What changed in this filing

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Item 9A. Controls and Procedures

2023-03-08 compared with 2022-03-23 · 525 added, 1653 removed, 197 unchanged (92% of the section changed)

and Procedures

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.

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

As of December 31, 2022, 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, 2022, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act).

Our internal control system is designed to provide reasonable assurance to management and our board of directors regarding the preparation and fair presentation of published financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we have assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making our assessment of internal control over financial reporting, we used the criteria issued in the report Internal Control-Integrated Framework (2013) by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have concluded that our internal control over financial reporting was effective as of December 31, 2022 based on these criteria.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the exemption from Section 404(b) of the Sarbanes-Oxley Act for non-accelerated filers provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Changes in Internal Control over Financial Reporting

During the fourth quarter of 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

Other Information

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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.

Chief Executive Officer and President

Enrique Poradosu

Executive Vice President,

Chief Scientific and Business Officer

Vice President, Chief Development and Operations Officer

Michael Carson

Vice President of Finance

Matthew Kaplan

Executive Officers and Senior Management

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.

URGN) from August 2015 until January 2019, and as CEO of Keryx Biopharmaceuticals, Inc.

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.

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.

Bentsur served as CEO of XTL Biopharmaceuticals, Inc.

XTLB) from January 2006 until

April 2009 and as Investor Relations and CFO of Keryx from October 2000 until January 2006.

Bentsur worked as

an investment banker in NYC and Tel Aviv, Israel, from 1994 until 2000.

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.

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.

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.

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.

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.

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.

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.

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.

2015 until 2020, he served as SVP, Clinical and Regulatory Affairs at Stemline Therapeutics, Inc.

STML, acquired by Menarini

in June 2020) where he led multi-disciplinary development teams in early and late-stage projects.

In this role, Mr.

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.

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.

Shemesh holds a BSc and MSc in Biotechnology from Bar Ilan University in

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.

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

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.

Carson holds a Bachelor of

Arts in Business and Economics along with a Bachelor of Science in Mechanical Engineering from Lafayette College in Pennsylvania.

is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania.

Non-Employee Directors

Hoberman (57), Director , joined our Board of Directors in July 2021.

Hoberman has extensive financial, investor

relations, corporate governance, operational, and business development experience including M&A, strategic alliances and partnerships

both domestic and international.

Hoberman has served as the Chief Operating Officer of Stemline Therapeutics, Inc.

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.

Hoberman directed all Stemline’s functional groups, including manufacturing, commercial,

regulatory, R&D, medical affairs, public and investor relations, HR and finance.

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.

He received a B.S.B.A.

in Finance from Boston University and completed post-baccalaureate studies at Columbia University.

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.

Kaplan (54), Director , joined our Board of Directors in September 2021.

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 &

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.

has received numerous citations as a top ranked Biotechnology Stock Picker by Thomson Reuters, The Financial Times, and Forbes.

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.

Kaplan received his BS in Biology from the University

Oliviero, III (46), Director , joined our Board of Directors in July 2021.

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.

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

From August 1999 to May 2003, Mr.

Oliviero was Director of Finance for ACCESS Oncology, Inc., a privately held

biotechnology company.

Oliviero began his professional career as an investment banker at Furman Selz LLC in New York City.

is a CFA charterholder and holds a B.B.A.

in Finance with Highest Distinction from Emory University’s Goizueta Business School.

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.

Board Leadership Structure

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

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

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

In making this determination, our board has considered prior experience, business acumen and independence.

The audit committee’s

responsibilities include:

the performance, independence and qualifications of our independent auditors and determining

whether to retain our existing independent auditors or engage new independent auditors;

and approving the engagement of our independent auditors to perform audit services and any

permissible non-audit services;

the rotation of partners of our independent auditors on our engagement team as required by

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;

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;

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;

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;

the report that the SEC requires in our annual proxy statement;

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;

our major financial risk exposures, including the guidelines and policies to govern the process

by which risk assessment and risk management are implemented;

on a periodic basis our investment policy;

and evaluating on an annual basis the performance of the audit committee and the audit committee

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:

and approving our philosophy, policies and plans with respect to the compensation of our

chief executive officer;

recommendations to our board of directors with respect to the compensation of our chief executive

officer and our other executive officers;

and assessing the independence of compensation advisors;

and administering our equity incentive plans;

and making recommendations to our board of directors with respect to director compensation;

the Compensation Committee reports required by the SEC, including our “Compensation

Discussion and Analysis” disclosure.

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.

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

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.

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.

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

Ron Bentsur, Chairman & CEO

Enrique Poradosu, Chief Scientific & Business Officer

Shay Shemesh, Chief Development and Operations Officer

Uri Ben-Or, Former Interim Chief Financial

the aggregate grant date fair value of restricted stock granted during the fiscal year calculated in accordance with FASB ASC

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.

Ben-Or's engagement with Nuvectis was mutually terminated on March 21, 2022.

Narrative to Summary Compensation Table

The following are our employment arrangements with our executive officers:

Annual Base Salary

As of February 4, 2022 (the “Effective

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”).

Bentsur did not receive

any cash compensation in 2021.

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.

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

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

(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.

was granted 96,759 shares of restricted stock;

(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.

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.

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

Bentsur’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr.

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.

shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the

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.

and his eligible dependents at the time of the termination of employment.

Enrique Poradosu

Annual Base Salary

As of February 4, 2022, Mr.

annual base salary is $400,000 per annum, paid monthly in equal installments.

On an annual basis, the amount of Mr.

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.

Poradosu received cash compensation

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.

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

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

(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;

(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.

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.

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.

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.

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

Poradosu’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr.

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

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.

shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the

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

Poradosu and his eligible dependents at the time of the termination of employment.

Annual Base Salary

As of February 4, 2022, Mr.

annual base salary is $400,000 per annum, paid monthly in equal installments.

On an annual basis, the amount of the Mr.

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.

Shemesh received cash compensation

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.

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

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

(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;

(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.

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.

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

Shemesh’s employment hereunder at any time, immediately, for Cause, upon written notice to Mr.

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

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.

shall receive payment of the termination benefits described above as if his employment had been terminated on the effective date of the

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.

and his eligible dependents at the time of the termination of employment.

Contract Agreement

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

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,

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.

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.

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.

that Have Not Vested

Value of Shares

that Have Not Vested (1)

Enrique Poradosu

(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.”

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:

of our named executive officers;

of our directors;

of our current directors and executive officers as a group;

person, or group of affiliated persons, known by us to be the beneficial owner of more than

5% of our outstanding shares common stock.

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

5% and Greater Stockholders:

Pontifax VI LP(1)

Charles Mosseri Marlio

Peters 2012 Family Trust

Named Executive Officers and Directors:

Ron Bentsur(2)

Enrique Poradosu(3)

Shay Shemesh(4)

Uri Ben-Or (8)

Kenneth Hoberman(5)

Matthew Kaplan(6)

Oliviero III(7)

All executive officers and directors as a group (7 persons) (8)

* Represents beneficial ownership of less than 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”).

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.

Kariv and Mr.

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.

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.

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.

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.

Excludes 16,380 shares owned by the Hoberman Descendants Trust, to which Mr.

Hoberman disclaims ownership.

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.

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.

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.

On March 21, 2022 Uri Ben-Or's position as Interim Chief Financial Officer was terminated.

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.

Relationships and Related Transactions, and Director Independence.

Since inception, we have not been involved in

a transaction or series of similar transactions that:

amount involved exceeded or exceeds $120,000 or 1% of the average of our total assets as

of December 31, 2021 and 2020;

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.

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.

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.

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.

and Financial Statement Schedules

(a) Financial

The following financial statements are filed

as part of this report:

of Independent Registered Public Accounting Firm ( PCAOB ID#1309)

Financial Statements:

Balance Sheets

as of December 31, 2021 and 2020

of Operations for the Years Ended December 31, 2021 and 2020

of Redeemable convertible preferred stock and Shareholders’ deficit for the Years Ended December 31, 2021 and 2020

of Cash Flows for the Years Ended December 31, 2021 and 2020

Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2023 Annual Meeting of Stockholders.

Executive Compensation

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2023 Annual Meeting of Stockholders.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2023 Annual Meeting of Stockholders.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2023 Annual Meeting of Stockholders.

Principal Accounting Fees and Services

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2023 Annual Meeting of Stockholders.

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)

Financial Statements:

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the Years Ended December 31, 2022 and 202 1

Statements of Redeemable convertible preferred stock and Stockholders’ equity (deficit) for the Years Ended December 31, 2022 and 202 1

Statements of Cash Flows for the Years Ended December 31, 2022 and 202 1

Notes to Financial Statements

NUVECTIS PHARMA INC.

INDEX TO FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

( PCAOB name:

Kesselman & Kesselman C.P.A.s and PCAOB ID:

of Operations

of Redeemable convertible preferred stock and stockholders' deficit

of Cash Flows

to the Financial Statements

Report of Independent Registered

Public Accounting Firm

of directors and shareholders of Nuvectis Pharma, Inc.

FINANCIAL STATEMENTS :

Balance Sheets

Statements of Operations

Statements of Redeemable convertible preferred stock and stockholders’ equity(deficit )

Statements of Cash Flows

Notes to the Financial Statements

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.

We have audited the accompanying balance sheets of Nuvectis Pharma, Inc.

(the "Company") as of December 31, 2022 and 2021, and the related statements of operations, changes in redeemable convertible preferred stock and stockholders’ equity (deficit) and cash flows for the years then ended, 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, 2022 and 2021, and the result of its operations and its cash flows for the years then ended 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

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

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.

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.

5 unchanged sentences

We have served as the Company’s auditor since 2021.

Kesselman & Kesselman,

146 Derech Menachem Begin St.

Kesselman & Kesselman, 146 Derech Menachem Begin St.

Tel-Aviv 6492103, Israel,

1 unchanged sentence

+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

Kesselman & Kesselman is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity

NUVECTIS PHARMA, INC.

in thousands, except per share and share amounts)

BALANCE SHEETS

(USD in thousands, except per share and share amounts)

CURRENT ASSETS:

3 unchanged sentences

Deferred offering costs

Liabilities, Redeemable Convertible Preferred Shares and

Stockholders’

Liabilities, Redeemable Convertible Preferred Shares and Stockholders’ Equity (Deficit)

CURRENT LIABILITIES

Accounts payables

1 unchanged sentence

Accrued liabilities

Employee compensation

Employee compensation and benefits

TOTAL CURRENT LIABILITIES

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES, see

COMMITMENTS AND CONTINGENCIES, see Note 3

REDEEMABLE CONVERTIBLE PREFERRED SHARES:

Convertible preferred stock A, $0.00001 par value –

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

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 (**)

Convertible preferred A stock, $ 0.00001 par value – Zero and 6,630,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2022 all issued and outstanding preferred A stock was converted to common stock.

As of December 31, 2021, 5,012,280 preferred A stock shares were issued and outstanding.

STOCKHOLDERS’ EQUITY (DEFICIT), see Note 4 :

Common Stock, $ 0.00001 par value – 60,000,000 and 12,870,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively 14,642,483 and 4,505,514 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Additional paid in capital

1 unchanged sentence

Accumulated deficit

TOTAL STOCKHOLDERS’

TOTAL LIABILITIES, REDEEMABLE COVERTIBLE

PREFERRED SHARES AND STOCKHOLDERS’

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

TOTAL LIABILITIES, REDEEMABLE COVERTIBLE PREFERRED SHARES AND STOCKHOLDERS’ EQUITY (DEFICIT)

* 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.

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

NUVECTIS PHARMA, INC.

OF OPERATIONS

in thousands, except per share and share amounts)

the year ended

STATEMENT OF OPERATIONS

(USD in thousands, except per share and share amounts)

For the year ended

December 31, 2022

the period from

July 27, 2020* until

December 31, 2021

1 unchanged sentence

Research and development

AND ADMINISTRATIVE

General and administrative

OPERATING LOSS

NET LOSS ATTRIBUTABLE TO COMMON

BASIC AND DILUTED NET LOSS PER

COMMON SHARE OUTSTANDING, see Note 8

BASIC AND DILUTED WEIGHTED AVERAGE

NUMBER OF COMMON SHARES OUTSTANDING**

T he date of the Company’s inception.

** Adjusted to reflect stock split, see note

*** Less than $0.01.

The accompanying notes are an integral part

of these financial statements.

Finance income

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

BASIC AND DILUTED NET LOSS PER COMMON SHARE OUTSTANDING, see Note 6

Basic and diluted weighted average number of common shares outstanding

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

NUVECTIS PHARMA, INC.

OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

in thousands, except share amounts)

STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(USD in thousands, except share amounts)

Redeemable Convertible

Preferred Stock

Common Shares

$0.00001 Par Value

Stockholders’

CHANGES DURING THE PERIOD

FROM JULY 27, 2020* until DECEMBER 31, 2020:

Issuance of common

Net loss for the period

Stockholders’

Equity (Deficit)

BALANCES AT DECEMBER 31, 2020

Issuance of Series A redeemable convertible preferred

Issuance of Series A redeemable convertible preferred shares

Share-based payments

BALANCES AT DECEMBER 31, 2021

T he date of the Company’s inception.

Conversion of Series A redeemable convertible preferred shares

( 5,012,280 )

Issuance of common stock upon initial public offering, net of offering costs of $ 2,892

Issuance of common stock, unexercised prefunded warrants and warrants in private placement, net of offering costs of $ 1,627

Exercise of prefunded warrants

Share-based payments

BALANCES AT DECEMBER 31, 2022

* 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.

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

NUVECTIS PHARMA, INC.

STATEMENTS OF CASH FLOWS

in thousands, except per share and share amounts)

ended December 31,

For the period

from July 27,

(USD in thousands, except per share and share amounts)

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Changes in operating assets and liabilities:

Increase in other

current assets

Increase in accounts

payable and accrued expenses

Increase in other current assets

Increase in accounts payable and accrued liabilities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash provided by (used in) investing

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of redeemable

convertible preferred shares

Proceeds from issuance of redeemable convertible preferred shares

Proceeds from issuance of common stock upon initial public offering

Issuance costs related to initial public offering

Proceeds from issuance of common stock and pre-funded warrants in private placement

Issuance costs related to private placement

Net cash provided by financing activities

2 unchanged sentences

CASH AND CASH EQUIVALENTS AT END OF PERIOD

Supplemental cash flow information:

Supplemental noncash disclosure of investing and financing

of common shares in return for note receivable

deferred offering costs

T he date of the Company’s inception.

Supplemental noncash disclosure of investing and financing activities:

Unpaid deferred offering costs

Issuance of common shares in return for note receivable

* Represent amount lower than $1,000 USD.

The accompanying notes are an integral part

of these financial statements.

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

NUVECTIS PHARMA, INC.

1 unchanged sentence

NOTE 1 – GENERAL:

(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.

May 2021, the Company entered into a worldwide, exclusive license agreement with the

CRT Pioneer Fund (“CRT”) (see note 5a).

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).

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

February 2022, the Company’s shares began trading on the NASDAQ under symbol “NVCT”

(see note 11).

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.

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.

Nuvectis Pharma Inc.

(formerly Centry Pharma Inc.) (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 potential potent and highly selective anticancer drugs.

In May 2021, the Company entered into a worldwide, exclusive license agreement with the CRT Pioneer Fund (“CRT”) (see note 5a).

In May 2021, the Company’s board of directors approved and declared a 100 :1 stock split of common and preferred shares.

In addition, on October 23, 2021 the Company’s Board of Directors approved a 39 :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 6).

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).

Initial Public Offering

On February 8, 2022, 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 $ 1.8 million.

In connection with the closing of the IPO, 5,012,280 shares of Series A redeemable convertible preferred stock, automatically converted into an equal number of shares of common stock.

The Company’s shares began trading on the NASDAQ under symbol “NVCT” (see note 2r and 6b)

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 $ 32 million as of December 31, 2022.

The Company had cash and cash equivalents of $ 20 million as of December 31, 2022 and has not generated positive cash flows from operations.

To date, the Company has been able to fund its operations primarily through the issuance and sale of common stock and redeemable convertible preferred shares.

On July 29, 2022, the Company completed a private placement in which it received approximately $ 14.3 million in net proceeds, after deducting placement agent fees and other offering expenses (see Note 6c).

Based on management’s cash flow projections, the Company believes that the Company’s currently available cash and cash equivalents as of December 31, 2022 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

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 1 – GENERAL:

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.

2 – SIGNIFICANT ACCOUNTING POLICIES :

of Presentation

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.

The significant accounting policies used in the preparation of

the financial statements are as follows:

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.

Coronavirus Pandemic

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.

Management believes this uncertainty is immaterial to the business.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES:

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.

The significant accounting policies used in the preparation of the financial statements are as follows:

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.

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

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.

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.

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.

Functional and Presentation Currency

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.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

2 – SIGNIFICANT ACCOUNTING POLICIES :

and Presentation Currency

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.

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:

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.

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.

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.

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 or losses in the years ended December 31, 2022 and December 31, 2021.

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.

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.

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.

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.

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, 2022, 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.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term in general and administrative.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The operating lease costs for 2022 and 2021 were $ 13 thousand and $ 11 thousand, respectively.

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, materials used for research and development activities, and professional services.

All costs associated with research and development are expensed as incurred.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

2 – SIGNIFICANT ACCOUNTING POLICIES :

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

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

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.

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.

The Company accounts for employees’,

directors’ and service providers’

share-based payment awards classified as equity awards using the grant-date fair value method.

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, 2022, and December 31, 2021, no contingent liabilities have been recognized.

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

The equity awards could come in the form of options, warrants and RSUs.

The Company elected to recognize compensation costs for awards using the accelerated method based on the multiple-option award approach.

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.

(see note 7).

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.

Comprehensive Loss

Comprehensive loss includes no items other than net loss.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

2 – SIGNIFICANT ACCOUNTING POLICIES :

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

Comprehensive

Comprehensive loss includes no items

other than net loss.

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.

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.

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.

Uncertainty in income taxes

The Company accounts for uncertain

tax positions in accordance with ASC 740-10.

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.

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.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

2 – SIGNIFICANT ACCOUNTING POLICIES :

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.

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.

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.

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 considered 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 period

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

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 ended

Common shares issuable in relation to:

1 unchanged sentence

*- Adjusted to reflect stock splits, see note 6a.

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.

levels of inputs that may be used to measure fair value include:

prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date for assets or liabilities.

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:

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.

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.

inputs that are supported by little or no market activity.

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.

Unobservable inputs that are supported by little or no market activity.

The fair value hierarchy gives the lowest priority to Level 3 inputs.

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 years ended December 31, 2022 and 2021, respectively, 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, 2022 and 2021, respectively.

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.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

2 – SIGNIFICANT ACCOUNTING POLICIES :

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.

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”).

costs, along with underwriting fees were charged to additional paid-in capital upon the completion of the Initial Public Offering.

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.

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.

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.

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.

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”) or the Private Investment in Public Entity (“PIPE”).

These costs, along with underwriting fees were charged to additional paid-in capital upon the completion of the IPO or PIPE.

The deferred offering costs were offset against the proceeds received upon the completion of the IPO or PIPE.

Deferred offering costs are recorded under other non-current assets on the accompanying balance sheets.

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.

Upon the consummation of the IPO, all of the Company's preferred stocks were converted into common stock and reclassified from temporary equity, into permanent equity.

The Company determines the accounting classification of warrants that are issued, as either liability or equity, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, (“ASC 480-10”), and then in accordance with ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815-40”).

Under ASC 480-10, warrants are considered liability-classified if the warrants are mandatorily redeemable, obligate the issuer to settle the warrants or the underlying shares by paying cash or other assets, or must or may require settlement by issuing variable number of shares.

If the warrants do not meet liability classification under ASC 480-10, the Company assesses the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature.

If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP.

After all relevant assessments are made, the Company concludes whether the warrants are classified as liability or equity.

Liability-classified warrants are required to be accounted for at fair value both on the date of issuance and on subsequent accounting period ending dates, with all changes in fair value after the issuance date recorded as a component of other income (expense), net in the statements of operations.

Equity-classified warrants are accounted for at consideration received on the issuance date with no changes in fair value recognized after the issuance date.

As of December 31, 2022, all of the Company’s outstanding warrants are equity-classified warrants.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance will be effective for Emerging Growth Companies (EGCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year.

No significant impact on the Company’s financial statements.

In August 2020, the FASB issued Accounting Standard Update No.

2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas.

This guidance is effective for public business entities except for smaller reporting companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021.

For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted ASU 2020-06 on January 1, 2022, using the modified retrospective method, and such adoption did not impact the Company’s financial position, results of operations, cash flows or net loss per share.

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.

NOTE 3 – RESEARCH AND DEVELOPMENT EXPENSES:

Research and development expenses consisted

of the following (in thousands):

For the period

July 27, 2020

Research and development expenses consisted of the following (in thousands):

For the year ended

Employee compensation and benefits

3 unchanged sentences

Total research and development expenses

NOTE 4 – GENERAL AND ADMINISTRATIVE

General and administrative expenses consisted

of the following (in thousands):

For the period

July 27, 2020

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 4 – GENERAL AND ADMINISTRATIVE EXPENSES:

General and administrative expenses consisted of the following (in thousands):

For the year ended

Professional and consulting services

4 unchanged sentences

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

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.

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);

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 and $ 1.0 million in patient recruitment milestones 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.

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.

On March 31, 2022, the Company and ICR revised the agreement for research and development support to a total of $ 865,000 (to allow for additional research activities).

$ 0.3 million and zero of expense of the research and development support was recognized during the year ended December 31, 2022 and 2021, respectively.

The expense from the revised agreement will be recognized over eighteen months beginning at the date of the revised agreement.

As of December 31, 2022, there are nine months remaining for this expense to be recognized.

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

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.

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,

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.

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.

For the year ended December 31, 2022, the Company paid $ 1.0 million in license fees associated with the achievement of certain milestones.

For the year ended December 31, 2021, the Company paid the upfront payment of $ 3.5 million.

During the years ended December 31, 2022 and 2021, respectively, these expenses were recorded as research and development expenses.

Any potential future research support, milestone or royalty payment amounts have not been accrued at December 31, 2022 and 2021 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.

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

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.

(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.

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, 2022, UoE’s research and development as described above has not yet begun and therefore no expenses were recorded in the financial statements.

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

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

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.

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.

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;

(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,

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.

Party Transactions

As for related party transactions,

(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, 2022, the Company paid $ 0.5 million related to the one-year anniversary milestone and $ 0.4 million associated with the IPO.

As of December 31, 2022 the Company recorded a liability of $ 0.4 million associated with the private placement.

As of December 31, 2021, the Company paid the upfront payment of $ 3.5 million.

During the years ended December 31, 2022 and 2021, respectively, these expenses were recorded as research and development expenses.

Related Party Transactions

As for related party transactions, see note 10.

Contingencies

As of December 31, 2021, and as

of December 31, 2020, no contingent liabilities have been recognized.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’

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

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.

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 —

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.

As of December 31, 2022, and as of December 31, 2021, no contingent liabilities have been recognized.

NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT:

In May 2021, the Company’s board of directors approved and declared a 100 :1 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 :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.

On February 3, 2022, the Company amended its certificate of incorporation such that the total number of shares of all classes of capital stock authorized to be issued was increased to 65,000,000 , with 5,000,000 shares designated as preferred stock with a par value of $ 0.00001 , and 60,000,000 shares designated as common stock with a par value of $ 0.00001 .

On February 8, 2022, the Company completed an 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 $ 1.8 million.

Additionally, on February 8, 2022, in connection with the closing of the IPO, 5,012,280 shares of Series A redeemable convertible preferred stock, respectively, automatically converted into an equal number of shares of common stock.

There were no shares of convertible preferred stock outstanding as of December 31, 2022.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’

Liquidation Rights —

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

Issued and paid

Common Shares

Redeemable Convertible Preferred Shares

December 31, 2020

Issued and paid

Common Shares

Redeemable convertible preferred shares

Adjusted to reflect stock splits

Represents amount lower than $1,000 USD.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 6 – REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’

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

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.

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.

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.

During February 2022 the company completed the IPO and the convertible preferred stock were converted to common shares.

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, 2022, no dividends have been declared.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

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.

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.

Private Placement in Public Entity

On July 29, 2022, the Company closed a private placement offering (the “July Private Placement”), pursuant to the terms and conditions of a Securities Purchase Agreement (the “Agreement”), dated July 27, 2022.

In connection with the July Private Placement, the Company issued 1,015,598 shares of common stock (the “Shares”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 909,091 shares of common stock and preferred investment options (the “Preferred Investment Options”) to purchase up to an aggregate of 1,924,689 shares of common stock.

The purchase price of each Share and each Pre-Funded Warrant was the $ 8.25 .

The purchaser received one Preferred Investment Option for no consideration, with each Share or Pre-Funded Warrant purchased.

The aggregate net cash proceeds to the Company from the July Private Placement were approximately $ 14.3 million, after deducting placement agent fees and other offering expenses.

The Pre-Funded Warrants had an exercise price of $ 0.001 per share, were exercisable on or after August 24, 2022, and are exercisable until the Pre-Funded Warrants were exercised in full.

Pre-Funded Warrants totaling 909,091 were exercised during the year ended December 31, 2022, and as such the Company issued 909,091 shares of common stock on that date.

The Preferred Investment Options are exercisable at any time on or after January 23, 2023 through January 29, 2026, at an exercise price of $ 9.65 per share, subject to certain adjustments as defined in the Agreement.

The Company agreed to pay the placement agent a fee and management fee equal to 7.0 % and 1.0 %, respectively, of the aggregate gross proceeds from the July Private Placement.

In addition, the Company issued warrants to the placement agent to purchase up to 115,481 shares of common stock.

The placement agent warrants are in substantially the same form as the Preferred Investment Options, except that the exercise price is $ 10.31 .

The Preferred Investment Options, the Pre-Funded Warrants, and the placement agent warrants are collectively referred to as the “Private Placement Warrants”.

The Company evaluated the terms of the Private Placement Warrants and determined that they should be classified as equity instruments based upon accounting guidance provided in ASC 480 and ASC 815-40.

Since the Company determined that the Private Placement Warrants were equity-classified, the Company recorded the proceeds from the July Private Placement, net of issuance costs, within common stock at par value and the balance of the net proceeds to additional paid in capital.

As of December 31, 2022, the outstanding Preferred Investment Options, and the placement agent warrants were not exercisable.

In connection with the July Private Placement, the Company entered into a Registration Rights Agreement with the certain purchasers defined therein, dated July 27, 2022 (the “July Registration Rights Agreement”).

The July Registration Rights Agreement required the Company to file a registration statement covering the resale of all of the securities with the Securities and Exchange Commission (the “SEC”).

The Company filed a registration statement on Form S-1 with the SEC on August 15, 2022.

The registration statement on Form S-1 was declared effective on August 24, 2022.

NOTE 7 – SHARE BASED PAYMENTS

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

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 an amount of 366,600 to the Company founders at an estimated value of approximately $ 1.4 million.

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:

The fair value of common shares was evaluated

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

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

2 unchanged sentences

Expected volatility

In February 2022, the Company granted to.

the underwriter of the IPO, 128,000 fully vested warrants upon the IPO, exercisable into common stock with an exercise price of $ 6.25 per share for 5 years after the grant date.

The 128,000 fully vested warrants have an estimated value (based on Black-Scholes model) of approximately $ 458,000 and were recognized as a reduction from gross proceeds of the IPO.

No warrants have been exercised as of December 31, 2022.

The following table summarizes assumptions used for the Black-Scholes model at the grant date:

Risk-free interest rate

Common share price

Expected dividend yield

Expected term (in years)

Expected volatility

In July 2022, the Company granted to the private placement agent of July Private Placement, 115,481 warrants which become exercisable any time between January 23, 2023 and January 29, 2026, exercisable into common stock with an exercise price of $ 10.31 per share.

The 115,481 warrants have an estimated value (based on Black-Scholes model) of approximately $ 618,000 .

No warrants have been exercised as of December 31, 2022.

The following table summarizes assumptions used for the Black-Scholes model at the grant date:

Risk-free interest rate

Common share price

Expected dividend yield

Expected term (in years)

Expected volatility

Volatility was estimated based on the historic volatility of comparable public companies.

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.

In May 2021, the Company’s board of directors approved an equity incentive plan (hereafter — “2021 Plan”), in which the Company has reserved a total amount of 408,486 common shares for issuance in connection with the Option Agreement.

In February 2022, the Company’s board of directors approved an increase to total shares under the incentive plan to 1,500,000 .

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION

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:

The 2021 Plan provides for a variety of stock-based compensation awards, including stock options, restricted stock unit awards, or other stock.

Under the 2021 Plan, the Company generally grants stock-based awards with service-based vesting conditions only.

Options and restricted stock unit awards granted typically vest over a three-year period, but may be granted with different vesting terms.

Ron Bentsur, Dr.

Enrique Poradosu and Mr.

Shay Shemesh will be eligible for fully vested shares of common stock equal to 1 %, 0.5 % and 0.5 %, respectively, of the then fully diluted share count when the Company reaches an average capitalization over a 30 -day period of $ 350 million or higher.

As of December 31, 2022, the market capitalization has not been achieved.

The following table summarizes the Company’s stock option activity for the year ended December 31, 2022, for the 2021 Incentive Plan:

Weighted average

Exercise price per

1 unchanged sentence

(in thousands)

Outstanding –

December 31, 2021

Exercisable –

December 31, 2021

Vested or Expected to vest -December 31,

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION

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.

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.

Balance, December 31, 2021

Outstanding – December 31, 2022

Exercisable – December 31, 2022

Expected to vest – December 31, 2022

As of December 31, 2022, there was $ 0.6 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 1.82 years, excluding warrants which vest upon completion of an IPO or PIPE.

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 –

December 2022

November 2021

Risk-free interest rate

2.39 % - 2.88 %

0.80 % - 1.37 %

Expected dividend yield

Common share price

$ 7.02 - $ 11.99

$ 2.28 - $ 2.97

Expected term (in years)

Expected volatility

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

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.

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.

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:

date fair value

On April 1, 2022, the Company issued 120,000 RSUs to Mr.

Ron Bentsur and 60,000 RSUs each to Dr.

Enrique Poradosu and Mr.

Shay Shemesh.

All RSUs granted to these founders of the Company vest over three years with 1/3 vesting on each anniversary of the date of the grant.

The fair value of these RSUs was determined to be $ 1.7 million.

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:

Weighted average

average grant

contractual term

Intrinsic value

date fair value

(in thousands)

Outstanding –

December 31, 2021

Vested or Expected to vest -December 31, 2021

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.

Balance, December 31, 2021

Outstanding – December 31, 2022

Expected to vest – December 31, 2022

As of December 31, 2022, there was $ 1.3 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted average period of 2.2 years.

The total fair value of RSUs vested for the year ended December 31, 2022, was $ 48 thousand.

On July 27, 2021, Mr.

Ron Bentsur, Dr.

Enrique Poradosu, and Mr.

Shay Shemesh were granted 96,759 RSUs, 48,399 RSUs and 48,399 RSUs, respectively, which were not part of the Incentive Plan and excluded from the table above.

On July 1, 2022 and December 13, 2022, the vesting of these grants was extended to January 1, 2023 and June 30, 2022, respectively.

Share compensation expense

For the period ended December 31, 2022, the Company recognized expenses of $ 0.8 million as part of the general and administrative expenses and $ 0.9 million as part of the research and development expenses.

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.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

NOTE 7 – SHARE BASED PAYMENTS AND COMPENSATION

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:

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.

the year ended

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, 2022

(inception), 2020 to December

December 31, 2021

in thousand U.S.

except per share and share amounts

dollars except per share and share amounts

Loss attributable to common stockholders

1 unchanged sentence

Weighted average of common share outstanding

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

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).

9 – INCOME TAXES :

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.

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.

As of December 31, 2022 and December 31, 2021, 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:

The Company has not recorded an income tax benefit for the years ended December 31, 2022 and 2021, 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.

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 2022 and 2021 is 26.9 % comprising U.S statutory tax rates of 21 % and state tax rate of 5.9 %.

For the years ended December 31, 2022 and 2021, 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.

Corporate Taxation in the U.S.

The applicable corporate tax rate for the Company is 21 %.

As of December 31, 2022, the Company has an accumulated tax loss carryforward of approximately $ 23.0 million (as of December 31, 2021, $ 9.3 million).

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.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

9 – INCOME TAXES (continued) :

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.

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).

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.

The company has not been taxed since

its inception.

tax effect of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and liabilities

are presented below:

Tax Assessments

The Company has not been taxed since its inception.

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:

December 31, 2022

(in thousands USD)

December 31, 2021

(in thousands USD)

Deferred tax asset:

6 unchanged sentences

Deferred tax assets recognized

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

9 – INCOME TAXES (continued) :

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 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:

December 31, 2022

(in thousands USD)

December 31, 2021

(in thousands USD)

Balance at beginning of the year

3 unchanged sentences

NOTE 10 – RELATED PARTY TRANSACTIONS:

related party transaction events, please also see note 6b and note 7a.

Indemnification

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.

following are the equity awards for the executive officers:

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:

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

Such shares will vest and become fully exercisable on the first anniversary of

the offering or financing event;

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

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.

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:

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

Such shares will vest and become fully exercisable on the first anniversary of

the offering or financing event;

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.

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:

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

Such shares will vest and become fully exercisable on the first anniversary of

the offering or financing event;

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.

As for related party transactions regarding equity grants, see note 7.

NOTE 11 – SUBSEQUENT EVENTS:

On January 12, 2023, the Company issued 210,000 RSUs to Mr.

Ron Bentsur and 115,000 RSUs each to Dr.

Enrique Poradosu and Mr.

Shay Shemesh.

On February 14, 2023, 105,920 warrants granted in February 2022 in association with the underwriter agreement associated with the Company’s IPO were exercised.

Gross proceeds from the exercise of these warrants were approximately $ 660 thousand.

NUVECTIS PHARMA, INC.

Notes to the Financial Statements (continued)

11 – SUBSEQUENT EVENTS:

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.

(b) Exhibits.

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.

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.

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.

Common Stock Certificate, filed as exhibit 4.1 to the Form S-1/A, filed on October 21, 2021 and incorporated herein by

Warrant, filed as exhibit 4.2 to the Form S-1/A filed on October 28, 2021 and incorporated herein by reference.

of Securities of Nuvectis Pharma, Inc.

Equity Incentive Plan, filed as exhibit 10.1 to the Form S-1/A filed on October 6, 2021 and incorporated herein by reference.

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.

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.

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.

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.

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.

of subsidiaries of Nuvectis Pharma, Inc.

of Attorney (included on signature page).

Certification

of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

On February 14, 2023, a certain investor exercised 4,000 Preferred Investment Options granted in July 2022 in association with the Securities Purchase Agreement.

Gross proceeds from the exercise of these options were approximately $ 39 thousand.

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.

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.

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.

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.

Form of Warrant, filed as exhibit 4.2 to the Form S-1/A filed on October 28, 2021 and incorporated herein by reference.

Form of Underwriter’s Warrant, filed as exhibit 4.2 to the Form S-1/A filed on January 18, 2022 and incorporated herein by reference.

Form of Preferred Investment Option, filed as exhibit 10.2 to the Form 8-K filed on July 29, 2022 and incorporated herein by reference.

Form of Pre-Funded Warrant, filed as exhibit 10.3 to the Form 8-K filed on July 29, 2022 and incorporated herein by reference.

Description of Securities of Nuvectis Pharma, Inc.

2021 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.

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.

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.

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.

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.

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.

List of subsidiaries of Nuvectis Pharma, Inc.

Consent of Independent Registered Public Accounting Firm

Power of Attorney (included on signature page).

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Inline XBRL Taxonomy Schema Linkbase Document

Inline XBRL Taxonomy Calculation Linkbase Document

Inline XBRL Taxonomy Definition Linkbase Document

Inline XBRL Taxonomy Labels Linkbase Document

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Filed herewith.

Certain portions of this

exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

Management Compensation

Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

Management Compensation Arrangement.

Form 10-K Summary

The Company has elected not to provide summary

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.

The Company has elected not to provide summary information.

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 8th day of March 2023.

Nuvectis Pharma, Inc.

/s/ Ron Bentsur

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.

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.

/s/ Ron Bentsur

Chairman, Chief Executive

Officer and President

March 23, 2022

Chairman, Chief Executive Officer and President

(Principal Executive Officer)

March 8, 2023

/s/ Michael J Carson

Vice President of Finance

March 23, 2022

Michael J Carson

(Principal Financial and Accounting Officer)

March 8, 2023

/s/ Kenneth Hoberman

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures