicenses when necessary to fulfill health or safety needs.

Pursuant to the Leiden
University Agreement, we are committed to make the following payments: (i) a one-time concession commission of 25,000 Euros; (ii)
annual royalties of 10,000 Euros until clinical trials commence; (iii) 2% to 3% of net sales value, as defined in the Leiden University
Agreement, received by us; (iv) royalties of up to 850,000 Euros based on certain progress milestones in the clinical stages of
the products which are the subject of the patent under the Leiden University Agreement; and (v) if we sublicense the agreement,
we will provide Leiden University royalties at a rate of 2-3% of net sales value, as defined in the Leiden University Agreement,
and 10% of certain consideration received for granting the sublicense. In the event that we transfer to a transferee the aspect
of our business involving the Leiden University Agreement, we must pay to Leiden University an assignment royalty of 10% of the
consideration received for the transfer of the agreement. However, a merger, consolidation or any other change in ownership will
not be viewed as an assignment of the agreement. In addition, we have agreed to bear all costs associated with the prosecution
of the patents and patent applications to which we are granted a license under the Leiden University Agreement. As of September
30, 2019, we have paid approximately 125,000 Euros in royalties to Leiden University in connection with the Leiden University
Agreement.

The Leiden University
Agreement expires when the last of the patents expires in each country of the territory, unless earlier terminated in accordance
with the terms of the Leiden University Agreement. The last of such patents is set to expire on 2027. The termination rights of
the parties include, but are not limited to, (i) the non-defaulting party’s right to terminate if the defaulting party does
not cure within 90 days of written notice identifying the default and requesting remedy of the same; and (ii) Leiden University’s
right to terminate if we become insolvent, have a receiver appointed over our assets or initiate a winding-up. In addition, Leiden
University may terminate the agreement when it is determined, in consultation with NIH, that termination is necessary to alleviate
health and safety needs and certain other similar circumstances.

Out-Licensing and Distribution Agreements

The following are
summary descriptions of certain out-licensing and distribution agreements to which we are a party.

Kwang Dong Agreements

On December 22, 2008,
we entered into a license agreement with Kwang Dong, or the Kwang Dong License Agreement, for the use, development and marketing of Piclidenoson
in the Republic of Korea with respect to rheumatoid arthritis. In addition, the Kwang Dong License Agreement grants to Kwang Dong an exclusive,
royalty-free license to use certain of our trademarks, as determined from time to time, in connection with the distribution, marketing,
promotion and sale of any products derived from Piclidenoson pursuant to the Kwang Dong License Agreement.

The Kwang Dong License
Agreement also provides for the creation of a four member joint committee consisting of two members from each party for the purpose
of serving as a joint source of experience and knowledge in Piclidenoson development and to facilitate communication and coordination
between the parties with respect to such development. The joint committee will, among other things specifically identified in
the Kwang Dong License Agreement, provide to the parties opinions, proposals, ideas and updates with respect to the Piclidenoson
development processes conducted separately by each party.

According to the Kwang
Dong License Agreement, we are entitled to receive or have received the following payments: (i) a non-refundable amount of $300,000
paid within 30 days of the effective date of the agreement; (ii) an amount of up to $1.2 million based on our compliance with
certain milestones, including but not limited to, the conclusion of the Phase II clinical trial for Piclidenoson for treating
rheumatoid arthritis and the receipt of various regulatory authorizations; and (iii) annual royalties of 7% of annual net sales
of the licensed drug in the Republic of Korea. In addition to the amounts detailed above, we will be entitled to additional payments
based on sales of raw materials to Kwang Dong for the purpose of developing, producing and marketing Piclidenoson. To date, we have received
a total of $500,000 from Kwang Dong in an upfront payment.

The Kwang Dong License
Agreement is effective until Kwang Dong completes all payments required thereunder, unless it is earlier terminated as a result of a material
breach not cured within the specified time frame, the breach by Kwang Dong of the Kwang Dong Purchase Agreement (as defined below) or
the initiation of bankruptcy or insolvency related proceedings.

Pursuant to a share
purchase agreement entered into with Kwang Dong at the same time as the Kwang Dong License Agreement, Kwang Dong purchased 95,304 of our ordinary
shares, representing approximately 1.0% of our share capital on a fully diluted basis, as of the date of the purchase, or the
Kwang Dong Purchase Agreement. The shares were purchased for a premium of 50% on the shares’ average closing price for the
ten days preceding December 11, 2008, or a purchase price of NIS 0.455 per share.

After the TASE approved
such shares for the listing for trade on January 5, 2009, the shares were allocated to Kwang Dong and the transaction was finalized in
January 2009. To date, Kwang Dong had paid us approximately $1.3 million, which represents milestone payments pursuant to the Kwang Dong
License Agreement, an advance of certain amounts to become due under the Kwang Dong License Agreement and the purchase price for
the shares.

Cipher Pharmaceuticals Agreement

On March 20, 2015,
we entered into a Distribution and Supply Agreement with Cipher granting Cipher the exclusive right to distribute Piclidenoson
in Canada for the treatment of psoriasis and rheumatoid arthritis.

Under the Distribution
and Supply Agreement, we are entitled to CAD 1.65 million upon execution of the agreement plus milestone payments upon receipt
of regulatory approval by the Therapeutic Products Directorate of Health Canada, or Health Canada, for Piclidenoson and the first
delivery of commercial launch quantities as follows (i) CAD 1 million upon the first approved indication for either psoriasis
or rheumatoid arthritis, and (ii) CAD 1 million upon the second approved indication for either psoriasis or rheumatoid arthritis.
In addition, following regulatory approval, we shall be entitled to a royalty of 16.5% of net sales of Piclidenoson in Canada
and reimbursement for the cost of manufacturing Piclidenoson. We are also entitled to a royalty payment for any authorized generic
of Piclidenoson that Cipher distributes in Canada. To date, we have received a total of $1.3 million from Cipher in an upfront
payment.

We are responsible
for supplying Cipher with finished product for distribution and conducting product development activities while Cipher is responsible
for distributing, marketing and obtaining applicable regulatory approvals in Canada. The Distribution and Supply Agreement has
an initial term of fifteen years, automatically renewable for additional five-year periods and may be terminated in certain limited
circumstances including certain breaches of the agreement and failure to achieve certain minimum quantities of sales during the
contract period.

The timeline to regulatory
submissions to Health Canada will be determined by the completion of the remaining clinical trial program.

CKD Agreement

On October 25, 2016,
we entered into an exclusive Distribution Agreement with CKD for the exclusive right to distribute Namodenoson for the treatment
of liver cancer in South Korea, upon receipt of regulatory approvals. On February 25, 2019, the Distribution Agreement was amended
to expand the exclusive right to distribute Namodenoson for the treatment of NASH in South Korea. The Distribution Agreement further
provides that we will deliver finished product to CKD and grant CKD a right of first refusal to distribute Namodenoson for other
indications for which we develop Namodenoson.

The Distribution Agreement
provides for up to $3,000,000 in upfront and milestone payments payable with respect to the liver cancer indication and up to
$3,000,000 with respect to the NASH indication. In addition, we are entitled to a transfer price of the higher of the manufacturing
cost plus 10% or 23% of net sales of Namodenoson following commercial launch in South Korea. To date, we have received a total
of $2,000,000 from CKD, $1,500,000 in upfront payments for the expansion of CKD’s existing agreement with us to include
the rights to distribute Namodenoson for the treatment of NASH in South Korea, and a further $500,000 for a milestone payment
received in the third quarter of 2017 upon receipt by CKD of a positive result from the preliminary review by the MFDS on obtaining
orphan drug designation in South Korea.

The Distribution Agreement
has an initial term of 10 years from first commercial sale of Namodenoson for the treatment of liver cancer or NASH and is renewable
for additional 3-year periods unless either party gives notice of termination at least 6 months prior to the then current term.
The Distribution Agreement may be terminated by CKD upon 30 days prior written notice if we fail to successfully complete our
ongoing Phase II clinical trial for Namodenoson and we may terminate the Distribution Agreement upon 30 days prior written notice
if certain commercialization milestones are not met by CKD or certain minimum quantities of sales are not made during the contract
period. In addition, either party may terminate the Distribution Agreement in the event of an uncured material breach or insolvency.

Gebro Agreement

On January 8, 2018,
we entered into a Distribution and Supply Agreement with Gebro, granting Gebro the exclusive right to distribute Piclidenoson
in Spain, Switzerland, Liechtenstein and Austria for the treatment of psoriasis and rheumatoid arthritis.

Under the Distribution
and Supply Agreement, we are entitled to €1,500,000 upon execution of the agreement plus milestone payments upon achieving
certain clinical, launch and sales milestones, as follows: (i) €300,000 upon initiation of the ACRobat Phase III clinical
trial for the treatment of rheumatoid arthritis and €300,000 upon the initiation of the COMFORT Phase III clinical trial
for the treatment of psoriasis, (ii) between €750,000 and €1,600,000 following first delivery of commercial launch quantities
of Piclidenson for either the treatment of rheumatoid arthritis or psoriasis, and (iii) between €300,000 and up to €4,025,000
upon meeting certain net sales. In addition, following regulatory approval, we shall be entitled to double digit percentage royalties
on net sales of Piclidenoson in the territories and payment for the manufacturing Piclidenoson. To date, we have received
a total of €2,100,000 from Gebro in upfront and milestone payments.

We are initially responsible
for supplying Gebro with finished product for distribution and obtaining EMA and Swissmedic marketing approval while Gebro is
responsible for distributing, marketing and obtaining pricing and reimbursement approvals in the territories. The Distribution
and Supply Agreement has an initial term of fifteen years, automatically renewable for additional five-year periods and may be
terminated in certain limited circumstances including certain breaches of the agreement and failure to achieve certain minimum
quantities of sales during the contract period.

CMS Medical

On August 6, 2018,
we entered into a License, Collaboration and Distribution Agreement with CMS Medical, for the exclusive right to develop, manufacture
and commercialize Piclidenoson for the treatment of rheumatoid arthritis and psoriasis and Namodenoson for the treatment of HCC
and NAFLD/NASH in China (including Hong Kong, Macau and Taiwan).

Under the License,
Collaboration and Distribution Agreement, we are entitled to $2,000,000 upon execution of the agreement plus milestone payments
of up to $14,000,000 upon achieving certain regulatory milestones and payments of up to $58,500,000 upon achieving certain sales
milestones, as follows: (i) $500,000 upon the granting of the marketing authorization of Piclidenoson in the United States for
rheumatoid arthritis; (ii) $500,000 upon the granting of the marketing authorization of Piclidenoson in the European Union for
rheumatoid arthritis; (iii) $500,000 upon the granting of the marketing authorization of Piclidenoson in the United States for
psoriasis; (iv) $500,000 upon the granting of the marketing authorization of Piclidenoson in the European Union for psoriasis;
(v) $500,000 upon the granting of the marketing authorization of Namodenoson in the United States for HCC; (vi) $500,000 upon
the granting of the marketing authorization of Namodenoson in the European Union for HCC; (vii) $500,000 upon the granting of
the marketing authorization of Namodenoson in the United States for NAFLD/NASH; (viii) $500,000 upon the granting of the marketing
authorization of Namodenoson in the European Union for NAFLD/NASH; (ix) $2,500,000 upon the issuance of an imported drug license
permitting the product to be imported into and marketed in China, or the IDL and granting of marketing authorization of Piclidenoson
in China for rheumatoid arthritis; (x) $2,500,000 upon the issuance of the IDL and granting of marketing authorization of Piclidenoson
in China for for psoriasis; (xi) $2,500,000 upon the issuance of the IDL and granting of marketing authorization of Namodenoson
in China for HCC; (xii) $2,500,000 upon the issuance of the IDL and granting of marketing authorization of Namodenoson in China
for NAFLD/NASH; and (xiii) between $1,000,000 and up to $30,000,000 upon meeting certain net sales.  In addition, following
regulatory approval, we shall be entitled to double-digit percentage royalties on net sales of Piclidenoson and Namodenoson in
the licensed territories. To date, we have received a total of $2,000,000 from CMS Medical in upfront and milestone payments.

According to the agreement,
CMS Medical will be responsible for the development of Piclidenoson and Namodenoson to obtain regulatory approval in China and
shall be further responsible for obtaining and maintaining regulatory approval in China for the indications described above. We
may, at the option of CMS Medical, supply finished product to CMS Medical.

The License, Collaboration
and Distribution Agreement shall continue in force unless earlier terminated and may be terminated in certain limited circumstances
including certain breaches of the agreement and failure to achieve certain minimum quantities of sales during the contract period.
Following expiration of the term of the agreement, the license granted shall become non-exclusive, fully paid, royalty free and
irrevocable.

Kyongbo Pharm Agreement

In August 2019, we
entered into a License and Distribution Agreement with Kyongbo. Under the terms of agreement, Kyongbo Pharm, in exchange for exclusive
distribution rights to sell Piclidenoson in the treatment of psoriasis in South Korea, made a total upfront payment of $750,000
to us, with additional payments of up to $3,250,000 upon achievement of certain milestones. We will also be entitled to a transfer
price for delivering finished product to Kyongbo.

SKK Agreement

On August 27, 2015,
we entered into an agreement with Japan-based Seikagaku Corporation, or SKK, terminating its license agreement with us. SKK informed
us that it is strategically focused on expanding its core research and development activities in the field of glyco-science. Under
the license agreement, SKK was granted a license for the use, development and marketing of Piclidenoson in Japan with respect to
inflammatory indications, except for ophthalmic disease indications. The termination agreement provides, among other things, that
all licenses and rights granted to SKK terminate and all clinical and non-clinical studies conducted by SKK shall be transferred
free of charge to us. Over the life of the license, we received an aggregate of approximately $8.5 million from SKK.

Total Revenues by Category of Activity and Geographic Markets

Historically, we have
generated revenues from payments received pursuant to our out-licensing agreements with Gebro, Cipher, KD, CMS Medical, Kyongbo
and SKK with respect to Piclidenoson and CKD with respect to Namodenoson. See “Business—Business Overview—Out-Licensing
and Distribution Agreements”. We recorded revenues of $1.3 million for the year ended December 31, 2018 as a result from
recognition a portion of an advance payment received in January 2018 under the distribution agreement with Gebro. We recorded revenues
of $0.1 million for the year ended December 31, 2018 under the Distribution Agreement with CKD which was due to the recognition
of a portion of the $0.5 million advance payment received in December 2016 under the Distribution Agreement with CKD. We recorded
revenues of $0.6 million for the year ended December 31, 2017 under the Distribution Agreement with CKD which was due to the recognition
of a portion of the $0.5 million advance payment received in December 2016 under the Distribution Agreement with CKD and a payment
of $0.5 million as a result of a milestone achievement. We recorded revenues of $0.4 million for the year ended December 31, 2018
and $0.2 million for the year ended December 31, 2017 which was due to the recognition of a portion of the CAD 1.65 million advance
payment received in March 2015 under the Distribution and Supply Agreement with Cipher. We expect to generate future revenues through
our current and potential future out-licensing arrangements with respect to Piclidenoson and Namodenoson based on the progress
we make in our clinical trials.

Seasonality

Our business and operations
are generally not affected by seasonal fluctuations or factors.

Raw Materials and Suppliers

We believe that the
raw materials that we require to manufacture Piclidenoson, Namodenoson and CF602 are widely available from numerous suppliers and
are generally considered to be generic industrial chemical supplies. We do not rely on a single or unique supplier for the current
production of any therapeutic small molecule in our pipeline.

Manufacturing

We are currently manufacturing
our API through a leading CRO. The relevant suppliers of our drug products are compliant with both current Good Manufacturing Practices,
or cGMP, and current Good Laboratory Practices, or cGLP, and allow us to manufacture drug products for our current clinical trials.
We anticipate that we will continue to rely on third parties to produce our drug products for clinical trials and commercialization.

There can be no assurance
that our drug candidates, if approved, can be manufactured in sufficient commercial quantities, in compliance with regulatory requirements
and at an acceptable cost. We and our contract manufacturers are, and will be, subject to extensive governmental regulation in
connection with the manufacture of any pharmaceutical products or medical devices. We and our contract manufacturers must ensure
that all of the processes, methods and equipment are compliant with cGMP for drugs on an ongoing basis, as mandated by the FDA
and other regulatory authorities, and conduct extensive audits of vendors, contract laboratories and suppliers.

Contract Research Organizations

We outsource certain
preclinical and clinical development activities to CROs, which in pre-clinical studies work according to cGMP and cGLP. We believe
our clinical CROs comply with guidelines from the International Conference on Harmonisation of Technical Requirements for Registration
of Pharmaceuticals for Human Use, which attempt to harmonize the FDA and the EMA regulations and guidelines. We create and implement
the drug development plans and, during the preclinical and clinical phases of development, manage the CROs according to the specific
requirements of the drug candidate under development.

Marketing and Sales

We do not currently
have any marketing or sales capabilities. We intend to license to, or enter into strategic alliances with, larger companies in
the pharmaceutical business, which are equipped to market and/or sell our products, if any, through their well-developed marketing
capabilities and distribution networks. We intend to out-license some or all of our worldwide patent rights to more than one party
to achieve the fullest development, marketing and distribution of any products we develop.

Intellectual Property

Our success depends
in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate
without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is
to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our
proprietary technology, inventions and improvements that we believe are important to the development of our business. We also rely
on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

Patents

As of January 20, 2020,
we owned or exclusively licensed (from Leiden University) 14 patent families that, collectively, contain approximately 192 issued
patents and pending patent applications in various countries around the world relating to our two clinical candidates, Piclidenoson
and Namodenoson, and our preclinical candidate, CF602. Patents related to our drug candidates may provide future competitive advantages
by providing exclusivity related to the composition of matter, formulation and method of administration of the applicable compounds
and could materially improve their value. The patent positions for our leading drug candidates are described below. In addition,
we filed a patent application in Israel concerning the use of cannabinoids for treatment of conditions associated with elevated
expression of the A3 adenosine receptor.

With respect to our
product candidates, we currently own patents and/or have patent applications pending in several countries around the world for
the following families of patents:

A3AR ligands to treat proliferative diseases (inflammation/cancer) – a family of patents which pertains to the use of substances that bind to the A3AR, including Piclidenoson and Namodenoson; the pharmaceutical uses to which such family relates include the treatment of proliferative diseases, such as cancer, psoriasis and autoimmune diseases. Such patents were granted in the United States, Europe (by the European Patent Office, or the EPO, and validated in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom), Australia, Canada, Israel, China, Japan, South Korea, Mexico, Russia and Hong Kong. These patents are set to expire towards the third quarter of 2020, other than the U.S. patent that will expire in 2022.

A3AR ligands to treat viral diseases – a family of patents and a patent application which pertain to use of substances that bind to the A3AR for the treatment of viral diseases, such as AIDS and hepatitis, and which inhibit viral replication. Such patents were granted in the United States, in Europe (by the EPO and validated in France, Germany, Italy, Switzerland and the United Kingdom), Australia, China, Israel, Japan, Singapore, Canada and Hong Kong. These patents have a filing date of January 1, 2002 and a priority date of January 16, 2001 and are set to expire in 2022, other than the U.S. patent that will expire in 2023.

A3AR ligands to treat RA – a patent which pertains to the use of A3AR agonists for the treatment of inflammatory arthritis, in particular rheumatoid arthritis. This patent was granted in the United States and is set to expire in 2023.

A3AR as a predictive and follow up biomarker – a family of patents and patent applications which pertain to a method of identifying inflammation, determining its severity, and determining and monitoring the efficacy of the anti-inflammatory treatment by determining the level of A3AR expression in white blood cells as a biological marker for inflammation. These patents were granted in certain countries in the United States, Europe (by the EPO and validated in France, Germany, Italy, Spain, Switzerland and the United Kingdom), Australia, Israel, Japan, China, Mexico and Canada. The patents are set to expire in 2025. There is a patent application pending in Brazil. Each of the patents and the  patent application has a filing date of November 30, 2005 and a priority date of December 2, 2004.

Specific dose to protect psoriasis – a family of patents and patent applications which pertains to the use of a specific dose level of Piclidenoson (total daily dose of 4.0 mg) for the treatment of psoriasis. Such a patent was granted in Israel, Japan, the United States, South Korea and Europe (by the EPO and validated in in Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom). The patent is set to expire in 2030. The patent applications are pending in the China, Hong Kong, and India each with a filing date of September 6, 2010 and a priority date of September 6, 2009.
Piclidenoson method of synthesis – a family of patents and patent applications which pertain to the method for producing Piclidenoson. Such patents were granted in the United States, India, China, Japan, Israel and Europe (by the EPO and validated in in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey and the United Kingdom. These patents are set to expire in 2028. Each patent has a filing date of March 13, 2008 and a priority date of March 14, 2007.
Osteoarthritis indication – a family of patents and patent applications which pertain to the use of A3AR agonists for the treatment of OA. Such patents were granted in Europe (by the EPO and validated in Austria, Belgium, Denmark, France, Germany, Italy, Spain, Sweden, Switzerland, Netherlands and the United Kingdom), U.S., Australia, Canada, South Korea, China, Israel, Japan and Mexico. The patents are set to expire in 2026. A patent application is pending in Brazil. These patents and patent applications have a filing date of November 29, 2006 and a priority date of November 30, 2005.

Liver protection – a family of patents and patent applications which pertains to the use of A3AR agonists for increasing liver cell division, intended to induce liver regeneration following injury or surgery. Such patents were granted in China, Israel, Japan, U.S. and Europe (by the EPO and validated in Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, Switzerland, United Kingdom and Turkey). Each patent in this family has a filing date of October 22, 2007 and a priority date of October 15, 2007.
Erectile dysfunction a family of patent applications which pertain to treatment of erectile dysfunction. This family includes granted patents in the United States, Australia, China, Hong Kong, Canada, South Korea and Japan and patent applications in Brazil, Israel, Europe, and Mexico with the application in Israel recently allowed. The patents and patent applications have a filing date of August 8, 2013 with priority dates of August 8, 2012 and November 12, 2012.

CAR T induced cytokine release syndrome – a family of patent applications which pertains to the use of A3AR ligands for managing cytokine release syndrome. This family includes a patent application in Israel and in the U.S. claiming priority from this Israeli application. The US patent application has a filing date of September 16, 2018 and the Israeli patent application has a filing date of September 17, 2017.
NAFLD/NASH – a family of patent applications which pertain to the use of A3AR ligands for treatment of ectopic fat accumulation. This family includes patent applications in Israel, China, Hong Kong, Europe, U.S., Brazil, Canada, Japan, Mexico and South Korea. The patent applications have a filing date of November 22, 2016.
Obesitya family of patent applications which pertains to the use of A3AR ligand for reducing level of adipocytes and specifically, for treating obesity. This family includes a patent application in Israel and a PCT application claiming priority from this Israeli application. The PCT patent application has a filing date of January 6, 2020 whie the Israeli patent application has a filing date of January 6, 2019.
Cannabinoids – an Israeli patent application pertaining to the use of cannabinoids for treating conditions and diseases that involve elevated expression of the A3AR. This Israeli patent application has a filing date of January 16, 2020 and will serve as a priority document to an International PCT application due to be filed no later than January 16, 2021.

We currently hold an
exclusive license from Leiden University of the Netherlands to a family of patents and patent applications that relate to the allosteric
modulators of the A3AR, which includes the allosteric modulator CF602. This exclusive license relates to patents that were granted
in the United States, China, Japan, South Korea, India and in Europe (validated in, Austria, Belgium, Denmark, France, Germany,
Italy, the Netherlands, Spain, Sweden, Switzerland and United Kingdom). These granted patents are set to expire in 2027.

We believe that our
owned and licensed patents provide broad and comprehensive coverage of our technology, and we intend to aggressively enforce our
intellectual property rights if necessary to preserve such rights and to gain the benefit of our investment. However, as a result
of the termination of the NIH license agreement between Can-Fite and NIH in June 2015 due to patent expiration, we no longer hold
rights to a family of composition of matter patents relating to Piclidenoson that were licensed from NIH. Nevertheless, because
Piclidenoson may be a NCE following approval of an NDA, we, if we are the first applicant to obtain NDA approval, may be entitled
to five years of data exclusivity in the United States with respect to such NCEs. Analogous data and market exclusivity provisions,
of varying duration, may be available in Europe and other foreign jurisdictions. We may also be entitled to the rights under Can-Fite’s
pharmaceutical use issued patents with respect to Piclidenoson, which provide patent exclusivity within the ophthalmic field until
the mid-2020s. While we believe that we may be able to protect our exclusivity in the ophthalmic field through such use patent
portfolio and such period of exclusivity, the lack of composition of matter patent protection may diminish our ability to maintain
a proprietary position for our intended uses of Piclidenoson. Moreover, we cannot be certain that we will be the first applicant
to obtain an FDA approval for any indication of Piclidenoson and we cannot be certain that we will be entitled to NCE exclusivity.
In addition, we have discontinued the prosecution of a family of pending patent applications under joint ownership of Can-Fite
and NIH pertaining to the use of A3AR agonists for the treatment of uveitis. Such diminution of our proprietary position could
have a material adverse effect on our business, results of operation and financial condition.

The patent positions
of companies like ours are generally uncertain and involve complex legal and factual questions. Our ability to maintain and solidify
our proprietary position for our technology will depend on our success in obtaining effective claims and enforcing those claims
once granted. We do not know whether any of our patent applications or those patent applications that we license will result in
the issuance of any patents. Our issued patents and those that may issue in the future, or those licensed to us, may be challenged,
narrowed, circumvented or found to be invalid or unenforceable, which could limit our ability to stop competitors from marketing
related products or the length of term of patent protection that we may have for our products. Neither we nor our licensors can
be certain that we were the first to invent the inventions claimed in our owned or licensed patents or patent applications. In
addition, our competitors may independently develop similar technologies or duplicate any technology developed by us, and the rights
granted under any issued patents may not provide us with any meaningful competitive advantages against these competitors. Furthermore,
because of the extensive time required for development, testing and regulatory review of a potential product, before any of our
products can be commercialized, any related patent may expire or remain in force for only a short period following commercialization,
thereby reducing any advantage of the patent.

Trade Secrets

We may rely, in some
circumstances, on trade secrets to protect our technology. However, trade secrets can be difficult to protect. We seek to protect
our proprietary technology and processes, in part, by confidentiality agreements and assignment of inventions agreements with our
employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our
data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information
technology systems. While we have confidence in these individuals, organizations and systems, such agreements or security measures
may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known
or be independently discovered by competitors or others.

Scientific Advisory Board

We seek advice from
our Scientific Advisory Board on scientific and medical matters generally. We call for Scientific Advisory Board meetings on an
as-needed basis. The following table sets forth certain information with respect to our Scientific Advisory Board member.

Name Position/Institutional
Affiliation
Nabil Hanna, Ph.D. Former Chief Science Officer of Biogen-Idec

Clinical Advisory Board

Our Clinical Advisory
Board, which consists of six members, a leading U.S.-based rheumatologist, oncologist, dermatologist, and three hepatologists,
who play an active role in consulting with us with respect to clinical drug development. We call for Clinical Advisory Board meetings
on an as-needed basis. The following table sets forth certain information with respect to our Clinical Advisory Board members.


Name Position/Institutional
Affiliation
Dr. Michael Weinblatt Head, Division of Rheumatology, Immunology and Allergy, Brigham and Women’s Hospital
Dr. Keith Stuart Chairman, Department of Hematology and Oncology; Professor of Medicine, Tufts University School of Medicine; Lahey Clinic Medical Center
Dr. Jonathan Wilkin Former Head, Dermatology Division, FDA
Dr. Scott Friedman Dean for Therapeutic Discovery and Chief of the Division of Liver Diseases at the Icahn School of Medicine at Mount Sinai in New York
Dr. Arun Sanyal Professor of Medicine, Physiology and Molecular Pathology at Virginia Commonwealth University School of Medicine
Dr. Rifaat Safadi Head of the Liver Unit, Gastroenterology and Liver Diseases, Division of Medicine at Hadassah Medical Center and Professor of Internal Medicine, Bowel, Liver Disease, and Metabolic Syndrome at Hadassah University in Israel


Competition

The pharmaceutical
industry is characterized by rapidly evolving technology, intense competition and a highly risky, costly and lengthy research and
development process. Adequate protection of intellectual property, successful product development, adequate funding and retention
of skilled, experienced and professional personnel are among the many factors critical to success in the pharmaceutical industry.

Our technology platform
is based on the finding that the A3AR is highly expressed in pathological cells, such as various tumor cell types and inflammatory
cells. We believe that targeting the A3AR with synthetic and highly selective A3AR agonists, such as Piclidenoson and Namodenoson,
and allosteric modulators, such as CF602, induces anti-cancer and anti-inflammatory effects. Currently, our drug candidates, Piclidenoson,
Namodenoson and CF602 are being developed to treat autoimmune inflammatory indications, oncology and liver diseases as well as
erectile dysfunction, including but not limited to psoriasis, rheumatoid arthritis, HCC and NASH. Preclinical studies have also
indicated that our drug candidates have the potential to treat additional inflammatory diseases, such as erectile dysfunction,
Crohn’s disease, oncological diseases and viral diseases, such as the JC virus, and obesity.

Despite the competition,
however, we believe that our drug candidates have unique characteristics and advantages over certain drugs currently available
on the market and under development to treat these indications. We believe that our pipeline of drug candidates has exhibited a
potential for therapeutic success with respect to the treatment of autoimmune-inflammatory, oncological and liver diseases. We
believe that targeting the A3AR with synthetic and highly selective A3AR agonists, such as Piclidenoson and Namodenoson, and allosteric
modulators, such as CF602, induces anti-cancer and anti-inflammatory effects.

We believe the characteristics
of Piclidenoson, as exhibited in our clinical studies to date, including its good safety profile, clinical activity, simple and
less frequent delivery through oral administration and its low cost of production, position it well against the competition in
the autoimmune-inflammatory markets, including the psoriasis and rheumatoid arthritis markets, where treatments, when available,
often include injectable drugs, many of which can be highly toxic, expensive and not always effective. For example, while TNF inhibitor
therapies transformed the treatment for many patients, a substantial percentage of patients (40% to 60%) do not respond to either
a DMARD or biologic therapies (Simsek, 2010).

Pre-clinical pharmacology
studies in different experimental animal models of arthritis revealed that Piclidenoson acts as a DMARD, which, when coupled with
its good safety profile, makes it competitive in the psoriasis, rheumatoid arthritis and OA markets. Our recent findings also demonstrate
that a biological predictive marker can be utilized prior to treatment with Piclidenoson, which may allow it to be used as a personalized
medicine therapeutic approach for the treatment of rheumatoid arthritis, potentially leading to an improvement in response rate
for patients. Like Piclidenoson, Namodenoson has a good safety profile, is orally administered and has a low cost of production,
which we believe positions it well in the HCC market, where only one drug, Nexavar (sorafenib), has been approved by the FDA.

In addition, our human
clinical data suggests that A3AR may be a biological marker in that high A3AR expression prior to treatment has been predictive
of good patient response to our drug treatment. In fact, as a result of our research we have developed a simple blood assay to
test for A3AR expression as a predictive biological marker. We hold a patent with respect to the intellectual property related
to such assay and are currently utilizing this assay in our ongoing Phase IIb study of Piclidenoson for the treatment of rheumatoid
arthritis.

On the other hand,
other drugs on the market, new drugs under development (including drugs that are in more advanced stages of development in comparison
to our drug pipeline) and additional drugs that were originally intended for other purposes, but were found effective for purposes
targeted by us, may all be competitive to the current drug candidates in our pipeline. In fact, some of these drugs are well established
and accepted among patients and physicians in their respective markets, are orally bioavailable, can be efficiently produced and
marketed, and are relatively safe. Moreover, other companies of various sizes engage in activities similar to ours. Most, if not
all, of our competitors have substantially greater financial and other resources available to them. Competitors include companies
with marketed products and/or an advanced research and development pipeline. The major competitors in the rheumatoid arthritis
and psoriasis therapeutic field include Amgen, J&J, Pfizer, Novartis, Abbvie, Eli Lilly, Bristol-Myers, and more. Competitors
in the HCC field include companies such as Bayer, Exelixis, Merck, and Bristol-Myers. Competitors in the NASH field include companies
such as Gilead, Genfit, Galmed, Allergan, Intercept, and Madrigal. Competitors in the erectile dysfunction field include Pfizer,
Eli Lilly and Bayer.

Moreover, several companies
have reported the commencement of research projects related to the A3AR. Such companies include CV Therapeutics Inc. (which was
acquired by Gilead), King Pharmaceuticals R&D Inv. (which was acquired by Pfizer), Hoechst Marion Roussel Inc., Novo Nordisk
A/S and Inotek Pharmaceuticals. However, to the best of our knowledge, there is no approved drug currently on the market which
is similar to our A3AR agonists, nor are we aware of any allosteric modulator in the A3AR product pipeline similar to our allosteric
modulator with respect to chemical profile and mechanism of action.

Piclidenoson for the Treatment of Psoriasis

Psoriasis is a skin
condition that affects 2% to 3% of the general population according to the National Psoriasis Foundation. The disease is manifested
by scaly plaques on the skin and in the severe form has a major effect on the physical and emotional well-being of the patients.
Topical agents are typically used for mild disease, phototherapy for moderate disease, and systemic agents for severe disease.
For moderate to severe cases, systemic biologic drugs, delivered via intravenous injection, or IV, have dominated the market. According
to the National Psoriasis Foundation, common side effects of biologics include respiratory infections, flu-like symptoms, and injection
site reactions while rare side effects include serious nervous system disorders, such as multiple sclerosis, seizures, or inflammation
of the nerves of the eyes, blood disorders, and certain types of cancer. We believe a significant need remains for novel oral and
safe drugs for patients who do not respond to existing therapies or for whom these therapies are unsuitable.

The psoriasis therapeutic
market is dominated by biological drugs that are primarily administered via IV and have potential side effects. Recently, a new
oral small molecule inhibitor of phosphodiesterase 4, Celgene’s Otezla, has gained sizable market share as a result in part
due to its convenience of oral dose and comparable efficacy to the biologic drugs. In January 2015, the FDA approved Cosentyx (secukinumab)
by Novartis. In March 2016, the FDA approved Taltz (ixekizumab) by Eli Lilly. The psoriasis drug market is forecast to grow to
$11.3 billion by 2025, according to estimates of iHealthcareAnalyst.

The current common
treatments for psoriasis include topical and systemic drugs, steroids, immunosuppressive drugs such as Cyclosporine A by Novartis,
MTX and biological drugs. Biological drugs, such as Enbrel (etanercept) by Amgen and Pfizer, Remicade (infliximab) by Centocor,
Humira (adalimumab) by Abbvie, Stelara (ustekinumab) by Janssen, Otezla (aprelimast) by Celgene, Cosentyx (secukinumab) by Novartis
and Taltz (ixekizumab) by Eli Lilly have significant side effects, are expensive and patients are often not responsive. For example,
some of these drugs have received an FDA “black box” warning for increased risk of cancer in children and adolescents
and risk of infection with Legionella and Listeria bacteria.

Many of the current
rheumatoid arthritis drugs on the market or in development are also used for the treatment of psoriasis. See “Business—Business
Overview—Piclidenoson for the Treatment of Rheumatoid Arthritis.” In addition, several therapies are in advanced clinical
development for psoriasis and many others are in Phase II or earlier stages of development.

Piclidenoson for the Treatment of Rheumatoid Arthritis

Rheumatoid arthritis
is a severe disease that attacks approximately 0.6% of the U.S. population, mainly women and, in particular, postmenopausal women.
According to Visiongain, the world rheumatoid arthritis market size is predicted to generate revenues of $47 billion by 2024.

Many drugs are used
to treat rheumatoid arthritis, including DMARDs. These include MTX, plaquenil, sulfasalazine and leflunomide, all of which are
small molecule drugs with mild effectiveness. MTX is the most commonly administered DMARD for rheumatoid arthritis. It is a generic
chemotherapeutic agent marketed by several manufacturers that is administered orally. Due to its relatively toxic nature, however,
MTX may result in severe side effects including sores, anemia, diarrhea, nausea/vomiting, abdominal pain, bruising/bleeding, and
liver problems.

The second class of
DMARD includes biological drugs, such as Enbrel (etanercept) by Amgen, Remicade (infliximab) by Centocor, and Humira (adalimumab)
by Abbvie. These drugs are usually administered in combination with MTX and are more effective in combination, but may have severe
side effects, including risk of lymphoma and serious infection. Biological drugs are administered through injection, are generally
expensive and there is no biomarker to predict the response, if any. As such, response rates typically range between 40-60% (Simsek,
2010). Steroidal drugs are also used to reduce the general activity of the immune system and for pain relief. In addition, the
FDA recently approved Pfizer’s Xeljanz (tofacitinib) small molecule drug, which is the first JAK inhibitor drug, or a drug
that inhibits the effect of one or more of the enzymes in the janus kinase family, or a family enzymes that transfer cytokine-mediated
signals, to treat rheumatoid arthritis. Moreover, several therapies, including biological drugs and small molecule drugs, are in
advanced clinical development for rheumatoid arthritis including baricitninib by Eli Lilly which is pending FDA approval, while
others are in Phase II or earlier stages of development.

Namodenoson for the Treatment of
HCC

According to the American
Cancer Society, HCC is the fifth most common form of cancer death in the U.S., the most common form of liver cancer in adults and
the third most common cause of cancer-related mortality worldwide, particularly in Asia. According to the American Cancer Society,
more than 700,000 people are diagnosed with liver cancer each year throughout the world and more than 600,000 persons die from
liver cancer each year. Nexavar (sorafenib) by Bayer is the only approved drug for HCC and prolongs patient survival time by only
a few months. According to Grand View Research, the HCC drug market is expected to reach $1.5 billion by 2022.

Several therapies are
in advanced clinical development for HCC. Some drugs under development act as a single agent and some act in combination with Nexavar
or approved checkpoint inhibitors pembrolizumab and/or nivolumab. Moreover, some are first line treatments while others are second
line treatments. In addition, many existing approaches are used in the treatment of unresectable liver cancer, including alcohol
injection, radiofrequency ablation, chemoembolization, cryoablation and radiation therapy.

Namodenoson for the Treatment of NASH

Rates of NAFLD and
NASH are increasing in the United States in concert with increasing rates of obesity and diabetes. In fact, NASH is now the third
leading cause of liver transplant in the United States. It is estimated that 17-33% of Americans have fatty liver, with approximately
one-third going on to develop NASH. NASH is believed to affect 2-5% of adult Americans. Despite the progression of several interesting
clinical-stage candidates by companies such as Gilead, Genfit, Madrigal, Conatus, Galmed, Allergan and Intercept as well as others,
there are currently no FDA approved treatment options for NASH. In February 2019, Intercept announced positive topline results
in its pivotal Phase 3 results of its NASH drug and filed for approval in September 2019. The U.S. FDA PDUFA action date for obeticholic
acid is in June 2020.

By 2025, Deutsche Bank
estimates the addressable pharmaceutical market for NASH will reach $35-40 billion in size.

CF602 for the Treatment of Erectile Dysfunction

According to the Massachusetts
Male Aging Study in 1994, 52% of the respondents between the ages of 40 and 70 years old reported some degree of erectile dysfunction.

The most popular class
of drug to treat erectile dysfunction is the phosphodiesterase type 5, or PDE5, inhibitors. These drugs block the degradative action
of cyclic guanosine monophosphate, or GMP, specific PDE5 on cyclic GMP in the smooth muscle cells lining the blood vessels supplying
the corpus cavernosum of the penis. An erection is caused by increased blood flow into the penis resulting from the relaxation
of penile arteries and corpus cavernosal smooth muscle. This response is mediated by the release of nitric oxide from nerve terminals
and endothelial cells, which stimulates the synthesis of cyclic GMP in smooth muscle cells. The inhibition of PDE5 enhances erectile
function by increasing the concentration of cyclic GMP in the corpus cavernosum and pulmonary arteries.

Unfortunately, the
systemic side effects of PDE5 inhibitors include a decrease in sitting blood pressure. This has resulted in warnings and precautions
and contraindications of use in patients already taking antihypertensive agents like nitrates or alpha-blockers. A study published
in the American Journal of Medicine (Selvin E., et al., 2007) found that persons with a history of heart disease, hypertension,
and diabetes had a higher probability of impotence. A second study published in the same journal (Shah NP., et al, 2015) notes
that vascular erectile dysfunction is a powerful marker of increased cardiovascular risk. We believe a significant market opportunity
exists targeting erectile dysfunction patients contraindicated for use of the market leading products, Viagra and Cialis.

Grand View Research
Inc. estimates the value of the erectile dysfunction therapeutic market to be approximately $3.2 billion by 2022.

Insurance

We maintain insurance
for our offices and laboratory in Petah-Tikva, Israel. Our insurance program covers approximately $0.85 million of equipment and
lease improvements against risk of loss,. In addition, we maintain the following insurance: employer liability with coverage of
approximately $5.7 million; third party liability with coverage of approximately $0.87 million; fire insurance coverage of approximately
$0.43 million; natural disaster coverage of approximately $1.3 million; all risk coverage of approximately $0.02 million for electronic
equipment and machinery insurance for laboratory refrigerators; and directors’ and officers’ liability insurance with
coverage of $20.0 million per claim and $20.0 million in the aggregate and also D&O Side A DIC insurance with coverage of $5.0
million per claim and in the aggregate.

We also maintain worldwide
product and clinical trial liability insurance with coverage of approximately $5 million with respect to the Piclidenoson and Namodenoson
drugs used in clinical trials. We also procure additional insurance for each specific clinical trial which covers a certain number
of trial participants and which varies based on the particular clinical trial. Certain of such policies are based on the Declaration
of Helsinki, which is a set of ethical principles regarding human experimentation developed for the medical community by the World
Medical Association, and certain protocols of the Israeli Ministry of Health.

We procure cargo marine
coverage when we ship substances for our clinical studies. Such insurance is custom-fit to the special requirements of the applicable
shipment, such as temperature and/or climate sensitivity. If required, we insure the substances to the extent they are stored in
central depots and at clinical sites.

We believe that our
insurance policies are adequate and customary for a business of our kind. However, because of the nature of our business, we cannot
assure you that we will be able to maintain insurance on a commercially reasonable basis or at all, or that any future claims will
not exceed our insurance coverage.

Environmental Matters

We are 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. 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 in Israel 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 testing facilities, however, entails risks in these areas. Significant
expenditures could be required in the future if these facilities are required to comply with new or more stringent environmental
or health and safety laws, regulations or requirements. See “Business—Business Overview—Government Regulation
and Funding—Israel Ministry of the Environment—Toxin Permit.”

Government Regulation and Funding

We operate in a highly
controlled regulatory environment. Stringent regulations establish requirements relating to analytical, toxicological and clinical
standards and protocols in respect of the testing of pharmaceuticals. Regulations also cover research, development, manufacturing
and reporting procedures, both pre- and post-approval. In many markets, especially in Europe, marketing and pricing strategies
are subject to national legislation or administrative practices that include requirements to demonstrate not only the quality,
safety and efficacy of a new product, but also its cost-effectiveness relating to other treatment options. Failure to comply with
regulations can result in stringent sanctions, including product recalls, withdrawal of approvals, seizure of products and criminal
prosecution.

Before obtaining regulatory
approvals for the commercial sale of our product candidates, we must demonstrate through preclinical studies and clinical trials
that our product candidates are safe and effective. Historically, the results from preclinical studies and early clinical trials
often have not accurately predicted results of later clinical trials. In addition, a number of pharmaceutical products have shown
promising results in clinical trials but subsequently failed to establish sufficient safety and efficacy results to obtain necessary
regulatory approvals. We have incurred, and will continue to incur substantial expense for and devote a significant amount of time
to, preclinical studies and clinical trials. Many factors can delay the commencement and rate of completion of clinical trials,
including the inability to recruit patients at the expected rate, the inability to follow patients adequately after treatment,
the failure to manufacture sufficient quantities of materials used for clinical trials, and the emergence of unforeseen safety
issues and governmental and regulatory delays. If a product candidate fails to demonstrate safety and efficacy in clinical trials,
this failure may delay development of other product candidates and hinder our ability to conduct related preclinical studies and
clinical trials. Additionally, as a result of these failures, we may also be unable to obtain additional financing.

Governmental authorities
in all major markets require that a new pharmaceutical product be approved or exempted from approval before it is marketed, and
have established high standards for technical appraisal which can result in an expensive and lengthy approval process. The time
to obtain approval varies by country and some products are never approved. The lengthy process of conducting clinical trials, seeking
approval and subsequent compliance with applicable statutes and regulations, if approval is obtained, are very costly and require
the expenditure of substantial resources.

A summary of the United
States, European Union and Israeli regulatory processes follow below.

United States

In the United States,
the Public Health Service Act and the Federal Food, Drug, and Cosmetic Act (FDCA), as amended, and the regulations promulgated
thereunder, and other federal and state statutes and regulations govern, among other things, the safety and effectiveness standards
for our products and the raw materials and components used in the production of, testing, manufacture, labeling, storage, record
keeping, approval, advertising and promotion of our products on a product-by-product basis.

Preclinical tests include
in vitro and in vivo evaluation of the product candidate, its chemistry, formulation and stability, and animal studies
to assess potential safety and efficacy. Certain preclinical tests must be conducted in compliance with good laboratory practice
regulations. Violations of these regulations can, in some cases, lead to invalidation of the studies, requiring them to be replicated.
After laboratory analysis and preclinical testing, a sponsor files an IND to begin human testing. Typically, a manufacturer conducts
a three-phase human clinical testing program which itself is subject to numerous laws and regulatory requirements, including adequate
monitoring, reporting, record keeping and informed consent. In Phase I, small clinical trials are conducted to determine the safety
and proper dose ranges of our product candidates. In Phase II, clinical trials are conducted to assess safety and gain preliminary
evidence of the efficacy of our product candidates. In Phase III, clinical trials are conducted to provide sufficient data for
the statistically valid evidence of safety and efficacy. The time and expense required for us to perform this clinical testing
can vary and is substantial. We cannot be certain that we will successfully complete Phase I, Phase II or Phase III testing of
our product candidates within any specific time period, if at all. Furthermore, the FDA, the Institutional Review Board responsible
for approving and monitoring the clinical trials at a given site, the Data Safety Monitoring Board, where one is used, or we may
suspend the clinical trials at any time on various grounds, including a finding that subjects or patients are exposed to unacceptable
health risk.

If the clinical data
from these clinical trials (Phases I, II and III) are deemed to support the safety and effectiveness of the candidate product for
its intended use, then we may proceed to seek to file with the FDA an NDA seeking approval to market a new drug for one or more
specified intended uses. We have not completed our clinical trials for any candidate product for any intended use and therefore,
we cannot ascertain whether the clinical data will support and justify filing an NDA. Nevertheless, if and when we are able to
ascertain that the clinical data supports and justifies filing an NDA, we intend to make such appropriate filings.

The purpose of the
NDA is to provide the FDA with sufficient information so that it can assess whether it ought to approve the candidate product for
marketing for specific intended uses. The fact that the FDA has designated a drug as an orphan drug for a particular intended use
does not mean that the drug has been approved for marketing. Only after an NDA has been approved by the FDA is marketing appropriate.
A request for orphan drug status must be filed before the NDA is filed. The orphan drug designation, though, provides certain benefits,
including a seven-year period of market exclusivity subject to certain exceptions. In February 2012, the FDA granted an orphan
drug status for the active moiety, or the part of the drug that is responsible for the physiological or pharmacological action
of the drug substance, of Namodenoson for the treatment of HCC. Subsequently, in October 2015, the EMA granted Namodenoson orphan
drug designation for the treatment of HCC. See “Business—Business Overview—Namodenoson”.

The NDA normally contains,
among other things, sections describing the chemistry, manufacturing, and controls, non-clinical pharmacology and toxicology, human
pharmacokinetics and bioavailability, microbiology, the results of the clinical trials, and the proposed labeling which contains,
among other things, the intended uses of the candidate product.

We cannot take any
action to market any new drug or biologic product in the United States until our appropriate marketing application has been approved
by the FDA. The FDA has substantial discretion over the approval process and may disagree with our interpretation of the data submitted.
The process may be significantly extended by requests for additional information or clarification regarding information already
provided. As part of this review, the FDA may refer the application to an appropriate advisory committee, typically a panel of
clinicians. Satisfaction of these and other regulatory requirements typically takes several years, and the actual time required
may vary substantially based upon the type, complexity and novelty of the product. Government regulation may delay or prevent marketing
of potential products for a considerable period of time and impose costly procedures on our activities. We cannot be certain that
the FDA or other regulatory agencies will approve any of our products on a timely basis, if at all. Success in preclinical or early
stage clinical trials does not assure success in later-stage clinical trials. Even if a product receives regulatory approval, the
approval may be significantly limited to specific indications or uses and these limitations may adversely affect the commercial
viability of the product. Delays in obtaining, or failures to obtain regulatory approvals, would have a material adverse effect
on our business.

Even after we obtain
FDA approval, we may be required to conduct further clinical trials (i.e., Phase IV trials) and provide additional data on safety
and effectiveness. We are also required to gain separate approval for the use of an approved product as a treatment for indications
other than those initially approved. In addition, side effects or adverse events that are reported during clinical trials can delay,
impede or prevent marketing approval. Similarly, adverse events that are reported after marketing approval can result in additional
limitations being placed on the product’s use and, potentially, withdrawal of the product from the market. Any adverse event,
either before or after marketing approval, can result in product liability claims against us.

As an alternate path
for FDA approval of new indications or new formulations of previously-approved products, a company may file a Section 505(b)(2)
NDA, instead of a “stand-alone” or “full” NDA. Section 505(b)(2) of the FDCA, was enacted as part of the
Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Amendments. Section 505(b)(2)
permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted
by or for the applicant and for which the applicant has not obtained a right of reference. Some examples of products that may be
allowed to follow a 505(b)(2) path to approval are drugs that have a new dosage form, strength, route of administration, formulation
or indication. The Hatch-Waxman Amendments permit the applicant to rely upon certain published nonclinical or clinical studies
conducted for an approved product or the FDA’s conclusions from prior review of such studies. The FDA may require companies
to perform additional studies or measurements to support any changes from the approved product. The FDA may then approve the new
product for all or some of the labeled indications for which the reference product has been approved, as well as for any new indication
supported by the NDA. While references to nonclinical and clinical data not generated by the applicant or for which the applicant
does not have a right of reference are allowed, all development, process, stability, qualification and validation data related
to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2).

To the extent that
the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already approved product,
the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange
Book publication. Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the
listed patent has expired; (iii) the listed patent has not expired, but will expire on a particular date and approval is sought
after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. The Section 505(b)(2)
application also will not be approved until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical
entity, listed in the Orange Book for the reference product has expired. Thus, the Section 505(b)(2) applicant may invest a significant
amount of time and expense in the development of its products only to be subject to significant delay and patent litigation before
its products may be commercialized.

In addition to regulating
and auditing human clinical trials, the FDA regulates and inspects equipment, facilities, laboratories and processes used in the
manufacturing and testing of such products prior to providing approval to market a product. If, after receiving FDA approval, we
make a material change in manufacturing equipment, location or process, additional regulatory review and approval may be required.
We also must adhere to cGMP regulations and product-specific regulations enforced by the FDA through its facilities inspection
program. The FDA also conducts regular, periodic visits to re-inspect our equipment, facilities, laboratories and processes following
the initial approval. If, as a result of these inspections, the FDA determines that our equipment, facilities, laboratories or
processes do not comply with applicable FDA regulations and conditions of product approval, the FDA may seek civil, criminal or
administrative sanctions and/or remedies against us, including the suspension of our manufacturing operations.

We have currently received
no approvals to market our products from the FDA or other foreign regulators.

We are also subject
to various federal, state and international laws pertaining to healthcare “fraud and abuse,” including anti-kickback
laws and false claims laws. The federal anti-kickback law, which governs federal healthcare programs (e.g., Medicare, Medicaid),
makes it illegal to solicit, offer, receive or pay any remuneration in exchange for, or to induce, the referral of business, including
the purchase or prescription of a particular drug. Many states have similar laws that are not restricted to federal healthcare
programs. Federal and state false claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented
for payment to third party payers (including Medicare and Medicaid), claims for reimbursement, including claims for the sale of
drugs or services, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically
unnecessary items or services. If the government or a whistleblower were to allege that we violated these laws there could be a
material adverse effect on us, including our stock price. Even an unsuccessful challenge could cause adverse publicity and be costly
to respond to, which could have a materially adverse effect on our business, results of operations and financial condition. A finding
of liability under these laws can have significant adverse financial implications for us and can result in payment of large penalties
and possible exclusion from federal healthcare programs. We will consult counsel concerning the potential application of these
and other laws to our business and our sales, marketing and other activities and will make good faith efforts to comply with them.
However, given their broad reach and the increasing attention given by law enforcement authorities, we cannot assure you that some
of our activities will not be challenged or deemed to violate some of these laws.

European Union

Regulation and Marketing Authorization in the European
Union

The process governing
approval of medicinal products in the European Union follows essentially the same lines as in the United States and, likewise,
generally involves satisfactorily completing each of the following:

preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable E.U. Good Laboratory Practice regulations;
submission to the relevant national authorities of a clinical trial application, or CTA, which must be approved before human clinical trials may begin;
performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;
submission to the relevant competent authorities of a marketing authorization application, or MAA, which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;

satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced current cGMP;

potential audits of the non-clinical and clinical trial sites that generated the data in support of the MAA; and

review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.

Preclinical Studies

Preclinical tests include
laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animal studies,
in order to assess the potential safety and efficacy of the product. The conduct of the preclinical tests and formulation of the
compounds for testing must comply with the relevant E.U. and/or Member States’ regulations and requirements. The results
of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA.

Clinical Trial Approval

Requirements for the
conduct of clinical trials in the European Union including Good Clinical Practice, or GCP, are implemented in the Clinical Trials
Directive 2001/20/EC and the GCP Directive 2005/28/EC. Pursuant to Directive 2001/20/EC and Directive 2005/28/EC, as amended, a
system for the approval of clinical trials in the European Union has been implemented through national legislation of the member
states. Under this system, approval must be obtained from the competent national authority of an E.U. member state in which a study
is planned to be conducted or in multiple member states if the clinical trial is to be conducted in a number of member states.
To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier, or IMPD, and further
supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and other applicable guidance documents. Furthermore,
a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application
in that country.

In April 2014, a new Clinical Trials Regulation, (EU) No 536/2014 was adopted which will replace the current
Clinical Trials Directive 2001/20/EC. To ensure that the rules for clinical trials are identical throughout the European Union,
the new E.U. clinical trials legislation was passed as a “regulation” that is directly applicable in all E.U. member
states. All clinical trials performed in the European Union are required to be conducted in accordance with the Clinical Trials
Directive 2001/20/EC until the new Clinical Trials Regulation (EU) No 536/2014 becomes applicable, which is connected to the functioning
of the new E.U. Clinical Trials Database and has therefore been postponed several times. Currently, an audit of the test database
is scheduled for end-2020, so the applicability of the Clinical Trials Regulation cannot be expected to occur in 2020.

The new Regulation
(EU) No 536/2014 aims to harmonize, simplify and streamline the approval of clinical trials in the European Union. The main characteristics
of the Regulation include:

A streamlined application procedure via a single entry point, the E.U. portal;
A single set of documents to be prepared and submitted for the application as well as simplified reporting procedures that will spare sponsors from submitting broadly identical information separately to various bodies and different member states;
A harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed jointly by all member states concerned. Part II is assessed separately by each member state concerned;
Strictly defined deadlines for the assessment of clinical trial application; and
The involvement of the ethics committees in the assessment procedure in accordance with the national law of the member state concerned but within the overall timelines defined by the Regulation (EU) No 536/2014.

Marketing Authorization

Authorization to market
a product in the member states of the European Union proceeds under one of four procedures: a centralized authorization procedure,
a mutual recognition procedure, a decentralized procedure or a national procedure.

Centralized Authorization Procedure

The centralized procedure
enables applicants to obtain a marketing authorization that is valid in all E.U. member states based on a single application. Certain
medicinal products, including products developed by means of biotechnological processes, must undergo the centralized authorization
procedure for marketing authorization which, if granted by the European Commission, is automatically valid in all 28 E.U. member
states. The EMA and the European Commission administer this centralized authorization procedure pursuant to Regulation (EC) No
726/2004.

Pursuant to Regulation
(EC) No 726/2004, this procedure is inter alia mandatory for:

medicinal products developed by means of one of the following biotechnological processes:

recombinant DNA technology;
controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells; and
hybridoma and monoclonal antibody methods;

advanced therapy medicinal products as defined in Article 2 of Regulation (EC) No. 1394/2007 on advanced therapy medicinal products;

medicinal products for human use containing a new active substance that, on the date of effectiveness of this regulation, was not authorized in the European Union, and for which the therapeutic indication is the treatment of any of the following diseases:

acquired immune deficiency syndrome;
cancer;
neurodegenerative disorder;
diabetes;
auto-immune diseases and other immune dysfunctions; and
viral diseases.

medicinal products that are designated as orphan medicinal products pursuant to Regulation (EC) No 141/2000.

The centralized authorization
procedure is optional for other medicinal products if they contain a new active substance or if the applicant shows that the medicinal
product concerned constitutes a significant therapeutic, scientific or technical innovation or that the granting of authorization
is in the interest of patients in the European Union.

Administrative Procedure

Under the centralized
authorization procedure, the EMA’s Committee for Human Medicinal Products, or CHMP, serves as the scientific committee that
renders opinions about the safety, efficacy and quality of medicinal products for human use on behalf of the EMA. The CHMP is composed
of experts nominated by each member state’s national authority for medicinal products, with expert appointed to act as Rapporteur
for the co-ordination of the evaluation with the possible assistance of a further member of the Committee acting as a Co-Rapporteur.
After approval, the Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP has 210 days to adopt
an opinion as to whether a marketing authorization should be granted. The process usually takes longer in case additional information
is requested, which triggers clock-stops in the procedural timelines. The process is complex and involves extensive consultation
with the regulatory authorities of member states and a number of experts. When an application is submitted for a marketing authorization
in respect of a drug that is of major interest from the point of view of public health and in particular from the viewpoint of
therapeutic innovation, the applicant may pursuant to Article 14(9) Regulation (EC) No 726/2004 request an accelerated assessment
procedure. If the CHMP accepts such request, the time-limit of 210 days will be reduced to 150 days but it is possible that the
CHMP can revert to the standard time-limit for the centralized procedure if it considers that it is no longer appropriate to conduct
an accelerated assessment. Once the procedure is completed, a European Public Assessment Report, or EPAR, is produced. If the opinion
is negative, information is given as to the grounds on which this conclusion was reached. After the adoption of the CHMP opinion,
a decision on the MAA must be adopted by the European Commission, after consulting the E.U. member states.

Conditional Approval

In specific circumstances,
E.U. legislation (Article 14(7) Regulation (EC) No 726/2004 and Regulation (EC) No 507/2006 on Conditional Marketing Authorisations
for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the
comprehensive clinical data required for an application for a full marketing authorization. Such conditional approvals may be granted
for product candidates (including medicines designated as orphan medicinal products) if (1) the risk-benefit balance of the
product candidate is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive
clinical trial data, (3) the product fulfills unmet medical needs and (4) the benefit to public health of the immediate
availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are
still required. A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization
holder, including obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance
data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains
positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines
for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional
marketing authorization.

Marketing Authorization under Exceptional
Circumstances

Under Article 14(8)
Regulation (EC) No 726/2004, products for which the applicant can demonstrate that comprehensive data (in line with the requirements
laid down in Annex I of Directive 2001/83/EC, as amended) cannot be provided (due to specific reasons foreseen in the legislation)
might be eligible for marketing authorization under exceptional circumstances. This type of authorization is reviewed annually
to reassess the risk-benefit balance. The fulfillment of any specific procedures/obligations imposed as part of the marketing authorization
under exceptional circumstances is aimed at the provision of information on the safe and effective use of the product and will
normally not lead to the completion of a full dossier/approval.

Market Authorizations Granted by Authorities
of E.U. Member States

In general, if the
centralized procedure is not followed, there are three alternative procedures as prescribed in Directive 2001/83/EC:

The decentralized procedure allows applicants to file identical applications to several E.U. member states and receive simultaneous national approvals based on the recognition by E.U. member states of an assessment by a reference member state;
The national procedure is only available for products intended to be authorized in a single E.U. member state; and
A mutual recognition procedure similar to the decentralized procedure is available when a marketing authorization has already been obtained in at least one E.U. member state.

A marketing authorization
may be granted only to an applicant established in the European Union.

Pediatric Studies

Prior to obtaining
a marketing authorization in the European Union, applicants have to demonstrate compliance with all measures included in an EMA-approved
Paediatric Investigation Plan, or PIP, covering all subsets of the paediatric population, unless the EMA has granted a product-specific
waiver, a class waiver, or a deferral for one or more of the measures included in the PIP. The respective requirements for all
marketing authorization procedures are set forth in Regulation (EC) No 1901/2006, which is referred to as the Pediatric Regulation.
This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of administration for
a medicine that is already authorized. The Pediatric Committee of the EMA, or PDCO, may grant deferrals for some medicines, allowing
a company to delay development of the medicine in children until there is enough information to demonstrate its effectiveness and
safety in adults. The PDCO may also grant waivers when development of a medicine in children is not needed or is not appropriate,
such as for diseases that only affect the elderly population.

Before a marketing
authorization application can be filed, or an existing marketing authorization can be amended, the EMA determines that companies
actually comply with the agreed studies and measures listed in each relevant PIP.

Periods of Authorization and Renewals

A marketing authorization
is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation
of the risk-benefit balance by the competent authority of the authorizing member state. To this end, the marketing authorization
holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and
efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing
authorization ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited period, unless the European
Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional
five-year renewal. Any authorization which is not followed by the actual placing of the drug on the E.U. market (in case of centralized
procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called
sunset clause).

Orphan Drug Designation and Exclusivity

Pursuant to Regulation
(EC) No 141/2000 and Regulation (EC) No. 847/2000, the European Commission can grant such orphan medicinal product designation
to products for which the sponsor can establish that it is intended for the diagnosis, prevention or treatment of a life-threatening
or chronically debilitating condition affecting not more than five in 10,000 people in the European Union, or a life threatening,
seriously debilitating or serious and chronic condition in the European Union and with regards to that without incentives it is
unlikely that sales of the drug in the European Union would generate a sufficient return to justify the necessary investment. In
addition, the sponsor must establish that there is no other satisfactory method approved in the European Union of diagnosing, preventing
or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients.

Orphan drug designation
is not a marketing authorization. It is a designation that provides a number of benefits, including fee reductions, regulatory
assistance, and the possibility to apply for a centralized E.U. marketing authorization, as well as ten years of market exclusivity
following a marketing authorization. During this market exclusivity period, neither the EMA, the European Commission nor the member
states can accept an application or grant a marketing authorization for a “similar medicinal product.” A “similar
medicinal product” is defined as a medicinal product containing a similar active substance or substances as those contained
in an authorized orphan medicinal product and that is intended for the same therapeutic indication. The market exclusivity period
for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that
the orphan designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not
to justify maintenance of market exclusivity. In addition, a competing similar medicinal product may in limited circumstances be
authorized prior to the expiration of the market exclusivity period, including if the marketing authorization holder is unable
to supply sufficient quantities of the product or if the competing product is shown to be safer, more effective or otherwise clinically
superior to the already approved orphan drug. Furthermore, a product can lose orphan designation, and the related benefits, prior
to us obtaining a marketing authorization if it is demonstrated that the orphan designation criteria are no longer met.

Regulatory Data Protection

E.U. legislation also
provides for a system of regulatory data and market exclusivity. According to Article 14(11) of Regulation (EC) No 726/2004, as
amended, and Article 10(1) of Directive 2001/83/EC, as amended, upon receiving marketing authorization, new chemical entities approved
on the basis of a complete independent data package benefit from eight years of data exclusivity and an additional two years of
market exclusivity. Data exclusivity prevents regulatory authorities in the European Union from referencing the innovator’s
data to assess a generic (abbreviated) application. During the additional two-year period of market exclusivity, a generic marketing
authorization can be submitted, and the innovator’s data may be referenced, but no generic medicinal product can be marketed
until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of 11 years if, during
the first eight years of those ten years, the marketing authorization holder, or MAH, obtains an authorization for one or more
new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant
clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity and the innovator
is able to gain the period of data exclusivity, another company nevertheless could also market another version of the drug if such
company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical
tests and clinical trials. However, products designated as orphan medicinal products enjoy, upon receiving marketing authorization,
a period of ten years of orphan market exclusivity—see also Orphan Drug Designation and Exclusivity. Depending
upon the timing and duration of the E.U. marketing authorization process, products may be eligible for up to five years’
supplementary protection certificates, or SPCs, pursuant to Regulation (EC) No 469/2009. Such SPCs extend the rights under the
basic patent for the drug (see below sub Patent Term Extension).

Regulatory Requirements After a Marketing
Authorization has been Obtained

If we obtain authorization
for a medicinal product in the European Union, we will be required to comply with a range of requirements applicable to the manufacturing,
marketing, promotion and sale of medicinal products:

Pharmacovigilance and other requirements

We will, for example,
have to comply with the E.U.’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization
studies and additional monitoring obligations can be imposed. Other requirements relate, for example, to the manufacturing of products
and APIs in accordance with good manufacturing practice standards. E.U. regulators may conduct inspections to verify our compliance
with applicable requirements, and we will have to continue to expend time, money and effort to remain compliant. Non-compliance
with E.U. requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products
for the pediatric population, can also result in significant financial penalties in the European Union. Similarly, failure to comply
with the E.U.’s requirements regarding the protection of individual personal data can also lead to significant penalties
and sanctions. Individual E.U. member states may also impose various sanctions and penalties in case we do not comply with locally
applicable requirements.

Manufacturing

The manufacturing of
authorized drugs, for which a separate manufacturer’s license is mandatory, must be conducted in strict compliance with the
EMA’s Good Manufacturing Practices, or cGMP, requirements and comparable requirements of other regulatory bodies in the European
Union, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their
safety and identity. The EMA enforces its current cGMP requirements through mandatory registration of facilities and inspections
of those facilities. The EMA may have a coordinating role for these inspections while the responsibility for carrying them out
rests with the member states competent authority under whose responsibility the manufacturer falls. Failure to comply with these
requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and could subject the applicant
to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of
product, injunctive action or possible civil and criminal penalties.

Marketing and Promotion

The marketing and promotion
of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers
of drugs and/or the general public, are strictly regulated in the European Union under Directive 2001/83/EC. The applicable regulations
aim to ensure that information provided by holders of marketing authorizations regarding their products is truthful, balanced and
accurately reflects the safety and efficacy claims authorized by the EMA or by the competent authority of the authorizing member
state. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential
civil and criminal penalties.

Patent Term Extension

In order to compensate
the patentee for delays in obtaining a marketing authorization for a patented product, a supplementary certificate, or SPC, may
be granted extending the exclusivity period for that specific product by up to five years. Applications for SPCs must be made to
the relevant patent office in each E.U. member state and the granted certificates are valid only in the member state of grant.
An application has to be made by the patent owner within six months of the first marketing authorization being granted in the European
Union (assuming the patent in question has not expired, lapsed or been revoked) or within six months of the grant of the patent
(if the marketing authorization is granted first). In the context of SPCs, the term “product” means the active ingredient
or combination of active ingredients for a medicinal product and the term “patent” means a patent protecting such a
product or a new manufacturing process or application for it. The duration of an SPC is calculated as the difference between the
patent’s filing date and the date of the first marketing authorization, minus five years, subject to a maximum term of five
years.

A six month pediatric
extension of an SPC may be obtained where the patentee has carried out an agreed pediatric investigation plan, the authorized product
information includes information on the results of the studies and the product is authorized in all member states of the European
Union.

Israel

Israel Ministry of the Environment — Toxin Permit

In accordance with
the Israeli Dangerous Substance Law — 1993, the Ministry of the Environment may grant a permit in order to use toxic materials.
Because we utilize toxic materials in the course of operation of our laboratories, we were required to apply for a permit to use
these materials. Our current toxin permit will remain in effect until January 2020 and is in the process of being renewed.

Other Licenses and Approvals

We have a business
license from the municipality of Petah-Tikva for a drug development research laboratory located at our offices in Petah Tikva,
Israel. In order to obtain this license, we also received approval from the Petah-Tikva Association of Towns Fire Department. The
business license is valid until December 31, 2019 and is in the process of being renewed. We also have a radioactive materials
or products containing radioactive materials license, which is valid until July 25, 2020.

Clinical Testing in Israel

In order to conduct
clinical testing on humans in Israel, special authorization must first be obtained from the ethics committee and general manager
of the institution in which the clinical studies are scheduled to be conducted, 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. Since we intend
to perform a portion of the clinical studies on certain of our product candidates 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.

Israel Ministry of Health

Israel’s Ministry
of Health, which regulates medical testing, has adopted protocols that correspond, generally, to those of the FDA and the EMA,
making it comparatively straightforward for studies conducted in Israel to satisfy FDA and the European Medicines Agency requirements,
thereby enabling medical technologies subjected to clinical trials in Israel to reach U.S. and EU commercial markets in an expedited
fashion. Many members of Israel’s medical community have earned international prestige in their chosen fields of expertise
and routinely collaborate, teach and lecture at leading medical centers throughout the world. Israel also has free trade agreements
with the United States and the European Union.

Other Countries

In addition to regulations
in the United States, the EU and Israel, we are subject to a variety of other regulations governing clinical trials and commercial
sales and distribution of drugs in other countries. Whether or not our products receive approval from the FDA, approval of such
products must be obtained by the comparable regulatory authorities of countries other than the United States before we can commence
clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the time
may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials and product
licensing vary greatly from country to country.

The requirements that
we and our collaborators must satisfy to obtain regulatory approval by government agencies in other countries prior to commercialization
of our products in such countries can be rigorous, costly and uncertain. In Canada and Australia, regulatory requirements and approval
processes are similar in principle to those in the United States. For example, in Canada, pharmaceutical product candidates are
regulated by the Food and Drugs Act and the rules and regulations promulgated thereunder, which are enforced by Health Canada.
Before commencing clinical trials in Canada, an applicant must complete preclinical studies and file a clinical trial application
with Health Canada. After filing a clinical trial application, the applicant must receive different clearance authorizations to
proceed with Phase 1 clinical trials, which can then lead to Phase 2 and Phase 3 clinical trials. To obtain regulatory approval
to commercialize a new drug in Canada, a new drug submission, or NDS, must be filed with Health Canada. If the NDS demonstrates
that the product was developed in accordance with the regulatory authorities’ rules, regulations and guidelines and demonstrates
favorable safety and efficacy and receives a favorable risk/benefit analysis, Health Canada issues a notice of compliance which
allows the applicant to market the product. Facilities, procedures, operations and/or testing of products are subject to periodic
inspection by Health Canada and the Health Products and Food Branch Inspectorate. In addition, Health Canada conducts pre-approval
and post-approval reviews and plant inspections to determine whether systems are in compliance with the good manufacturing practices
in Canada, Drug Establishment Licensing requirements and other provisions of the Food and Drug Regulations.

Foreign governments
also have stringent post-approval requirements including those relating to manufacture, labeling, reporting, record keeping and
marketing. Failure to substantially comply with these on-going requirements could lead to government action against the product,
our company and/or our representatives.

Related Matters

From time to time,
legislation is drafted, introduced and passed in governmental bodies that could significantly change the statutory provisions governing
the approval, manufacturing and marketing of products regulated by the FDA, the EMA, the Israeli Ministry of Health and other applicable
regulatory bodies to which we are subject. In addition, regulations and guidance are often revised or reinterpreted by the national
agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whether such
legislative changes will be enacted, whether FDA, EMA or Israeli Ministry of Health regulations, guidance or interpretations will
change, or what the impact of such changes, if any, may be. We may need to adapt our business and product candidates and products
to changes that occur in the future.

Organizational Structure

Our corporate structure
consists of Can-Fite and three wholly owned subsidiaries, all of which are inactive: Ultratrend Limited, incorporated in England
and Wales, Eye-Fite Limited, incorporated in Israel (which is in the process of being wound up), and Can-Fite Biopharma Europe,
incorporated in France.

Property, Plants and Equipment

We are headquartered in Petah-Tikva, Israel.
We lease one floor in one facility pursuant to a lease agreement with Eshkolit Nihul Nadlan LTD, an Israeli limited company. Pursuant
to a verbal agreement with the lessor, the lease expires on December 31, 2020. The Petah-Tikva headquarters consists of approximately
300 square meters of space. Lease payments are approximately NIS 20,447, or $5,318, per month. If our lease is terminated, we do
not foresee significant difficulty in leasing another suitable facility. The current facility houses our administrative, clinical
and research operations. The research laboratory consists of approximately 150 square meters and includes a tissue culture laboratory
and a molecular biology laboratory.




MANAGEMENT


Directors and Senior Management.

The following table sets forth our directors
and senior management:

Member Age Position
Ilan Cohn, Ph.D. 64 Chairman of the Board
Pnina Fishman, Ph.D. 71 Chief Executive Officer, Director
Motti Farbstein 56 Chief Operating and Financial Officer
Sari Fishman, Ph.D. 48 VP of Business Development
Guy Regev 50 Director, Audit Committee and Compensation Committee member
Abraham Sartani, M.D. 73 Director
Israel Shamay 55 Director, Audit Committee and Compensation Committee member
Yaacov Goldman 64 Director, Audit Committee and Compensation Committee member
Golan Bitton 43 Director

Ilan Cohn, Ph.D. Ilan
Cohn, Ph.D. is a patent attorney and senior partner at the patent attorney firm Reinhold Cohn and Partners, where he has been an
attorney since 1986. Dr. Cohn co-founded Can-Fite, served as its Chief Executive Officer until September 2004, served on our Board
of Directors since 1994 and since May 30, 2013 serves as the Chairman of the Can-Fite Board of Directors. Dr. Cohn has also been
a director of OphthaliX since November 21, 2011. Dr. Cohn holds a Ph.D. in biology and is a patent attorney with many years of
experience in the biopharmaceutical field. He has served on the Board of Directors of a number of life science companies, including
Discovery Laboratories Inc. (formerly Ansan Pharmaceuticals), a U.S. public company. Dr. Cohn has also been involved in the past
in management of venture capital funds focused on investments in the life sciences industry. Dr. Cohn served a number of years
as a co-chairman of the Biotech Committee of the US-Israeli Science and Technology Commission. Dr. Cohn is also currently a member
of the Board of Directors of I.C.R.C. Management Ltd, Famillion BVI Ltd. and Famillion Ltd. (a subsidiary of Famillion BVI Ltd.). Dr.
Cohn holds a Ph.D. in Biology from the Hebrew University of Jerusalem.

Pnina Fishman,
Ph.D.
Pnina Fishman, Ph.D. co-founded Can-Fite and has served as our Chief Executive Officer and served on our Board
of Directors since September 2005. Dr. Fishman is the scientific founder of Can-Fite and was previously a professor of Life Sciences
and headed the Laboratory of Clinical and Tumor Immunology at the Felsenstein Medical Research Institute, Rabin Medical Center,
Israel. Dr. Fishman has authored or co-authored over 150 publications and presented the findings of her research at many major
scientific meetings. Her past managerial experience included seven years as Chief Executive Officer of Mor Research Application,
the technology transfer arm of Clalit Health Services, the largest healthcare provider in Israel. Mor Research Application was
also the first clinical research organization in Israel. Dr. Fishman currently also serves as a member of the Board of Directors
of F.D Consulting Ltd., Ultratrend Ltd., and Eye-Fite Ltd. Dr. Fishman holds a Ph.D. in Immunology from the Bar Ilan University
in Ramat Gan, Israel.

Motti Farbstein.
Motti Farbstein has been with Can-Fite since 2003. Mr. Farbstein served as our Chief Operating Officer from August 2003 until May
2005 and from that date onwards he served as Chief Operating and Financial Officer. Mr. Farbstein also serves as a director of
Eye-Fite Ltd. since July 2011. Mr. Farbstein’s past managerial experience includes seven years as Vice President of Mor Research
Application, a company that managed the commercialization of the intellectual property of all hospitals and research centers affiliated
with Clalit Health Services, which is the largest healthcare provider in Israel and was Israel’s first clinical CRO. Mr.
Farbstein also has extensive experience in the data management of clinical trials.

Sari Fishman,
Ph.D
.
Sari Fishman, Ph.D. has served as our Director Clinical Affairs from 2004 to 2014, Director of Business Development
from 2014 to 2017 and since 2017 serves as VP of Business Development. Dr. Fishman gained her Ph.D. at the Bar-Ilan University,
Ramat-Gan, Israel.

Abraham Sartani,
M.D.
Abraham Sartani has served on our Board of Directors since 2001. Dr. Sartani has over 30 years of experience
in the pharmaceuticals industry and currently acts as a consultant to pharmaceutical and medical device companies. Dr. Sartani
is a member of a number of scientific and management societies and the author or co-author of numerous publications and patents
in the urology, pain treatment and hypertension fields. Dr. Sartani previously served on the Board of Directors of Akkadeas Pharma
Srl (formerly Arkadia Pharma) and was a co-founder. From 1985 until 2008, Dr. Sartani was the Vice-President of R&D and Licensing
and Group coordinator of B&D of Recordati, a European specialty pharmaceutical company. Prior to joining Recordati, from 1980
until 1985, Dr. Sartani was employed at Farmitalia-Carlo Erba, serving in a number of capacities, including as the Medical Director
for Europe.

Guy Regev. Guy
Regev has over twelve years of experience in accounting, financial management and control and general management of commercial
enterprises. He has served on our Board of Directors since July 2011 and has served as a member of our Audit Committee and Compensation
Committee since February 2014. Mr. Regev has also been a director of OphthaliX since November 2011. Mr. Regev is currently the
Chief Executive Officer of Gaon Holdings Ltd, a publicly traded Israeli holding company traded on the TASE which focuses on three
areas of operation – Cleantech / Water, Financial Services, Retail/Trading. Mr. Regev is currently also the Chief Executive Officer
of Middle East Tube Company Ltd a publicly traded Israeli company traded on the TASE which focuses on steel pipe manufacturing
and galvanization services. Mr. Regev was the Chief Executive Officer of Shaked Global Group Ltd, a privately-held equity investment
firm that provides value added capital to environmental-related companies and technologies. Prior to joining Shaked, from 2001
to 2008, Mr. Regev was Vice President of Commercial Business at Housing & Construction Holding, or HCH, Israel’s largest
infrastructure company. His duties included being responsible for the consolidation and financial recovery of various business
units within HCH. Prior to that, Mr. Regev carried several roles within the group including as a Chief Financial Officer and later
the Chief Executive Officer of Blue-Green Ltd., the environmental services subsidiary of HCH. Between 1999 and 2001, Mr. Regev
was a manager at Deloitte & Touche, Israel. Mr. Regev holds an LLB degree in Law (Israel) and is a licensed attorney and has
been a licensed CPA since 1999. Mr. Regev is also a director of, The Green Way Ltd, Shtang Construction and Engineering Ltd, R.I.B.E.
Consulting & Investment Ltd., Middle East Tube Company Ltd, Middle East Tube – Industries 2001 Ltd, Middle East Tubes – Galvanizing
(1994) Ltd, I-Solar Greentech Ltd, Plassim Infrastructure Ltd, Plassim Advanced Solutions in Sanitation Ltd, Hakohav Valves Industries
Metal (1987) Ltd, Metzerplas Agriculture Cooperative Ltd, B. Gaon Retail & Trading Ltd, Gaon Agro – Rimon Management Services
Ltd, B. Gaon Business (2004) Ltd, Gaon Antan Investments Ltd, Or Asaf Investments Ltd, Hamashbir Holdings (1999) Ltd, and AHAVA
Holdings LTD.

Israel Shamay.
Israel Shamay has served as external director since December 2014 and serves as a member on both the Audit Committee
and Compensation Committee. Since 2012 Mr. Shamay has served as Executive Director, Strategic Initiatives and Head of the Americas
Operations of MATIMOP (Israeli Industry Center for R&D), the International Operations agency of the Israeli Office of the
Israel Innovation Authority (formerly the Office of Chief Scientist), focusing on developing and implementing cooperation platforms
for industrial R&D and innovation projects in the Americas region. From 2006 until 2012 Mr. Shamay served as Executive Director
of European Cooperations at MATIMOP, where he was in charge of architecting, realizing and evaluating industrial innovation cooperation
frameworks at bilateral and European level, making them a major R&D cooperation instrument for Israeli industry with Europe.
Between 2010 and 2011, Mr. Shamay was Head of the Israeli EUREKA Chairmanship Program (EUREKA is Europe’s largest innovation
network with nearly 40 member states). The Israeli EUREKA Chairmanship focused on developing new financial instruments for innovative
small and medium sized enterprises and on expanding EUREKA’s international dimension. From 2002 Mr. Shamay served as Israel’s
National Representative in several international R&D programs, from 2005 as an expert evaluator for the EU Framework Programs
for R&D and from 2006 until 2009 managed the Israeli R&D collaboration with the EU Global Satellite Navigation Program
– GALILEO. From 1991 until 2001, Mr. Shamay served in senior technical, marketing and executive positions in Israeli hi-tech
companies operating globally, including the RAD group and Comverse Technologies. Mr. Shamay is an MBA graduate of the Recanati
School of Business at the Tel-Aviv University and a graduate of the Technion in Haifa, faculty of Information Systems Engineering.

Yaacov
Goldman
. Yaacov Goldman has served as external director since August 2017. Mr. Goldman provides consulting
services to companies in strategic-financial areas, through his wholly owned company, Maanit-Goldman Management &
Investments (2002) Ltd. Mr. Goldman also serves as a director of Avgol Industries 1953 Ltd., Industrial Buildings Corporation
Ltd., Fattal Properties (Europe) Ltd. and Prashkovsky Investments and Construction Ltd. Mr. Goldman served as the
Professional Secretary of the Peer Review Institute of the Certified Public Accountants Institute in Israel from October 2004
until September 2008. Commencing in 1981, Mr. Goldman worked for Kesselman & Kesselman (Israeli member firm of
PricewaterhouseCoopers) for 19 years, and from 1991 until 2000, as a partner and then senior partner of such firm. From
September 2000 until November 2001, Mr. Goldman served as managing director of Argoquest Holdings, LLC. Mr. Goldman holds a
B.A. degree in Economics and Accounting from Tel Aviv University and is a Certified Public Accountant (Israel).

Golan Bitton.
Golan Bitton has served on our Board of Directors since December 2019. Mr. Bitton has many years of managerial experience in the
Israeli Ministry of Defense. During his tenure there, he implemented and managed multi-million dollar projects for the Israeli
Government. Mr. Bitton is the founder of Univo and is considered today as one of the leading worldwide experts in the cannabis
arena. Mr. Bitton holds a B.A. in Economics and Business Management from Max Stern Academic College and Computer Engineering from
Negev University.



EXECUTIVE COMPENSATION

The following table
presents in the aggregate all compensation we paid to all of our office holders as a group for the year ended December 31, 2019.
It does not include any business travel, relocation, professional, and business association dues and expenses reimbursed to office
holders, and other benefits commonly reimbursed or paid by companies in Israel.

The term ‘office
holder’ as defined in the Companies Law includes a general manager, chief business manager, deputy general manager, vice
general manager, any other person fulfilling or assuming the responsibilities of any of the foregoing positions without regard
to such person’s title, as well as a director, or a manager directly subordinate to the general manager or the chief executive
officer. As of January 23, 2020, in addition to the six members of the Board of Directors (including the Company’s Chief
Executive Officer), the Company considers two other individuals, including its Chief Financial Officer and its VP Business Development
to be office holders.

Salaries, fees,

commissions,

bonuses and

options

(thousand USD)

All office holders as a group, consisting of 9 persons

1,069

The following table
presents information regarding compensation reflected in our financial statements for five most highly compensated office holders,
as of December 31, 2019.


Name and Position

Salary

Bonus

Value of

Options

Granted(4)

Other(5)

Total

(USD in thousands)

Pnina Fishman

Chief Executive Officer

365

(1)

69

14

448

Motti Farbstein

Chief Financial Officer

195

(2)

67

15

277

Sari Fishman

VP Business Development

148

(2)

50

13

211

Yaacov Goldman

External Director

35

(3)

5

40

Guy Regev

External Director

35

(3)

5

40

(1) Amount represents consulting fee.
(2) Salary includes gross salary plus payment of social benefits made by us on behalf of such person. Such benefits may include, to the extent applicable, payments, contributions and/or allocations for savings funds (e.g., managers’ life insurance policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, risk insurances (e.g., life, or work disability insurance), payments for social security payments and tax gross-up payments, vacation, medical insurance and benefits, convalescence or recreation pay and other benefits and perquisites consistent with our policies.
(3) Amount represents fees for Board service.
(4) The value of options is the expense recorded in our financial statements for the period ended December 31, 2019 with respect to all options granted to such person. Assumptions and key variables used in the calculation of such amounts are discussed in Note 12 of our financial statements.
(5) Amount represents cost of use of company car.

Each director other
than our Chief Executive Officer and Avraham Sartani, is entitled to the payment of annual fee of NIS 48,721 or $14,114 (based on the exchange rate reported by the Bank of Israel on January 22, 2020),
and payment of NIS 3,256 or $943 (based on the exchange rate reported by the Bank of Israel on January 22, 2020) per meeting for participating in meetings of the Board and committees of the Board.
The annual fee shall not exceed the annual fee of an expert external director set forth in the Companies Regulations (Rules regarding
Compensation and Expenses of External Directors) 5760-2000 as adjusted by the Companies Regulations (Relief for Public Companies
with Shares Listed for Trading on a Stock Market Outside of Israel), 5760-2000. The compensation awarded for participating in resolutions
that are adopted without an actual convening (i.e., unanimous written resolutions) and for participating through telephone meetings
will be reduced as follows: (1) for resolutions that will be adopted without an actual convening, the participation compensation
will be reduced by 50%; and (2) for participation through telephone meetings, the participation compensation will be reduced by
40%. The participation compensation and the annual fee is inclusive of all expenses incurred by our directors in connection with
their participation in a meeting held at our offices or with regard to resolutions resolved by written consent or teleconference.
Avraham Sartani is entitled to a fee of $1,000 per meeting. In addition, our directors (other than our Chief Executive Officer
and external directors) are entitled to reimbursement for expenses related to their participation at meetings taking place not
at our offices and outside their respective residency area.

Employment and Consulting Agreements

We have entered into
employment or consulting agreements with our directors, senior management and key service providers. All of these agreements contain
customary provisions regarding noncompetition, confidentiality of information and assignment of proprietary information and inventions.
However, the enforceability of the noncompetition provisions may be limited under applicable law.

The following are summary
descriptions of certain agreements to which we are a party. The descriptions provided below do not purport to be complete and are
qualified in their entirety by the complete agreements, which are attached as exhibits to this prospectus.

Service Management
Agreement with F.D. Consulting:
On June 27, 2002, we entered into a Service Management Agreement with F.D. Consulting, a company
partially owned by Pnina Fishman, pursuant to which Dr. Fishman began serving as our Chief Scientific Officer and later became
our Chief Executive Officer and is a member of our Board of Directors and continues to be retained through this agreement. F.D.
Consulting’s current gross monthly fee is NIS 108,360 or $31,390 (based on the exchange rate reported by the Bank of Israel
on January 22, 2020) which is linked to the Israeli CPI and fluctuates accordingly. Dr. Fishman, through F.D. Consulting, is also
entitled to reimbursement for reasonable out-of-pocket expenses and use of a company automobile and mobile phone.

The term of F.D. Consulting’s
service management agreement is indefinite, unless earlier terminated for cause by us or without cause by either party, subject
to three months’ advanced notice.

Dr. Fishman is also
entitled to receive options exercisable into our ordinary shares from time to time. As of January 23, 2020, we have granted her
options to purchase an aggregate of 707,200 ordinary shares, of which (i) 2,680,000 options to purchase 107,200 ordinary shares
have an exercise price of NIS 0.644 per option or $18 per option (based on the exchange rate reported by the Bank of Israel on
January 22, 2020), are fully vested and expire on January 13, 2021, (ii) 200,000 options to purchase 200,000 ordinary shares have
an exercise price of NIS 3.573 per ordinary share or $1.03 per ordinary share (based on the exchange rate reported by the Bank
of Israel on January 22, 2020), vesting on a quarterly basis over three years commencing October 22, 2015, and expire on October
22, 2025, and (iii) 400,000 options to purchase 400,000 ordinary shares have an exercise price of NIS 2.344 per ordinary share
or $0.68 per ordinary share (based on the exchange rate reported by the Bank of Israel on January 22, 2020), vesting on a quarterly
basis over three years commencing January 7, 2019, and expire on January 7, 2029.

Employment and Non-Competition
Agreement with Motti Farbstein:
On September 1, 2003 we entered into an employment and non-competition agreement with Motti
Farbstein pursuant to which Mr. Farbstein began serving as our Director of Clinical Operations and Administrative Affairs on September
1, 2003 and is currently serving as our Chief Operating and Financial Officer. Mr. Farbstein’s current gross monthly salary
is NIS 52,000 or $15,064 (based on the exchange rate reported by the Bank of Israel on January 22, 2020). Mr. Farbstein is entitled
to an allocation to a manager’s insurance policy equivalent to an amount up to 13-1/3% of his gross monthly salary, up to
2-1/2% of his gross monthly salary for disability insurance and 7-1/2% of his gross monthly salary for a study fund. The foregoing
amounts are paid by us. Five percent of his gross monthly salary is deducted for the manager’s insurance policy and 2-1/2%
is deducted for the study fund. Mr. Farbstein is also entitled to reimbursement for reasonable out-of-pocket expenses, including
travel expenses, and use of a company automobile and mobile phone.

The term of Mr. Farbstein’s
employment and non-competition agreement is indefinite, unless earlier terminated for just cause by either party, upon the death,
disability or retirement age, or without cause by either party, subject to 60 days’ advanced notice.

Mr. Farbstein is also
entitled to receive options exercisable into our ordinary shares from time to time. As of January 23, 2020, we have granted him
options to purchase an aggregate of 478,000 ordinary shares, of which (i) 100,000 options are exercisable into 4,000 ordinary
shares at an exercise price of NIS 0.385 per option or $0.11
per option (based on the exchange rate reported by the Bank of Israel on January 22, 2020) , are fully vested, and expire on May
2, 2022, (iv) 100,000 options are exercisable into 4,000 ordinary shares at an exercise price of NIS 0.326 per option or $0.09
per option (based on the exchange rate reported by the Bank of Israel on January 22, 2020)are fully vested, and expire on March
20, 2023, (v) 10,000 options to purchase 10,000 ordinary shares at an exercise price of NIS 8.1205 per option or $2.35 per option
(based on the exchange rate reported by the Bank of Israel on January 22, 2020), vesting on a quarterly basis over four years
commencing March 19, 2015, and expire on March 18, 2025, (vi) 60,000 options to purchase 60,000 ordinary shares at an exercise
price of NIS 4.317 per option or $1.25 per option (based on the exchange rate reported by the Bank of Israel on January 22, 2020),
vesting on a quarterly basis over four years commencing February 18, 2016 and expire on February 18, 2026, (vii) 250,000 options
to purchase 250,000 ordinary shares at an exercise price of NIS 2.513 per option or $0.73 per option (based on the exchange rate
reported by the Bank of Israel on January 22, 2020), vesting on a quarterly basis over four years commencing December 28, 2017
and expire on December 28, 2027, and (viii) 150,000 options to purchase 150,000 ordinary shares at an exercise price of NIS 2.344
per option or $0.68 per option (based on the exchange rate reported by the Bank of Israel on January 22, 2020), vesting on a quarterly
basis over four years commencing January 7, 2019 and expire on January 7, 2029.

Consulting Agreement
with BioStrategics:
On September 27, 2005, we entered into a consulting agreement with BioStrategics through its President,
Michael Silverman pursuant to which Dr. Silverman began serving as our Medical Director. Dr. Silverman has extensive experience
in clinical development acquired through his involvement in clinical development in large pharmaceutical and small biopharmaceutical
companies. He was involved in international clinical research, market-oriented strategic planning, and the challenges of managing
research and development portfolios in various capacities at Sterling Winthrop Research Institute and subsequently at Sandoz Research
Institute.

BioStrategics’
current fee is $400 per hour with a maximum daily fee of $2,600. In addition, BioStrategics is entitled to reimbursement for reasonable
pre-approved expenses. The term of the consulting agreement is currently on a year-to-year basis, unless earlier terminated by
either party upon 30 days’ prior written notice or immediately by either party if such termination is for cause.

Master Services
Agreement with Accellient Partners:
On May 10, 2010, we entered into a Master Services Agreement with Accellient Partners,
a company owned by William Kerns, who currently serves as our current Vice President of Drug Development. Dr. Kerns has over 20
years of experience in Pharmaceutical Research and Development at SmithKline Beecham and Eisai Pharmaceuticals. As a Senior Executive
he has participated in the development of drugs for over 100 Phase I studies and 13 NDA’s and/or Marketing Authorization
Applications. Dr. Kerns has chaired a FDA committee on biomarkers and he is an expert in preclinical development and regulatory
strategy.

According to the agreement,
consulting services are provided by Accellient Partners’ personnel in accordance with individual work orders that are executed
from time to time. Each individual work order defines the scope of work to be provided and sets forth the fees to be paid to Accellient
Partners.

Beginning on May 10,
2012, the term of the master services agreement is on a month-to-month basis, unless terminated by us upon 30 days’ prior
written notice, by us at any time if Accellient Partners commits a breach and fails to cure, or by Accellient Partners upon 30
days’ prior written notice if we commit a breach and fail to cure.

Reinhold Cohn and
Partners:
Reinhold Cohn and Partners, an Israeli partnership, of which Ilan Cohn, Ph.D. is a partner provides intellectual
property services to us in the ordinary course of business.

Board Practices

General

According to the Israeli
Companies Law, the management of our business is vested in our Board of Directors. Our Board of Directors may exercise all powers
and may take all actions that are not specifically granted to our shareholders. Our executive officers are responsible for our
day-to-day management and have individual responsibilities established by our Board of Directors. Executive officers are appointed
by and serve at the discretion of our Board of Directors, subject to any applicable employment agreements we have entered into
with the executive officers. See “Executive Compensation—Employment and Consulting Agreements.”

Election of Directors and Terms of
Office

Our Board of Directors
currently consists of six members. Other than our two external directors, our directors are elected by an ordinary resolution at
the annual general meeting of our shareholders. The nomination of our directors is proposed by the Board of Directors. Our Board
has the authority to add additional directors up to the maximum number of 12 directors allowed under our Articles. Such directors
appointed by the Board serve until the next annual general meeting of the shareholders. Unless they resign before the end of their
term or are removed in accordance with our Amended and Restated Articles of Association, all of our directors, other than our external
directors, will serve as directors until our next annual general meeting of shareholders. On December 18, 2019, at an annual general
meeting of our shareholders, Pnina Fishman, Ilan Cohn, Abraham Sartani, and Guy Regev were re-elected, and Golan Bitton was elected,
to serve as directors for a term expiring at our next annual general meeting of shareholders and until his or her respective successor
is duly elected. On August 1, 2017, at an annual general meeting of our shareholders Yaacov Goldman was elected to serve as one
of our external directors for a three-year term ending July 31, 2020. Yaacov Goldman may be re-elected for another three-year term.
On December 27, 2017, at a special meeting of our shareholders, Israel Shamay was elected to serve for a three-year term ending
December 26, 2020 as one of our external directors. Israel Shamay may be re-elected for another three-year term. On May 30, 2013,
Ilan Cohn was appointed as Chairman of the Board.

None of our directors
or senior management has any family relationship with any other director or senior management except that Sari Fishman is the daughter
of Pnina Fishman. None of our directors have service contracts that provide for benefits upon termination of his or her directorship
with us, other than the payment of salary due, accrued and unpaid as of and through the date of termination. See “Executive
Compensation—Employment and Consulting Agreements.”

Chairman of the
Board.
Under the Israeli Companies Law, without shareholder approval, a person cannot hold the role of both chairman of the
Board of Directors and chief executive officer of a company. Furthermore, a person who is directly or indirectly subordinate to
a chief executive officer of a company may not serve as the chairman of the Board of Directors of that company and the chairman
of the Board of Directors may not otherwise serve in any other capacity in a company or in a subsidiary of that company other than
as the chairman of the Board of Directors of such a subsidiary.

The Israeli Companies
Law provides that an Israeli company may, under certain circumstances, exculpate an office holder from liability with respect to
a breach of his duty of care toward the company if appropriate provisions allowing such exculpation are included in its articles
of association. Our Amended and Restated Articles of Association permit us to maintain directors’ and officers’ liability
insurance and to indemnify our directors and officers for actions performed on behalf of us, subject to specified limitations.
We maintain a directors and officers insurance policy which covers the liability of our directors and officers as allowed under
the Israeli Companies Law.

The term office holder
is defined in the Israeli Companies Law as a director, general manager, chief business manager, deputy general manager, vice general
manager, executive vice president, vice president, any other manager directly subordinate to the general manager, director, or
any other person assuming the responsibilities of any of the foregoing positions, without regard to such person’s title.

External and Independent Directors

Under
the Israeli Companies Law, the boards of directors of companies whose shares are publicly traded, either within or outside of Israel,
are required to include at least two members who qualify as external directors.

External
directors must be elected by a majority vote of the shares present and voting at a shareholders meeting, provided that either:

the majority of the shares that are voted at the meeting, shall include at least a majority of the shares held by non-controlling shareholders and shareholders who 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) who voted at the meeting, excluding abstentions, vote in favor of the election of the external director; Anyone with a personal interest will be subject to the provisions of section 276, mutatis mutandis; or

the total number of shares held by non-controlling, disinterested shareholders (as described in the preceding bullet point) that are voted against the election of the external director does not exceed 2% of the aggregate voting rights in the company.

The
term “controlling shareholder” means a shareholder with the ability to direct the activities of the company, other
than by virtue of being an office holder. A shareholder is presumed to have “control” of the company and thus to be
a controlling shareholderof the company if the shareholder holds 50% or more of the “means of control” of the company.
“Means of control” is defined as (1) the right to vote at a general meeting of a company or a corresponding body of
another corporation; or (2) the right to appoint directors of the corporation or its general manager. For the purpose of approving
related-party transactions, the term also includes any shareholder that holds 25% or more of the voting rights of the company if
the company has no shareholder that owns more than 50% of its voting rights. For the purpose of determining the holding percentage
stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval
are deemed as joint holders.

A
person may not serve as an external director of a company if (i) such person is a relative of a controlling shareholder of a company
or (ii) at the date of such person’s appointment or within the prior two years, such person, such person’s relative,
partner, employer or any entity under such person’s control or anyone to whom such person is subordinate, whether directly
or indirectly, has or had any affiliation with (a) the company, (b) the controlling shareholder or his relative, at the time of
such person’s appointment or (c) any entity that is either controlled by the company or by its controlling shareholder at
the time of such appointment or during the prior two years. If a company does not have a controlling shareholder or a group of
shareholders who have a control block entitling them to vote at least 25% of the votes in a shareholders meeting, then a person
may not serve as an external director if, such person or such person’s relative, partner, employer or any entity under such
person’s control, has or had, on or within the two years preceding the date of the person’s appointment to serve as
an external director, any affiliation with the chairman of our Board of Directors, chief executive officer, a substantial shareholder
who holds at least 5% of the issued and outstanding shares of the company or voting rights which entitle him to vote at least 5%
of the votes in a shareholders meeting, or the chief financial officer of the company.

The
term affiliation includes:

an employment relationship;

a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships);

service as an office holder, excluding service as a director in a private company prior to the initial offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the public offering.

The
term relative is defined as a spouse, sibling, parent, grandparent or descendant; a spouse’s sibling, parent or descendant;
and the spouse of each of the foregoing persons.

In
addition, no person may serve as an external director if that person’s professional activities create, or may create, a conflict
of interest with that person’s responsibilities as a director or otherwise interfere with that person’s ability to
serve as an external director or if the person is an employee of the Israel Securities Authority, or the ISA, or of the TASE. Furthermore,
a person may not continue to serve as an external director if he or she received direct or indirect compensation from the company
for his or her role as a director. This prohibition does not apply to compensation paid or given in accordance with regulations
promulgated under the Israeli Companies Law or amounts paid pursuant to indemnification and/or exculpation contracts or commitments
and insurance coverage. If, at the time an external director is appointed, all current members of the Board of Directors not otherwise
affiliated with the company are of the same gender, then that external director must be of the other gender. In addition, a director
of a company may not be elected as an external director of another company if, at that time, a director of the other company is
acting as an external director of the first company.

Following
the termination of an external director’s service on a Board of Directors, such former external director and his or her spouse
and children may not be provided with a direct or indirect benefit by the company, its controlling shareholder or any entity under
its controlling shareholder’s control. This includes engagement to serve as an executive officer or director of the company
or a company controlled by its controlling shareholder, or employment by, or providing services to, any such company for consideration,
either directly or indirectly, including through a corporation controlled by the former external director, for a period of two
years (and for a period of one year with respect to relatives of the former external director).

The Israeli Companies
Law provides that an external director must meet certain professional qualifications or have financial and accounting expertise
and that at least one external director must have financial and accounting expertise. However, if at least one of our other directors
(i) meets the independence requirements of the Exchange Act, (ii) meets the standards of the NYSE American rules for membership
on the audit committee and (iii) has financial and accounting expertise as defined in the Israeli Companies Law and applicable
regulations, then neither of our external directors is required to possess financial and accounting expertise as long as both possess
other requisite professional qualifications. Our Board of Directors is required to determine whether a director possesses financial
and accounting expertise by examining whether, due to the director’s education, experience and qualifications, the director
is highly proficient and knowledgeable with regard to business-accounting issues and financial statements, to the extent that the
director is able to engage in a discussion concerning the presentation of financial information in our financial statements, among
others. The regulations define a director with the requisite professional qualifications as a director who satisfies one of the
following requirements: (i) the director holds an academic degree in either economics, business administration, accounting, law
or public administration; (ii) the director either holds an academic degree in any other field or has completed another form of
higher education in our primary field of business or in an area which is relevant to the office of an external director; or (iii)
the director has at least five years of experience serving in any one of the following, or at least five years of cumulative experience
serving in two or more of the following capacities: (a) a senior business management position in a corporation with a substantial
scope of business; (b) a senior position in our primary field of business; or (c) a senior position in public administration. Yaacov
Goldman, who is one of our external directors, meets the required qualifications and has financial and accounting expertise as
required by the Israeli Companies Law, while Guy Regev, an independent director, also meets the required qualifications and has
financial and accounting expertise as required by the Israeli Companies Law.

The Israeli Companies
Law defines an independent director as a director who complies with the following and was appointed as such in accordance with
Chapter 1 of Part 56 of the Israeli Companies Law: (1) the director complies with the qualification to serve as an external director
as set out in Sections 240 (b)-(f) of the Israeli Companies Law and the audit committee has approved such compliance; and (2) the
director has not served as a director of the company for more than nine consecutive years (which, for such purpose, does not include
breaks in such service for periods of less than two year).

If an external directorship
becomes vacant and there are less than two external directors on the Board of Directors at the time, then the Board of Directors
is required under the Israeli Companies Law to call a shareholders’ meeting as soon as possible to appoint a replacement
external director.

Each committee of the
Board of Directors that is authorized to exercise the powers of the Board of Directors must include at least one external director,
except that the audit committee and compensation committee must each include all external directors then serving on the Board of
Directors. Under the Israeli Companies Law, external directors of a company are prohibited from receiving, directly or indirectly,
any compensation for their services as external directors, other than compensation and reimbursement of expenses pursuant to applicable
regulations promulgated under the Israeli Companies Law. Compensation of an external director is determined prior to his or her
appointment and may not be changed during his or her term subject to certain exceptions.

Israel Shamay and Yaacov
Goldman serve as external directors on our Board of Directors pursuant to the provisions of the Israeli Companies Law. They both
serve on our audit committee and our compensation committee. Our Board of Directors has determined that Yaacov Goldman possesses
accounting and financial expertise, and that both of our external directors possess the requisite professional qualifications.
In addition to our external directors, Guy Regev and Abraham Sartani serve as independent directors on our Board of Directors.
Guy Regev also serves on our audit committee and our compensation committee.

Audit Committee

The Israeli Companies
Law requires public companies to appoint an audit committee. The responsibilities of the audit committee include identifying irregularities
in the management of our business and approving related party transactions as required by law. An audit committee must consist
of at least three directors, including all of its external directors and a majority of independent directors. The chairman of the
Board of Directors, any director employed by or otherwise providing services to the company, and a controlling shareholder or any
relative of a controlling shareholder, may not be a member of the audit committee. An audit committee may not approve an action
or a transaction with a controlling shareholder, or with an office holder, unless at the time of approval two external directors
are serving as members of the audit committee and at least one of the external directors was present at the meeting in which an
approval was granted.

Our audit committee
is currently comprised of three independent non-executive directors. The audit committee is chaired by Yaacov Goldman, who serves
as the audit committee financial expert, with Israel Shamay and Guy Regev as members. Our audit committee meets at least four times
a year and monitors the adequacy of our internal controls, accounting policies and financial reporting. It regularly reviews the
results of the ongoing risk self-assessment process, which we undertake, and our interim and annual reports prior to their submission
for approval by the full Board of Directors. The audit committee oversees the activities of the internal auditor, sets its annual
tasks and goals and reviews its reports. The audit committee reviews the objectivity and independence of the external auditors
and also considers the scope of their work and fees.

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.

Under the Israeli Companies
Law, our audit committee is responsible for (i) determining whether there are deficiencies in the business management practices
of our company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the
Board of Directors to improve such practices and amend such deficiencies, (ii) determining whether certain related party transactions
(including transactions in which an office holder has a personal interest) should be deemed as material or extraordinary, and to
approve such transactions (which may be approved according to certain criteria set out by our audit committee on an annual basis)
(see “—Approval of Related Party Transactions under the Israeli Companies Law”); (iii) establishing procedures
to be followed in respect of related party transactions with a controlling shareholder (where such are not extraordinary transactions),
which may include, where applicable, the establishment of a competitive process for such transaction, under the supervision of
the audit committee, or individual, or other committee or body selected by the audit committee, in accordance with criteria determined
by the audit committee; (iv) determining procedures for approving certain related party transactions with a controlling shareholder,
which having been determined by the audit committee not to be extraordinary transactions, were also determined by the audit committee
not to be negligible transactions; (v) approving the working plan of the internal auditor, to examine such working plan before
its submission to the Board and proposing amendments thereto, (vi) examining our internal controls and internal auditor’s
performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities, (vii)
examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our Board
of Directors or shareholders, depending on which of them is considering the appointment of our auditor, and (viii) establishing
procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided
to such employees.

We have adopted a written
charter for our audit committee, setting forth its responsibilities as outlined by the regulations of the SEC. In addition, our
audit committee has adopted procedures for the receipt, retention and treatment of complaints we may receive regarding accounting,
internal accounting controls or auditing matters and the submission by our employees of concerns regarding questionable accounting
or auditing matters. In addition, SEC rules mandate that the audit committee of a listed issuer consist of at least three members,
all of whom must be independent, as such term is defined by rules and regulations promulgated by the SEC. We are in compliance
with the independence requirements of the SEC rules.

Any person who is not
eligible to serve on the audit committee is further restricted from participating in its meetings and votes, unless the chairman
of the audit committee determines that such person’s presence is necessary in order to present a certain matter; provided,
however, that company employees who are not controlling shareholders or relatives of such shareholders may be present in the meetings,
but not for actual voting, and likewise, company counsel and secretary who are not controlling shareholders or relatives of such
shareholders may be present in the meetings and for actual voting if such presence is requested by the audit committee.

In addition to the
above, all such committee’s members must apply with the following requirements:

All members shall be members of the Board of Directors of the company.

At least one of the committee’s members shall have financial and accounting expertise and the rest of the committee’s members must have the ability to read and understand financial statements.

Our company, through
our audit committee, is in full compliance with the above requirements.

Financial Statement Examination Committee

Under
the Israeli Companies Law, the Board of Directors of a public company must appoint a financial statement examination committee,
which consists of members with accounting and financial expertise or the ability to read and understand financial statements. According
to a resolution of our Board of Directors, the audit committee has been assigned the responsibilities and duties of a financial
statements examination committee, as permitted under relevant regulations promulgated under the Israeli Companies Law. From time
to time as necessary and required to approve our financial statements, the audit committee holds separate meetings, prior to the
scheduled meetings of the entire Board of Directors regarding financial statement approval. The function of a financial statements
examination committee is to discuss and provide recommendations to its Board of Directors (including the report of any deficiency
found) with respect to the following issues: (i) estimations and assessments made in connection with the preparation of financial
statements; (ii) internal controls related to the financial statements; (iii) completeness and propriety of the disclosure in the
financial statements; (iv) the accounting policies adopted and the accounting treatments implemented in material matters of the
company; and (v) value evaluations, including the assumptions and assessments on which evaluations are based and the supporting
data in the financial statements. Our independent auditors and our internal auditors are invited to attend all meetings of audit
committee when it is acting in the role of the financial statements examination committee.

Compensation Committee

Amendment no. 20 to
the Israeli Companies Law was published on November 12, 2012 and became effective on December 12, 2012, or Amendment no. 20. In
general, Amendment no. 20 requires public companies to appoint a compensation committee and to adopt a compensation policy with
respect to its officers, or the Compensation Policy. In addition, Amendment no. 20 addresses the corporate approval process required
for a public company’s engagement with its officers (with specific reference to a director, a non-director officer, a chief
executive officer and controlling shareholders and their relatives who are employed by the company).

The compensation committee
shall be nominated by the Board of Directors and be comprised of its members. The compensation committee must consist of at least
three members. All of the external directors must serve on the compensation committee and constitute a majority of its members.
The remaining members of the compensation committee must be directors who qualify to serve as members of the audit committee (including
the fact that they are independent) and their compensation should be identical to the compensation paid to the external directors
of the company.

Similar to the rules
that apply to the audit committee, the compensation committee may not include the chairman of the board, or any director employed
by the Company, by a controlling shareholder or by any entity controlled by a controlling shareholder, or any director providing
services to the company, to a controlling shareholder or to any entity controlled by a controlling shareholder on a regular basis,
or any director whose primary income is dependent on a controlling shareholder, and may not include a controlling shareholder or
any of its relatives. Individuals who are not permitted to be compensation committee members may not participate in the committee’s
meetings other than to present a particular issue; provided, however, that an employee that is not a controlling shareholder or
relative may participate in the committee’s discussions, but not in any vote, and our legal counsel and corporate secretary
may participate in the committee’s discussions and votes if requested by the committee.

The roles of the compensation
committee are, among others, to: (i) recommend to the Board of Directors the Compensation Policy for office holders and recommend
to the board once every three years the extension of a Compensation Policy that had been approved for a period of more than three
years; (ii) recommend to the directors any update of the Compensation Policy, from time to time, and examine its implementation;
(iii) decide whether to approve the terms of office and of employment of office holders that require approval of the compensation
committee; and (iv) decide, in certain circumstances, whether to exempt the approval of terms of office of a chief executive officer
from the requirement of shareholder approval.

The Compensation Policy
requires the approval of the general meeting of shareholders with a “Special Majority”, which requires a majority of
the shareholders of the company who are not either a controlling shareholder or an “interested party” in the proposed
resolution, or that shareholders holding less than 2% of the voting power in the company voted against the proposed resolution
at such meeting. However, under special circumstances, the Board of Directors may approve the compensation policy without shareholder
approval, if the compensation committee and thereafter the Board of Directors decided, based on substantiated reasons after they
have reviewed the Compensation Policy again, that the Compensation Policy is in the best interest of the company. The Compensation
Policy is required to be brought before the shareholders of the Company once every three years for approval.

Under the Israeli Companies
Law, our Compensation Policy must generally serve as the basis for corporate approvals with respect to the financial terms of employment
or engagement of office holders, including exemption, 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
objective, 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 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 relationship between the terms offered and the average compensation of the other employees of the company, including those employed through manpower companies;

The impact of disparities in salary upon work relationships in the company;

The possibility of reducing variable compensation at the discretion of the Board of Directors;

The possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and

As to severance compensation, 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 contributions 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 the following principles:

the link between variable compensation and the 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.

The Compensation Policy
was approved by the general meeting of shareholders on January 19, 2017 after discussions and recommendation of the compensation
committee and approval by the Board of Directors. Moreover, the approval of the compensation committee is required in order to
approve terms of office and/or employment of office holders.

Yaacov Goldman is the
chairman of our compensation committee. Israel Shamay and Guy Regev serve as the other members of our compensation committee.

Under Amendment no.
27 to the Israeli Companies Law, which became effective as of February 17, 2016, the audit committee of an Israeli public company
which has been established and conducts itself also in accordance with provisions governing the composition of the compensation
committee as set forth in the Israeli Companies Law, may act in lieu of a compensation committee with respect to the responsibilities
of a compensation committee which are set forth in the Israeli Companies Law.


Approval of Related Party Transactions
under the Israeli Companies Law

Fiduciary
duties of the office holders

The
Israeli Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company. The duty of care of an office
holder is based on the duty of care set forth in connection with the tort of negligence under the Israeli Torts Ordinance (New
Version) 5728-1968. This duty of care requires an office holder to act with the degree of proficiency with which a reasonable office
holder in the same position would have acted under the same circumstances. The duty of care includes a duty to use reasonable means,
in light of the circumstances, 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 these action.

The
duty of loyalty requires an office holder to act in good faith and for the benefit of the company, and includes the duty to:

refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;

refrain from any activity that is competitive with the business of the company;

refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself or others; and

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

We
may approve an act performed in breach of the duty of loyalty of an office holder provided that the office holder acted in good
faith, the act or its approval does not harm the company, and the office holder discloses his or her personal interest, as described
below.

Disclosure
of personal interests of an office holder and approval of acts and transactions

The
Israeli Companies Law requires that an office holder promptly disclose to the company any personal interest that he or she may
have and all related material information or documents relating to any existing or proposed transaction by 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. An office holder is not obligated to disclose such information if the personal interest
of the office holder derives solely from the personal interest of his or her relative in a transaction that is not considered as
an extraordinary transaction.

The
term personal interest is defined under the Israeli Companies Law to include the personal interest of a person in an action or
in the business of a company, including the personal interest of such person’s relative or the interest of any corporation
in which the person is an interested party, but excluding a personal interest stemming solely from the fact of holding 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 interest of the office holder with respect to his or her vote on behalf of the shareholder for whom he or she holds
a proxy even if such shareholder itself has no personal interest in the approval of the matter. An office holder is not, however,
obliged 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 Israeli Companies Law, an extraordinary transaction which requires approval 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 our profitability, assets or liabilities.

Under
the Israeli Companies Law, once an office holder has complied with the disclosure requirement described above, a company may approve
a transaction between the company and the office holder or a third party in which the office holder has a personal interest, or
approve an action by the office holder that would otherwise be deemed a breach of duty of loyalty. However, a company may not approve
a transaction or action that is adverse to our interest or that is not performed by the office holder in good faith.

Under
the Israeli Companies Law, unless the articles of association of a company provide otherwise, a transaction with an office holder,
a transaction with a third party in which the office holder has a personal interest, and an action of an office holder that would
otherwise be deemed a breach of duty of loyalty requires approval by the Board of Directors. Our Amended and Restated Articles
of Association do not provide otherwise. If the transaction or action considered is (i) an extraordinary transaction, (ii) an action
of an office holder that would otherwise be deemed a breach of duty of loyalty and may have a material impact on a company’s
profitability, assets or liabilities, (iii) an undertaking to indemnify or insure an office holder who is not a director, or (iv)
for matters considered an undertaking concerning the terms of compensation of an office holder who is not a director, including,
an undertaking to indemnify or insure such office holder, then approval by the audit committee is required prior to approval by
the Board of Directors. Arrangements regarding the compensation, indemnification or insurance of a director require the approval
of the audit committee, Board of Directors and shareholders, in that order.

A
director who has a personal interest in a matter that is considered at a meeting of the Board of Directors or the audit committee
may generally not be present at the meeting or vote on the matter, unless a majority of the directors or members of the audit committee
have a personal interest in the matter or the chairman of the audit committee or Board of Directors, as applicable, determines
that he or she should be present to present the transaction that is subject to approval. If a majority of the directors have a
personal interest in the matter, such matter would also require approval of the shareholders of the company.

Disclosure
of personal interests of a controlling shareholder and approval of transactions

Under
the Israeli Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of
a public company. See “— Audit Committee” for a definition of controlling shareholder. Extraordinary transactions
with a controlling shareholder or in which a controlling shareholder has a personal interest, including a private placement in
which a controlling shareholder has a personal interest, as well as transactions for the provision of services whether directly
or indirectly by a controlling shareholder or his or her relative, or a company such controlling shareholder controls, and transactions
concerning the terms of engagement of a controlling shareholder or a controlling shareholder’s relative, whether as an office
holder or an employee, require the approval of the audit committee, the Board of Directors and a majority of the shares voted by
the shareholders of the company participating and voting on the matter in a shareholders’ meeting. In addition, such shareholder
approval must fulfill one of the following requirements:

at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or
the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 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 the audit committee determines that the duration of the transaction is reasonable given the circumstances
related thereto.

Duties
of shareholders

Under
the Israeli Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and
in an acceptable manner in exercising its rights and performing its obligations to the company and other shareholders, including,
among other things, voting at general meetings of shareholders on the following matters:

an amendment to the articles of association;
an increase in our authorized share capital;

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

A
shareholder also has a general duty to refrain from discriminating against other shareholders.

The
remedies generally available upon a breach of contract will also apply to a breach of the above mentioned duties, and in the event
of discrimination against other shareholders, additional remedies are available to the injured shareholder.

In addition, any controlling
shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote and any shareholder that,
under a company’s articles of association, has the power to appoint or prevent the appointment of an office holder, or has
another power with respect to a company, is under a duty to act with fairness towards the company. The Israeli Companies Law does
not describe the substance of this duty 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, taking the shareholder’s position in the company into account.

Exculpation, Insurance and Indemnification of Directors
and Officers

Under the Israeli 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 us, in whole or in part, for damages caused to us 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 Amended and Restated
Articles of Association include such a provision. We may not exculpate in advance a director from liability arising out of a prohibited
dividend or distribution to shareholders.

Under the Israeli Companies
Law and the Israeli Securities Law, a company may indemnify, or undertake in advance to indemnify, an office holder, provided its
articles of association include a provision authorizing such indemnification, for the following liabilities and expenses imposed
on an office holder or incurred by office holder due to acts performed by him or her as an office holder:

Financial liability incurred by or 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 foreseen based on our 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;

Reasonable litigation expenses, including attorneys’ fees, incurred by the office holder 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 (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability 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 or as a monetary sanction;

Reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by us, on our 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; and

Expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments required to be made to an injured party, pursuant to certain provisions of the Israeli Securities Law.

Under the Israeli Companies
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 us, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm us;

a breach of duty of care to us or to a third party; and

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

Subject to the provisions
of the Israeli Companies Law and the Israeli Securities Law, we may also enter into a contract to insure an office holder, in respect
of expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative
proceeding instituted against such office holder or payment required to be made to an injured party, pursuant to certain provisions
of the Israeli Securities Law.

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

a breach of fiduciary duty, except for indemnification and insurance for a breach of the duty of loyalty to us in the event office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us;

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

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

a fine, monetary sanction, penalty or forfeit levied against the office holder.

Under the Israeli Companies
Law, exculpation, indemnification and insurance of office holders require the approval of the compensation committee, Board of
Directors and, in certain circumstances, the shareholders. Our Amended and Restated Articles of Association permit us to exculpate,
indemnify and insure our office holders to the fullest extent permitted by the Israeli Companies Law.

Approval of Compensation to Our Officers

The Israeli Companies
Law prescribes that compensation to officers must be approved by a company’s Board of Directors after obtaining the approval
of the compensation committee.

As detailed above,
our compensation committee consists of three independent directors: Israel Shamay, Yaacov Goldman and Guy Regev. The responsibilities
of the compensation committee are to set our overall policy on executive remuneration and to decide the specific remuneration,
benefits and terms of employment for directors, officers and the Chief Executive Officer.

The objectives of the
compensation committee’s policies are that such individuals should receive compensation which is appropriate given their
performance, level of responsibility and experience. Compensation packages should also allow us to attract and retain executives
of the necessary caliber while, at the same time, motivating them to achieve the highest level of corporate performance in line
with the best interests of shareholders. In order to determine the elements and level of remuneration appropriate to each executive
director, the compensation committee reviews surveys on executive pay, obtains external professional advice and considers individual
performance.

Internal Auditor

Under the Israeli Companies
Law, the Board of Directors must appoint an internal auditor, nominated by the audit committee. The role of the internal auditor
is to examine, among other matters, whether our actions comply with the law and orderly business procedure. Under the Israeli Companies
Law, an internal auditor may not be:

a person (or a relative of a person) who holds more than 5% of our ordinary shares;

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

an executive officer or director of the company (or a relative thereof); or

a member of our independent accounting firm, or anyone on his or her behalf.

We comply with the
requirement of the Israeli Companies Law relating to internal auditors. Our internal auditors examine whether our various activities
comply with the law and orderly business procedure. Our current internal auditor is Deloitte.


Employees.

As of January 23, 2020,
we had eight employees, three of whom were employed in management and administration, four of whom were employed in research and
development and one of whom was employed in business development. All of these employees were located in Israel.

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 order of the Israel Ministry of Labor. These provisions primarily concern the
length of the workday, minimum daily wages for professional workers, pension fund benefits for all employees, insurance for work-related
accidents, procedures for dismissing employees, determination of severance pay and other conditions of employment. 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.




RELATED PARTY TRANSACTIONS

The following is a
description of the transactions with related parties to which we, or our subsidiaries, are party, and which were in effect since
January 1, 2017. The descriptions provided below are summaries of the terms of such agreements, 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. We are required by Israeli law to ensure that all future transactions between us and our officers,
directors and principal shareholders and their affiliates are approved by a majority of our Board of Directors, including a majority
of the independent and disinterested members of our Board of Directors, and that they are on terms no less favorable to us than
those that we could obtain from unaffiliated third parties.

OphthaliX Merger Agreement

On May 21, 2017, our
now former subsidiary, OphthaliX and a wholly-owned private Israeli subsidiary of OphthaliX, Bufiduck Ltd., or Merger Sub, and
Wize Pharma Ltd., an Israeli company formerly listed on the Tel Aviv Stock Exchange, or Wize Israel, entered into an Agreement
and Plan of Merger, or the Merger Agreement. On October 31, 2017, OphthaliX entered into an amendment to the Merger Agreement with
Merger Sub and Wize Israel extending the Expiration Date (as defined in the Merger Agreement) to November 30, 2017.

Concurrently with the
execution of the Merger Agreement and as contemplated therein, we entered into a Voting and Undertaking Agreement with OphthaliX
and Wize Israel, or the Voting Agreement, pursuant to which we agreed to vote our shares of OphthaliX held by us in favor of approving
the matters on the agenda of the annual general meeting and against any actions that could adversely affect the consummation of
the Merger. In addition, the Voting Agreement placed certain restrictions on the transfer of the shares of OphthaliX held by us
and we agreed to indemnify Wize Israel and OphthaliX with respect to certain liabilities of OphthaliX occurring in the period up
to the closing of the Merger but excluding certain liabilities in respect of any legal proceedings arising out of or related to
the transactions contemplated by the Merger Agreement.

On November 16, 2017,
OphthaliX (which has been renamed “Wize Pharma, Inc.”) completed its transaction with Wize Israel in accordance with
the terms of the Merger Agreement pursuant to which Merger Sub merged with and into Wize Israel, with Wize Israel surviving as
a wholly owned subsidiary of the Company, or the Merger. In connection with the Merger and under the terms of the Merger Agreement,
at the effective time of the Merger, each ordinary share of Wize Israel that was issued and outstanding was automatically cancelled
and converted into 4.1445791236989 shares of common stock of OphthaliX. As a result, an aggregate of 93,971,259 shares of common
stock of OphthaliX were issued to former Wize Israel shareholders. The pre-Merger stockholders of OphthaliX retained an aggregate
of 10,441,251 shares of the common stock of OphthaliX. Consequently, our ownership of OphthaliX, which consisted of 8,563,254 shares
of common stock, was reduced from approximately 82% immediately prior to the Merger to approximately 8% immediately after the Merger.

Immediately prior to
the effective time of the Merger, OphthaliX sold on an “as is” basis to us all the ordinary shares of Eye-Fite in exchange
for the irrevocable cancellation and waiver of all indebtedness owed by the OphthaliX and Eye-Fite to us, including approximately
$5 million of deferred payments owed by OphthaliX and Eye-Fite to us and, as part of the purchase of Eye-Fite, we also assumed
certain accrued milestone payments in the amount of $175,000 under a license agreement previously entered into with NIH. In addition,
that certain exclusive license between us and OphthaliX and a related services agreement were terminated pursuant to a Termination
of License Agreement and a Termination of Services Agreement that was entered into in connection with the closing of the Merger.
Immediately following the Merger, OphthaliX continued to hold 446,827 of our ordinary shares.

The foregoing share
amounts of OphthaliX do not give effect to a 1-for-24 reverse stock split of OphthaliX that took effect, subsequent to the completion
of the Merger, on March 5, 2018.

Employment and Consulting Agreements

We have or have had
employment, consulting or related agreements with each member of our senior management. See “Executive Compensation”.

We employ Zivit Harpaz
as Director of Regulatory and Clinical Operations. For fiscal years 2019, 2018 and 2017, Ms. Harpaz received salary, bonus and
benefits totaling approximately $141,000, $164,000 and $150,000, respectively, and during fiscal years 2019, 2018 and 2017 we awarded
to Ms. Harpaz options to purchase 70,000, nil and 125,000 ordinary shares, respectively. Ms. Harpaz is the daughter of Pnina Fishman.

Options

We have granted options
to purchase our ordinary shares to certain of our senior management and directors. See “Executive Compensation” and
“Principal Shareholders”. We describe our option plans under “Principal Shareholders”.

Indemnification Agreements

Our Amended and Restated
Articles of Association permit us to exculpate, indemnify and insure our directors and officeholders to the fullest extent permitted
by the Israeli 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.



PRINCIPAL SHAREHOLDERS

The following table
sets forth information regarding the beneficial ownership of our outstanding ordinary shares as of January 23, 2020 by the members
of our senior management and Board of Directors individually and as a group. The beneficial ownership of ordinary shares is based
on the 142,931,223 ordinary shares outstanding as of January 23, 2020 and is determined in accordance with the rules of the
SEC and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power. For purposes
of the table below, we deem shares subject to options or warrants that are currently exercisable or exercisable within 60 days
of January 23, 2020, to be outstanding and to be beneficially owned by the person holding the options or warrants for the purposes
of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage
ownership of any other person.


Name of Beneficial Owner

Number of

Ordinary Shares*

Percentage

of

Class**

Senior Management and Directors

Ilan Cohn, Ph.D.

172,567

(1)

**

Pnina Fishman, Ph.D.

670,633

(2)

**

Motti Farbstein

257,382

(3)

**

Sari Fishman, Ph.D.

227,375

(4)

**

Guy Regev

73,240

(5)

**

Abraham Sartani, M.D.

43,000

(6)

**

Israel Shamay

39,000

(7)

**

Golan Bitton

Yaacov Goldman

39,000

(7)

**

Senior Management and Directors as a group (9 persons)

1,522,197

1.1

%

Holders of more than 5% of our voting securities

Univo

19,934,355

13.9

%

* U.S. dollar translations of NIS amounts presented in the footnotes to this table are translated using the exchange rate reported by the Bank of Israel on January 22, 2020
** Denotes less than 1%
(1) Represents (i) 133,567 ordinary shares, and (ii) 39,000 options to purchase 39,000 ordinary shares at an exercise price of NIS 2.926 per option or $0.84 per option and expire on November 8, 2027. Excludes 9,000 options to purchase 9,000 ordinary shares that vest in more than 60 days from January 23, 2020.
(2) Represents (i) 263,433 ordinary shares, (ii) 2,680,000 options to purchase 107,200 ordinary shares at an exercise price of NIS 0.644 per option or $0.18 per option and expiring on January 13, 2021, (iii) 200,000 options to purchase 200,000 ordinary shares at an exercise price of NIS 3.573 per option or $1.03 per option  and expire on October 22, 2025 and (iv) 100,000 options to purchase 100,000 ordinary shares at an exercise price of NIS 2.344 per option or $0.68 per option and expire on January 7, 2029. Excludes 300,000 options to purchase 300,000 ordinary shares that vest in more than 60 days from January 23, 2020.
(3) Represents (i) 1,257 ordinary shares, (ii) 200,000 options to purchase 8,000 ordinary shares, of which (1) 100,000 are exercisable into 4,000 ordinary shares at an exercise price of NIS 0.385 per option or $0.11 per option  and expire on May 2, 2022, and (2) 100,000 are exercisable into 4,000 ordinary shares at an exercise price of NIS 0.326 per option or $0.09 per option and expire on March 20, 2023, (iii) 10,000 options to purchase 10,000 ordinary shares at an exercise price of NIS 8.1205 per option or $2.35 per option  and expire on March 18, 2025, (iv) 60,000 options to purchase 60,000 ordinary shares at an exercise price of NIS 4.317 per option or $1.25 per option and expire on February 18, 2026, (v) 140,625 options to purchase 140,625 ordinary shares at an exercise price of NIS 2.513 per option or $0.73 per option and expire on December 28, 2027 and (vi) 37,500 options to purchase 37,500 ordinary shares at an exercise price of NIS 2.344 per option or $0.68 per option and expire on January 7, 2029. Excludes 221,875 options to purchase 221,875 ordinary shares that vest in more than 60 days from January 23, 2020.
(4) Represents (i) 200,000 options to purchase 8,000 ordinary shares, of which (1) 100,000 are exercisable into 4,000 ordinary shares at an exercise price of NIS 0.385 per option or $0.11 per option  and expire on May 2, 2022, and (2) 100,000 are exercisable into 4,000 ordinary shares at an exercise price of NIS 0.326 per option or $0.09 per option  and expire on March 20, 2023, and (ii) 10,000 options to purchase 10,000 ordinary shares at an exercise price of NIS 8.1205 per option or $2.35 per option  and expire on March 18, 2025, (iii) 40,000 options to purchase 40,000 ordinary shares at an exercise price of NIS 4.317 per option or $1.25 per option  and expire on February 18, 2026, (iv) 55,000 options to purchase 55,000 ordinary shares at an exercise price of NIS 3.662 per option or $1.06 per option  and expire on March 30, 2027, (v) 84,375 options to purchase 84,375 ordinary shares at an exercise price of NIS 2.513 per option or $0.73 per option  and expire on December 30, 2027, and (vi) 30,000 options to purchase 30,000 ordinary shares at an exercise price of NIS 2.344 per option or $0.68 per option  and expire on January 7, 2029. Excludes 180,625 options to purchase 180,625 ordinary shares that vest in more than 60 days from January 23, 2020.

(5) Represents (i) 24,240 ordinary shares, (ii) 250,000 options are exercisable into 10,000 ordinary shares at an exercise price of NIS 0.60 per option or $0.17 per option  and expire on May 2, 2023, (iii) 18,000 options are exercisable into 18,000 ordinary shares at an exercise price of NIS 2.926 per option or $0.84 per option  and expire on December 28, 2027. Excludes 30,000 options to purchase 30,000 ordinary shares that vest in more than 60 days from January 23, 2020.
(6) Represents (i) 100,000 options to purchase 4,000 ordinary shares at an exercise price of NIS 0.60 per option or $0.17 per option  and expire on August 14, 2022, and (ii) 39,000 options to purchase 39,000 ordinary shares at an exercise price of NIS 2.926 per option or $0.84 per option  and expire on November 8, 2027. Excludes 9,000 options to purchase 9,000 ordinary shares that vest in more than 60 days from January 23, 2020.
(7) Represents 39,000 options to purchase 39,000 ordinary shares at an exercise price of NIS 2.926 per option or $0.84 per option  and expire on November 8, 2027. Excludes 9,000 options to purchase 9,000 ordinary shares that vest in more than 60 days from January 23, 2020.

The Bank of New York
Mellon, or BNY, is the holder of record for our ADR program, pursuant to which each ADS represents 30 ordinary shares. As of                   ,
2020, BNY held                  ordinary shares representing approximately                  % of the outstanding ordinary shares at that date. Certain
of these ordinary shares were held by brokers or other nominees. As a result, the number of holders of record or registered holders
in the United States is not representative of the number of beneficial holders or of the residence of beneficial holders.

Share Option Plans

We maintain the following
share option plans for our and our subsidiary’s employees, directors and consultants. In addition to the discussion below,
see Note 12b of our consolidated financial statements, included elsewhere in this prospectus.

Our Board of Directors
administers our share option plans and has the authority to designate all terms of the options granted under our plans including
the grantees, exercise prices, grant dates, vesting schedules and expiration dates, which may be no more than ten years after the
grant date. Options may not be granted with an exercise price of less than the fair market value of our ordinary shares on the
date of grant, unless otherwise determined by our Board of Directors.

As of December 31, 2019, options to purchase an aggregate of 2,173,400 ordinary shares, par value NIS 0.25, are outstanding
pursuant to the 2003 and 2013 share option plans.

2003 Share Option Plan

Under the 2003 Plan
we granted options during the period between 2003 and 2013, at exercise prices between NIS 0.25 and NIS 31.175 per ordinary share,
par value NIS 0.25. Options to purchase up to 1,132,514 ordinary shares, par value NIS 0.25, were available to be granted under
the 2003 Plan. As of September 30, 2019, 3,710,025 options to purchase 148,400 ordinary shares were outstanding. Options granted
to Israeli employees were in accordance with section 102 of the Income Tax Ordinance, 1961, or the Tax Ordinance, under the capital
gains option set forth in section 102(b)(2) of the Tax Ordinance. The options are non-transferable.

The option term is
for a period of ten years from the grant date. The options were granted for no consideration. The options vest over a four or two
year period. As of January 23, 2020, 148,400 options to purchase 148,400 ordinary shares, par value NIS 0.25, were fully vested.

2013 Share Option Plan

Under the 2013 Plan
we granted options at exercise prices between NIS 3.573 and NIS 12 per ordinary share, par value NIS 0.25. Options to purchase
up to 2,500,000 ordinary shares, par value NIS 0.25, were available to be granted under the 2013 Plan. As of September 30, 2019,
2,025,000 options to purchase 2,025,000 ordinary shares were outstanding. Options granted to Israeli employees were in accordance
with the Tax Ordinance under the capital gains option set forth in section 102(b)(2) of the Tax Ordinance. The options are non-transferable.

The option term is
for a period of ten years from the grant date. The options were granted for no consideration. The options vest over a four year
period. As of January 23, 2020, options to purchase 1,101,565 ordinary shares, par value NIS 0.25, were fully vested.

To the best of our
knowledge, no other person who we know beneficially owns 5.0% or more of the Company’s ordinary shares outstanding as of
January 23, 2020. None of our shareholders has different voting rights from other shareholders. Other than as described herein,
to the best of our knowledge, we are not owned or controlled, directly or indirectly, by another corporation, by any foreign government
or by any natural person or legal persons, severally or jointly, and we are not aware of any arrangement that may, at a subsequent
date, result in a change of control of our Company.

DESCRIPTION OF THE OFFERED SECURITIES

We are offering
(i) up to                Units, with each
Unit consisting of one ADS, and a Warrant to purchase one ADS, and (ii) up
to                       
Pre-funded Units, each Pre-funded Unit consisting of one Pre-funded Warrant to purchase one ADS and one Warrant. For each
Pre-funded Unit we sell, the number of Units we are offering will be decreased on a one-for-one basis. The ADSs and Warrant
included in each Unit will be issued separately and will be immediately separable upon issuance, and the Pre-funded Warrant
to purchase one ADS and the accompanying Warrant included in each Pre-funded Unit will be issued separately and will be
immediately separable upon issuance. The Units and Pre-funded Units will not be issued or certificated. We are also
registering the ADSs issuable upon exercise of the Pre-funded Warrants and the Warrants part of the Pre-funded Units and the
ordinary shares underlying the ADSs and ADSs issuable upon exercise of the Warrants and the Pre-funded Warrants.

As of January 23, 2020,
our authorized share capital consists of 500,000,000 ordinary shares, par value NIS 0.25 per share, of which 142,931,223 are outstanding.

All of our outstanding
ordinary shares will be validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any
preemptive rights. Pursuant to Israeli securities laws, a company whose shares are traded on the TASE may not have more than one
class of shares (subject to an exception which is not applicable to us), and all outstanding shares must be validly issued and
fully paid. Shares and convertible securities may not be issued without the consent of the Israeli Securities Authority and all
outstanding shares must be registered for trading on the TASE.

On May 10, 2019, we
effected a change in the ratio of our ADSs to ordinary shares from one (1) ADS representing two (2) ordinary shares to a new ratio
of one (1) ADS representing thirty (30) ordinary shares. For ADS holders, the ratio change had the same effect as a one-for-fifteen
reverse ADS split. All ADS and related option and warrant information presented in this prospectus have been retroactively adjusted
to reflect the reduced number of ADSs and the increase in the ADS price which resulted from this action.


Description of American Depositary Shares

The Bank of New York
Mellon, as Depositary, will register and deliver American Depositary Shares, or ADSs. Each ADS will represent thirty (30) ordinary
shares (or a right to receive thirty (30) ordinary shares) deposited with the principal Tel Aviv office of Bank Hapoalim, as custodian
for the Depositary. Each ADS will also represent any other securities, cash or other property which may be held by the Depositary.
The Depositary’s corporate trust office at which the ADSs will be administered is located at 101 Barclay Street, New York,
New York 10286. The Bank of New York Mellon’s principal executive office is located at One Wall Street, New York, New York
10286.

You may hold ADSs either
(i) directly (a) by having an American Depositary Receipt, or an ADR, which is a certificate evidencing a specific number of ADSs,
registered in your name, or (b) by having ADSs registered in your name in the Direct Registration System, or DRS, or (ii) indirectly
by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are
a registered ADS holder, or an ADS holder. The description in this section assumes you are an ADS holder. If you hold the ADSs
indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described
in this section. You should consult with your broker or financial institution to find out what those procedures are.

The DRS is a system
administered by The Depository Trust Company, or DTC, pursuant to which the Depositary may register the ownership of uncertificated
ADSs, which ownership is confirmed by periodic statements sent by the Depositary to the registered holders of uncertificated ADSs.

As an ADS holder, we
will not treat you as one of our shareholders and you will not have shareholder rights. Israeli law governs shareholder rights.
The Depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADS holder
rights. The Deposit Agreement, or the Deposit Agreement, among us, the Depositary and you, as an ADS holder, and all other persons
indirectly holding ADSs sets out ADS holder rights as well as the rights and obligations of the Depositary. New York law governs
the Deposit Agreement and the ADSs.

The following is a
summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire Deposit
Agreement and the form of ADS. Directions on how to obtain copies of those documents are provided under “Where You Can Find
More Information”.

Dividends and
Other Distributions

How will you receive
dividends and other distributions on the shares?

The Depositary has
agreed to pay to ADS holders the cash dividends or other distributions it or the custodian receives on shares or other deposited
securities, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary
shares your ADSs represent.

Cash. The Depositary will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the Deposit Agreement allows the Depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the Depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.

Shares. The Depositary may distribute additional ADSs representing any shares we distribute as a dividend or free distribution. The Depositary will only distribute whole ADSs. It will sell shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the Depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new shares. The Depositary may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution.

Rights to purchase additional shares. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the Depositary may make these rights available to ADS holders. If the Depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the Depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. The Depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.

If the Depositary makes rights available to ADS holders, it will exercise the rights and purchase the shares on your behalf. The Depositary will then deposit the shares and deliver ADSs to the persons entitled to them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

U.S. securities laws may restrict transfers and cancellation of the ADSs represented by shares purchased upon exercise of rights. For example, you may not be able to tradethese ADSs freely in the United States. In this case, the Depositary may deliver restricted Depositary shares that have the sameterms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.

Other Distributions. The Depositary will send to ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practicable. If it cannot make the distribution in that way, the Depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the Depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The Depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.

The Depositary is not
responsible if it decides that it is unlawful or impracticable to make a distribution available to any ADS holders.

We have no obligation
to register ADSs, shares, rights or other securities under the Securities Act of 1933, as amended, or the Securities Act, other
than in accordance with a registration rights agreement entered into in connection with our March 2014 private placement. We also
have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders.
This means that you may not receive the distributions we make on our shares or any value for them if it is illegal or impracticable
for us to make them available to you
.

Deposit, Withdrawal and Cancellation

How are ADSs issued?

The Depositary will
deliver ADSs if you or your broker deposit shares or evidence of rights to receive shares with the custodian. Upon payment of its
fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the Depositary will register
the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons
that made the deposit.

How can ADS holders
withdraw the deposited securities?

You may surrender your
ADSs at the Depositary’s corporate trust office. Upon payment of its fees and expenses and of any taxes or charges, such
as stamp taxes or stock transfer taxes or fees, the Depositary will deliver the shares and any other deposited securities underlying
the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and
expense, the Depositary will deliver the deposited securities at its corporate trust office, if feasible.

How do ADS holders
interchange between certificated ADSs and uncertificated ADSs?

You may surrender your
ADR to the Depositary for the purpose of exchanging your ADR for uncertificated ADSs. The Depositary will cancel that ADR and will
send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Alternatively,
upon receipt by the Depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange
of uncertificated ADSs for certificated ADSs, the Depositary will execute and deliver to the ADS holder an ADR evidencing those
ADSs.

Voting Rights

How do you vote?

ADS holders may instruct
the Depositary to vote the number of deposited shares their ADSs represent. The Depositary will notify ADS holders of shareholders’
meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be voted
on and explain how ADS holders may instruct the Depositary how to vote. For instructions to be valid, they must reach the Depositary
by a date set by the Depositary. Otherwise, you will not be able to exercise your right to vote unless you withdraw the shares.
To do so, however, you would need to know about the meeting sufficiently in advance to withdraw the shares
.

The Depositary will
try, as far as practical, subject to the laws of Israel and of our Amended and Restated Articles of Association or similar documents,
to vote or to have its agents vote the shares or other deposited securities as instructed by ADS holders. The Depositary will only
vote or attempt to vote as instructed.

We cannot assure you
that you will receive the voting materials in time to ensure that you can instruct the Depositary to vote your shares. In addition,
the Depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out
voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do
if your shares are not voted as you requested.

In order to give you
a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to deposited securities, if we
request the Depositary to act, we agreed under the Deposit Agreement to give the Depositary notice of any such meeting and details
concerning the matters to be voted upon not less than 45 days in advance of the meeting date.


Fees and Expenses

Persons
depositing or withdrawing 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 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 shares and the 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 ADSs per calendar year Depositary services
Registration or transfer fees Transfer and registration of shares on our share register to or from the name of the Depositary or its agent when you deposit or withdraw 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 have to pay on any ADS or share underlying an ADS, for example, 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 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, by directly billing investors or by charging the book-entry
system accounts of participants acting for them. 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 us for expenses and/or share revenue with us from the fees collected from ADS
holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of the 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.

Payment of Taxes

You will be responsible
for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs.
The Depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by
your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented
by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the Depositary sells deposited securities,
it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders
any property, remaining after it has paid the taxes.


Reclassifications, Recapitalizations
and Mergers

If
we:
Then:

●     Change
the nominal or par value of our ordinary shares

●     Reclassify,
split up or consolidate any of the deposited securities

●     Distribute
securities on the shares that are not distributed to you

●     Recapitalize,
reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action

The cash, shares or other securities received
by the Depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited
securities.

The Depositary may, and will if we ask
it to, distribute some or all of the cash, shares or other securities it received. It may also deliver new ADRs or ask you to surrender
your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.

Amendment and Termination

How may the Deposit
Agreement be amended?

We may agree with
the Depositary to amend the Deposit Agreement and the ADRs without your consent for any reason. If an amendment adds or increases
fees or charges, except for taxes and other governmental charges or expenses of the Depositary for registration fees, facsimile
costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding
ADSs until 30 days after the Depositary notifies ADS holders of the amendment. At the time an amendment becomes effective,
you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the Deposit Agreement,
as amended.

How may the Deposit
Agreement be terminated?

The Depositary will
terminate the Deposit Agreement at our direction by mailing notice of termination to the ADS holders then outstanding at least
30 days prior to the date fixed in such notice for such termination. The Depositary may also terminate the Deposit Agreement by
mailing notice of termination to us and the ADS holders if 60 days have passed since the Depositary told us it wants to resign
but a successor depositary has not been appointed and accepted its appointment.

After termination,
the Depositary and its agents will do the following under the Deposit Agreement, but nothing else: collect distributions on the
deposited securities, sell rights and other property, and deliver shares and other deposited securities upon cancellation of ADSs.
Four months after termination, the Depositary may sell any remaining deposited securities by public or private sale. After that,
the Depositary will hold the money it received on the sale, as well as any other cash it is holding under the Deposit Agreement
for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability
for interest. The Depositary’s only obligations will be to account for the money and other cash. After termination, our only
obligations will be to indemnify the Depositary and to pay fees and expenses of the Depositary that we agreed to pay.

Limitations on Obligations and Liability

Limits on our Obligations and the Obligations
of the Depositary; Limits on Liability to ADS Holders

The Deposit Agreement
expressly limits our obligations and the obligations of the Depositary. It also limits our liability and the liability of the Depositary.
We and the Depositary:

are only obligated to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith;

are not liable if we are or it is prevented or delayed by law or circumstances beyond our control from performing our or its obligations under the Deposit Agreement;

are not liable if we or it exercises discretion permitted under the Deposit Agreement;

are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the Deposit Agreement, or for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement;

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the Deposit Agreement on your behalf or on behalf of any other person; and

may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person.

In the Deposit Agreement,
we and the Depositary agree to indemnify each other under certain circumstances.

Requirements for Depositary Actions

Before the Depositary
will deliver or register a transfer of an ADS, make a distribution on an ADS, or permit withdrawal of shares, the Depositary may
require:

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;

satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including presentation of transfer documents.

The Depositary may
refuse to deliver ADSs or register transfers of ADSs generally when the transfer books of the Depositary or our transfer books
are closed or at any time if the Depositary or we think it advisable to do so.

Your Right to Receive the Shares
Underlying your ADSs

ADS holders have the right to cancel their
ADSs and withdraw the underlying shares at any time except:

when temporary delays arise because: (i) the Depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of shares is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our ordinary shares;

when you owe money to pay fees, taxes and similar charges; or

when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal
may not be limited by any other provision of the Deposit Agreement.

Pre-release of ADSs

Subject to the provisions
of the Deposit Agreement, the Depositary may issue ADSs before deposit of the underlying shares. This is called a pre-release of
ADSs. The Depositary may also deliver shares prior to the receipt and cancellation of pre-released ADSs even if the ADSs are cancelled
before the pre-release transaction has been closed out. A pre-release is closed out as soon as the underlying shares are delivered
to the Depositary. The Depositary may receive ADSs instead of shares to close out a pre-release. The Depositary may pre-release
ADSs only under the following conditions:

before or at the time of the pre-release, the person to whom the pre-release is being made must represent to the Depositary in writing that it or its customer, as the case may be, (i) owns the shares or ADSs to be remitted, (ii) will assign all beneficial rights, title and interest in the ADSs or shares to the Depositary and for the benefit of the ADS holders, and (iii) will not take any action with respect to the ADSs or shares that is inconsistent with the assignment of beneficial ownership (including, without the consent of the Depositary, disposing of the ADSs or shares) other than in satisfaction of the pre-release;

the pre-release must be fully collateralized with cash or collateral that the Depositary considers appropriate; and

the Depositary must be able to close out the pre-release on not more than five business days’ notice.

The pre-release will
be subject to whatever indemnities and credit regulations that the Depositary considers appropriate. In addition, the Depositary
will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the Depositary may disregard
the limit from time to time, if it thinks it is appropriate to do so. At our instruction, a pre-release may be discontinued entirely.

Direct Registration System

In the Deposit Agreement,
all parties to the Deposit Agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated
ADSs upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC under which the Depositary may register the ownership
of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the Depositary to the registered holders
of uncertificated ADSs. Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of a registered
holder of ADSs, to direct the Depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to
the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the ADS holder to register
that transfer.

In connection with
and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Deposit Agreement understand
that the Depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an ADS holder in
requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of
the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the Deposit Agreement, the parties agree
that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile and
in accordance with the Deposit Agreement will not constitute negligence or bad faith on the part of the Depositary.

Shareholder Communications; Inspection of Register ADS Holders

The Depositary will
make available for your inspection at its office all communications that it receives from us as a holder of deposited securities
that we make generally available to holders of deposited securities. The Depositary will send you copies of those communications
if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders
about a matter unrelated to our business or the ADSs.

Disclosure of Beneficial Ownership

We may from time to
time request that ADS holders provide information as to the capacity in which they hold ADSs or a beneficial interest in such ADSs
and regarding the identity of any other persons then or previously having a beneficial interest in ADSs, and the nature of such
interest and various other matters. ADS holders agree to provide such information reasonably requested by us pursuant to the Deposit
Agreement. The Depositary agrees to comply with reasonable written instructions received from time to time from us requesting that
the Depositary forward any such written requests to the Owners and to forward to us any such responses to such requests received
by the Depositary.

Each ADS holder agrees
to comply with any applicable provision of Israeli law with regard to the notification to us of the holding or proposed holding
of certain interests in the underlying ordinary shares and the obtaining of certain consents, to the same extent as if such ADS
holder were a registered holder or beneficial owner of the underlying ordinary shares. The Depositary is not required to take any
action with respect to such compliance on behalf of any ADS holder, including the provision of the notifications described below.

As of the date of the
Deposit Agreement, under Israeli law, persons who hold a direct or indirect interest in 5% or more of the voting securities of
us (including persons who hold such an interest through the holding of ADSs) are required to give written notice of their interest
and any subsequent changes in their interest to us within the timeframes set forth in Israeli law. The foregoing is a summary of
the relevant provision of Israeli law and does not purport to be a complete review of this or other provisions that may be applicable
to ADS holders. We undertake no obligation to update this summary in the future.

Pre-funded Warrants Being Offered in this Offering

The following summary
of certain terms and provisions of Pre-funded Warrants included in the Pre-funded Units that are being offered hereby is not complete
and is subject to, and qualified in its entirety by, the provisions of the Pre-funded Warrant, the form of which is filed as an
exhibit to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the
terms and provisions of the form of Pre-funded Warrant for a complete description of the terms and conditions of the Pre-funded
Warrant.

Duration and Exercise Price

Each Pre-funded Warrant
offered hereby will have an initial exercise price per share equal to $0.01. The Pre-funded Warrants will be immediately exercisable
and may be exercised at any time until the Pre-funded Warrants are exercised in full. The exercise price and number of ADSs issuable
upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events
affecting our ADSs and the exercise price. The Pre-funded Warrants will be issued separately from the accompanying Warrants, and
may be transferred separately immediately thereafter.

Exercisability

The
Pre-funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed
exercise notice accompanied by payment in full for the number of shares of our ordinary shares purchased upon such exercise (except
in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of
the Pre-funded Warrant to the extent that the holder would own more than 4.99% of the outstanding ordinary shares immediately after
exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership
of outstanding stock after exercising the holder’s Pre-funded Warrants up to 9.99% of the number of ordinary shares outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the
Pre-funded Warrants. Purchasers of Pre-funded Warrants in this offering may also elect prior to the issuance of the Pre-funded
Warrants to have the initial exercise limitation set at 9.99% of our outstanding ordinary shares.

Cashless Exercise

If,
at the time a holder exercises its Pre-funded Warrants, a registration statement registering the issuance of the ADSs underlying
the Pre-funded Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu
of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of ADSs determined according
to a formula set forth in the Pre-funded Warrants.

Transferability

Subject to applicable laws, the Pre-funded
Warrants may be offered for sale, sold, transferred or assigned without our consent. There is currently no trading market for the
Pre-funded Warrants.

Exchange Listing

There is no trading
market available for the Pre-funded Warrants on any securities exchange or nationally recognized trading system. We do not intend
to list the Pre-funded Warrants on any securities exchange or nationally recognized trading system. The ADSs issuable upon exercise
of the Pre-funded Warrants is currently listed on the NYSE American under the symbol “CANF.”

Right as a Shareholder

Except as otherwise provided in the Warrants (such as the rights described above of a warrant holder upon
our sale or grant of any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata
basis) or by virtue of such holder’s ownership of our ordinary shares, the holders of the Warrants do not have the rights
or privileges of holders of our ordinary shares, including any voting rights, until they exercise their warrants.

Purchase Rights, Fundamental Transaction

If we sell or grant any rights to purchase stock, warrants or securities or other property to our shareholders
on a pro rata basis, we will provide the holders of warrants with the right to acquire, upon the same terms, the securities subject
to such purchase rights as though the warrant had been exercised immediately prior to the declaration of such rights. If we consummate
any fundamental transaction, as described in the warrants and generally including any consolidation or merger into another corporation,
the consummation of a transaction whereby another entity acquires more than 50% of our outstanding ordinary shares, the sale of
all or substantially all of our assets, or another transaction in which our ordinary shares is converted into or exchanged for
other securities or other consideration, the holder of warrants will thereafter receive upon exercise of the warrants the securities
or other consideration to which a holder of the number of ordinary shares then deliverable upon the exercise or conversion of such
warrants would have been entitled upon such consolidation, merger or other transaction.

Warrants Being Offered in this Offering

The following summary
of certain terms and provisions of Warrants included in the Units and Pre-funded Units that are being offered hereby is not complete
and is subject to, and qualified in its entirety by, the provisions of the Warrant, the form of which is filed as an exhibit to
the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the form of Warrant for a complete description of the terms and conditions of the Warrant.

The following summary
of certain terms and provisions of the Warrants offered hereby is not complete and is subject to, and qualified in its entirety
by the provisions of the Warrant, which is filed as an exhibit to the registration statement of which this prospectus is a part.
Prospective investors should carefully review the terms and provisions set forth in the Warrant.

Duration and Exercise Price

Each
Warrant included in the Units and the Pre-funded Units offered hereby will have an initial exercise price equal to $        per
ADS. The Warrants will be immediately exercisable and will expire on the anniversary of the original issuance date. The exercise
price and number of ADSs issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits,
reorganizations or similar events affecting our ADSs and the exercise price. The Warrants will be issued separately from the ADSs
included in the Units, or the Pre-funded Warrants included in the Pre-funded Units, as the case may be. A Warrant to purchase one
ADS will be included in each Unit or Pre-funded Unit purchased in this offering.

Exercisability

The
Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice
accompanied by payment in full for the number of ADSs purchased upon such exercise (except in the case of a cashless exercise as
discussed below). A holder (together with its affiliates) may not exercise any portion of the Warrant to the extent that the holder
would own more than 4.99% of the outstanding ordinary shares immediately after exercise, except that upon at least 61 days’
prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s
Warrants up to 9.99% of the number of shares of our ordinary shares outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the Warrants. Purchasers of Warrants in this offering
may also elect prior to the issuance of the Warrants to have the initial exercise limitation set at 9.99% of our outstanding ordinary
shares.

Cashless Exercise

If,
at the time a holder exercises its Warrants, a registration statement registering the issuance of the ADSs underlying the Warrants
under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of making the cash payment
otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead
to receive upon such exercise (either in whole or in part) the net number of ADSs determined according to a formula set forth
in the Warrants.

Transferability

Subject to applicable laws, the Warrants
may be offered for sale, sold, transferred or assigned without our consent. There is currently no trading market for the Warrants.

Exchange Listing

There is no trading
market available for the Warrants on any securities exchange or nationally recognized trading system. We do not intend to list
the Warrants on any securities exchange or nationally recognized trading system. The ADSs issuable upon exercise of the Warrants
is currently listed on the NYSE American under the symbol “CANF.”

Right as a Shareholder

Except as otherwise provided in the Warrants (such as the rights described above of a warrant holder upon
our sale or grant of any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata
basis) or by virtue of such holder’s ownership of our ordinary shares, the holders of the Warrants do not have the rights
or privileges of holders of our ordinary shares, including any voting rights, until they exercise their warrants.

Purchase Rights, Fundamental Transaction

If we sell or grant
any rights to purchase stock, warrants or securities or other property to our shareholders on a pro rata basis, we will provide
the holders of warrants with the right to acquire, upon the same terms, the securities subject to such purchase rights as though
the warrant had been exercised immediately prior to the declaration of such rights. If we consummate any fundamental transaction,
as described in the warrants and generally including any consolidation or merger into another corporation, the consummation of
a transaction whereby another entity acquires more than 50% of our outstanding ordinary shares, the sale of all or substantially
all of our assets, or another transaction in which our ordinary shares is converted into or exchanged for other securities or
other consideration, the holder of warrants will thereafter receive upon exercise of the warrants the securities or other consideration
to which a holder of the number of ordinary shares then deliverable upon the exercise or conversion of such warrants would have
been entitled upon such consolidation, merger or other transaction.

Articles of Association

Our number with the
Israeli Registrar of Companies is 512022153. Our purpose is set forth in Section 3 of our Articles of Association and includes
every lawful purpose.

Our ordinary shares
that are fully paid for are issued in registered form and may be freely transferred under our Amended and Restated 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 Amended
and Restated Articles of Association or the laws of the State of Israel, except for ownership by nationals of some countries that
are, or have been, in a state of war with Israel

Pursuant to the Israeli
Companies Law and our Amended and Restated Articles of Association, our Board of Directors may exercise all powers and take all
actions that are not required under law or under our Amended and Restated Articles of Association to be exercised or taken by our
shareholders, including the power to borrow money for company purposes.

Our Amended and Restated
Articles of Association enable us to increase or reduce our share capital. Any such changes are subject to the provisions of the
Israeli 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

We may declare a dividend
to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Israeli Companies Law,
dividend distributions are determined by the Board of Directors and do not require the approval of the shareholders of a company
unless such company’s articles of association provide otherwise. Our Amended and Restated Articles of Association do not
require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our Board
of Directors.

Pursuant to the Israeli
Companies Law, we may only distribute dividends from our profits accrued over the previous two years, as defined in the Israeli
Companies Law, according to our then last reviewed or audited financial reports, or we may distribute dividends with court approval.
In each case, we are only permitted to pay a dividend if there is no reasonable concern that payment of the dividend will prevent
us from satisfying our existing and foreseeable obligations as they become due.

Election of Directors

Our ordinary shares
do not have cumulative voting rights in 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 described under “Executive Compensation—Board Practices — External and Independent Directors”.

Pursuant to our Amended
and Restated Articles of Association, other than the external directors, for whom special election requirements apply under the
Israeli Companies Law, our directors are elected at a general or special meeting of our shareholders and serve on the Board of
Directors until the end of the next general meeting or they are removed by the majority of our shareholders at a general or special
meeting of our shareholders or upon the occurrence of certain events, in accordance with the Israeli Companies Law and our Amended
and Restated Articles of Association. In addition, our Amended and Restated Articles of Association allow our Board of Directors
to appoint directors to fill vacancies on the Board of Directors to serve until the next general meeting or special meeting, or
earlier if required by our Amended and Restated Articles of Association or applicable law. We have held elections for each of our
non-external directors at each annual meeting of our shareholders since our initial public offering in Israel. External directors
are elected for an initial term of three years and may be removed from office pursuant to the terms of the Israeli Companies Law.

See “Executive
Compensation—Board Practices — External and Independent Directors.”

Shareholder Meetings

Under Israeli Companies
Law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be 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 Israeli Companies Law and our Amended and Restated 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 our Board of Directors or (ii) one or more shareholders holding, in the aggregate, either
(1) 5% of our outstanding shares and 1% of our outstanding voting power or (2) 5% of our outstanding voting power.

Subject to the provisions
of the Israeli 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, which may be between four and forty
days prior to the date of the meeting. Furthermore, the Israeli Companies Law and our Amended and Restated Articles of Association
require that resolutions regarding the following matters must be passed at a general meeting of our shareholders:

amendments to our Amended and Restated 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 Israeli Companies Law;

director compensation, indemnification and change of the principal executive officer;

increases or reductions of our authorized share capital;

the exercise of our Board of Director’s 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.

The Israeli 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.

The Israeli Companies
Law does not allow shareholders of publicly traded companies to approve corporate matters by written consent. Consequently, our
Amended and Restated Articles of Association does not allow shareholders to approve corporate matters by written consent.

Pursuant to our Amended
and Restated Articles of Association, holders of our ordinary shares have one vote for each ordinary share held on all matters
submitted to a vote before the shareholders at a general meeting.

Quorum

The quorum required
for our general meetings of shareholders consists of at least two shareholders present in person, by proxy or written ballot who
hold or represent between them at least 25% of the total outstanding voting rights.

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 Amended and Restated
Articles of Association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required
by applicable law.

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;

an approval of a merger or any other matter in respect of which there is a provision in the articles of association providing that decisions of the general meeting may also be passed by written ballot;

authorizing the chairman of the Board of Directors or his relative to act as our chief executive officer or act with such authority; or authorize our chief executive officer or his relative to act as the chairman of the Board of Directors or act with such authority; 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. Our Amended and Restated Articles of Association provide that our Board of Directors may prevent voting by means of a written
ballot and this determination is required to be stated in the notice convening the general meeting.

The Israeli 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 our registered capital, mergers
and approval of 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, is required to act with fairness towards the company. The Israeli Companies Law does not describe
the substance of this duty except to state 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.

Under the Israeli 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. 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 Israeli Companies
Law, all shareholders of a company generally have the right to review minutes of our 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 Israel Securities Authority. Any of our shareholders may request access 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 Israeli 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 Israeli Companies Law to make a tender offer to all of our 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. 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 our issued and outstanding share capital or of the applicable class from shareholders who accepted the tender
offer.

Special Tender
Offer

The Israeli 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 Israeli 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 Israeli 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 Israeli Companies Law is met.

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 our 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 our 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.

Merger

The Israeli Companies
Law permits merger transactions if approved by each party’s Board of Directors and, unless certain requirements described
under the Israeli 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.