<SEC-DOCUMENT>0001171843-16-012788.txt : 20161101
<SEC-HEADER>0001171843-16-012788.hdr.sgml : 20161101
<ACCEPTANCE-DATETIME>20161101160011
ACCESSION NUMBER:		0001171843-16-012788
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20161101
FILED AS OF DATE:		20161101
DATE AS OF CHANGE:		20161101

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RedHill Biopharma Ltd.
		CENTRAL INDEX KEY:			0001553846
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			L3

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-35773
		FILM NUMBER:		161964734

	BUSINESS ADDRESS:	
		STREET 1:		21 HA'ARBA'A STREET
		CITY:			TEL AVIV
		STATE:			L3
		ZIP:			64739
		BUSINESS PHONE:		972-3-541-3131

	MAIL ADDRESS:	
		STREET 1:		21 HA'ARBA'A STREET
		CITY:			TEL AVIV
		STATE:			L3
		ZIP:			64739
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>f6k_110116.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"><html lang="en-US"><head><title>EdgarFiling</title><meta content="text/html; charset=windows-1252"><meta name="GENERATOR" content="MSHTML 8.00.7601.18094"></head><body style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><div align="center"><div style="margin-top: 3pt; margin-bottom: 12pt;"><div style="font-size: 1pt; border-top: Black 2.5pt solid; border-bottom: Black 1.1pt solid; width: 100%;">&#160;</div></div><p style="font-size: 14pt;" align="center"><strong>UNITED STATES</strong><br><strong>SECURITIES AND EXCHANGE COMMISSION</strong><br><strong>Washington, D.C. 20549</strong></p><p style="font-size: 14pt; text-transform: uppercase;" align="center"><strong>Form 6-K</strong></p><p><strong></strong></p><p><strong>Report of Foreign Private Issuer<br>Pursuant to Rule 13a-16 or 15d-16<br>of the Securities Exchange Act of 1934</strong></p><p>For the month of November 2016<br>Commission File No.:&#160;001-35773&#160;</p><p><strong>REDHILL BIOPHARMA LTD.</strong><br>(Translation of registrant's name into English)</p><p><strong>21 Ha'arba'a Street, Tel Aviv, 64739, Israel</strong><br>(Address of principal executive office)</p></div><p>Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.<br>Form 20-F [&#160;X ] &#160;&#160;&#160;&#160;&#160;Form 40-F [&#160;&#160; ]</p><p>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):&#160;<samp style="text-decoration: underline;">&#160;</samp></p><p>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):&#160;<samp style="text-decoration: underline;">&#160;</samp></p><p><hr style="page-break-after: always;" noshade="noshade"><p>Attached hereto as Exhibit 99.1 and incorporated by reference herein is a press release issued by the Registrant on November 1, 2016 entitled: <em>"</em><em>RedHill Biopharma Announces Proposed Public Offering of its American Depository Shares".</em></p><p>The press release was issued pursuant to, and in accordance with, Rule 134 under the Securities Act of 1933 (as amended) and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of ADSs in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.</p><p>In connection with the proposed offering announced in the attached press release, the Company has provided &#160;certain information regarding its cash and short-term investments as of September 30, 2016 and has provided information on potential commercial activities in the U.S. in its prospectus supplement filed on November 1, 2016. &#160;This financial information disclosure and information on potential commercial activities in the U.S. are attached as Exhibit 99.2 to this Form 6-K and is incorporated herein by reference. In addition, Exhibit 99.2 provides information regarding the adoption by the Company of the Israeli corporate governance exemptions set forth in the Companies Regulations (Relief for Public Companies Whose Securities are Listed for Trading on an Exchange Abroad) 5760-2000 (Regulation 5d.).</p><p>This Form 6-K and related exhibits are incorporated by reference into the Company's Registration Statements on Form S-8 filed with the Securities and Exchange Commission on May 2, 2013 (Registration No. 333-188286) and on October 29, 2015 (Registration No. 333-207654) and its Registration Statement on Form F-3 filed with the Securities and Exchange Commission on February 25, 2016 (Registration No. 333- 209702).</p><table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" class="mce-item-table"><tr><td style="text-decoration: underline;" valign="bottom"><font style="font-size: 10pt;"><strong>Exhibit No.</strong></font></td><td width="20"><font style="font-size: 10pt;">&#160;</font></td><td style="text-decoration: underline;" valign="bottom"><font style="font-size: 10pt;"><strong>Description of Exhibit</strong></font></td></tr><tr><td>&#160;</td><td width="20"><font style="font-size: 10pt;">&#160;</font></td><td><font style="font-size: 10pt;">&#160;</font></td></tr><tr><td><font style="font-size: 10pt;">99.1</font></td><td width="20"><font style="font-size: 10pt;">&#160;</font></td><td><font style="font-size: 10pt;">Press release, dated November 1, 2016</font></td></tr><tr><td><font style="font-size: 10pt;">99.2</font></td><td width="20"><font style="font-size: 10pt;">&#160;</font></td><td><font style="font-size: 10pt;">Financial disclosure, potential U.S. commercial activities disclosure and Israeli corporate governance exemptions disclosure.</font></td></tr></table><p><em>This Form 6-K contains &#8220;forward-looking statements&#8221; within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words &#8220;intends,&#8221; &#8220;may,&#8221; &#8220;will,&#8221; &#8220;plans,&#8221; &#8220;expects,&#8221; &#8220;anticipates,&#8221; &#8220;projects,&#8221; &#8220;predicts,&#8221; &#8220;estimates,&#8221; &#8220;aims,&#8221; &#8220;believes,&#8221; &#8220;hopes,&#8221; &#8220;potential&#8221; or similar words. Forward-looking statements are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company&#8217;s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company&#8217;s research, manufacturing, preclinical studies, clinical trials, and other therapeutic candidate development efforts; (ii) the Company&#8217;s ability to advance its therapeutic candidates into clinical trials or to successfully complete its preclinical studies or clinical trials; (iii) the extent and number of additional studies that the Company may be required to conduct and the Company&#8217;s receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings, approvals and feedback; (iv) the manufacturing, clinical development, commercialization, and market acceptance of the Company&#8217;s therapeutic candidates; (v) the Company&#8217;s ability to establish and maintain corporate collaborations; (vi) the Company's ability to acquire products approved for marketing in the U.S. that achieve commercial success and build its own marketing and commercialization capabilities; (vii) the interpretation of the properties and characteristics of the Company&#8217;s therapeutic candidates and of the results obtained with its therapeutic candidates in research, preclinical studies or clinical trials; (viii) the implementation of the Company&#8217;s business model, strategic plans for its business and therapeutic candidates; (ix) the scope of protection the Company is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; (x) parties from whom the Company licenses its intellectual property defaulting in their obligations to the Company; (xi) estimates of the Company&#8217;s expenses, future revenues capital requirements and the Company&#8217;s needs for additional financing; (xii) competitive companies and technologies within the Company&#8217;s industry; and (xiii) the impact of the political and security situation in Israel on the Company's business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 20-F filed with the SEC on February 25, 2016.</em> <em>Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.</em></p></p><hr style="page-break-after: always;" noshade="noshade"><p style="text-align: center;"><strong>SIGNATURES</strong></p><p>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</p><table style="font-family: Times New Roman; font-size: 10pt;" border="0" width="100%" cellspacing="0" cellpadding="0"><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%">REDHILL BIOPHARMA LTD.</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%">(Registrant)</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%">&#160;</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%"></td></tr><tr valign="top"><td width="47%">Date:&#160;November 1, 2016</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%">By: <u>/s/ Dror Ben-Asher</u></td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%">Dror Ben-Asher</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%">Chief Executive Officer</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-align: left;" align="center" width="47%"></td></tr></table></body></html>
</TEXT>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh_991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"><html lang="en-US"><head><title>EdgarFiling</title><meta content="text/html; charset=windows-1252"><meta name="GENERATOR" content="MSHTML 8.00.7601.18094"></head><body bgcolor="#ffffff"><p style="text-align: right;"><strong>EXHIBIT 99.1</strong></p><p style="text-align: center;"><strong>RedHill Biopharma Announces Proposed Public Offering of its American Depository Shares</strong></p><p style="text-align: center;"><p> <p align="justify">TEL-AVIV, Israel, Nov.  01, 2016  (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL) (&#8220;RedHill&#8221; or the &#8220;Company&#8221;), a biopharmaceutical company primarily focused on the development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for gastrointestinal and inflammatory diseases and cancer, today announced that it intends to offer its American Depository Shares (&#8220;ADSs&#8221;), each representing ten of its ordinary shares, in an underwritten public offering. RedHill also expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the ADSs offered to the public. The offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.<br></p>  <p align="justify">The Company intends to use the proceeds from the offering to fund clinical development programs, for potential acquisitions, to support commercial operations and for general corporate purposes.</p>  <p align="justify">Roth Capital Partners and FBR are acting as joint book-running managers and Echelon Wealth Partners is acting as Canadian manager for the offering with respect to sales in Canada.</p>  <p align="justify">The ADSs will be issued pursuant to a shelf registration statement that was previously filed with, and declared effective by, the Securities and Exchange Commission (the &#8220;SEC&#8221;). A preliminary prospectus supplement related to the offering has been filed with the SEC and is available on the SEC's website located at www.sec.gov.</p>  <p align="justify">This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.</p>  <p align="justify">This offering will be made only by means of a prospectus. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the offering may be obtained, when available, by contacting Roth Capital Partners, Attention: Equity Capital Markets, 888 San Clemente Drive, Newport Beach, CA 92660, or by telephone at 800-678-9147, or FBR, Attention: Syndicate Prospectus Department, 1300 North 17th Street, Suite 1400, Arlington, VA 22209, or by telephone at 703-312-9726, or by email at prospectuses@fbr.com.&#160;</p>  <p align="justify"><strong>About RedHill Biopharma Ltd.:</strong><br>RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL)&#160;is a biopharmaceutical company headquartered in Israel, primarily focused on the development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for the treatment of gastrointestinal and inflammatory diseases and cancer. RedHill&#8217;s current pipeline of proprietary products includes: (i) <strong>RHB-105</strong> <strong>-</strong> an oral combination therapy for the treatment of <em>Helicobacter pylori</em> infection with successful results from a first Phase III study; (ii) <strong>RHB-104</strong> <strong>-</strong> an oral combination therapy for the treatment of Crohn's disease with an ongoing first Phase III study and an ongoing proof-of-concept Phase IIa study for multiple sclerosis; (iii) <strong>BEKINDA<sup>&#174;</sup></strong><strong> (RHB-102)</strong> <strong>-</strong> a once-daily oral pill formulation of ondansetron with an ongoing Phase III study for acute gastroenteritis and gastritis and an ongoing Phase II study for IBS-D; (iv) <strong>RHB-106</strong> <strong>-</strong> an encapsulated bowel preparation licensed to Salix Pharmaceuticals, Ltd.; (v) <strong>YELIVA<sup>&#153;</sup> (ABC294640)</strong> <strong>-</strong> a Phase II-stage, orally-administered, first-in-class SK2 selective inhibitor targeting multiple oncology, inflammatory and gastrointestinal indications; (vi) <strong>MESUPRON - </strong>a Phase II-stage first-in-class, orally-administered uPA inhibitor, targeting gastrointestinal and other solid tumors; (vii) <strong>RP101</strong> <strong>-</strong> currently subject to an option-to-acquire by RedHill, RP101 is a Phase II-stage first-in-class, orally-administered Hsp27 inhibitor, targeting pancreatic and other gastrointestinal cancers; (viii)<strong> RIZAPORT<sup>&#174;</sup> (RHB-103)</strong> <strong>-</strong> an oral thin film formulation of rizatriptan for acute migraines, with a U.S. NDA currently under discussion with the FDA and marketing authorization received in Germany in October 2015; and (ix) <strong>RHB-101</strong> <strong>-</strong> a once-daily oral pill formulation of the cardio drug carvedilol.</p>  <p align="justify"><strong>Forward-Looking Statements</strong></p>  <p align="justify"><em>This press release contains &#8220;forward-looking statements&#8221; within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words &#8220;intends,&#8221; &#8220;may,&#8221; &#8220;will,&#8221; &#8220;plans,&#8221; &#8220;expects,&#8221; &#8220;anticipates,&#8221; &#8220;projects,&#8221; &#8220;predicts,&#8221; &#8220;estimates,&#8221; &#8220;aims,&#8221; &#8220;believes,&#8221; &#8220;hopes,&#8221; &#8220;potential&#8221; or similar words. Forward-looking statements are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company&#8217;s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company&#8217;s research, manufacturing, preclinical studies, clinical trials, and other therapeutic candidate development efforts; (ii) the Company&#8217;s ability to advance its therapeutic candidates into clinical trials or to successfully complete its preclinical studies or clinical trials; (iii) the extent and number of additional studies that the Company may be required to conduct and the Company&#8217;s receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings, approvals and feedback; (iv) the manufacturing, clinical development, commercialization, and market acceptance of the Company&#8217;s therapeutic candidates; (v) the Company&#8217;s ability to establish and maintain corporate collaborations; (vi) the Company's ability to acquire products approved for marketing in the U.S. that achieve commercial success and build its own marketing and commercialization capabilities; (vii) the interpretation of the properties and characteristics of the Company&#8217;s therapeutic candidates and of the results obtained with its therapeutic candidates in research, preclinical studies or clinical trials; (viii) the implementation of the Company&#8217;s business model, strategic plans for its business and therapeutic candidates; (ix) the scope of protection the Company is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; (x) parties from whom the Company licenses its intellectual property defaulting in their obligations to the Company; (xi) estimates of the Company&#8217;s expenses, future revenues capital requirements and the Company&#8217;s needs for additional financing; (xii) competitive companies and technologies within the Company&#8217;s industry; and (xiii) the impact of the political and security situation in Israel on the Company's business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 20-F filed with the SEC </em><em>on February 25, 2016. All forward-looking statements included in this Press Release are made only as of the date of this Press Release. We assume no obligation to update any written or oral forward-looking statement unless required by law.</em></p></p><p>Company contact:<br>Adi Frish<br>Senior VP Business Development & <br>Licensing <br>RedHill Biopharma<br>+972-54-6543-112<br>adi@redhillbio.com<br><br>IR contact (U.S.): <br>Marcy Nanus<br>Senior Vice President<br>The Trout Group<br>+1-646-378-2927<br>Mnanus@troutgroup.com</p></body></html>
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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exh_992.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"><html lang="en-US"><head><title>EdgarFiling</title><meta content="text/html; charset=windows-1252"><meta name="GENERATOR" content="MSHTML 8.00.7601.18094"></head><body><p><p style="margin: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">EXHIBIT 99.2</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><i>Our shareholders or potential investorsmay be referred to as &ldquo;you&rdquo; or &ldquo;your&rdquo; in this disclosure and &ldquo;RedHill,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo;&ldquo;our,&rdquo; the &ldquo;Company&rdquo; and similar designations refer to RedHill Biopharma Ltd.</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b>Financial Update</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of September 30, 2016, we had approximately$40.5 million of cash and short-term investments. Our current cash resources are not sufficient to complete the research and developmentof all of our therapeutic candidates. We believe our existing capital resources should be sufficient to fund our operations forat least the next 12 months. Additional information and disclosures would be required for a more complete understanding of ourfinancial position and results of operations as of September 30, 2016.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b>Potential Commercial Activities in theU.S.</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b><i>&#160;</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We are in the process of establishing commercialpresence and capabilities in the U.S., and we plan to leverage such presence and capabilities to support, among others, potentialfuture commercial launch of our GI-related products under development (RHB-104/RHB-105/BEKINDA&reg;) in the U.S.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On October 3, 2016, we entered into a non-bindingterm sheet with a pharmaceutical company, as part of our strategic vertical integration plan to build a U.S. specialty pharmaceuticalcompany by establishing a commercial presence and capabilities. Under the term sheet, we would be granted the right to exclusivelypromote a specialty GI product in certain territories in the U.S. The parties would share revenues generated in such territories,based on an agreeable split between the parties. We are not</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">required to make any upfront or milestonepayments under the term sheet. Although our goal is to complete the transaction pertaining to the commercial asset in the fourthquarter of 2016, the term sheet is non-binding and there is no certainty as to the execution and timing of the execution of a definitiveagreement between us and our potential partner. There is no assurance that satisfactory due diligence will be completed or theparties will obtain all necessary corporate approvals.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b>Israeli corporate governance exemptionsin the Israeli Companies Regulations </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Our board of directors has resolved to adoptthe Israeli corporate governance exemptions set forth in the Companies Regulations (Relief for Public Companies Whose Securitiesare Listed for Trading on an Exchange Abroad) 5760- 2000 (Regulation 5d.) (the &ldquo;Regulation&rdquo;). In accordance with theRegulation, a company with no &ldquo;controlling shareholder&rdquo; (as defined in the Israeli Companies Law) and with securitieslisted for trading on certain stock exchanges outside of Israel, including the NASDAQ, may adopt exemptions from various corporategovernance requirements of the Israeli Companies Law so long as the company satisfies the applicable foreign country laws and regulations(including applicable stock exchange rules) that apply to companies organized in that country relating to the appointment of independentdirectors and the composition of audit and compensation committees (collectively, the &ldquo;Exemption&rdquo;). Companies, suchas ours, adopting the Exemption are exempt from the following Israeli Companies Law requirements: (i) the composition requirementsfor members of the audit and compensation committees, including independence requirements, the requirement of who may be presentat meetings and during discussions and decisions of such committees, and the quorum requirements of such committees and (ii) therequirement to appoint external directors, the requirement that an external director be a member of certain committees of the boardof directors and the limitations on employment and payment to certain directors and their relatives.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Pursuant to the Regulation, the Company intendsto comply with the NASDAQ Listing Rules in connection with a majority of independent directors on its board of directors and inconnection with the composition of each of the audit committee and the compensation committee, in lieu of such requirements ofthe Israeli Companies Law. Pursuant to the Regulation, our external directors at the time of our adoption of the Exemption, Mr.Ofer Tsmichi and Ms. Nurit Benjamini, may remain in office as Company directors at their option until the earlier of such directors'original end of term of office or the second annual meeting of shareholders after the adoption of the Exemption. &#160;</p><p style="margin: 0"></body></html>
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