What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-27 compared with 2024-03-06 · 47 added, 50 removed, 7 unchanged (93% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

We are exposed to a variety

of risks, including changes in interest rates, foreign currency exchange rates, changes in the value of our marketable securities and

As of December 31, 2023,

we had $9.1 million in cash and cash equivalents and $95.3 million in short term bank deposits.

We aim to preserve our financial

assets, maintain adequate liquidity and maximize return while minimizing exposure to market risks.

Such policy further provides that

we should hold most of our current assets in bank deposits.

As of today, the currency of our financial assets is mainly in U.S.

Marketable securities

We own 1,701,357 common shares

of DNA, 117,000 ordinary shares of Entera and 4,500,000 Closing Penny Warrants, which are presented in our financial statements as marketable

Marketable securities are presented at fair value and their realization is subject to certain limitations if sold through

the market, and we are therefore exposed to market risk.

There is no assurance that at the time of sale of the marketable securities

the price per share will be the same or higher, nor that we will be able to sell all of the securities at once given the volume of securities

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

are exposed to a variety of risks, including changes in interest rates, foreign currency exchange rates, changes in the value of our

marketable securities and inflation.

As of December 31, 2024, we had approximately $54,420,000 in cash and

cash equivalents and approximately $55,281,000 in short term bank deposits.

aim to preserve our financial assets, maintain adequate liquidity and maximize return while minimizing exposure to market risks.

policy further provides that we should hold most of our current assets in bank deposits.

As of today, the currency of our financial assets

is mainly in U.S.

own 1,701,357 common shares of DNA, 6,500,000 shares of Scilex Common Stock and 117,000 ordinary shares of Entera, which are presented

in our financial statements as marketable securities.

Marketable securities are presented at fair value and their realization is subject

to certain limitations if sold through the market, and we are therefore exposed to market risk.

There is no assurance that at the time

of sale of the marketable securities the price per share will be the same or higher, nor that we will be able to sell all of the securities

at once given the volume of securities we hold.

Entera shares and the Closing Penny Warrants are traded on Nasdaq in U.S.

dollars, while DNA shares are traded on the Tel Aviv

Stock Exchange in NIS.

We are also exposed to changes in the market price of the Entera, DNA shares and the Closing Penny Warrants, as

well as to exchange rates fluctuations in the NIS currency compared to the U.S.

dollar with respect to the DNA shares.

Interest Rate Risk

We invest a major portion

of our cash surplus in bank deposits in banks in Israel.

Since the bank deposits typically carry fixed interest rates, financial income

over the holding period is not sensitive to changes in interest rates, but only the fair value of these instruments.

However, our interest

gains from future deposits may decline in the future as a result of changes in the financial markets.

The Note issued by Scilex

is based on the SOFR rate.

dollars, while

DNA shares are traded on the Tel Aviv Stock Exchange in NIS.

We are also exposed to changes in the market price of the Scilex, Entera

and DNA shares and the Closing Penny Warrants, as well as to exchange rates fluctuations in the NIS currency compared to the U.S.

with respect to the DNA shares.

invest a major portion of our cash surplus in bank deposits in banks in Israel.

Since the bank deposits typically carry fixed interest

rates, financial income over the holding period is not sensitive to changes in interest rates, but only the fair value of these instruments.

However, our interest gains from future deposits may decline in the future as a result of changes in the financial markets.

Note issued by Scilex is based on the SOFR rate.

Our interest income may decline in the future as a result of a change in the SOFR rate.

Foreign Currency Exchange Risk

A significant portion of our

expenditures, including salaries, clinical research expenses, consultants’ fees and office expenses relate to our operations in

The cost of those Israeli operations, as expressed in U.S.

dollars, is influenced by the extent to which any increase in the rate

of inflation in Israel is not offset (or is offset on a lagging basis) by a devaluation of the NIS in relation to the U.S.

dollar declines in value in relation to the NIS, it will become more expensive for us to fund our operations in Israel.

as of December 31, 2023, we own net balances in NIS of approximately $546,000.

Currency Exchange Risk

A significant portion of our expenditures, including salaries, clinical

research expenses, consultants’ fees and office expenses relate to our operations in Israel.

The cost of those Israeli operations,

as expressed in U.S.

dollars, is influenced by the extent to which any increase in the rate of inflation in Israel is not offset (or is

offset on a lagging basis) by a devaluation of the NIS in relation to the U.S.

dollar declines in value in relation

to the NIS, it will become more expensive for us to fund our operations in Israel.

In addition, as of December 31, 2024, we own net balances

in NIS of approximately $2,078,000.

Assuming a 10% appreciation of the NIS against the U.S.

dollar, we would experience an exchange rate gain of approximately $50,000, while assuming a 10% devaluation of the NIS against the U.S.

dollar, we would experience an exchange rate loss of approximately $61,000.

The exchange rate of the

dollar, we would experience an exchange rate

gain of approximately $231,000, while assuming a 10% devaluation of the NIS against the U.S.

dollar, we would experience an exchange rate

loss of approximately $189,000.

exchange rate of the U.S.

dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows:

1 unchanged sentence

Rate at period-end

We do not use any currency

hedging transactions of options or forwards to decrease the risk of financial exposure from fluctuations in the exchange rate of the

do not use any currency hedging transactions of options or forwards to decrease the risk of financial exposure from fluctuations in the

exchange rate of the U.S.

dollar against the NIS.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

See Item 15 of this Annual

Report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Item 15 of this Annual Report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 7A. Quantitative and Qualitative Disclosures About Market Risk