Nuvectis Pharma, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures As of December 31, 2021, management carried out, under the supervision and with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective. Changes in and Management’s Report on Internal Control over Financial Reporting. This annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. We are not currently required to maintain an effective system of internal controls over financial reporting as defined by Section 404 of SOX. We will be required to comply with the internal control requirements of SOX as of the end of the first full fiscal year after becoming a public company. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement. Prior to this report, we have not completed a full assessment, nor has our independent registered public accounting firm tested our systems, of internal controls. This annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 53 PART III Item 10. Directors, Executive Officers and Corporate Governance The following biographies set forth the names of our current directors and executive officers, their ages, their positions with us, their principal occupations and employers, any other directorships held by them during the past five years in companies that are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), or any company registered as an investment company under the Investment Company Act of 1940, as well as additional information, all of which we believe sets forth each director nominee’s qualifications to serve on the Board. There is no family relationship between and among any of our executive officers or directors. The following table sets forth certain information about our directors and executive officers. Name ​ ​ Age ​ ​ Position ​ Ron Bentsur ​ ​ 56 ​ ​ Chairman, Chief Executive Officer and President ​ Enrique Poradosu ​ ​ 56 ​ ​ Executive Vice President, Chief Scientific and Business Officer ​ Shay Shemesh ​ ​ 39 ​ ​ Executive Vice President, Chief Development and Operations Officer ​ Michael Carson ​ ​ 46 ​ ​ Vice President of Finance ​ Kenneth Hoberman ​ ​ 57 ​ ​ Director ​ Matthew Kaplan ​ ​ 54 ​ ​ Director ​ James F. Oliviero ​ ​ 46 ​ ​ Director ​ Executive Officers and Senior Management Ron Bentsur (56), Co-Founder, Chairman, Chief Executive Officer and President , has 20 years of senior leadership experience in the biotechnology industry and has served as our Chief Executive Officer since our inception. He served as CEO of UroGen Pharma, Inc. (NASDAQ: URGN) from August 2015 until January 2019, and as CEO of Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX, acquired by Akebia Therapeutics) from May 2009 until May 2015. At UroGen and Keryx, Mr. Bentsur led the clinical development, regulatory approvals and the commercial infrastructure buildouts for the US commercial launches of Jelmyto and Auryxia, respectively. Mr. Bentsur also led the establishment of a successful worldwide partnership for an earlier-stage program at UroGen and an ex-US development partnership for Auryxia at Keryx. Mr. Bentsur served as CEO of XTL Biopharmaceuticals, Inc. (NASDAQ: XTLB) from January 2006 until April 2009 and as Investor Relations and CFO of Keryx from October 2000 until January 2006. Mr. Bentsur worked as an investment banker in NYC and Tel Aviv, Israel, from 1994 until 2000. Mr. Bentsur served as a member of the Board of Directors of Stemline Therapeutics, Inc. from 2009 through the approval and launch of Elzonris® and through the subsequent acquisition of the company by Menarini in June 2020, and serves on the Board of Directors of Beyond Air, Inc. (NASDAQ: XAIR). Mr. Bentsur holds a BA in Economics and Business Administration with distinction from the Hebrew University of Jerusalem, Israel and an MBA ( Magna Cum Laude ), from New York University’s Stern School of Business. Mr. Bentsur has been selected to serve on our Board of Directors based on his years of experience in the biotechnology industry and extensive management experience. Enrique Poradosu, PhD (56), Co-Founder, Executive Vice President, Chief Scientific and Business Officer , has 20 years of senior scientific leadership experience in the biotechnology industry and has served as our Executive Vice President, Chief Scientific and Business Officer since our inception. From January 2016 until December 2020, he served as SVP, Business and Scientific Strategy at Stemline Therapeutics, Inc. (NASDAQ: STML, acquired by Menarini in June 2020). At Stemline Dr. Poradosu led the licensing and scientific strategy of the company’s pipeline, as well as directly leading strategic planning and operational execution of the early-stage drug development programs. Prior to that, Dr. Poradosu served as VP Business and Scientific Strategy at Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX), acquired by Akebia Therapeutics (NASDAQ: AKBA)), from 2003 until 2016. From 1998 until 2003, Dr. Poradosu served as a project manager at a private biomedical incubator. Dr. Poradosu holds a BSc in Chemistry and Biology with distinction from the Hebrew University of Jerusalem, Israel and a PhD in Biochemistry, from the Hebrew University of Jerusalem. 54 Shay Shemesh (39), Co-Founder, Executive Vice President, Chief Development and Operations Officer , has 14 years of multi-disciplinary experience in drug development and has served as our Executive Vice President and Chief Development Officer since our inception. From 2015 until 2020, he served as SVP, Clinical and Regulatory Affairs at Stemline Therapeutics, Inc. (NASDAQ: STML, acquired by Menarini in June 2020) where he led multi-disciplinary development teams in early and late-stage projects. In this role, Mr. Shemesh held responsibilities for the strategic planning and operational execution of the Elzonris ® Biologics License Application, with the FDA and Marketing Authorization Application with EMA, resulting in the approval of Elzonris™ in both regions for the treatment of blastic plasmacytoid dendritic cell neoplasm, an orphan hematologic malignancy. Prior to that, Mr. Shemesh was a clinical operations lead at Keryx Biopharmaceuticals (NASDAQ: KERX, acquired by Akebia Therapeutics (NASDAQ: AKBA)), where he managed the late-stage clinical trials for Auryxia™ for the treatment of anemia in patients with non-dialysis CKD, which led to the approval of Auryxia in this indication in the US and the EU. Mr. Shemesh holds a BSc and MSc in Biotechnology from Bar Ilan University in Israel. Michael Carson (46), Vice President of Finance , has over 20 years of broad experience in corporate finance, accounting, and operations. He specializes in clinical stage biopharmaceutical and biotechnology companies. From late 2019 until 2021, he served as Vice President of Finance at XyloCor Theraputics, Inc. where he led the accounting, treasury and finance functions. During 2019, Mr. Carson consulted for Smiths Medical, Inc., a division of Smiths Group, as Global Controller along with serving as Vice President of Finance in a consulting role for several other biopharmaceutical and medical device companies. At Smiths Medical, he led a team responsible for accounting, treasury and foreign currency exposure. From 2015 to 2019 he served as Director of Financial Planning and Analysis at Neuronetics (NASDAQ: STIM). In this role, Mr. Carson served as the second in command to the Chief Financial Officer and held responsibilities for strategic planning, financial execution, investor relations, and controllership. In the past, he has held several finance and accounting positions at Abbott Laboratories (NYSE: ABT) and served as an auditor at Crowe LLP and Deloitte. Mr. Carson holds a Bachelor of Arts in Business and Economics along with a Bachelor of Science in Mechanical Engineering from Lafayette College in Pennsylvania. He is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania. Non-Employee Directors Kenneth Hoberman (57), Director , joined our Board of Directors in July 2021. Mr. Hoberman has extensive financial, investor relations, corporate governance, operational, and business development experience including M&A, strategic alliances and partnerships both domestic and international. Mr. Hoberman has served as the Chief Operating Officer of Stemline Therapeutics, Inc. (“Stemline”) since 2013, where he negotiated and closed several licensing agreements and was responsible for multiple vendor contracts. While at Stemline, he helped lead the company from an early-stage drug development company to a fully integrated commercial entity, including through Stemline’s successful initial public offering. Mr. Hoberman directed all Stemline’s functional groups, including manufacturing, commercial, regulatory, R&D, medical affairs, public and investor relations, HR and finance. Mr. Hoberman also led the M&A transaction which resulted in the sale of Stemline to the Menarini Group in June 2020 for approximately $750 million. He was previously Vice President of Corporate and Business Development of Keryx Biopharmaceuticals, Inc., where he initiated and executed a Japanese partnership valued at up to $100 million, and originated, negotiated and closed dozens of licensing and operational contracts, including the licensing of Auryxia™, which was approved by the FDA in September 2014. He is on the Board of Directors of TG Therapeutics, Inc. (Nasdaq: TGTX). He received a B.S.B.A. in Finance from Boston University and completed post-baccalaureate studies at Columbia University. Mr. Hoberman has been selected to serve on our Board of Directors based on his extensive experience in the biopharmaceutical industry and in-depth understanding of our business. 55 Matthew L. Kaplan (54), Director , joined our Board of Directors in September 2021. Mr. Kaplan is an experienced Equity Analyst with deep knowledge in biotechnology, particularly for analysis and advisement of early-stage companies. With 24 years of experience as an Equity Analyst, since 2008, he has been a Managing Director and the Head of Healthcare Equity Research at Ladenburg Thalmann & Co. Prior to joining Ladenburg Thalmann & Co., he was a Partner and the Director of Healthcare Research with Punk, Ziegel & Company, a Senior Biotechnology Analyst at Evolution Capital, and a Director of The Life Sciences Group at The Carson Group. Mr. Kaplan has received numerous citations as a top ranked Biotechnology Stock Picker by Thomson Reuters, The Financial Times, and Forbes. Mr. Kaplan also spent six years as a Research Associate with the Albert Einstein College of Medicine / Montefiore Hospital Department of Cardiology, where he co-authored numerous articles on gene regulation in the heart. Mr. Kaplan received his BS in Biology from the University of Michigan. James F. Oliviero, III (46), Director , joined our Board of Directors in July 2021. Mr. Oliviero has over twenty years of operational experience in the biotechnology industry. Since 2015, Mr. Oliviero has served as the President and Chief Executive Officer of Checkpoint Therapeutics, Inc. (NASDAQ: CKPT), where he has completed over $100 million in private and public financings for the company to date, while designing and overseeing the company’s development programs for its novel immuno-oncology and targeted therapy product candidates being evaluated for the treatment of several solid tumor cancer indications. Prior to Checkpoint, from May 2003 to September 2015, Mr. Oliviero served in a variety of leadership capacities at Keryx Biopharmaceuticals, Inc., which was subsequently acquired by Akebia. His most recent position at Keryx, beginning in April 2009, was as Chief Financial Officer, responsible for all of the finance, accounting, investor relations, corporate governance and legal matters and was also involved in the clinical and regulatory development of Auryxia ® , which successfully obtained FDA approval in 2014. From August 1999 to May 2003, Mr. Oliviero was Director of Finance for ACCESS Oncology, Inc., a privately held biotechnology company. Mr. Oliviero began his professional career as an investment banker at Furman Selz LLC in New York City. Mr. Oliviero is a CFA charterholder and holds a B.B.A. in Finance with Highest Distinction from Emory University’s Goizueta Business School. Mr. Oliviero has been selected to serve on our Board of Directors based on his extensive experience in the biotechnology industry and in-depth understanding of our business. Election of Officers and Family Relationships Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers. Board Composition Our bylaws provide that our board of directors shall consist of between one and nine directors, which number shall be fixed from time to time by resolution of our board of directors. Currently our board of directors consists of Ron Bentsur, Kenneth Hoberman, James Oliviero, and Matthew Kaplan. Our bylaws also provide that our directors may be removed with or without cause by the affirmative vote of the holders of at least two-thirds of the votes that all our stockholders would be entitled to cast in an annual election of directors. Our current and future executive officers and significant employees serve at the discretion of our Board. Our Board may also choose to form certain committees, such as a compensation committee and an audit committee. Director Independence Our board of directors has determined that Kenneth Hoberman, Matthew Kaplan and James Oliviero are independent directors. In making this determination, our board of directors applied the standards set forth in the rules of Nasdaq and in Rule 10A-3 under the Exchange Act. Our board of directors considered all relevant facts and circumstances known to it in evaluating the independence of these directors, including their current and historical employment, any compensation we have given to them, any transactions we have with them, their beneficial ownership of our capital stock, their ability to exert control over us, all other material relationships they have had with us and the same facts with respect to their immediate families. Although there is no specific policy regarding diversity in identifying director nominees, the board of directors seek the talents and backgrounds that would be most helpful to us in selecting director nominees. 56 Board Leadership Structure Mr. Ron Bentsur, our Chief Executive Officer, is also the Chairman of our board of directors. Our corporate governance guidelines provide our board of directors with flexibility to select the appropriate leadership structure at a particular time based on what our board of directors determines to be in the best interests of the Company. Our board of directors determined that, at the present time, having our Chief Executive Officer also serve as the Chairman of our board of directors provides us with optimally effective leadership and is in our best interests and those of our stockholders. Twenty years of management experience in our industry as well as his extensive understanding of our business, operations, and strategy make him well qualified to serve as chairman of our board. Board Oversight of Risk Risk assessment and oversight are an integral part of our governance and management processes. Our board of directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the board of directors at regular board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks. Our board of directors does not have a standing risk management committee, but rather administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure. Our audit committee is responsible for coordinating the board of director’s oversight of our internal control over financial reporting, disclosure controls and procedures, related-party transactions and code of conduct and corporate governance guidelines. Our compensation committee is responsible for assessing and monitoring whether any of our compensation policies and programs has the potential to encourage excessive risk-taking as well as succession planning as it relates to our Chief Executive Officer. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors will be regularly informed through committee reports about such risks. Board Committees Our board of directors has established an audit committee and compensation committee, each of which operates pursuant to a charter adopted by our board of directors. Our board of directors may also establish other committees from time to time to assist the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Each committee already established has adopted a written charter that will satisfy the applicable rules and regulations of the Sarbanes-Oxley Act, the SEC and Nasdaq Listing Rules, which is available on our website at www.nuvectis.com. Audit Committee Our audit committee consists of Kenneth Hoberman, Matthew Kaplan and James Oliviero, with James Oliviero serving as chair. Our board of directors has determined that each member of the audit committee has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. Our board of directors has determined James Oliviero qualifies as an “audit committee financial expert,” as defined under the applicable rules of the SEC. In making this determination, our board has considered prior experience, business acumen and independence. The audit committee’s responsibilities include: 57 ➢ evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors; ➢ reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services; ➢ monitoring the rotation of partners of our independent auditors on our engagement team as required by law; ➢ prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor; ➢ reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management; ➢ reviewing, with our independent auditors and management, significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls; ➢ reviewing with management and our independent auditors any earnings announcements and other public announcements regarding material developments; ➢ establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters and other matters; ➢ preparing the report that the SEC requires in our annual proxy statement; ➢ reviewing and providing oversight of any related-person transactions in accordance with our related-person transaction policy and reviewing and monitoring compliance with legal and regulatory responsibilities, including our code of business conduct and ethics; ➢ reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are implemented; ➢ reviewing on a periodic basis our investment policy; and ➢ reviewing and evaluating on an annual basis the performance of the audit committee and the audit committee charter. Compensation Committee Our compensation committee consists of Kenneth Hoberman, Matthew Kaplan and James Oliviero, with Kenneth Hoberman serving as chair. Our board of directors has determined that each of the members of our compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act, and satisfies the Nasdaq independence requirements. The functions of this committee include, among other things: ➢ reviewing and approving our philosophy, policies and plans with respect to the compensation of our chief executive officer; ➢ making recommendations to our board of directors with respect to the compensation of our chief executive officer and our other executive officers; ➢ reviewing and assessing the independence of compensation advisors; ➢ overseeing and administering our equity incentive plans; ➢ reviewing and making recommendations to our board of directors with respect to director compensation; and ➢ preparing the Compensation Committee reports required by the SEC, including our “Compensation Discussion and Analysis” disclosure. 58 We believe that the composition and functioning of our compensation committee complies with all applicable requirements of the Sarbanes-Oxley Act, and all applicable SEC and Nasdaq rules and regulations. We intend to comply with future requirements to the extent they become applicable to us. Nominating and Corporate Governance Matters Our board of directors does not currently have a nominating and corporate governance committee or other committee performing a similar function, nor do we have any formal written policies outlining the factors and process relating to the selection of nominees for consideration for membership on our board of directors by our directors or our stockholders. Our board of directors has adopted resolutions in accordance with the rules of The Nasdaq Stock Market authorizing a majority of our independent members to recommend qualified director nominees for consideration by the board of directors. Our board of directors believes that it is appropriate for us to not have a standing nominating and corporate governance committee because of a number of factors, including the number of independent members who want to participate in consideration of candidates for membership on our board of directors and in matters that relate to the corporate governance of our company. Our board of directors consists of four members, three of whom are independent. Our board of directors considered forming a nominating and corporate governance committee consisting of several of the independent members of our board of directors. Forming a committee consisting of less than all of the independent members was unattractive because it would have omitted the other independent members of our board of directors who wanted to participate in considering qualified candidates for board membership and to have input on corporate governance matters related to our company. Since our board of directors desired the participation in the nominations process of all of its independent directors, it therefore decided not to form a nominating and corporate governance committee and instead authorized a majority of the independent members of our board of directors to make and consider nominations for membership to our board of directors. The independent members of our board of directors do not have a nominating and corporate governance committee charter, but act pursuant to board of director resolutions as described above. Each of the members of our board of directors authorized to recommend director nominees is independent within the meaning of the current “independent director” standards established by The Nasdaq Stock Market rules. Our board of directors intends to review this matter periodically, and may in the future elect to designate a formal nominating and corporate governance committee. Code of Business Conduct and Ethics We have adopted a written code of business conduct, that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is available on our website at www.nuvectis.com . Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of the shares of our common stock to file an initial report of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors and 10% stockholders are also required by SEC rules to furnish us with copies of any Forms 3, 4 or 5 that they file. The SEC rules require us to disclose late filings of initial reports of stock ownership and changes in stock ownership by our directors, executive officers and 10% stockholders. Based solely on a review of copies of the Forms 3, 4 and 5 furnished to us by reporting persons and any written representations furnished by certain reporting persons, we believe that during the fiscal year ended December 31, 2021, all Section 16(a) filing requirements applicable to our directors, executive officers and 10% stockholders were completed in a timely manner. 59 Item 11. Executive Compensation Summary Compensation Table The following table sets forth information concerning compensation paid by us to the executive officers named below, collectively referred to as “Named Executive Officers” elsewhere in this report, for their services rendered to us in all capacities during the year ended December 31, 2021. Name and Principal Position Year Salary ($) Bonus Stock Awards (1) ($) All Other Compensation ($) Total ($) Ron Bentsur, Chairman & CEO 2021 -- -- 384,018 (2) -- 384,018 Enrique Poradosu, Chief Scientific & Business Officer 2021 27,083 -- 192,056 (2) -- 219,139 Shay Shemesh, Chief Development and Operations Officer 2021 27,083 -- 192,056 (2) -- 219,139 Uri Ben-Or, Former Interim Chief Financial Officer 2021 25,000 -- 58,384 (3) -- 83,384 (1) Reflects the aggregate grant date fair value of restricted stock granted during the fiscal year calculated in accordance with FASB ASC Topic 718. The grant date fair value of the stock awards is based on the fair market value of the underlying shares on the date of grant and does not take into account any estimated forfeitures. The grant date fair value of the stock awards also does not take into account any stock awards which vest upon certain corporate milestones when the “measurement date” for accounting purposes for such awards has not yet occurred and the fair value is uncertain. For such awards, stock-based compensation is measured and recorded if and when a milestone occurs, and the compensation for such awards are reflected in the table in such year the compensation is recorded. (2) Reflects value of restricted stock awards vesting on July 27, 2022 and value of fully vested stock awarded in May 2021. (3) Reflects value of shares of fully vested stock awarded in May 2021. Mr. Ben-Or's engagement with Nuvectis was mutually terminated on March 21, 2022. Narrative to Summary Compensation Table Overview The following are our employment arrangements with our executive officers: Ron Bentsur Annual Base Salary As of February 4, 2022 (the “Effective Date”), Mr. Bentsur’s annual base salary is $575,000 per annum, paid monthly in equal installments. On an annual basis, the amount of Mr. Bentsur’s salary shall be increased by no less than the greater of (1) the amount determined by the Company’s Compensation Committee, or (2) the relevant consumer price index (“CPI”). Mr. Bentsur did not receive any cash compensation in 2021. Annual Bonus Mr. Bentsur’s annual bonus target will be 75% of his annual base salary, based on the achievement of corporate goals & objectives, paid no later than March 15 following such bonus performance calendar year period. The Board or Compensation Committee shall have the discretion to pay Mr. Bentsur an annual performance bonus in excess of the target for performance exceeding goals, which bonus may be awarded without proration in the event of a partial contract year. 60 Equity Awards Mr. Bentsur will be eligible for grants of equity awards under the Company’s long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Mr. Bentsur: (i) restricted shares of common stock upon the consummation of the earlier of (a) initial public offering (“IPO”) raising at least $15 million in gross proceeds, or (b) capital raising of at least $15 million in a private equity financing, equal to 1% of the fully-diluted share count immediately preceding such IPO/financing event, which restricted shares will vest and become fully exercisable on the first anniversary of the offering or financing event, which milestone was met on July 27, 2021 in connection with the closing of the $15.3 million Preferred A round and Mr. Bentsur was granted 96,759 shares of restricted stock; and (ii) fully vested shares of common stock equal to 1% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. Termination Provisions In the event that Mr. Bentsur is terminated without Cause, for Good Reason, Change of Control, Death or Disability, as each such term is defined in Mr. Bentsur’s employment agreement, all unvested shares of restricted stock and options shall be immediately accelerated and become fully vested and unrestricted/​exercisable. Upon termination for Cause, all unvested shares of restricted shock shall expire and terminate. If Mr. Bentsur resigns for Good Reason or is terminated due to Death or Disability, Change of Control, or otherwise terminated without Cause, then Mr. Bentsur or his estate or beneficiaries, in the case of Death or Disability, will receive a one-time payment equal to two years of Mr. Bentsur’s then annual base salary, plus a bonus payment equal to the annual bonus earned in the preceding year (if not already paid), the pro rata portion of the target bonus earned in the current year, benefits and expense reimbursement due to Mr. Bentsur, payment in lieu of any accrued but unused vacation time, payment of any unreimbursed expenses, and continued coverage through the longest applicable limitations period under the Company’s directors and officers insurance policies, all such payments to be made within 60 (sixty) days of the date of termination. Notwithstanding the above the Company may terminate Mr. Bentsur’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr. Bentsur. If Mr. Bentsur’s employment is terminated for Cause, he shall be entitled to receive (i) the unpaid portion of his base salary then in effect accrued through the effective date of the termination of his employment hereunder, and (ii) payment for any unused vacation days which have accrued through the effective date of the termination of Mr. Bentsur’s employment, in each case to be paid within 30 (thirty) days after such effective date. In the event that a “ Transaction ” ​(as such term is defined in the Company’s Global Equity Incentive Plan, as amended from time to time, or a successor plan) occurs during Mr. Bentsur’s employment, regardless of whether Mr. Bentsur’s employment is terminated, Mr. Bentsur shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the Transaction. Following the Transaction, Mr. Bentsur shall not be entitled to receive such termination benefits upon a future termination of his employment; provided that he shall remain eligible to receive (i) any accrued benefits upon any such subsequent termination, and (ii) cash payments, paid in periodic installments in accordance with the Company’s usual payroll practices, for a period of 18 months, equal to the cost the Company would have incurred had Mr. Bentsur continued group medical, dental, vision and/or prescription drug benefit coverage for himself and/or his eligible dependents under any Company sponsored group health plan covering Mr. Bentsur and his eligible dependents at the time of the termination of employment. 61 Enrique Poradosu Annual Base Salary As of February 4, 2022, Mr. Poradosu’s annual base salary is $400,000 per annum, paid monthly in equal installments. On an annual basis, the amount of Mr. Poradosu’s salary shall be increased by no less than the greater of (1) the amount determined by the Company’s Compensation Committee, or (2) the relevant CPI. In 2021, Mr. Poradosu received cash compensation of $27,083. Annual Bonus Mr. Poradosu’s annual bonus target shall be 50% of the annual base salary, based on the achievement of corporate goals & objectives, paid no later than March 15 following such bonus performance calendar year period. The Board or Compensation Committee shall have the discretion to pay Mr. Poradosu an annual performance bonus in excess of the target for performance exceeding goals, which bonus may be awarded without proration in the event of a partial contract year. Equity Awards Mr. Poradosu will be eligible for grants of equity awards under the Company’s long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Mr. Poradosu: (i) restricted shares of common stock upon the consummation of the earlier of (a) IPO raising at least $15 million in gross proceeds, or (b) capital raising of at least $15 million in a private equity financing, equal to 0.5% of the fully-diluted share count immediately preceding such IPO/financing event, which restricted shares will vest and become fully exercisable on the first anniversary of the offering or financing event, which milestone was met on July 27, 2021 in connection with the closing of the $15.3 million Preferred A round and Mr. Poradosu was granted 48,399 shares of restricted stock; and (ii) fully vested shares of common stock equal to 0.5% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. Termination Provisions In the event that Mr. Poradosu’s is terminated without Cause, for Good Reason, Change of Control, Death or Disability (as such terms are defined in Mr. Poradosu’s employment agreement) all unvested shares of restricted stock and options shall be immediately accelerated and become fully vested and unrestricted/​exercisable. Upon termination for Cause, all unvested shares of restricted shock shall expire and terminate. If Mr. Poradosu resigns for Good Reason or is terminated due to Death or Disability, Change of Control, or otherwise terminated without Cause, Mr. Poradosu or his estate or beneficiaries, in the case of Death or Disability, will receive a one-time payment equal to two years of Mr. Poradosu’s then annual Base Salary, plus a bonus payment equal to Mr. Poradosu’s annual bonus earned in the preceding year if not already paid, the pro rata portion of the target bonus earned in the current year, benefits and expense reimbursement due to Mr. Poradosu, payment in lieu of any accrued but unused vacation time, payment of any unreimbursed expenses, and continued coverage through the longest applicable limitations period under the Company’s directors and officers insurance policies, all such payments to be made within 60 (sixty) days of the date of termination. Notwithstanding the above the Company may terminate Mr. Poradosu’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr. Poradosu. If Mr. Poradosu’s employment is terminated for Cause, he shall be entitled to receive (i) the unpaid portion of his base salary then in effect accrued through the effective date of the termination of his employment hereunder, and (ii) payment for any unused vacation days which have accrued through the effective date of the termination of his employment, in each case to be paid within 30 (thirty) days after such effective date. 62 In the event that a “ Transaction ” ​(as such term is defined in the Company’s Global Equity Incentive Plan, as amended from time to time, or a successor plan) occurs during Mr. Poradosu’s employment, regardless of whether Mr. Poradosu’s employment is terminated, Mr. Poradosu shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the Transaction. Following the Transaction, Mr. Poradosu shall not be entitled to receive such termination benefits upon a future termination of his employment; provided that he shall remain eligible to receive (i) any accrued benefits upon any such subsequent termination, and (ii) cash payments, paid in periodic installments in accordance with the Company’s usual payroll practices for a period of 18 months, equal to the cost the Company would have incurred had Mr. Poradosu continued group medical, dental, vision and/or prescription drug benefit coverage for himself and/or his eligible dependents under any Company sponsored group health plan covering Mr. Poradosu and his eligible dependents at the time of the termination of employment. Shay Shemesh Annual Base Salary As of February 4, 2022, Mr. Shemesh’s annual base salary is $400,000 per annum, paid monthly in equal installments. On an annual basis, the amount of the Mr. Shemesh’s Salary shall be increased by no less than the greater of (1) the amount determined by the Company’s Compensation Committee, or (2) the relevant CPI. In 2021, Mr. Shemesh received cash compensation of $27,083. Annual Bonus Mr. Shemesh’s annual bonus target will be 50% of his annual base salary, based on the achievement of corporate goals & objectives, paid no later than March 15 following such bonus performance calendar year period. The Board or Compensation Committee shall have the discretion to pay the Mr. Shemesh an annual performance bonus in excess of the target for performance exceeding goals, which bonus may be awarded without proration in the event of a partial contract year. Equity Awards Mr. Shemesh will be eligible for grants of equity awards under the Company’s long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Mr. Shemesh: (i) restricted shares of common stock upon the consummation of the earlier of (a) IPO raising at least $15 million in gross proceeds, or (b) capital raising of at least $15 million in a private equity financing, equal to 0.5% of the fully-diluted share count immediately preceding such IPO/financing event, which restricted shares will vest and become fully exercisable on the first anniversary of the offering or financing event, which milestone was met on July 27, 2021 in connection with the closing of the $15.3 million Preferred A round and Mr. Shemesh was granted 48,399 shares of restricted stock; and (ii) fully vested shares of common stock equal to 0.5% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. Termination Provisions In the event that Mr. Shemesh is terminated without Cause, for Good Reason, Change of Control, Death or Disability (as such terms are defined in the employment agreement) all unvested shares of restricted stock and options shall be immediately accelerated and become fully vested and unrestricted/exercisable. Upon termination for Cause, all unvested shares of restricted shock shall expire and terminate. 63 If Mr. Shemesh resigns for Good Reason or is terminated due to Death or Disability, Change of Control, or otherwise terminated without Cause, then Mr. Shemesh or his estate or beneficiaries, in the case of Death or Disability, will receive a one-time payment equal to two years of Mr. Shemesh’s then annual Base Salary, plus a bonus payment equal to the annual bonus earned in the preceding year if not already paid, the pro rata portion of the target bonus earned in the current year, plus benefits and expense reimbursement due to Mr. Shemesh, payment in lieu of any accrued but unused vacation time, payment of any unreimbursed expenses, and continued coverage through the longest applicable limitations period under the Company’s directors and officers insurance policies, all such payments to be made within 60 (sixty) days of the date of termination. Notwithstanding the above the Company may terminate Mr. Shemesh’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr. Shemesh. If Mr. Shemesh’s employment is terminated for Cause, he shall be entitled to receive (i) the unpaid portion of his base salary then in effect accrued through the effective date of the termination of his employment hereunder, and (ii) payment for any unused vacation days which have accrued through the effective date of the termination of his employment, in each case to be paid within 30 (thirty) days after such effective date. In the event that a “ Transaction ” ​(as such term is defined in the Company’s Global Equity Incentive Plan, as amended from time to time, or a successor plan) occurs during Mr. Shemesh’s employment, regardless of whether Mr. Shemesh’s employment is terminated, Mr. Shemesh shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the Transaction. Following the Transaction, Mr. Shemesh shall not be entitled to receive such termination benefits upon a future termination of his employment; provided that he shall remain eligible to receive (i) any accrued benefits upon any such subsequent termination and (ii) cash payments, paid in periodic installments in accordance with the Company’s usual payroll practices for a period of 18 months, equal to the cost the Company would have incurred had Mr. Shemesh continued group medical, dental, vision and/or prescription drug benefit coverage for himself and/or his eligible dependents under any Company sponsored group health plan covering Mr. Shemesh and his eligible dependents at the time of the termination of employment. Uri Ben-Or Contract Agreement Mr. Ben-Or’s engagement with us mutually terminated as of March 21, 2022. In connection with the engagement, the Company paid Mr. Ben-Or $109,000 comprised of $100,000 in connection with the IPO, of which $25,000 was paid in 2021, and an additional $9,000 paid for services provided after the IPO. Equity Awards Mr. Ben-Or has received 25,584 fully vested shares of common stock. Employee Benefit and Incentive Plans We do not maintain any deferred compensation, retirement, pension or profit-sharing plans. Our Board of Directors has adopted an incentive plan, the material terms of which are described below, allowing for the grant of equity and cash-based awards to our employees and directors. Outstanding Equity Awards as of December 31, 2021 Since our inception through December 31, 2021, we granted 100,893 warrants to service providers with an exercise price of $3.05. All of these warrants are now fully vested. On August 20, 2021 we granted 138,840 options to service providers, all with 3-year vesting period. Since inception through December 31, 2021, we also issued 4,699,071 shares of common stock to our three co-founders, and two additional individuals, including Mr. Uri-Ben-Or, our former interim-CFO. The following table sets forth certain information concerning option awards and stock awards held by our Named Executive Officers as of December 31, 2021. 64 Name Number of Shares that Have Not Vested (#) Market Value of Shares that Have Not Vested (1) ($) Ron Bentsur 96,759 (2) 738,271 Enrique Poradosu 48,399 (2) 369,284 Shay Shemesh 48,399 (2) 369,284 (1) Market value is based on $7.63 per share, the closing price of our common stock on the Nasdaq Capital Market on March 17, 2022. (2) Reflects restricted stock awards granted upon the completion of a $15.3 million financing round that will vest on July 27, 2022. Director Compensation None of our directors received any compensation during the year ended December 31, 2021 for services rendered to us. Upon the completion of our initial public offering, which occurred on February 8, 2022, our directors will be compensated pursuant to our Global Equity Incentive Plan (2021). Our directors will receive an annual cash retainer of $40,000, payable in quarterly installments on the last day of each calendar quarter, with prorated payment for any partial quarters. Each member of the Compensation Committee and Audit Committee will also receive an additional $5,000 annual fee for membership on each committee, with the Chairs of the Audit and Compensation Committees to receive $7,500, payable in quarterly installments on the last day of each calendar quarter, with prorated payment for any partial quarters. Directors also received (i) an initial equity grant of 29,250 options to purchase our Common Stock, with an exercise price of $3.05 per option and will receive (ii) annual option grants with an estimated value of approximately $150,000, with the first of such grants to occur only upon the first Board meeting following the consummation of the Company's initial public offering. All option grants will vest in 3 years, with 1/3 of the granted options of each grant vesting on the first, second and third anniversaries of the date of such grant. respectively. The Board will have full discretion with respect to the annual grants. Compensation Committee Interlocks and Insider Participation None of our current or former executive officers serve as a member of the compensation committee. None of our officers serve, or have served during the last completed fiscal year, on the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or our compensation committee. For a description of transactions between us and members of our compensation committee and affiliates of such members, please see “Certain Relationships and Related-Party Transactions.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security Ownership of Certain Beneficial Owners The following table sets forth information with respect to the beneficial ownership of our common stock as of March 17, 2022, for: ➢ each of our named executive officers; ➢ each of our directors; ➢ all of our current directors and executive officers as a group; and ➢ each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding shares common stock. 65 We have determined beneficial ownership in accordance with the rules of the SEC, which generally means that a person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security, including options or warrants that are currently exercisable or exercisable within 60 days of March 17, 2022. We did not, however, deem such shares outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, to our knowledge, the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to community property laws where applicable. The information in the table below does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Sections 13(d) and 13(g) of the Securities Act. The calculations are based on 12,717,794 shares of common stock outstanding on March 17, 2022. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Nuvectis Pharma, Inc., 1 Bridge Plaza, Fort Lee, NJ 07024. Name of Beneficial Owner Number of Shares Beneficially Owned Percentage of Shares Beneficially Owned 5% and Greater Stockholders: Pontifax VI LP(1) 1,379,360 10.85 % Charles Mosseri Marlio 1,265,200 9.95 % Thomas P. Peters 2012 Family Trust 755,200 5.94 % Named Executive Officers and Directors: Ron Bentsur(2) 2,724,700 21.42 % Enrique Poradosu(3) 1,149,250 9.04 % Shay Shemesh(4) 1,131,216 8.89 % Uri Ben-Or (8) 25,584 * % Kenneth Hoberman(5) 49,140 * % Matthew Kaplan(6) 32,760 * % James F. Oliviero III(7) 9,828 * % All executive officers and directors as a group (7 persons) (8) 5,096,094 40.08 % * Represents beneficial ownership of less than 1%. 1) Pontifax Management 4 GP (2015) Ltd. is the general partner (the “General Partner”) of Pontifax VI GP L.P, the general partner of each of, Pontifax VI (Cayman) LP and Pontifax VI (Israel) LP (which are collectively referred to as “Pontifax VI LP”). Mr. Tomer Kariv holds approximately 51% of the share capital of the General Partner; as a result, Mr. Kariv may be deemed to exercise control over Pontifax VI LP. The remaining share capital is held by Mr. Ran Nussbaum. Mr. Kariv and Mr. Nussbaum disclaim beneficial ownership of all the reported shares and the inclusion of all shares herein shall not be deemed to be an admission of beneficial ownership of the reported shares except to the extent of their pecuniary interest therein. 2) This excludes 96,759 shares of restricted stock granted to Mr. Bentsur on July 27, 2021 in connection with the closing of the $15.3 million Preferred A capital raise. These restricted shares vest on July 27, 2022. 3) This excludes 48,399 shares of restricted stock granted to Mr. Poradosu on July 27, 2021 in connection with the closing of the $15.3 million Preferred A capital raise. These restricted shares vest on July 27, 2022. 4) This excludes 48,399 shares of restricted stock granted to Mr. Shemesh on July 27, 2021 in connection with the closing of the $15.3 million Preferred A capital raise. These restricted shares vest on July 27, 2022. 5) Excludes 16,380 shares owned by the Hoberman Descendants Trust, to which Mr. Hoberman disclaims ownership. On July 19, 2021, Mr. Hoberman was granted 29,250 options vesting over a 3-year period, 1/3 each year, exercisable into common shares of the Company at a price of $3.05. 6) On September 2, 2021, Mr. Kaplan was granted 29,250 options vesting over a 3-year period, 1/3 each year, exercisable into common shares of the Company at a price of $3.05. 7) On July 6, 2021, Mr. Oliviero was granted 29,250 options vesting over a 3-year period, 1/3 each year, exercisable into common shares of the Company at a price of $3.05. 8) On March 21, 2022 Uri Ben-Or's position as Interim Chief Financial Officer was terminated. Mr. Ben-Or was replaced by Michael Carson, our Vice President of Finance. On November 1, 2021, Mr. Carson received a restricted stock grant of 27,300 shares, vesting over 3 years, with no shares currently vested. 66 Item 13. Certain Relationships and Related Transactions, and Director Independence. Since inception, we have not been involved in a transaction or series of similar transactions that: ➢ the amount involved exceeded or exceeds $120,000 or 1% of the average of our total assets as of December 31, 2021 and 2020; and ➢ any of our directors or executive officers, any holder of 5% of our capital stock or any member of their immediate family had or will have a direct or indirect material interest. Policies and Procedures for Transaction with Related Persons Upon the consummation of our initial public offering, our board of directors adopted a written related person transaction policy, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 or 1% of the average of our total assets as of December 31, 2021 and 2020 and a related person had or will have a direct or indirect material interest, including without limitation purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including but not limited to whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated third party and the extent of the related person’s interest in the transaction. Director Independence Our board of directors has determined that Kenneth Hoberman, Matthew Kaplan and James Oliviero are independent directors. In making this determination, our board of directors applied the standards set forth in the rules of Nasdaq and in Rule 10A-3 under the Exchange Act. Our board of directors considered all relevant facts and circumstances known to it in evaluating the independence of these directors, including their current and historical employment, any compensation we have given to them, any transactions we have with them, their beneficial ownership of our capital stock, their ability to exert control over us, all other material relationships they have had with us and the same facts with respect to their immediate families. Although there is no specific policy regarding diversity in identifying director nominees, the board of directors seek the talents and backgrounds that would be most helpful to us in selecting director nominees. 67 Item 14. Principal Accounting Fees and Services The following presents the aggregate fees billed to the Company for professional services rendered by Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited (“PwC”) for our years ended December 31, 2021 and 2020. Audit Fees The fees for professional services rendered for audit and review of our financial statements since our inception through December 31, 2020 and for the year ended December 31, 2021 were $200,000 and $195,000, respectively. Audit-Related Fees There have been no audit-related fees billed by our accountants in the last two fiscal years of our Company. Tax Fees There have been no tax fees billed by our accountants in the last two fiscal years of our Company. All Other Fees There have been no other fees billed by our accountants in the last two fiscal years of our Company. 68 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements. The following financial statements are filed as part of this report: Report of Independent Registered Public Accounting Firm ( PCAOB ID#1309) F-2 Financial Statements: Balance Sheets as of December 31, 2021 and 2020 F-3 Statements of Operations for the Years Ended December 31, 2021 and 2020 F-4 Statements of Redeemable convertible preferred stock and Shareholders’ deficit for the Years Ended December 31, 2021 and 2020 F-5 Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-6 Notes to Financial Statements F-7 - F-2 7 69 NUVECTIS PHARMA INC. INDEX TO FINANCIAL STATEMENTS U.S. DOLLARS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s and PCAOB ID: 1309) F-2 FINANCIAL STATEMENTS : Balance Sheets F-3 Statements of Operations F-4 Statements of Redeemable convertible preferred stock and stockholders' deficit F-5 Statements of Cash Flows F-6 Notes to the Financial Statements F-7- F-27 F- 1 Report of Independent Registered Public Accounting Firm To the board of directors and shareholders of Nuvectis Pharma, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Nuvectis Pharma, Inc. (the "Company") as of December 31, 2021 and 2020, and the related statements of operations, changes in redeemable convertible preferred stock and stockholders' deficit and cash flows for the year ended December 31, 2021 and for the period from July 27, 2020 (inception) to December 31, 2020, including the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the result of its operations and its cash flows for the year ended December 31, 2021 and for the period from July 27, 2020 (inception) to December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member firm of PricewaterhouseCoopers International Limited Tel-Aviv, Israel March 23, 2022 We have served as the Company's auditor since 2021. Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel, P.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il Kesselman & Kesselman is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity F- 2 NUVECTIS PHARMA, INC. BALANCE SHEETS (USD in thousands, except per share and share amounts) December 31, 2021 2020 Assets CURRENT ASSETS: Cash and cash equivalents 5,742 - Other current assets 91 - TOTAL CURRENT ASSETS 5,833 - Deferred offering costs 824 TOTAL ASSETS 6,657 - Liabilities, Redeemable Convertible Preferred Shares and Stockholders’ Deficit Accounts payables 1,058 10 Payable offering costs 824 - Accrued liabilities 395 - Employee compensation and benefits 142 - TOTAL CURRENT LIABILITIES 2,419 10 TOTAL LIABILITIES 2,419 10 COMMITMENTS AND CONTINGENCIES, see Note 5 REDEEMABLE CONVERTIBLE PREFERRED SHARES: Convertible preferred stock A, $0.00001 par value – 170,000 and 40,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively. As of December 31, 2021, 128,520 preferred shares were issued and outstanding. No preferred stock was issued or outstanding as of December 31, 2020 15,246 - STOCKHOLDERS’ DEFICIT , see Note 6 : Common Stock, $0.00001 par value – 12,870,000 and 3,900,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively 4,505,514 and 3,900,000 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively (**) * * Additional paid in capital 1,892 - Notes received for common shares (* ) (* ) Accumulated deficit (12,900 ) (10 ) TOTAL STOCKHOLDERS’ DEFICIT (11,008 ) (10 ) TOTAL LIABILITIES, REDEEMABLE COVERTIBLE PREFERRED SHARES AND STOCKHOLDERS’ DEFICIT 6,657 - * Represent amount lower than $1,000 USD. ** Adjusted to reflect stock splits, see note 1. The accompanying notes are an integral part of these financial statements. F- 3 NUVECTIS PHARMA, INC. STATEMENT OF OPERATIONS (USD in thousands, except per share and share amounts) For the year ended December 31, 2021 For the period from July 27, 2020* until December 31, 2020 OPERATING EXPENSES: RESEARCH AND DEVELOPMENT 9,545 - GENERAL AND ADMINISTRATIVE 3,349 10 OPERATING LOSS (12,894 ) (10 ) FINANCE INCOME 4 - NET LOSS (12,890 ) (10 ) NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDER (12,890 ) (10 ) BASIC AND DILUTED NET LOSS PER COMMON SHARE OUTSTANDING, see Note 8 3.02 *** BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING** 4,268,285 3,900,000 * T he date of the Company’s inception. ** Adjusted to reflect stock split, see note 1. *** Less than $0.01. The accompanying notes are an integral part of these financial statements. F- 4 NUVECTIS PHARMA, INC. STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (USD in thousands, except share amounts) Redeemable Convertible Preferred Stock $0.00001 Par Value Common Shares $0.00001 Par Value Notes received from Common Additional Paid-In Accumulated Total Stockholders’ Shares Amount Shares*** Amount shares Capital Deficit Deficit CHANGES DURING THE PERIOD FROM JULY 27, 2020* until DECEMBER 31, 2020: Issuance of common shares - - 3,900,000 ** (** ) - - - Net loss for the period - - - (10 ) (10 ) BALANCES AT DECEMBER 31, 2020 - - 3,900,000 ** (** ) - (10 ) (10 ) Issuance of Series A redeemable convertible preferred shares 128,520 15,246 Share-based payments 605,514 ** - 1,892 1,892 Net Loss (12,890 ) (12,890 ) BALANCES AT DECEMBER 31, 2021 128,520 15,246 4,505, 514 ** (** ) 1,892 (12,900 ) (11,008 ) * T he date of the Company’s inception. ** Represent amount lower than $1,000 USD. *** Adjusted to reflect stock splits, see note 1. The accompanying notes are an integral part of these financial statements. F- 5 NUVECTIS PHARMA, INC. STATEMENTS OF CASH FLOWS (USD in thousands, except per share and share amounts) For the year ended December 31, 2021 For the period from July 27, 2020* until December 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (12,890 ) (10 ) Adjustments to reconcile loss to net cash used in operating activities: Cost of share-based payments 1,892 - Changes in operating assets and liabilities : Increase in other current assets (91 ) - Increase in accounts payable and accrued expenses 1,585 10 Net cash used in operating activities (9,504 ) - CASH FLOWS FROM INVESTING ACTIVITIES: Net cash provided by (used in) investing activities - - CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of redeemable convertible preferred shares 15,246 - Net cash provided by financing activities 15,246 - INCREASE IN CASH AND CASH EQUIVALENTS 5,742 - CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD - - CASH AND CASH EQUIVALENTS AT END OF PERIOD 5,742 - Supplemental cash flow information: Interest paid -- -- Income tax paid -- -- Supplemental noncash disclosure of investing and financing activities: Issuance of common shares in return for note receivable - ** Unpaid deferred offering costs 824 - * T he date of the Company’s inception. ** Represent amount lower than $1,000 USD. The accompanying notes are an integral part of these financial statements. F- 6 NUVECTIS PHARMA, INC. Notes to the Financial Statements NOTE 1 – GENERAL: a. Nuvectis Pharma Inc. (formerly Centry Pharma Inc.) (hereafter – the “Company”) was incorporated under the laws of the State of Delaware on July 27, 2020 and commenced its principal operations in May 2021. The company's principal executive offices are located at Fort Lee in the state of New Jersey. The Company is a biopharmaceutical company focused on the development of novel targeted small molecule therapeutics for the treatment of cancer in genetically defined patient populations. The Company's precision medicine approach translates key scientific insights relating to the oncogenic drivers and pathway addiction of cancer into potent and highly selective anticancer drugs. b. In May 2021, the Company entered into a worldwide, exclusive license agreement with the CRT Pioneer Fund (“CRT”) (see note 5a). c. In May 2021, the Company’s board of directors approved and declared a 1:100 stock split of common and preferred shares. In addition, on October 23, 2021 the Company’s Board of Directors approved a 39 for 1 stock split of common stock. All the share and per share amounts reflected in these financial statements and the notes thereto have been adjusted, on a retroactive basis, to reflect these share splits (see note 6b). d. In August 2021, the Company entered into a worldwide, exclusive license agreement with the University of Edinburgh, Scotland for the Company’s second drug candidate (see note 5a). e. In February 2022, the Company’s shares began trading on the NASDAQ under symbol “NVCT” (see note 11). f. Liquidity The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net operating losses since its inception and had an accumulated deficit of $12.9 million as of December 31, 2021. The Company had cash and cash equivalents of $5.7 million as of December 31, 2021 and has not generated positive cash flows from operations. To date, the Company has been able to fund its operations primarily through the issuance of redeemable convertible preferred shares. During 2021, the Company has received an aggregate of $15.3 million in proceeds from the issuance of shares of its Series A redeemable convertible preferred shares. The Company paid $0.1 million in issuance costs. On February 8, 2022, subsequent to the reporting period, the Company completed an initial public offering (“IPO”) in which it sold 3,200,000 shares of common stock at $5.00 per share and received net proceeds of $13.6 million, after underwriting discounts and commissions, of $1.1 million and expenses of $1.3 million (see note 11). Based on management’s cash flow projections, the Company believes that the Company’s currently available cash and cash equivalents as of December 31, 2021 along with funds received from the IPO is sufficient to fund the Company’s planned operations for a period greater than 12 months from the issuance of these financial statements. The Company will need to raise additional capital in order to complete the clinical trials aimed at developing the product candidates until obtaining its regulation and marketing approvals. There can be no assurances that the Company will be able to secure such additional financing if at all, or at terms that are satisfactory to the Company, and that it will be sufficient to meet its needs. In the event the Company is not successful in obtaining sufficient funding, this could force the Company to delay, limit, or reduce our products’ development, clinical trials, commercialization efforts or other operations, or even close down or liquidate. F- 7 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 1 – GENERAL: (continued) g. Coronavirus Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. During 2021, there was a wide distribution of several vaccinations and medicines to overcome the pandemic. The Company has shifted its operations to co-exist along with the pandemic, including encouragement of vaccinations to all of its employees worldwide. The uncertainty to which the COVID-19 pandemic impacts the Company’s business, affects management’s judgment and assumptions relating to accounting estimates in a variety of areas that depend on these estimates and assumptions. COVID-19 did not have a material influence on these estimates and judgements since the Company began operations in 2021. The Company continues to face relative uncertainty as to the remaining intensity and duration of and the nature and timeline for recovery from the COVID-19 pandemic going forward and how all of that impacts the Company, including the extent to which potentially permanent changes clinical trial operations have been caused by the pandemic. The Company has taken the approach of managing the pandemic (to the extent that it continues to remain a significant factor) via strengthening its balance sheet and cash assets and avoiding debt while focusing on cost controls. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : a. Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and stated in U.S. dollars . The significant accounting policies used in the preparation of the financial statements are as follows: b. Segment Reporting The Company has one operating segment. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources and for which discrete financial information is available. c. Use of Estimates in the Preparation of Financial Statements The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses, valuation of equity awards, and valuation allowances for deferred tax assets. These estimates and assumptions are based on current facts, future expectations, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. F- 8 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : (continued) d. Functional and Presentation Currency The U.S. dollar (“dollar”) is the currency of the primary economic environment in which the operations of the Company are conducted and expects to continue to operate in the foreseeable future. Accordingly, the functional currency of the Company is the dollar. e. Functional and Presentation Currency Adjustments arising from foreign currency transactions between the purchase and the settlement dates are reflected in the statements of operations as a component of financial income (expense). For non-dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions — exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation) — historical exchange rates. The Company did not recognize net foreign currency transaction gains in the year ended December 31, 2021 and the period July 27, 2020 through December 31, 2020. f. Cash and Cash Equivalents The Company considers as cash equivalents all highly liquid investments, which include short-term bank deposits that are not restricted as to withdrawal or use, with maturities of three months or less at the date acquired, are considered to be cash equivalents. g. Concentrations of Credit Risk The Company is subject to credit risk from holding its cash and cash equivalents at one commercial bank. The Company limits its exposure to credit losses by investing in money market accounts which are included in cash and cash equivalents through a U.S. bank with high credit ratings. Cash may consist of deposits held with banks that may at times exceed federally insured limits, however, exposure to credit risk in the event of default by the financial institution is limited to the extent of amounts recorded on the balance sheets. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. h. Leases In accordance with Accounting Standards Codification (“ASC”) 842, Leases, the Company defines a short-term lease if a lease has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. At the inception of the lease and as of December 31, 2021, the Company determined all leases were classified as short-term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term in general and administrative. For real estate leases, the Company does not separate lease and non-lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The operating lease costs for 2021 was $11 thousand. F- 9 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : (continued) i. Research and Development Expenses Research and development expenses include costs directly attributable to the conduct of research and development programs, including licensing fees, cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and development activities, including clinical trials, manufacturing costs and professional services. All costs associated with research and developments are expensed as incurred. j. General and Administrative General and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, and share-based compensation, and recruiting costs for personnel in executive, finance, and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, insurance costs, and travel expenses. General and administrative costs are expensed as incurred. k. Loss Contingencies Certain conditions may exist as of the date of the financial statements, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. Management applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed. As of December 31, 2021, and December 31, 2020, no contingent liabilities have been recognized. l. Share-Based Compensation The Company accounts for employees’, directors’ and service providers’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period. The equity awards could come in the form of options, warrants and RSUs. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Performance based awards are expensed over the vesting period when the achievement of performance criteria is probable. F- 10 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : (continued) The Company has elected to recognize forfeitures as they occur. For stock options containing a market condition, the market conditions are required to be considered when calculating the grant date fair value. ASC 718 requires selection of a valuation technique that best fits the circumstances of an award. In order to reflect the substantive characteristics of the market condition option award, a Monte Carlo simulation valuation model was used to calculate the grant date fair value of such stock options. Expense for the market condition stock options is recognized over the derived service period as determined through the Monte Carlo simulation model. m. Comprehensive Loss Comprehensive loss includes no items other than net loss. n. Income Taxes 1) Deferred taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (hereafter – “ASC 740”). ASC 740 prescribes that Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company concluded it is more likely than not the deferred tax assets will not be realized and has provided a full valuation allowance with respect to its deferred tax assets. 2) Uncertainty in income taxes The Company accounts for uncertain tax positions in accordance with ASC 740-10. The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. The Company does not have any provision for uncertain tax positions. o. Net Loss Per Share The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of ordinary shares are anti-dilutive. F- 11 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : (continued) The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers its redeemable convertible preferred shares to be participating securities as the holders of the redeemable convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares on a pro-rata basis assuming conversion of all redeemable convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the periods presented was not allocated to the Company’s preferred shares. The following potentially dilutive securities were excluded from the calculation of diluted net loss per Ordinary Share because their effect would have been anti-dilutive for the years presented: For the year end December 31, 2021 For the period end December 31, 2020 Common shares issuable in relation to: Warrants* 81,003 - Options* 226,590 - RSU* 241,137 - Redeemable convertible preferred shares 5,012,280 - *- Adjusted to reflect stock splits, see note 6a. p. Fair Value Measurement The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (at exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. The Company’s Level 1 assets consist of money market funds. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity. The fair value hierarchy gives the lowest priority to Level 3 inputs. F- 12 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES : (continued) p. Fair Value Measurement (continued) In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The money market accounts included in cash and cash equivalents are considered Level 1. During the year ended December 31, 2021, there were no transfers between fair value measure levels. The company had no financial assets and liabilities measured at fair value as of December 31, 2020. Other financial instruments consist mainly of cash and cash equivalents, other current assets, accounts payable and accrued liabilities. The fair value of these financial instruments approximates their carrying values. q. Deferred Offering Costs Deferred offering costs consist of legal and other costs incurred in connection with the formation and preparation for the Initial Public Offering (“IPO”). These costs, along with underwriting fees were charged to additional paid-in capital upon the completion of the Initial Public Offering. The deferred offering costs will be offset against the proceeds received upon the completion of the IPO. Deferred offering costs are recorded under other non-current assets on the accompanying balance sheets. r. Redeemable Convertible Preferred Shares When the Company issues convertible preferred shares, it considers the provisions of ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) in order to determine whether the preferred share should be classified as a liability. If the instrument is not within the scope of ASC 480, the Company further analyzes the instrument’s characteristics in order to determine whether it should be classified within temporary equity (mezzanine) or within permanent equity in accordance with the provisions of ASC 480-10-S99. The Company’s redeemable convertible preferred shares are not mandatorily or currently redeemable. However, they include a liquidation or deemed liquidation events that would constitute a redemption event that is outside of the Company’s control. As such, all shares of redeemable preferred shares have been presented outside of permanent equity. s. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted ASU 2019-12 when it commenced its principal operations in May 2021 and the standard did not have a material impact on its financial statements and related disclosures. t. Recently Issued Accounting Pronouncements Not Yet Adopted Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. F- 13 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 3 – RESEARCH AND DEVELOPMENT EXPENSES: Research and development expenses consisted of the following (in thousands): For the year ended December 31, 2021 For the period July 27, 2020 to December 31, 2020 License Fee 7,111 - Employee Compensation and Benefits 1,164 - Clinical Expense 670 - Manufacturing 424 - Professional services and other 175 - Total research and development expenses 9,545 - NOTE 4 – GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses consisted of the following (in thousands): For the year ended December 31, 2021 For the period July 27, 2020 to December 31, 2020 Professional and consulting services 2,574 - Employee Compensation and Benefits 414 - Other 361 10 Total general and administrative expenses 3,349 10 NOTE 5 – COMMITMENTS AND CONTINGENCIES: a. License agreement CRT Pioneer Fund License Agreement In May 2021, the Company entered into a worldwide, exclusive license agreement with the CRT Pioneer Fund for CP800 and any of its derivatives, (collectively, the “CP800 Program”). CP800 is a small molecule drug candidate that the Company believes can be applied to a broad range of cancers. Prior to licensing by the Company, CRT was the commercial owner of the CP800 Program, which it acquired from the Institute of Cancer Research in London, UK (“ICR”). The ICR is a world-renowned research institute focused on the discovery and preclinical development of cancer therapeutics pursuant to the license agreement, the Company has an obligation to pay success-based milestones and royalties to CRT, as follows: 1) pre-approval milestone payments of up to approximately $26.5 million including an upfront nonrefundable payment of $3.5 million which has already been paid; 2) regulatory approval and commercial sales milestones of up $178 million (in addition to the above $26.5 million); and 3) mid-single digit to 10% royalties on a tiered basis on net sales. F- 14 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 5 – COMMITMENTS AND CONTINGENCIES (continued): In addition, in connection with the licensing agreement, the Company will provide ICR with up to an additional $500,000 in research and development support over the next 18 months to conduct additional scientific research and preclinical testing for certain indications that the Company selects in connection with the CP800 Program. According to the license agreement the Company has also exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products resulting from the collaboration. As of December 31, 2021, ICR’s research and development as described above has not yet begun and therefore no expenses were recorded in the financial statements. License Term The license will remain in effect in each territory subject to the license and will continue until the Company’s obligation to pay royalties in such territory has expired. The royalty term for each licensed product in each country commences with the first commercial sale of the applicable licensed product in the applicable country and ends on the expiration of the last to expire of any patent specified by the license (with the key composition of matters patent expiring October 2034) or the expiration of any extended exclusivity period in the relevant country. CRT may earlier terminate the license if the Company, or any of our affiliates or sub-licensees, challenge or seek to challenge the validity of any of the licensed patents or upon a change of control in which the Company becomes controlled by a Tobacco Party, as such term is defined in the license. Either party may terminate the license upon material breach by the other party, and upon the appointment of a receiver or upon a winding-up order or similar or equivalent action. As of December 31, 2021, the Company paid the upfront payment of $3.5 million. Those expenses were recorded as research and development expenses during the year ended December 31, 2021. Any potential future research support, milestone or royalty payment amounts have not been accrued at December 31, 2021 and 2020 due to the uncertainty related to the achievement of these events, milestones or commitments to additional research. University of Edinburgh License Agreement In August 2021, the Company entered into a worldwide, exclusive license agreement with the University Court of the University of Edinburgh (“Edinburgh” or “University” or “Parties” or “UoE”) for the second drug candidate. The company is obligated to pay success-based milestones and royalties to the UoE, as follows: (1) pre-approval milestone payments of up to approximately $49.5 million including an upfront nonrefundable payment of $3.5 million which has already been paid and $0.5 million on the first anniversary of the effective date of this agreement. (2) regulatory approval and commercial sales milestones of up $279.5 million. (3) mid- single digit to 8% royalties on a tiered basis on net sales; and 2.5% of the gross amount of each of the Company’s future fund raisings up to a cumulative total of $3.0 million. In collaboration with Edinburgh, the Company wishes to generate preclinical data to support Investigational New Drug (IND) submission and inform patient selection/enrichment strategies. The aim of the development collaboration formed between the Parties under this Agreement is to progress the development of the Licensed Technology, which is licensed under the License Agreement) according to the Work Plan. The Company has agreed to provide funding to Edinburgh to support such collaboration. F- 15 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 5 – COMMITMENTS AND CONTINGENCIES (continued): The Parties wish to enter into this Agreement to set out the terms for the provision of such funding by the company and the terms of the development collaboration formed between the Parties. In consideration of the obligations of Edinburgh, the Company shall pay the Project Costs in the amount of $772,000, payable over 18 months. As of December 31, 2021, UoE’s research and development as described above has not yet begun and therefore no expenses were recorded in the financial statements. License Term The royalty term for each licensed product in each country is the period commencing with the first commercial sale of the applicable licensed product in the applicable country and ending on the expiration of the last to expire of any patent specified by the license (statutory expiration for the NXP900 patent family is April 2036), or the expiration of any extended exclusivity period in the relevant country. The Company may terminate the license if the Company determines that it is not scientifically or commercially viable to research, develop, or commercialize the licensed products which are the subject of the license agreement. UoE may terminate the agreement if the Company: (i) ceases to carry on the business regarding the treatment, prevention and/or diagnosis of human diseases; (ii) discontinues the development of the licensed products which are the subject of the license; (iii) disposes of our assets or business in whole or in material part; (iv) challenges the validity, ownership, or enforceability of the exclusively licensed technology; (v) contests the secret or substantial nature of certain know-how subject to the license; or (vi) breaches certain diligence obligations or fails to pay any amount due under the license within a specified time frame. As of December 31, 2021, the Company paid the upfront payment of $3.5 million. Those expenses were recorded as research and development expenses during the year ended December 31, 2021. Any potential future research support, milestone or royalty payment amounts have not been accrued at December 31, 2021 and 2020 due to the uncertainty related to the achievement of these events, milestones or commitments to additional research. b. Related Party Transactions As for related party transactions, see note 10. c. Contingencies As of December 31, 2021, and as of December 31, 2020, no contingent liabilities have been recognized. F- 16 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT: a. In May 2021, the Company’s board of directors approved and declared a 1:100 stock split of common shares with a par value of $0.00001 and preferred shares, with a par value of $0.00001. In addition, the Company increased the number of authorized common shares from 3,900,000 to 12,870,000 and preferred shares from 40,000 to 170,000. In addition, on October 23, 2021, the Company's Board of Directors approved a 39 for 1 stock split. As a result of the above splits, all shares, options and warrants exercisable into common shares and restricted stock units, exercise prices and income or loss per share amounts have been adjusted on a retroactive basis for all periods presented to reflect such stock splits. b. Redeemable Convertible Preferred Shares During June and July 2021, the Company entered into an investment agreement with its founders and certain new investors to issue 128,520 redeemable convertible preferred shares (“Preferred Stock”) in a total amount of approximately $15.3 million in which $1.73 million were invested by related parties on the same terms as all investors in the Preferred Stock. The holders of shares of the Preferred Stock have the following rights, preferences and privileges: Voting rights — On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder, which is one share of Common Stock for each Preferred Share (subject to the conversation ratio as described below) owned that are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Company’s Certificate of Incorporation, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class and on an as-converted to Common Stock basis on a 1:1 basis on all matters. Dividend rights — The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in the Company’s Certificate of Incorporation) the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend at least equal to the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (B) the number of shares of Common Stock issuable upon conversion of a share of Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend. F- 17 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT: (Continued): Liquidation Rights — In the event of any Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation), the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the greater of the applicable Original Issue Price, plus any dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they shall be entitled under the Company’s Certificate of Incorporation, the holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. As of December 31, 2021 and December 31, 2020 the share capital is composed of $0.00001 par value shares, as follows: December 31, 2021 Authorized Issued and paid Carrying Value Liquidation Preference Common Shares 12,870,000 * 4,505,514 * ** — Redeemable convertible preferred shares 170,000 128,520 15,246 15,246 December 31, 2020 Authorized Issued and paid Carrying Value Liquidation Preference Common Shares 3,900,000 * 3,900,000 * ** — Redeemable convertible preferred shares 40,000 — — — * Adjusted to reflect stock splits ** Represents amount lower than $1,000 USD. F- 18 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT: (Continued): Conversion Rights — Trigger Events — Upon either (a) the closing of a Deemed Liquidation Event, (b) an initial public offering the Corporation’s securities on a major public stock exchange (including, without limitation and for illustration purposes, the Nasdaq Stock Market’s National Market or the New York Stock Exchange) resulting in at least $15,000,000 of proceeds to the Corporation, or (c) the vote or written consent of the majority of the Preferred Stockholders (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), then (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate as calculated as follows — each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Original Issue Price ($119.0476) by the Conversion Price ($3.05 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization or event with respect to the applicable Preferred Stock). Such initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as detailed in the Company’s Certified of Incorporation in effect at the time of conversion (as of December 31, 2021 the conversion is $3.05 per share) (ii) such shares may not be reissued by the Corporation. Upon a successful IPO the convertible preferred stock will be converted to common shares. During February 2022 the company completed the IPO and the convertible preferred stock were converted to common shares. Rights to Future Stock Issuances — Subject to the terms and conditions detailed in the Company’s Certified of Incorporation and applicable securities laws, if the Corporation proposes to offer or sell any new securities, the Corporation shall first offer such New Securities to each stockholder of the Corporation (each, an “Entitled Stockholder”). An Entitled Stockholder shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself, (ii) its Affiliates . The Preferred Stock is not currently redeemable. Upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, the Preferred Stock is contingently redeemable. F- 19 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) c. Rights of the Company’s common shares The holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders. The holders of our common stock do not have any cumulative voting rights. Holders of our common stock are entitled to receive ratably any dividends declared by our board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions. In the event of our liquidation, dissolution or winding up, holders of the Company common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock. As of December 31, 2021, no dividends have been declared. NOTE 7 – SHARE BASED PAYMENTS a. Share Based Payments In May 2021, the Company’s board of directors approved issuance of common shares in a total amount of 605,514 each with par value of $0.00001 per share including amount of 238,914 to service providers and amount of 366,600 to related parties at estimated value of approximately $1.4 million (see note 10). These common shares are fully vested on the grant date. The fair value of common shares was evaluated at the grant date using hybrid pricing model with a combination of the Black-Scholes Option Pricing Model (OPM) and the P-WERM model for various possible scenarios. For the various scenarios modeled, volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the time period until a liquidity event occurs. The expected term represents the period of time until a liquidity event occurs. The following table summarizes assumptions used for the OPM model at the grant date: Risk-free interest rate 0.79 Expected dividend yield - Expected term (in years) 4.9 Expected volatility 107 % b. 2021 Incentive Plan In May 2021, the Company’s board of directors approved an equity incentive plan (hereafter — “Option Agreement”), in which the Company has reserved a total amount of 408,486 common shares for issuance in connection with the Option Agreement. In June 2021, the Company granted to certain service providers 81,003 fully vested warrants and 8,190 warrants vesting upon the initial public offering, exercisable into common shares with an exercise price of $3.05 per share. The 81,003 fully vested warrants have an estimated value (based on Black- Scholes model) of approximately $136 thousand and were recognized as expenses in the period ended December 31, 2021. F- 20 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION (continued) b. 2021 Incentive Plan (continued) In July 2021, the Company granted stock options to purchase 58,500 shares of common stock to two members of the Company’s Board of Directors and a warrant to purchase 11,700 shares of common stock to a certain service provider, vesting one month after the IPO. The options are exercisable into common shares with an exercise price of $3.05 per share all vesting over a 3-year period. The stock options to purchase 58,500 shares of common stock mentioned above have an estimated value (based on Black-Scholes model) of approximately $132 thousand for which $20 thousand were recognized as expenses in the period ended December 31, 2021. In addition, subject to the full discretion of the Board of Directors, the Company will grant options annually, to each Board member, with an estimated value (based on the Black-Scholes option pricing model) of approximately $150,000, with the first of such grants in to occur only upon the first Board meeting following the consummation of the Company’s initial public offering. The Board of Directors will have full discretion with respect to the annual grants. In August 2021, the Company granted to certain service providers stock options to purchase 138,840 common stock exercisable into common shares with an exercise price of $3.05 per share, all vesting over a 3-year period and with an estimated value (based on Black-Scholes model) of approximately $306 thousand which $33 thousand were recognized as expenses in the period ended December 31, 2021. In September 2021, the Company granted to an employee 15,600 RSU’s and 29,250 stock options to a Company’s board of director member exercisable into common shares with an exercise price of $3.05 per share, all vesting over a 3-year period and with an estimated value (based on Black-Scholes model) of approximately $38 thousand and $74 thousand, respectively, which $8 thousand and $10 thousand, respectively, were recognized as expended in the period ended December 31, 2021. In October 2021, the Company granted to an employee 4,680 RSUs, all vesting over a 3-year period and with an estimated value (based on Black-Scholes model) of approximately $11 thousand which $1.4 thousand were recognized as expended in the period ended December 31, 2021. In November 2021, the Company granted to an employee 27,300 RSUs, all vesting over a 3-year period and with an estimated value (based on Black-Scholes model) of approximately $65 thousand which $7 thousand were recognized as expended in the period ended December 31, 2021. The following table summarizes the Company’s stock option activity for the year ended December 31, 2021, as described above: Number of shares under option Weighted average Exercise price per Option Weighted average remaining life Aggregated Intrinsic value (in thousands) Granted 226,590 3.0526 Exercised - - Forfeited - - Outstanding – December 31, 2021 226,590 3.0526 9.067 492 Exercisable – December 31, 2021 - - - Vested or Expected to vest -December 31, 2021 226,590 3.0526 9.067 492 F- 21 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION (continued) b. 2021 Incentive Plan (continued) As of December 31, 2021, there was $0.3 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.5 years, excluding warrants which vest upon completion of an IPO. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The expected term of the options granted represents the period of time that the granted options are expected to remain outstanding based on common practice in the industry. Common share price is calculated using the model described. The following table summarizes the Black-Scholes assumptions used at the grant date: Grant Dates May – November 2021 Risk-free interest rate 0.80% - 1.37% Expected dividend yield — Common share price $2.28 - $2.97 Expected term (in years) 5 – 10 Expected volatility 88% – 107% Restricted stock Units Restricted stock units (RSUs) have been granted to employees and directors. The value of an RSU award is based on the Company’s stock price on the date of grant using hybrid pricing model with a combination of the Black-Scholes Option Pricing Model (OPM) and the P-WERM model for various possible scenarios. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of the Company’s common stock. The Company has granted RSUs pursuant to the 2021 plan. The following table summarizes the Company’s restricted stock unit activity for the year ended December 31, 2021, as described above from the 2021 Incentive Plan: Number of shares under option Weighted average grant date fair value Weighted average contractual term (in years) Aggregated Intrinsic value (in thousands) Granted 47,580 2.4907 Vested - - Outstanding – December 31, 2021 47,580 2.4907 2.7158 114 Vested or Expected to vest -December 31, 2021 47,580 2.4907 2.7158 114 As of December 31, 2021, there was $0.1 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted average period of 2.7 years. The total fair value of RSUs vested for the year ended December 31, 2021, was zero. F- 22 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION (continued) c. Share compensation expense For the period ended December 31, 2021, the company recognized expenses of $1.0 million as part of the general and administrative expenses and $0.9 million as part of the research and development expenses. NOTE 8 – NET LOSS PER SHARE: a. Basic Basic net loss per share is calculated by dividing the net loss attributable to the Company’s stockholders by the weighted average number of common shares outstanding. For the year ended December 31, 2021 Period from July 27 (inception), 2020 to December 31, 2020 in thousand U.S. dollars except per share and share amounts Loss attributable to common stockholders 12,890 10 Basic and diluted net loss per common share 3.02 Less than $0.01 Weighted average of common share outstanding 4,268,285 3,900,000 Basic loss per share is calculated by dividing the result attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year. b. Diluted As of December 31, 2021 and December 31, 2020, the Company excluded potentially dilutive securities from the calculation of diluted net loss per Ordinary Share because their effects would have been anti-dilutive (see note 2n). NOTE 9 – INCOME TAXES : a. The Company has not recorded an income tax benefit for the years ended December 31, 2021 and 2020, respectively. The Company has incurred net pre-tax losses in the United States only for all periods presented. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases using tax rates expected to be in effect during the years in which the basis differences reverse. F- 23 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 9 – INCOME TAXES (continued) : b. Tax Rates: Income of the Company is taxed according to the federal tax laws in the US and the relevant state laws. The U.S tax rate in 2021 and 2020 is 28% comprising U.S statutory tax rates of 21% and state tax rate of 7%. For the years ended December 31, 2021 and the period ended December 31, 2020, the Company’s effective tax rate is below the federal statutory income tax rate of 21% primarily due to state income taxes, net of federal benefit and the Company’s position to establish a full valuation allowance on its deferred tax assets. c. Corporate Taxation in the U.S . The applicable corporate tax rate for the Company is 21%. As of December 31, 2021, the Company has an accumulated tax loss carryforward of approximately $9,283 (as of December 31, 2020, $10). Under U.S. tax laws, subject to certain limitations, carryforward tax losses originating in tax years beginning after January 1, 2018, have no expiration date, but they are limited to 80% of the company’s taxable income in any given tax year. d. Tax Assessments The company has not been taxed since its inception. e. Deferred Taxes The tax effect of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and liabilities are presented below: As of December 31, 2021 (in thousands USD) As of December 31, 2020 (in thousands USD) Deferred tax asset: Net operating loss carry forward 2,500 10 Share Compensation 510 Research and Development credits 26 Accruals and reserves 435 Total deferred tax assets 3,471 10 Valuation allowance (3,471 ) (10 ) Deferred tax assets recognized -- -- F- 24 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 9 – INCOME TAXES (continued) : As the achievement of required future taxable income is not likely, the Company recorded a full valuation allowance. The following table presents a reconciliation of the beginning and ending valuation allowance: As of December 31, 2021 (in thousands USD) As of December 31, 2020 (in thousands USD) Balance at beginning of the year 10 -- Additions to valuation allowance 3,461 10 Release of valuation allowance -- -- Balance at end of the year 3,471 10 NOTE 10 – Related party transactions: a. Regarding related party transaction events, please also see note 6b and note 7a. b. Indemnification The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. c. The following are the equity awards for the executive officers: Ron Bentsur Equity Awards Executive will be eligible for grants of equity awards under the Company's long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Executive: · Restricted shares of common stock upon the consummation of the earlier of (a) IPO raising at least US $15M in gross proceeds, or (b) capital raising of at least US $15M in a private equity financing, equal to 1% of the fully-diluted share count immediately preceding such IPO/financing event. Such shares will vest and become fully exercisable on the first anniversary of the offering or financing event; and · Fully vested shares of common stock equal to 1% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. While the funding condition has been achieved during the year ended December 31, 2021, the market capitalization has not been achieved. This resulted in 96,759 RSU being granted in May 2021 and vesting in July 2022. F- 25 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 10 – Related party transactions (continued): Enrique Poradosu Equity Awards Executive will be eligible for grants of equity awards under the Company’s long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Executive: · Restricted shares of common stock upon the consummation of the earlier of (a) IPO raising at least US $15M in gross proceeds, or (b) capital raising of at least US $15M in a private equity financing, equal to 0.5% of the fully-diluted share count immediately preceding such IPO/financing event. Such shares will vest and become fully exercisable on the first anniversary of the offering or financing event; and · Fully vested shares of common stock equal to 0.5% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. While the funding condition has been achieved during the year ended December 31, 2021, the market capitalization has not been achieved. This resulted in 48,399 RSU being granted in May 2021 and vesting in July 2022. Shay Shemesh Equity Awards Executive will be eligible for grants of equity awards under the Company’s long-term equity incentive plan. On the Effective Date, the Company shall award the following to the Executive: · Restricted shares of common stock upon the consummation of the earlier of (a) IPO raising at least US $15M in gross proceeds, or (b) capital raising of at least US $15M in a private equity financing, equal to 0.5% of the fully-diluted share count immediately preceding such IPO/financing event. Such shares will vest and become fully exercisable on the first anniversary of the offering or financing event; and · Fully vested shares of common stock equal to 0.5% of the then fully diluted share count of the Company when the Company reaches an average market capitalization over a 30-day period of $350 million or higher. While the funding condition has been achieved during the year ended December 31, 2021, the market capitalization has not been achieved. This resulted in 48,399 RSU being granted in May 2021 and vesting in July 2022. F- 26 NUVECTIS PHARMA, INC. Notes to the Financial Statements (continued) NOTE 11 – SUBSEQUENT EVENTS: a. Initial Public Offering and Related Transaction On February 8, 2022, the Company issued and sold 3,200,000 shares of common stock in the IPO at a public offering price of $5.00 per share, and received net proceeds $13.6 million, after underwriting discounts and commissions, of $1.1 million and expenses of $1.3 million. In connection with the IPO, all 128,520 shares of redeemable convertible preferred stock outstanding at the time of the IPO converted into 5,012,280 shares of the Company’s common stock. F- 27 (b) Exhibits. Exhibit No. Description 3.1 Second Amended and Restated Certificate of Incorporation of Nuvectis Pharma, Inc., filed as exhibit 3.1 to the Form 8-K filed on February 4, 2022 and incorporated herein by reference. 3.2 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Nuvectis Pharma, Inc., filed as exhibit 3.3 to the Form 8-K filed on February 4, 2022 and incorporated herein by reference. 3.3 Amended and Restated Bylaws of Nuvectis Pharma, Inc., filed as exhibit 3.2 to the Form 8-K filed on February 4, 2022 and incorporated herein by reference. 4.1 ​ Form of Common Stock Certificate, filed as exhibit 4.1 to the Form S-1/A, filed on October 21, 2021 and incorporated herein by reference. 4.2 Form of Warrant, filed as exhibit 4.2 to the Form S-1/A filed on October 28, 2021 and incorporated herein by reference. 4.3 Description of Securities of Nuvectis Pharma, Inc. * 10.1 Global Equity Incentive Plan, filed as exhibit 10.1 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. 10.2 Executive Employment Agreement with Ron Bentsur, filed as exhibit 10.2 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. # 10.3 Executive Employment Agreement with Enrique Poradosu, filed as exhibit 10.3 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. # 10.4 Executive Employment Agreement with Shay Shemesh, filed as exhibit 10.4 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. # 10.5 License Agreement between Nuvectis Pharma, Inc. and CRT Pioneer Fund LP dated May 19, 2021, filed as exhibit 10.5 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. ** 10.6 License Agreement between Nuvectis Pharma, Inc. and The University Court of the University of Edinburgh, dated August 26, 2021, filed as exhibit 10.6 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference. ** 21.1 List of subsidiaries of Nuvectis Pharma, Inc. * 24.1 Power of Attorney (included on signature page). * 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * 70 * Filed herewith. ** Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. # Management Compensation Arrangement. Item 16. Form 10-K Summary The Company has elected not to provide summary information. 71 Signatures Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fort Lee, State of New Jersey, on this 23rd day of March 2022. Nuvectis Pharma, Inc. By: /s/ Ron Bentsur Name: Ron Bentsur Title: Chairman, Chief Executive Officer and President POWER OF ATTORNEY We, the undersigned directors and/or executive officers of Nuvectis Pharma, Inc., hereby severally constitute and appoint Ron Bentsur, acting singly, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her in any and all capacities, to sign this report and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing necessary or appropriate to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby approving, ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature ​ Title ​ Date ​ /s/ Ron Bentsur Chairman, Chief Executive Officer and President March 23, 2022 Ron Bentsur (Principal Executive Officer) /s/ Michael J Carson Vice President of Finance March 23, 2022 Michael J Carson (Principal Financial and Accounting Officer) /s/ Kenneth Hoberman Kenneth Hoberman Director March 23, 2022 /s/ James F. Olivero III James F. Oliviero III Director March 23, 2022 /s/ Matthew L. Kaplan Matthew L. Kaplan Director March 23, 2022